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As filed with the Securities and Exchange Commission on October 7, 1998
Registration Nos. 33-48605 and 811-06139
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 18
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 37
THE 59 WALL STREET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
21 Milk Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (617) 423-0800
Philip W. Coolidge
21 Milk Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copy to:
John E. Baumgardner, Jr., Esq.
Sullivan & Cromwell
125 Broad Street, New York, New York 10004
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
(par value $.001)
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EXPLANATORY NOTE
This Amendment (the "Amendment") to the Registrant's Registration
Statement relates to the Prospectus of The 59 Wall Street Tax-Efficient
Equity Fund (the "Fund"), a new series of shares of the Registrant. This
Amendment is being filed in order to file responses to comments with respect
to the Fund's Prospectus included in Post-Effective Amendment No. 17.
Two other series of shares of the Registrant, The 59 Wall Street U.S.
Equity Fund and The 59 Wall Street Inflation-Indexed Securities Fund, each a
series of shares of the Registrant are each offered by the Prospectus that is
included in Part A of Amendment No. 34 to the Registrant's Registration
Statement.
Three other series of shares of the Registrant, The 59 Wall Street
Small Company Fund, The 59 Wall Street European Equity Fund and The 59 Wall
Street Pacific Basin Equity Fund, are offered by the combined Prospectus that
is included in Part A of Amendment No. 28 to the Registrant's Registration
Statement.
Two other series of shares of the Registrant, The 59 Wall Street
International Equity Fund and The 59 Wall Street Emerging Markets Fund are
offered by the Prospectus that is included in Part A of Amendment No. 33 to the
Registrant's Registration Statement.
One other series of shares of the Registrant, The 59 Wall Street Mid-
Cap Fund is offered by the Prospectus that is included in Part A of Amendment
No. 35 to the Registrant's Registration Statement.
This Amendment does not relate to, amend or otherwise affect the
above-referenced Prospectuses, which are incorporated herein by reference.
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PROSPECTUS
The 59 Wall Street Tax-Efficient Equity Fund
21 Milk Street, Boston, Massachusetts 02109
The 59 Wall Street Tax-Efficient Equity Fund is a separate portfolio of
The 59 Wall Street Fund, Inc. Shares of the Fund are offered by this Prospectus.
The Fund's investment objective is to provide investors with tax-efficient
long-term capital growth while also generating current income. The Fund is
designed to reduce the impact of Federal income taxes on a shareholder's
investment return and to maximize return on an after tax basis. The assets of
the Fund under normal circumstances are fully invested in equity securities of
companies that are well-established and financially sound. The Fund is an
appropriate investment for those investors seeking superior long-term returns
combined with some current income and who are able to accept the risks inherent
in equity investing. There can be no assurance that the Fund's investment
objective will be achieved.
Investments in the Fund are neither insured nor guaranteed by the U.S.
Government. Shares of the Fund are not deposits or obligations of, or guaranteed
by, Brown Brothers Harriman & Co. or any other bank, and the shares are not
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other federal, state or other governmental agency.
Brown Brothers Harriman & Co. is the investment adviser to, the
administrator of and the shareholder servicing agent for the Fund. Shares of the
Fund are offered at net asset value and without a sales charge.
This Prospectus, which investors are advised to read and retain for
future reference, sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated October 15, 1998. This information is
incorporated herein by reference and is available without charge upon request
from the Fund's distributor, 59 Wall Street Distributors, Inc., 21 Milk Street,
Boston, Massachusetts 02109.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is October 15, 1998.
<PAGE>
TABLE OF CONTENTS
Page
----
Expense Table 3
Investment Objective and Policies 4
Investment Restrictions 7
Purchase of Shares 8
Redemption of Shares 9
Management of the Corporation 10
Net Asset Value 15
Dividends and Distributions 16
Taxes 16
Description of Shares 17
Additional Information 18
Appendix 20
TERMS USED IN THIS PROSPECTUS
Corporation The 59 Wall Street Fund, Inc.
Fund The 59 Wall Street Tax-Efficient
Equity Fund
Investment Adviser and Administrator Brown Brothers Harriman & Co.
Subadministrator 59 Wall Street Administrators, Inc.
("59 Wall Street Administrators")
Distributor 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors")
1940 Act The Investment Company Act of 1940,
as amended
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EXPENSE TABLE
The following table provides (I) a summary of estimated expenses
relating to purchases and sales of shares of the Fund, and the aggregate annual
operating expenses of the Fund, as a percentage of average net assets of the
Fund, and (ii) an example illustrating the dollar cost of such estimated
expenses on a $1,000 investment in the Fund.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee 0.65%
12b-1 Fee None
Other Expenses
Administration Fee 0.15%
Shareholder Servicing/
Eligible Institution Fee 0.25
Expense Payment Fee 0.15 0.55
---- ----
Total Fund Operating Expenses 1.20%
Example
A shareholder of the Fund would pay the following expenses 1 year 3 years
on a $1,000 investment, assuming (1) 5% annual return,
and (2) redemption at the end of each time period: $12 $38
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In connection
with the Example, please note that $1,000 is currently less than the Fund's
minimum purchase requirement. The purpose of this table is to assist investors
in understanding the various costs and expenses that shareholders of the Fund
bear directly or indirectly. Under an expense payment agreement, 59 Wall Street
Administrators pays the Fund's expenses, other than fees paid to Brown Brothers
Harriman & Co. under the Corporation's Administration Agreement and other than
expenses relating to the organization of the Fund. If this expense payment
agreement was not in place, the "Other Expenses" would be 0.70%, total Fund
operating expenses would be expected to be 1.35% and the shareholder expenses
reflected in the example above would be $14 and $43, respectively for the Fund.
(See "Expense Payment Agreement").
For more information with respect to the expenses of the Fund see
"Management of the Corporation" herein.
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INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fund is to provide investors with
tax-efficient long-term capital growth.
The investment objective of the Fund is a fundamental policy and may be
changed only with the approval of the holders of a "majority of the Fund's
outstanding voting securities" (as defined in the 1940 Act). (See "Additional
Information" in this Prospectus.) However, the investment policies of the Fund
as described below are not fundamental and may be changed without such approval.
The Fund is an appropriate investment for those investors seeking
superior long-term returns who are able to accept the risks inherent in equity
investing. The Fund is not an appropriate investment for tax deferred accounts
such as 401k and IRA plans.
The assets of the Fund under normal circumstances are fully invested in
equity securities traded on the New York Stock Exchange, American Stock Exchange
or the National Association of Securities Dealers Automated Quotations (NASDAQ)
System. Although the assets of the Fund are invested primarily in common stocks,
other securities with equity characteristics may be purchased, including
securities convertible into common stock, trust or limited partnership
interests, rights, warrants and American Depositary Receipts. Investments
generally consist of equities issued by domestic firms; however, equities of
foreign-based companies may also be purchased if they are registered under the
Securities Act of 1933.
The Fund primarily invests in medium and large sized companies with a
sound financial structure, proven management, an established industry position
and competitive products and services. In selecting individual securities, the
focus is primarily on those companies that exhibit above average revenue and
earnings growth as well as high or improving returns on investment.
The Fund holds a broadly diversified portfolio representing many
sectors of the U.S. economy. Investment in both growth and value equities
provides exposure to each of the dominant investment styles. These
diversification strategies are designed to control the portfolio's exposure to
economic sector risk, style risk and company specific risk.
Historically, common stocks have provided investors with higher
long-term returns than other investment vehicles. The following graph
illustrates that over time, common stocks have outperformed investments in
long-term government bonds and U.S. Treasury bills.
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[The following table was depicted as a line graph in the printed material]
<TABLE>
<CAPTION>
Growth of a $1 investment made in 1925
<S> <C> <C> <C> <C>
Long Term U.S.
Common Stock Gov't Bonds Treasury Bills Inflation
1925 . . . . . . . $1 $1 $1 $1
1935 . . . . . . . $2 $2 $1 $1
1945 . . . . . . . $4 $3 $1 $1
1955 . . . . . . . $19 $3 $1 $2
1965 . . . . . . . $53 $3 $2 $2
1975 . . . . . . . $73 $5 $3 $3
1985 . . . . . . . $279 $11 $8 $6
1995 . . . . . . . $1,114 $34 $13 $9
1997 . . . . . . . $1,830 $39 $14 $9
<FN>
This graph illustrates the total return of the major classes of financial assets
since 1925, including common stocks, long-term government bonds and money market
securities as measured by U.S. Treasury bills. The Consumer Price Index is used
as a measure of inflation. This graph is not a prediction of the future
performance of any of these assets or of inflation. Source: Brown Brothers
Harriman & Co.
</FN>
</TABLE>
The "drag" on investment returns related to income taxes and capital gains taxes
can be reduced over time through the use of tax-efficient investment strategies.
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This enables investors to retain a larger portion of their pre-tax
investment returns on an after-tax basis.
Key elements of our tax-efficient approach include:
o Pursuing an equity strategy which emphasizes capital appreciation
o Focusing stock selection process on the security's long-term
investment potential
o Selective realization of losses within the Fund that can be used to
offset realized gains
o Evaluating potential stock sales and reinvestment alternatives on an
after-tax bsis
While many equity mutual funds seek to provide superior pre-tax
returns, the Fund seeks to provide superior after-tax returns. Although the
Fund's tax-efficient strategy is to minimize an investor's tax liability, there
can be no guarantee that it will be minimized. In employing its strategies, the
Fund will sell securities when the anticipated performance benefit justifies
incurring the resulting tax liability.
The Fund is actively managed by a team of investment professionals and
research analysts. (See "Investment Adviser".) The Investment Adviser analyzes
economic trends and identifies stocks appropriate for investment in the Fund.
Investment decisions are the result of a disciplined process which
systematically evaluates future growth expectations and asset valuations in
relation to prevailing price levels.
The Fund generally intends to pay redemption proceeds in cash, however,
it reserves the right at its sole discretion to pay significant redemptions by a
distribution in-kind of securities
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(instead of cash). An in-kind redemption payment can shield the Fund, and other
shareholders, from tax liabilities that might otherwise be incurred. However,
the stocks received will continue to fluctuate in value after redemption and
will be subject to brokerage and other transaction costs when liquidated.
Risk Factors
Although the assets of the Fund are invested primarily in equity
securities of larger, well-established companies, the portfolio is subject to
market risk, meaning that stock prices in general may decline over short or
extended periods of time. As with any equity-based mutual fund, the investor
should be aware that unfavorable economic conditions can adversely affect
corporate earnings and cause declines in stock prices.
Hedging Strategies
Subject to applicable laws and regulations and solely as a hedge
against changes in the market value of portfolio securities or securities
intended to be purchased, put and call options on stock indexes may be purchased
and futures contracts on stock indexes may be entered into for the Fund. (See
Appendix on page for more detail.) For the same purpose, put and call options on
stocks may be purchased, although the current intention is not to do so in such
a manner that more than 5% of the Fund's net assets would be at risk.
Over-the-counter (OTC) options purchased are treated as not readily
marketable.
Portfolio Brokerage
The portfolio of the Fund is managed actively in pursuit of its
tax-efficient investment objective. Securities are not traded for short-term
profits but, when circumstances warrant, securities are sold without regard to
the length of time held. The Fund's annual portfolio turnover rate is expected
to be 30%. A 25% annual turnover rate would occur, for example, if one-quarter
of the securities in the Fund's portfolio (excluding short-term obligations)
were replaced once in a period of one year. The amount of brokerage commissions
and taxes on realized capital gains to be borne by the shareholders of the Fund
tend to increase as the turnover rate activity increases. In effecting
securities transactions for the Fund, the Investment Adviser seeks to obtain the
best price in execution of orders. In selecting brokers, the Investment Adviser
considers a number of factors including: the broker's ability to execute orders
without disturbing the market price; the broker's reliability for prompt,
accurate confirmations and on-time delivery of securities; the broker's
financial condition and responsibility; the research and other investment
information provided by the broker; and the commissions charged. Accordingly,
the commissions charged by any such broker may be greater than the amount
another firm might charge if the Investment Adviser determines in good faith
that the amount of such commissions is reasonable in relation to the value of
the brokerage services and research information provided by such broker. The
Investment Adviser may direct a portion of the Fund's securities transactions to
certain
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unaffiliated brokers which in turn use a portion of the commissions
they receive from the Fund to pay other unaffiliated service providers on behalf
of the Fund for services provided for which the Fund would otherwise be
obligated to pay. Such commissions paid by the Fund are at the same rate paid to
other brokers for effecting similar transactions in listed equity securities.
Brown Brothers Harriman & Co. acts as one of the principal brokers of the Fund
in the purchase and sale of portfolio securities when, in the judgment of the
Investment Adviser, that firm is able to obtain a price and execution at least
as favorable as other qualified brokers. As one of the principal brokers of the
Fund, Brown Brothers Harriman & Co. receives brokerage commissions from the
Fund.
On those occasions when Brown Brothers Harriman & Co. deems the
purchase or sale of a security to be in the best interests of the Fund as well
as other customers, Brown Brothers Harriman & Co., to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Fund with those to be sold or
purchased for other customers in order to obtain best execution, including lower
brokerage commissions, if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction are made by Brown Brothers Harriman & Co. in the manner it considers
to be most equitable and consistent with its fiduciary obligations to its
customers, including the Fund. In some instances, this procedure might adversely
affect the Fund.
Other Investment Techniques
Short-Term Instruments. The assets of the Fund may be invested in U.S.
dollar denominated short-term instruments, including repurchase agreements,
obligations of the U.S. Government, its agencies or instrumentalities,
commercial paper and bank obligations (such as certificates of deposit, fixed
time deposits, and bankers' acceptances). Cash is held for the Fund in demand
deposit accounts with the Fund's custodian bank.
U.S. Government Securities. The assets of the Fund may be invested in
securities issued by the U.S. Government, its agencies or instrumentalities.
These securities include notes and bonds issued by the U.S. Treasury, zero
coupon bonds and stripped principal and interest securities.
Restricted Securities. Securities that have legal or contractual
restrictions on their resale may be acquired for the Fund. The price paid for
these securities, or received upon resale, may be lower than the price paid or
received for similar securities with a more liquid market. Accordingly, the
valuation of these securities reflects any limitation on their liquidity.
Loans of Portfolio Securities. Loans up to 30% of the total value of
the securities of the Fund are permitted. These loans must be secured
continuously by cash or equivalent collateral or by an irrevocable letter of
credit in favor of the Fund at least equal at all times to 100% of the market
value of the securities loaned plus accrued income. By lending the securities of
the Fund, the Fund's income can be increased by the Fund continuing to receive
income on the loaned securities as well as by the opportunity for the Fund to
receive interest
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on the collateral. Any appreciation or depreciation in the market price of the
borrowed securities which occurs during the term of the loan inures to the Fund
and its shareholders.
When-Issued and Delayed Delivery Securities. Securities may be
purchased for the Fund on a when-issued or delayed delivery basis. For example,
delivery and payment may take place a month or more after the date of the
transaction. The purchase price and the interest rate payable on the securities,
if any, are fixed on the transaction date. The securities so purchased are
subject to market fluctuation and no income accrues to the Fund until delivery
and payment take place. At the time the commitment to purchase securities on a
when-issued or delayed delivery basis is made, the transaction is recorded and
thereafter the value of such securities is reflected each day in determining the
Fund's net asset value. At the time of its acquisition, a when-issued or delayed
delivery security may be valued at less than the purchase price. Commitments for
such when-issued or delayed delivery securities are made only when there is an
intention of actually acquiring the securities. On delivery dates for such
transactions, such obligations are met from maturities or sales of securities
and/or from cash flow. If the right to acquire a when-issued or delayed delivery
security is disposed of prior to its acquisition, the Fund could, as with the
disposition of any other portfolio obligation, incur a gain or loss due to
market fluctuation. When-issued or delayed delivery commitments for the Fund may
not be entered into if such commitments exceed in the aggregate 15% of the
market value of its total assets, less liabilities other than the obligations
created by when- issued or delayed delivery commitments.
INVESTMENT RESTRICTIONS
The Statement of Additional Information for the Fund includes a listing
of the specific investment restrictions which govern the Fund's investment
policies. Certain of these investment restrictions are deemed fundamental
policies and may be changed only with the approval of the holders of a "majority
of the Fund's outstanding voting securities" (as defined in the 1940 Act) (see
"Additional Information in this Prospectus").
As a fundamental policy, money is not borrowed for the Fund in an
amount in excess of 33 1/3% of the assets of the Fund. Money is borrowed only
from banks and only either to accommodate requests for the redemption of shares
while effecting an orderly liquidation of portfolio securities or to maintain
liquidity in the event of an unanticipated failure to complete a portfolio
security transaction or other similar situations.
As a non-fundamental policy, under normal circumstances, at least 65%
of the value of the total assets of the Fund is invested in equity securities.
The Fund is classified as diversified under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; securities issued
by the U.S. Government, its agencies or instrumentalities; and other securities
limited in respect of any one issuer to an amount not greater in value than 5%
of the Fund's total assets. The Fund does not purchase more than 10% of the
outstanding voting securities of any issuer.
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PURCHASE OF SHARES
Shares of the Fund are offered on a continuous basis at their net asset
value without a sales charge. The Corporation reserves the right to determine
the purchase orders for Fund shares that it will accept. Shares of the Fund may
be purchased on any day the New York Stock Exchange is open for regular trading
if the Corporation receives the purchase order and acceptable payment for such
order prior to 4:00 P.M., New York time. Purchases of Fund shares are then
executed at the net asset value per share next determined on that same day.
Shares are entitled to dividends declared, if any, starting as of the first
business day following the day a purchase order is executed on the books of the
Corporation.
An investor who has an account with an Eligible Institution (see page )
or a Financial Intermediary (see page ) may place purchase orders for Fund
shares with the Corporation through that Eligible Institution or Financial
Intermediary which holds such shares in its name on behalf of that customer
pursuant to arrangements made between that customer and that Eligible
Institution or Financial Intermediary. Each Eligible Institution and each
Financial Intermediary may establish and amend from time to time a minimum
initial and a minimum subsequent purchase requirement for its customers. Each
Eligible Institution or Financial Intermediary arranges payment for Fund shares
on behalf of its customers. A transaction fee may be charged by an Eligible
Institution or a Financial Intermediary on the purchase of Fund shares.
An investor who does not have an account with an Eligible Institution
or a Financial Intermediary must place purchase orders for Fund shares with the
Corporation through the Fund's Shareholder Servicing Agent. Such an investor has
such shares held directly in the investor's name on the books of the Corporation
and is responsible for arranging for the payment of the purchase price of Fund
shares. All purchase orders for initial and subsequent purchases are executed at
the net asset value per share next determined after the Corporation's custodian,
State Street Bank and Trust Company, has received payment in the form of a
cashier's check drawn on a U.S. bank, a check certified by a U.S. bank or a wire
transfer. Brown Brothers Harriman & Co., as the Fund's Shareholder Servicing
Agent, has established a minimum initial purchase requirement for the Fund of
$100,000 and a minimum subsequent purchase requirement for the Fund of $25,000.
These minimum purchase requirements may be amended from time to time.
Inquiries regarding the manner in which purchases of Fund shares may be
effected and other matters pertaining to the Fund should be directed to Brown
Brothers Harriman & Co., the Fund's Shareholder Servicing Agent. (See back cover
for address and phone number.)
REDEMPTION OF SHARES
A redemption request must be received by the Corporation prior to 4:00
P.M., New York time on any day the New York Stock Exchange is open for regular
trading. Such a redemption is executed at the net asset value per share next
determined on that same day. Shares continue to earn dividends declared, if any,
through the business day a redemption request is executed on the books of the
Corporation.
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Shares held by an Eligible Institution or a Financial Intermediary on behalf of
a shareholder must be redeemed through that Eligible Institution or Financial
Intermediary pursuant to arrangements made between that shareholder and that
Eligible Institution or Financial Intermediary. Proceeds of a redemption are
paid to that shareholder's account at that Eligible Institution or Financial
Intermediary on a date established by the Eligible Institution or Financial
Intermediary. A transaction fee may be charged by an Eligible Institution or a
Financial Intermediary on the redemption of Fund shares.
Shares held directly in the name of a shareholder on the books of the
Corporation may be redeemed by submitting a redemption request in good order to
the Corporation through the Fund's Shareholder Servicing Agent. (See back cover
for address and phone number.) Proceeds resulting from such redemption are paid
by the Corporation directly to the shareholder in "available" funds generally on
the next business day after the redemption request is executed, and in any event
within seven days.
Redemptions By the Corporation
The Fund's Shareholder Servicing Agent (see page ), each Eligible
Institution (see page ) and each Financial Intermediary (see page ) may
establish and amend from time to time for their respective customers a minimum
account size. If the value of a shareholder's holdings in the Fund falls below
that amount because of a redemption of shares, the shareholder's remaining
shares may be redeemed. If such remaining shares are to be redeemed, the
shareholder is so notified and is allowed 60 days to make an additional
investment to enable the shareholder to meet the minimum requirement before the
redemption is processed. Brown Brothers Harriman & Co., as the Fund's
Shareholder Servicing Agent, has established a minimum account size of $25,000.
Further Redemption Information In the event a shareholder redeems all shares
held in the Fund, future purchases of shares of the Fund by such shareholder
would be subject to the Fund's minimum initial purchase requirements. The value
of shares redeemed may be more or less than the shareholder's cost depending on
Fund performance during the period the shareholder owned such shares.
Redemptions of shares are taxable events on which a shareholder may realize a
gain or a loss.
An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.
The Corporation has reserved the right to pay the amount of a
redemption from the Fund, either totally or partially, by a distribution in kind
of securities (instead of cash) from the Fund. (See "Net Asset Value; Redemption
in Kind" in the Statement of Additional Information.)
A shareholder's right to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed for up to
seven days and for such other
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periods as the 1940 Act may permit. (See "Additional Information" in
the Statement of Additional Information.)
MANAGEMENT OF THE CORPORATION
Directors and Officers
The Directors, in addition to supervising the actions of the
Administrator, Investment Adviser and Distributor of the Fund, as set forth
below, decide upon matters of general policy. Because of the services rendered
by the Investment Adviser and the Administrator, the Corporation itself requires
no employees other than its officers, none of whom, other than the Chairman,
receive compensation from the Fund and all of whom, other than the Chairman, are
employed by 59 Wall Street Administrators. (See "Directors and Officers" in the
Statement of Additional Information.)
The Directors of the Corporation are:
J.V. Shields, Jr.
Chairman and Chief Executive Officer of Shields & Company
Eugene P. Beard
Vice Chairman -- Finance and Operations of The Interpublic Group of
ompanies
David P. Feldman
Retired, Chairman and Chief Executive Officer -- AT&T Investment
Management Corporation
Alan G. Lowy
Private Investor
Arthur D. Miltenberger
Retired, Vice President and Chief Financial Officer of Richard K.
Mellon and Sons
Investment Adviser
The Investment Adviser to the Fund is Brown Brothers Harriman & Co.,
Private Bankers, a New York limited partnership established in 1818. The firm is
subject to examination and regulation by the Superintendent of Banks of the
State of New York and by the Department of Banking of the Commonwealth of
Pennsylvania. The firm is also subject to supervision and examination by the
Commissioner of Banks of the Commonwealth of Massachusetts.
Brown Brothers Harriman & Co. provides investment advice and portfolio
management services to the Fund. Subject to the general supervision of the
Corporation's Directors, Brown Brothers Harriman & Co. makes the day-to-day
investment decisions for the Fund, places the purchase and sale orders for the
portfolio transactions of the Fund, and generally manages the Fund's
investments. Brown Brothers Harriman & Co. provides a broad range of investment
management services for customers in the United States and abroad. At June 30,
1998, it managed total assets of approximately $30 billion.
The Fund's portfolio is managed on a day-to-day basis by a team of
individuals, including Mr. Brian A. Berris, Mr. Stephen C. Whitman, Jr., Mr.
Geoffrey D. Kimball and Mr. Thomas H. MacCowatt. Mr. Berris holds a B.S.B.A.
from the University of Nebraska, a M.B.A. from
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Northwestern University and is a Chartered Financial Analyst. He joined Brown
Brothers Harriman & Co. in 1973. Mr. Whitman holds a B.A. from Colgate
University and a M.B.A. from the University of Virginia. He joined Brown
Brothers Harriman & Co. in 1986. Mr. Kimball holds a B.A. from Yale University
and a M.A. from Columbia University. He joined Brown Brothers Harriman & Co in
1977. Mr. MacCowatt holds a B.A. from Colgate University, a M.B.A. from New York
University and is a Chartered Financial Analyst. He joined Brown Brothers
Harriman & Co. in 1990.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by Brown Brothers Harriman & Co. under the
Investment Advisory Agreement, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.65% of the
average daily net assets of the Fund. Brown Brothers Harriman & Co. also
receives an annual administration fee from the Fund equal to 0.15% of the Fund's
average daily net assets and an annual shareholder servicing/eligible
institution fee from the Fund equal to 0.25% of the average daily net assets of
the Fund represented by shares owned during the period by customers for whom
Brown Brothers Harriman & Co. is the holder or agent of record. The investment
advisory services of Brown Brothers Harriman & Co. to the Fund are not exclusive
under the terms of the Investment Advisory Agreement. Brown Brothers Harriman &
Co. is free to and does render investment advisory services to others, including
other registered investment companies.
Pursuant to a license agreement between the Corporation and Brown
Brothers Harriman & Co. dated September 5, 1990, as amended as of December 15,
1993, the Corporation may continue to use in its name 59 Wall Street, the
current and historic address of Brown Brothers Harriman & Co. The agreement may
be terminated by Brown Brothers Harriman & Co. at any time upon written notice
to the Corporation upon the expiration or earlier termination of any investment
advisory agreement between the Corporation or any investment company in which a
series of the Corporation invests all of its assets and Brown Brothers Harriman
& Co. Termination of the agreement would require the Corporation to change its
name and the name of the Fund to eliminate all reference to 59 Wall Street.
Pursuant to license agreements between Brown Brothers Harriman & Co.
and each of 59 Wall Street Administrators and 59 Wall Street Distributors (each
a Licensee), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name 59 Wall Street, the current and historic address
of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co. does not
terminate the respective license agreement, which would require the Licensee to
change its name to eliminate all reference to 59 Wall Street.
Administrator
Brown Brothers Harriman & Co. acts as Administrator for the
Corporation. (See "Administrator" in the Statement of Additional Information.)
In its capacity as Administrator, Brown Brothers Harriman & Co.
administers all aspects of the Corporation's operations subject to the
supervision of the Corporation's Directors except
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as set forth below under "Distributor". In connection with its responsibilities
as Administrator and at its own expense, Brown Brothers Harriman & Co. (I)
provides the Corporation with the services of persons competent to perform such
supervisory, administrative and clerical functions as are necessary in order to
provide effective administration of the Corporation, including the maintenance
of certain books and records; (ii) oversees the performance of administrative
and professional services to the Corporation by others, including the Fund's
Custodian, Transfer and Dividend Disbursing Agent; (iii) provides the
Corporation with adequate office space and communications and other facilities;
and (iv) prepares and/or arranges for the preparation, but does not pay for, the
periodic updating of the Corporation's registration statement and the Fund's
prospectus, the printing of such documents for the purpose of filings with the
Securities and Exchange Commission and state securities administrators, and the
preparation of tax returns for the Fund and reports to the Fund's shareholders
and the Securities and Exchange Commission.
For the services rendered to the Corporation and related expenses borne
by Brown Brothers Harriman & Co., as Administrator of the Corporation, Brown
Brothers Harriman & Co. receives from the Fund an annual fee, computed daily and
payable monthly, equal to 0.15% of the Fund's average daily net assets.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators performs such subadministrative
duties for the Corporation as are from time to time agreed upon by the parties.
The offices of 59 Wall Street Administrators are located at 21 Milk Street,
Boston, Massachusetts 02109. 59 Wall Street Administrators is a wholly-owned
subsidiary of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated
with Brown Brothers Harriman & Co. 59 Wall Street Administrators'
subadministrative duties may include providing equipment and clerical personnel
necessary for maintaining the organization of the Corporation, participation in
the preparation of documents required for compliance by the Corporation with
applicable laws and regulations, preparation of certain documents in connection
with meetings of Directors and shareholders of the Corporation, and other
functions that would otherwise be performed by the Administrator as set forth
above. For performing such subadministrative services, 59 Wall Street
Administrators receives such compensation as is from time to time agreed upon
but not in excess of the amount paid to the Administrator from the Fund.
Shareholder Servicing Agent
The Corporation has entered into a shareholder servicing agreement with
Brown Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co.,
as agent for the Corporation with respect to the Fund, among other things:
answers inquiries from shareholders of and prospective investors in the Fund
regarding account status and history, the manner in which purchases and
redemptions of Fund shares may be effected and certain other matters pertaining
to the Fund; assists shareholders of and prospective investors in the Fund in
designating and changing dividend options, account designations and addresses;
and provides such other related services as the Corporation or a shareholder of
or prospective investor in the Fund may reasonably request. For these services,
Brown Brothers Harriman
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<PAGE>
& Co. receives from the Fund an annual fee, computed daily and payable monthly,
equal to 0.25% of the Fund's average daily net assets represented by shares
owned during the period for which payment was being made by shareholders who did
not hold their account with an eligible institution.
Financial Intermediaries
From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customers' shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Fund; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund shares in a customer's account; transmits proxy
statements, annual reports, updated prospectuses and other communications from
the Corporation to its customers; and receives, tabulates and transmits to the
Corporation proxies executed by its customers with respect to meetings of
shareholders of the Fund. For these services, the Financial Intermediary
receives such fees from the Shareholder Servicing Agent as may be agreed upon
from time to time between the Shareholder Servicing Agent and such Financial
Intermediary.
Eligible Institutions
The Corporation enters into eligible institution agreements with banks,
brokers and other financial institutions pursuant to which each financial
institution, as agent for the Corporation with respect to shareholders of and
prospective investors in the Fund who are customers with that financial
institution, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customer's shares in its name or its nominee name on the
shareholder records of the Corporation; assists in processing purchase and
redemption transactions; arranges for the wiring of funds; transmits and
receives funds in connection with customer orders to purchase or redeem shares
of the Fund; provides periodic statements showing a customer's account balance
and, to the extent practicable, integrates such information with information
concerning other customer transactions otherwise effected with or through it;
furnishes, either separately or on an integrated basis with other reports sent
to a customer, monthly and annual statements and confirmations of all purchases
and redemptions of Fund
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<PAGE>
shares in a customer's account; transmits proxy statements, annual reports,
updated prospectuses and other communications from the Corporation to its
customers; and receives, tabulates and transmits to the Corporation proxies
executed by its customers with respect to meetings of shareholders of the Fund.
For these services, each financial institution receives from the Fund an annual
fee, computed daily and payable monthly, equal to 0.25% of the Fund's average
daily net assets represented by shares owned during the period for which payment
was being made by customers for whom the financial institution was the holder or
agent of record.
Expense Payment Agreement
Under an agreement dated August 11, 1998, 59 Wall Street Administrators
pays the Fund's expenses (see "Expense Table"), other than fees paid to Brown
Brothers Harriman & Co. under the Corporation's Administration Agreement and
other than expenses relating to the organization of the Fund. In return, 59 Wall
Street Administrators receives a fee from the Fund such that after such payment
the aggregate expenses of the Fund do not exceed an agreed upon annual rate,
currently 1.20% of the average daily net assets of the Fund. Such fees are
computed daily and paid monthly. The expense payment agreement will terminate on
July 31, 2003. If there had been no expense payment agreement, the Directors of
the Corporation estimate that the total operating expenses of the Fund may
increase to approximately 1.35% of the average annual net assets of the Fund.
The expenses of the Fund paid by 59 Wall Street Administrators under
the agreement include the shareholder servicing/eligible institution fees, the
compensation of the Directors of the Corporation; governmental fees; interest
charges; taxes; membership dues in the Investment Company Institute allocable to
the Fund; fees and expenses of independent auditors, of legal counsel and of any
transfer agent, custodian, registrar or dividend disbursing agent of the Fund;
insurance premiums; expenses of calculating the net asset value of shares of the
Fund; expenses of preparing, printing and mailing prospectuses, reports,
notices, proxy statements and reports to shareholders and to governmental
officers and commissions; expenses of shareholder meetings; expenses related to
the issuance, registration and qualification of shares of the Fund; and expenses
connected with the execution, recording and settlement of portfolio security
transactions; and the expenses associated with the investment advisory
agreement.
Distributor
59 Wall Street Distributors acts as exclusive Distributor of shares of
the Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109.
59 Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Corporation pays for the preparation,
printing and filing of copies of the Corporation's registration statements and
the Fund's prospectus as required under federal and state securities laws. (See
"Distributor" in the Statement of Additional Information.) 59 Wall Street
Distributors holds itself available
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<PAGE>
to receive purchase orders for Fund shares.
Custodian, Transfer and Dividend
Disbursing Agent
State Street Bank and Trust Company ("State Street" or the
"Custodian"), 225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is
Custodian, Transfer and Dividend Disbursing Agent for the Fund.
As Custodian, it is responsible for maintaining books and records of
the Fund's portfolio transactions and holding the Fund's portfolio securities
and cash pursuant to a custodian agreement with the Corporation. Cash is held
for the Fund in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator, the Custodian maintains the Fund's accounting
and portfolio transaction records and for each day computes the Fund's net asset
value. As Transfer and Dividend Disbursing Agent it is responsible for
maintaining the books and records detailing the ownership of the Fund's shares.
Independent Auditors
Deloitte & Touche LLP are the independent auditors for the Fund.
NET ASSET VALUE
The Fund's net asset value per share is determined once daily at 4:00
P.M., New York time on each day the New York Stock Exchange is open for regular
trading.
The determination of the Fund's net asset value per share is made by
subtracting from the value of the total assets of the Fund the amount of its
liabilities and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made.
Values of assets in the Fund's portfolio are determined on the basis of
their market or other fair value. (See "Net Asset Value; Redemption in Kind" in
the Statement of Additional Information.)
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the Fund's net investment income, together with a
discretionary portion of any net short-term capital gains, is declared and paid
to shareholders as a dividend semi-annually. Substantially all of the Fund's
realized net long-term capital gains, if any, are declared and paid to
shareholders on an annual basis as a capital gains distribution. An additional
dividend and/or capital gains distribution may be made to the extent necessary
to avoid the imposition of federal excise tax on the Fund. (See "Taxes" below.)
Dividends and capital gains distributions are payable to shareholders of record
on the record date. Unless a shareholder whose shares are held directly in the
shareholder's name on the books of the Corporation elects to have dividends and
capital gains distributions paid in cash, dividends and capital gains
distributions are automatically reinvested in additional Fund
17
<PAGE>
shares without reference to the minimum subsequent purchase requirement. The
Corporation reserves the right to discontinue, alter or limit the automatic
reinvestment privilege at any time, but will provide shareholders prior written
notice of any such discontinuance, alteration or limitation.
Each Eligible Institution and each Financial Intermediary may establish
its own policy with respect to the reinvestment of dividends and capital gains
distributions in additional Fund shares.
TAXES
Each year, the Corporation intends to qualify the Fund and elect that
the Fund be treated as a separate regulated investment company under the
Internal Revenue Code of 1986, as amended. Accordingly, the Fund is not subject
to federal income taxes on its net income and realized net long-term capital
gains that are distributed to its shareholders. A 4% non-deductible excise tax
is imposed on the Fund to the extent that certain distribution requirements for
the Fund for each calendar year are not met. The Corporation intends to meet
such requirements.
Dividends are taxable to shareholders of the Fund as ordinary income,
whether such dividends are paid in cash or reinvested in additional shares.
Dividends paid from the Fund may be eligible for the dividends-received
deduction allowed to corporate shareholders because all or a portion of the
Fund's net income may consist of dividends paid by domestic corporations.
Capital gains distributions are taxable to shareholders as long-term capital
gains, whether paid in cash or reinvested in additional shares and regardless of
the length of time a particular shareholder has held Fund shares.
Any dividend or capital gains distribution has the effect of reducing
the net asset value of Fund shares held by a shareholder by the same amount as
the dividend or capital gains distribution. If the net asset value of the shares
should be reduced below a shareholder's cost as a result of such a dividend or
capital gains distribution, the dividend or capital gains distribution, although
constituting a return of invested capital, would be taxable as described above.
Any gain or loss realized on the redemption of Fund shares by a shareholder who
is not a dealer in securities is treated as long-term capital gain or loss if
the shares have been held for more than one year, and otherwise as short-term
capital gain or loss. However, any loss realized by a shareholder upon the
redemption of shares in the Fund held one year or less is treated as a long-term
capital loss to the extent of any long-term capital gains distributions received
by the shareholder with respect to such shares.
Under U.S. Treasury regulations, the Corporation and each Eligible
Institution are required to withhold and remit to the U.S. Treasury a portion
(31%) of dividends and capital gains distributions on the accounts of those
shareholders who fail to provide a correct taxpayer identification number
(Social Security Number for individuals) or to make required certifications, or
who have been notified by the Internal Revenue Service that they are subject to
such withholdings. Prospective investors should submit an IRS Form W-9 to avoid
such withholding.
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<PAGE>
State and Local Taxes
The treatment of the Fund and its shareholders in those states which
have income tax laws might differ from treatment under the federal income tax
laws. Distributions to shareholders may be subject to additional state and local
taxes. Shareholders are urged to consult their tax advisors regarding any state
or local taxes.
Foreign Investors
The Fund is designed for investors who are either citizens of the
United States or aliens subject to United States income tax. Prospective
investors who are not citizens of the United States and who are not aliens
subject to United States income tax are subject to United States withholding tax
on the entire amount of all dividends. Therefore, such investors should not
invest in the Fund since alternative investments are available which would not
be subject to United States withholding tax.
Other Information
Annual notification as to the tax status of capital gains
distributions, if any, is provided to shareholders shortly after October 31, the
end of the Fund's fiscal year. Additional tax information is mailed to
shareholders in January.
This tax discussion is based on the tax laws and regulations in effect
on the date of this Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.
DESCRIPTION OF SHARES
The Corporation is an open-end management investment company organized
on July 16, 1990 as a corporation under the laws of the State of Maryland. Its
offices are located at 21 Milk Street, Boston, Massachusetts 02109; its
telephone number is (617) 423-0800.
The Articles of Incorporation currently permit the Corporation to issue
2,500,000,000 shares of common stock, par value $.001 per share, of which
25,000,000 shares have been classified as shares of the Fund. The Board of
Directors may increase the number of shares the Corporation is authorized to
issue without the approval of shareholders. The Board of Directors also has the
power to designate one or more series of shares of common stock and to classify
and reclassify any unissued shares with respect to such series. Currently there
are eight such series in addition to the Fund.
Each share of the Fund represents an equal proportional interest in the
Fund with each other share. Upon liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
Shareholders of the Fund are entitled to a full vote for each full
share held and to a fractional vote for fractional shares. The voting rights of
shareholders are not cumulative. Shares have no preemptive or conversion rights.
The rights of redemption are described elsewhere herein. Shares are fully paid
and nonassessable by the Corporation. It is the intention of the
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<PAGE>
Corporation not to hold meetings of shareholders annually. The Directors may
call meetings of shareholders for action by shareholder vote as may be required
by the 1940 Act or as may be permitted by the Articles of Incorporation or
By-laws. Shareholders have under certain circumstances (e.g., upon application
and submission of certain specified documents to the Directors by a specified
number of shareholders) the right to communicate with other shareholders in
connection with requesting a meeting of shareholders for the purpose of removing
one or more Directors. Shareholders also have the right to remove one or more
Directors without a meeting by a declaration in writing by a specified number of
shareholders.
The By-laws of the Corporation provide that the presence in person or
by proxy of the holders of record of one third of the shares of the Fund
outstanding and entitled to vote thereat shall constitute a quorum at all
meetings of shareholders of the Fund, except as otherwise required by applicable
law. The By-laws further provide that all questions shall be decided by a
majority of the votes cast at any such meeting at which a quorum is present,
except as otherwise required by applicable law.
The Corporation's Articles of Incorporation provide that, at any
meeting of shareholders of the Fund, each Eligible Institution may vote any
shares as to which that Eligible Institution is the agent of record and which
are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which that
Eligible Institution is the agent of record. Any shares so voted by an Eligible
Institution are deemed represented at the meeting for purposes of quorum
requirements.
ADDITIONAL INFORMATION
As used in this Prospectus, the term "majority of the Fund's
outstanding voting securities" (as defined in the 1940 Act) currently means the
vote of (I) 67% or more of the Fund's shares present at a meeting, if the
holders of more than 50% of the outstanding voting securities of the Fund are
present in person or represented by proxy; or (ii) more than 50% of the Fund's
outstanding voting securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors. The annual report also contains performance information
and is made available to investors upon request and without charge.
A confirmation of each purchase and redemption transaction is issued on
execution of that transaction.
The Fund's performance may be used from time to time in shareholder
reports or other communications to shareholders or prospective investors.
Performance figures are based on historical earnings and are not intended to
indicate future performance. Performance information may include the Fund's
investment results and/or comparisons of its investment results to various
unmanaged indexes (such as the Standard & Poor's 500 Index) and to investments
for which reliable performance data is available. Performance information may
20
<PAGE>
also include comparisons to averages, performance rankings or other information
prepared by recognized mutual fund statistical services. To the extent that
unmanaged indexes are so included, the same indexes are used on a consistent
basis. The Fund's investment results as used in such communications are
calculated on a total rate of return basis in the manner set forth below.
Period and average annualized total rates of return may be provided in
such communications. The total rate of return refers to the change in the value
of an investment in the Fund over a stated period based on any change in net
asset value per share and including the value of any shares purchasable with any
dividends or capital gains distributions during such period. Period total rates
of return may be annualized. An annualized total rate of return is a compounded
total rate of return which assumes that the period total rate of return is
generated over a one year period, and that all dividends and capital gains
distributions are reinvested. An annualized total rate of return is slightly
higher than a period total rate of return if the period is shorter than one
year, because of the assumed reinvestment.
The Fund may use an after-tax total return performance. To calculate
the after-tax returns, the Fund will segregate out the return from undistributed
gains, income distributions and realized gains distributions by term, if any,
expressed as a percentage of total return. The Fund will then apply the top
marginal Federal income tax rate to any income distributed during the year.
Additionally, the Fund applies the relevant capital gains tax rate to both short
term and long term realized capital gains, if any.
The following formula will be used to calculate the Fund's after-tax total
return:
ATR=PTR-[OI/BNAV)*(1-A)]-[(CG/BNAV)*(1-B)]
ATR=After-tax return
PTR=Pre-tax total return, calculated using the SEC method
OI=Ordinary income distributed per share of the Fund during the period
BNAV=Net asset value per share at the beginning of the period
A=Top marginal Federal income tax rate applicable to ordinary income during the
period
CG=Long term capital gain distributions per share of the Fund during the period
B=Federal long-term capital gains rate during the period
The Fund's after-tax performance may be compared to the after-tax performance of
unmanaged indexes.
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The calculation of the after-tax performance for the unmanaged indexes
will be determined using the top marginal Federal income tax rates for dividend
income and long-term capital gains. The calculation will also include an
assumption of portfolio turnover to determine the amount of realized capital
gains for the unmanaged indexes. Portfolio turnover assumption will be
determined using industry average turnover for similar funds.
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<PAGE>
This Prospectus omits certain of the information contained in the
Statement of Additional Information and the Registration Statement filed with
the Securities and Exchange Commission. The Statement of Additional Information
may be obtained from 59 Wall Street Distributors without charge and the
Registration Statement may be obtained from the Securities and Exchange
Commission upon payment of the fee prescribed by the rules and regulations of
the Securities and Exchange Commission.
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APPENDIX -- HEDGING STRATEGIES
Options on Stock Indexes. A stock index fluctuates with changes in the market
values of the stocks included in the index. Examples of stock indexes are the
Standard & Poor's 500 Stock Index (Chicago Board of Options Exchange) and the
New York Stock Exchange Composite Index (New York Stock Exchange).
Options on stock indexes are generally similar to options on stock except
that the delivery requirements are different. Instead of giving the right to
take or make delivery of stock at a fixed price (strike price), an option on a
stock index gives the holder the right to receive a cash exercise settlement
amount equal to (a) the amount, if any, by which the strike price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied by (b)
a fixed index multiplier. Receipt of this cash amount will depend upon the
closing level of the stock index upon which the option is based being greater
than, in the case of a call, or less than, in the case of a put, the price of
the option. The amount of cash received will be equal to such difference between
the closing price of the index and the strike price of the option times a
specified multiple.
The effectiveness of purchasing stock index options as a hedging technique
depends upon the extent to which price movements in the portion of the
securities portfolio of the Fund being hedged correlate with price movements of
the stock index selected. The value of an index option depends upon future
movements in the level of the overall stock market measured by the underlying
index before the expiration of the option. Accordingly, the successful use of
options on stock indexes for the Fund is subject to the Investment Adviser's
ability both to select an appropriate index and to predict future price
movements over the short term in the overall stock market. Brokerage costs are
incurred in the purchase of stock index options and the incorrect choice of an
index or an incorrect assessment of future price movements may result in poorer
overall performance than if a stock index option had not been purchased.
The Corporation may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction in which it purchases
an option having the same terms as the option written. It is possible, however,
that illiquidity in the options markets may make it difficult from time to time
for the Corporation to close out its written option positions. Also, the
securities exchanges have established limitations on the number of options which
may be written by an investor or group of investors acting in concert. It is not
contemplated that these position limits will have any adverse impact on the
Corporation's portfolio strategies.
Futures Contracts on Stock Indexes. Subject to applicable laws and
regulations and solely as a hedge against changes in the market value of
portfolio securities or securities intended to be purchased, futures contracts
on stock indexes ("Futures Contracts") may be entered into for the Fund.
In order to assure that the Fund is not deemed a "commodity pool" for
purposes of the Commodity Exchange Act, regulations of the Commodity Futures
Trading Commission
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<PAGE>
("CFTC") require that the Fund enter into transactions in futures contracts and
options on futures contracts only (I) for bona fide hedging purposes (as defined
in CFTC regulations), or (ii) for non-hedging purposes, provided that the
aggregate initial margin and premiums on such non-hedging positions does not
exceed 5% of the liquidation value of the Fund's assets.
Futures Contracts provide for the making and acceptance of a cash settlement
based upon changes in the value of an index of stocks and are used to hedge
against anticipated future changes in overall stock market prices which
otherwise might either adversely affect the value of securities held for the
Fund or adversely affect the prices of securities which are intended to be
purchased at a later date. A Futures Contract may also be entered into to close
out or offset an existing futures position.
In general, each transaction in Futures Contracts involves the establishment
of a position which is expected to move in a direction opposite to that of the
investment being hedged. If these hedging transactions are successful, the
futures positions taken would rise in value by an amount which approximately
offsets the decline in value of the portion of the Fund's investments that is
being hedged. Should general market prices move in an unexpected manner, the
full anticipated benefits of Futures Contracts may not be achieved or a loss may
be realized. There is also the risk of a potential lack of liquidity in the
secondary market.
The effectiveness of entering into Futures Contracts as a hedging technique
depends upon the extent of which price movements in the portion of the
securities portfolio being hedged correlate with price movements of the stock
index selected. The value of a Futures Contract depends upon future movements in
the level of the overall stock market measured by the underlying index before
the closing out of the Futures Contract. Accordingly, the successful use of
Futures Contracts is subject to the Investment Adviser's ability both to select
an appropriate index and to predict future price movements over the short term
in the overall stock market. The incorrect choice of an index or an incorrect
assessment of the future price movements over the short term in the overall
stock market may result in a poorer overall performance than if a Futures
Contract had not been purchased. Brokerage costs are incurred in entering into
and maintaining Futures Contracts.
When the Fund enters into a Futures Contract, it may be initially required to
deposit, in a segregated account in the name of the broker performing in the
transaction, an "initial margin" of cash, U.S. Government securities or other
high grade liquid obligations equal to approximately 3% of the contract amount.
Initial margin requirements are established by the exchanges on which Futures
Contracts trade and may, from time to time, change. In addition, brokers may
establish margin deposit requirements in excess of those required by the
exchanges. Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing of
funds by a broker's client but is, rather, a good faith deposit on the Futures
Contract which will be returned upon the proper termination of the Futures
Contract. The margin deposits made are marked to market daily and the Fund may
be required to make subsequent deposits of cash or eligible securities called
"variation margin", with its futures contract clearing broker, which are
reflective of price fluctuations in the Futures Contract.
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<PAGE>
Currently, Futures Contracts can be purchased on stock indexes such as the
Standard & Poor's 500 Stock Index (Chicago Board of Options Exchange) and the
New York Stock Exchange Composite Index (New York Stock Exchange).
Exchanges may limit the amount by which the price of a Futures Contract may
move on any day. If the price moves equal the daily limit on successive days,
then it may prove impossible to liquidate a futures position until the daily
limit moves have ceased.
The 59 Wall Street Fund, Inc.
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, Massachusetts 02109
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(800) 625-5759
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus and the Statement of Additional Information, in connection with the
offer contained in this Prospectus, and if given or made, such other information
or representations must not be relied upon as having been authorized by the
Corporation or the Distributor. This Prospectus does not constitute an offer by
the Corporation or by the Distributor to sell or the solicitation of any offer
to buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful for the Corporation or the Distributor to make such offer in
such jurisdiction.
[LOGO]
Tax-Efficient Equity Fund
PROSPECTUS
October 15, 1998
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STATEMENT OF ADDITIONAL INFORMATION
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
21 Milk Street, Boston, Massachusetts 02109
The 59 Wall Street Tax-Efficient Equity Fund (the "Tax-Efficient Equity
Fund" or the "Fund") is a separate portfolio of The 59 Wall Street Fund, Inc.
(the "Corporation"), a management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund is
designed to enable investors to be invested in a portfolio of equity securities
of companies that are well established and financially sound. The Fund's
investment objective is to provide investors with tax-efficient long-term
capital growth while also generating current income. There can be no assurance
that the investment objective of the Fund will be achieved.
Brown Brothers Harriman & Co. is the investment adviser (the
"Investment Adviser") to the Fund. This Statement of Additional Information is
not a prospectus and should be read in conjunction with the Prospectus dated
October 15, 1998, a copy of which may be obtained from the Corporation at the
address noted above.
Table of Contents
Cross-Reference to
Page Page in Prospectus
Investment Objective and Policies . . . . . . . . . 2
Investment Restrictions . . . . . . . . . . . . . . 3
Directors and Officers . . . . . . . . . . . . . . . 5
Investment Adviser . . . . . . . . . . . . . . . . . 8
Administrator . . . . . . . . . . . . . . . . . . . 9
Distributor . . . . . . . . . . . . . . . . . . . . 9
Financial Intermediaries . . . . . . . . . . . . . . 10
Net Asset Value; Redemption in Kind . . . . . . . . 10
Computation of Performance . . . . . . . . . . . . . 11
Federal Taxes . . . . . . . . . . . . . . . . . . . 12
Description of Shares . . . . . . . . . . . . . . . 13
Portfolio Transactions . . . . . . . . . . . . . . . 15
Additional Information . . . . . . . . . . . . . . . 16
The date of this Statement of Additional Information is October 15 ,
1998.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following supplements the information contained in the Prospectus
concerning the investment objective, policies and techniques of the Fund.
Equity Investments
Equity investments may or may not pay dividends and may or may not
carry voting rights. Common stock occupies the most junior position in a
company's capital structure. Convertible securities entitle the holder to
exchange the securities for a specified number of shares of common stock,
usually of the same company, at specified prices within a certain period of time
and to receive interest or dividends until the holder elects to convert. The
provisions of any convertible security determine its ranking in a company's
capital structure. In the case of subordinated convertible debentures, the
holder's claims on assets and earnings are subordinated to the claims of other
creditors, and are senior to the claims of preferred and common shareholders. In
the case of convertible preferred stock, the holder's claims on assets and
earnings are subordinated to the claims of all creditors and are senior to the
claims of common shareholders.
Options Contracts
Options on Stock. For the sole purpose of reducing risk, put and call
options on stocks may be purchased for the Fund, although the current intention
is not to do so in such a manner that more than 5% of the Fund's net assets
would be at risk. A call option on a stock gives the purchaser of the option the
right to buy the underlying stock at a fixed price at any time during the option
period. Similarly, a put option gives the purchaser of the option the right to
sell the underlying stock at a fixed price at any time during the option period.
To liquidate a put or call option position, a "closing sale transaction" may be
made for the Fund at any time prior to the expiration of the option which
involves selling the option previously purchased.
Loans of Portfolio Securities
Securities of the Fund may be loaned if such loans are secured
continuously by cash or equivalent collateral or by an irrevocable letter of
credit in favor of the Fund at least equal at all times to 100% of the market
value of the securities loaned plus accrued income. While such securities are on
loan, the borrower pays the Fund any income accruing thereon, and cash
collateral may be invested for the Fund, thereby earning additional income. All
or any portion of interest earned on invested collateral may be paid to the
borrower. Loans are subject to termination by the Corporation in the normal
settlement time, currently three business days after notice, or by the borrower
on one day's notice. Borrowed securities are returned when the loan is
terminated. Any appreciation or depreciation in the market price of the borrowed
securities which occurs during the term of the loan inures to the Fund and its
shareholders. Reasonable finders' and custodial fees may be paid in connection
with a loan. In addition, all facts and circumstances, including the
creditworthiness of the borrowing financial institution, are considered before a
loan is made and no loan is made in excess of one year. There is the risk that a
borrowed security may not be returned to the Fund. Securities of the Fund are
not loaned to Brown Brothers Harriman & Co. or to any affiliate of the
Corporation or Brown Brothers Harriman & Co.
INVESTMENT RESTRICTIONS
The Fund is operated under the following investment restrictions which
are deemed fundamental policies and may be changed only with the approval of the
holders of a "majority of the Fund's outstanding voting securities" (as defined
in the 1940 Act). (See "Additional Information".)
Except that the Corporation may invest all of the Fund's assets in an
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund, the Corporation, with respect to the
Fund, may not:
(1) borrow money or mortgage or hypothecate its assets, except that in
an amount not to exceed 1/3 of the current value of its net assets, it may
borrow money as a temporary measure for extraordinary or emergency purposes, and
except that it may pledge, mortgage or hypothecate not more than 1/3 of such
assets to secure such borrowings (it is intended that money will be borrowed
only from banks and only either to accommodate requests for the redemption of
Fund shares while effecting an orderly liquidation of portfolio securities or to
maintain liquidity in the event of an unanticipated failure to complete a
portfolio security transaction or other similar situations);
(2) purchase any security or evidence of interest therein on margin,
except that such short-term credit as may be necessary for the clearance of
purchases and sales of securities may be obtained and except that deposits of
initial deposit and variation margin may be made in connection with the
purchase, ownership, holding or sale of futures or the purchase, ownership,
holding, sale or writing of options;
(3) underwrite securities issued by other persons except insofar as it
may technically be deemed an underwriter under the Securities Act of 1933, as
amended, in selling a portfolio security;
(4) make loans to other persons except (a) through the lending of its
portfolio securities and provided that any such loans not exceed 30% of its net
assets (taken at market value), (b) through the use of repurchase agreements or
the purchase of short-term obligations and provided that not more than 10% of
its net assets is invested in repurchase agreements maturing in more than seven
days, or (c) by purchasing, subject to the limitation in paragraph (5) below, a
portion of an issue of debt securities of types commonly distributed privately
to financial institutions, for which purposes the purchase of short-term
commercial paper or a portion of an issue of debt securities which is part of an
issue to the public shall not be considered the making of a loan;
(5) knowingly invest in securities which are subject to legal or
contractual restrictions on resale (other than repurchase agreements maturing in
not more than seven days) if, as a result thereof, more than 10% of its net
assets (taken at market value) would be so invested (including repurchase
agreements maturing in more than seven days);
(6) purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts
(except futures and option contracts) in the ordinary course of business (the
freedom of action to hold and to sell real estate acquired as a result of the
ownership of securities is reserved);
(7) make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of its net
assets (taken at market value) is represented by such securities, or securities
convertible into or exchangeable for such securities, at any one time (it is the
present intention of management to make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes; such
sales would not be made of securities subject to outstanding options);
(8) concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of its investment objective, up to 25%
of its assets, at market value at the time of each investment, may be invested
in any one industry, except that positions in futures or option contracts shall
not be subject to this restriction;
(9) issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, provided that collateral arrangements with
respect to options and futures, including deposits of initial deposit and
variation margin, are not considered to be the issuance of a senior security for
purposes of this restriction;
(10) invest more than 5% of its total assets in the securities or
obligations of any one issuer (other than obligations issued by the U.S.
Government, its agencies or instrumentalities); provided, however, that up to
25% of its total assets may be invested without regard to this restriction; or
(11) purchase more than 10% of the outstanding voting securities of
any one issuer.
Non-Fundamental Restrictions. The Fund may not as a matter of operating
policy (except that the Corporation may invest all of the Fund's assets in an
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund): (i) purchase securities of any
investment company if such purchase at the time thereof would cause more than
10% of its total assets (taken at the greater of cost or market value) to be
invested in the securities of such issuers or would cause more than 3% of the
outstanding voting securities of any such issuer to be held for it; or (ii)
invest more than 10% of its net assets (taken at the greater of cost or market
value) in restricted securities. These policies are not fundamental and may be
changed without shareholder approval in response to changes in the various state
and federal requirements.
Percentage and Rating Restrictions. If a percentage or rating
restriction on investment or utilization of assets set forth above or referred
to in the Prospectus is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
value of the portfolio securities or a later change in the rating of a portfolio
security is not considered a violation of policy.
DIRECTORS AND OFFICERS
The Directors and executive officers of the Corporation, their
principal occupations during the past five years (although their titles may have
varied during the period) and business addresses are:
DIRECTORS OF THE CORPORATION
J.V. SHIELDS, JR.* -- Chairman of the Board and Director; Trustee of
The 59 Wall Street Trust; Managing Director, Chairman and Chief Executive
Officer of Shields & Company; Chairman and Chief Executive Officer of Capital
Management Associates, Inc.; Director of Flowers Industries, Inc. His business
address is Shields & Company, 140 Broadway, New York, NY 10005.
EUGENE P. BEARD** -- Director; Trustee of The 59 Wall Street Trust
(since April 1993); Vice Chairman - Finance and Operations of The Interpublic
Group of Companies. His business address is The Interpublic Group of Companies,
Inc., 1271 Avenue of the Americas, New York, NY 10020.
DAVID P. FELDMAN** -- Director; Trustee of The 59 Wall Street Trust;
Retired; Chairman and Chief Executive Officer - AT&T Investment Management
Corporation (prior to October 1997); Director of Dreyfus Mutual Funds, Equity
Fund of Latin America, New World Balanced Fund, India Magnum Fund, and U.S.
Prime Properties Inc.; Trustee of Corporate Property Investors. His business
address is 3 Tall Oaks Drive, Warren, NJ 07059.
ALAN G. LOWY** -- Director; Trustee of The 59 Wall Street Trust (since
April 1993); Secretary of the Los Angeles County Board of Investments (prior to
March 1995). His business address is 4111 Clear Valley Drive, Encino, CA
91436.
ARTHUR D. MILTENBERGER** -- Director; Trustee of The 59 Wall Street
Trust; Retired; Vice President and Chief Financial Officer of Richard K. Mellon
and Sons; Treasurer of Richard King Mellon Foundation; Director of Vought
Aircraft Corporation (prior to September 1994), Caterair International (prior to
April 1994); Member of Advisory Committee of Carlyle Group and Pittsburgh Seed
Fund and Valuation Committee of Morgenthaler Venture Funds(2). His business
address is Richard K. Mellon and Sons, P.O. Box RKM, Ligonier, PA 15658.
Officers of the Corporation
PHILIP W. COOLIDGE -- President; Chief Executive Officer and President
of Signature Financial Group, Inc. ("SFG"), 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors") and 59 Wall Street Administrators, Inc. ("59
Wall Street Administrators").
JAMES E. HOOLAHAN -- Vice President; Senior Vice President of SFG.
JOHN R. ELDER -- Treasurer; Vice President of SFG (since April 1995);
Treasurer of Phoenix Family of Mutual Funds (prior to April 1995).
LINDA T. GIBSON -- Secretary; Vice President and Assistant Secretary of
SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall Street
Administrators.
MOLLY S. MUGLER -- Assistant Secretary; Vice President and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.
CHRISTINE A. DRAPEAU -- Assistant Secretary; Assistant Vice President
of SFG (since January 1996); Paralegal and Compliance Officer, various financial
companies (July 1992 to January 1996); Graduate Student, Bentley College (prior
to December 1994).
- -------------------------
* Mr. Shields is an "interested person" of the Corporation because of
his affiliation with a registered broker-dealer.
** These Directors are members of the Audit Committee of the
Corporation.
(1) Shields & Company, Capital Management Associates, Inc. and Flowers
Industries, Inc., with which Mr. Shields is associated, are a registered
broker-dealer and a member of the New York Stock Exchange, a registered
investment adviser, and a diversified food company, respectively.
(2) Richard K. Mellon and Sons, Richard King Mellon Foundation, Vought Aircraft
Corporation, Caterair International, The Carlyle Group and Morgenthaler Venture
Funds, with which Mr. Miltenberger is or has been associated, are a private
foundation, a private foundation, a business development firm, an aircraft
manufacturer, an airline food services company, a merchant bank, and a venture
capital partnership, respectively.
Each Director and officer listed above holds the equivalent position
with The 59 Wall Street Trust. The address of each officer is 21 Milk Street,
Boston, Massachusetts 02109. Messrs. Coolidge, Hoolahan, and Elder and Mss.
Gibson, Mugler and Drapeau also hold similar positions with other investment
companies for which affiliates of 59 Wall Street Distributors serve as the
principal underwriter.
Except for Mr. Shields, no Director is an "interested person" of the
Corporation as that term is defined in the 1940 Act.
Directors of the Corporation
The Directors of the Corporation receive a base annual fee of $15,000
(except the Chairman who receives a base annual fee of $20,000) which is paid
jointly by all series of the Corporation and The 59 Wall Street Trust and
allocated among the series based upon their respective net assets. In addition,
each series which has commenced operations pays an annual fee to each Director
of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Compensation
Pension or from the
Retirement Corporation
Aggregate Benefits Accrued Estimated Annual and Fund
Name of Person, Compensation as Part of Benefits upon Complex*
Position from the Corp. Fund Expenses Retirement Paid to Directors
- --------------- -------------- --------------- ---------------- ------------------
J.V. Shields, Jr., $10,822 none none $28,500
Director
Eugene P. Beard, $ 9,492 none none 23,500
Director
David P. Feldman, $ 9,492 none none 23,500
Director
Alan G. Lowy, $ 9,492 none none 23,500
Director
Arthur D. Miltenberger, $ 9,492 none none 23,500
Director
<FN>
* The Fund Complex consists of the Corporation and The 59 Wall Street Trust
which currently consists of three series.
</FN>
</TABLE>
By virtue of the responsibilities assumed by Brown Brothers Harriman &
Co. under the Investment Advisory Agreement and the Administration Agreement
(see "Investment Adviser" and "Administrator"), the Corporation does not require
employees other than its officers, and none of its officers devote full time to
the affairs of the Corporation, or, other than the Chairman, receive any
compensation from the Fund.
As of June 30, 1998, the Corporation's Directors and officers as a
group beneficially owned less than 1% of the outstanding shares of the
Corporation.
INVESTMENT ADVISER
Under an Investment Advisory Agreement with the Corporation, subject to
the general supervision of the Corporation's Directors and in conformance with
the stated policies of the Fund, Brown Brothers Harriman & Co. provides
investment advice and portfolio management services to the Fund. In this regard,
it is the responsibility of Brown Brothers Harriman & Co. to make the day-to-day
investment decisions for the Fund, to place the purchase and sale orders for
portfolio transactions of the Fund, and to manage, generally, the investments of
the Fund.
The Investment Advisory Agreement between Brown Brothers Harriman & Co.
and the Corporation is dated August 11, 1998 and remains in effect for two years
from such date and thereafter, but only as long as the agreement is specifically
approved at least annually (i) by a vote of the holders of a "majority of the
Fund's outstanding voting securities" (as defined in the 1940 Act) or by the
Corporation's Directors, and (ii) by a vote of a majority of the Directors of
the Corporation who are not parties to the Investment Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of the Corporation
("Independent Directors") cast in person at a meeting called for the purpose of
voting on such approval. The Investment Advisory Agreement terminates
automatically if assigned and is terminable at any time without penalty by a
vote of a majority of the Directors of the Corporation or by a vote of the
holders of a "majority of the Fund's outstanding voting securities (as defined
in the 1940 Act) on 60 days' written notice to Brown Brothers Harriman & Co. and
by Brown Brothers Harriman & Co. on 90 days' written notice to the Corporation.
(See "Additional Information".)
The investment advisory fee paid to the Investment Adviser is
calculated daily and paid monthly at an annual rate equal to 0.65% of the Fund's
average daily net assets.
The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting, selling or distributing securities and
from sponsoring, organizing or controlling a registered open-end investment
company continuously engaged in the issuance of its shares, such as the Fund.
There is presently no controlling precedent prohibiting financial institutions
such as Brown Brothers Harriman & Co. from performing investment advisory,
administrative or shareholder servicing/eligible institution functions. If Brown
Brothers Harriman & Co. were to terminate its Investment Advisory Agreement with
the Corporation or were prohibited from acting in such capacity, it is expected
that the Directors would recommend the shareholders that they approve a new
investment advisory agreement for the Fund with another qualified adviser. If
Brown Brothers Harriman & Co. were to terminate its Eligible Institution
Agreement or Administration Agreement with the Corporation or were prohibited
from acting in any such capacity, its customers would be permitted to remain
shareholders of the Corporation and alternative means for providing shareholder
services or administrative services, as the case may be, would be sought. In
such event, although the operation of the Corporation might change, it is not
expected that any shareholders would suffer any adverse financial consequences.
However, an alternative means of providing shareholder services might afford
less convenience to shareholders.
ADMINISTRATOR
The Administration Agreement between the Corporation and Brown Brothers
Harriman & Co. (dated November 1, 1993) will remain in effect for two years from
such date and thereafter, but only so long as such agreement is specifically
approved at least annually in the same manner as the Investment Advisory
Agreement (see "Investment Adviser"). The Independent Directors most recently
approved the Corporation's Administration Agreement on December 17, 1997. The
agreement will terminate automatically if assigned by either party thereto and
is terminable at any time without penalty by a vote of a majority of the
Directors of the Corporation, or by a vote of the holders of a "majority of the
Corporation's outstanding voting securities" (as defined in the 1940 Act). (See
"Additional Information"). The Administration Agreement is terminable by the
Directors of the Corporation or shareholders of the Corporation on 60 days'
written notice to Brown Brothers Harriman & Co. and by Brown Brothers Harriman &
Co. on 90 days' written notice to the Corporation. The administrative fee
payable to Brown Brothers Harriman & Co. from the Fund is calculated daily and
payable monthly at an annual rate equal to 0.15% of the Fund's average daily net
assets.
DISTRIBUTOR
The Distribution Agreement (dated September 5, 1990, as amended and
restated February 12, 1991) between the Corporation and 59 Wall Street
Distributors remains in effect indefinitely, but only so long as such agreement
is specifically approved at least annually in the same manner as the Investment
Advisory Agreement. (See "Investment Adviser".) The Distribution Agreement was
most recently approved by the Independent Directors of the Corporation on
February 24, 1998. The agreement terminates automatically if assigned by either
party thereto and is terminable with respect to the Fund at any time without
penalty by a vote of a majority of the Directors of the Corporation or by a vote
of the holders of a "majority of the Fund's outstanding voting securities" (as
defined in the 1940 Act). (See "Additional Information".) The Distribution
Agreement is terminable with respect to the Fund by the Corporation's Directors
or shareholders of the Fund on 60 days' written notice to 59 Wall Street
Distributors. The agreement is terminable by 59 Wall Street Distributors on 90
days' written notice to the Corporation.
FINANCIAL INTERMEDIARIES
One or more brokers which serve as Financial Intermediaries have been
authorized by the Corporation to accept purchase and redemption orders for Fund
shares on its behalf and are authorized to designate other intermediaries to
accept purchase and redemption orders for Fund shares on the Corporation's
behalf. The Corporation will be deemed to have received a purchase or redemption
order for Fund shares when an authorized broker or, if applicable, such broker's
authorized designee, accepts the order and such an order will be executed at the
net asset value per share next determined after such acceptance.
NET ASSET VALUE; REDEMPTION IN KIND
The net asset value of each of the Fund's shares is determined each day
the New York Stock Exchange is open for regular trading. (As of the date of this
Statement of Additional Information, such Exchange is open every weekday except
for the following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas.) This determination of net asset value of each
share of the Fund is made once during each such day as of the close of regular
trading on such Exchange by subtracting from the value of the Fund's total
assets the amount of its liabilities, and dividing the difference by the number
of shares of the Fund outstanding at the time the determination is made.
The value of investments listed on a securities exchange is based on
the last sale prices as of the close of regular trading of the New York Stock
Exchange (which is currently 4:00 P.M., New York time) or, in the absence of
recorded sales, at the average of readily available closing bid and asked prices
on such Exchange. Unlisted securities are valued at the average of the quoted
bid and asked prices in the over-the-counter market. The value of each security
for which readily available market quotations exist is based on a decision as to
the broadest and most representative market for such security.
Bonds and other fixed income securities (other than short-term
obligations but including listed issues) are valued on the basis of valuations
furnished by a pricing service, use of which has been approved by the Board of
Directors. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques which take
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance upon
quoted prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities.
Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Corporation's
Directors. Short-term investments which mature in 60 days or less are valued at
amortized cost if their original maturity was 60 days or less, or by amortizing
their value on the 61st day prior to maturity, if their original maturity when
acquired for the Fund was more than 60 days, unless this is determined not to
represent fair value by the Directors.
Subject to the Corporation's compliance with applicable regulations,
the Corporation has reserved the right to pay the redemption price of shares of
the Fund, either totally or partially, by a distribution in kind of 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. The Corporation has elected, however, to be governed by Rule 18f-1
under the 1940 Act, as a result of which the Corporation is obligated with
respect to any one investor during any 90 day period to redeem shares of the
Fund solely in cash up to the lesser of $250,000 or 1% of the Fund's net assets
at the beginning of such 90 day period.
COMPUTATION OF PERFORMANCE
The average annual total rate of return of the Fund is calculated for
any period by (a) dividing (i) the sum of the aggregate net asset value per
share on the last day of the period of shares purchased with a $1,000 payment on
the first day of the period and the aggregate net asset value per share on the
last day of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to shares purchased on
the first day of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) $1,000, (b) raising the
quotient to a power equal to 1 divided by the number of years in the period, and
(c) subtracting 1 from the result.
The total rate of return of the Fund for any specified period is
calculated by (a) dividing (i) the sum of the aggregate net asset value per
share on the last day of the period of shares purchased with a $1,000 payment on
the first day of the period and the aggregate net asset value per share on the
last day of the period of shares purchasable with dividends and capital gains
distributions declared during such period with respect to shares purchased on
the first day of such period and with respect to shares purchased with such
dividends and capital gains distributions, by (ii) $1,000, and (b) subtracting 1
from the result.
Performance calculations should not be considered a representation of
the average annual or total rate of return of the Fund in the future since the
rates of return are not fixed. Actual total rates of return and average annual
rates of return depend on changes in the market value of, and dividends and
interest received from, the investments held by the Fund and the Fund's expenses
during the period.
Total and average annual rate of return information may be useful for
reviewing the performance of the Fund and for providing a basis for comparison
with other investment alternatives. However, unlike bank deposits or other
investments which pay a fixed yield for a stated period of time, the Fund's
total rate of return fluctuates, and this should be considered when reviewing
performance or making comparisons.
FEDERAL TAXES
Each year, the Corporation intends to continue to qualify the Fund and
elect that the Fund be treated as a separate "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). Under Subchapter M of the Code the Fund is not subject to federal
income taxes on amounts distributed to shareholders.
Qualification as a regulated investment company under the Code
requires, among other things, that (a) at least 90% of the Fund's annual gross
income, without offset for losses from the sale or other disposition of
securities, be derived from interest, payments with respect to securities loans,
dividends and gains from the sale or other disposition of securities or other
income derived with respect to its business of investing in such securities; (b)
less than 30% of the Fund's annual gross income be derived from gains (without
offset for losses) from the sale or other disposition of securities held for
less than three months; and (c) the holdings of the Fund be diversified so that,
at the end of each quarter of its fiscal year, (i) at least 50% of the market
value of the Fund's assets be represented by cash, U.S. Government securities
and other securities limited in respect of any one issuer to an amount not
greater than 5% of the Fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of the Fund's
assets be invested in the securities of any one issuer (other than U.S.
Government securities). In addition, in order not to be subject to federal
income tax, at least 90% of the Fund's net investment income and net short-term
capital gains earned in each year must be distributed to the Fund's
shareholders.
Gains or losses on sales of securities for the Fund are treated as
long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where a put has been acquired or a
call has been written thereon for the Fund. Other gains or losses on the sale of
securities are treated as short-term capital gains or losses. Gains and losses
on the sale, lapse or other termination of options on securities are generally
treated as gains and losses from the sale of securities. If an option written
for the Fund lapses or is terminated through a closing transaction, such as a
repurchase for the Fund of the option from its holder, the Fund may realize a
short-term capital gain or loss, depending on whether the premium income is
greater or less than the amount paid in the closing transaction. If securities
are sold for the Fund pursuant to the exercise of a call option written for it,
the premium received is added to the sale price of the securities delivered in
determining the amount of gain or loss on the sale. The requirement that less
than 30% of the Fund's gross income be derived from gains from the sale of
securities held for less than three months may limit the ability to write
options and engage in transactions involving stock index futures.
Certain options contracts held for the Fund at the end of each fiscal
year are required to be "marked to market" for federal income tax purposes; that
is, treated as having been sold at market value. Sixty percent of any gain or
loss recognized on these deemed sales and on actual dispositions are treated as
long-term capital gain or loss, and the remainder are treated as short-term
capital gain or loss regardless of how long such options were held. The Fund may
be required to defer the recognition of losses on stock or securities to the
extent of any unrecognized gain on offsetting positions held for it.
Return of Capital. If the net asset value of shares is reduced below a
shareholder's cost as a result of a dividend or capital gains distribution by
the Fund, such dividend or capital gains distribution would be taxable even
though it represents a return of invested capital.
Redemption of Shares. Any gain or loss realized on the redemption of
Fund shares by a shareholder who is not a dealer in securities would be treated
as long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as short-term capital gain or loss. However, any loss
realized by a shareholder upon the redemption of Fund shares held one year or
less is treated as a long-term capital loss to the extent of any long-term
capital gains distributions received by the shareholder with respect to such
shares. Additionally, any loss realized on a redemption or exchange of Fund
shares is disallowed to the extent the shares disposed of are replaced within a
period of 61 days beginning 30 days before such disposition, such as pursuant to
reinvestment of a dividend or capital gains distribution in Fund shares.
Other Taxes. The Fund may be subject to state or local taxes in
jurisdictions in which it is deemed to be doing business. In addition, the
treatment of the Fund and its shareholders in those states which have income tax
laws might differ from treatment under the federal income tax laws. Shareholders
should consult their own tax advisors with respect to any state or local taxes.
DESCRIPTION OF SHARES
The Corporation is an open-end management investment company organized
as a Maryland corporation on July 16, 1990. The Articles of Incorporation
currently permit the Corporation to issue 2,500,000,000 shares of common stock,
par value $0.001 per share, of which 25,000,000 shares have been classified as
shares of The 59 Wall Street Tax-Efficient Equity Fund. The Corporation
currently consists of nine portfolios.
Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Corporation do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Corporation may elect all of the Directors of the
Corporation if they choose to do so and in such event the other shareholders in
the Corporation would not be able to elect any Director. The Corporation is not
required and has no current intention to hold meetings of shareholders annually
but the Corporation will hold special meetings of shareholders when in the
judgment of the Corporation's Directors it is necessary or desirable to submit
matters for a shareholder vote. Shareholders have under certain circumstances
(e.g., upon application and submission of certain specified documents to the
Directors by a specified number of shareholders) the right to communicate with
other shareholders in connection with requesting a meeting of shareholders for
the purpose of removing one or more Directors. Shareholders also have the right
to remove one or more Directors without a meeting by a declaration in writing by
a specified number of shareholders. Shares have no preference, pre-emptive,
conversion or similar rights. Shares, when issued, are fully paid and
non-assessable.
Stock certificates are not issued by the Corporation.
The Articles of Incorporation of the Corporation contain a provision
permitted under Maryland Corporation Law which under certain circumstances
eliminates the personal liability of the Corporation's Directors to the
Corporation or its shareholders.
The Articles of Incorporation and the By-Laws of the Corporation
provide that the Corporation indemnify the Directors and officers of the
Corporation to the full extent permitted by the Maryland Corporation Law, which
permits indemnification of such persons against liabilities and expenses
incurred in connection with litigation in which they may be involved because of
their offices with the Corporation. However, nothing in the Articles of
Incorporation or the By-Laws of the Corporation protects or indemnifies a
Director or officer of the Corporation against any liability to the Corporation
or its shareholders to which he 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.
PORTFOLIO TRANSACTIONS
In effecting securities transactions for the Fund, the Investment
Adviser seeks to obtain the best price and execution of orders. In selecting a
broker, the Investment Adviser considers a broker's ability to execute orders
without disturbing the market price, a broker's reliability for prompt, accurate
confirmations and on-time delivery of securities, and the quality and
reliability of brokerage services, including execution capability and
performance and financial responsibility, and may consider the research and
other investment information provided by such brokers. Accordingly, the
commissions charged by a broker may be greater than the amount another firm
might charge if the Investment Adviser determines in good faith that the amount
of such commissions is reasonable in relation to the value of the brokerage
services and research information provided by that broker.
Portfolio securities are not purchased from or sold to the
Administrator, Distributor or Investment Adviser or any "affiliated person" (as
defined in the 1940 Act) of the Administrator, Distributor or Investment Adviser
when such entities are acting as principals, except to the extent permitted by
law. The Corporation uses Brown Brothers Harriman & Co. as one of the Fund's
principal brokers where, in the judgment of the Investment Adviser, such firm is
able to obtain a price and execution at least as favorable as prices and
executions provided by other qualified brokers. As one of the Fund's principal
brokers, Brown Brothers Harriman & Co. receives brokerage commissions from the
Fund.
The use of Brown Brothers Harriman & Co. as a broker for the Fund is
subject to the provisions of Rule 11a2-2(T) under the Securities Exchange Act of
1934 which permits the Corporation to use Brown Brothers Harriman & Co. as a
broker provided that certain conditions are met.
In addition, under the 1940 Act, commissions paid by the Fund to Brown
Brothers Harriman & Co. in connection with a purchase or sale of securities
offered on a securities exchange may not exceed the usual and customary broker's
commission.
A committee of non-interested Directors from time to time reviews,
among other things, information relating to the commissions charged by Brown
Brothers Harriman & Co. to the Fund and to its other customers and information
concerning the prevailing level of commissions charged by other qualified
brokers. In addition, the procedures pursuant to which Brown Brothers Harriman &
Co. effects brokerage transactions for the Fund are reviewed and approved no
less often than annually by a majority of the non-interested Directors.
A portion of the transactions for the Fund are executed through
qualified brokers other than Brown Brothers Harriman & Co. In selecting such
brokers, the Investment Adviser may consider the research and other investment
information provided by such brokers. Research services provided by brokers to
which Brown Brothers Harriman & Co. has allocated brokerage business in the past
include economic statistics and forecasting services, industry and company
analyses, portfolio strategy services, quantitative data, and consulting
services from economists and political analysts. Research services furnished by
brokers are used for the benefit of all the Investment Adviser's clients and not
solely or necessarily for the benefit of the Fund. The Investment Adviser
believes that the value of research services received is not determinable nor
does such research significantly reduce its expenses. The Corporation does not
reduce the fee paid by the Fund to the Investment Adviser by any amount that
might be attributable to the value of such services.
A committee, comprised of officers and partners of Brown Brothers
Harriman & Co. who are portfolio managers of some of Brown Brothers Harriman &
Co.'s managed accounts (the "Managed Accounts"), evaluates semi-annually the
nature and quality of the brokerage and research services provided by brokers,
and, based on this evaluation, establishes a list and projected ranking of
preferred brokers for use in determining the relative amounts of commissions to
be allocated to such brokers. However, in any semi-annual period, brokers not on
the list may be used, and the relative amounts of brokerage commissions paid to
the brokers on the list may vary substantially from the projected rankings.
The Directors of the Corporation review regularly the reasonableness of
commissions and other transaction costs incurred for the Fund in light of facts
and circumstances deemed relevant from time to time and, in that connection,
receive reports from the Investment Adviser and published data concerning
transaction costs incurred by institutional investors generally.
Miscellaneous
Over-the-counter purchases and sales are transacted directly with
principal market makers, except in those circumstances in which, in the judgment
of the Investment Adviser, better prices and execution of orders can otherwise
be obtained. If the Corporation effects a closing transaction with respect to a
futures or option contract, such transaction normally would be executed by the
same broker-dealer who executed the opening transaction. The writing of options
by the Corporation may be subject to limitations established by each of the
exchanges governing the maximum number of options in each class which may be
written by a single investor or group of investors acting in concert, regardless
of whether the options are written on the same or different exchanges or are
held or written in one or more accounts or through one or more brokers. The
number of options which the Corporation may write may be affected by options
written by the Investment Adviser for other investment advisory clients. An
exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.
ADDITIONAL INFORMATION
As used in this Statement of Additional Information and the Prospectus,
the term "majority of the Fund's outstanding voting securities" (as defined in
the 1940 Act) currently means the vote of (i) 67% or more of the Fund's shares
present at a meeting, if the holders of more than 50% of the Fund's outstanding
voting securities are present in person or represented by proxy; or (ii) more
than 50% of the Fund's outstanding voting securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.
A shareholder's right to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed: (i) during
periods when the New York Stock Exchange is closed for other than weekends and
holidays or when regular trading on such Exchange is restricted as determined by
the Securities and Exchange Commission by rule or regulation, (ii) during
periods in which an emergency exists which causes disposal of, or evaluation of
the net asset value of, the Fund's portfolio securities to be unreasonable or
impracticable, or (iii) for such other periods as the Securities and Exchange
Commission may permit.
With respect to the securities offered by the Prospectus, this
Statement of Additional Information and the Prospectus do not contain all the
information included in the Registration Statement filed with the Securities and
Exchange Commission under the Securities Act of 1933. Pursuant to the rules and
regulations of the Securities and Exchange Commission, certain portions have
been omitted. The Registration Statement including the exhibits filed therewith
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in this Statement of Additional Information and
the Prospectus concerning the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement. Each such statement is qualified in all respects by such reference.
WS5622A
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PART C
ITEM 23. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Financial statements included in Part A:
Not Applicable.
Financial Statements included Part B of this Registration Statement:
Not Applicable.
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(b) Exhibits:
1 -- (a) Restated Articles of Incorporation of the Registrant.(7)
-- (b) Establishment and Designation of Series of The 59 Wall
Street U.S. Equity Fund and The 59 Wall Street Short/
Intermediate Fixed Fund.(7)
-- (c) Establishment and Designation of Series of The 59 Wall
Street Small Company Fund.(7)
-- (d) Establishment and Designation of Series of The 59 Wall
Street International Equity Fund.(7)
-- (e) Establishment and Designation of Series of The 59 Wall
Street Short Term Fund. (7)
-- (f) Redesignation of series of the The 59 Wall Street Short/
Intermediate Fixed Income Fund as The 59 Wall Street
Inflation-Indexed Securities Fund. (8)
-- (g) Establishment and Designation of Series of The 59 Wall
Street Tax-Efficient Equity Fund. (9)
2 -- Amended and Restated By-Laws of the Registrant.(7)
3 -- Not Applicable.
4 -- Not Applicable.
5 -- (a) Advisory Agreement with respect to The 59 Wall Street
U.S. Equity Fund.(7)
(b) Advisory Agreement with respect to The 59 Wall Street
Short/Intermediate Fixed Income Fund.(7)
(c) Form of Advisory Agreement with respect to The 59 Wall
Street Inflation-Indexed Securities Fund.(8)
(d) Advisory Agreement with respect to The 59 Wall
Street Tax-Efficient Equity Fund. (9)
6 -- Form of Amended and Restated Distribution Agreement.(3)
7 -- Not Applicable.
8 -- (a) Form of Custody Agreement.(2)
(b) Form of Transfer Agency Agreement.(2)
9 -- (a) Amended and Restated Administration Agreement.(6)
(b) Subadministrative Services Agreement.(6)
(c) Form of License Agreement.(1)
(d) Amended and Restated Shareholder Servicing Agreement.(6)
(i) Appendix A to Amended and Restated Shareholder
Servicing Agreement.(9)
(e) Amended and Restated Eligible Institution Agreement.(6)
(ii) Appendix A to Amended and Restated Eligible
Institution Agreement.(9)
(f) Form of Expense Reimbursement Agreement with respect to
The 59 Wall Street U.S. Equity Fund.(6)
(g) Form of Expense Reimbursement Agreement with respect to
The 59 Wall Street Short/Intermediate Fixed
Fund.(6)
(h) Form of Expense Payment Agreement with respect to
The 59 Wall Street Inflation-Indexed Securities Fund.(8)
(i) Expense Payment Agreement with respect to The
59 Wall Street Tax-Efficient Equity Fund. (9)
10 -- Opinion of Counsel (including consent).(2)
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11 -- Independent auditors' consent.(9)
12 -- Not Applicable.
13 -- Copies of investment representation letters from initial
shareholders.(2)
14 -- Not Applicable.
15 -- Not Applicable.
16 -- Financial Data Schedule.(8)
(1)Filed with the initial Registration Statement on July 16, 1990.
(2)Filed with Amendment No. 1 to this Registration Statement on October 9, 1990.
(3)Filed with Amendment No.2 to this Registration Statement on February 14,
1991.
(4)Filed with Amendment No. 5 to this Registration Statement on June 15, 1992.
(5)Filed with Amendment No. 7 to this Registration Statement on March 1, 1993.
(6)Filed with Amendment No.9 to this Registration Statement on
December 30, 1993.
(7)Filed with Amendment No. 24 to this Registration Statement on
February 28, 1996.
(8)Filed with Amendment No. 27 to this Registration Statement on
February 28, 1997.
(9)Filed with Amendment No. 37 to this Registration Statement on
September 21, 1998,
Item 24. Persons Controlled by or Under Common Control with Registrant.
See "Directors and Officers" in the Statement of Additional Information
filed as part of this Registration Statement.
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Item 25. Indemnification
Reference is made to Article VII of Registrant's By-Laws and to Section
5 of the Distribution Agreement between the Registrant and 59 Wall Street
Distributors, Inc.
Registrant, its Directors and officers, and persons affiliated with
them are insured against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities that might be imposed as
a result of such actions, suits or proceedings.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), 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 of controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer or 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 of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser.
The Registrant's investment adviser, Brown Brothers Harriman & Co.
("BBH & Co."), is a New York limited partnership. BBH & Co. conducts a general
banking business and is a member of the New York Stock Exchange, Inc.
To the knowledge of the Registrant, none of the general partners or
officers of BBH & Co. is engaged in any other business, profession, vocation or
employment of a substantial nature.
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Item 27. Principal Underwriters.
1. (a) 59 Wall Street Distributors, Inc. ("59 Wall Street
Distributors") and its affiliates, also serves as
administrator and/or distributor to other
registered investment companies.
(b) Set forth below are the names, principal business
addresses and positions of each Director and
officer of 59 Wall Street Distributors. The
principal business address of these individuals is
c/o 59 Wall Street Distributors, Inc., 21 Milk
Street, Boston, MA 02109. Unless otherwise
specified, no officer or Director of 59 Wall
Street Distributors serves as an officer or
Director of the Registrant.
Position and Offices with Position and Offices
Name 59 Wall Street Distributors with the Registrant
- ------------- --------------------------- --------------------
Philip W. Coolidge Chief Executive President
Officer, President
and Director
John R. Elder Assistant Treasurer Treasurer
Linda T. Gibson Assistant Secretary Secretary
Molly S. Mugler Assistant Secretary Assistant Secretary
Christine A. Drapeau -- Assistant Secretary
Linwood C. Downs Treasurer --
Robert Davidoff Director --
CMNY Capital, L.P.
135 East 57th Street
New York, NY 10022
Donald Chadwick Director --
Scarborough & Company
110 East 42nd Street
New York, NY 10017
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Leeds Hackett Director --
National Credit
Management Corporation
10155 York Road
Cockeysville, MD 21030
Laurence E. Levine Director --
First International
Capital Ltd.
130 Sunrise Avenue
Palm Beach, FL 33480
(c) Not Applicable.
Item 28. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained at the offices of:
The 59 Wall Street Fund, Inc.
21 Milk Street
Boston, MA 02109
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
(investment adviser, eligible institution
and shareholder servicing agent)
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, MA 02109
(distributor)
59 Wall Street Administrators, Inc.
21 Milk Street
Boston, MA 02109
(subadministrator)
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
(custodian and transfer agent)
Item 29. Management Services.
Other than as set forth under the caption "Management of the
Corporation" in the Prospectus constituting Part A of the Registration
Statement, Registrant is not a party to any management-related service contract.
Item 30. Undertakings.
The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
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SIGNATURES
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 Boston, and Commonwealth of Massachusetts on the 7th day of
October, 1998.
THE 59 WALL STREET FUND, INC.
By /s/ PHILIP W. COOLIDGE
(Philip W. Coolidge, President)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated above.
Signature Title
/s/ J.V. SHIELDS, JR. Director and Chairman of
(J.V. Shields, Jr.) the Board
/s/ PHILIP W. COOLIDGE President (Principal
(Philip W. Coolidge) Executive Officer)
/s/ EUGENE P. BEARD Director
(Eugene P. Beard)
/s/ DAVID P. FELDMAN Director
(David P. Feldman)
/s/ ARTHUR D. MILTENBERGER Director
(Arthur D. Miltenberger)
/s/ ALAN D. LOWY Director
(Alan D. Lowy)
/S/ JOHN R. ELDER Treasurer
(John R. Elder)