SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
The 59 Wall Street Fund, Inc.
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(Name of Registrant as Specified in its Charter)
Linda T. Gibson
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
NOTE: REMOVE LAST PAGE WITH QUESTIONS BEFORE FILING
WS5733C
PRELIMINARY DRAFT/CONFIDENTIAL
THE 59 WALL STREET FUND, INC.
21 Milk Street, Boston, Massachusetts 02109
(617) 423-0800
Notice of Special Meeting of Shareholders
To be held October 8, 1999
A Special Meeting of Shareholders of THE 59 WALL STREET
INFLATION-INDEXED SECURITIES FUND, THE 59 WALL STREET U.S. EQUITY FUND, THE 59
WALL STREET TAX-EFFICIENT EQUITY FUND (the "Tax-Efficient Fund"), THE 59 WALL
STREET SMALL COMPANY FUND (the "Small Company Fund"), THE 59 WALL STREET
EUROPEAN EQUITY FUND, THE 59 WALL STREET PACIFIC BASIN EQUITY FUND, and THE 59
WALL STREET INTERNATIONAL EQUITY FUND (the "International Equity Fund"), (each a
"Fund" and collectively the "Funds"), each a series of The 59 Wall Street Fund,
Inc., a Maryland corporation (the "Corporation"), will be held at the offices of
Brown Brothers Harriman & Co. at 59 Wall Street, New York, NY 10005 on Friday,
October 8, 1999 at 3:00 p.m. for the following purposes, all as set forth in the
accompanying Proxy Statement.
For shareholders of all Funds:
PROPOSAL 1. To vote on an amendment to the Articles
of Incorporation of the Corporation regarding
Director retirement and removal provisions.
PROPOSAL 2.To elect four Directors of the Corporation.
PROPOSAL 3. To vote on the selection of Deloitte &
Touche LLP as the independent certified public
accountants of the Corporation.
For shareholders of the Tax-Efficient Fund only:
PROPOSAL 4. To vote on an Investment Advisory
Agreement (as set forth in Appendix A to the
accompanying Proxy Statement) between the Corporation
on behalf of the Tax-Efficient Fund and its
investment adviser, Brown Brothers Harriman & Co.
<PAGE>
For shareholders of the Small Company Fund and the International Equity Fund
only:
PROPOSAL 5: To authorize the Corporation, on behalf
of each of the Small Company Fund and the
International Equity Fund, to vote at a meeting of
investors of each such Fund's corresponding portfolio
(the U.S. Small Company Portfolio and the
International Equity Portfolio, respectively (each a
"Portfolio")) to: (A) vote on an amendment to the
Declaration of Trust of that Portfolio regarding
Trustee retirement and removal provisions; (B) elect
six Trustees of that Portfolio; (C) vote on the
selection of Deloitte & Touche LLP as the independent
certified public accountants of that Portfolio; and
(D) with respect to the International Equity
Portfolio only, to vote on an Investment Advisory
Agreement between the International Equity Portfolio
and its investment adviser, Brown Brothers Harriman &
Co. .
For shareholders of all Funds:
PROPOSAL 6: To transact such other business as may
properly come before the meeting or any adjournment
thereof.
The Directors recommend that you vote in favor of items 1, 2, 3, 4 and 5.
Only shareholders of record on August 20, 1999 will be entitled to vote
at the meeting and at any adjournments thereof.
Linda T. Gibson, Secretary
August 31, 1999
YOUR VOTE IS IMPORTANT. We would appreciate your voting, signing and returning
the enclosed proxy promptly, which will help in avoiding the additional expenses
of a second solicitation. A stamped, self-addressed envelope is enclosed for
your convenience.
<PAGE>
PRELIMINARY DRAFT / CONFIDENTIAL
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying
form of proxy are being furnished in connection with the solicitation of proxies
by and on behalf of the Board of Directors of The 59 Wall Street Fund, Inc. (the
"Corporation"), to be used at a special meeting of shareholders of The 59 Wall
Street Inflation-Indexed Securities Fund (the "Inflation-Indexed Fund"), The 59
Wall Street U.S. Equity Fund (the "U.S. Equity Fund"), The 59 Wall Street
Tax-Efficient Equity Fund (the "Tax-Efficient Fund"), The 59 Wall Street Small
Company Fund (the "Small Company Fund"), The 59 Wall Street European Equity Fund
(the "European Fund"), The 59 Wall Street Pacific Basin Equity Fund (the
"Pacific Basin Fund"), and The 59 Wall Street International Equity Fund (the
"International Equity Fund"), (each, a "Fund" and collectively, the "Funds")
each a series of the Corporation, to be held at the offices of Brown Brothers
Harriman & Co., at 59 Wall Street, New York, NY 10005 on Friday, October 8, 1999
at 3:00 p.m. and at any adjournments thereof for the purposes set forth in the
accompanying Notice (such meeting and any adjournment or postponement thereof
are referred to as the "Meeting"). It is expected that proxy solicitations will
be made primarily by mail. The Corporation will bear all proxy solicitation
costs. The Corporation's officers and service contractors may also solicit
proxies by telephone or personal interview at no additional cost to the
Corporation. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked prior to its exercise by a signed writing delivered at
the Meeting or filed with the Secretary of the Corporation. This Proxy Statement
and the enclosed proxy card are expected to be distributed on or about August
31, 1999 to shareholders of record at the close of business on August 20, 1999
(the "Record Date").
Only shareholders of record on the Record Date will be entitled to vote
at the Meeting. On the Record Date, the numbers of shares of beneficial interest
of each Fund outstanding and entitled to vote at the Meeting were as follows:
the Inflation-Indexed Fund - [NUMBER] shares; the U.S. Equity Fund - [NUMBER]
shares; the Tax-Efficient Fund - [NUMBER] shares; the Small Company Fund -
[NUMBER] shares; the European Fund - [NUMBER] shares; the Pacific Basin Fund -
[NUMBER] shares; and the International Equity Fund - [NUMBER] shares. (The
shares are referred to individually as a "Share" and collectively as the
"Shares".) Each Share is entitled to one vote, and fractional Shares are
entitled to proportionate shares of one vote.
The Corporation is a no-load, open-end management investment company
organized as a corporation under the laws of the State of Maryland on July 16,
1990 and restated September 11, 1990 and September 18, 1990 and amended February
28, 1997 and March 13, 1997. Each of the European Fund and the Pacific Basin
Fund were designated as a series of the Corporation on September 18, 1990; the
Small Company Fund was designated as a series of the Corporation on March 7,
1991; the U.S. Equity Fund was designated as a series of the Corporation on July
1, 1992; each of the Inflation-Indexed Fund and the International Equity Fund
was designated as a series of the Corporation on September 12, 1994; the
Inflation-Indexed Fund (previously, The 59 Wall Street Short/Intermediate Fixed
Income Fund) was designated as a series of the Corporation on March 13, 1997 and
the Tax-Efficient Fund was designated as a series of the Corporation on August
11, 1998. Each of the Small Company Fund and the International Equity Fund seeks
to achieve its investment objective by investing all of its investable assets in
its corresponding portfolio (each a "Portfolio" and collectively the
"Portfolios"), an open-end management investment company having the same
investment objective as the corresponding Fund. Shareholders of each of the
Small Company Fund and the International Equity Fund are being asked to vote on
certain matters with respect to that Fund's corresponding Portfolio because that
Portfolio has called a meeting of its investors (principally the corresponding
Fund) to vote on such matters.
Brown Brothers Harriman & Co., 59 Wall Street, New York, New York
10005, acts as the administrator for the Corporation and as the investment
adviser for each of the Portfolios and for the Inflation-Indexed Fund, the
European Fund, the Pacific Basin Fund, the U.S. Equity Fund, and the
Tax-Efficient Fund. 59 Wall Street Distributors, Inc., 21 Milk Street, Boston,
Massachusetts 02109, acts as distributor for the Corporation.
<TABLE>
<CAPTION>
The Board of Directors is recommending the following proposals:
<S> <C>
PROPOSAL FUNDS AFFECTED
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1. To vote on an amendment to the Articles of Incorporation of the All
Corporation regarding Director retirement and removal provisions.
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2. To elect four Directors of the Corporation. All
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3. To vote on the selection of Deloitte & Touche LLP as the independent All
certified public accountants of the Corporation.
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4. To vote on an Investment Advisory between the Corporation on behalf of Only
the Tax-Efficient Equity Fund the Tax-Efficient Equity Fund and its
investment adviser, Brown Brothers Harriman & Co.
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5. To authorize the Corporation, on behalf of each of the Small Company Only the Small Company Fund and
Fund and the International Equity Fund, to vote at a meeting of investors the International Equity Fund
of each such Fund's corresponding Portfolio, to: (A) vote on an amendment
to the Declaration of Trust of that Portfolio regarding Trustee retirement
and removal provisions; (B) elect five Trustees of that Portfolio; (C)
vote on the selection of Deloitte & Touche as the independent certified
public accountants of that Portfolio; and (D) with respect to the
International Equity Portfolio only, to vote on an Investment Advisory
Agreement between the International Equity Portfolio and its investment
adviser, Brown Brothers Harriman & Co..
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6. To transact such other business as may properly come before the All meeting
or any adjournment thereof.
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</TABLE>
The Annual Report to Shareholders of each Fund, containing audited
financial statements for its fiscal year ended October 31, 1998, and the most
recent semi-annual report for the 6-month period ended April 30, 1999 were
mailed to all shareholders of record of that Fund prior to the Meeting. These
reports are available without charge upon request by calling the Corporation at
(800) 625-5759. These reports are not to be regarded as proxy solicitation
material.
This joint Proxy Statement is being used in order to reduce the
preparation, printing, handling and postage expenses that would result from the
use of separate proxy statements for each Fund and, because many shareholders
own Shares of more than one Fund, to avoid overburdening shareholders with more
than one proxy statement. It is therefore essential that shareholders complete,
date and sign the enclosed proxy card(s). Proposals 1, 2 and 3 described herein
relate to all of the Funds and shareholders of all Funds will vote together on
these proposals. Separate proxy cards are enclosed for each Fund in which a
shareholder is a record owner of shares. Proposal 4 described herein relates to
only the Tax-Efficient Fund. Proposal 5 described herein relates to only the
Small Company Fund and the International Equity Fund and authorizes the
Corporation to vote at a meeting of investors in each such Fund's corresponding
Portfolio. Shareholders of each of the Small Company Fund and the International
Equity Fund, as the case may be, will vote separately on this proposal. Thus, if
the proposal is approved by the shareholders of one Fund and disapproved by the
shareholders of the other Fund, the proposal will be implemented for the Fund
that approved the proposal and will not be implemented for the Fund that did not
approve the proposal. Separate proxy cards are enclosed for each Fund in which a
shareholder is a record owner of shares.
In the event that a quorum is not present at the Meeting or in the
event that a quorum is present at the Meeting but sufficient votes to approve
any of the proposals are not received, the persons named as proxies may propose
one or more adjournments of the Meeting (with respect to all or some of the
proposals and with respect to all or some of the Funds) to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those Shares affected by the adjournment represented at the
Meeting in person or by proxy. In the event that a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies will vote those proxies which they are entitled to vote FOR all
such items, in favor of such an adjournment; and will vote those proxies
required to be voted AGAINST any such item, against any adjournment. A
shareholder vote may be taken on one or more of the proposals with respect to
one or more Funds in this Proxy Statement prior to any such adjournment if
sufficient votes have been received for approval. Pursuant to the Articles of
Incorporation of the Corporation, a quorum is constituted by the presence in
person or by proxy of the holders of a majority of the issued and outstanding
Shares of the Corporation entitled to vote at the Meeting except where the
holders of any series of Shares are to vote as a series, then the presence in
person or by proxy of the holders of one-third of the Shares of such series
issued and outstanding and entitled to vote thereat shall constitute a quorum
for the transaction of such business.
If you return your proxy card with no voting instructions, your Shares
will be voted in favor of each matter described in the Proxy Statement. If you
give instructions to abstain, your Shares will be represented at the Meeting for
purposes of determining whether a quorum is present and your instructions to
abstain will have the same effect as instructions to cast a negative vote. For
purposes of determining the presence of a quorum of transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present but which have not been voted. For
this reason, abstentions and broker "non-votes" will have the effect of a "no"
vote for purposes of obtaining the requisite approval of proposals 1, 2, 3, 4, 5
and 6. The Corporation's Articles of Incorporation provide that, at any meeting
of shareholders of a 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 will be deemed
to be represented at the meeting for purposes of quorum requirements.
In order that your Shares may be represented at the Meeting, you are
requested to:
o Indicate your instructions on the enclosed proxy card(s);
o Date and sign the proxy card(s);
o Mail the proxy card(s) promptly in the enclosed envelope,
which requires no postage if mailed in the United States; and
o Allow sufficient time for the proxy card(s) to be received on or
before 9:00 a.m. on October 1, 1999.
PROPOSAL 1: TO AMEND ARTICLES OF INCORPORATION OF THE CORPORATION
REGARDING RETIREMENT AND REMOVAL PROVISIONS.
The Board of Directors of the Corporation has approved, and recommends
that shareholders of the Corporation approve, a proposal to amend certain
provisions of the Articles of Incorporation of the Corporation dated on July 16,
1990 and restated September 11, 1990 and September 18, 1990 and amended February
28, 1997 and March 13, 1997 (the "Corporation's Articles of Incorporation") to
establish a mandatory retirement age and removal provisions.
Currently, the Corporation's Articles of Incorporation do not
specifically define a Director's term of office. The Directors of the
Corporation have recommended that the Articles of Incorporation be amended. Such
amendment would specifically provide that a Director shall hold office until he
or she attains the age of seventy (except for the Directors elected prior to
January 1, 2000 who hold office until he or she attains the age of seventy-two)
for ten years or until he or she sooner or until he or she sooner dies, resigns
or as otherwise removed for cause by the action of two-thirds of the remaining
Directors or with or without cause by a vote of three quarters of the remaining
Directors who are not "interested persons," as defined in Section 2(a)(19) of
the Investment Company Act of 1940, as amended (the "1940 Act") of the
Corporation ("Independent Directors") of the Corporation.
If this item is approved by Shareholders of the Corporation, the Sixth
Article of the Corporation's Articles of Incorporation shall be amended to read
in relevant part as follows:
Subject to the provisions of Section 16(a) of the Investment Company
Act of 1940, a Director shall hold office until he or she attains the
age of seventy (except with respect to Directors elected prior to
January 1, 2000, until he or she attains the age of seventy-two), or
until he or she sooner dies, resigns or is removed for cause by the
action of two-thirds of the remaining Directors or with or without
cause by a vote of three quarters of the remaining Directors who are
not "interested persons," as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act") of the
Corporation ("Independent Directors") of the Corporation. Removal with
cause includes, but is not limited to, the removal of a Director due to
physical or mental incapacity or failure to comply with such written
policies as from time to time may be adopted by at least two-thirds of
the Directors with respect to the conduct of the Directors and
attendance at meetings.
The full text of the Sixth Article of the Corporation's Articles of
Incorporation, as proposed to be amended, is set forth in the Appendix B to this
proxy statement.
It is intended that proxies submitted by Shareholders of the
Corporation not limited to the contrary will be voted in favor of amending the
Articles of Incorporation of the Corporation as set forth in Appendix B. The
amendment to the Articles of Incorporation of the Corporation requires the vote
of a majority of the outstanding voting securities of the Corporation present in
person or represented by proxy at the Meeting ("Majority Shareholder Vote").
The Board of Directors of the Corporation unanimously recommends that the
shareholders of the Corporation vote FOR the approval of the proposed amendments
to the Corporation's Articles of Incorporation.
PROPOSAL 2: To elect FOUR Directors of the Corporation.
It is proposed by the Board of Directors of the Corporation and the
Board of Trustees of each Portfolio that there be a common Board of
Directors/Trustees among the Corporation and the Portfolios as well as The 59
Wall Street Trust (the "Trust") and, with respect to The 59 Wall Street Money
Market Fund, a series of the Trust which is organized in the Hub and Spoke(R)
master-feeder mutual fund structure, that fund's corresponding portfolio (the
"U.S. Money Market Portfolio") (the Trust, the Portfolio, the Corporation and
the U.S. Money Market Portfolio are referred to collectively as "The 59 Wall
Street Family of Funds"). The Trust is an open-end management investment company
that is organized as a Massachusetts business trust. The U.S. Money Market
Portfolio is an open-end management investment company having the same
investment objective The 59 Wall Street Money Market Fund. The Directors of the
Corporation believe that a combined Board or Directors/Trustees would permit the
Directors/Trustees to more efficiently supervise the affairs of each of the
Corporation and the Portfolios as well as the other entities in The 59 Wall
Street Family of Funds.
When the Corporation and the Portfolios were organized, the Independent
Directors of the Corporation and the Trustees who are not "interested persons,"
as defined in the 1940 Act of the Portfolios ("Independent Trustees) were
separate. The Trustees of each Portfolio and the Directors of the Corporation
believe that the supervision of the affairs of the Corporation and the
Portfolios will be more efficient and effective if there is a common Board of
Directors/Trustees.
The Board of Directors of the Corporation has fixed the number of
Directors at nine, and, at a meeting on August 10, 1999, nominated Messrs.
Carpenter, Clark, Seitzman and Ivory for election by the shareholders in
accordance with the provisions of the 1940 Act. The Board of Trustees of each
Portfolio has fixed the number of its Trustees at nine and, at a meeting on
August 10, 1999 nominated the five current Directors of the Corporation (Messrs.
Shields, Feldman, Miltenberger Beard and Lowy) and Mr. Ivory for election by
investors.
Thus, if shareholders of the Corporation and investors in each
Portfolio approve the nominees for election for their respective
funds/portfolios, the Corporation and each Portfolio will have a common Board of
Directors/Trustees. Additionally, the Boards of Trustees of each of the Trust
and the U.S. Money Market Portfolio have also requested shareholders and
investors to elect the same nominees. If shareholders of the Trust and investors
of the U.S. Money Market Portfolio also approve the nominees for election, all
the funds/portfolios in The 59 Wall Street Family of Funds will have a common
Board of Directors/Trustees.
It is the present intention that the enclosed proxy will, unless
authority to vote for election of one or more nominees is specifically withheld
by executing the proxy in the manner stated thereon, be used to vote FOR the
election of the four nominees indicated below as Directors of the Corporation.
Each Director so elected will hold office for a term of unlimited duration until
he resigns, retires, attains the age of seventy (except for Directors elected
prior to January 1, 2000 who would hold office until he or she attains the age
of seventy-two) or is removed, as provided in the Corporation's Articles of
Incorporation. Please note that each of Messrs. Carpenter, Clark and Seitzman
currently serves as a Trustee of each Portfolio as well as the U.S. Money Market
Portfolio and each nominee has consented to serve if elected at the Meeting. Mr.
Ivory is being nominated as a Director of the Corporation and the Portfolios and
has consented to serve if elected at the Meeting.
The following table shows the current Directors and officers of the
Corporation, the current Trustees and officers of the Portfolios and the
nominees for election as Directors of the Corporation and Trustees of the
Portfolios and their principal occupations which, unless otherwise specified,
are of more than five years duration, although the titles held may have varied
during that period. Asterisks indicate those Directors/Trustees and officers who
are "interested persons," as defined in the 1940 Act, of the Corporation or the
Portfolios. Only the Independent Directors of the Corporation and the
Independent Trustees of the Portfolios receive compensation from the Corporation
and the Portfolios, respectively. Unless otherwise indicated, the principal
business address of each Director/Trustee or officer is 21 Milk Street, Boston,
Massachusetts 02109.
<TABLE>
<CAPTION>
The following table sets forth certain information about the current
Directors of the Corporation and nominees for election as Trustees of
the Portfolios:
<S> <C> <C> <C>
Business Experience
Name Age Trustee Since During Past Five Years
J.V. Shields, Jr.* 61 June, 1990 Chairman of the Board and Trustee of The
59 Wall Street Trust; Director, Chairman
and Chief Executive Officer of Shields &
Company; Chairman of Capital Management
Associates, Inc.; Director of Flowers
Industries, Inc; Vice Chairman and Trustee
of New York Racing Association.
Eugene P. Beard** 64 September, 1993 Trustee of The 59 Wall Street Trust; Executive Vice
President - Finance and Operations of The
Interpublic Group of Companies, Inc.
David P. Feldman** 59 September, 1990 Trustee of The 59 Wall Street Trust; Retired;
Vice President and Investment Manager -
AT&T Investment Management Corporation
(prior to October 1997); Director of
Dreyfus Mutual Funds; and Jeffrey Co.; and
Heitman Financial.
Alan G. Lowy** 60 September, 1993 Trustee of The 59 Wall Street Trust; Private Investor;
Secretary, Los Angeles County Board of
Investments (prior to March 1995).
Arthur D. Miltenberger** 60 February, 1992 Trustee of The 59 Wall Street Trust; Retired; Executive
Vice President and Chief Financial Officer
of Richard K. Mellon and Sons (prior to
June 1998); Treasurer of the Richard King
Mellon Foundation (prior to June 1998);
Vice President of the Richard King Mellon
Foundation; Trustee, R.K. Mellon Family
Trusts; General Partner, Mellon Family
Investment Company IV, V and VI; Director
of Aerostructures Corporation (since 1996).
J. Angus Ivory 67 Pending acceptance Trustee of Dow Jones Islamic Market Index Portfolio (since March 1999);
Director of Brown Brothers Harriman Ltd.,
subsidiary of Brown Brothers Harriman &
Co.; Director of Old Daily Saddlery;
Advisor, RAF Central Fund; Committee
Member, St. Thomas Hospital Pain Clinic
</TABLE>
(since 1999)
Prior to August 10, 1999, the Directors of the Corporation received a
base annual fee of $15,000 (except the Chairman who received a base annual fee
of $20,000) which was 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 had commenced operations paid an annual
fee to each Trustee of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Compensation
from the
Trust
Pension or from the
Retirement Corporation
Aggregate Benefits Accrued Estimated Annual and Fund
Name of Person, Compensation as Part of Benefits upon Complex**Paid
Position from the Trust Fund Expenses Retirement to Trustees
J.V. Shields, Jr., $19,854 none none $31,000
Trustee
Eugene P. Beard, $15,828 none none $26,000
Trustee
David P. Feldman, $15,828 none none $26,000
Trustee
Alan G. Lowy, $15,828 none none $26,000
Trustee
Arthur D. Miltenberger, $15,828 none none $26,000
Trustee
J. Angus Ivory, N/A N/A N/A N/A
Nominee
<FN>
* The "Fund Complex" consists of the Trust and The 59 Wall Street Fund, Inc. which currently consists of seven
series.
</FN>
</TABLE>
<TABLE>
<CAPTION>
The following table sets forth certain information about the current
Trustees of the Portfolio and nominees for election as Directors of the
Corporation:
<S> <C> <C> <C>
Business Experience
Name Age Trustee Since During Past Five Years
Richard L. Carpenter** 66 September 1993 Trustee of the Portfolios and U.S. Money Market Portfolio;
and Dow Jones Islamic Market Index
Portfolio (since March 1999); Retired;
Director of Investments, Pennsylvania
Public School Employees' Retirement System
(prior to 1997).
Clifford A. Clark** 69 September 1993 Retired; Trustee of the Portfolios and U.S Money
Market Portfolio; and Dow Jones Islamic
Market Index Portfolio (since March 1999).
David M. Seitzman** 70 September 1993 Trustee of the Portfolios and U.S. Money Market Portfolio;
Physician, Private Practice.
J. Angus Ivory 67 Pending acceptance Trustee of Dow Jones Islamic Market Index Portfolio
(since March 1999); Director of Brown
Brothers Harriman Ltd., subsidiary of
Brown Brothers Harriman & Co.; Director of
Old Daily Saddlery; Advisor, RAF Central
Fund; Committee Member, St. Thomas
Hospital Pain Clinic (since 1999)
</TABLE>
Prior to August 10, 1999, the Trustees of the Portfolios received a
base annual fee of $12,000 (except the Chairman who received a base annual fee
of $17,000) which was paid jointly by the Portfolios and U.S. Money Market
Portfolio and allocated among the Portfolios and U.S. Money Market Portfolio
based upon their respective net assets. In addition, each Portfolio which had
commenced operations paid an annual fee to each Trustee of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Total
Compensation
from the
Portfolio
Pension or from the
Retirement Corporation
Name Aggregate Benefits Accrued Estimated Annual Complex*
of Person, Compensation as Part of Benefits upon Paid
Position from the Portfolios Fund Expenses Retirement to Trustees
Richard L. Carpenter, $11,970 none none $15,000
Trustee
Clifford A. Clark, $11,970 none none $15,000
Trustee
David M. Seitzman, $11,970 none none $15,000
Trustee
J. Angus Ivory, N/A N/A N/A N/A
Nominee
<FN>
*The Portfolio Complex consists of the Portfolios and U.S. Money Market Portfolio.
- - -----------------------------------------------------
</FN>
</TABLE>
*Mr. Shields is an "interested person" of the Corporation, as defined
in the 1940 Act, because of his affiliation with a registered broker-dealer.
**These Directors or Trustees are members of the Audit Committee of the
Corporation or the Portfolios, as the case may be. Each of the Directors of the
Corporation attended all four of the Audit Committee meetings held during the
Corporation's last fiscal year. Each of the Trustees of the Portfolios attended
all four of the Audit Committee meetings held during the Portfolios' last fiscal
year. The duties and functions of the Audit Committee are, among other things,
to (1) serve as the liaison between the independent auditors and the Funds' and
Portfolio's management as their duties relate to assuring the integrity of the
Funds' and Portfolio's financial reporting and the safeguarding of the Funds'
and Portfolio's assets; (2) assure the independence of the auditors, the
integrity of management and the adequacy of disclosures to shareholders and
holders of interests; and (3) review the scope of the audit, the financial
results of the Fund and the Portfolio for the year and the auditors' evaluation
of the overall adequacy of internal controls and thereby assists the Board of
Trustees in fulfilling its fiduciary responsibilities as to accounting policies
and reporting practices.
(3) As of June 30, 1999, the Directors of the Corporation and the
Trustees of the Portfolios, individually or as a group directly or indirectly
beneficially owned less than 1% of the outstanding shares of a Fund and less
than 1% of the aggregate beneficial interests in a Portfolio.
<TABLE>
<CAPTION>
The following table sets forth certain information about the current
officers of the Corporation and the Portfolios:
<S> <C> <C>
Position with
the Corporation and Business Experience
Name the Portfolios During Past Five Years
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).
Linda T. Gibson Secretary Senior Vice President and Secretary of SFG;
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.
Susan Jakuboski Assistant Treasurer Assistant Secretary*, Vice President of SFG, Assistant Secretary, Assistant
Treasurer and Vice President of Signature Financial Group (Grand Cayman)
Limited (since August 1994).
Christine A. Drapeau Assistant Secretary Vice President of SFG (since January 1996);
Paralegal and Compliance Officer, various
financial companies (July 1992 to January
1996); Graduate Student, Bentley College
(prior to December 1994).
Linwood C. Downs Assistant Treasurer Senior Vice President and Treasurer of SFG;
Treasurer of 59 Wall Street Distributors
and 59 Wall Street Administrators.
<FN>
*Ms. Jakuboski is Assistant Secretary of the Portfolios only.
</FN>
</TABLE>
At a meeting of the Board of Directors held on August 10, 1999, the
Directors of the Corporation approved a change in the compensation of the
Directors. The Directors of the Corporation currently receive an annual base fee
of $15,000 (except for the Chairman who receives a base fee of $20,000) which is
allocated among all series of the Corporation, all series of the 59 Wall Street
Trust, U.S. Money Market Portfolio, the Portfolios and any other active Hub
portfolios having the same Board of Trustees/Directors based on their respective
net assets. In addition, each series of the Corporation or the 59 Wall Street
Trust that has commenced operations, U.S. Money Market Portfolio, the Portfolios
and any other active Hub portfolios having the same Board of Trustees pays an
annual fee to each Director of $1,000.
During the fiscal year ended October 31, 1998, the Board of Directors
of the Corporation and the Board of Trustees of each Portfolio each met four
times. Each Director of the Corporation attended at least 75% of the meetings of
the Board of Directors of the Corporation. Each Trustee of the Portfolios
attended at least 75% of the meetings of the Board of Trustees of the
Portfolios.
Election of the nominees as Trustees of the Trust requires a Majority
Shareholder Vote.
The Trustees unanimously recommend that you vote FOR election of the
nominees as Trustees of the Trust. In the event the shareholders of the Trust
fail to approve this proposal, the Trustees of the Trust will consider what
further action should be taken.
Election of the nominees as Directors of the Corporation requires a
Majority Shareholder Vote.
The Directors unanimously recommend that you vote FOR election of the
nominees as Directors of the Corporation. In the event the shareholders of the
Corporation fail to approve this proposal, the Directors of the Corporation will
consider what further action should be taken.
PROPOSAL 3: RATIFICATION OF SELECTION OF ACCOUNTANTS
A majority of the Independent Directors of the Corporation have
selected Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts
02116, as independent certified public accountants to sign or certify any
financial statements which may be filed by the Corporation with the Securities
and Exchange Commission in respect of all or any part of the fiscal year ending
June 30, 2000, the employment of such auditors being expressly conditioned upon
the right of the Corporation, by a Majority Shareholder Vote at any meeting
called for the purpose, to terminate such employment forthwith without any
penalty. Such selection was made pursuant to provisions of Section 32(a) of the
1940 Act, and is subject to ratification or rejection by the shareholders of the
Corporation at a meeting of such shareholders. Deloitte & Touche LLP currently
serves as the independent certified public accountants of the Corporation and
each Portfolio and has served as independent certified public accountants for
the Corporation and each Portfolio since each commenced operations. Furthermore,
Deloitte & Touche LLP has served as the independent certified public accountants
of the Trust since 1990 and of the U.S. Money Market Portfolio since it
commenced operations. The Corporation is informed that no member of Deloitte &
Touche LLP has any direct or material indirect interest in the Corporation or
the Portfolios.
The Corporation's independent certified public accountants provide
customary professional services in connection with the audit function for a
management investment company such as the Corporation, and their fees for such
services include fees for work leading to the expression of opinions on the
financial statements included in annual reports to the holders of interests in
the Corporation, opinions on the financial statements and other data included in
the Corporation's annual report to the Securities and Exchange Commission,
opinions on financial statements included in amendments to the Corporation's
registration statement, and preparation of the Corporation's federal and state
income tax returns. The nature and scope of the professional services of the
accountants were approved by the Corporation's Directors, who have considered
the possible effect thereof on the independence of the accountants.
Representatives of Deloitte & Touche LLP are not expected to be present
at the meeting but have been given the opportunity to make a statement if they
do so desire and will be available should any matter arise requiring their
presence. If the Corporation receives a written request from any shareholder at
least five days prior to the Meeting stating that the shareholder will be
present in person at the Meeting and desires to ask questions of the
accountants, the Corporation will arrange to have a representative of Deloitte &
Touche LLP present at the Meeting who will respond to appropriate questions and
have an opportunity to make a statement.
It is intended that proxies not limited to the contrary will be voted
in favor of authorizing the Corporation to ratify the selection of Deloitte &
Touche LLP as the independent certified public accountants to be employed by the
Corporation to sign or certify financial statements required to be signed or
certified by independent public accountants and filed with the Securities and
Exchange Commission in respect of all or part of the fiscal years ending October
31, 1999 and October 31, 2000.
The Directors of the Corporation recommend that the shareholders of the
Corporation vote FOR ratification of the selection of Deloitte & Touche as the
independent certified public accountants of the Corporation. In the event the
shareholders of the Corporation fail to approve this proposal, the Directors of
the Corporation will consider what further action should be taken.
PROPOSAL 4: TO APPROVE THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE CORPORATION
ON BEHALF OF THE TAX-EFFICIENT FUND AND BROWN BROTHERS HARRIMAN & CO.
Brown Brothers Harriman & Co. acts as investment adviser to the
Tax-Efficient Fund pursuant to an Investment Advisory Agreement with Brown
Brothers Harriman & Co., dated August 11, 1998 (as referred to in this proposal
4, the "Advisory Agreement"). The Advisory Agreement is set forth as Exhibit C
to this Proxy Statement. The Advisory Agreement has not previously been
submitted for approval by the Tax-Efficient Fund's public shareholders. It
should be noted that the Investment Advisory Agreement for the European Fund,
the Pacific Basin Fund, the Inflation-Indexed Fund (formerly, The 59 Wall Street
Short/Intermediate Fixed Income Fund), the U.S. Equity Fund and with respect to
the Small Company Fund, that series corresponding portfolio has already been
approved by the public shareholders/investors.
The Advisory Agreement provides that the Tax-Efficient Fund employs
Brown Brothers Harriman & Co. to provide investment advice and portfolio
management services. Subject to the supervision of the Corporation's Directors,
Brown Brothers Harriman & Co. makes the day-to-day investment decisions for the
Fund, arranges for the execution of the purchase and sale orders for the
portfolio transactions of the Fund and generally manages the Fund's investments.
Pursuant to the Advisory Agreement, Brown Brothers Harriman & Co.
receives a fee equal to an annual rate of 0.65% of the Tax-Efficient Fund's
average daily net assets, which produced an advisory fee of $129,018 for the
period from November 2, 1998 (commencement of operations) to June 30,1999. The
net assets as of June 30, 1999 of the Fund were $35,079,609. As the Fund only
commenced operations on November 2, 1999, it has not yet had a full fiscal year
of operation.
The Advisory Agreement will remain in full force and effect for two
years from the date of such agreement and will continue in full force and effect
indefinitely thereafter, but only so long as such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Directors of the Corporation who are not parties to the proposed Advisory
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, or (ii) by a vote of a majority of the Fund's outstanding shares, and
by the Corporation's Independent Directors who are not parties to the Advisory
Agreement. The Advisory Agreement may be terminated 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 shares on 60 days' written
notice to Brown Brothers Harriman & Co. and by Brown Brothers Harriman & Co.
upon 90 days' written notice to the Fund. In addition, the Advisory Agreement
will terminate immediately and automatically if assigned.
The Advisory Agreement further provides that Brown Brothers Harriman &
Co. shall not be liable for any error of judgment or mistake of law of for any
loss suffered by the Fund in connection with matters to which the Advisory
Agreements relates, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
wilful misfeasance, bad faith or gross negligence on its part in the performance
of its duties or from reckless disregard by it of its obligations and duties
under the Advisory Agreement.
The Board of Directors, including a majority of the Independent
Directors who were not parties to the proposed Advisory Agreement approved the
proposed Advisory Agreement on August 11, 1998 and authorized its presentation
to the shareholders of the Fund on August 10, 1999. At the time of such action
by the Directors of the Corporation, Messrs. David P. Feldman, Arthur D.
Miltenberger, Eugene P. Beard, Alan G. Lowy and J.V. Shields, Jr. were Directors
of the Corporation. In considering the Advisory Agreement, the Directors
considered and evaluated, among other things, the staff and professional
personnel of Brown Brothers Harriman & Co., comparative fees charged to other
investment companies by other investment advisers; comparative performance
results, and expense ratio data comparing the Fund with other investment
companies of similar size and with similar investment objectives. Before
approving the Advisory Agreement, the Directors conducted a review of the
various documents, reports and other materials submitted to them by Brown
Brothers Harriman & Co., information that they were familiar with as Directors,
as well as information obtained from independent sources such as Lipper
Analytical Services, Inc.
For information about Brown Brothers Harriman & Co., the identity of
its general partners and its other contractual arrangements with the
Corporation, see pages [#] - [#] of this Proxy Statement.
Authorization of the Advisory Agreement requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which term as used in this Proxy Statement means the vote of the lesser of
(a) more than 50% of the outstanding Shares of that Fund, or (b) 67% of the
Shares of the Fund present at the Meeting if the holders of more than 50% of the
outstanding Shares of that Fund are present or represented by proxy at the
Meeting.
The Directors of the Corporation recommend that the shareholders of the
Tax-Efficient Fund vote FOR the approval of the Advisory Agreement. In the event
the shareholders of the Fund fail to approve this Proposal, the Directors of the
Corporation will consider what further action should be taken.
PROPOSAL 5: AUTHORIZING THE CORPORATION TO VOTE AT A MEETING OF PORTFOLIO
INVESTORS ON BEHALF OF EACH OF THE SMALL COMPANY FUND AND THE INTERNATIONAL
EQUITY FUND.
Shareholders of each of the Small Company Fund and the International
Equity Fund are being asked to vote on certain matters because each Fund's
corresponding Portfolio is expected to call a meeting of its investors
(including the Small Company Fund and the International Equity Fund,
respectively) to vote on such matters. Specifically, it is expected that each
Portfolio will ask its investors to vote at such meeting to:
(A) vote on an amendment to the Declaration of Trust of the regarding
Trustee retirement and removal provisions;
(B) elect six Trustees of the Portfolio;
(C) vote on the selection of Deloitte & Touche LLP as the independent
certified public accountants of the Portfolio; and
(D) with respect to the International Equity Portfolio only, to vote
on an Investment Advisory Agreement between the International
Equity Portfolio and its investment adviser, Brown Brothers
Harriman & Co.
The Corporation on behalf of each of the Small Company Fund and the
International Equity Fund will cast its votes at the meeting of investors in
that Fund's corresponding Portfolio on each matter, as applicable, in the same
proportions as the votes cast by the Small Company Fund's or the International
Equity Fund's shareholders, as the case may be. The investment of each of the
Small Company Fund and the International Equity Fund in its corresponding
Portfolio as of June 30, 1999 represents approximately 88% and 82%, respectively
of the total interests in that Portfolio.
PROPOSAL 5A: AUTHORIZING THE AMENDMENT OF THE DECLARATION OF TRUST OF
EACH PORTFOLIO REGARDING TRUSTEE RETIREMENT AND REMOVAL
PROVISIONS
The Board of Trustees of each Portfolio has approved, and recommends
that investors in that Portfolio approve, a proposal to amend certain provisions
of the Portfolio's Declaration of Trust to establish a mandatory retirement age
and expand removal provisions relating to Trustees of the Portfolio.
Each Portfolio's Declaration of Trust currently provides, in Section
2.2 of Article II, that beginning with the Trustees elected at the first meeting
of investors, each Trustee holds office until the termination of the Portfolio
unless the Trustee resigns or is removed as otherwise provided in the
Declaration.
The Trustees of each Portfolio and the Corporation have recommended
that the respective Declarations of Trust be amended. Such amendments would
specifically provide that a Trustee shall hold office until he or she attains
the age of seventy (except for Trustees elected prior to January 1, 2000 who
would hold office until he or she attains the age of seventy-two), or until he
or she sooner dies, resigns or is otherwise removed as provided in the
respective Declarations of Trust. Additionally, such amendments would provide
that a Trustee could be removed with or without cause by a vote of
three-quarters of the remaining Trustees who are Independent Trustees of a
Portfolio.
If this item is approved by Shareholders and the other investors in
each Portfolio, the definition section of each Portfolio's Declaration of Trust
shall be amended in relevant part to read as follows:
"Independent Trustees" shall mean those Trustees who are not
"interested persons" of the Trust as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended.
Section 2.2 of Article II of the Portfolio's Declaration of Trust shall
be amended in relevant part to read as follows:
Subject to the provisions of Section 16(a) of the 1940 Act and except
as provided in Section 2.3 hereof, each Trustee shall hold office until
he or she attains the age of seventy (except with respect to Trustees
who are elected as Trustees prior to January 1, 2000, until he or she
attains the age of seventy-two), or until he or she sooner dies,
resigns or is removed as provided in Section 2.3 below.
Section 2.3 of Article II of the Portfolio's Declaration of Trust shall
be amended in relevant part as follows:
Any Trustee may be removed with or without cause by the action of
three-quarters of the remaining Trustees who are Independent Trustees
(provided the aggregate number of Trustees, after such removal and
after giving effect to any appointment made to fill the vacancy created
by such removal, shall not be less than the number required by Section
2.1 hereof).
If this proposal is approved, the Corporation's Articles of Amendment
will also be amended by adding similar language to Article Sixth of the
Corporation's Articles of Incorporation.
The full text of applicable sections of each Portfolio's Declaration of
Trust and the Corporation's Articles of Incorporation, as proposed to be
amended, are set forth in the Appendix C and B, respectively, to this proxy
statement.
It is intended that proxies submitted by Shareholders of the Small
Company Fund and the International Equity Fund not limited to the contrary will
be voted in favor of amending the respective Portfolio's Declaration of Trust as
set forth in Appendix C Amendment of the Portfolio's Declaration of Trust
requires the vote of investors in the Portfolio holding more than 50% of the
total interests entitled to vote.
The Board of Directors the Corporation unanimously recommends that the
shareholders of each of the Small Company Fund and the International Equity Fund
vote FOR the approval of the proposed amendments to the Declaration of Trust of
that Fund's corresponding Portfolio. In the event the shareholders of one or
both Funds fail to approve this proposal, the Directors of the Corporation will
consider what further action should be taken.
PROPOSAL 5B: AUTHORIZING THE ELECTION OF SIX TRUSTEES OF THE PORTFOLIO.
As described under proposal 2 of this Proxy Statement, it is proposed
by the Board of Directors of the Corporation and the Board of Trustees of each
Portfolio that there be a common Board of Directors/Trustees between the
Corporation and the Portfolio as well as among all other funds in The 59 Wall
Street Family of Funds. For the reasons stated, the Directors of the Corporation
believe that a combined Board or Directors/Trustees would permit the Directors
to more efficiently supervise the affairs of the Corporation and each Portfolio
as well as the other entities in The 59 Wall Street Family of Funds.
It is the present intention that the enclosed proxy will, unless
authority to vote for election of one or more nominees is specifically withheld
by executing the proxy in the manner stated thereon, be used to vote FOR the
election of the six nominees as Trustees of the Portfolios. Each Trustee so
elected will hold office for a term of unlimited duration until he resigns,
retires or is removed, as provided in each Portfolio's Declaration of Trust.
Please note that each of the nominees, Messrs. Shields, Feldman, Miltenberger,
Beard and Lowy, currently serves as a Director of the Corporation and a Trustee
of the Trust and each nominee has consented to serve as Trustee of each
Portfolio if elected at the Meeting. Mr. Ivory is being nominated as a Trustee
of the Trust, the Portfolio and the Corresponding Portfolios and has consented
to serve if elected at the Meeting
Election of the nominees as Trustees of a Portfolio requires the vote
of investors in that Portfolio holding more than 50% of the total interests
entitled to vote.
The Directors unanimously recommend that the shareholders of each of
the Small Company Fund and the International Equity Fund vote FOR election of
the nominees as Trustees of that Fund's corresponding Portfolio. In the event
the shareholders of one or both Funds fail to approve this proposal, the
Directors of the Corporation will consider what further action should be taken.
PROPOSAL 5C: RATIFICATION OF SELECTION OF ACCOUNTANTS
A majority of the Independent Trustees of each Portfolio have selected
Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts 02116, as
independent certified public accountants to sign or certify any financial
statements which may be filed by the Portfolio with the Securities and Exchange
Commission in respect of all or any part of the fiscal years ending October 31,
1999 and October 31, 2000, the employment of such auditors being expressly
conditioned upon the right of the Portfolio, by vote of a majority of the
outstanding "voting securities" in the Portfolio at any meeting called for the
purpose, to terminate such employment forthwith without any penalty. Such
selection was made pursuant to provisions of Section 32(a) of the 1940 Act, and
is subject to ratification or rejection by the investors of each Portfolio at a
meeting of such investors.
The independent certified public accountants of each Portfolio provide
customary professional services in connection with the audit function for a
management investment company such as that Portfolio, and their fees for such
services include fees for work leading to the expression of opinions on the
financial statements included in annual reports to the holders of interests in
the Portfolio, opinions on the financial statements and other data included in
the Portfolio's annual report to the Securities and Exchange Commission,
opinions on financial statements included in amendments to the Portfolio's
registration statement, and preparation of the Portfolio's federal and state
income tax returns. The nature and scope of the professional services of the
accountants were approved by each Portfolio's Trustees, who have considered the
possible effect thereof on the independence of the accountants.
It is intended that proxies not limited to the contrary will be voted
in favor of authorizing the ratification of the selection of Deloitte & Touche
LLP as the independent certified public accountants to be employed by each
Portfolio to sign or certify financial statements required to be signed or
certified by independent public accountants and filed with the Securities and
Exchange Commission in respect of all or part of the fiscal years ending October
31, 1999 and October 31, 2000.
The Directors of the Corporation recommend that the shareholders of
each of the Small Company Fund and the International Equity Fund vote FOR the
ratification of the selection of Deloitte & Touche LLP as the independent
certified public accountants of that Fund's corresponding Portfolio. In the
event the shareholders of the one or both Funds fail to approve this proposal,
the Directors of the Corporation will consider what further action should be
taken.
PROPOSAL 5D. AUTHORIZE THE CORPORATION TO APPROVE AN INVESTMENT ADVISORY
AGREEMENT BETWEEN INTERNATIONAL EQUITY PORTFOLIO AND BROWN
BROTHERS HARRIMAN & CO.
Brown Brothers Harriman & Co. acts as investment adviser to
International Equity Portfolio pursuant to an Investment Advisory Agreement with
Brown Brothers Harriman & Co., dated August 23, 1994 (as referred to in this
Proposal 5D, the "Advisory Agreement"). The Advisory Agreement is set forth as
Appendix D to this Proxy Statement. The Advisory Agreement has not previously
been submitted for approval by the International Equity Portfolio's investors.
The Advisory Agreement provides that the International Equity Portfolio
employs Brown Brothers Harriman & Co. to render investment advisory services.
Subject to the supervision of the Portfolio's Trustees, Brown Brothers Harriman
& Co. makes the day-to-day investment decisions for the Portfolio, arranges for
the execution of the purchase and sale orders for the portfolio transactions of
the Portfolio and generally manages the Portfolio's investments.
Pursuant to the Advisory Agreement, Brown Brothers Harriman & Co.
receives a fee equal to an annual rate of 0.65% of the International Equity
Portfolio's average daily net assets, which produced an advisory fee of $448,851
for the fiscal year ended October 31, 1998. The net assets as of October 31,
1998 of the Portfolio were $66,632,581.
The Advisory Agreement will remain in full force and effect for two
years from the date of such agreement and will continue in full force and effect
indefinitely thereafter, but only so long as such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees of the Portfolio who are not parties to the proposed Advisory
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, or (ii) by a vote of a majority of the Portfolio's outstanding voting
securities, and by the Portfolio's Independent Trustees who are not parties to
the Advisory Agreement. The Advisory Agreement may be terminated at any time
without penalty by a vote of a majority of the Trustees of the Portfolio or by a
vote of the holders of a majority of the Portfolio's outstanding shares on 60
days' written notice to Brown Brothers Harriman & Co. and by Brown Brothers
Harriman & Co. upon 90 days' written notice to the Portfolio. In addition, the
agreement will terminate immediately and automatically if assigned.
The Advisory Agreement further provides that Brown Brothers Harriman &
Co. shall not be liable for any error of judgment or mistake of law of for any
loss suffered by the Portfolio in connection with matters to which the Advisory
Agreements relates, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
wilful misfeasance, bad faith or gross negligence on its part in the performance
of its duties or from reckless disregard by it of its obligations and duties
under the Advisory Agreement.
The Board of Trustees, including a majority of those Independent Trustees who
were not parties to the proposed Advisory Agreement approved the proposed
Advisory Agreement on November 10, 1998 and authorized its presentation to the
investors in the Portfolio on August 10, 1999. At the time of such action by the
Trustees of the Portfolio, Messrs. H.B. Alvord, Richard L. Carpenter, Clifford
A. Clark, and David M. Seitzman were Trustees of the Portfolio. In considering
the Advisory Agreement, the Directors considered and evaluated, among other
things, the staff and professional personnel of Brown Brothers Harriman & Co.,
comparative fees charged to other investment companies by other investment
advisers; comparative performance results; and expense ratio data comparing the
Portfolio with other investment companies of similar size and with similar
investment objectives. Before approving the Advisory Agreement, the Trustees
conducted a review of the various documents, reports and other materials
submitted to them by Brown Brothers Harriman & Co., information that they were
familiar with as Trustees, as well as information obtained from independent
sources such as Lipper Analytical Services, Inc.
For information about Brown Brothers Harriman & Co., the identity of
its general partners and its other contractual arrangements with the
Corporation, see pages [] - [] of this Proxy Statement.
Approval of the International Equity Portfolio's Investment Advisory
Agreement with Brown Brothers Harriman & Co. requires the vote of investors in
the Portfolio holding more than 50% of the total interests entitled to vote.
The Directors of the Corporation recommend that the shareholders of
each Fund vote to approve this Proposal. In the event that the shareholders of a
Fund fail to approve this Proposal, the Directors of the Corporation will
consider what further action should be taken.
PROPOSAL 6: OTHER BUSINESS
Neither the Directors of the Corporation nor the persons appointed as
proxies are aware of any matters other than those set forth in the accompanying
Notice of Special Meeting which may be presented by others, nor do they have any
intention of bringing before the Meeting for action any matters other than those
specified in such Notice. If any other business shall properly come before the
Meeting, the persons appointed as proxies shall vote thereon in accordance with
their best judgment. Proposals of shareholders which are intended to be
presented at a future shareholder meeting must be received by the Corporation a
reasonable time prior to the Corporation's solicitation of proxies relating to
such future meeting.
ADDITIONAL INFORMATION
Brown Brothers Harriman & Co.
Brown Brothers Harriman & Co., Private Bankers, is a New York limited
partnership established in 1818. The principal offices of Brown Brothers
Harriman & Co. are located at 59 Wall Street, New York, New York 10005. Brown
Brothers Harriman & Co. is subject to 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 a broad range of investment management services for
customers in the United States and abroad. At December 31, 1998, it managed
total assets of approximately $32 million.
The general partners of Brown Brothers Harriman & Co. are Messrs. J.
William Anderson, Peter B. Bartlett, Brian A. Berris, Taylor S. Bodman, John J.
Borland, Douglas A. Donahue, Jr., Anthony T. Enders, A. T. Erckientz, T. M.
Farley, John A. Gehret, Elbridge T. Gerry, Jr., Robert R. Gould, Kyosuke
Hashimoto, Ronald J. Hill, Landon Hilliard, Radford W. Klotz, Michael Kraynak,
Jr., T. Michael Long, Hampton S. Lynch, Jr., Michael W. McConnell, William H.
Moore III, Donald B. Murphy, John A. Nielsen, Eugene C. Rainis, A. Heaton
Robertson III, Jeffrey A. Schoenfeld, Stokley P. Towles, Andrew J. F. Tucker,
Lawrence C. Tucker, Maarten van Hengel, Douglas C. Walker, Laurence F.
Whittemore and Richard H. Witmer, Jr. and Mss. Kristen F. Giarrusso and Susan C.
Livingston. The mailing address for each general partner is Brown Brothers
Harriman & Co., 59 Wall Street, New York, New York 10005, with the following
exceptions: Messrs. Bodman, Donahue, Robertson and Towles and Mss. Giarrusso and
Livingston at Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts 02109; Mr. Walker at Brown Brothers Harriman & Co., 1531 Walnut
Street, Philadelphia, Pennsylvania 19102; Mr. Borland at 125 South Wacker Drive,
Suite 2150, Chicago, Illinois 60606; Mr. Hashimoto at Daimatsu Building, 4th
Floor, 8-14 Nihonbashi 3-Chome, Chuo-Ku, Tokyo, 103-0027, Japan; and Mr. Lynch
at Veritas House, 125 Finsbury Pavement, London EC2A 1PN, England. The five
partners with the largest economic interests in Brown Brothers Harriman & Co.
are Messrs. Enders, Hilliard, Murphy, Tucker and McConnell. The Steering
Committee of Brown Brothers Harriman & Co. is comprised of Messrs. Enders,
Bartlett, Hilliard, Murphy, Tucker, Donahue and McConnell. Messrs. Nielsen and
Murphy have significant management responsibilities relating to the Trust and
the Portfolio.
The investment advisory services provided by Brown Brothers Harriman &
Co. to each Fund and Portfolio are not exclusive under the terms of each
Advisory Agreement. Brown Brothers Harriman & Co. is free to and does render
similar investment advisory services to others, including the other funds in the
59 Wall Street Family of Funds. The names of the funds in the 59 Wall Street
Family of Funds for which Brown Brothers Harriman & Co. provides investment
advisory services, the approximate amounts of their net assets or market value
as of June 30, 1999 and the annual rates of Brown Brothers Harriman & Co.'s fees
for its investment advisory services to such companies are as follows:
<TABLE>
<S> <C> <C>
Rate of Investment
Net Assets Advisory Compensation
as of as Percentage of Average
Name of Fund June 30, 1999 Daily Net Assets
- ------------ ------------- ========================
U.S. Money $1,058,041,530 0.15%
Market Portfolio
The 59 Wall Street $192,642,426 0.15%
U.S. Treasury Money Fund
The 59 Tax Exempt $13,110,638 0.15%
Money Fund
The 59 Wall Street Tax $76,478,367 0.25%
Free Short/Intermediate
Fixed Income Fund
U.S. Small Company Portfolio $17,663,245 0.65%
The 59 Wall Street $139,443,165 0.65%
European Equity Fund
The 59 Wall Street $61,440,800 0.65%
Pacific Basin Equity Fund
The 59 Wall Street $11,864,194 0.25%
Inflation-Indexed Securities
Fund
The 59 Wall Street U.S. $23,234,878 0.65%
Equity Fund
The 59 Wall Street Tax- $34,677,316 0.65%
Efficient Equity Fund
International Equity Portfolio $61,149,888 0.65%
</TABLE>
The Corporation has entered into an Eligible Institution Agreement and
a Shareholder Servicing Agreement with Brown Brothers Harriman & Co. pursuant to
which Brown Brothers Harriman & Co. acts as shareholder servicing agent for its
customers and for other fund investors. These shareholder services include:
answering inquiries regarding account status and history, the manner in which
purchases and redemptions of Shares may be effected, and certain other matters
pertaining to the Fund; assisting in designating and changing dividend options,
account designations and addresses; providing necessary personnel and facilities
to coordinate the establishment and maintenance of shareholder accounts and
records with the transfer agent; transmitting purchase and redemption orders to
the transfer agent; arranging for the wiring or other transfer of funds to and
from customer accounts in connection with orders to purchase or redeem Shares;
verifying purchase and redemption orders, transfers among and changes in
accounts; informing the distributor of the gross amount of purchase and
redemption orders for Shares; and providing other related services. The
Corporation on behalf of each Fund has agreed to pay Brown Brothers Harriman &
Co. for these services a fee, which is computed daily and may be paid monthly
and is equal to an annual percentage rate of the value of Fund Shares owned by
or for shareholders for whom Brown Brothers Harriman & Co. is acting either as
shareholder servicing agent or eligible institution.
The Corporation has also entered into an Administrative Services
Agreement with Brown Brothers Harriman & Co. pursuant to which Brown Brothers
Harriman & Co. administers all aspects of the Corporation's operations subject
to the supervision of the Directors of the Corporation. In connection with its
responsibilities as Administrator for each Fund and at its own expense, Brown
Brothers Harriman & Co. (i) provides the Corporation with the services of
persons competent to perform such supervisory, administration and clerical
functions as are necessary in order to provide effective administration of the
Trust, including the maintenance of certain books and records; (ii) oversees the
performance of administrative and professional services to the Corporation by
others, including the Funds' Custodian, Transfer Agent 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 of, 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.
The Corporation on behalf of each Fund has agreed to pay Brown Brothers
Harriman & Co. for these services a fee, which is computed daily and may be paid
monthly equal to an annual percentage rate of the value of the Fund's shares.
With respect to the Tax-Efficient Fund, the fees payable to Brown Brothers
Harriman & Co. as shareholder servicing agent or eligible institution are 0.25%
of the Fund's average daily net assets and the fees payable to Brown Brothers
Harriman & Co. as administrator are 0.15% of the Fund's average daily net
assets. With respect to the International Equity Fund, the fees payable to Brown
Brothers Harriman & Co. as shareholder servicing agent or eligible institution
are 0.25% of the Fund's average daily net assets and the fees payable to Brown
Brothers Harriman & Co. as administrator of the International Equity Fund and
the International Equity Portfolio are 0.125% and 0.035%, respectively, of the
Fund's or the Portfolio's average daily net assets. Brown Brothers Harriman &
Co. pays a subadministration fee as determined from time to time to 59 Wall
Street Administrators, Inc. Therefore the net administration fee payable to
Brown Brothers Harriman & Co. is lower.
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
Corporation. There is presently no controlling precedent prohibiting financial
institutions such as Brown Brothers Harriman & Co. from performing the
investment advisory, administrative or shareholder servicing/eligible
institution functions described above. If Brown Brothers Harriman & Co. were to
terminate the Tax Efficient Fund's Investment Advisory Agreement with the Trust
or the International Equity Portfolio's Investment Advisory Agreement or were
prohibited from acting in either such capacity, it is expected that Directors of
the Corporation and/or the Trustees of the International Equity Portfolio would
recommend to the shareholders of the Trust or investors in the International
Equity Portfolio, as the case may be, that they approve a new investment
advisory agreement with another qualified adviser selected by the
Directors/Trustees be approved. If Brown Brothers Harriman & Co. were to
terminate its Shareholder Servicing Agreement, Eligible Institution Agreement or
Administrative Services Agreement with the Trust or were prohibited from acting
in any such capacity, its customers would be permitted to remain shareholders of
the Trust and alternative means for providing shareholder services or
administrative services, as the case may be, would be sought. In such event,
although the operation of the Trust and/or the Portfolio might change, it is not
expected that any shareholders and/or investors would suffer any adverse
financial consequences. However, an alternative means of providing shareholder
services may afford less convenience to investors.
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 a Fund 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".
Portfolio Transactions
In effecting securities transactions for the Tax-Efficient Fund or the
International Equity Portfolio, 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.
On those occasions when Brown Brothers Harriman & Co. deems the
purchase or sale of a security to be in the best interests of a Fund and/or
Portfolio 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 and/or
Portfolio 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 and/or Portfolio. In
some instances, this procedure might adversely affect the Fund and/or Portfolio.
By Order of the Board of Trustees.
Linda T. Gibson, Secretary.
<PAGE>
APPENDIX A
THE 59 WALL STREET FUND, INC.
INVESTMENT ADVISORY AGREEMENT
THE 59 WALL STREET TAX-EFFICIENT U.S. EQUITY FUND
AGREEMENT, made on the 11th day of August, 1998, between THE 59 WALL
STREET FUND, INC., a Maryland corporation (the "Corporation"), on behalf of The
59 Wall Street Tax-Efficient U.S. Equity Fund (the "Fund"), and BROWN BROTHERS
HARRIMAN & CO., a New York limited partnership (the "Adviser"),
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the " 1940
Act"); and
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory services to the Fund, and the Adviser is willing to render
such services;
NOW, THEREFORE, this Agreement
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Corporation hereby appoints the Adviser to act as investment
adviser to the Fund for the period and on the terms set forth in this Agreement.
The Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Directors of the
Corporation, the Adviser shall manage the investment operations of the Fund and
the composition of the Fund's portfolio of securities and investments, including
cash, the purchase, retention and disposition thereof and agreements relating
thereto, in accordance with the Fund's investment objective and policies as
stated in the Prospectus (as defined in paragraph 3 of this Agreement) and
subject to the following understandings:
(a) the Adviser shall furnish a continuous investment program
for the Fund's portfolio and determine from time to time what
investments or securities will be purchased, retained, sold or lent by
the Fund, and what portion of the assets will be invested or held
uninvested as cash;
(b) the Adviser shall use the same skill and care in the
management of the Fund's portfolio as it uses in the administration of
other accounts for which it has investment responsibility as agent;
(c) the Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws and the Prospectus
of the Fund and with the instructions and directions of the Directors
of the Corporation and will conform to and comply with the requirements
of the 1940 Act and all other applicable federal and state laws and
regulations including, without limitation, the regulations and rulings
of the New York State Banking Department;
(d) the Adviser shall determine the securities to be
purchased, sold or lent by the Fund and as agent for the Fund will
effect portfolio transactions pursuant to its determinations either
directly with the issuer or with any broker and/or dealer in such
securities; in placing orders with brokers and or dealers the Adviser
intends to seek best price and execution for purchases and sales; the
Adviser shall also make recommendations regarding whether or not the
Fund shall enter into repurchase or reverse repurchase agreements and
interest rate futures contracts.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other customers, the Adviser,
may, to the extent permitted by applicable laws and regulations, but shall not
be obligated to, aggregate the securities to be so sold or purchased in order to
obtain the best execution and lower brokerage commissions, if any. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers;
(e) the Adviser shall maintain books and records with respect
to the Fund's securities transactions and shall render to the
Corporation's Directors such periodic and special reports as the
Directors may reasonably request; and
(f) the investment management services of the Adviser to the
Fund under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. The Corporation has delivered copies of each of the following
documents to the Adviser and will promptly notify and deliver to it all future
amendments and supplements, it any:
(a) Articles of Incorporation of the Corporation, filed with
the State of Maryland on July 16, 1990 (such Articles of Incorporation,
as presently in effect and as amended from time to time, are herein
called the "Articles of Incorporation");
(b) By-Laws of the Corporation (such By-Laws, as presently in
effect and as amended from time to time, are herein called the
"By-Laws");
(c) Certified resolutions of the Directors of the Corporation
authorizing the appointment of the Adviser and approving the form of
this Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (No. 33-46805) (the
"Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission") on March 1, 1993 relating to the
Corporation and the shares of common stock. par value $.001 per share
(the "Shares"), of the Fund;
(e) Notification of Registration of the Corporation under the
1940 Act on Form N-8A as filed with the Commission on July 16, 1990;
and
(f) Prospectus of the Fund, dated September 21, 1998 (such
prospectus, as presently in effect and as amended or supplemented with
respect to the Fund from time to time, is herein called the
"Prospectus").
4. The Adviser shall keep the Fund's books and records required to be
maintained by it pursuant to paragraph 2(e). The Adviser agrees that all records
which it maintains for the Fund are the property of the Fund and it will
promptly surrender any of such records to the Fund upon the Fund's request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 of
the Commission under the 1940 Act any such records as are required to be
maintained by the Adviser with respect to the Fund by Rule 31a-1 of the
Commission under the 1940 Act.
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Fund (including taxes
and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will receive from the Fund as full compensation therefor
a fee at an annual rate equal to 0.65 % of the Fund's average daily net assets.
This fee will be computed based on net assets at 4:00 P.M. New York time on each
day the New York Stock Exchange is open for trading and will be paid to the
Adviser monthly during the succeeding calendar month.
7. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 1940 Act) or a loss resulting from wilful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated with
respect to the Fund by the Corporation at any time, without the payment of any
penalty, by vote of a majority of all the Directors of the Corporation or by
"vote of a majority of the outstanding voting securities" of the Fund on 60 days
written notice to the Adviser, or by the Adviser at any time, without the
payment of any penalty, on 90 days written notice to the Corporation. This
Agreement will automatically and immediately terminate in the event of its
"assignment".
9. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Directors of the Corporation from time to time, have no
authority to act for or represent the Fund or the Corporation in any way or
otherwise be deemed an agent of the Fund or the Corporation.
10. This Agreement may be amended by mutual consent, but the consent of
the Corporation must be approved (a) by vote of a majority of those Directors of
the Corporation who are not parties to this Agreement or "interested persons" of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (b) by "vote of a majority of the outstanding voting
securities" of the Fund.
11. As used in this Agreement, the terms "assignment", "interested
persons" and "vote of a majority of the outstanding voting securities" shall
have the meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Adviser by the Corporation
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 59 Wall Street, New York, New York 10005, Attention: Treasurer, or at
such other address or to such other individual as shall be specified by the
Adviser to the Corporation. Notices of any kind to be given to the Corporation
by the Adviser shall be in writing and shall be duly given if mailed or
delivered to the Corporation at The 59 Wall Street Fund, Inc., 21 Milk Street,
Boston, Massachusetts 02109, Attention: Secretary, or at such other address or
to such other individual as shall be specified by the Corporation to the
Adviser.
13. The Directors have authorized the execution of this Agreement in
their capacity as Directors and not individually and the Adviser agrees that
neither the shareholders nor the Directors nor any officer, employee,
representative or agent of the Corporation shall be personally liable upon, nor
shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Corporation,
that the shareholders, Directors, officers, employees, representatives and
agents of the Corporation shall not be personally liable hereunder, and the
Adviser shall look solely to the property of the Corporation for the
satisfaction of any claim hereunder.
14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
THE 59 WALL STREET FUND, INC.
By
Joseph V. Shields, Jr., Chairman
ATTEST:
Christine A. Drapeau
Assistant Secretary
BROWN BROTHERS HARRIMAN & CO.
By
John A. Nielsen, Partner
ATTEST:
Christine A. Drapeau
Assistant Secretary
<PAGE>
APPENDIX B
Proposed amendment to Article Sixth of the Articles of Amendment of the
Corporation (words deleted have been marked through and words added are
underscored):
SIXTH: The number of Directors of the Corporation shall initially be five. The
number of Directors may be increased or decreased in accordance with the By-laws
so long as the number is never less than three. The names of the initial
Directors who shall act until the first annual meeting or until their successors
are duly chosen and qualified are: Philip W. Coolidge, Cynthia J. Colitti, James
E. Hoolahan, Gail E. McHugh and Molly S. Mugler. Subject to the provisions of
Section 16(a) of the Investment Company Act of 1940, a Director shall hold
office until he or she attains the age of seventy (except with respect to
Directors elected prior to January 1, 2000, until he or she attains the age of
seventy-two), or until he or she sooner dies, resigns or is removed for cause by
the action of two-thirds of the remaining Directors or with or without cause by
a vote of three-quarters of the remaining Directors of the Corporation who are
not "interested persons" of the Corporation as defined in Section 2(a)(19) of
the Investment Company Act. Removal with cause includes, but is not limited to,
the removal of a Director due to physical or mental incapacity or failure to
comply with such written policies as from time to time may be adopted by at
least two-thirds of the Directors with respect to the conduct of the Directors
and attendance at meetings.
<PAGE>
APPENDIX C
Proposed amendment to Section 1.2 (Definitions) of the Declaration of
Trust of each Portfolio (words deleted have been marked through and words added
are underscored):
"Independent Trustees" shall mean those Trustees who are not
"interested persons" of the Trust as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended.
Proposed Amendment to Sections 2.2 and 2.3 of Article II of the
Declaration of Trust of each Portfolio (words deleted have been marked through
and words added are underscored):
Section 2.2. Term and Election. Each Trustee named herein, or elected
or appointed prior to the first meeting of the Holders, shall (except
in the event of resignations or removals or vacancies pursuant to
Section 2.3 or 2.4 hereof) hold office until his successor has been
elected at such meeting and has qualified to serve as Trustee, as
required under the 1940 Act. Subject to the provisions of Section 16(a)
of the 1940 Act and except as provided in Section 2.3 hereof, each
Trustee shall hold office during the lifetime of this Trust and until
its termination as hereinafter provided until he or she attains the age
of seventy (except with respect to Trustees who are elected as Trustees
prior to January 1, 2000, until he or she attains the age of
seventy-two), or until he or she sooner dies, resigns or is removed as
provided in Section 2.3 below.
Section 2.3. Resignation, Removal and Retirement Any Trustee may resign
his or her trust (without need for prior or subsequent accounting) by
an instrument in writing executed by such Trustee and delivered or
mailed to the Chairman, if any, the President or the Secretary of the
Trust and such resignation shall be effective upon such delivery, or at
a later date according to the terms of the instrument. Any Trustee may
be removed by the affirmative vote of Holders of two-thirds of the
Interests or (provided the aggregate number of Trustees, after such
removal and after giving effect to any appointment made to fill the
vacancy created by such removal, shall not be less than the number
required by Section 2.1 hereof) with a cause, by the action of
two-thirds of the remaining Trustees. Any Trustee may be removed with
or without cause by the action of three-quarters of the remaining
Trustees who are Independent Trustees (provided the aggregate number of
Trustees, after such removal and after giving effect to any appointment
made to fill the vacancy created by such removal, shall not be less
than the number required by Section 2.1 hereof). Removal with cause
includes, but is not limited to, the removal of a Trustee due to
physical or mental incapacity or failure to comply with such written
policies as from time to time may be adopted by at least two-thirds of
the Trustees with respect to the conduct of the Trustees and attendance
at meetings. Any Trustee who has attained a mandatory retirement age,
if any, established pursuant to any written policy adopted from time to
time by at least two-thirds of the Trustees shall, automatically and
without action by such Trustee or the remaining Trustees, be deemed to
have retired in accordance with the terms of such policy, effective as
of the date determined in accordance with such policy. Any Trustee who
has become incapacitated by illness or injury as determined by a
majority of the other Trustees, may be retired by written instrument
executed by a majority of the other Trustees, specifying the date of
such Trustee's retirement. Upon the resignation, retirement or removal
of a Trustee or a Trustee otherwise ceasing to be a Trustee, such
resigning, retired removed or former Trustee shall execute and deliver
such documents as the remaining Trustees shall require for the purpose
of conveying to the Trust or the remaining Trustees any Trust Property
held in the name of such resigning, retired, removed or former Trustee.
Upon the death of any Trustee or upon removal, retirement or
resignation due to any Trustee" incapacity to serve as Trustee, the
legal representative of such deceased, removed, retired or resigning
Trustee shall execute and deliver on behalf of such deceased, removed,
retired or resigning Trustee such documents as the remaining Trustees
shall require for the purpose set forth in the preceding sentence.
<PAGE>
APPENDIX D
INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made this day of August 23, 1994 between INTERNATIONAL
EQUITY PORTFOLIO, a New York trust, (the "Portfolio"), and BROWN BROTHERS
HARRIMAN & CO., a New York limited partnership (the "Adviser"),
WHEREAS, the Portfolio is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Portfolio desires to retain the Adviser to render
investment advisory services, and the Adviser is willing to render such
services;
NOW, THEREFORE, this Agreement
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Adviser to act as investment
adviser to the Portfolio for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of Trustees of the
Portfolio, the Adviser shall manage the investment operations of the Portfolio
and the composition of the Portfolio's portfolio of securities and investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with the Portfolio's investment objective and
policies as stated in the Registration Statement on Form N-1A (as defined in
paragraph 3 of this Agreement) and subject to the following understandings:
(a) the Adviser shall furnish a continuous investment program for the
Portfolio and determine from time to time what investments or securities will be
purchased, retained, sold or lent by the Portfolio, and what portion of the
assets will be invested or held uninvested as cash;
(b) the Adviser shall use the same skill and care in the management of
the Portfolio as it uses in the administration of other accounts for which it
has investment responsibility as agent;
(c) the Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Portfolio's Declaration of
Trust and By-Laws and the Registration Statement on Form N-1A of the Portfolio
and with the instructions and directions of the Trustees of the Portfolio and
will conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations including, without limitation,
the regulations and rulings of the New York State Banking Department;
(d) the Adviser shall determine the securities to be purchased, sold or
lent by the Portfolio and as agent for the Portfolio will effect portfolio
transactions pursuant to its determinations either directly with the issuer or
with any broker and/or dealer in such securities; in placing orders with brokers
and or dealers the Adviser intends to seek best price and execution for
purchases and sales; the Adviser shall determine whether or not the Portfolio
shall enter into repurchase or reverse repurchase agreements, contracts
providing for the making or acceptance of a cash settlement based upon changes
in the value of an index of securities, or put or call option contracts, with
respect to the Portfolio's portfolio.
On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Adviser, may, to the extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be so sold or purchased
in order to obtain the best execution and lower brokerage commissions, if any.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers;
(e) the Adviser shall maintain books and records with respect to the
Portfolio's securities transactions and shall render to the Portfolio's Trustees
such periodic and special reports as the Trustees may reasonably request; and
(f) the investment management services of the Adviser to the Portfolio
under this Agreement are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others.
3. The Portfolio has delivered copies of each of the following
documents to the Adviser and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) Declaration of Trust of the Portfolio, dated August 15, 1994 (such
Declaration of Trust, as presently in effect and as amended from time to time,
is herein called the "Declaration of Trust");
(b) By-Laws of the Portfolio (such By-Laws, as presently in effect and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Portfolio authorizing
the appointment of the Adviser and approving the form of this Agreement;
(d) Registration Statement under the 194O Act, as amended, on Form N-1A
(the "Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission"); and
(e) Notification of Registration of the Portfolio under the 1940 Act on
Form N-8A as filed with the Commission on
4. The Adviser shall keep the Portfolio's books and records required to
be maintained by it pursuant to paragraph 2(e). In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for the Portfolio are property of the Portfolio
and further agrees to surrender promptly to the Portfolio any such records upon
the Portfolio's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Portfolio (including
taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement, the Adviser will receive from the Portfolio as full compensation
therefor a fee at an annual rate equal to 0.65% of the portfolio's average daily
net assets. This fee will be computed based on net assets at 4:00 P.M. New York
time on each day the New York Stock Exchange is open for trading and will be
paid to the Adviser monthly during the succeeding calendar month.
7. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolio in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from wilful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of all the Trustees of the Portfolio or by ,"vote of a majority of the
outstanding voting securities" of the Portfolio on 60 days' written notice to
the Adviser, or by the Adviser at any time, without the payment of any penalty,
on 90 days' written notice to the Portfolio. This Agreement will automatically
and immediately terminate in the event of its "assignment".
9. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Trustees of the Portfolio from time to time, have no authority
to act for or represent the Portfolio in any way or otherwise be deemed an agent
of the Portfolio.
10. This Agreement may be amended by mutual consent, but the consent of
the Portfolio must be approved (a) by vote of a majority of those Trustees of
the Portfolio who are not parties to this Agreement or "interested persons" of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (b) by "vote of a majority of the outstanding voting
securities" of the Portfolio.
11. As used in this Agreement, the terms "assignment", "interested
persons" and "vote of a majority of the outstanding voting securities" shall
have the meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Adviser by the Portfolio
shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 59 Wall Street, New York, New York 10005, Attention: Treasurer, or at
such other address or to such other individual as shall be specified by the
Adviser to the Portfolio. Notices of any kind to be given to the Portfolio by
the Adviser shall be in writing and shall be duly given if mailed or delivered
to the Portfolio at International Equity Portfolio, Butterfield House, Fort
Street, P.O. Box 705, George Town, Grand Cayman BWI, or at such other address or
to such other individual as shall be specified by the Portfolio to the Adviser.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
INTERNATIONAL EQUITY PORTFOLIO
By
BROWN BROTHERS HARRIMAN & CO.
By
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(R) "HUB AND SPOKE" is a registered service mark of Signature Financial Group,
Inc.
