As filed with the Securities and Exchange Commission on November 1, 1999.
Registration No. 33-39020
(The 59 Wall Street U.S. Treasury Money Fund
The 59 Wall Street Tax Exempt Money Fund)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 12
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 49
THE 59 WALL STREET TRUST
(Exact name of Registrant as specified in charter)
21 Milk Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (617)423-0800
PHILIP W. COOLIDGE
21 Milk Street, Boston, Massachusetts 02109
(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)
[ ] on pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a) i)
[X] on November 1, 1999 pursuant to paragraph (a)(i)
[ ] 75 days afterfiling 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.
Title of Securities Being Registered: Shares of Beneficial Interest
(par value $.001)
<PAGE>
PROSPECTUS
The 59 Wall Street Money Market Fund
The 59 Wall Street U.S. Treasury Money Fund
The 59 Wall Street Tax Exempt Money Fund
The 59 Wall Street Tax Free Short/Intermediate Fixed Income Fund
21 Milk Street, Boston, Massachusetts 02109
The Money Market Fund, the U.S. Treasury Money Fund, the Tax Exempt
Money Fund and the Tax Free Short/Intermediate Fixed Income Fund are separate
series of The 59 Wall Street Trust. Shares of each Fund are offered by this
Prospectus. The Money Market Fund invests all of its assets in the U.S. Money
Market Portfolio (the Portfolio).
Brown Brothers Harriman & Co. is the Investment Adviser for the U.S.
Treasury Money Fund, the Tax Exempt Money Fund, the Tax Free Short/Intermediate
Fixed Income Fund and the Portfolio and the administrator and shareholder
servicing agent of each Fund. Shares of each Fund are offered at net asset value
without a sales charge.
_______________________________________________________________________________
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, 1999.
<PAGE>
TABLE OF CONTENTS
Page
Investment Objective and Strategies .......................................
Principal Risk Factors ....................................................
Fund Performance ..........................................................
Fees and Expenses of the Funds ............................................
Investment Adviser.........................................................
Shareholder Information ...................................................
Financial Highlights.......................................................
Additional Investment Information .........................................
<PAGE>
INVESTMENT OBJECTIVE
The investment objective of the U.S. Treasury Money Fund and the Money
Market Fund is to provide investors with as high a level of income as is
consistent with the preservation of capital and the maintenance of liquidity.
The investment objective of the Tax Exempt Money Fund is to provide investors
with as high a level of current income exempt from federal income taxes as is
consistent with the preservation of capital and the maintenance of liquidity.
The investment objective of the Tax Free Short/Intermediate Fixed Income 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.
INVESTMENT STRATEGIES
U.S. Treasury Money Fund
The Investment Adviser of the U.S. Treasury Money Fund invests only in
securities backed as to principal and interest payments by the full faith and
credit of the United States of America. These securities are issues of the U.S.
Treasury, such as bills, notes and bonds as well as other full faith and credit
obligations of the U.S. Government.
Money Market Fund
The Money Market Fund invests all of its assets in the U.S. Money Market
Portfolio, an investment company that has the same objective as the Fund. The
Investment Adviser of the Portfolio invests only in the highest rated,
short-term money market instruments denominated in U.S. dollars. These
instruments include U.S. Government securities and bank obligations of U.S. and
non-U.S. banks (such as certificates of deposit, fixed time deposits and
bankers' acceptances), commercial paper, repurchase agreements, reverse
repurchase agreements, when-issued and delayed delivery securities, bonds issued
by U.S. corporations and obligations of certain supranational organizations.
Tax Exempt Money Fund
The Investment Adviser invests at least 80% of the Fund's assets in
municipal securities the interest on which is exempt from federal income tax and
alternative minimum tax. Municipal securities may be fully or partially
guaranteed. They may be guaranteed by the local government or by the credit of a
private issuer. Municipal securities may also be guaranteed by the current or
anticipated revenues from a specific project or specific assets. Additionally,
municipal securities may be guaranteed by domestic or foreign entities providing
credit support such as letters of credit, guarantees or insurance. The
Investment Adviser may invest more than 25% of the Fund's total assets in
securities that finance similar projects, such as those relating to education,
health care, transportation and utilities.
Tax Free Short/Intermediate Fixed Income Fund
The Tax Free Short/Intermediate Fixed Income Fund invests primarily 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. The
dollar weighted average maturity of the Fund's portfolio does not exceed three
years.
The net asset value of shares of each of the Money Market Fund, the U.S.
Treasury Money Fund and the Tax Exempt Money Fund is expected to remain constant
at $1.00 by investing in securities with a maturity of 13 months or less, and by
maintaining a dollar-weighted average maturity of 90 days or less. The share
price of the Tax Free Short/Intermediate Fixed Income Fund changes daily based
on market conditions.
PRINCIPAL RISK FACTORS
The principal risks of investing in each Fund are described below. A
shareholder may lose money by investing in the Funds. Market Risk, Interest Rate
Risk and Credit Risk discussed below are applicable to each Fund and the
Portfolio.
o Market Risk:
The price of a debt security will fluctuate in response to changes in
interest rates.
o Interest Rate Risk:
The amount of income paid to the shareholder by each Fund will fluctuate
depending on day-to-day variations in short-term interest rates. In general, the
prices of debt securities fall when interest rates rise. The Tax Free Fixed
Income Fund invests in longer term obligations which are usually more sensitive
to interest rate changes than the shorter-term obligations in which the money
market funds invest.
o Credit Risk:
Credit risk refers to the likelihood that an issuer will default on
interest or principal payments. Changes in the financial condition of an issuer,
changes in specific economic or political conditions that affect a particular
type of issuer, and changes in general economic or political conditions can
adversely affect the credit quality or value of an issuer's securities. Entities
providing credit support or a maturity-shortening structure also can be affected
by these types of changes. Municipal securities backed by current or anticipated
revenues from a specific project or specific assets can be negatively affected
by the discontinuance of the taxation supporting the project or assets or the
inability to collect revenues for the project or from the assets. If a
security's structure fails to function as intended, the security could become
taxable or decline in value. Because the Funds may invest their assets in
municipal securities of issuers financing similar type projects, the Funds may
be adversely affected by a particular economic or political event affecting that
type project.
Money Market Fund
o Industry Concentration Risk:
Industry concentration risk refers to the likelihood that an event adverse
to a particular industry could negatively affect securities invested in that
industry. Because the U.S. Money Market Portfolio invests a significant portion
of its assets in bank obligations, the value of these investments and the net
assets of the Portfolio could decline more dramatically as a result of adverse
events affecting the bank industry.
o Foreign Investment Risk:
Securities issued by non-U.S. banks are subject to additional risks such as
adverse political, social and economic developments abroad, different kinds and
levels of market and issuer regulations and the different characteristics of
overseas economies and markets. There may be rapid changes in the values of
these securities.
Investments in each Fund are neither insured nor guaranteed by the U.S.
Government. Shares of each Fund are not deposits or obligations of, or
guaranteed by, Brown Brothers Harriman & Co. or any other bank, and the shares
are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other federal, state or other governmental agency. Although
the Money Market Fund, U.S. Treasury Money Fund and Tax Exempt Money Fund seek
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in each Fund.
<PAGE>
Fund Performance
The chart and table below give an indication of the risks of investing in
the Money Market Fund, U.S. Treasury Money Fund and Tax Free Short/Intermediate
Fixed Income Fund. The chart shows changes in each Fund's performance from year
to year. The table shows how the Tax Free Short/Intermediate Fixed Income Fund's
average annual returns for the periods indicated compare to those of a broad
measure of market performance. For current yield information, please call
800-625-5759 toll free, or contact your account representative.
When you consider this information, please remember that a Fund's
performance in past years is not an indication of how a Fund will do in the
future.
Since the Tax Exempt Money Fund has not been in existence for a full
calendar year, bar chart and table information is not included.
[This table was depicted as a bar chart in the printed material]
Total Returns (% per calendar year)
Money Market Fund U.S. Treasury Money Fund Tax Free Fixed Income Fund
1993 2.81% 2.60% 5.91%
1994 3.65% 3.49% 3.52%
1995 5.59% 5.18% 4.57%
1996 5.02% 4.72% 4.34%
1997 5.16% 4.76% 4.27%
1998 5.08% 4.60% 4.31%
Highest and Lowest Returns
(Quarterly 1993-1998)
Highest Return Lowest Return
-------------- -------------
Quarter Quarter
% Ended % Ended
-------------- -------------
Money Market Fund 1.44 Jun-95 0.68 Jun-93
U.S. Treasury Money Fund 1.31 Jun-95 0.61 Jun-93
Tax Free Fixed Income Fund 2.47 Mar-95 (0.94) Mar-94
Average Annual Total Returns
(through December 31, 1998)
1 Year 5 Years Life of Fund
----- ------- ------------
Money Market Fund 5.08% 4.90% 6.08% (Since 12/12/83)
U.S. Treasury Money Fund 4.60 4.55 4.18 (Since 03/12/91)
------ ------- ------------
1 Year 5 Years Life of Fund
------ ------- ------------
Tax Free Fixed Income Fund 4.49% 3.87% 4.31% (Since 7/23/92)
Merrill Lynch 0-3 General
Obligation Municipal Bond
Index 4.97 4.73 4.62 (Since 7/23/92)
<PAGE>
FEES AND EXPENSES OF THE FUNDS
The tables below describe the fees and expenses1 that an investor may pay
if that investor buys and holds shares of the Funds.
SHAREHOLDER FEES
(Fees paid directly from an investor's account)
All Funds
---------
Maximum Sales Charge (Load) None
Imposed on Purchases
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) None
Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES
(Expenses that are deducted from Fund assets as a percentage of average
net assets)
<TABLE>
<S> <C> <C> <C>
Money U.S. Treasury Tax Exempt Tax Free Fixed
Market Fund Money Fund Money Fund Income Fund
Management Fees 0.15% 0.15% 0.15% 0.25%
Distribution (12b-1) Fees None None None None
Other Expenses
Administration Fee 0.110% 0.10% 0.10% 0.15%
Shareholder Servicing/Eligible Institution Fee 0.225 0.225 0.25 0.25
Other Expenses 0.045 0.38 0.145 0.47 0.73 1.08 0.18 0.58
------ ------ ------ ----- ----- ----- ---- ----
Total Annual Fund Operating Expenses 0.53% 0.62% 1.23% 0.83%
==== ==== ==== ====
Expense Payment2 n/a n/a (0.58)2 n/a
Net Expenses n/a n/a 0.65% n/a
====
- --------
<FN>
1 The expenses shown for the Money Market Fund include the
expenses of the U.S. Money Market Portfolio.
2 The expense payment arrangement is a contractual limitation on
expense which will continue until December 31, 2004.
</FN>
</TABLE>
10
<PAGE>
EXAMPLE
This example is intended to help an investor compare the cost of investing
in the Funds to the cost of investing in other mutual funds. The example assumes
that an investor invests $10,000 in a Fund for the time periods indicated and
then sells all of his shares at the end of those periods. The example also
assumes that an investment has a 5% return each year and that the Funds'
operating expenses remain the same as shown in the table above. Although actual
costs on an investor's investment may be higher or lower, based on these
assumptions the investor's costs would be:
Money U.S. Treasury Tax Exempt
Market Fund Money Fund Money Fund
1 year $123 $165 $153
3 years $384 $511 $502
5 years $665 $811 $866
10 years $1,466 $1,922 $1,889
3 The example above reflect the expenses of both the Fund and the
Portfolio.
<PAGE>
INVESTMENT ADVISER
The Investment Adviser to the U.S. Treasury Money Fund, the Tax Exempt
Money Fund, the Tax Free Short/Intermediate Fixed Income Fund and U.S. Money
Market Portfolio 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. The Investment Adviser is located at 59 Wall
Street, New York, NY 10005.
The Investment Adviser provides investment advice and portfolio
management services to the Funds and the Portfolio. Subject to the general
supervision of the Trustees, the Investment Adviser makes the day-to-day
investment decisions, places the purchase and sale orders for the portfolio
transactions, and generally manages the investments. The Investment Adviser
provides a broad range of investment management services for customers in the
United States and abroad. At June 30, 1999, it managed total assets of
approximately $33 billion.
A team of individuals manages the Tax Free Short/Intermediate Fixed
Income Fund's portfolio on a day-to-day basis. This team includes
Mr. Jeffrey A. Schoenfeld, Mr. Glenn E. Baker, Mr. John P. Nelson, Ms.
Barbara A. Brinkley and Ms. Debra L. Croviez of Brown Brothers Harriman &
Co. Mr. Schoenfeld holds a B.A. from the University of California,
Berkeley and a M.B.A. from the Wharton School of the University of
Pennsylvania. He joined Brown Brothers Harriman & Co. in 1984. Mr.
Baker holds a B.A. and a M.B.A. from the University of Michigan and is a
Chartered Financial Analyst. He joined Brown Brothers Harriman & Co.
in 1991. Mr. Nelson holds a B.S. from St. Vincent's College. He
joined Brown Brothers Harriman & Co. in 1987. Ms. Brinkley holds a B.A.
from Smith College. She joined Brown Brothers Harriman & Co. in 1967. Ms.
Croviez holds a B.B.A. from George Washington University. She joined
Brown Brothers Harriman & Co. in 1997. Prior to joining Brown
Brothers Harriman & Co., she worked for Republic National Bank.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by the Investment Adviser, under the
Investment Advisory Agreements, the Funds pay the Investment Adviser the
following annual fees, computed daily and payable monthly:
Percentage of Average
Daily Net Assets
U.S. Money Market Portfolio 0.15%
U.S. Treasury Money Fund 0.15%
Tax Exempt Money Fund 0.15%
Tax Free Short/Intermediate
Fixed Income Fund 0.25%
SHAREHOLDER INFORMATION
NET ASSET VALUE
The Trust determines the net asset value of each Fund every day the New
York Stock Exchange is open for regular trading and the Federal Reserve banks
are open for business. The Money Market Fund, U.S. Treasury Money Fund and Tax
Exempt Money Fund each calculate their net asset value once daily at 12:00 P.M.,
New York time. The Tax Free Short/Intermediate Fixed Income Fund calculates its
net asset value once daily at 4:00 P.M., New York time. Net asset value is the
value of a single share of a Fund.
It is anticipated that the net asset value per share of the Money Market
Fund, U.S. Treasury Money Fund and Tax Exempt Money Fund will remain constant at
$1.00. No assurance can be given that this goal can be achieved.
The Trust values the assets of the U.S. Treasury Money Fund, Tax Exempt
Money Fund and the Portfolio at amortized cost, which is approximately equal to
market value. The Trust values the assets in the Tax Free Short/Intermediate
Fixed Income Fund's portfolio on the basis of their market quotations and
valuations provided by independent pricing services. If quotations are not
readily available, the assets of the Tax Free Short/Intermediate Fixed Income
Fund are valued at fair value in accordance with procedures established by the
Trustees of the Trust.
PURCHASE OF SHARES
The Trust offers shares of each Fund on a continuous basis at its net
asset value without a sales charge. The Trust reserves the right to determine
the purchase orders for Fund shares that it will accept. Investors may purchase
shares on any day the net asset value is calculated if the Trust receives the
purchase order, including acceptable payment for such order, prior to such
calculation. The Trust then executes purchases of Fund shares at the net asset
value per share next determined. Shares of the Money Market Fund, U.S. Treasury
Money Fund and Tax Exempt Money Fund are entitled to dividends declared on the
day the Trust executes the purchase order on the books of the Trust. Shares of
the Tax Free Short/Intermediate Fixed Income Fund are entitled to dividends
declared on the next business day following the day the Trust executes the
purchase order on the books of the Trust.
An investor who has an account with an Eligible Institution or a
Financial Intermediary may place purchase orders for Fund shares through that
Eligible Institution or Financial Intermediary, which holds such shares in its
name on behalf of that customer pursuant to arrangements made between that
customer and that Eligible Institution or Financial Intermediary. Each Eligible
Institution and each Financial Intermediary may establish and amend from time to
time a minimum initial and a minimum subsequent purchase requirement for its
customers. Currently, such minimum purchase requirements range from $1,000 to
$5,000. Each Eligible Institution or Financial Intermediary arranges payment for
Fund shares on behalf of its customers. An Eligible Institution or a Financial
Intermediary may charge a transaction fee on the purchase of Fund shares.
An investor who does not have an account with an Eligible Institution or
a Financial Intermediary must place purchase orders for Fund shares with the
Trust through Brown Brothers Harriman & Co., the Fund's Shareholder Servicing
Agent. Such an investor has such shares held directly in the investor's name on
the books of the Trust and is responsible for arranging for the payment of the
purchase price of Fund shares. The Trust executes all purchase orders for
initial and subsequent purchases at the net asset value per share next
determined after the Trust's Custodian, State Street Bank and Trust Company has
receive payment in the form of a cashier's check drawn on a U.S. bank, a check
certified by a U.S. bank or a wire transfer. The Shareholder Servicing Agent has
established a minimum initial purchase requirement for each Fund of $100,000 and
a minimum subsequent purchase requirement for each Fund of $25,000. The
Shareholder Servicing Agent may amend these minimum purchase requirements from
time to time.
REDEMPTION OF SHARES
The Trust executes your redemption request at the next net asset value
calculated after the Trust receives your redemption request. Shares of the Money
Market Fund, U.S. Treasury Money Fund and Tax Exempt Money Fund continue to earn
daily dividends declared prior to the business day that the Trust executes the
redemption request on the books of the Trust. Shares of the Tax Free
Short/Intermediate Fixed Income Fund continue to earn dividends declared through
the business day that the Trust executes the redemption request on the books of
the Trust.
Shareholders must redeem shares held by an Eligible Institution or a
Financial Intermediary on behalf of such shareholder pursuant to arrangements
made between that shareholder and that Eligible Institution or Financial
Intermediary. The Trust pays proceeds of a redemption to that shareholder's
account at that Eligible Institution or Financial Intermediary on a date
established by the Eligible Institution or Financial Intermediary. An Eligible
Institution or a Financial Intermediary may charge a transaction fee on the
redemption of Fund shares.
Shareholders may redeem shares held directly in the name of a shareholder
on the books of the Trust by submitting a redemption request in good order to
the Trust through the Shareholder Servicing Agent. The Trust pays proceeds
resulting from such redemption directly to shareholders of the Money Market
Fund, U.S. Treasury Money Fund and Tax Exempt Money Fund generally on the day
the redemption request is executed, and in any event within seven days. The
Trust pays proceeds resulting from such redemption directly to shareholders of
the Tax Free Short/Intermediate Fixed Income Fund generally on the next business
day after the redemption request is executed, and in any event within seven
days.
A shareholder redeeming shares should be aware that the net asset value
of the shares of the Money Market Fund, U.S. Treasury Money Fund and Tax Exempt
Money Fund may, in unusual circumstances, decline below $1.00 per share.
Accordingly, a redemption request may result in payment of a dollar amount which
differs from the number of shares redeemed.
Redemptions by the Trust
The Shareholder Servicing Agent has established a minimum account size of
$100,000 for the Funds, which may be amended from time to time. If the value of
a shareholder's holdings in a Fund falls below that amount because of a
redemption of shares, the Trust may redeem the shareholder's remaining shares.
If such remaining shares are to be redeemed, the Trust notifies the shareholder
and allows the shareholder 60 days to make an additional investment to meet the
minimum requirement before the redemption is processed. Each Eligible
Institution and each Financial Intermediary may establish and amend from time to
time for their respective customers a minimum account size, each of which is
currently lower than that established by the Shareholder Servicing Agent.
Further Redemption Information
Redemptions of shares are taxable events on which a shareholder may
realize a gain or a loss.
The Trust may suspend a shareholder's right to receive payment with
respect to any redemption or postpone the payment of the redemption proceeds for
up to seven days and for such other periods as applicable law may permit.
DIVIDENDS AND DISTRIBUTIONS
The net income and short-term capital gains and losses of the Money
Market Fund, U.S. Treasury Money Fund and Tax Exempt Money Fund, if any, are
declared as a dividend daily and paid monthly. All of the Tax Free
Short/Intermediate Fixed Income Fund's net investment income and a discretionary
portion of any net short-term capital gains are declared as a dividend daily and
paid monthly.
Determination of each Fund's net income is made each business day
immediately prior to the determination of the net asset value per share of each
Fund. Net income for days other than such business days is determined at the
time of the determination of the net asset value per share of each Fund on the
immediately preceding business day.
Each Eligible Institution and each Financial Intermediary may establish
its own policy with respect to the reinvestment of dividends in additional Fund
shares.
Dividends declared are payable to shareholders of record of the Funds on
the date of determination. For the Money Market Fund, U.S. Treasury Money Fund
and Tax Exempt Money Fund, shares purchased through submission of a purchase
order prior to 12:00 P.M., New York time on such a business day begin earning
dividends on that business day. Shares redeemed do not qualify for a dividend on
the business day that the redemption is executed. For the Tax Free
Short/Intermediate Fixed Income Fund, shares purchased through submission of a
purchase order prior to 4:00 P.M., New York time on such a business day begin
earning dividends on the next business day. Shares redeemed do qualify for a
dividend on the business day that the redemption is executed. Unless a
shareholder whose shares are held directly in the shareholder's name on the
books of the Trust elects to have dividends paid in cash, the Trust
automatically reinvests dividends in additional Fund shares without reference to
the minimum subsequent purchase requirement.
Such shareholder who elects to have dividends paid in cash receives a
check in the amount of such dividends. 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.
Substantially all of the Tax Free Short/Intermediate Fixed Income 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. The Trust may
make an additional dividend and/or capital gains distribution in a given year to
the extent necessary to avoid the imposition of federal excise tax on the Fund.
TAXES
Dividends of net income and net short-term capital gains, if any, are
taxable to shareholders of the Money Market Fund and U.S. Treasury Money Fund as
ordinary income, whether such dividends are paid in cash or reinvested in
additional shares.
The Tax Exempt Money Fund and the Tax Free Short/Intermediate Fixed
Income Fund expect that most of their net income will be attributable to
interest on municipal obligations and as a result most of the Funds' dividends
to shareholders will not be taxable. The non-exempt portion of dividends are
taxable to shareholders of the Funds as ordinary income, whether such dividends
are paid in cash or reinvested in additional shares.
The Tax Free Income Fund's capital gains may be taxable at different
rates depending on the length of time the Fund holds its assets. 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.
The treatment of each Fund and its shareholders in those states which
have income tax laws might differ from treatment under the federal income tax
laws. Therefore, distributions to shareholders may be subject to additional
state and local taxes. Shareholders are urged to consult their tax advisors
regarding any state or local taxes.
Foreign Investors
Each Fund is designed for investors who are either citizens of the United
States or aliens subject to United States income tax. Prospective investors 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
Funds since alternative investments would not be subject to United States
withholding tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help an investor understand
the financial performance of the Funds. Certain information reflects financial
results for a single Fund share. The total returns in the tables represent the
rate that an investor would have earned on an investment in each Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Deloitte & Touche LLP, whose report, along with the Funds' financial
statements, are included in the annual report, which is available upon request.
<TABLE>
<S> <C> <C> <C> <C> <C>
Money Market Fund
For the years ended June 30,
1999 1998 1997 1996 1995
Net asset value, beginning of year ....... $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment operations:
Net investment income ................. 0.05 0.05 0.05 0.05 0.05
Dividends to shareholders
from net investment income ............... (0.05) (0.05) (0.05) (0.05) (0.05)
Net asset value, end of year ............. $1.00 $1.00 $1.00 $1.00 $1.00
Total return * ........................... 4.77% 5.22% 5.07% 5.33% 4.92%
Ratios/supplemental data**:
Net assets, end of year
(000's omitted)........................... $1,074,741 $937,790 $917,536 $763,972 $624,847
Ratio of expenses to average
net assets*............................... 0.53% 0.55% 0.55% 0.55% 0.55%
Ratio of net investment income
to average net assets .................... 4.66% 5.11% 4.96% 5.14% 4.86%
<FN>
* Had the expense reimbursement agreement, which commenced July 1, 1993,
not been in place, the ratio of expenses to average net assets, for the
years ended June 30, 1997, 1996 and 1995, would have been 0.55%, 0.56%
and 0.56%, respectively. For the same periods, the total return of
the Fund would have been 5.07%, 5.32% and 4.90%, respectively. The
expense reimbursement agreement was terminated on July 1, 1997.
** Ratios include the Fund's share of Portfolio income and
expenses, as appropriate.
</FN>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
U.S. Treasury Money Fund
For the years ended June 30,
1999 1998 1997 1996 1995
Net asset value,
beginning of period........... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income......... 0.04 0.05 0.04 0.05 0.05
Dividends to shareholders from
net investment income....... (0.04) (0.05) (0.04) (0.05) (0.05)
----- ------ ----- ------ ------
Net asset value, end of
period........................ $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ====== ===== =====
Total return.................... 4.15% 4.78% 4.75% 4.96%* 4.67%*
Ratios/supplemental data:
Net assets, end of period
(000's omitted)................. $193,222 $194,694 $160,458 $146,225 $144,969
Ratio of expenses to
average net assets ......... 0.62% 0.56% 0.55% 0.56%* 0.55%*
Ratio of net investment
income to average
net assets.................. 4.07% 4.70% 4.65% 4.78% 4.52%
<FN>
* Had the expense reimbursement agreement, which commenced July 1, 1993,
not been in place, the ratio of expenses to average net assets, for the years
ended June 30, 1996 and 1995 would have been 0.57% and 0.58, respectively. For
the same periods, the total return would have been 4.91% and 4.64%,
respectively. The expense reimbursement agreement terminated on February 1,
1996.
</FN>
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Tax Exempt Money Fund
For the period from
February 22, 1999
(commencement of
operations) to
June 30, 1999
Net asset value, beginning of period...... $1.00
Income from investment
operations:
Net investment income ................... 0.01
Dividends to shareholders from
net investment income.................... (0.01)
Net asset value, end of period............ $ 1.00
Total return(1)........................... 1.03%
Ratios/supplemental data:
Net assets, end of period (000's
omitted).................................. $14,654
Ratio of expenses to average net
assets(1)(2) 0.65%
Ratio of net investment income to
average net assets(2)..................... 2.63%
- -------------------------------
<FN>
(1)Had the expense payment agreement not been in place, the ratio
of expenses to average net assets and total return would have
been as follows:
Ratio of expenses to average net assets(2) 1.23%
Total Return 0.45%
(2) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Tax Free Short/Intermediate Fixed Income Fund
For the years ended June 30,
1999 1998 1997 1996 1995
Net asset value, beginning of period...... $10.40 $ 10.33 $ 10.26 $ 10.28 $ 10.11
Income from investment operations:
Net investment income ................... 0.35 0.36 0.37 0.37 0.37
Net realized and unrealized
gain (loss) on investments............... (0.10) 0.07 0.07 (0.02) 0.17
Less dividends and distributions:
Dividends to shareholders from
net investment income.................... (0.35) (0.36) (0.37) (0.37) (0.37)
----- ----- ----- ------ -----
Net asset value, end of period............ $ 10.30 $ 10.40 $ 10.33 $ 10.26 $ 10.28
===== ===== ====== ======= =======
Total return*............................. 2.44% 4.25% 4.34% 3.60% 5.42%
Ratios/supplemental data:
Net assets, end of period
(000's omitted)........................... $75,719 $80,160 $55,714 $44,776 $51,828
Ratio of expenses to average net
assets:*
Total expenses paid by the Fund.......... 0.82% 0.78% 0.70%* 0.70%* 0.70%*
Expense offset arrangement............... 0.01% 0.02% n/a n/a n/a
Total expenses............................ 0.83% 0.80% 0.70% 0.70% 0.70%
Ratio of net investment income to
average net assets ...................... 3.37% 3.49% 3.55% 3.51% 3.67%
Portfolio turnover rate .................. 44% 20% 48% 48% 39%
* Had the expense payment agreement not been in place, the ratio of
expenses to average net assets for the years ended June 30, 1997, 1996 and 1995
would have been 0.96%, 0.90% and 0.99%, respectively. For the same periods, the
total return of the Fund would have been 4.16%, 3.40% and 5.13%, respectively.
The expense payment agreement terminated on July 1, 1997. Further information
about the performance of the Fund is contained in the Fund's annual report to
shareholders which may be obtained without charge.
</TABLE>
<PAGE>
ADDITIONAL INVESTMENT INFORMATION
Money Market Fund
Investment Structure. The Trust seeks to achieve the investment objective
of the Money Market Fund by investing all of the Fund's assets in the Portfolio,
a diversified open-end investment company having the same investment objective
as the Fund. Other mutual funds or institutional investors may invest in the
Portfolio on the same terms and conditions as the Fund. However, these other
investors may have different operating expenses which may generate different
aggregate performance results. The Trust may withdraw the Fund's investment in
the Portfolio at any time as a result of changes in the Portfolio's investment
objective, policies or restrictions or if the Board of Trutees determines that
it is otherwise in the best interests of the Fund to do so.
U.S. Government Securities. The Portfolio may invest 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.
Bank Obligations. The Portfolio may invest in U.S. dollar-denominated high
quality securities. These securities include 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. The Portfolio's investments also include obligations of
non-U.S. branches of such banks, or of non-U.S. banks or their U.S. or non-U.S.
branches. (The Portfolio may only invest in obligations of such non-U.S. banks
if 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). The
Portfolio may invest in unrated obligations of non-U.S. banks if such
obligations are of comparable quality as determined by or under the direction of
the Portfolio's Board of Trustees.)
Commercial Paper. The Portfolio may invest 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 Portfolio's Board of Trustees.
Repurchase Agreements. The Portfolio may enter into repurchase agreements
for the Portfolio only with a "primary dealer" (as designated by the Federal
Reserve Bank of New York) in U.S. Government securities. A repurchase agreement
is an agreement in which the seller (the "Lender") of a security agrees to
repurchase from the Portfolio 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
Portfolio always receives as collateral securities which are issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
Other Obligations. Assets of the Portfolio may be invested in bonds, with
maturities not exceeding one year, issued by U.S. corporations which at the date
of investment are rated within the highest rating category for such 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 Portfolio's Board of
Trustees.
Assets of the Portfolio may also be invested in obligations of the
International Bank for Reconstruction and Development which may be supported by
appropriated but unpaid commitments of its member countries, although there is
no assurance that these commitments will be undertaken in the future. However,
assets of the Portfolio may not be invested in obligations of the Inter-American
Development Bank or the Asian Development Bank.
Money Market Fund and U.S. Treasury Money Fund
The Investment Adviser invests all of the assets of the U.S. Treasury
Money Fund and U.S. Money Market Portfolio in securities which are 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 Investors Service, Inc. ("Moody's") and Standard &
Poor's Corporation ("S&P")) or, if unrated, are of comparable quality as
determined by or under the direction of the Board of Trustees of the Fund and
the Portfolio.
Tax Exempt Money Fund and Tax Free Short/Intermediate Fixed Income Fund
The following information describes the securities each Fund may
purchase, the interest on which is exempt from federal income tax and the
alternative minimum tax. However, other such securities not mentioned below may
be purchased for each Fund if they meet the quality and maturity guidelines set
forth in each Fund's investment policies. Municipal Bonds. Municipal securities
are issued to raise money for a variety of public and private purposes,
including general financing for state and local governments, or financing for a
specific project or public facility. Municipal securities 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. The Tax Exempt Money Fund
may purchase Municipal Bonds with a remaining maturity of 397 days or less.
These securities include:
- General Obligation Bonds-bonds backed by the municipality's pledge of
full faith, credit and taxing power.
- 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.
- 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.
- 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.
- 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.
- Zero Coupon Bonds-securities issued at a discount from their face value
that pay all interest and principal upon maturity.
- Participation Certificates-variable rate demand instruments that the Tax
Exempt Money Fund may invest in include Participation Certificates purchased by
such Fund from banks, insurance companies or other financial institutions in
fixed or variable rate, tax-exempt municipal obligations (expected to be focused
in Revenue Bonds) owned by such institutions or affiliated organizations. A
participation certificate represents the sale by the bank of an undivided
interest in a municipal obligation it owns. These certificates may be supported
by a bank letter of credit or guarantee.
Other Federal Tax-Exempt Obligations--Any other Federal tax-exempt
obligations issued by or on behalf of states and municipal governments and their
authorities, agencies, instrumentalities and political subdivisions, whose
inclusion in the Tax Exempt Money Fund would be consistent with such Fund's
"Investment Objectives, Policies and Risks" and permissable under Rule 2a-7
under the Investment Company Act of 1940, as amended (the "1940 Act").
Stand-by Commitments--When the Tax Exempt Money Fund purchases Municipal
Obligations it may also acquire stand-by commitments from banks and other
financial institutions with respect to such Municipal Obligations. Under a
stand-by commitment, a bank or broker-dealer agrees to purchase at such Fund's
option a specified Municipal Obligation at a specified price with same day
settlement.
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:
- Tax and Revenue Anticipation Notes-notes issued in expectation of future
taxes or revenues.
- 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.
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.
Each Fund
Year 2000 issue. Information technology experts are concerned about
computer systems' ability to process data-related information on and after
January 1, 2000. This situation, commonly known as the "Year 2000" issue, could
have an adverse impact on each Fund. The cost of addressing the Year 2000 issue,
if substantial, could adversely affect companies and governments that issue
securities held by each Fund and the Portfolio. The Investment Adviser is
addressing the Year 2000 issue for its systems. Each Fund has been informed by
its other service providers that they are taking similar measures. Although each
Fund does not expect the Year 2000 issue to adversely effect it, each Fund
cannot guarantee that the efforts of each Fund, which are limited to requesting
and receiving reports from its services providers, or the efforts of its
services providers to correct the problem will be successful.
<PAGE>
The 59 Wall Street Money Market Fund
The 59 Wall Street U.S. Treasury Money Fund
The 59 Wall Street Tax Exempt Money Fund
The 59 Wall Street Tax Free Short/Intermediate Fixed Income Fund
More information on each Fund
is available free upon request,
including the following:
o Annual/Semi-Annual Report
Describes the Funds' performance, lists portfolio holdings and contains a
letter from the Funds' Investment Adviser discussing recent market conditions,
economic trends and Fund strategies that significantly affected the Funds'
performance during its last fiscal year.
o Statement of Additional Information
Provides more details about each Fund and its policies. A current SAI is
on file with the Securities and Exchange Commission (SEC) and is
incorporated by reference (is legally considered part of this
prospectus). To obtain information or make shareholder inquiries:
o By telephone
1-800-625-5759
o By mail write to the Funds' Shareholder Servicing Agent:
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
o By E-mail send your request
to:
[email protected]
On the Internet:
Text-only versions of Fund documents can be viewed online or
downloaded from:
Brown Brothers Harriman & Co.
http://www.bbhco.com
SEC
http://www.sec.gov
You can also review or obtain copies by visiting the SEC's Public Reference
Room in Washington, D.C. or by sending your request and a duplicating fee to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Information on the
operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
SEC file number: 811-03779
<PAGE>
Money Market Fund
U.S. Treasury Money Fund
Tax Exempt Money Fund
Tax Free Short/Intermediate Fixed
Income Fund
Prospectus
November 1, 1999
<PAGE>
WS5039L
STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET U.S. TREASURY MONEY FUND
21 Milk Street, Boston, Massachusetts 02109
The 59 Wall Street U.S. Treasury Money 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 Fund is a type of mutual fund commonly known as a money market
fund. The Fund is designed to be a cost effective and convenient means of making
substantial investments in money market instruments. The Fund's investment
objective is to achieve as high a level of current income as is consistent with
the preservation of capital and the maintenance of liquidity. There can be no
assurance that the investment objective of the Fund will be achieved. The Trust
pursues the investment objective of the Fund by investing in short-term
obligations backed as to principal and interest payments by the full faith and
credit of the United States of America. Although investments held for the Fund
are issued by the U.S. Government, an investment in the Fund is not insured or
guaranteed by the U.S. Government
Brown Brothers Harriman & Co. is the investment adviser of the Fund
(the "Investment Adviser"). This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus dated November
1, 1999, a copy of which may be obtained from the Trust at the address noted
above.
The date of this Statement of Additional Information is November 1, 1999.
<TABLE>
<CAPTION>
Table of Contents
<S> <C> <C>
Cross-Reference to
Page Page in Prospectus
Investments
Investment Objective and Policies . . . . . 3 3-4
Investment Restrictions . . . . . . . . 4
Management
Trustees and Officers . . . . . 6
Investment Adviser . . . . . . . . . . 11 6
Administrators. . . . . . . . . . . . 12
Distributor . . . . . . . . . . . . 13
Shareholder Servicing Agent,
Financial Intermediaries and Eligible Institutions 14-15
Custodian, Transfer and Dividend Disbursing
Agent 15
Independent Auditors 15
Net Asset Value; Redemption in Kind . . . . 16 6
</TABLE>
<PAGE>
Table of Contents
Page
Computation of Performance . . . . . . . 17
Purchases and Redemptions 18
Federal Taxes . . . . . . . . . . . . 19
Description of Shares . . . . . . . . . 21
Portfolio Brokerage Transactions . . . . 23
Additional Information. . . . . . . . . . . . . . . 24
Financial Statements . . . . . . . . . 25
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of the Fund.
Treasury Receipts
Assets of the Fund are not invested in stripped securities issued by
any entity other than the U.S. Treasury.
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 will
assets of the Fund be 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 have 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 "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.
Reverse Repurchase Agreements
Reverse repurchase agreements may also be entered into for the Fund,
although the current intention is not to do so.
Loans of Portfolio Securities
Securities of the Fund may be loaned if such loans would be 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 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) or reverse repurchase agreements, and except that assets may
be pledged to secure letters of credit solely for the purpose of participating
in a captive insurance company sponsored by the Investment Company Institute;
(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;
(3) write, purchase or sell any put or call option or any combination
thereof;
(4) underwrite securities issued by other persons except insofar as it
may technically be deemed an underwriter under the Securities Act of 1933, as
amended in selling a portfolio security;
(5) 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 net 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;
(6) 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 the its
total assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days);
(7) 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 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);
(8) 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);
(9) concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of its investment objective, up to 25%
of its assets, at market value at the time of each investment, may be invested
in any one industry; or
(10) 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.
Non-Fundamental Restrictions. The Fund may not as a matter of operating
policy (except that the Fund 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) purchase securities of any investment company
if such purchase at the time thereof would cause more than 10% of 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; (ii) invest more than 5% of the Fund's
assets in repurchase agreements although it is the intention of the Adviser to
do so only when other means of efficiently investing cash flows are unavailable;
or (ii) invest more than 10% of its net assets (taken at the greater of cost or
market value) in restricted securities. These policies are not fundamental and
may be changed without shareholder approval.
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.
The Fund is classified as "diversified" under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; securities issued
by the U.S. Government, its agencies and instrumentalities; and other securities
limited in respect of any one issuer to an amount no greater than 5% of the
Fund's total assets (other than securities issued by the U.S. Government, its
agencies or instrumentalities).
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
to 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.
The Trustees and executive officers of the Trust, their principal
occupations 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.; Trustee of the Portfolios(1); Managing Director,
Chairman and Chief Executive Officer of Shields & Company; Chairman of Capital
Management Associates, Inc.; Director of Flowers Industries, Inc.(2). Vice
Chairman and Trustee of New York Racing Assocation. His business address is
Shields & Company, 140 Broadway, New York, NY 10005.
EUGENE P. BEARD** - Trustee; Director of The 59 Wall Street Fund, Inc.;
Trustee of the Portfolios; 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.
DAVID P. FELDMAN** - Trustee; Director of The 59 Wall Street Fund,
Inc.; Trustee of the Portfolios; Retired; Vice President and Investment Manager
- - AT&T Investment Management Corporation (prior to October 1997); Director of
Dreyfus Mutual Funds, Jeffrey Co. and Heitman Financial. His business address is
3 Tall Oaks Drive, Warren, NJ 07059.
ALAN G. LOWY** - Trustee; Director of The 59 Wall Street Fund, Inc.;
Trustee of the Portfolios; Private Investor; 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.; Trustee of the Portfolios; Retired, Executive Vice President and
Chief Financial Officer of Richard K. Mellon and Sons (prior to June 1998);
Treasurer of Richard King Mellon Foundation (prior to June 1998); Vice President
of the Richard King Mellon Foundation; Trustee, R.K. Mellon Family Trusts;
General Partner, Mellon Family Investment Company IV, V and VI; Director of
Aerostructures Corporation (since 1996) (2). His business address is Richard K.
Mellon and Sons, P.O.
Box RKM, Ligonier, PA 15658.
RICHARD L. CARPENTER - Trustee (since October 1999); Trustee of the
Portfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Director of The 59 Wall Street Fund, Inc. (since October 1999); Retired;
Director of Investments, Pennsylvania Public School Employees' Retirement System
(prior to December 1997). His business address is 12664 Lazy Acres Court, Nevada
City, CA 95959.
CLIFFORD A. CLARK - Trustee (since October 1999); Trustee of the
Porfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Director of The 59 Wall Street Fund, Inc. (since October 1999); Retired.
His business address is 42 Clowes Drive, Falmouth, MA 02540.
DAVID M. SEITZMAN - Trustee (since October 1999); Trustee of the
Porfolios; Director of The 59 Wall Street Fund, Inc. (since October 1999);
Physician, Private Practice. His business address is 7117 Nevis Road, Bethesda,
MD 20817.
J. ANGUS IVORY - Trustee (since October 1999); Trustee of the
Portfolios (since October 1999); Director of The 59 Wall Street Fund, Inc.
(since October 1999); Trustee of Dow Jones Islamic Market Index Portfolio (since
March 1999); Director of Brown Brothers Harriman Ltd., subsidiary of Brown
Brothers Harriman & Co.; Director of Old Daily Saddlery; Advisor, RAF Central
Fund; Committee Member, St. Thomas Hospital Pain Clinic (since 1999).
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") and 59 Wall Street Administrators, Inc. ("59
Wall Street Administrators").
JAMES E. HOOLAHAN - Vice President; Senior Vice President of SFG.
JOHN R. ELDER - Treasurer; Vice President of SFG (since April 1995);
Treasurer of Phoenix Family of Funds (prior to April 1995).
LINDA T. GIBSON - Secretary, Senior Vice President and Secretary of
SFG; Secretary of 59 Wall Street Distributors and 59 Wall Street Administrators.
SUSAN JAKUBOSKI - Assistant Treasurer; Assistant Secretary, Assistant
Treasurer and Vice President of Signature Financial Group (Cayman) Limited.
LINWOOD C. DOWNS - Assistant Treasurer; Senior Vice President and
Treasurer of SFG.
MOLLY S. MUGLER - Assistant Secretary; Legal Counsel and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.
CHRISTINE D. DORSEY - Assistant Secretary; Vice President of SFG (since
January 1996); Paralegal and Compliance Officer, various financial companies
(July 1992 to January 1996); Graduate Student, Bentley College (prior to
December 1994).
- ----------------------
* 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 of the Trust.
(1) The Portfolios consist of the following active investment
companies: U.S. Money Market Portfolio, U.S. Small Company
Portfolio and International Equity Portfolio and the following
inactive investment companies: U.S. Equity Portfolio, European
Equity Portfolio, Pacific Basin Equity Portfolio and
Inflation-Indexed Securities Portfolio.
(2) 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.
(3) Richard K. Mellon and Sons, Richard King Mellon Foundation, R.K. Mellon
Family Trusts, Mellon Family Investment Company IV, V and VI and
Aerostructures Corporation, with which Mr. Miltenberger is or has been
associated, are a private foundation, a private foundation, a trust, an
investment company and an aircraft manufacturer, respectively.
Each Trustee and officer listed above holds the equivalent position
with The 59 Wall Street Fund, Inc. The address of each officer is 21 Milk
Street, Boston, Massachusetts 02109. Messrs. Coolidge, Hoolahan, Elder and
Downs, and Mss. Gibson, Jakuboski, Mugler and Drapeau 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 of the Trust receive a base annual fee of $15,000 (except
the Chairman who receives a base annual fee of $20,000) and such base annual fee
is allocated among all series of the Trust, all series of The 59 Wall Street
Fund, Inc. and the Portfolios and any other active Portfolios having the same
Board of Trustees based upon their respective net assets. In addition, each
series of the Trust and The 59 Wall Street Fund, Inc., the Portfolios and any
other active Portfolios which has commenced operations pays an annual fee to
each Trustee of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Pension or Total
Aggregate Retirement Compensation
Compensation Benefits Accrued Estimated Annual from Fund
Name of Person, from the Fund as Part of Benefits upon Complex* Paid
Position Complex* Fund Expenses Retirement to Trustees
J.V. Shields, Jr., $19,854 none none $31,000
Trustee
Eugene P. Beard, $15,828 none none $26,000
Trustee
Richard L. Carpenter**, $11,970 none none $15,000
Trustee
Clifford A. Clark**, $11,970 none none $15,000
Trustee
David P. Feldman, $15,828 none none $26,000
Trustee
J. Angus Ivory**, $0 none none $0
Trustee
Alan G. Lowy, $15,828 none none $26,000
Trustee
Arthur D. Miltenberger, $15,828 none none $26,000
Trustee
David M. Seitzman**, $11,970 none none $15,000
Trustee
<FN>
* The Fund Complex consists of the Trust, The 59 Wall Street Fund, Inc. (which
currently consists of seven series) and seven Portfolios.
**Prior to October 22, 1999, these Trustees received no compensation from The
59 Wall Street Trust or The 59 Wall Street Fund, Inc.
</FN>
</TABLE>
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, 1999, the Trust's Trustees and officers as a group
owned less than 1% of the Fund's 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 except American
Saw and Manufacturing Co. owned 20,176,941 (12.30%) shares, James M. Clark, Jr.
owned 10,854,741 (6.6%) shares and Owen J. Roberts owned 10,032,919 (6.1%)shares
c/o Brown Brothers Harriman & Co., 59 Wall Street, New York, New York 10005. As
of that date, the Partners of Brown Brothers Harriman & Co. and their immediate
families owned 1,085,643 (0.66%) shares of the Fund. Brown Brothers Harriman &
Co. and its affiliates separately were able to direct the disposition of an
additional 20,526,739 (12.51%) shares of the Fund, as to which 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 February 12, 1991, 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 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 most recently
approved by the Independent Trustees on November 10, 1998. 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 0.15% of the Fund's
average daily net assets. For the fiscal years ended June 30, 1999, 1998 and
1997, the Fund incurred $308,367, $278,914 and $286,522, respectively, for
advisory services.
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 Trust 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".
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 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 Shareholder Servicing
Agreement, 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
Brown Brothers Harriman & Co. acts as Administrator of the Trust.
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, 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.
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. The Independent Trustees of the Trust most recently approved the
Trust's Administration Agreement on November 10, 1998. 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 outstanding voting securities"
(as defined in the 1940 Act) of the Trust (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 paid to Brown Brothers Harriman & Co. is
calculated daily and payable monthly at an annual rate equal to 0.10% of the
Fund's average daily net assets. For the fiscal years ended June 30, 1999, 1998
and 1997, the Fund incurred $205,578, $185,942 and $191,014, respectively, for
administrative services.
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 21 Milk Street, Boston,
Massachusetts 02109. 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.
DISTRIBUTOR
59 Wall Street Distributors acts as exclusive Distributor of shares of
the Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109.
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.
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. The Distribution Agreement was most
recently approved by the Independent Trustees of the Trust on February 9, 1999.
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). The Distribution Agreement is terminable with respect to the Fund by the
Trust's Trustees or shareholders of 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.
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.
SHAREHOLDER SERVICING AGENT
The Trust has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Fund, among other things: answers inquiries from shareholders of
and prospective investors in the Fund regarding account status and history, the
manner in which purchases and redemptions of Fund shares may be effected and
certain other matters pertaining to the Fund; assists shareholders of and
prospective investors in the Fund in designating and changing dividend options,
account designations and addresses; and provides such other related services as
the Trust or a shareholder of or prospective investor in the Fund may reasonably
request. For these services, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.225% of the
average daily net assets of the Fund represented by shares owned during the
period for which payment was being made by shareholders who did not hold their
shares with an Eligible Institution.
FINANCIAL INTERMEDIARIES
From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, 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, the Financial Intermediary receives such fees from the
Shareholder Servicing Agent as may be agreed upon from time to time between the
Shareholder Servicing Agent and such Financial Intermediary.
ELIGIBLE INSTITUTIONS
The Trust enters into eligible institution agreements with banks, brokers
and other financial institutions pursuant to which that financial institution as
agent for the Trust with respect to shareholders of and prospective investors in
the Fund who are customers of that financial institution 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, each financial
institution receives from the Fund an annual fee, computed daily and payable
monthly, equal to 0.225% 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 the financial institution was the holder or agent of record.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company ("State Street" or the "Custodian"),
225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is the Fund's
Custodian, 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 ownership of the Fund's shares.
INDEPENDENT AUDITORS
Deloitte & Touche LLP are the independent auditors for the Fund.
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, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus 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. It is
anticipated that the net asset value of each share of the Fund will remain
constant at $1.00 and, although no assurance can be given that it will be able
to do so on a continuing basis, the Trust employs specific investment policies
and procedures to accomplish this result.
The Fund's assets are valued by using the amortized cost method of
valuation. This method involves valuing a security at its cost at the time of
purchase and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. The market value of the Fund's portfolio
securities fluctuates on the basis of the creditworthiness of the issuers of
such securities and on the levels of interest rates generally. While the
amortized cost method provides certainty in valuation, it may result in periods
when the value so determined is higher or lower than the price the Fund would
receive if the security were sold.
Pursuant to a rule of the Securities and Exchange Commission, an
investment company may use the amortized cost method of valuation subject to
certain conditions and the determination that such method is in the best
interests of its shareholders. The use of amortized cost valuations for the Fund
is subject to the following conditions: (i) as a particular responsibility
within the overall duty of care owed to the Fund's shareholders, the Trustees
have established procedures reasonably designed, taking into account current
market conditions and the Fund's investment objective, to stabilize the net
asset value per share as computed for the purpose of distribution and redemption
at $1.00 per share; (ii) the procedures include periodic review by the Trustees,
as they deem appropriate and at such intervals as are reasonable in light of
current market conditions, of the relationship between the net asset value per
share using amortized cost and the net asset value per share based upon
available indications of market value with respect to such portfolio securities;
(iii) the Trustees will consider what steps, if any, should be taken if a
difference of more than 1/2 of 1% occurs between the two methods of valuation;
and (iv) the Trustees will take such steps as they consider appropriate, such as
changing the dividend policy, shortening the average portfolio maturity,
realizing gains or losses, establishing a net asset value per share by using
available market quotations, or reducing the value of the Fund's outstanding
shares, to minimize any material dilution or other unfair results which might
arise from differences between the two methods of valuation.
Such conditions also generally require that: (i) investments for the
Fund be limited to instruments which the Trustees determine present minimal
credit risks and which are of high quality as determined by any nationally
recognized statistical rating organization that is not an affiliated person of
the issuer of, or any issuer, guarantor or provider of credit support for, the
instrument, or, in the case of any instrument that is not so rated, is of
comparable quality as determined by the Investment Adviser under the general
supervision of the Trustees; (ii) a dollar-weighted average portfolio maturity
of not more than 90 days be maintained appropriate to the Fund's objective of
maintaining a stable net asset value of $1.00 per share and no instrument is
purchased with a remaining maturity of more than 13 months; (iii) the Fund's
available cash will be invested in such a manner as to reduce such maturity to
90 days or less as soon as is reasonably practicable, if the disposition of a
portfolio security results in a dollar-weighted average portfolio maturity of
more than 90 days; and (iv) no more than 5% of the Fund's total assets may be
invested in the securities of any one issuer (other than U.S. Government
securities).
It is expected that the Fund will have a positive net income at the
time of each determination thereof. If for any reason the Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in his or her
account which represents his or her share of the amount of such excess. Each
shareholder would be deemed to have agreed to such contribution in these
circumstances by his or her investment in the Fund.
COMPUTATION OF PERFORMANCE
The current and effective yields of the Fund may be used from time to time
in shareholder reports or other communications to shareholders or prospective
investors. Seven-day current yield is computed by dividing the net change in
account value (exclusive of capital changes) of a hypothetical pre-existing
account having a balance of one share at the beginning of a seven-day calendar
period by the value of that account at the beginning of that period, and
multiplying the return over the seven-day period by 365/7. For purposes of the
calculation, net change in account value reflects the value of additional shares
purchased with dividends from the original share and dividends declared on both
the original share and any such additional shares, but does not reflect realized
gains or losses or unrealized appreciation or depreciation. The Fund's current
yield for the seven-day calendar period ended June 30, 1999 was 3.61%. In
addition, the Trust may use an effective annualized yield quotation for the Fund
computed on a compounded basis by adding 1 to the base period return (calculated
as described above), raising the sum to a power equal to 365/7, and subtracting
1 from the result. Based upon this latter method, the Fund's effective
annualized yield for the seven-day calendar period ended June 30, 1999 was
3.55%.
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 a stated period of time, the Fund's yield does fluctuate, and
this should be considered when reviewing performance or making comparisons.
The Fund's "yield" and "effective yield" may be used from time to time
in shareholder reports or other communications to shareholders or prospective
investors. Both yield 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 1-month LIBOR) and to investments for
which reliable performance data is available. Performance information may also
include comparisons to averages, performance rankings or other information
prepared by recognized mutual fund statistical services. To the extent that
unmanaged indexes are so included, the same indexes will be used on a consistent
basis. The Funds' investment results as used in such communications are
calculated in a manner set forth below.
The "yield" of the Fund refers to the income generated by an investment
in the Fund over a seven-day period (which period will be stated). This income
is then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. 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.
PURCHASES AND REDEMPTIONS
A confirmation of each purchase and redemption transaction is issued on
execution of that transaction.
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'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.
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.
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.
A shareholder redeeming shares should be aware that the net asset value
of the Fund's shares may, in unusual circumstances, decline below $1.00 per
share. Accordingly, a redemption request may result in payment of a dollar
amount which differs from the number of shares redeemed.
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. 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.
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.
To maintain a constant $1.00 per share net asset value, the Trustees
may direct that the number of outstanding shares be reduced pro rata. If this
adjustment is made, it will reflect the lower market value of portfolio
securities and not realized losses.
Other Taxes. Assets of the Fund are invested in direct obligations of the
U.S. Government, the interest from which is specifically exempted from state and
local income taxes when held directly by taxpayers. All states by legislation or
regulation allow the character of interest income from direct obligations of the
U.S. Government received by a regulated investment company organized as a series
of a Massachusetts business trust, such as the Fund, to pass through to
shareholders. However, a shareholder of the Fund is subject to state and local
income taxes in most jurisdictions on the portion of dividends received from the
Fund which is derived from income from repurchase agreements. It is the
intention of the Investment Adviser to minimize the portion of the Fund's income
which is derived from repurchase agreements to the extent practicable. The Trust
intends to advise shareholders of the proportion of the Fund's dividends which
is derived from interest on direct obligations of the U.S. Government.
Dividends paid from the Fund which are derived from interest on direct
obligations of the U.S. Government are generally expected to be exempt from
income taxation in the District of Columbia and the following states:
Alabama Maine Ohio
Arizona Maryland Oklahoma
Arkansas Massachusetts Oregon
Colorado Michigan Pennsylvania
Delaware Minnesota Rhode Island
Georgia Missouri South Carolina
Hawaii Mississippi Tennessee
Idaho Montana Utah
Illinois Nebraska Vermont
Indiana New Hampshire Virginia
Iowa New Jersey West Virginia
Kansas New Mexico Wisconsin.
Kentucky North Carolina
Louisiana North Dakota
Such dividends are also generally expected to be so exempt in the
following states provided that a certain minimum percentage of the Fund's assets
consist of direct obligations of the U.S. Government. It is the Trust's
intention to meet these minimum percentage requirements, none of which is
greater than 50%.
California Connecticut New York.
There is currently no state income tax in the following states:
Alaska South Dakota Washington
Florida Texas Wyoming.
Nevada
Shareholders are urged to consult their tax advisors regarding the possible
exclusion for state and local income tax purposes of the portion of dividends
paid from the Fund which is derived from interest on direct obligations of the
U.S. Government.
Other Information. Dividends of net income and net short-term gains, if
any, are taxable to shareholders of the Fund as ordinary income, whether such
dividends are paid in cash or reinvested in additional shares. These
distributions are not eligible for the dividends-received deduction allowed to
corporate shareholders.
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.
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.
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 21 Milk Street,
Boston, Massachusetts 02109; its telephone number is (617) 423-0800. 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
four series.
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 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.
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 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, each Eligible Institution may vote any shares as to which that
Eligible Institution 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 that Eligible Institution is the agent
of record. Any shares so voted by an Eligible Institution are deemed represented
at the meeting for purposes of quorum requirements.
The Trustees of the Trust themselves have the power to alter the number
and the terms of office of the Trustees of the Trust, 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 of the Trust have been elected by the shareholders.
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 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 BROKERAGE TRANSACTIONS
Brown Brothers Harriman & Co., as Investment Adviser, places orders for
all purchases and sales of portfolio securities, enters into repurchase and
reverse repurchase agreements and executes loans of portfolio securities.
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.
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.
Although the Fund generally holds investments until maturity and does not
seek profits through short-term trading, it may dispose of any portfolio
security prior to its maturity if it believes such disposition advisable.
U.S. Treasury securities are generally traded 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
market maker for the securities involved. Purchases from dealers serving as
market makers may include a spread between the bid and asked price. The policy
of the Fund regarding purchases and sales of securities is that primary
consideration will be 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. 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 furnish research and other services to the Fund and 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.
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 the independent auditors.
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 Annual Report of the Fund dated June 30, 1999 has been filed with
the Securities and Exchange Commission pursuant to Section 30(b) of the 1940 Act
and Rule 30b2-1 thereunder and is hereby incorporated herein by reference. A
copy of the Annual Report will be provided, without charge, to each person
receiving this Statement of Additional Information.
<PAGE>
ws5669a
STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET TAX EXEMPT MONEY FUND
21 Milk Street, Boston, Massachusetts 02109
The 59 Wall Street Tax Exempt Money 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 Fund is a type of mutual fund commonly known as a tax exempt
money market fund. The Fund is designed to be a cost effective and convenient
means of making substantial investments in tax exempt money market instruments.
The Fund's investment objective is to achieve as high a level of current income
exempt from federal income taxes as is consistent with the preservation of
capital and the maintenance of liquidity. There can be no assurance that the
investment objective of the Fund will be achieved.
Brown Brothers Harriman & Co. is the investment adviser of the Fund
(the "Investment Adviser"). This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus dated November
1, 1999, a copy of which may be obtained from the Trust at the address noted
above.
The date of this Statement of Additional Information is November 1, 1999.
<TABLE>
<CAPTION>
Table of Contents
<S> <C> <C>
Cross-Reference to
Page Page in Prospectus
Investments
Investment Objective and Policies . . . . . 3 3-4
Investment Restrictions . . . . . . . . 7
Management
Trustees and Officers . . . . . 7
Investment Adviser . . . . . . . . . . 13 6
Administrators. . . . . . . . . . . . 14
Distributor . . . . . . . . . . . . 15
Shareholder Servicing Agent,
Financial Intermediaries and Eligible Institutions 16-17
Custodian, Transfer and Dividend Disbursing
Agent 17
Independent Auditors 17
Net Asset Value; Redemption in Kind . . . . 17-18 6
</TABLE>
<PAGE>
Table of Contents
Page
Computation of Performance . . . . . . . 19
Purchases and Redemptions 20
Federal Taxes . . . . . . . . . . . . 20-22
Description of Shares . . . . . . . . . 22-24
Portfolio Brokerage Transactions . . . . 25
Additional Information. . . . . . . . . . . . . . . 25-26
Financial Statements . . . . . . . . . 26
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of the Fund.
Municipal leases and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are issued by
state and local governments and authorities to acquire land or a wide variety of
equipment and facilities.
Generally, the Fund will not hold these obligations directly as a lessor of the
property, but will purchase a participation interest in a municipal obligation
from a bank or other third party. A participation interest gives the purchaser a
specified, undivided interest in the obligation in proportion to its purchased
interest in the total amount of the issue.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set forth
requirements that states or municipalities must meet to incur debt. These may
include voter referenda, interest rate limits, or public sale requirements.
Leases, installment purchases, or conditional sale contracts (which normally
provide for title to the leased asset to pass to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for the issuance
of debt. Many leases and contracts include Anon-appropriation clauses providing
that the governmental issuer has no obligation to make future payments under the
lease or contract unless money is appropriated for such purposes by the
appropriate legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance limitations. If a
municipality stops making payments or transfers its obligations to a private
entity, the obligation could lose value or become taxable.
Municipal market disruption risk. The value of municipal securities may be
affected by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Proposals to restrict
or eliminate the federal income tax exemption for interest on municipal
securities are introduced before Congress from time to time. Proposals also may
be introduced before state legislatures that would affect the state tax
treatment of a municipal fund=s distributions. If such proposals were enacted,
the availability of municipal securities and the value of a municipal fund's
holdings would be affected and the Trustees would reevaluate the Fund's
investment objectives and policies. Municipal bankruptcies are relatively rare,
and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies
are unclear and remain untested. Further, the application of state law to
municipal issuers could produce varying results among the states or among
municipal securities issuers within a state. These legal uncertainties could
affect the municipal securities market generally, certain specific segments of
the market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all of
the municipal securities held by the Fund, making it more difficult for the Fund
to maintain a stable net asset value per share.
Education. In general, there are two types of education-related bonds; those
issued to finance projects for public and private colleges and universities, and
those representing pooled interests in student loans. Bonds issued to supply
educational institutions with funds are subject to the risk of unanticipated
revenue decline, primarily the result of decreasing student enrollment or
decreasing state and federal funding. Among the factors that may lead to
declining or insufficient revenues are restrictions on students' ability to pay
tuition, availability of state and federal funding, and general economic
conditions. Student loan revenue bonds are generally offered by state (or
substate) authorities or commissions and are backed by pools of student loans.
Underlying student loans may be guaranteed by state guarantee agencies and may
be subject to reimbursement by the United States Department of Education through
its guaranteed student loan program. Others may be private, uninsured loans made
to parents or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be applied to
redemption of bonds or may be used to re-lend, depending on program latitude and
demand for loans. Cash flows supporting student loan revenue bonds are impacted
by numerous factors, including the rate of student loan defaults, seasoning of
the loan portfolio, and student repayment deferral periods of forbearance. Other
risks associated with student loan revenue bonds include potential changes in
federal legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
Electric utilities. The electric utilities industry has been experiencing, and
will continue to experience, increased competitive pressures. Federal
legislation in the last two years will open transmission access to any
electricity supplier, although it is not presently known to what extent
competition will evolve. Other risks include: (a) the availability and cost of
fuel, (b) the availability and cost of capital, (c) the effects of conservation
on energy demand, (d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local regulations, (e)
timely and sufficient rate increase, and (f) opposition to nuclear power.
Health care. The health care industry is subject to regulatory action by a
number of private and governmental agencies, including federal, state, and local
governmental agencies. A major source of revenues for the health care industry
is payments from the Medicare and Medicaid programs. As a result, the industry
is sensitive to legislative changes and reductions in governmental spending for
such programs. Numerous other factors may affect the industry, such as general
and local economic conditions; demand for services; expenses (including
malpractice insurance premiums); and competition among health care providers. In
the future, the following elements may adversely affect health care facility
operations: adoption of legislation proposing a national health insurance
program; other state or local health care reform measures; medical and
technological advances which dramatically alter the need for health services or
the way in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by employers,
insurers, and governmental agencies to reduce the costs of health insurance and
health care services.
Housing. Housing revenue bonds are generally issued by a state, county, city,
local housing authority, or other public agency. They generally are secured by
the revenues derived from mortgages purchased with the proceeds of the bond
issue. It is extremely difficult to predict the supply of available mortgages to
be purchased with the proceeds of an issue or the future cash flow from the
underlying mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner repayments
will create an irregular cash flow. Many factors may affect the financing of
multi-family housing projects, including acceptable completion of construction,
proper management, occupancy and rent levels, economic conditions, and changes
to current laws and regulations.
Transportation. Transportation debt may be issued to finance the construction of
airports, toll roads, highways, or other transit facilities. Airport bonds are
dependent on the general stability of the airline industry and on the stability
of a specific carrier who uses the airport as a hub. Air traffic generally
follows broader economic trends and is also affected by the price and
availability of fuel. Toll road bonds are also affected by the cost and
availability of fuel as well as toll levels, the presence of competing roads and
the general economic health of an area. Fuel costs and availability also affect
other transportation-related securities, as do the presence of alternate forms
of transportation, such as public transportation.
Water and sewer. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack of
water supply due to insufficient rain, run-off, or snow pack is a concern that
has led to past defaults. Further, public resistance to rate increases, costly
environmental litigation, and federal environmental mandates are challenges
faced by issuers of water and sewer bonds.
Put features entitle the holder to sell a security back to the issuer or a third
party at any time or at specified intervals. In exchange for this benefit, the
Fund may accept a lower interest rate. Securities with put features are subject
to the risk that the put provider is unable to honor the put feature (purchase
the security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other entities.
Demand features, standby commitments, and tender options are types of put
features.
Repurchase Agreements. All repurchase agreement transactions are
collateralized by U.S. Treasury securities and are entered into only with
"primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government securities. A shareholder of the Fund is subject to state and
local income taxes in most jurisdictions on the portion of dividends received
from the Fund which is derived from income from repurchase agreements. It is the
intention of the Investment Adviser to minimize the portion of the Fund's income
which is derived from repurchase agreements to the extent practicable.
Participation Certificates. A Participasttion Certificate gives the Fund
an undivided interest in the municipal obligation in the proportion that the
Fund's participation interest bears to the total principal amount of the
municipal obligation and provides the demand repurchase feature described below.
The interest rate generally is adjusted periodically, and the holder can sell
back to the issuer after a specified notice period. If interest rates rise or
fall, the rates on participation certificates and other variable rate
instruments generally will be readjusted. As a result, these instruments do not
offer the same opportunity for capital appreciation or loss as fixed rate
instruments.
Where the institution issuing the participation does not meet the Fund's
eligibility criteria, the participation is backed by an irrevocable letter of
credit or guaranty of a bank (which may be the bank that issued the
Participation Certification, a bank issuing a confirming letter of credit to
that of the issuing bank, or a bank serving as agent of the issuing bank with
respect to the possible repurchase of the certification of participation or a
bank serving as agent of the issuer with respect to the possible repurchase of
the issue) or insurance policy of an insurance company that the Board of
Trustees of the Fund has determined meets the prescribed quality standards for
the Fund. The Fund has the right to sell the Participation Certificate back to
the institution and, where applicable, draw on the letter of credit, Guarantee
or insurance after no more than 30 days' notice either at any time or at
specified intervals no exceeding 397 days (depending on the terms of the
participation), for all or any part of the full principal amount of the Fund's
participation interest in the security, plus accrued interest. The Fund intends
to exercise the demand only (1) upon a default under the terms of the bond
documents, (2) as needed to provide liquidity to the Fund in order to make
redemptions of Fund shares, or (3) to maintain a high quality investment
portfolio. The institutions issuing the Participation Certificates will retain a
service and letter of credit fee (where applicable) and a fee for providing the
demand repurchase feature, in an amount equal to the excess of the interest paid
on the instruments over the negotiated yield at which the participations were
purchased by the Fund. The total fees generally range from 5% to 15% of the
applicable prime.
When-Issued and Delayed Delivery Securities. The Fund may purchase
municipal securities 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 and the Fund will set aside the assets to pay
for these securities at the time of the agreement. 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.
Zero Coupon Bonds. The Fund may invest in zero coupon bonds. These are
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.
Lease Obligation Bonds. The Fund may invest in lease obligation bonds.
These ar 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
Variable and Floating Rate Instruments. The Fund may invest in variable
rate and floating rate instruments. These are 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.
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").
As a fundamental policy, at least 80% of the Fund's assets are invested
in securities the interest on which is exempt from federal income taxation.
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 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) or reverse repurchase agreements, and except that assets may
be pledged to secure letters of credit solely for the purpose of participating
in a captive insurance company sponsored by the Investment Company Institute;
(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;
(3) write, purchase or sell any put or call option or any combination
thereof;
(4) underwrite securities issued by other persons except insofar as it
may technically be deemed an underwriter under the Securities Act of 1933, as
amended in selling a portfolio security;
(5) 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 net 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;
(6) 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 the its
total assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days);
(7) 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 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);
(8) 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);
(9) concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of its investment objective, up to 25%
of its assets, at market value at the time of each investment, may be invested
in any one industry; or
(10) 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.
Non-Fundamental Restrictions. The Fund may not as a matter of operating
policy (except that the Fund 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) purchase securities of any investment company
if such purchase at the time thereof would cause more than 10% of 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; or (ii) invest more than 5% of the
Fund's assets may be invested in repurchase agreements although it is the
intention of the Investment Adviser to do so only when other means of
efficiently investing cash flows are unavailable. or (iii) invest more than 10%
of its net assets (taken at the greater of cost or market value) in restricted
securities. These policies are not fundamental and may be changed without
shareholder approval.
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.
The Fund is classified as "diversified" under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; securities issued
by the U.S. Government, its agencies and instrumentalities; and other securities
limited in respect of any one issuer to an amount no greater than 5% of the
Fund's total assets (other than securities issued by the U.S. Government, its
agencies or instrumentalities).
The Investment Adviser does not currently intend to invest the Fund's
assets in municipal securities whose interest is subject to federal income tax
or in municipal securities whose interest is subject to the federal alternative
minimum tax.
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
to 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.
The Trustees and executive officers of the Trust, their principal
occupations 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.; Trustee of the Portfolios(1) (since October 1999);
Managing Director, Chairman and Chief Executive Officer of Shields & Company;
Chairman of Capital Management Associates, Inc.; Director of Flowers Industries,
Inc.(2) Vice Chairman and Trustee of New York Racing Association. His business
address is Shields & Company, 140 Broadway, New York, NY 10005.
EUGENE P. BEARD** - Trustee; Director of The 59 Wall Street Fund, Inc.;
Trustee of the Portfolios (since October 1999); 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.
DAVID P. FELDMAN** - Trustee; Director of The 59 Wall Street Fund,
Inc.; Trustee of the Portfolios (since October 1999); Retired; Vice President
and Investment Manager - AT&T Investment Management Corporation (prior to
October 1997); Director of Dreyfus Mutual Funds, Jeffrey Co. and Heitman
Financial. His business address is 3 Tall Oaks Drive, Warren, NJ 07059.
ALAN G. LOWY** - Trustee; Director of The 59 Wall Street Fund, Inc.;
Trustee of the Portfolios (since October 1999); Private Investor; 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.; Trustee of the Portfolios (since October 1999); Retired, Executive
Vice President and Chief Financial Officer of Richard K. Mellon and Sons (prior
to June 1998); Treasurer of Richard King Mellon Foundation (prior to June 1998);
Vice President of the Richard King Mellon Foundation; Trustee, R.K. Mellon
Family Trusts; General Partner, Mellon Family Investment Company IV, V and VI;
Director of Aerostructures Corporation (since 1996)(2). His business address is
Richard K.
Mellon and Sons, P.O. Box RKM, Ligonier, PA 15658.
RICHARD L. CARPENTER** - Trustee (since October 1999); Trustee of the
Portfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Director of The 59 Wall Street Fund, Inc. (since October 1999); Retired;
Director of Investments, Pennsylvania Public School Employees' Retirement System
(prior to December 1997).
His business address is 12664 Lazy Acres Court, Nevada City, CA 95959.
CLIFFORD A. CLARK** - Trustee (since October 1999); Trustee of the
Porfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Director of The 59 Wall Street Fund, Inc. (since October 1999); Retired.
His business address is 42 Clowes Drive, Falmouth, MA 02540.
DAVID M. SEITZMAN** - Trustee (since October 1999); Trustee of the
Porfolios; Director of The 59 Wall Street Fund, Inc. (since October 1999);
Physician, Private Practice. His business address is 7117 Nevis Road, Bethesda,
MD 20817.
J. ANGUS IVORY - Trustee (since October 1999); Trustee of the
Portfolios (since October 1999); Director of The 59 Wall Street Fund, Inc.
(since October 1999); Trustee of Dow Jones Islamic Market Index Portfolio (since
March 1999); Director of Brown Brothers Harriman Ltd., subsidiary of Brown
Brothers Harriman & Co.; Director of Old Daily Saddlery; Advisor, RAF Central
Fund; Committee Member, St. Thomas Hospital Pain Clinic (since 1999).
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") and 59 Wall Street Administrators, Inc. ("59
Wall Street Administrators").
JAMES E. HOOLAHAN - Vice President; Senior Vice President of SFG.
JOHN R. ELDER - Treasurer; Vice President of SFG; Treasurer of Phoenix
Family of Funds (prior to April 1995).
LINDA T. GIBSON - Secretary, Senior Vice President and Secretary of
SFG; Secretary of 59 Wall Street Distributors and 59 Wall Street Administrators.
SUSAN JAKUBOSKI - Assistant Treasurer; Assistant Secretary, Assistant
Treasurer and Vice President of Signature Financial Group (Cayman) Limited.
LINWOOD C. DOWNS - Assistant Treasurer; Senior Vice President and
Treasurer of SFG.
MOLLY S. MUGLER - Assistant Secretary; Legal Counsel and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.
CHRISTINE D. DORSEY - Assistant Secretary; Vice President of SFG (since
January 1996); Paralegal and Compliance Officer, various financial companies
(July 1992 to January 1996); Graduate Student, Bentley College (prior to
December 1994).
- ----------------------
* 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 of the Trust.
(1) The Portfolios consist of the following active investment
companies: U.S. Money Market Portfolio, U.S. Small Company
Portfolio and International Equity Portfolio and the following
inactive investment companies: U.S. Equity Portfolio, European
Equity Portfolio, Pacific Basin Equity Portfolio and
Inflation-Indexed Securities Portfolio.
(2) 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.
(3) Richard K. Mellon and Sons, Richard King Mellon Foundation, R.K. Mellon
Family Trusts, Mellon Family Investment Company IV, V and VI and
Aerostructures Corporation, with which Mr. Miltenberger is or has been
associated, are a private foundation, a private foundation, a trust, an
investment company and an aircraft manufacturer, respectively.
Each Trustee and officer listed above holds the equivalent position with
The 59 Wall Street Fund, Inc. The address of each officer is 21 Milk Street,
Boston, Massachusetts 02109. Messrs. Coolidge, Hoolahan, Elder and Downs, and
Mss. Gibson, Jakuboski, Mugler and Drapeau 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 of the Trust receive a base annual fee of $15,000 (except
the Chairman who receives a base annual fee of $20,000) and such base annual fee
is allocated among all series of the Trust, all series of The 59 Wall Street
Fund, Inc. and the Portfolios and any other active Portfolios having the same
Board of Trustees based upon their respective net assets. In addition, each
series of the Trust and The 59 Wall Street Fund, Inc., the Portfolios and any
other active Portfolios which has commenced operations pays an annual fee to
each Trustee of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Pension or Total
Aggregate Retirement Compensation
Compensation Benefits Accrued Estimated Annual from Fund
Name of Person, from the Fund as Part of Benefits upon Complex* Paid
Position Complex* Fund Expenses Retirement to Trustees
J.V. Shields, Jr., $19,854 none none $31,000
Trustee
Eugene P. Beard, $15,828 none none $26,000
Trustee
Richard L. Carpenter**, $11,970 none none $15,000
Trustee
Clifford A. Clark**, $11,970 none none $15,000
Trustee
David P. Feldman, $15,828 none none $26,000
Trustee
J. Angus Ivory**, $0 none none $0
Trustee
Alan G. Lowy, $15,828 none none $26,000
Trustee
Arthur D. Miltenberger, $15,828 none none $26,000
Trustee
David M. Seitzman**, $11,970 none none $15,000
Trustee
<FN>
* The Fund Complex consists of the Trust, The 59 Wall Street Fund, Inc. which
currently consists of seven series and seven Portfolios.
**Prior to October 22, 1999, these Trustees received no compensation from
The 59 Wall Street Trust or The 59 Wall Street Fund, Inc.
</FN>
</TABLE>
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, 1999, the Trust's Trustees and officers as a group
owned less than 1% of the Fund's 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 except Thomas R.
Galloway, Sr. owned 3,912,443 (16.58%) shares, Nashayte Associates L.P. owned
2,774,374 (11.76%) shares, F M Supper TA owned 2,725,000 (11.55%) shares,
Herbert Schoenfeld IRR Trust owned 1,384,411 (5.87%) shares, Knipp Family Trust
owned 1,349,000 (5.72%) shares and Anthony J. Prevett owned 1,329,743 (5.64%)
shares c/o Brown Brothers Harriman & Co., 59 Wall Street, New York, New York
10005. As of that date, the Partners of Brown Brothers Harriman & Co. and their
immediate families owned 327,473 (1.39%) shares of the Fund. Brown Brothers
Harriman & Co. and its affiliates separately were able to direct the disposition
of an additional 14,637,011 (62.04%) shares of the Fund, as to which 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 February 12, 1991, 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 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 most recently
approved by the Independent Trustees on February 9, 1999. 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 0.15% of the Fund's average
daily net assets. For the period February 16, 1999 through June 30, 1999, the
Fund incurred $4,948 for advisory services.
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 Trust 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".
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 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 Shareholder Servicing
Agreement, 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
Brown Brothers Harriman & Co. acts as Administrator of the Trust.
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, 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.
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 of the Trust most recently
approved the Trust's Administration Agreement on February 9, 1999. 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 outstanding
voting securities" (as defined in the 1940 Act) of the Trust (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 paid to Brown Brothers Harriman & Co. is calculated
daily and payable monthly at an annual rate equal to 0.10% of the Fund's average
daily net assets. For the period February 16, 1999 through June 30, 1999, the
Fund incurred $3,299 for administrative services.
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 21 Milk Street, Boston,
Massachusetts 02109. 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 andclerical 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.
DISTRIBUTOR
59 Wall Street Distributors acts as exclusive Distributor of shares of
the Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109.
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.
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 9, 1999. 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
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.
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.
SHAREHOLDER SERVICING AGENT
The Trust has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Fund, among other things: answers inquiries from shareholders of
and prospective investors in the Fund regarding account status and history, the
manner in which purchases and redemptions of Fund shares may be effected and
certain other matters pertaining to the Fund; assists shareholders of and
prospective investors in the Fund in designating and changing dividend options,
account designations and addresses; and provides such other related services as
the Trust or a shareholder of or prospective investor in the Fund may reasonably
request. 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 shareholders who did not hold their
shares with an Eligible Institution.
FINANCIAL INTERMEDIARIES
From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, 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, the Financial Intermediary receives such fees from the
Shareholder Servicing Agent as may be agreed upon from time to time between the
Shareholder Servicing Agent and such Financial Intermediary.
ELIGIBLE INSTITUTIONS
The Trust enters into eligible institution agreements with banks, brokers
and other financial institutions pursuant to which that financial institution as
agent for the Trust with respect to shareholders of and prospective investors in
the Fund who are customers of that financial institution 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, each financial
institution 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 the financial institution was the holder or agent of record.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company ("State Street" or the "Custodian"),
225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is the Fund's
Custodian, 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 ownership of the Fund's shares.
INDEPENDENT AUDITORS
Deloitte & Touche LLP, Boston, Massachusetts are the independent auditors
for the Fund.
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, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Columbus 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. It is
anticipated that the net asset value of each share of the Fund will remain
constant at $1.00 and, although no assurance can be given that it will be able
to do so on a continuing basis, the Trust employs specific investment policies
and procedures to accomplish this result.
The Fund's assets are valued by using the amortized cost method of
valuation. This method involves valuing a security at its cost at the time of
purchase and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. The market value of the Fund's portfolio
securities fluctuates on the basis of the creditworthiness of the issuers of
such securities and on the levels of interest rates generally. While the
amortized cost method provides certainty in valuation, it may result in periods
when the value so determined is higher or lower than the price the Fund would
receive if the security were sold.
Pursuant to a rule of the Securities and Exchange Commission, an
investment company may use the amortized cost method of valuation subject to
certain conditions and the determination that such method is in the best
interests of its shareholders. The use of amortized cost valuations for the Fund
is subject to the following conditions: (i) as a particular responsibility
within the overall duty of care owed to the Fund's shareholders, the Trustees
have established procedures reasonably designed, taking into account current
market conditions and the Fund's investment objective, to stabilize the net
asset value per share as computed for the purpose of distribution and redemption
at $1.00 per share; (ii) the procedures include periodic review by the Trustees,
as they deem appropriate and at such intervals as are reasonable in light of
current market conditions, of the relationship between the net asset value per
share using amortized cost and the net asset value per share based upon
available indications of market value with respect to such portfolio securities;
(iii) the Trustees will consider what steps, if any, should be taken if a
difference of more than 1/2 of 1% occurs between the two methods of valuation;
and (iv) the Trustees will take such steps as they consider appropriate, such as
changing the dividend policy, shortening the average portfolio maturity,
realizing gains or losses, establishing a net asset value per share by using
available market quotations, or reducing the value of the Fund's outstanding
shares, to minimize any material dilution or other unfair results which might
arise from differences between the two methods of valuation.
Such conditions also generally require that: (i) investments for the Fund
be limited to instruments which the Trustees determine present minimal credit
risks and which are of high quality as determined by any nationally recognized
statistical rating organization that is not an affiliated person of the issuer
of, or any issuer, guarantor or provider of credit support for, the instrument,
or, in the case of any instrument that is not so rated, is of comparable quality
as determined by the Investment Adviser under the general supervision of the
Trustees; (ii) a dollar-weighted average portfolio maturity of not more than 90
days be maintained appropriate to the Fund's objective of maintaining a stable
net asset value of $1.00 per share and no instrument is purchased with a
remaining maturity of more than 13 months; (iii) the Fund's available cash will
be invested in such a manner as to reduce such maturity to 90 days or less as
soon as is reasonably practicable, if the disposition of a portfolio security
results in a dollar-weighted average portfolio maturity of more than 90 days;
and (iv) no more than 5% of the Fund's total assets may be invested in the
securities of any one issuer (other than U.S. Government securities).
It is expected that the Fund will have a positive net income at the time
of each determination thereof. If for any reason the Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in his or her
account which represents his or her share of the amount of such excess. Each
shareholder would be deemed to have agreed to such contribution in these
circumstances by his or her investment in the Fund.
COMPUTATION OF PERFORMANCE
The current and effective yields of the Fund may be used from time to time
in shareholder reports or other communications to shareholders or prospective
investors. Seven-day current yield is computed by dividing the net change in
account value (exclusive of capital changes) of a hypothetical pre-existing
account having a balance of one share at the beginning of a seven-day calendar
period by the value of that account at the beginning of that period, and
multiplying the return over the seven-day period by 365/7. For purposes of the
calculation, net change in account value reflects the value of additional shares
purchased with dividends from the original share and dividends declared on both
the original share and any such additional shares, but does not reflect realized
gains or losses or unrealized appreciation or depreciation. The Fund's current
yield for the seven-day calendar period ended June 30, 1999 was 3.32%. In
addition, the Trust may use an effective annualized yield quotation for the Fund
computed on a compounded basis by adding 1 to the base period return (calculated
as described above), raising the sum to a power equal to 365/7, and subtracting
1 from the result. Based upon this latter method, the Fund's effective
annualized yield for the seven-day calendar period ended June 30, 1999 was
3.27%.
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 a
stated period of time, the Fund's yield does fluctuate, and this should be
considered when reviewing performance or making comparisons.
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 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
1-month LIBOR) and to investments for which reliable performance data is
available. Performance information may also include comparisons to averages,
performance rankings or other information prepared by recognized mutual fund
statistical services. To the extent that unmanaged indexes are so included, the
same indexes will be used on a consistent basis. The Fund's investment results
as used in such communications are calculated in the manner set forth below.
The "yield" of the Fund refers to the income generated by an investment
in the Fund over a seven-day period (which period will be stated). This income
is then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. 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.
PURCHASES AND REDEMPTIONS
A confirmation of each purchase redemption transaction is issued on
execution of that transaction.
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.
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.
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.
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.
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. 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 meet such
requirements.
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.
To maintain a constant $1.00 per share net asset value, the Trustees may
direct that the number of outstanding shares be reduced pro rata. If this
adjustment is made, it will reflect the lower market value of portfolio
securities and not realized losses.
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. 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 not intended, it is possible that the Fund may realize
short-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.
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.
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 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.
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.
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. 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.
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 21 Milk Street, Boston,
Massachusetts 02109; its telephone number is (617) 423-0800. 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
four series.
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 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.
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 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, each Eligible Institution may vote any shares as to which that
Eligible Institution 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 that Eligible Institution is the agent
of record. Any shares so voted by an Eligible Institution are deemed represented
at the meeting for purposes of quorum requirements.
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.
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. 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
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 BROKERAGE TRANSACTIONS
Brown Brothers Harriman & Co., as Investment Adviser, places orders for
all purchases and sales of portfolio securities, enters into repurchase and
reverse repurchase agreements and executes loans of portfolio securities.
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.
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.
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.
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 the independent auditors.
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 Annual Report of the Fund for the period February 16, 1999 through
June 30, 1999 has been filed with the Securities and Exchange Commission
pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder and is
hereby incorporated herein by reference. A copy the Annual Report will be
provided, without charge, to each person receiving this Statement of Additional
Information.
<PAGE>
PART C
OTHER INFORMATION
ITEM 23 EXHIBITS:
1(a) Amended and Restated Declaration of Trust of the
Registrant (10)
1(b) Designation of Series of The 59 Wall Street U.S. Treasury Money
Fund (10)
1(c) Designation of Series of The 59 Wall Street Tax Free Short/Intermediate
Fixed Income Fund (10)
1(d) Designation of Series of The 59 Wall Street Tax Exempt Money
Fund (11)
2 By-Laws of the Registrant (10)
3 Not Applicable
4 Not Applicable
5(a) Advisory Agreement with respect to The 59 Wall Street Money
Market Fund (7)
(b) Advisory Agreement with respect to The 59 Wall Street U.S.
Treasury Money Fund (10)
(c) Advisory Agreement with respect to The 59 Wall Street Tax
Free Short/Intermediate Fixed Income Fund (8)
(d) Advisory Agreement with respect to The 59 Wall Street Tax Exempt
Money Fund (11)
6 Distribution Agreement (2)
7 Not Applicable
8(a) Custody Agreement (1)
(b) Transfer Agency Agreement (1)
9(a) Amended and Restated Administration Agreement (9)
(b) Subadministrative Services Agreement (9)
(c) License Agreement (2)
(d) Shareholder Servicing Agreement (9)
(e) Eligible Institution Agreement (9)
(f) Form of Expense Reimbursement Agreement with respect to
The 59 Wall Street Money Market Fund (6)
(g) Form of Expense Reimbursement Agreement with respect to
The 59 Wall Street U.S. Treasury Money Fund (6)
(h) Form of Expense Reimbursement Agreement with respect to
The 59 Wall Street Tax Free Short/Intermediate Fixed Income
Fund (7)
(i) Expense Reimbursement Agreement with respect to
The 59 Wall Street Tax Exempt Money Fund (11)
10 Opinion of Counsel (including consent) (12)
11 Consent of independent auditors (12)
12 Not Applicable
13 Purchase Agreement (1)
14 Not Applicable
15 Not Applicable
16(a) Schedule of Computation of Performance Quotations
with respect to The 59 Wall Street Money Market Fund (5)
(b) Schedule of Computation of Performance Quotations
with respect to The 59 Wall Street U.S. Treasury Money
Fund (6)
(c) Schedule of Computation of Performance Quotations with
respect to The 59 Wall Street Tax Free
Short/Intermediate Fixed Income Fund (4)
17 Financial Data Schedule. (12)
(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 with Amendment No. 30 to this Registration Statement
on October 27, 1995.
(11) Filed with Amendment No. 41 to this Registration Statement
on November 30, 1998.
(12) Filed herewith.
ITEM 24. 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 25. 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.
<PAGE>
ITEM 26. 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 27. 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., 21 Milk Street, Boston, MA
02109. 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.
JOHN R. ELDER: Assistant Treasurer of 59 Wall Street Distributors. Treasurer
of the Registrant.
LINDA T. GIBSON: Secretary of 59 Wall Street Distributors. Secretary
of the Registrant.
MOLLY S. MUGLER: Assistant Secretary of 59 Wall Street Distributors. Assistant
Secretary of Registrant.
CHRISTINE D. DORSEY: Assistant Secretary of the Registrant.
SUSAN JAKUBOSKI: Assistant Treasurer of 59 Wall Street Distributors. Assistant
Treasurer of the Registrant.
LINWOOD C. DOWNS: Treasurer of 59 Wall Street Distributors. Assistant
Treasurer of the 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.
(c) Not Applicable.
ITEM 28. 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.
21 Milk Street
Boston, MA 02109
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 29. 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 30. 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 29th day of October, 1999.
THE 59 WALL STREET TRUST
By /s/PHILIP W. COOLIDGE
(Philip W. Coolidge, President)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Trustee and
/s/JOSEPH V. SHIELDS, JR. Chairman of the Board October 29, 1999
(J.V. Shields, Jr.)
President (Principal
/s/PHILIP W. COOLIDGE Executive Officer) October 29, 1999
(Philip W. Coolidge)
/s/EUGENE P. BEARD Trustee October 29, 1999
(Eugene P. Beard)
/s/DAVID P. FELDMAN Trustee October 29, 1999
(David P. Feldman)
/s/ARTHUR D. MILTENBERGER Trustee October 29, 1999
(Arthur D. Miltenberger)
/s/ALAN G. LOWY Trustee October 29, 1999
(Alan G. Lowy)
Treasurer
/s/ JOHN R. ELDER (Principal Financial and
(John R.Elder) Principal Accounting
Officer) October 29, 1999
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
EX-99.B10 Opinions of Counsel
EX-99.B11 Consent of independent auditors
EX-99.B27(i)-(ii) Financial Data Schedules
October 28, 1999
The 59 Wall Street Trust
21 Milk Street
Boston, MA 02109
Ladies and Gentlemen:
This opinion is being furnished in connection with the filing of
post-effective amendment No. 12 to the registration statement on Form N-1A under
the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Securities Act of 1933, as amended (the "1933 Act"), of The 59 Wall Street
Trust, a Massachusetts business trust (the "Trust"). Please be advised that
pursuant to Rule 24f-2 under the 1940 Act an indefinite number of Shares of
Beneficial Interest (par value $0.001 per share) (the "Shares") of the Trust's
series The 59 Wall Street U.S. Treasury Money Fund (the "Fund"), have been
registered under the 1933 Act.
This opinion is limited solely to the laws of the Commonwealth of
Massachusetts as applied by courts in such Commonwealth. I understand that the
foregoing limitation is acceptable to you.
Based upon and subject to the foregoing, please be advised that it is my
opinion that the Shares outstanding and registered under the 1933 Act as of
October 28, 1999 are legally issued and are fully paid and nonassessable, except
that, as set forth in the Trust's registration statement as currently in effect
filed with the Securities and Exchange Commission pursuant to the 1933 Act,
shareholders of the Fund may under certain circumstances be held personally
liable for the Fund's obligations.
Very truly yours,
Philip W. Coolidge
WS5817
<PAGE>
October 28, 1999
The 59 Wall Street Trust
21 Milk Street
Boston, MA 02109
Ladies and Gentlemen:
This opinion is being furnished in connection with the filing of
post-effective amendment No. 12 to the registration statement on Form N-1A
under the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Securities Act of 1933, as amended (the "1933 Act"), of The 59 Wall Street
Trust, a Massachusetts business trust (the "Trust"). Please be advised that
pursuant to Rule 24f-2 under the 1940 Act an indefinite number of Shares of
Beneficial Interest (par value $0.001 per share) (the "Shares") of the Trust's
series The 59 Wall Street Tax Exempt Money Fund (the "Fund"), have been
registered under the 1933 Act.
This opinion is limited solely to the laws of the Commonwealth of
Massachusetts as applied by courts in such Commonwealth. I understand that the
foregoing limitation is acceptable to you.
Based upon and subject to the foregoing, please be advised that it is
my opinion that the Shares outstanding and registered under the 1933 Act as of
October 28, 1999 are legally issued and are fully paid and nonassessable, except
that, as set forth in the Trust's registration statement as currently in effect
filed with the Securities and Exchange Commission pursuant to the 1933 Act,
shareholders of the Fund may under certain circumstances be held personally
liable for the Fund's obligations.
Very truly yours,
Philip W. Coolidge
WS5817
EXHIBIT 11
Independent Auditors' Consent
We consent to the use in this Post-Effective Amendment No. 12 to Registration
Statement (No. 33-39020) of The 59 Wall Street Trust on behalf of The 59 Wall
Street U.S. Treasury Money Fund and The 59 Wall Street Tax Exempt Money Fund
(two of the series constituting The 59 Wall Street Trust) of our reports dated
August 13, 1999 incorporated by reference 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 28, 1999
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This schedule contains summary information from the 59 Wall Street U.S.
Treasury Money Market Fund Annual Report, dated June 30, 1999, and is
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<NAME> The 59 Wall Street Trust
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<GROSS-EXPENSE> 1,265,268
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<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary information from the 59 Wall Street Tax Exempt
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</LEGEND>
<CIK> 0000722575
<NAME> The 59 Wall Street Trust
<SERIES>
<NUMBER> 4
<NAME> Tax Exempt Money Fund
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<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> FEB-22-1999
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<INVESTMENTS-AT-COST> 13,054,704
<INVESTMENTS-AT-VALUE> 13,054,704
<RECEIVABLES> 1,614,622
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<TOTAL-ASSETS> 14,669,326
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<OTHER-ITEMS-LIABILITIES> 14,869
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<NET-CHANGE-FROM-OPS> 86,781
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<DISTRIBUTIONS-OF-INCOME> (88,486)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,042,736
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<SHARES-REINVESTED> 48,744
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<GROSS-EXPENSE> 23,507
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