=====================================================
SEC File Nos. 2-97999
811-4309
=====================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 23
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 19
THE GROWTH FUND OF WASHINGTON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
1101 VERMONT AVENUE, N.W.
WASHINGTON, D.C. 20005
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(202) 842-5665
HARRY J. LISTER
WASHINGTON MANAGEMENT CORPORATION
1101 VERMONT AVENUE, N.W.
WASHINGTON, D.C. 20005
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
ALLAN S. MOSTOFF
DECHERT PRICE & RHOADS
1500 K STREET, N.W.
WASHINGTON, D.C. 20005
(COUNSEL FOR THE REGISTRANT)
THE REGISTRANT INTENDS TO FILE ITS 24F-2 NOTICE FOR FISCAL 1998 ON OR ABOUT
MARCH 3, 1999.
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
/X/ IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE ON MAY 1, 1999,
PURSUANT TO PARAGRAPH (A) OF RULE 485.
===============================================
PROSPECTUS MAY 1, 1999
CHASE VISTA
THE GROWTH FUND
OF WASHINGTON
Neither the Securities and Exchange Commission nor any state securities
commision has approved securities of this Fund or determined if this prospectus
is accurate or complete. It is a crime to state otherwise.
PLX-1-299
<CHASE LOGO>
<PAGE>
<TABLE>
<S> <C>
INFORMATION ABOUT THE FUND 1
THE FUND'S OBJECTIVE AND MAIN INVESTMENT
STRATEGY 1
MAIN RISKS OF INVESTING IN THE FUND 3
FEES AND EXPENSES 5
FUND MANAGEMENT 6
HOW YOUR ACCOUNT WORKS 8
ABOUT SALES CHARGES 8
BUYING FUND SHARES 9
SELLING FUND SHARES 10
EXCHANGING FUND SHARES 11
OTHER INFORMATION CONCERNING THE FUND 12
DISTRIBUTIONS AND TAXES 12
SHAREHOLDER SERVICES 14
FINANCIAL HIGHLIGHTS OF THE FUND 15
HOW TO REACH US Back cover
</TABLE>
<PAGE>
CHASE VISTA THE GROWTH FUND OF WASHINGTON
The Fund's objective
The Fund seeks to provide you with long-term growth of capital by investing
primarily in securities of companies headquartered or having a major place of
business in Washington, D.C., Maryland or Virginia.
The Fund's main investment
strategy
The Fund will invest at least 65% of its total assets in common stocks or
securities convertible into common stock of companies headquartered or having a
major place of business, i.e. deriving at least 40% of their gross revenues from
activities, in Washington, D.C., Maryland or Virginia. The Fund may invest up to
35% of its total assets in common stocks or securities convertible into common
stock of other companies that are headquartered elsewhere in the United States
or do not meet the 40% gross revenue test and in high quality short term
securities and repurchase agreements.
It anticipated that the assets of the Fund will be invested in securities,
which in the opinion of the Investment Adviser, offer potential for long-term
growth of capital. The Fund may invest in the entire range of Washington area
companies, and there is no limit as to the size of such companies or where
their securities are traded.
The Fund's Investment Adviser looks for stocks with one or more of the
following characteristics: those that are undervalued with respect to their
earnings or cash flow growth rates, possess financial strength relative to
their peers, operate in a market niche, have demonstrated superior performance
over several business cycles and/or have a seasoned management team. Meeting
with management first hand is a crucial part
1
<PAGE>
CHASE VISTA THE GROWTH FUND OF WASHINGTON
of the Investment Adviser's methodology. Sell decisions will be impacted by
liquidity needs of the Fund, a major change in a stock's characteristics,
and/or the presence of alternative investments with more attractive
characteristics. These strategies are supported by other measurements that take
into account the macro and micro economic environment of the business, as well
as the intrinsic value of these concerns.
The Investment Adviser seeks to diversify across a number of sectors. However,
it may change sector weighting in response to market developments.
Additionally, certain industries in the Washington area, such as financial
services and banking, represent a significant portion of the region's economy
and may tend to appear in larger concentrations in the Fund's portfolio.
The Fund may change any of these investment policies, but not its objective,
without shareholder approval. In addition to the principal investment
strategies described above, the Fund has investment practices and policies
described in the Statement of Additional Information.
<CHASE LOGO>
2
<PAGE>
Main risks of investing in the Fund
All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund.
The prices of equity securities held by the Fund may decline in response to
certain events, including those directly involving issuers of those securities,
adverse conditions affecting the general economy, or overall market declines.
In addition, the growth-oriented, equity securities generally purchased by the
Fund may involve large price swings and potential for loss.
The market value of convertible securities tends to decline as interest rates
increase, and increase as interest rates decline. Their value also tends to
change whenever the market value of underlying common or preferred stock
fluctuates.
The concentration of the Fund's investments in companies in the Washington
region involves risk. The economic, geographic and demographic factors which,
to the Investment Adviser, make this area a favorable one for long-term
investment may become less favorable or reverse themselves at some time in the
future.
If the Fund invests a substantial portion of its assets in money market
instruments and repurchase agreements, it could reduce the Fund's potential
return.
An investment in the Fund isn't a bank deposit and it isn't insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency
<CHASE LOGO>
3
<PAGE>
CHASE VISTA THE GROWTH FUND OF WASHINGTON
Fund's past performance
This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return over the past year, five years and ten years. It compares
that performance to the Standard & Poor's 500 Composite Index, a widely
recognized benchmark for equity funds.
The calculations assume that all dividends and distributions are reinvested in
the Fund.
<CHASE LOGO>
YEAR-BY-YEAR RETURNS
<CHASE LOGO>
Past performance does not predict how this Fund will perform in the future.
The performance figures in the bar chart do not reflect any deduction for the
front-end sales charge which is assessed on shares. If the sales charge were
reflected, the performance figures would have been lower.
<GRAPHIC OMITTED>
<TABLE>
<S> <C>
BEST QUARTER 19.74%
- ------------------- ---------
2nd quarter, 1997
WORST QUARTER -20.02%
- ------------------- ----------
3rd quarter, 1990
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN THE FUND(1) S&P 500 (2) CPI (3)
<S> <C> <C> <C>
ONE YEAR 16.14% 28.52% 1.67%
FIVE YEARS 18.92% 24.02% 2.38%
TEN YEARS 14.12% 19.16% 3.13%
</TABLE>
(1)These fund results were calculated according to a formula which requires
that the maximum sales charge be deducted. Results would be higher if they
were calculated at net asset value.
(2)The Standard & Poor's 500 Composite Index represents U.S. stocks. This index
is unmanaged and does not reflect sales charges, commissions or expenses.
(3)The Consumer Price Index is a measure of inflation and is computed from data
supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
4
<PAGE>
CHASE VISTA THE GROWTH FUND OF WASHINGTON
Fees and expenses
The following describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
Shareholder fees
(fees paid directly from your investment)
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
as a percentage of offering price 5.75%(1)
Maximum sales charge imposed on reinvested dividends 0%
Maximum deferred sales charge 0%
Redemption or exchange fees 0%
(1)Sales charges are reduced or eliminated for larger purchases.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
- --------------------------------------------------------------------------------
Management fees 0.72%
Service (12b-1) Fees* 0.25%
Other expenses .27%
Total Annual Fund Operating Expenses 1.24%
*12b-1 expenses may not exceed 0.25% of the Fund's average net assets annually.
Example
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
- --------------------------------------------------------------------------------
One year $ 694
Three years $ 946
Five years $1,217
Ten years $1,989
5
<PAGE>
FUND MANAGEMENT
The business manager
Washington Management Corporation (the "Business Manager") provides facilities
and services required to carry on the Fund's general administrative and
corporate affairs. These services encompass general corporate governance,
regulatory compliance and oversight of each of the Fund's contractual service
providers including custodian operations, shareholder services and Fund share
distribution functions. The Business Manager, a wholly owned subsidiary of The
Johnston-Lemon Group, Incorporated ("JLG"), maintains its principal business
address at 1101 Vermont Avenue, NW, Washington, D.C. 20005. The Business
Manager provides business management and administrative services to three other
mutual funds with assets of more than $5X billion. The Business Manager's
compensation for the year ended December 31, 1998 equaled .343% of average
daily net assets of the Fund.
<CHASE LOGO>
The investment adviser
Washington Investment Advisers, Inc. (the "Investment Adviser") is the
investment adviser to the Fund. The Investment Adviser is a wholly owned
subsidiary of JLG. The Investment Adviser provides the Fund with investment
advice and general portfolio management services. The Investment Adviser
maintains its principal business address at 1101 Vermont Avenue, NW, Washington,
D.C. 20005. Washington Investment Advisers, or its predecessor,
6
<PAGE>
has provided advisory services to the Fund since its inception in 1985. The
Investment Adviser's compensation for the year ended December 31, 1998 equaled
.375% of average daily net assets of the Fund.
<CHASE LOGO>
The portfolio manager
Prabha S. Carpenter, Senior Vice President, The Growth Fund of Washington; Vice
President, Washington Investment Advisers, Inc., is responsible for asset
allocation and investment strategy for the Fund. Mrs. Carpenter, a chartered
financial analyst, has been portfolio counselor to the Fund for 12 years and
has 20 years of total investment advisory experience.
<CHASE LOGO>
7
<PAGE>
HOW YOUR ACCOUNT WORKS
SALES CHARGES
The initial sales charge is deducted directly from the money you invest. As the
table shows, the charge is lower the more you invest. The public offering price
of shares is the net asset value plus the initial sales charge. Net asset value
is the value of everything the Fund owns, minus everything it owes, divided by
the number of shares held by investors.
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
AS % OF THE
OFFERING AS % OF
AMOUNT OF PRICE NET AMOUNT
INVESTMENT PER SHARE INVESTED
<S> <C> <C>
LESS THAN
$ 100,000 5.75% 6.10%
$ 100,000
BUT UNDER
$ 250,000 3.75% 3.90%
$ 250,000
BUT UNDER
$ 500,000 2.50% 2.56%
$ 500,000
BUT UNDER
$1 MILLION 2.00% 2.04%
</TABLE>
There is no sales charge for investments of $1 million or more.
Vista Fund Distributors Inc. (VFD) is the distributor for the Fund. It's a
subsidiary of BISYS Group, Inc. The Fund has adopted a Rule 12b-1 distribution
plan under which it pays annual distribution fees of up to 0.25% of the average
daily net assets. Payments cover such things as compensation for services
provided by broker-dealers and expenses connected to the sale of shares.
8
<PAGE>
Because 12b-1 expenses are paid out of the Fund's assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost you
more than other types of sales charges.
<CHASE LOGO>
Buying Fund shares
You can buy shares three ways:
Through your investment representative
Tell your representative you want to buy shares of the Fund and he or she will
contact us.
Through the Chase Vista Funds Service Center
Call 1-800-34-VISTA
Or
Complete the enclosed application form and mail it along with a check for the
amount you want to invest to:
Chase Vista Funds Service Center,
P.O. Box 419392
Kansas City, MO 64141-6392
Through a Systematic Investment Plan
You can make regular automatic purchases of at least $100. There's more on the
Systematic Investment Plan later in this document.
The price of the shares is based on the net asset value per share (NAV). NAV is
the value of everything a Fund owns, minus everything it owes, divided by the
number of shares held by investors. You'll pay the public offering price, which
is based on the next NAV calculated after the Chase Vista Funds Service Center
accepts your instructions, and includes a sales charge as explained above. The
Fund calculates its NAV once each day at the close of regular trading on the
New York Stock Exchange. The Fund generally values its assets at their market
value but may use fair value if market prices are unavailable. The Chase Vista
Funds Service Center will not accept your order until it is in proper form. An
order is in proper form only after payment is converted into federal funds.
The Chase Vista Funds Service Center accepts purchase orders on any business
day that the New York Stock Exchange is open. Normally, if the Chase Vista
Funds Service Center receives your order in proper form by the close of regular
trading on the New York Stock Exchange, we'll process your order at that day's
price.
You must provide a Social Security Number or Taxpayer Identification Number
when you open an account. The Fund has the right to refuse any purchase order
or to stop offering shares for sale at any time.
9
<PAGE>
HOW YOUR ACCOUNT WORKS
TO OPEN AN ACCOUNT, BUY OR SELL SHARES OR GET FUND INFORMATION, CALL:
THE CHASE VISTA FUNDS SERVICE CENTER
1-800-34-VISTA
MINIMUM INVESTMENTS
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENT INVESTMENTS
<S> <C> <C>
REGULAR
ACCOUNT $ 2,500 $ 100
SYSTEMATIC
INVESTMENT
PLAN $ 1,000 $ 100
IRAS $ 1,000 $ 100
SEP-IRAS $ 1,000 $ 100
EDUCATION
IRAS $ 500 $ 100
</TABLE>
Make your check out to Chase Vista Funds in U.S. dollars. We won't accept
credit cards, cash, or checks from a third party. You cannot sell your shares
until your check has cleared, which could take more than 15 calendar days. If
you buy through an Automated Clearing House, you can't sell your shares until
the payment clears. That could take more than seven business days.
Your purchase will be canceled if your check doesn't clear and you'll be
responsible for any expenses and losses to the Fund. Orders by wire will be
cancelled if the Chase Vista Funds Service Center doesn't receive payment by
4:00 p.m. Eastern time on the day you buy.
If you're planning to exchange, sell or transfer shares to another person
shortly after buying the shares, you should pay by certified check to avoid
delays. The Fund will not issue certificates for Fund shares unless you request
them.
Selling Fund shares
You can sell your shares three ways:
Through your investment representative
Tell your representative you want to sell the Fund. He or she will send the
necessary documents to the Chase Vista Funds Service Center. Your
representative might charge you for this service.
Through the Chase Vista Funds Service Center
Call 1-800-34-VISTA. We will mail you a check or send the proceeds via
electronic transfer or wire. You cannot sell by phone if you have changed your
address of record within the previous 30 days. If you sell $25,000 or more
worth of the Fund by phone, we'll send it by wire only to a bank account listed
on our records.
We charge $10 for each transaction by wire.
Or
Send a signed letter with your instructions to:
Chase Vista Funds Service Center,
P.O. Box 419392
Kansas City, MO 64141-6392
Through a Systematic Withdrawal Plan
You can automatically sell as little as $50 worth of shares. See Shareholder
Services for details.
You can sell your shares on any day the Chase Vista Funds Service Center is
accepting purchase orders. You'll receive the next NAV calcu-
10
<PAGE>
lated after the Chase Vista Funds Service Center accepts your order.
Under normal circumstances, if the Chase Vista Funds Service Center receives
your order before the close of regular trading on the New York Stock Exchange,
the Fund will send you the proceeds the next business day. We won't accept an
order to sell shares if the Fund hasn't collected your payment for the shares.
The Fund may stop accepting orders to sell and may postpone payments for more
than seven days, as federal securities laws permit.
You'll need to have signatures guaranteed for all registered owners or their
legal representative if:
o you want to sell shares with a net asset value of $100,000 or more
o you want your payment sent to an address other than the one we have in our
records.
We may also need additional documents or a letter from a surviving joint owner
before selling the shares. Contact the Chase Vista Funds Service Center for
more details.
Exchanging Fund shares
You can exchange your shares for A-Class shares of certain other Chase Vista
Funds at net asset value, beginning 15 days after you buy your shares. For tax
purposes, an exchange is treated as a sale of Fund shares. This will generally
result in a capital gain or loss to you.
You can exchange your shares three ways:
Through your investment representative
Tell your representative which Funds you want to exchange from and to. He or
she will send the necessary documents to the Chase Vista Funds Service Center.
Your representative might charge you for this service.
Through the Chase Vista Funds Service Center
Call 1-800-34-VISTA to ask for details.
Through a Systematic Exchange Plan
You can automatically exchange money from one Chase Vista account to another of
the same class. Call the Chase Vista Funds Service Center for details.
Carefully read the prospectus of the Fund you want to buy before making an
exchange. You'll need to meet any minimum investment requirements.
You should not exchange shares as a means of short-term trading as this could
increase management cost and affect all shareholders. We reserve the right to
limit the number of exchanges or to refuse an exchange. We may also terminate
this privilege. We charge an administration fee of $5 for each exchange deemed
to be excessive. See the Statement of Additional Information to find out more
about the exchange privilege.
<CHASE LOGO>
11
<PAGE>
HOW YOUR ACCOUNT WORKS
Other information concerning the Fund
We may close your account if the balance falls below $500 because you've sold
shares. We may also close the account if you are in the Systematic Investment
Plan and fail to meet investment minimums over a 12-month period. We'll give
you 60 days notice before closing your account.
Unless you indicate otherwise on your account application, we are authorized to
act on redemption and transfer instructions received by phone. If someone
trades on your account by phone, we'll ask that person to confirm your account
registration and address to make sure they match those you provided us. If they
give us the correct information, we are generally authorized to follow that
person's instructions. We'll take all reasonable precautions to confirm that
the instructions are genuine. Investors agree that they will not hold the Fund
liable for any loss or expenses from any sales request, if the Fund takes
reasonable precautions. The Fund will be liable for any losses to you from an
unauthorized sale or fraud against you if we do not follow reasonable
procedures.
You may not always reach the Chase Vista Funds Service Center by telephone.
This may be true at times of unusual market changes and shareholder activity.
You can mail us your instructions or contact your investment representative or
agent. We may modify or cancel the sale of shares by phone without notice.
<CHASE LOGO>
Distributions and taxes
The Fund can earn income and it can realize capital gains. The Fund deducts its
expenses then pays out these earnings to shareholders as distributions.
The Fund distributes any net investment income at least semi-annually. Net
capital gain is distributed annually. You have three options for your
distributions. You may:
o reinvest all of them in additional Fund shares without a sales charge;
o take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain
in additional shares; or
o take all distributions in cash or as a deposit in a pre-assigned bank
account.
If you don't select an option when you open your account, we'll reinvest all
distributions in additional shares. The taxation of dividends won't be affected
by the form in which you receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels.
If you receive distributions of net capital gain, the tax rate will be based on
how long the Fund held a particular asset, not on how long you have owned your
shares. If you buy shares just before a distribution
12
<PAGE>
the NAV will be higher on that date because it includes the distribution amount
and you will pay tax on the entire amount of the taxable distribution you
receive.
Early in each calendar year, the Fund will send you a notice showing the amount
of distributions you received in the preceding year and the tax status of those
distributions.
The above is a general summary of tax implications of investing in the Fund.
Please consult your tax adviser to see how investing in the Fund will affect
your own tax situation.
<CHASE LOGO>
13
<PAGE>
SHAREHOLDER SERVICES
SYSTEMATIC INVESTMENT PLAN
You can regularly invest $100 or more in the first or third week of any month.
The money is automatically deducted from your checking or savings account.
You can set up a plan when you open an account by completing the appropriate
section of the application. Current shareholders can join by sending a signed
letter and a deposit slip or void check to the Chase Vista Funds Service
Center. Call 1-800-34-VISTA for complete instructions.
SYSTEMATIC WITHDRAWAL PLAN
You can make regular withdrawals of $50 or more. You can have automatic
withdrawals made monthly, quarterly or semiannually. Your account must contain
at least $5,000 to start the plan. Call 1-800-34-VISTA for complete
instructions.
SYSTEMATIC EXCHANGE
You can transfer assets automatically from one Vista account to another on a
regular basis. It's a free service.
FREE EXCHANGE PRIVILEGE
You can exchange money between Chase Vista Funds in the same class without
charge. This allows you to adjust your investments as your objectives change.
REINSTATEMENT PRIVILEGE
You can buy back Fund shares you sell, without paying a sales charge, as long
as you make a request in writing within 90 days of the sale.
<CHASE LOGO>
14
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
results for the past five years. Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Johnson Lambert & Co., whose report, along with the Fund's financial
statements, is included in the Fund's Annual Report, which is available upon
request.
THE YEAR 2000
The Fund, like any business, could be affected if the computer systems on which
it relies fails to properly process information beginning on January 1, 2000.
The Fund's service providers are updating their own systems and encouraging
secondary service providers to do the same, but there's no guarantee these
systems will work properly.
15
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the year ended December 31,
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $ 26.09 $ 20.00 $ 18.19 $ 13.32 $ 15.37
- ------------------------------------------ ------- ------- ------- ------- -------
Income from Investment Operations:
0 Net Investment Income .08 .09 .07 .14 .18
Net Realized and Unrealized
Gain (Loss) on Investment 5.95 7.20 2.60 5.72 ( 1.61)
------- ------- ------- ------- -------
Total from Investment Operations 6.03 7.29 2.67 5.86 ( 1.43)
------- ------- ------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) ( .07) ( .09) ( .07) ( .14) ( .18)
Distributions (from Capital Gains) ( 1.19) ( 1.11) ( .79) ( .85) ( .44)
------- ------- ------- ------- -------
Total Distributions ( 1.26) ( 1.20) ( .86) ( .99) ( .62)
- ------------------------------------------ ------- ------- ------- ------- -------
Net Asset Value, End of Year $ 30.86 $ 26.09 $ 20.00 $ 18.19 $ 13.32
- ------------------------------------------ ------- ------- ------- ------- -------
TOTAL RETURN(1) 23.22% 36.56% 14.65% 44.25% ( 9.32)%
- ------------------------------------------ ------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
- ------------------------------------------
Net Assets, End of Year
(in thousands) $77,868 $61,649 $48,801 $45,397 $33,715
- ------------------------------------------ ------- ------- ------- ------- -------
Ratio of Expenses to
Average Net Assets 1.24% 1.25% 1.42% 1.46% 1.50%
- ------------------------------------------ ------- ------- ------- ------- -------
Ratio of Net Income
to Average Net Assets .26% .35% .35% .87% 1.20%
- ------------------------------------------ ------- ------- ------- ------- -------
Portfolio Turnover Rate 11.17% 13.03% 24.20% 25.65% 13.34%
- ------------------------------------------ ------- ------- ------- ------- -------
</TABLE>
(1)Excludes maximum sales charge of 5.75% of the Fund's offering price.
16
<PAGE>
HOW TO REACH US
More information
You'll find more information about the Funds in the following documents:
ANNUAL AND SEMI-ANNUAL REPORTS
Our annual and semi-annual reports contain more information about the Fund's
investments and performance. The annual report also includes details about the
market conditions and investment strategies that had a significant effect on
the Fund's performance during the last fiscal year.
STATEMENT OF ADDITIONAL
INFORMATION (SAI)
The SAI contains more detailed information about the Funds and its policies.
You can get a free copy of these documents and other information, or ask us any
questions, by calling us at 1-800-34-VISTA or writing to:
Chase Vista Fund Service Center
P.O. Box 419392
Kansas City, MO 64141-6392
If you buy your shares through a financial adviser you should contact the
adviser directly for more information. You can also find information on-line at
www.chasevista.com on the internet.
You can write the SEC's Public Reference Room and ask them to mail you
information about the Funds, including the SAI. They'll charge you a copying
fee for this service. You can also visit the Public Reference Section and copy
the documents while you're there.
Public Reference Section of the SEC
Washington, DC 20549-6009.
1-800-SEC-0330
Reports, a copy of the SAI and other information about the Fund is also
available on the SEC's website at http://www.sec.gov.
The Fund's Investment Company Act File No. is 811-4309.
Chase Vista Funds
Fulfillment Center
393 Manley Street
West Bridgewater, MA 02379-1039
THE GROWTH FUND OF WASHINGTON, INC.
Part B
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1999
1101 Vermont Avenue, NW
Washington, D.C. 20005
(202) 842-5665
(800)972-9274
The Growth Fund of Washington, Inc. (the "Fund") is a diversified, open-end
investment company that seeks long-term capital growth by investing primarily
in securities of companies headquartered or having a major place of business in
Washington, D.C., Maryland or Virginia. This Statement of Additional
Information relating to the Fund is not a prospectus and should be read in
conjunction with the Fund's Prospectus. The Fund's Annual Report is
incorporated by reference into the SAI. Copies of the Fund's Prospectus,
Annual Report and Semi-Annual Report are available, without charge, upon
request by writing or calling the Secretary of the Fund at the above address.
The date of the Prospectus to which this statement relates is May 1, 1999.
__________________________
Vista Fund Distributors, Inc.
Distributor
Washington Management Corporation
Business Manager
Washington Investment Advisers, Inc.
Investment Adviser
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
CAPTION PAGE
General Information and History 3
Description of Certain Securities 3
Additional Investment Restrictions and Policies 4
Management of the Fund 6
Directors and Director Compensation 6
Investment Advisory and Other Services 7
Execution of Portfolio Transactions and Brokerage Allocation 10
Description of Shares, Voting Rights and Liabilities 11
Purchases, Redemptions and Exchanges 11
Determination of Net Asset Value 14
Tax Status 14
Investment Results 15
Year 2000 16
Financial Statements 16
</TABLE>
GENERAL INFORMATION AND HISTORY
The Growth Fund of Washington, Inc. (the "Fund") is a diversified, open-end
investment company that seeks long-term capital growth by investing primarily
in securities of companies headquartered or having a major place of business in
Washington, D.C., Maryland or Virginia. The Fund was incorporated under the
laws of the State of Maryland on May 24, 1985.
Washington Management Corporation, a wholly-owned subsidiary of The
Johnston-Lemon Group, Incorporated ("JLG"), is the Fund's Business Manager.
Washington Investment Advisers, Inc., a wholly-owned subsidiary of JLG, is the
Fund's Investment Adviser. Vista Fund Distributors, Inc., a wholly-owned
subsidiary of The BISYS Group, Inc., is the Distributor of the Fund's shares.
The Investment Adviser believes economic and demographic strengths of the
Washington-Maryland-Virginia area benefit both area businesses and their
shareholders. In the opinion of the Investment Adviser, one measure of such
strengths is the performance of area securities as reflected in the Johnston,
Lemon Index (the "Index"), an unmanaged index of the common stocks of 30
Washington area companies, which is published each day in THE WASHINGTON POST.
The Fund is not required to invest in stocks in the Index, and may invest a
large portion or all of its assets in stocks not in the Index, so the
performance of the Fund could be better or worse than the performance of the
Index. Past performance of the Index does not predict future performance of
the Index or the Fund. Johnston, Lemon & Co. Incorporated ("Johnston, Lemon"),
a Washington, D.C. based regional brokerage firm and a member of the New York
Stock Exchange, developed the Index. Johnston, Lemon is a wholly-owned
subsidiary of JLG.
Washington Investment Advisers, Inc. has adopted a personal investing policy
based upon Investment Company Institute guidelines. This policy includes: a
ban on acquisitions of securities pursuant to an initial public offering;
restrictions on acquisitions of private placement securities; pre-clearance and
reporting requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the Fund; blackout periods for certain investment personnel; limitations on
service as a director of publicly traded companies; and disclosure of personal
securities transactions.
DESCRIPTION OF CERTAIN SECURITIES
U.S. Government Securities and Other Short-Term Securities
These securities may include direct obligations of the U.S. Treasury (such as
Treasury bills, notes and bonds), federal agency obligations guaranteed as to
principal and interest by the U.S. Treasury, and certain securities issued by
U.S. Government instrumentalities and certain federal agencies which securities
are neither direct obligations of, nor guaranteed by, the Treasury. These
latter securities, however, generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported
by the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality. Other short-term securities may also include
commercial paper issued by domestic corporations rated at the time of purchase
Prime-1 by Moody's Investors Service, Inc. or A-1 by Standard & Poor's
Corporation, or certificates of deposit issued by U.S. Banks having assets in
excess of $1 billion.
Commercial Paper
The Fund may invest in commercial paper issued by domestic corporations rated
at the time of purchase Prime-1 by Moody's Investors Service, Inc. or A-1 by
Standard & Poor's Corporation.
Certficates of Deposit
The Fund may invest in certificates of deposit issued by U.S. banks having
assets in excess of $1 billion.
Repurchase Agreements
The Fund may invest in repurchase agreements with commercial banks or
broker-dealers meeting creditworthiness standards set and monitored by the
Fund's Directors. A repurchase agreement involves the purchase by the Fund of
U.S. Government securities or other debt obligations with the condition that,
after a stated period of time, the seller will buy back the same securities
(the "collateral") at a predetermined price or yield. The collateral will be
maintained in an amount equal to the repurchase price under the agreement
(including accrued interest due thereunder). In the event the original seller
defaults on its obligations to repurchase, the Fund will sell the collateral,
which action could involve costs or delays. The Fund's rights to the
collateral are unclear where the seller is a bank which becomes insolvent.
Moreover, the Fund could suffer a loss to the extent proceeds from the sale of
the collateral may be less than the repurchase price. Either the Fund or its
custodian will have physical custody of the collateral or the Fund will have
constructive possession by entry into the Fund's account in the Federal
book-entry system. No more than 10% of the Fund's assets, at the time of
investment, may be invested in repurchase agreements not terminable within
seven days.
ADDITIONAL INVESTMENT RESTRICTIONS AND POLICIES
Investment Restrictions
The Fund has adopted the following restrictions which, together with its
investment objective, are its fundamental policies. These fundamental policies
cannot be changed without approval of the holders of a majority (as defined in
the Investment Company Act of 1940, the "Act") of the Fund's outstanding
shares. The Act defines "majority" as the lesser of (1) 67% of the Fund's
outstanding shares present at a meeting at which the holders of more than 50%
of the outstanding shares are present in person or by proxy, or (2) more than
50% of the Fund's outstanding shares.
The Fund may not:
(1) borrow money, except for temporary or emergency purposes and not for
investment purposes and then only from banks in an amount not exceeding at the
time of borrowing the lesser of 10% of the Fund's total assets taken at cost or
5% of the market value of the Fund's total assets;
(2) underwrite any securities issued by other persons, except to the extent
that the purchase of portfolio securities and the later disposition thereof may
be deemed to be underwriting;
(3) purchase or sell real estate, but this shall not prevent the Fund from
investing in securities secured by real estate or interests therein;
(4) purchase or sell commodities, commodities contracts or oil, gas or other
mineral exploration or development programs (although it may invest in
companies which own or invest in such interests);
(5) make loans to other persons, except to the extent that the purchase of
debt obligations in accordance with the Fund's investment objectives is
considered the making of loans, and except that the Fund may (i) lend its
portfolio securities and (ii) enter into repurchase agreements;
(6) purchase any securities which would cause 25% or more of the value of its
total assets at the time of such purchase to be invested in the securities of
one or more issuers having their principal business activities in the same
industry, provided that there is no limitation in respect to investments in
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities;
(7) issue senior securities except as appropriate to evidence indebtedness
which it is permitted to incur;
(8) with respect to 75% of its assets, invest more than 5% of its total assets
(taken at market value) in the securities of any one issuer;
(9) with respect to 75% of its assets, purchase more than 10% of the voting
securities of any one issuer (except for investments in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities). In
order to comply with current state rules this restriction shall be applicable
to 100% of the Fund's assets, but may be lowered to no less than 75% without
shareholder approval if state rules are changed.
The following restrictions are not fundamental and may be changed by the Fund
without shareholder approval, in compliance with applicable law, regulation, or
regulatory policy. The Fund may not:
(a) make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance of
transactions;
(b) purchase any securities subject to legal or contractual restrictions on
the resale thereof, or purchase securities which are not readily marketable, or
enter into repurchase agreements not terminable within seven business days, if
such purchase or entering into a repurchase agreement would cause more than 10%
of the value of its total assets to be invested in such securities and such
repurchase agreements;
(c) purchase securities of any issuer with a record of less than three years
continuous operation, including predecessors, except obligations issued or
guaranteed by the U.S. Government or its agencies, if such purchase would cause
the investments of the Fund in all such issuers to exceed 5% of the value of
its total assets;
(d) invest its assets in securities of other open-end investment companies,
but may invest up to 5% of its assets in closed-end investment companies, and
may (together with other investment companies having the same investment
adviser or controlled by the Fund or such other investment companies) purchase
or acquire up to 10% of the outstanding voting stock of a closed-end fund, and
may acquire securities of other investment companies as part of a merger,
consolidation or acquisition of assets;
(e) purchase warrants of any issuer if, as a result more than 2% of the value
of its total assets would be invested in warrants which are not listed on the
New York Stock Exchange or the American Stock Exchange, or more than 5% of the
value of its total assets would be invested in warrants whether or not so
listed, such warrants in each case to be valued at market or fair value, but
assigning no value to warrants acquired by the Fund in units with or attached
to debt securities.
(f) pledge, mortgage or hypothecate its assets except, to secure borrowings
permitted by subparagraph (1) above, it may pledge securities having a value at
the time of pledge not exceeding 15% of the cost of its total assets.
For the purposes of subparagraphs (1), (6), (b), (c) and (e) "value" shall mean
the value used in determining the Fund's net asset value.
All percentage limitations shall be computed as of the time of making the
investment or taking the action to which the limitation refers. Moreover, any
investment restriction which involves a maximum percentage of securities or
assets shall not be considered to be violated unless an excess over the
percentage occurs immediately after, and is caused by, the restricted activity.
MANAGEMENT OF THE FUND
FUND DIRECTORS AND OFFICERS
Directors and Director Compensation
(with their principal occupations during the past five years)#
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name and Address Position with Principal Occupation(s) during Aggregate Compensation from Total
Compensation from
Registrant Past 5 Years# Registrant during Fiscal Year ended Registrant and
Fund
12/31/98 Complex/3/
Cyrus A. Ansary Director President, Investment Services $2,000 $2,000
1725 K Street, NW Suite 410 International Co.
Washington, DC 20006
Age: 65
*James H. Lemon, Jr./1,2/ Chairman of the Chairman and Chief Executive 0 0
Age: 63 Board Officer, The Johnston-Lemon
Group, Incorporated
*Harry J. Lister/1,2/ President and President and Director, 0 0
Age: 63 Director Washington Management
Corporation
T. Eugene Smith Director President, T. Eugene Smith, Inc. $2,000 $2,000
666 Tintagel Lane
McLean, VA 22101
Age: 68
Leonard P. Steuart II Director Vice President, Steuart $2,000 $2,000
5454 Wisconsin Avenue Investment Company
Chevy Chase, MD 20815
Age: 64
Margita E. White Director President, Association for $2,000 $2,000
1776 Massachusetts Ave., NW Maximum Service Television,
Suite 310 Inc.
Washington, DC 20036
Age: 61
</TABLE>
#Positions within the organizations listed may have changed during the period.
* Address is 1101 Vermont Avenue, NW, Washington, DC 20005
/1/ James H. Lemon, Jr. and Harry J. Lister are affiliated with the Business
Manager and, accordingly, receive no remuneration from the Fund.
/2/ Directors who are considered "interested persons" as defined in the Act.
The Fund pays all Directors who are not "interested persons" an attendance fee
of $400 per meeting and $200 for each committee meeting attended. The total
compensation paid by the Fund to such Directors for the fiscal year ended
December 31, 1998 was $8,000. All directors who are not "interested persons"
of the Fund serve on the Contracts, Audit and Nominating Committees. No
officers, directors or employees of the Business Manager or Investment Adviser
receive remuneration directly from the Fund.
/3/ No director serves on any other fund boards in the complex and none has any
pension or retirement benefits from the Fund.
Officers
(
with their principal occupations during the past five years)#
* Stephen Hartwell (Age: 84), EXECUTIVE VICE PRESIDENT. Washington Management
Corporation, Chairman
* Howard L. Kitzmiller (Age: 68), SENIOR VICE PRESIDENT, SECRETARY/TREASURER
AND CHIEF FINANCIAL OFFICER. Washington Management Corporation, Senior Vice
President, Secretary, Assistant Treasurer and Director
* Prabha S. Carpenter (Age: 45), SENIOR VICE PRESIDENT. Washington Investment
Advisers, Inc., Vice President
* Ralph S. Richard (Age: 80), VICE PRESIDENT. Washington Management
Corporation, Vice President, Treasurer and Director
* Lois A. Erhard (Age: 46), VICE PRESIDENT. Washington Management Corporation,
Vice President
* Michael W. Stockton (Age: 32), ASSISTANT VICE PRESIDENT, ASSISTANT SECRETARY
AND ASSISTANT TREASURER. Washington Management Corporation, Assistant Vice
President, Assistant Secretary and Assistant Treasurer
* J. Lanier Frank (Age: 37), ASSISTANT VICE PRESIDENT. Washington Management
Corporation, Assistant Vice President
#Positions within the organizations listed may have changed during the period.
* Address is 1101 Vermont Avenue, NW, Washington, DC 20005
Directors of the Fund, acting on behalf of shareholders, direct and coordinate
the Fund's overall policy and have retained the services of the Business
Manager and Investment Adviser to operate the Fund.
As of April 6, 1999 officers and directors as a group owned beneficially or of
record approximately XXX,000 shares of the Fund (X%).
INVESTMENT ADVISORY AND OTHER SERVICES
As compensation for services rendered to the Fund, the Fund pays the Investment
Adviser a fee, computed daily and paid monthly, of .375% per annum on the
Fund's net assets up to $100,000,000, decreasing to .35% per annum on the net
assets in excess of $100,000,000. The Fund also pays the Business Manager, as
compensation for services rendered to the Fund, a fee computed daily and paid
monthly, of .375% per annum on the Fund's net assets up to $40,000,000,
decreasing to .30% on the next $60,000,000 of net assets and .25% per annum on
net assets in excess of $100,000,000. During the fiscal year ended December 31,
1998 the Business Manager received a fee of $237,145 and the Investment Adviser
$259,032. During fiscal year ended December 31, 1997, the Business Manager
received $190,793 and the Investment Adviser received $201,092. Comparable
fees for the fiscal year ended December 31, 1996 were $172,781 and $178,474
respectively.
James H. Lemon, Jr., an interested Director of the Fund, is a controlling
shareholder of the Adviser's parent and serves as a Director to the Adviser.
Ralph S. Richard is an affiliated person of the Fund and the Adviser. He
serves as Vice President to the Fund and is a 5% or greater shareholder of the
Adviser's parent.
The Fund pays all expenses not assumed by the Investment Adviser or Business
Manager. Expenses paid by the Fund include custodian, stock transfer and
dividend disbursing fees and accounting and record keeping expenses;
distribution expenses pursuant to a plan under Rule 12b-1 of the Act; costs of
designing, printing and mailing reports, prospectuses, proxy statements and
notices to its shareholders; taxes and insurance; expenses of the issuance,
sale or repurchase of shares of the Fund (including federal registration and
state fees); legal and audit fees and expenses; compensation, fees and expenses
paid to Directors who are not interested persons of the Fund; association dues;
and costs of stationery and forms prepared exclusively for the Fund.
Subject to the supervision and direction of the Fund's Board of Directors, the
Investment Adviser determines the securities to be bought, sold or held in the
Fund's portfolio, determines the timing and amount of transactions, and places
orders with broker-dealers of its choice. The Business Manager provides the
facilities and services required to carry on the Fund's general administrative
and corporate affairs. Such services include providing executive personnel,
clerical staff, office space and equipment, arranging for and supervising all
shareholder services and federal and state regulatory compliance.
The Investment Advisory and Business Management Agreements are subject to
annual approval by (i)the Board of Directors of the Fund or (ii)vote of a
majority (as defined in the Act) of the outstanding voting securities of the
Fund, provided that in either event the continuance is also approved by a
majority of the Directors who are not "interested persons" of the Fund by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Investment Advisory and the Business Management Agreements were last
approved by shareholders at the annual meeting on April 29, 1991. The Board of
Directors, including a majority of the Directors who are not "interested
persons" of the Fund, at a meeting held on March x, 1999, voted to extend the
Investment Advisory and Business Management Agreements for one year beginning
May 1, 1999 until April 30, 2000. The Investment Advisory and Business
Management Agreements are each terminable without penalty on not less than 60
days' notice by the Board of Directors of the Fund or by vote of the holders of
a majority of the Fund's shares. Each will terminate automatically in the
event of its assignment.
The Chase Manhattan Bank (the "Custodian"), One Chase Manhattan Plaza, New
York, NY 10081, serves as the Fund's custodian. As Custodian, it maintains
custody of Fund assets, settles portfolio purchases and sales, collects
portfolio income, maintains general ledger and capital stock accounts and
investment ledgers, prepares daily trial balances and calculates net asset
values. DST Systems, Inc. (the "Transfer Agent"), located at 210 W. 10th
Street, Kansas City, MO 64105 serves as the Fund's transfer agent. The
Transfer Agent maintains the Fund's official record of shareholders and, as
dividend agent, it is responsible for crediting dividends to shareholders
accounts.
Johnson Lambert & Co., independent certified public accountants, located at
7500 Old Georgetown Road, Bethesda, Maryland 20814, has been selected as
auditor for the Fund. In such capacity, Johnson Lambert & Co. conducts an
annual audit of the Fund, meets with the Fund's Audit Committee and management
at least annually, reads filings, such as Form N-SAR and registration statement
amendments, prepares tax returns, and reads the Fund's annual and semi-annual
reports.
Distribution Plan and Distributor
The Fund has adopted a Distribution Plan (the "Plan") under which the Fund will
pay to the Distributor a monthly fee at a maximum annual rate of .25 of 1% of
the Fund's net assets. Payments under the Plan will be made to the Distributor
to finance activity which is primarily intended to result in the sale and
retention of Fund shares including, but not limited to, advertising, salaries
and other expenses of the Distributor relating to selling or servicing efforts,
expenses of organizing and conducting sales seminars, printing of prospectuses
and reports for other than existing shareholders, preparation and distribution
of advertising material and sales literature and payments to dealers whose
customers purchase Fund shares.
The Fund's Distributor is Vista Funds Distributors, Inc. ("VFD"). VFD is a
wholly owned subsidiary of The BISYS Group, Inc.
VFD may provide promotional incentives to broker-dealers who meet specified
sales targets for one or more of the Vista Funds. These incentives may include
gifts of up to $100 per person annually; an occasional meal, ticket to a
sporting event or theater for entertainment for broker-dealers and their
guests; and payment or reimbursement for travel expenses, including lodging and
meals, in connection with attendance at training and educational meetings.
VFD may from time to time, pursuant to objective criteria established by it,
pay additional compensation to qualifying authorized broker-dealers for certain
services or activities which are primarily intended to result in the sale of
shares of the Fund. In some instances, such compensation may be offered only
to certain broker-dealers who employ registered representatives who have sold
or may sell significant amounts of shares of the Fund and/or other Chase Vista
Funds during a specified period of time. Such compensation does not represent
additional expense to the Fund or its shareholders, since it will be paid by
VFD or other sources available to it.
The Plan, together with a distribution agreement with the Distributor, was
approved by the Directors including a majority of the Directors who are not
"interested persons", as defined in the Act, who have no direct or indirect
financial interest in the operation of the Plan or the Distribution Agreement
("Plan Directors"). While the Plan is in effect, the selection and nomination
of Directors who are not "interested persons" shall be committed to the
discretion of Plan Directors. The Plan was approved by shareholders at the
annual meeting on August 28, 1986. Renewal of the Plan must be considered by
the Board of Directors annually after their review of information and
consideration of all pertinent factors with respect to the Plan at a meeting
called for that purpose. In considering whether to continue the Plan and any
agreement related to it, the Directors have a duty to request and evaluate, and
the Distributor has a duty to furnish, such information as the Directors deem
reasonably necessary for them to reach an informed determination. Each year
that the Plan remains in effect the Directors will be furnished and will
review, at least quarterly, a written report of the amounts expended under the
Plan and the purpose for which expenditures were made.
All material amendments to the Plan must be approved by a vote of the
Directors, including a majority of the Plan Directors, at a meeting called for
that purpose. The Plan may not be amended to increase materially the amount to
be spent for distribution without shareholder approval. The Plan may be
terminated without penalty at any time by a vote of a majority of the Plan
Directors or a majority of the outstanding shares of the Fund. Any agreement
under the Plan may be terminated upon 60 days' written notice and will
terminate automatically in the event of its assignment.
The total amount paid to the Distributor under the Plan for the fiscal year
ended December 31, 1998 was $171,797. Only actual expenses of the Distributor,
categories of which have been pre-approved, can be reimbursed up to the limit
of .25% of average net assets annually under the Plan. Those amounts were
expended as follows and such expenditures were reviewed quarterly by the Fund's
Board of Directors:
Service Fees to Dealers $109,071
Printing and mailing of prospectuses
other than to existing shareholders $ 7,156
Advertising $47,770
Distributor's Selling and
Servicing Expenses $ 7,800
All officers of the Fund and two of its Directors, who are "interested persons"
of the Fund, are officers or directors of Washington Management Corporation or
Washington Investment Advisers, Inc., wholly-owned subsidiaries of JLG.
Johnston, Lemon, also a subsidiary of JLG, participates in receiving dealer
service fee payments from the Plan. Some of the Fund's officers and two
Directors who are "interested persons" of the Fund are also registered
representatives with Johnston, Lemon and, as such, to the extent they have sold
shares of the Fund, receive a portion of the service fee payments in the same
manner as all other Johnston, Lemon registered representatives. During the
fiscal year ended December 31, 1998 Johnston, Lemon received $80,796 in
commissions from sales and $53,823 in dealer service fees from VFD in
accordance with the terms of VFD's Selling Group Agreement.
EXECUTION OF PORTFOLIO TRANSACTIONS
AND BROKERAGE ALLOCATION
Orders for the Fund's portfolio securities transactions are placed by the
Investment Adviser. The objective of the Fund is to obtain the best available
prices in its portfolio transactions taking into account the costs and
promptness of executions. There is no agreement or commitment to place orders
with any broker-dealer. In transactions executed in the over-the-counter
market, purchases and sales are transacted directly with principal
market-makers except in those circumstances where, in the opinion of the
Investment Adviser, better prices and executions are available elsewhere.
Subject to the requirement of seeking the best available prices and executions,
the Investment Adviser, in circumstances in which two or more broker-dealers
are in a position to offer comparable prices and execution, may give preference
to broker-dealers which have provided research, statistical, and other related
services to the Investment Adviser for the benefit of the Fund if, in its
judgment, the Fund will obtain prices and executions comparable with those
available from other qualified firms. The Investment Adviser is of the opinion
that while such research and related services are useful in varying degrees,
they are of indeterminable value and do not reduce the expenses of the
Investment Adviser.
The Directors of the Fund have adopted a policy which permits the Investment
Adviser, subject to the objective of obtaining the best price and execution, to
consider a broker-dealer's sale of Fund shares as a factor in selecting from
among broker-dealers qualified to offer comparable prices and execution of
portfolio transactions. This policy does not imply a commitment by the Fund to
execute portfolio transactions through all broker-dealers which sell shares of
the Fund. The Investment Adviser will periodically report to the Directors to
enable them to assure themselves that the best execution objective continues to
be paramount in selection of executing broker-dealers.
The Fund's Board of Directors has determined that the Fund may effect portfolio
transactions through Johnston, Lemon (i) if, in the Investment Adviser's
judgment, the use of Johnston, Lemon is likely to result in prices and
executions at least as favorable as those of other qualified broker-dealers,
(ii) if, in the transaction, the commission, fee or other remuneration to be
received by Johnston, Lemon is consistent with those charged by Johnston, Lemon
to comparable unaffiliated customers in similar transactions and (iii) if such
commission, fee or other remuneration is reasonable and fair compared to the
commission, fee or other remuneration received by other broker-dealers in
connection with comparable transactions involving similar securities being
purchased or sold on an exchange during a comparable period of time. The
Fund's Board of Directors, including a majority of those Directors who are not
"interested persons" of the Fund, have adopted procedures which are reasonably
designed to provide that any commission, fee or other remuneration received by
Johnston, Lemon is consistent with these standards. Johnston, Lemon will not
participate in commissions from brokerage given by the Fund to other brokers or
dealers. Over-the-counter purchases and sales are transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere. The Fund will in no event effect
principal transactions with Johnston, Lemon, even in securities in which
Johnston, Lemon makes a market.
The Fund does not consider that it has an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Nevertheless, the personnel of the Investment Adviser are
authorized to negotiate payment only for brokerage services rendered and not
for research, statistical or other services. The Fund does not authorize the
payment of commissions to broker-dealers in excess of commissions other
qualified broker-dealers would have charged for handling comparable
transactions in recognition of their having provided research, statistical, or
other related services, or of their having sold Fund shares.
Brokerage commissions paid on portfolio transactions for the fiscal years ended
December 31, 1998, 1997, and 1996 amounted to $17,554, $17,314 and $21,010,
respectively. Differences in commission amounts reflect essentially
differences in aggregate dollar amount of the portfolio transactions. During
fiscal years ended December 31, 1998, 1997, and 1996 Johnston, Lemon received
no commissions for executing portfolio transactions for the Fund.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Growth Fund of Washington, Inc. (the "Fund") is a diversified, open-end
investment company which was incorporated under the laws of the State of
Maryland on May 24, 1985. The Fund has one class of shares. All shareholders
have one vote per share owned and each Fund share participates equally in
dividends and distributions or, upon liquidation or dissolution, in the net
assets remaining after satisfaction of outstanding liabilities. At the request
of the holders of at least 10% of the shares, the Fund will hold a meeting at
which the board could be removed by a majority vote. There will not usually be
a shareholder meeting in any year, except, for example, when the election of
the board is required to be acted upon by shareholders under the Act.
PURCHASES, REDEMPTIONS AND EXCHANGES
The Fund has established certain procedures and restrictions, subject to change
from time to time, for purchase, redemption, and exchange orders, including
procedures for accepting telephone instructions and effecting automatic
investments and redemptions. The Fund's Transfer Agent may defer acting on a
shareholder's instructions until it has received them in proper form. In
addition, the privileges described in the Prospectus are not available until a
completed and signed account application has been received by the Transfer
Agent. Telephone transaction privileges are made available to shareholders
automatically upon opening an account unless the privilege is declined on the
Account Application. The Telephone Exchange Privilege is not available if you
were issued certificates for shares that remain outstanding.
An investor can buy Fund shares three ways: (i) through an investment
representative; (ii) through the Fund's distributor by calling the Chase Vista
Service Center or (iii) through the Systematic Investment Plan. Upon receipt
of any instructions or inquiries by telephone from a shareholder or, if held in
a joint account, from either party, or any person claiming to be the
shareholder or joint account parties, the Fund or its agent is authorized,
without notifying the shareholder or joint account parties, to carry out the
instructions or to respond to the inquiries, consistent with the service
options chosen by the shareholder or joint shareholders in his or their latest
account application or other written request for services, including
purchasing, exchanging, or redeeming shares of the Fund and depositing and
withdrawing monies from the bank account specified in the Bank Account
Registration section of the shareholder's latest account application or as
otherwise properly specified to the Fund in writing.
The following table shows (a) the sales charge as a percentage of the amount
invested, (b) the sales charge as a percentage of the Offering Price, and (c)
the Dealer concession as a percentage of the Offering Price.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Dollar Amount (a) (b) (c)
of Purchase Percentage Percentage Percentage
of Amount of Offering of Offering
Invested Price Price
Less than $100,000 6.10% 5.75% 5.00%
$100,000 but less than $250,000 3.90% 3.75% 3.25%
$250,000 but less than $500,000 2.56% 2.50% 2.25%
$500,000 but less than $1,000,000 2.04% 2.00% 1.75%
$1,000,000 but less than $2,500,000 0.00% 0.00% 1.00%
$2,500,000 but less than $10,000,000 0.00% 0.00% 0.75%
$10,000,000 but less than $50,000,000 0.00% 0.00% 0.50%
$50,000,000 or more 0.00% 0.00% 0.20%
</TABLE>
Subject to compliance with applicable regulations, the Fund has reserved the
right to pay the redemption price of its shares, either totally or partially,
by a distribution in kind of readily marketable portfolio securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares being
sold. If a shareholder received a distribution in kind, the shareholder could
incur brokerage or other charges in converting the securities to cash.
Investors in the Fund may qualify for reduced initial sales charges by signing
a statement of intention (the "Statement"). This enables the investor to
aggregate purchases of shares in the Fund with purchases of Class A shares of
any other Chase Vista Fund (or if a fund has only one class, shares of such
fund), excluding shares of any Chase Vista money market fund, during a 13-month
period. The sales charge is based on the total amount to be invested in Class
A shares during the 13-month period. All Class A or other qualifying shares of
these funds currently owned by the investor will be credited as purchases (at
their current offering prices on the date the Statement is signed) toward
completion of the Statement. A 90-day back-dating period can be used to
include earlier purchases at the investor's cost. The 13-month period would
then begin on the date of the first purchase during the 90-day period. No
retroactive adjustment will be made if purchases exceed the amount indicated in
the Statement. A shareholder must notify the Transfer Agent or Distributor
whenever a purchase is being made pursuant to a Statement.
The Statement is not a binding obligation on the investor to purchase the full
amount indicated; however, on the initial purchase, if required (or subsequent
purchases if necessary), 5% of the dollar amount specified in the Statement
will be held in escrow by the Transfer Agent in Class A shares (or if a Fund
has only one class and is subject to an initial sales charge, shares of such
fund) registered in the shareholder's name in order to assure payment of the
proper sales charge. If total purchases pursuant to the Statement (less any
redemptions and exclusive of any distributions on such shares automatically
reinvested) are less that the amount specified, the investor will be requested
to remit to the Transfer Agent an amount equal to the difference between the
sales charge paid and the sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. This privilege is subject to modification or discontinuance at any
time with respect to all shares purchased thereunder. Reinvested dividend and
capital gain distributions are not counted toward satisfying the Statement.
Shares of the Fund may also be purchased by any person at a reduced initial
sales charge which is determined by (a) aggregating the dollar amount of the
new purchase and the greater of the purchaser's total (i) net asset value or
(ii) cost of any shares acquired and still held in the Fund, or any other Chase
Vista fund excluding any Chase Vista money market fund, and (b) applying the
initial sales charge applicable to such aggregate dollar value (the "Cumulative
Quantity Discount"). The privilege of the Cumulative Quality Discount is
subject to modification or discontinuance at any time with respect to shares
(or if a fund has only one class and is subject to an initial sales charge,
shares of such fund) purchased thereafter.
An individual who is a member of a qualified group (as hereinafter defined) may
also purchase shares of the Fund at the reduced sales charge applicable to the
group taken as a whole. The reduced initial sales charge is based upon the
aggregate dollar value of shares previously purchased and still owned by the
group plus the securities currently being purchased and is determined as stated
in the preceding paragraph. In order to obtain such discount, the purchaser or
investment dealer must provide the Transfer Agent with sufficient information,
including the purchaser's total cost, at the time of purchase to permit
verification that the purchaser qualifies for a cumulative quantity discount,
and confirmation of the order is subject to such verification. Information
concerning the current initial sales charge applicable to a group may be
obtained by contacting the Transfer Agent.
A "qualified group" is one which (i) has been in existence for more than six
months, (ii) has a purpose other than acquiring Fund shares at a discount and
(iii) satisfies uniform criteria which enables the Distributor to realize
economies of scale in its costs of distributing shares. A qualified group must
have more than 10 members, must be available to arrange for group meetings
between representatives of the Fund and the members, must agree to include
sales and other materials related to the Fund in its publications and mailings
to members at reduced or no cost to the Distributor, and must seek to arrange
for payroll deduction or other bulk transmission of investments in the Fund.
This privilege is subject to modification or discontinuance at any time with
respect to all shares purchased thereafter.
Investors may be eligible to buy shares at reduced sales charges. One's
investment representative or the Chase Vista Funds Service Center should be
consulted for details about Chase Vista's combined purchase privilege,
cumulative quantity discount, statement of intention, group sales plan,
employee benefit plans and other plans.
No initial sales charge will apply to the purchase of a fund's shares if (i)
one is investing proceeds from a qualified retirement plan where a portion of
the plan was invested in the Chase Vista Funds, (ii) one is investing through
any qualified retirement plan with 50 or more participants or (iii) the
investor is a participant in certain qualified retirement plans and is
investing (or reinvesting) the proceeds from the repayment of a plan loan made
to him or her.
The Fund may sell shares at net asset value without an initial sales charge to
the current and retired Directors (and their immediate families), current and
retired employees (and their immediate families) of the Business Manager and
Adviser, the Fund's distributor, custodian and transfer agent or any affiliates
or subsidiaries thereof, registered representatives and other employees,
employees (and their immediate families) of broker-dealers having selected
dealer agreements with the Fund's distributor (or otherwise having an agreement
with a broker-dealer or financial institution with respect to sales of Chase
Vista Fund shares), financial institutions trust departments investing an
aggregate of $1 million or more in the Chase Vista Funds and clients of certain
administrators of tax-qualified plans when proceeds from repayments of loans to
participants are invested (or reinvested) in the Chase Vista Funds.
Investors may incur a fee if they effect transactions through a broker or
agent.
The Fund may sell shares at net asset value without an initial sales charge in
connection with the acquisition by the Fund of assets of an investment company
or personal holding company.
Shareholders of other Chase Vista Funds may be entitled to exchange their
shares for, or reinvest distributions from their funds in, shares of theFund at
net asset value.
The Fund reserves the right to change any of these policies at any time and may
reject any request to purchase shares at a reduced sales charge.
Reinstatement Privilege. Upon written request, shareholders of the Fund have a
one time privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar days of the
redemption. The reinstatement request must be accompanied by payment for the
shares (not in excess of the redemption), and shares will be purchased at the
next determined net asset value.
Under the Exchange Privilege, shares may be exchanged for shares of another
fund only if shares of the fund exchanged into are registered in the state
where the exchange is to be made. Shares of a fund may only be exchanged into
another fund if the account registrations are identical. With respect to
exchanges from any Vista money market fund, shareholders must have acquired
their shares in such money market fund by exchange from one of the Vista
non-money market funds or the exchange will be done at relative net asset value
plus the appropriate sales charge. Any such exchange may create a gain or loss
to be recognized for federal income tax purposes. Normally, shares of the fund
to be acquired are purchased on the redemption date, but such purchase may be
delayed by either fund for up to five business days if a fund determines that
it would be disadvantaged by an immediate transfer of the proceeds.
The Fund may require signature guarantees for changes that shareholders request
be made in Fund records with respect to their accounts, including but not
limited to, changes in bank accounts, for any written requests for additional
account services made after a shareholder has submitted an initial account
application to the Fund, and in certain of the circumstances described in the
Prospectus. The Fund may also refuse to accept or carry out any transaction
that does not satisfy any restrictions then in effect. A signature guarantee
may be obtained from a bank, trust company, broker-dealer or other member of a
national securities exchange. Please make note that a notary public cannot
provide a signature guarantee.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share is determined as of the close of trading
on the New York Stock Exchange (the "NYSE") (currently 4:00 p.m. New York time)
on each day, Monday through Friday, on which the NYSE is open for trading. The
Fund is not required to determine its net asset value per share on days when
changes in the value of its portfolio securities will not affect such value or
on days during which no orders to purchase or sell Fund shares are received.
Net asset value per share is computed by dividing the value of the Fund's total
assets less liabilities by the total number of shares outstanding. The Fund's
expenses and fees are accrued daily and taken into account in determining the
net asset value.
TAX STATUS
The Fund intends to qualify and elect to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code ("Code").
Qualification and election to be taxed as a regulated investment company
involve no supervision or management by any government agency. To qualify as
a regulated investment company the Fund must distribute to shareholders at
least 90% of its net investment income, and meet certain diversification of
assets, source of income, and other requirements of the Code. By so doing, the
Fund will not be subject to income tax on that portion of its net investment
income and net realized capital gains distributed to shareholders. If the Fund
does not meet all of these Code requirements, it will be taxed as an ordinary
corporation and its dividends and distributions will be taxable to shareholders
as ordinary income dividends regardless of whether such distributions were
derived from the Fund's net long-term capital gains.
The Fund will be subject to a non-deductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax the Fund must distribute during each calendar
year (1) at least 98% of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, (2) at least 98% of its capital
gains in excess of its capital losses for the twelve-month period ending on
December 31, and (3) all ordinary income and capital gains for previous years
that were not distributed during such years. To avoid application of the
excise tax, the Fund intends, to the extent practicable, to make its
distributions in accordance with the calendar year distribution requirement. A
distribution will be treated as paid during the calendar year if it is declared
by the Fund in December, with a record date in that month, and paid by the Fund
by January 31 of the following year. Such distributions will be taxable to
shareholders in the year the distributions are declared, rather than the year
in which the distributions are received.
Dividends from net investment income and net short-term capital gain
distributions are taxable to shareholders as ordinary income. To the extent
determined each year, such dividends are eligible for the dividends received
deduction available to corporations.
Distributions of net long-term capital gains are taxable to shareholders as
long-term capital gains, regardless of the length of time the Fund shares have
been held by a shareholder, and are not eligible for the dividends received
deduction. A loss by a shareholder on the sale of shares of the Fund with
respect to which long-term capital gain distributions have been paid will, to
the extent of such long-term capital gain distributions, be treated as
long-term capital loss even though such shares have been held by the
shareholder for less than one year.
All dividends and distributions are taxable to the shareholder whether
reinvested in additional shares or received in cash. Shareholders receiving
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share equal to the net asset value of a
share of the Fund on the reinvestment date. Shareholders will be notified
annually as to the federal tax status of such payments.
Distributions and dividends by the Fund reduce the net asset value of the
Fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, it nevertheless would be taxable to the shareholder
as ordinary income or capital gains as described above, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Therefore,
those purchasing Fund shares just prior to a distribution will receive a return
of capital upon the ensuing distribution which will nevertheless be taxable to
them.
Upon redemption, sale or exchange of his shares, a shareholder will realize a
taxable gain or loss depending upon his cost basis in his shares. Such gain or
loss will be treated as capital gain or loss if the shares are capital assets
in the shareholder's hands. Such gain or loss will be long-term or short-term
depending on the shareholder's holding period for the shares.
A gain realized on a redemption will not be affected by exercise of the
reinstatement privilege. A loss realized on a redemption, however, will be
disallowed to the extent the shares redeemed are replaced pursuant to exercise
of the reinstatement privilege. In such case, the basis of the shares acquired
pursuant to the exercise of the reinstatement privilege will be adjusted to
reflect the disallowed loss.
The Fund is required to report to the Internal Revenue Service all dividends
and distributions as well as gross proceeds from the redemption of Fund shares,
except in the case of certain exempt shareholders. All dividends and proceeds
will be subject to withholding of federal income tax at a rate of 31% ("backup
withholding") in the case of non-exempt shareholders if (1) the shareholder
fails to furnish the Fund with the shareholder's correct taxpayer
identification number or social security number, (2) the Internal Revenue
Service notifies the Fund that the shareholder has failed to report properly
certain interest and dividend income to the IRS and to respond to notices to
that effect, or (3) when required to do so, the shareholder fails to certify
that he is not subject to backup withholding. If the withholding provisions
are applicable, any such dividends or proceeds, whether reinvested in
additional shares or taken in cash, will be reduced by the amounts required to
be withheld.
The foregoing discussion relates only to federal income tax law as applicable
to U.S. persons (i.e., U.S. citizens and residents and U.S. domestic
corporations, partnerships, trusts and estates). Distributions and dividends
by the Fund also may be subject to state and local taxes, and their treatment
under state and local income tax laws may differ from federal income tax
treatment. Shareholders should consult their tax advisers with respect to
particular questions of federal, state and local taxation. Shareholders who
are not U.S. persons should consult their tax advisers regarding U.S. and
foreign tax consequences of ownership of shares of the Fund, including the
likelihood that dividends to them would be subject to withholding of U.S. tax.
INVESTMENT RESULTS
From time to time, the Fund may use hypothetical investment examples and
performance information in advertisements, shareholder reports or other
communications to shareholders. From time to time, the performance and yield
of the Fund may be quoted and compared to those of other mutual funds with
similar investment objectives, unmanaged investment accounts, including savings
accounts, or other similar products and to stock or other relevant indices or
to rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
performance of the Fund may be compared to data prepared by CDA/Wiesenberger,
Ibbotson Associates, Lipper Analytical Services and Morningstar, Inc.
Performance and yield data as reported in national financial publications
including, but not limited to, MONEY MAGAZINE, FORBES, BARRON'S, THE WALL
STREET JOURNAL and THE NEW YORK TIMES, or in local or regional publications,
may also be used in comparing the performance and yield of the Fund.
Additionally, the Fund may, with proper authorization, reprint articles written
about the Fund and provide them to prospective shareholders.
Quotations of total return for the Fund will be expressed in terms of the
annual compound rate of return of a hypothetical investment in the Fund over
periods of one year, five years and ten years, calculated pursuant to the
following formula required by the Securities and Exchange Commission: P(1 +
T)/n/ = ERV (where P = a hypothetical initial payment of $1,000, T = the
average annual total return, n = the number of years, and ERV = the ending
redeemable value of a hypothetical $1,000 payment made at the beginning of the
period.
The Fund's average annual compound rates of return for the one, five and ten
year periods, ending December 31, 1998 were +16.14%, +18.92% and +14.12%
respectively. These figures assume deduction of the maximum sales charge of
5.75% from the investment at the beginning of each period and assume that all
dividends and distributions are reinvested at net asset value on the
reinvestment date. (Sales charges are reduced under certain circumstances as
described in the Prospectus under "Buying Fund Shares", but these reductions
are not reflected in the quoted return figures above.) The average annual
compound rates of return for the same periods without assuming deduction of a
sales charge would be +23.22%, +20.34% and +14.80%, respectively.
The Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses, so
that total return should not be considered representative of what an investment
in the Fund may earn in any future period. These factors and possible
differences in the methods used in calculating performance should be considered
when comparing the Fund's investment results with those published for other
investment companies, other investment vehicles and unmanaged indices. The
Fund's results also should be considered relative to the risks associated with
its investment objective and policies.
YEAR 2000
The Fund and its shareholders depend on the proper functioning of computer
systems maintained by key service providers, including the investment adviser,
administrator, transfer agent and custodian. Many computer systems in use
today will require reprogramming or replacement prior to the year 2000 because
of the way they store dates and make date-related calculations. The Fund
understands that these service providers are taking steps to address the "Year
2000 problem". However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Fund. In addition, the Fund's
investments may be impacted by the Year 2000 problem. For example, the markets
for securities in which the Fund invests could experience settlement problems
and liquidity issues. Corporate and government data processing errors may
cause losses for individual companies and overall economic uncertainties.
Earnings of individual issuers are likely to be affected by the costs of
addressing the problem, which may be substantial and may be reported
inconsistently.
FINANCIAL STATEMENTS
The Investment Portfolio, Statement of Assets and Liabilities, Statement of
Operations, Statement of Changes in Net Assets, Notes to Financial Statements,
and Report of Independent Accountants contained in the Annual Report dated
December 31, 1998 and on file with the Securities and Exchange Commission are
hereby incorporated by reference into this statement of additional information.
PART C
OTHER INFORMATION
Item 23. Exhibits
a. On file (see SEC files nos. 811-4309 and 2-97999)
b. On file (see SEC files nos. 811-4309 and 2-97999)
c. None
d. On file (see SEC files nos. 811-4309 and 2-97999)
e. On file (see SEC files nos. 811-4309 and 2-97999)
f. On file (see SEC files nos. 811-4309 and 2-97999)
g. On file (see SEC files nos. 811-4309 and 2-97999)
h. On file (see SEC files nos. 811-4309 and 2-97999)
i. Not applicable to this filing
j. Consent of Independent Accountants (TO BE PROVIDED)
k. None.
l. On file (see SEC files nos. 811-4309 and 2-97999)
m. On file (see SEC files nos. 811-4309 and 2-97999)
n. Financial Data Schedule
o. None
Item 24. Persons Controlled by or under Common Control With Registrant.
None
Item 25. Indemnification.
Article VI, paragraph (3) of the Registrant's Articles of Incorporation
provides as follows:
(3) Each director and each officer of the Corporation shall be indemnified by
the Corporation to the full extent permitted by the general laws of the State
of Maryland, subject to the requirements of the 1940 Act.
Article XII of Registrant's By-Laws provides as follows:
ARTICLE XII
Indemnification of Directors, Officers, and Employees
The Corporation shall indemnify to the full extent authorized by law any
person made or threatened to be made a party to any action, suit or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, is or was a director, officer, or employee of the Corporation or
serves or served any other enterprise as a director, officer, or employee at
the request of the Corporation, except that such indemnity shall not protect
any such person against any liability to the Corporation or any stockholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
Section 2-418 of the Maryland General Corporation Law provides as follows:
<UNDEF> 2-418. Indemnification of directors, officers, employees and agents.
(a) Definitions. -- In this section the following words have the meanings
indicated.
(1) "Director" means any person who is or was a director of a corporation
and any person who, while a director of a corporation, is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor entity of a
corporation in a merger, consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the officer or a director in the
corporation; and
(ii) When used with respect to a person other than a director as
contemplated in subsection (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for any other foreign or
domestic corporation or any partnership, joint venture, other enterprise, or
employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened pending or contemplated action, suit or
proceeding, whether civil, criminal, administrative, or investigative.
(b) Permitted indemnification of director.
(1) A Corporation may indemnify any director made a party to any proceeding
by reason of service in that capacity if the director:
(i) Acted in good faith;
(ii) Reasonably believed:
1. In the case of conduct in the director's official capacity with the
corporation, that the conduct was in the best interests of the corporation; and
2. In all other cases, that the conduct was at least not opposed to the
best interests of the corporation; and
(iii) In the case of any criminal proceeding, had no reasonable cause to
believe that the conduct was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may be made only against reasonable expenses and
may not be made in respect of any proceeding in which the director shall have
been adjudged to be liable to the corporation.
(3) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent creates a
rebuttable presumption that the director did not meet the requisite standard of
conduct set forth in this subsection.
(c) No indemnification of director liable for improper personal benefit. -- A
director may not be indemnified under subsection (b) of this section in respect
of any proceeding charging improper personal benefit to the director, whether
or not involving action in the director's official capacity, in which the
director was adjudged to be liable on the basis that personal benefit was
improperly received.
(d) Required indemnification against expenses incurred in successful defense.
- -- Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise, in the
defense of any proceeding referred to in subsection (b) of this section shall
be indemnified against reasonable expenses incurred by the director in
connection with the proceeding.
(2) A court of appropriate jurisdiction, upon application of a director and
such notice as the court shall require, may order indemnification in the
following circumstances:
(i) If it determines a director is entitled to reimbursement under paragraph
(1) of this subsection, the court shall order indemnification, in which case
the director shall be entitled to recover the expenses of securing such
reimbursement; or
(ii) If it determines that the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not the
director has met the standards of conduct set forth in subsection (b) of this
section or has been adjudged liable under the circumstances described in
subsection (c) of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect to any
proceeding by or in the right of the corporation or in which liability shall
have been adjudged in the circumstances described in subsection (c) shall be
limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in which the
proceeding involving the director's liability took place.
(e) Determination that indemnification is proper.
(1) Indemnification under subsection (b) of this section may not be made by
the corporation unless authorized in the specific case after a determination
has been made that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set forth in
subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum consisting of
directors not, at the time, parties to the proceeding, or, if such a quorum
cannot be obtained, then by a majority vote of a committee of the board
consisting solely of two or more directors not, at the time, parties to such
proceeding and who were duly designated to act in the matter by a majority vote
of the full board in which the designated directors who are parties may
participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (i) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the
full board in which directors who are parties may participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination that
indemnification is permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of expenses shall be
made in the manner specified in subparagraph (ii) of paragraph (2) of this
subsection for selection of such counsel.
(4) Shares held by directors who are parties to the proceeding may not be
voted on the subject matter under this subsection.
(f) Payment of expenses in advance of final disposition of action.
(1) Reasonable expenses incurred by a director who is a party to a proceeding
may be paid or reimbursed by the corporation in advance of the final
disposition of the proceeding, after a determination that the facts then known
to those making the determination would not preclude indemnification under this
section, upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good faith belief
that the standard of conduct necessary for indemnification by the corporation
as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay the
amount if it shall ultimately be determined that the standard of conduct has
not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of this
subsection shall be an unlimited general obligation of the director but need
not be secured and may be accepted without reference to financial ability to
make the repayment.
(3) Determinations and authorizations of payments under this subsection shall
be in the manner specified in subsection (e) of this section.
(g) Validity of indemnification provision. -- A provision for the corporation
to indemnify a director who is made a party to a proceeding, whether contained
in the charter, the bylaws, a resolution of stockholders or directors, an
agreement or otherwise, except as
contemplated by subsection (k) of this section, is not valid unless consistent
with this section or, to the extent that indemnity under this section is
limited by the charter, consistent with the charter.
(h) Reimbursement of director's expenses incurred while appearing as witness.
- -- This section does not limit the corporation's power to pay or reimburse
expenses incurred by a director in connection with an appearance as a witness
in a proceeding at a time when the director has not been made a named defendant
or respondent in the proceeding.
(i) Director's service to employee benefit plan. -- For purposes of this
section:
(1) The corporation shall be deemed to have requested a director to serve an
employee benefit plan where the performance of the director's duties to the
corporation also imposes duties on, or otherwise involves services by, the
director to the plan or participants or beneficiaries of the plan;
(2) Excise taxes assessed on a director with respect to an employee benefit
plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with respect to an employee
benefit plan in the performance of the director's duties for a purpose
reasonably believed by the director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the corporation.
(j) Officer, employee or agent. -- Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the extent
provided in subsection (d) of this section for a director and shall be
entitled, to the same extent as a director, to seek indemnification pursuant to
the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer, employee,
or agent of the corporation to the same extent that it may indemnify directors
under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to an
officer, employee, or agent who is not a director to such further extent,
consistent with law, as may be provided by its charter, bylaws, general or
specific action of its board of directors, or contract.
(k) Insurance. -- A corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against and incurred by such person
in any such capacity or arising out of such person's position, whether or not
the corporation would have the power to indemnify against liability under the
provisions of this section.
(l) Report of indemnification to stockholders. -- Any indemnification of, or
advance of expenses to, a director in accordance with this section, if arising
out of a proceeding by or in the right of the corporation, shall be reported in
writing to the stockholders with the notice of the next stockholders' meeting
or prior to the meeting. (1981, ch. 737.)
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant 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 director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer of controlling person 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 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.
Reference is also made to the Distribution Agreement and Underwriting
Agreement previously filed with the Commission.
Item 26. Business and Other Connections of Investment Adviser
For information concerning Washington Investment Advisers, Inc., see
"Management of the Fund" in Part B of the Prospectus. Set forth below is a list
of each officer and director of Washington Investment Advisers, Inc. indicating
each business, profession, vocation or employment of a substantial nature in
which each such person has been engaged since January, 1996 for his own account
or in the capacity of director, trustee, officer, partner or employee. All
addresses are Washington Investment Advisers, Inc., 1101 Vermont Avenue, N.W.,
Washington, D.C. 20005.
<TABLE>
<CAPTION>
Name Position with Washington Investment Advisers, Inc. Principal Occupation or Other Employment of a Substantial
Nature During Past Two Years
<S> <C> <C>
Prabha S. Carpenter Vice President and Portfolio Manager Senior Vice President, The Growth
Fund of Washington, Inc.
Stephen Hartwell President and Director Chairman of the Board, Washington Management Corporation
Howard L. Kitzmiller Secretary and Treasurer Senior Vice President, Secretary, Assistant Treasurer, and Director, Washington
Management Corporation
James H. Lemon, Jr. Director Chairman and Chief Executive Officer of The Johnston-Lemon Group, Incorporated
Harry J. Lister Chairman of the Board President and Director, Washington Management Corporation
Michael W. Stockton Asst. Vice President, Assistant Secretary and Assistant Treasurer Assistant Vice President, Assistant
Secretary and Assistant Treasurer,
Washington Management Corporation
</TABLE>
____________
* For information with respect to other substantial business, profession,
vocation or employment of the above directors and officers, see "Management of
the Fund" in Part B of the Prospectus which is incorporated herein by
reference.
ITEM 27. Principal Underwriters
(a) Vista Fund Distributors, Inc., formerly called Vista Broker-Dealer
Services, Inc., a wholly-owned subsidiary of The BISYS Group, Inc., is the
underwriter for the Registrant.
(b) The following are the Directors and officers of Vista Fund Distributors,
Inc., a wholly-owned subsidiary of The BISYS Group, Inc..
<TABLE>
<CAPTION>
Name Position and Offices with Position and Offices with
Distributor the Registrant
<S> <C> <C> <C>
* Lynn J. Mangum Chairman None
Richard Baxt President None
12 E. 46th Street, 8th Fl.
New York, NY 10017
Lee W. Shultheis Senior Vice President None
One Chase Manhattan
Plaza, 3rd Floor
New York, NY 10081
* Dennis Sheehan Director None
# Michael Burns Vice President None
# David Blackmore Vice President None
# Stephen Ludwig Compliance Officer None
* Kevin Dell Secretary None
# Robert L. Tuch Asst. Secretary None
# William J. Tomko Senior Vice President None
</TABLE>
* Address is 150 Clove Street, Little Falls, NJ 07424
# Address is 3435 Stelzer Road, Columbus, OH 43219
(c) None
ITEM 28. Location of Accounts and Records
The accounts and records of the Registrant are located, in whole or in part,
at the office of the Registrant and the following locations:
<TABLE>
<CAPTION>
Name Address
<S> <C>
Vista Fund Distributors, Inc., a wholly-owned subsidiary of The BISYS Group, Inc. 3435 Stelzer Road
Columbus, OH 43219
DST Systems, Inc. (transfer agent) 210 W. 10th Street
Kansas City, MO 64105
The Chase Manhattan Bank (custodian) One Chase Manhattan Plaza
New York, NY 10081
Washington Management Corporation (business manager) 1101 Vermont Ave., NW
Washington, DC 20005
Washington Investment Advisers, Inc. (investment adviser) 1101 Vermont Ave., NW
Washington, DC 20005
</TABLE>
ITEM 29. Management Services
Not applicable
ITEM 30. Undertakings
As reflected in the Prospectus, the Fund undertakes to provide each person to
whom a prospectus is delivered with a copy of the Fund's latest annual report
to shareholders, upon request and without charge.
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Washington, District of Columbia, on the 24th day of February, 1999.
THE GROWTH FUND OF WASHINGTON, INC.
By /S/ Harry J. Lister
President
Pursuant to the requirement of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below on February 24th, 1999 by the
following persons in the capacities indicated.
SIGNATURE TITLE
(1) Principal Executive Officer:
/S/Harry J. Lister President
(2) Principal Financial Officer and
Principal Accounting Officer:
/S/Howard L. Kitzmiller Senior Vice President,
Secretary, Treasurer
and Chief Financial Officer
(3) Directors
James H. Lemon* Chairman of the Board
Cyrus A. Ansary* Director
/S/Harry J. Lister Director
T. Eugene Smith* Director
Leonard P. Steuart II* Director
Margita E. White* Director
*/S/By Howard L. Kitzmiller, Attorney-in-fact
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 22879002
<INVESTMENTS-AT-VALUE> 77886745
<RECEIVABLES> 92461
<ASSETS-OTHER> 27231
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 78006437
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138289
<TOTAL-LIABILITIES> 138289
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22827398
<SHARES-COMMON-STOCK> 2523667
<SHARES-COMMON-PRIOR> 2362463
<ACCUMULATED-NII-CURRENT> 11934
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18002
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 55007743
<NET-ASSETS> 77868148
<DIVIDEND-INCOME> 928278
<INTEREST-INCOME> 108638
<OTHER-INCOME> 0
<EXPENSES-NET> 855083
<NET-INVESTMENT-INCOME> 181833
<REALIZED-GAINS-CURRENT> 2941788
<APPREC-INCREASE-CURRENT> 11385760
<NET-CHANGE-FROM-OPS> 14509381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 169899
<DISTRIBUTIONS-OF-GAINS> 2883033
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 238097
<NUMBER-OF-SHARES-REDEEMED> 169144
<SHARES-REINVESTED> 92251
<NET-CHANGE-IN-ASSETS> 16219092
<ACCUMULATED-NII-PRIOR> 3070
<ACCUMULATED-GAINS-PRIOR> 49248
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 496177
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 855083
<AVERAGE-NET-ASSETS> 69107359
<PER-SHARE-NAV-BEGIN> 26.09
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> 5.95
<PER-SHARE-DIVIDEND> .07
<PER-SHARE-DISTRIBUTIONS> 1.185
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 30.86
<EXPENSE-RATIO> 1.24
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
