<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
W.P. STEWART & CO. GROWTH FUND, INC.
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
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.
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total Fee Paid:
_______________________________________________________________
[ ] 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:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
_____________________________________________________________
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
527 Madison Avenue
New York, New York 10022
____________________________________
Notice of Annual Meeting of Shareholders
____________________________________
To the Shareholders of W.P. Stewart & Co. Growth Fund, Inc.:
NOTICE IS HEREBY GIVEN that an annual meeting of shareholders of W.P.
Stewart & Co. Growth Fund, Inc. (the "Fund") will be held at 527 Madison Avenue,
New York, New York 10022, on October 28, 1998, at 10:00 a.m., local (New York
City) time, and at any adjournments thereof (the "Meeting") for the following
purposes:
(1) To approve or disapprove the proposed Investment Advisory Services
Agreement (the "New Advisory Agreement") between the Fund and W.P. Stewart
& Co., Inc. (the "Current Adviser");
(2) To consider ratification of the payment of advisory fees (the "Interim
Advisory Fees") by the Fund to the Current Adviser and its predecessors
(collectively, the "Adviser") for the period from January 12, 1996 through
the date of the Meeting;
(3) To elect a slate of seven members to the Fund's Board of Directors to
hold office until their successors are duly elected and qualified;
(4) To consider ratification of the selection of Lopez Edwards Frank &
Co., LLP as the Fund's independent accountants for the fiscal year ending
December 31, 1998; and
(5) To transact such other matters as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors of the Fund has fixed the close of business on
August 31, 1998 as the record date for determining the number of shares
outstanding and the shareholders entitled to receive notice of and to vote at
the Meeting.
By Order of the Board of Directors,
Robert L. Schwartz
Secretary
New York, New York
September 16, 1998
_________________________________________________________________
YOUR VOTE IS IMPORTANT REGARDLESS OF HOW MANY
SHARES YOU OWNED ON THE RECORD DATE.
__________________________________________________________________
IF YOU CANNOT ATTEND THE MEETING, PLEASE FILL IN, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. NO POSTAGE IS NECESSARY IF
MAILED IN THE UNITED STATES.
PLEASE HELP AVOID THE EXPENSE OF A FOLLOW UP MAILING BY VOTING TODAY!
<PAGE>
W.P. STEWART & CO. GROWTH FUND, INC.
527 Madison Avenue
New York, New York 10022
____________________________________
PROXY STATEMENT
Annual Meeting of Shareholders
October 28, 1998 at 10:00 a.m.
____________________________________
The Board of Directors of W.P. Stewart & Co. Growth Fund, Inc. (the "Fund")
solicits your proxy for use at an annual meeting of shareholders scheduled to be
held at 527 Madison Avenue, New York, New York 10022, on October 28, 1998 at
10:00 a.m., local (New York City) time, and at any adjournments thereof (the
"Meeting"). As described in more detail below, the Meeting is being called for
the following purposes:
SUMMARY OF PROPOSALS
1. To approve or disapprove the proposed Investment Advisory Services
Agreement (the "New Advisory Agreement") between the Fund and W.P. Stewart
& Co., Inc. (the "Current Adviser");
2. To consider ratification of the payment of advisory fees (the "Interim
Advisory Fees") by the Fund to the Current Adviser and its predecessors
(collectively, the "Adviser") for the period from January 12, 1996 through
the date of the Meeting;
3. To elect a slate of seven members to the Fund's Board of Directors to
hold office until their successors are duly elected and qualified;
4. To consider ratification of the selection of Lopez Edwards Frank & Co.,
LLP as the Fund's independent accountants for the fiscal year ending
December 31, 1998; and
5. To transact such other matters as may properly come before the meeting
or any adjournment thereof.
PLEASE FILL IN, DATE AND SIGN THE PROXY CARD AND RETURN THE CARD IN THE
RETURN ENVELOPE PROVIDED.
This Proxy Statement and accompanying form of proxy are being sent on or
about September 17, 1998 on behalf of the Board of Directors of the Fund to Fund
shareholders to solicit proxy voting instructions on the proposals to be
considered at the Meeting. The close of business on August 31, 1998, has been
fixed as the record date (the "Record Date") for determining the number of
shares outstanding and the shareholders entitled to be present and vote at the
Meeting.
<PAGE>
QUORUM, VOTING
The Fund was incorporated in Maryland on September 23, 1993 and is a non-
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Act"). Pursuant to the Fund's
Articles of Incorporation, the holders of one-third of the Fund's issued and the
outstanding shares shall constitute a quorum.
Each shareholder of the Fund is entitled to one vote for each share he or
she holds and to a fraction of a vote equal to any fractional share which he or
she holds, on each matter submitted to a vote at the Meeting. Shares held by
two or more persons (whether as joint tenants, co-fiduciaries or otherwise) will
be voted as follows unless a written instrument or court order providing to the
contrary has been filed with the Secretary of the Fund: (1) if only one votes,
his or her vote will bind all; (2) if more than one votes, the vote of the
majority will bind all; and (3) if more than one votes and the vote is evenly
divided, the vote will be cast proportionately, or any person voting the stock
(or any beneficiary) may apply to a court of competent jurisdiction to appoint
an additional person to act with the persons voting the stock and the stock
shall then be voted as determined by a majority of those persons and the person
appointed by the court.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees which cannot be voted on a
proposal because instructions have not been received from the beneficial
owners), if any, will be counted for purposes of determining whether a quorum is
present for purposes of convening the Meeting. Abstentions and broker non-votes
will have the effect of votes "AGAINST" proposals 1 and 2, and will have no
effect on proposals 3 and 4. If, by the time scheduled for the Meeting, a
quorum of shareholders of the Fund is not present or if a quorum is present but
sufficient votes in favor of the proposals are not received, the persons present
in person or by proxy (or the persons named as proxies) may propose one or more
adjournments of the Meeting to permit further solicitation of proxies from
shareholders of the Fund. The persons named as proxies will vote in favor of any
such adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interests of the Fund's shareholders.
If the accompanying form of proxy is properly executed and returned in time
to be voted at the Meeting, the shares represented by the proxy will be voted in
accordance with the instructions marked on the proxy by the shareholder.
Executed proxies that are unmarked will be voted "FOR" the proposals. Any proxy
may be revoked at any time prior to its exercise by providing written notice of
revocation to the Fund, by delivering a duly executed proxy bearing a later
date, or by attending the Meeting and voting in person.
2
<PAGE>
SOLICITATION OF PROXIES
The entire cost of this solicitation, including the cost of the Meeting and
the cost of printing, assembling and mailing of proxy materials will be borne by
the Adviser. Solicitation may be made by mail, telephone, telegram or in
person. As described above, management also may request broker-dealer firms, as
well as banks, custodians, nominees and fiduciaries to obtain authorization
for the execution of proxies, and may reimburse them for expenses incurred by
them in connection therewith. The Adviser, at its own expense, has retained a
proxy solicitation firm, Georgeson & Co., to assist in the solicitation of
proxies. The anticipated cost of such firm is approximately $6,500.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The only voting securities of the Fund are its common stock, par value
$0.001 per share. As of the Record Date, there were 213,127.344 shares
outstanding of the Fund. As of the same date, the Directors and officers of the
Fund, both individually and as a group, owned in the aggregate 2,412.050 shares
(approximately 1% of the Fund's outstanding shares), and no person or "group"
(as such term is defined in the Securities Exchange Act of 1934, as amended, and
the rules thereunder) was known to the Fund to own 5% or more of the outstanding
shares of the Fund.
3
<PAGE>
PROPOSAL NO. 1
APPROVAL OF A NEW ADVISORY AGREEMENT
Section 15 of the Act requires that the Fund's investment advisory
agreement be in writing, and be approved by both (i) the Fund's Directors
(including a majority of the Directors who are not parties to the agreement or
"interested persons" of any such party ("Disinterested Directors")) and (ii) the
Fund's shareholders. The agreement can have an initial term of two years, but
thereafter must be reapproved annually by the Board, including by vote of a
majority of the Disinterested Directors at an in-person meeting of the
Directors.
.
When the Fund commenced operations, it retained the Adviser to provide
portfolio management and other services to the Fund pursuant to a written
investment advisory services agreement (the "Original Advisory Agreement"),
effective January 11, 1994. The Original Advisory Agreement was initially
approved by the Fund's Board of Directors, including a majority of the
Disinterested Directors, on January 10, 1994. The Original Advisory Agreement
also was approved by the Fund's initial shareholder on January 11, 1994.
Consistent with Section 15 of the Act, the Original Advisory Agreement had a
two-year initial term (January 11, 1994 through January 11, 1996).
Each of the Directors of the Fund recalls having considered, and approved,
continuation of the Original Advisory Agreement for an additional one-year
period at a meeting of the Board of Directors held in early 1996. Further, the
minutes of the Board of Directors' February 20, 1997 meeting reflect that the
Board considered and approved the further continuation of the Original Advisory
Agreement at that time. Thus, the Directors of the Fund believe that the
Original Advisory Agreement was continued on an annual basis. However, there is
some uncertainty concerning this matter, because the Fund's written records of
its Board's meetings from 1996 are missing or otherwise deficient. This is
significant because if the Original Advisory Agreement was not effectively
continued by the Board in 1996, then it would have lapsed as a technical matter
and could not have been revived by the 1997 Board action (because approval of a
new advisory agreement, as opposed to continuation of the Original Advisory
Agreement, would have required shareholder action, as well as Board action). In
addition, it appears that the 1997 approval may not have complied in all
respects with the Act's technical requirements, as one of the Disinterested
Directors attended the meeting by telephone conference.
Under the Act, if the Original Advisory Agreement lapsed, the Fund would
not now have a valid investment advisory contract with the Adviser and some part
of the fees paid to the Adviser since the occurrence of the lapse might be
recoverable by the Fund. (This latter issue is addressed in Proposal No. 2.)
In reviewing the issues relating to approval of the Original Advisory
Agreement, the Adviser found that from February 28, 1994 (commencement of
investment operations) through June 30, 1998, advisory fees were calculated
quarterly in arrears rather than quarterly in advance as provided
4
<PAGE>
for in the Original Advisory Agreement. As the Fund's assets tended to rise over
the period, this resulted in an overpayment of fees to the Adviser. This
overpayment did not actually commence until 1997 however, because before that
time the Adviser waived its fees and/or reimbursed expenses under a voluntary
expense cap. The amount of the overpayment has been repaid in full to the Fund
by the Adviser. Neither the overpayment nor the repayment had a material effect
on the Fund's net asset value per share. In view of the foregoing and certain
other deficiencies in the Fund's records and operations, the Fund and the
Adviser have reviewed all of the Fund's procedures and taken steps designed to
ensure that the Fund's operations comply with the provisions of all governing
agreements and applicable laws, including the Act.
At in-person meetings held on March 25, 1998 and June 16, 1998, the Adviser
presented the information regarding the Original Advisory Agreement to the
Directors of the Fund. Because of the importance of removing any doubt about
the status of the advisory agreement between the Adviser and the Fund, the
Adviser proposed that the Fund's Directors consider approving a new investment
advisory services agreement (the "New Advisory Agreement"), having substantially
identical terms as the Original Advisory Agreement, and submitting this New
Advisory Agreement, to the Fund's shareholders for their approval. The Board
approved the New Advisory Agreement and it is this same New Advisory Agreement
that you are now being asked to approve.
SUMMARY OF THE NEW ADVISORY AGREEMENT
The following is a brief summary of the terms of the New Advisory
Agreement. Shareholders should review the copy of the New Advisory Agreement
that is attached as Exhibit A for the complete terms of the agreement. The New
Advisory Agreement is identical in all material respects to the Original
Advisory Agreement except for a change in the method of calculating the fee
payable by the Fund. Under the New Advisory Agreement, the fee rate will not
change (remaining at 1.5% of the Fund's net assets) but the fee will be
calculated based on the Fund's average daily net assets and paid in arrears.
The Original Advisory Agreement provides that the fee is paid quarterly, in
advance, based on the net asset value of the Fund as of the last day of the
preceding quarter (after giving effect to subscriptions and redemptions on that
date). This change will ensure that the Fund's fee payments more closely track
the Fund's actual size, and that the fee will be charged against those shares
actually receiving services during the period for which the fee is paid.
For the fiscal year ended December 31, 1997, advisory fees payable to the
Adviser in accordance with the terms of the Original Advisory Agreement totaled
$406,906. If the advisory fee had been calculated under the New Advisory
Agreement's proposed method, advisory fees payable would have totaled $469,277,
or 15.3% more than what was actually payable under the Original Advisory
Agreement. This is because the Fund's net assets experienced steady growth over
the period, due to net sales of new shares as well as to positive investment
results. If the Fund's net assets were to decrease over a quarter (due to any
combination of net redemptions and negative
5
<PAGE>
investment results), however, the fee payable under the New Advisory Agreement
would be lower than the fee payable under the Original Advisory Agreement.
The other material terms of the New Advisory Agreement are identical to
those of the Original Advisory Agreement. Specifically, the New Advisory
Agreement provides that the Adviser will manage the investment and reinvestment
of the Fund's assets subject to the supervision and control of the Fund's Board
of Directors. The Adviser furnishes or pays for various items on behalf of the
Fund, including office space and supplies and personnel for managing the Fund's
affairs. The Adviser and its affiliates generally are not liable for any error
of judgment, mistake of law or loss arising out of any investment, or for any
other act or omission by the Adviser unless the liability results from willful
misfeasance, bad faith or gross negligence or a breach of fiduciary duty with
respect to the receipt of compensation.
SUMMARY OF BOARD DELIBERATIONS
At the March 25, 1998 Board of Directors meeting, the Directors considered
the similarity of the New Advisory Agreement to the Original Advisory Agreement,
and the greater precision in tracking the Fund's size provided by the new fee
calculation method. The Directors also considered, among other things, the
nature and quality of the services provided to the Fund by the Adviser since the
Fund's inception. The Directors reviewed materials indicating the level of the
Fund's advisory fees and overall expenses and those of other growth oriented
funds. The Directors considered the benefits to the Adviser of the relationship
with the Fund. The Directors took into account the Adviser's undertaking to
bear the costs associated with the Meeting and the benefit to the Fund of
eliminating any uncertainty regarding the status of its contract with the
Adviser.
RECOMMENDATION OF THE BOARD OF DIRECTORS
As a result of their deliberations, the Board of Directors, including all
of the Disinterested Directors, voted unanimously to approve the New Advisory
Agreement and to recommend to shareholders that they vote "FOR" Proposal No. 1.
VOTE REQUIRED FOR PROPOSAL NO. 1
Approval of Proposal No. 1 requires the affirmative vote of (i) 67% or
more of the shares of the Fund present in person at the Meeting or represented
by proxy, if holders of more than 50% of the outstanding shares on the record
date are present, in person or by proxy, or (ii) more than 50% of the
outstanding shares on the record date, whichever is less.
If Proposal No. 1 is not approved, the New Advisory Agreement will not take
effect and the uncertainty regarding the status of the relationship between the
Fund and the Adviser will not be resolved. The Adviser has indicated that in
that event, it may be unwilling to continue to serve as investment adviser to
the Fund. If the Adviser terminates its relationship with the Fund, the Fund
will seek to retain another investment adviser. There can be no assurance that
the Fund will be able
6
<PAGE>
to retain another investment adviser with the same investment strategy as the
Adviser. Any additional costs associated with obtaining shareholder approval of
an investment advisory agreement with any such investment adviser will be borne
by the Fund.
PROPOSAL NO. 2
RATIFICATION OF PAYMENT OF
INTERIM ADVISORY FEES
To the extent that the Original Advisory Agreement may have lapsed after
January 11, 1996, the Adviser has been providing services to the Fund, and the
Fund has been paying fees to the Adviser, without the benefit of a written
agreement. For the period January 1, 1996 through June 30, 1998, the advisory
fees payable to the Adviser in accordance with the terms of the Original
Advisory Agreement were approximately $920,757. As the Adviser had voluntarily
agreed to waive advisory fees and/or reimburse Fund expenses to the extent the
Fund's expense ratio would have exceeded 2.5% of net assets, the amount actually
payable under the Original Advisory Agreement during this period (after giving
effect to the expense cap) was approximately $912,267. These fees, together
with any additional fees that are payable from July 1, 1998 until shareholder
approval of the New Advisory Agreement is obtained, are referred to as the
"Interim Advisory Fees."
As described above, the Act requires that the investment advisory agreement
between a fund and its adviser be in writing and be approved by directors and
shareholders. The Act provides in effect that a court can rescind an agreement
that was performed in violation of the Act, unless the court finds that allowing
the agreement to stand would be more equitable and would not be inconsistent
with the purposes of the Act. This means that the Fund's Board of Directors
could refuse to have the Fund pay any further fees to the Adviser until the New
Advisory Agreement is approved by shareholders, and could seek the repayment to
the Fund of the Interim Advisory Fees already paid, on the grounds that there is
no valid written advisory agreement in effect. However, the Adviser could seek
to retain some or all of the Interim Advisory Fees on the grounds that the
Adviser in fact provided valuable services to the Fund and that it would be
unjust to force the Adviser to perform those services free of charge merely
because there may have been an unintended lapse of the Original Advisory
Agreement due to failure to comply with all of the requirements of the Act. The
Adviser has advised the Fund that it would intend to pursue its rights to retain
and/or collect the Interim Advisory Fees.
SUMMARY OF BOARD DELIBERATIONS
At the Board of Directors meeting held on March 25, 1998, and at a second
in-person meeting held on June 16, 1998, the Board considered the issue of the
Interim Advisory Fees. The Board stated that it was its intention to have had a
contract with the Adviser in effect at all relevant times, and each of the Board
members expressed his or her belief that the Original Advisory Agreement had in
fact been renewed by the Directors in 1996. The Board reviewed the services
7
<PAGE>
provided by the Adviser under the Original Advisory Agreement subsequent to
January 11, 1996, as well as the Fund's investment performance during this
period (the Fund's provided by the Adviser under the Original Advisory Agreement
subsequent to January 11, 1996, average annual total return over the period
January 1, 1996 through December 31, 1997 was approximately 27.31%), and the
level of the advisory fees during this period. The Board discussed the option of
seeking return of some or all of the Interim Advisory Fees from the Adviser. In
considering this option, the Board discussed the fact that the Act authorizes a
court to enforce the Original Advisory Agreement if that would produce a more
equitable result and would not be inconsistent with the purposes of the Act. The
Board discussed the fact that the Adviser could and likely would seek to retain
the Interim Advisory Fees on equitable grounds, especially in light of the
uncertainty as to whether or when the Original Advisory Agreement actually
lapsed. The Board considered the likelihood that a court could find the Adviser
entitled to retain some, if not all, of the Interim Advisory Fees, and weighed
this against the expense and disruption, and the damage to the Fund's
relationship with the Adviser, that would result from a dispute of this nature.
The Board also considered how the new method of calculating the advisory fee
might affect the Interim Advisory Fees.
RECOMMENDATION OF THE BOARD OF DIRECTORS
In light of these considerations, the Board unanimously determined not to
seek the return of the Interim Advisory Fees. However, the Board stipulated
that the Interim Advisory Fees should be paid at the lower of the rates that
would result from the method of calculating the advisory fee under the Original
Advisory Agreement and the New Advisory Agreement. Any excess will be repaid to
the Fund by the Adviser. The Board further determined to seek shareholder
ratification of the payment of the Interim Advisory Fees. The Board recommends
that shareholders vote "FOR" ratification of the payment of the Interim Advisory
Fees.
VOTE REQUIRED FOR PROPOSAL NO. 2
Approval of Proposal No. 2 requires the affirmative vote of (i) 67% or more
of the shares of the Fund present in person at the Meeting or represented by
proxy, if holders of more than 50% of the outstanding shares on the record date
are present, in person or by proxy, or (ii) more than 50% of the outstanding
shares on the record date, whichever is less.
If Proposal No. 2 is not approved, the uncertainty with respect to the
Interim Advisory Fees will continue.
8
<PAGE>
PROPOSAL NO. 3 - ELECTION OF DIRECTORS
At the Meeting, shareholders are asked to elect a slate of seven nominees,
including five who are not interested persons of the Fund, to serve as Directors
of the Fund, to hold office until their successors are duly elected and
qualified. It is the intention of the persons named in the accompanying form of
proxy to vote "FOR" the election of each of the nominees named below, each of
whom has consented to be a nominee. Each nominee currently is serving as
Director of the Fund, except for Marilyn G. Breslow, Thomas R. LeViness and
David J. Winkler.
If any of the nominees become unavailable for election as a Director before
the Meeting, proxies will be voted for other persons that the Directors may
recommend.
9
<PAGE>
INFORMATION REGARDING NOMINEES
PRINCIPAL OCCUPATION AND OTHER INFORMATION
<TABLE>
<CAPTION> DIRECTOR OF
NAME, AGE AND ADDRESS FUND SINCE PRINCIPAL OCCUPATION DURING PAST 5 YEARS /+/
- --------------------- ---------- ----------------------------------------
<S> <C> <C>
Antoine Bernheim (45) 1994 Mr. Bernheim is President of Dome Capital Management,
405 Park Avenue, Suite 500 Inc. and President of The U.S. Offshore Funds Directory Inc.
New York, New York 10022
William Talcott May (36) 1994 Mr. May has since 1988 held various officerships and
575 Madison Avenue directorships in May family controlled companies engaged in
New York, New York 10022 the real estate brokerage and residential property
management business.
Robert L. Schwartz (64)* 1994 Director of the Current Adviser since 1998. Director, Vice
527 Madison Avenue Chairman and portfolio manager of the Original Adviser,
New York, New York 10022 1981-1998.
June Eichbaum (48)/++/ 1996 Ms. Eichbaum has since 1992 been a principal of Major,
570 Lexington Avenue Hagan & Africa (New York) Inc. (an executive search firm).
New York, New York 10022
Marilyn G. Breslow (54)* ** President, Director and portfolio manager of the Current
527 Madison Avenue Adviser since 1998. Director and portfolio manager of the
New York, New York 10022 Original Adviser, 1990-1998. Ms. Breslow has served as
portfolio manager of the Fund since mid-1997.
Thomas R. LeViness (58) *** President of Pell & LeViness, P.C. (a law firm).
90 Park Avenue
New York, New York 10016
David J. Winkler (42) *** Senior Vice President of American Phoenix Corp. (a
1211 Sixth Avenue commercial insurance broker).
New York, New York 10036
</TABLE>
- ---------------------
/+/ For a discussion of the Current Adviser and its predecessors, including
the Original Adviser, see "General Information--Information About the
Current Adviser and its Predecessors" below.
/++/ As of June 30, 1998, Ms. Eichbaum owned approximately 1,337 shares of the
Fund.
* Ms. Breslow and Mr. Schwartz are interested persons, as defined by the
Act, by virtue of their positions with and indirect ownership interests in
the Current Adviser. See "General Information--Information About the
Current Adviser and its Predecessors" below.
** At the March 25, 1998 meeting of the Board of Directors, William P.
Stewart, Jr. stated his intention to resign from the Board of Directors,
subject to election of Ms. Breslow by shareholders at the Meeting, who was
nominated to fill Mr. Stewart's vacancy by unanimous vote of Ms. Eichbaum
and Messrs. Bernheim, May and Schwartz.
*** At the June 16, 1998 Meeting of the Board of Directors, the Board voted
unanimously to increase the number of members of the Board from five to
seven and to nominate Messrs. LeViness and Winkler to fill the two new
vacancies.
10
<PAGE>
The Directors met three times during the fiscal year ended December 31,
1997. Each of the incumbents who was serving as a Director during 1997 attended
all of the meetings of the Directors. The Board currently has no standing audit,
nominating or compensation committees.
EXECUTIVE OFFICERS OF THE FUND
<TABLE>
<CAPTION>
POSITION
WITH
POSITION WITH CURRENT
NAME* (AGE) THE FUND ADVISER** EXPERIENCE DURING THE PAST FIVE YEARS
- ----------- -------- ------- -------------------------------------
<S> <C> <C> <C>
Marilyn G. Breslow (54) President Director President, Director and portfolio manager of the
and Current Adviser since 1998. Director and portfolio
President manager of the Original Adviser, 1990-1998. Ms.
Breslow has served as portfolio manager of the Fund
since mid-1997.
Robert L. Schwartz (64) Treasurer, Director Director of the Current Adviser since 1998.
Secretary and Director, Vice Chairman and portfolio manager of
Director the Original Adviser, 1981-1998.
John C. Russell (63) Vice President None Director, Deputy Chairman and Managing Director of
W.P. Stewart-Bermuda since 1998. Director of the
Original Adviser, 1996-1998. General Counsel of the
Original Adviser, 1996-1997. Chief Operating Officer
of the Original Adviser, 1997-1998. Partner of Kroll
& Tract (a law firm), 1994-1996. Prior thereto
engaged in practice of law in New York.
Lisa D. Levey (42)*** Assistant General General Counsel and Assistant Secretary of the
Secretary Counsel Current Adviser since 1998. General Counsel and
and Assistant Secretary of the Original Adviser, 1997-
Assistant 1998. General Counsel and Secretary of Danielson
Secretary Holding Corporation (a publicly traded financial
services holding company), 1991-1996.
</TABLE>
- ---------------------
* Each of the Executive Officers, except Ms. Levey, may be deemed to hold
indirectly shares of the Current Adviser. See "General Information--
Information About the Current Adviser and its Predecessors" below.
** For a discussion of the Current Adviser and its predecessors, including the
Original Adviser, see "General Information--Information About the Current
Adviser and its Predecessors" below.
*** As of June 30, 1998, Ms. Levey owned approximately 857 shares of the Fund.
All officers of the Fund have been elected to serve until their successors
are elected and qualified. Each officer's address is 527 Madison Avenue, New
York, New York 10022-4212.
11
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
The Fund makes no payments to any of its officers and employees for
services and the Fund does not pay any retirement benefits. However, each of
the Fund's Disinterested Directors is paid by the Fund a fee of $1,250 for each
meeting of the Fund's Board of Directors and for each meeting of any committee
of the Board of Directors that he or she attends (other than those attended by
telephone conference call). Each Director is reimbursed by the Fund for any
expenses he or she may incur by reason of attending such meetings or in
connection with services he or she may perform for the Fund. During the fiscal
year ended December 31, 1997, no fees were paid to the Disinterested Directors
by the Fund, although, as stated above, the Fund held three in-person meetings
of the Board. The Disinterested Directors have not requested payment of their
fees in connection with the 1997 meetings but retain the right to request
payment of such fees. During the six-month period ended June 30, 1998, the Fund
paid each of the Disinterested Directors a fee of $1,250 for each of the
quarterly meetings held therein.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors unanimously recommends to shareholders that they
vote "FOR" the election of the nominees to the Board.
VOTE REQUIRED FOR PROPOSAL NO. 3
The nominees receiving the affirmative vote of a majority of the votes cast
by shares of the Fund for the election of Directors at the Meeting will be
elected.
PROPOSAL NO. 4 - RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
Under Proposal No. 4, shareholders of the Fund are being asked to ratify
the Board's selection of Lopez Edwards Frank & Co., LLP as independent
accountants for the Fund for the fiscal year ending December 31, 1998. The firm
of Lopez Edwards Frank & Co., LLP has served as independent accountants to the
Fund since its inception. The financial statements included in the Fund's
Annual Report, dated December 31, 1997, have been examined by Lopez Edwards
Frank & Co., LLP. It is not expected that a representative of Lopez Edwards
Frank & Co., LLP will be present at the Meeting.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors voted unanimously to approve the selection of Lopez
Edwards Frank & Co., LLP as independent accountants for the Fund for the fiscal
year ending December 31, 1998, and to recommend to shareholders that they vote
"FOR" Proposal No. 4.
12
<PAGE>
VOTE REQUIRED FOR PROPOSAL NO. 4
Approval of Proposal No. 4 requires a majority of the votes cast with
respect to such proposal at the Meeting.
GENERAL INFORMATION
INFORMATION ABOUT THE CURRENT ADVISER AND ITS PREDECESSORS
The Current Adviser was incorporated in Delaware in 1998 and is registered
with the Securities and Exchange Commission (the "SEC") as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act").
Neither the Current Adviser nor any of its predecessors currently serves as an
investment adviser to any investment company registered under the Act other than
the Fund. The address of the Current Adviser is 527 Madison Avenue, New York,
New York 10022-4212.
The Current Adviser is a wholly owned subsidiary of W.P. Stewart & Co.,
Ltd., a Bermuda corporation ("W.P. Stewart-Bermuda"). The address of W.P.
Stewart-Bermuda is 129 Front Street, Fifth Floor, P.O. Box HM2905, Hamilton HM
LX, Bermuda. The sole shareholder of W.P. Stewart-Bermuda is WPS II, Inc., a
Delaware corporation ("WPS II"). The address of WPS II is 527 Madison Avenue,
New York, New York 10022-4212. William P. Stewart, Robert L. Schwartz, Robert
Kahn, Marilyn G. Breslow and John C. Russell may be deemed to own directly or
indirectly, of record or beneficially, approximately 39.5%, 14.0%, 11.2%, 1.9%
and less than 1%, respectively, of the outstanding stock of W.P. Stewart-
Bermuda. The address of each such person, except with respect to Messrs.
Stewart and Russell, is 527 Madison Avenue, New York, New York 10022. The
address of Messrs. Stewart and Russell is 129 Front Street, Fifth Floor, P.O.
Box HM2905, Hamilton HM LX, Bermuda.
Prior to July 1, 1998, and since inception, the Fund's investment adviser
was W.P. Stewart & Co., Inc., a Delaware corporation which was incorporated in
1973 (the "Original Adviser"). Effective July 1,1998, the Original Adviser
entered into a Plan and Agreement of Merger and Amalgamation with W.P. Stewart-
Bermuda, under which the Original Adviser merged with and into W.P. Stewart-
Bermuda, with W.P. Stewart-Bermuda as the surviving entity (the "Merger"). As a
result of the Merger, W.P. Stewart-Bermuda succeeded to the Original Adviser's
SEC registration under the Advisers Act and assumed the Original Adviser's
obligations under the Original Advisory Agreement with the Fund. Effective the
same date, W.P. Stewart-Bermuda transferred the Original Advisory Agreement, and
its rights and obligations thereunder, to the Current Adviser. The Current
Adviser has represented to the Fund that neither the consummation of the Merger
nor the transfer of the Original Advisory Agreement to the Current Adviser
resulted in an "assignment," as that term is defined in the Act, of the Original
Advisory Agreement. The transfer of the Original Advisory
13
<PAGE>
Agreement to the Current Adviser has not resulted in any change in the
portfolio manager of the Fund or any change in the Fund's investment objective
or policies.
OFFICERS AND DIRECTORS OF THE CURRENT ADVISER
The following chart lists the name and principal occupation of each
principal executive officer and director of the Current Adviser:
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION /+/
- ---- --------------------
<S> <C>
Robert L. Rohn Director, Chairman and Portfolio Manager.
Harry W. Segalas Director, Vice Chairman and Portfolio Manager.
Marilyn G. Breslow Director, President and Portfolio Manager.
David Altman Director, Vice President and Portfolio Manager.
Stephen E. Memishian Director, Vice President and Portfolio Manager.
Peter H. Jennison Vice President and Portfolio Manager.
John A. Allison Director and Portfolio Manager.
C. Graydon Rogers Director.
Robert L. Schwartz Director.
Daniel B. Strickberger Director.
Joseph S. Frelinghuysen, Jr. Director. President of J.S. Frelinghuysen & Co., Inc. (an investment banking firm).
Lisa D. Levey General Counsel and Assistant Secretary.
</TABLE>
/+/ Title with Current Adviser unless otherwise indicated.
The address of each of the above principal executive officers and directors
of the Current Adviser is 527 Madison Avenue, New York, New York 10022-4212.
AFFILIATED BROKERS
The Current Adviser selects the brokers to be used for the Fund's
transactions and W.P. Stewart Securities Limited, which is under common control
with the Current Adviser, is permitted to act as broker for the Fund. As
broker, W.P. Stewart Securities Limited charges the Fund commissions not
exceeding the rates charged to its institutional customers for similar trades at
the time of execution. For the fiscal year ended December 31, 1997, the Fund
incurred $83,484 in brokerage commissions, which was paid to the Original
Adviser (while it was a registered broker-dealer) and its affiliate W.P. Stewart
Securities Limited (thereafter).
14
<PAGE>
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company, which has its principal place of
business at 1776 Heritage Drive, North Quincy, Boston, Massachusetts 02171, acts
as the Fund's administrator, custodian and shareholder servicing agent.
OTHER MATTERS
The Board of Directors of the Fund does not know of any other business to
be brought before the meeting. If any other matters properly come before the
meeting, proxies will vote on such matters in their discretion.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
A copy of the Fund's Annual Report to Shareholders will be furnished,
without charge, to shareholders. Copies of the Fund's Annual Report to
Shareholders may be obtained from the Fund, free of charge, upon request by
mailing the self-addressed postage paid card enclosed herein.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and
currently does not intend to hold such meetings unless shareholder action is
required in accordance with the Act or the Fund's Articles of Incorporation. A
shareholder proposal to be considered for inclusion in the proxy statement at
any subsequent meeting of shareholders must be submitted a reasonable time
before the proxy statement for that meeting is mailed. Whether a proposal
submitted will be included in the proxy statement will be determined in
accordance with applicable federal and state laws.
Respectfully Submitted,
Robert L. Schwartz
Secretary
Dated: September 16, 1998
SHAREHOLDERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE PROXY CARD AND RETURN
IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
15
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY SERVICES AGREEMENT
--------------------------------------
(Additions to, and deletions from, the Original Advisory Agreement
appear in double-underlined text and strike through text, respectively)
======================
This Agreement is made as of the th day of ,1998 between W.P.
==== ============
Stewart & Co. Growth Fund, Inc., a Maryland corporation (the "Fund"), and W.P.
Stewart & Co., Inc., a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Fund desires to avail itself of the experience, sources of
information, advice, assistance and facilities available to the Adviser and to
have the Adviser manage the Fund and perform for the Fund various other services
appropriate to the operations of the Fund pertaining to assets of the Fund; and
WHEREAS, the Adviser is willing to furnish such management and other
services in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereby agree as follows:
1. The Fund hereby engages the Adviser to manage the investment and
reinvestment of the assets of the Fund and to perform the other services
provided herein, subject to the supervision and control of the Board of
Directors of the Fund. The Adviser hereby accepts such engagement and agrees, at
its own expense, to render the services and to assume the obligations set forth
herein, for the compensation set forth herein.
2. As part of its obligations to manage the investment and reinvestment
of the assets of the Fund, the Adviser shall:
(a) obtain and evaluate such economic, statistical and financial data
and information and undertake such additional investment research as it
shall deem necessary or advisable in connection with the management of the
investment and reinvestment of the assets of the Fund in accordance with
the Fund's investment objectives and policies as adopted from time to time
and provided in writing to the Adviser;
(b) take such steps as are necessary to implement the investment
policies of the Fund by the purchase and sale of securities, consistently,
in its opinion, with the investment
A-1
<PAGE>
policies and objectives of the Fund including the placing of orders for
such purchase and sale;
(c) report regularly to the Board of Directors with respect to the
implementation of the investment policies of the Fund; and
(d) determine the net asset value of the shares of the Fund as
required by applicable law.
3. All activities in connection with the management of the affairs of the
Fund undertaken by the Adviser pursuant to this Agreement shall at all times be
subject to the supervision and control of the Board of Directors, any duly
constituted committee thereof or any officer of the Fund acting pursuant to like
authority; and the Fund shall have ultimate responsibility and authority for
direction and control of the services provided hereunder. In particular, the
Fund shall at all times retain the ultimate responsibility for and control of
all investments made hereunder, and the Fund reserves the right to direct,
approve or disapprove any action taken on its behalf by the Adviser.
4. The Adviser agrees to make its principal executive officers available
as principal executive officers of the Fund at no expense to the Fund. The
Adviser shall furnish to the Fund at the Adviser's own expense or pay the
expenses of the Fund, subject to Section 5 and subject to possible reimbursement
by an entity other than the Fund, for the following:
(a) office space in such place or places as may be agreed upon from
time to time, and appropriate office supplies, facilities, and equipment;
(b) executive and other personnel appropriate for managing the
affairs of the Fund, including personnel to perform clerical, bookkeeping,
accounting, stenographic and other office functions (exclusive of those
related to, and to be performed under, contracts for custodial, transfer
agency, dividend disbursing, shareholder servicing agency and accounting
services by any financial institution selected to perform such services);
(c) compensation, if any, of directors of the Fund who are directors,
officers or employees of the Adviser or any affiliated person (other than a
registered investment company) of the Adviser; and
(d) all services, other than services of counsel, required in
connection with (i) the preparation of registration statements,
prospectuses and other disclosure documents, including amendments and
revisions thereto, (ii) all annual, semi-annual and periodic reports and
(iii) notices and proxy solicitation material furnished to shareholders of
the Fund or regulatory authorities.
A-2
<PAGE>
5. Nothing in Section 4 hereof shall require the Adviser to bear, or to
reimburse the Fund for:
(a) any of the costs of printing and mailing the items referred to in
Subsection (d) of Section 4;
(b) any of the costs of preparing, printing and distributing sales
literature;
(c) compensation of directors of the Fund who are not directors,
officers or employees of the Adviser or any affiliated person (other than a
registered investment company) of the Adviser;
(d) registration, filing and other fees in connection with
requirements of regulatory authorities;
(e) charges and expenses of independent accountants retained by the
Fund;
(f) charges and expenses of any transfer agents and registrars
(including the Adviser and any of its affiliates) appointed by the Fund;
(g) brokers' commissions (including those payable to the Adviser) and
other costs and issue and transfer taxes chargeable to the Fund in
connection with securities transactions to which the Fund is a party;
(h) taxes and fees payable by the Fund to Federal, state or other
governmental agencies;
(i) the cost of printing and mailing dividend notices, dividend
payments and stock certificates representing shares of the Fund;
(j) legal fees and expenses in connection with the affairs of the
Fund including registering and qualifying the Fund or its shares with
Federal and state regulatory authorities;
(k) expenses of meetings of shareholders and directors of the Fund;
(l) insurance premiums for fidelity and other coverage of the Fund's
operations;
(m) fees and dues of the Investment Company Institute;
A-3
<PAGE>
(n) such non-recurring expenses as may arise, including those
relating to actions, suits or proceedings affecting the Fund and the legal
obligations which the Fund may have to indemnify its employees, officers
and directors with respect thereto; and
(o) interest, including interest on borrowings by the Fund, if any.
Notwithstanding the other provisions of this Section 5 and Section 4,
the Adviser shall pay or reimburse the Fund for all expenses of the organization
of the Fund and the initial registration of the Fund and its shares, including,
but not limited to, fees and disbursements of legal counsel and the accountants
of the Fund, all filing and other governmental fees and printing costs,
including the printing of the Fund's preliminary prospectus and up to 5,000
copies of the Fund's final initial prospectus (and an equal number of copies of
the Statement of Additional Information).
6. The services of the Adviser to the Fund hereunder shall not be deemed
exclusive, and the Adviser shall be free to render similar services, so long as
its services hereunder are not impaired thereby. When the Adviser determines
that it would be appropriate for the Fund and any other account managed by the
Adviser to participate in an investment opportunity, the Adviser will seek to
execute orders on a basis which is fair, reasonable and equitable to all such
accounts. In such situations, the Adviser may place orders for each account
simultaneously and if all such orders are not filled at the same price, the
Adviser may cause each account to pay or receive the average of the prices at
which the orders were filled for all accounts. If all such orders cannot be
fully executed under prevailing market conditions, the Adviser may allocate the
securities traded among the accounts on a basis which it considers equitable,
taking into account the size of the order placed for each such account as well
as any other factors which it deems relevant.
7. (a) As full compensation for all services rendered, facilities
furnished and expenses borne by the Adviser hereunder, the Fund shall pay the
Adviser compensation quarterly in advance arrears at an annual rate of one and
=======
one half percent (1.5%) of the average daily net assets of the Fund (the
========================
"Advisory Fee"). Each payment of the Advisory Fee, shall be due and payable
==== ========================
promptly after the last day of the fiscal quarter in respect of which such
==============
payment is payable. The average daily net assets of the Fund shall be computed
========================
in accordance with applicable provisions of the Fund's articles of incorporation
and disclosure document for investors, as each may be amended from time to time.
For purposes of this Agreement, the fiscal year of the Fund shall be deemed to
end on December 31 of each year.
(b) In the event of the expiration or termination of this Agreement
in accordance with the terms hereof other than on the last day of any fiscal
quarter, the Advisory Fee for the fiscal quarter which includes such expiration
or termination shall be prorated to the effective date thereof,
A-4
<PAGE>
8. If the total of all ordinary business expenses of the Fund (including
investment advisory fees but excluding taxes, portfolio brokerage commissions,
interest and, where permitted, extraordinary expenses) for any fiscal year
exceeds the lowest applicable percentage of average net assets or income
limitations prescribed by any state, to the extent the Adviser would be required
to pay such excess if the Fund's securities were qualified for sale in such
state, the Adviser shall pay such excess annually before publication of the
Fund's Annual Report.
9. The Adviser shall place the portfolio transactions of the Fund with
brokers and negotiate any commissions paid on such transactions when not
effected by the Adviser or an affiliate of the Adviser acting as broker. In
placing portfolio transactions, the Adviser shall seek to obtain the best
execution for the Fund, taking into account such factors as price (including the
applicable dealer spread or commission, if any), size of order, difficulty of
execution, operational facilities of the brokers involved and the broker's risk
in positioning a block of securities. When selecting brokers or effecting
transactions directly on behalf of the Fund, the Adviser shall comply with all
applicable provisions of the Fund's disclosure document for investors and the
Investment Company Act of 1940 (the "1940 Act"), including without limitation
Section 17 thereof and the rules thereunder, as may be amended from time to
time.
10. It is understood that any of the shareholders, directors, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Adviser, any affiliated
person of the Adviser, any organization in which the Adviser may have an
interest or any organization which may have an interest in the Adviser; that the
Adviser, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the articles of incorporation of the Fund and the Adviser,
respectively, or by specific provisions of applicable law.
11. This Agreement shall become effective as of the date of its execution
and delivery, and
(a) shall be in effect for two years after its date of execution and
shall continue in force from year to year thereafter, subject to prior
termination as provided herein, but only so long as its continuance shall
be approved specifically at least annually by (i) the Board of Directors of
the Fund, including specific approval by a majority of the Directors who
are not interested persons of any party to this Agreement (other than as
Directors of the Fund) by votes cast in person at a meeting specifically
called for such purpose ("Disinterested Director Vote") or (ii) the issued
and outstanding voting securities of the Fund by a majority vote and a
Disinterested Director Vote;
A-5
<PAGE>
(b) may at any time be terminated either by vote of the Board of
Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Fund (i) on sixty days' written notice to the Adviser or
(ii) if the Adviser fails to perform in a satisfactory manner;
(c) shall terminate automatically in the event of its assignment; and
(d) may be terminated by the Adviser on sixty days' written notice to
the Fund.
Termination of this Agreement pursuant to this Section 11 shall be without the
payment of any penalty.
12. The Adviser hereby acknowledges that all records necessary to the
operation of the Fund, including records pertaining to the Fund's shareholders
and investments, are the sole and exclusive property of the Fund, and in the
event that a transfer of management or investment advisory services to someone
other than the Adviser should ever occur, the Adviser will promptly, and at its
own cost, take all steps necessary to segregate such records and deliver them to
the Fund, free from any claim or retention of rights by the Adviser. The Adviser
agrees to maintain and preserve, for the periods described by Rule 31a-2
pursuant to the 1940 Act, any books and records with respect to the Fund's
securities transactions and any other records required to be maintained by said
Rule which are not being maintained by a custodian or any other party pursuant
to an agreement with the Fund. The Adviser will provide materials relating to
its services as may be requested by the Fund or as may be required by any
governmental agency with proper jurisdiction. The Adviser also agrees to
maintain all such records and accounts in a confidential manner and agrees not
to disclose or use any records or information obtained hereunder in any manner
except as expressly authorized herein. The Adviser will keep confidential any
information obtained pursuant hereto and disclose such information only if the
Fund has authorized such disclosure, or if such disclosure is expressly required
by appropriate state or Federal regulatory authorities.
13. The Fund and the Adviser are not partners or joint venturers with each
other and nothing herein shall be construed so as to make them partners or joint
venturers or impose any liability as such on either of them. The Adviser shall
be deemed to be an independent contractor and, except as expressly provided or
authorized in this Agreement, shall have no authority to act for or represent
the Fund.
14. This Agreement shall be subject to all applicable provisions of law,
including without limitation the applicable provisions of the 1940 Act. To the
extent that any provisions herein contained conflict with any applicable
provisions of law, the latter shall control.
15. This Agreement is executed and delivered in the State of New York and
shall be construed in accordance with its laws, without regard to its rules
regarding conflict of laws.
A-6
<PAGE>
16. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same instrument.
17. This Agreement may be amended only by mutual consent of the parties by
an instrument in writing signed by the parties, provided that such consent on
the part of the Fund shall be approved (i) by an affirmative vote of a majority
of the outstanding voting securities of the Fund and (ii) by a Disinterested
Director Vote.
18. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities," "interested person," "affiliated person" and
"assignment" shall have the meanings set forth in the 1940 Act, subject to such
exemptions as may be granted by the Securities and Exchange Commission pursuant
to the 1940 Act.
19. Neither the Adviser nor any of its affiliates, officers, directors,
managers, members or employees shall have any liability to the Fund or any
shareholder of the Fund for any error of judgment, mistake of law or any loss
arising out of any investment, or for any other act or omission in the
performance by the Adviser of its duties hereunder, except for liability
resulting from (i) willful misfeasance, bad faith or gross negligence in the
performance of its duties, or reckless disregard of its obligations and duties
hereunder and (ii) a breach of fiduciary duty with respect to the receipt of
compensation for services, but only to the extent specified in (S)36(b) of the
1940 Act.
IN WITNESS WHEREOF, the Fund and the Adviser have executed this Agreement
as of the day and year first above written.
W.P. STEWART & CO., INC. W.P. STEWART & CO. GROWTH FUND, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
A-7
<PAGE>
APPENDIX TO PROXY STATEMENT - PROXY CARD
<TABLE>
<CAPTION>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER [X] USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK
- ------------------------------------------------------------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL PROPOSALS, PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
---
FOR AGAINST ABSTAIN
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve or disapprove the proposed Investment Advisory Services Agreement [_] [_] [_]
(the "New Advisory Agreement") between the Fund and W.P. Stewart & Co., Inc. (the
"Current Adviser")
2. To ratify or reject the payment of the advisory fees by the Fund to the Current [_] [_] [_]
Adviser and its predecessors (collectively, the "Adviser") for the period from
January 12, 1996 through the date of the Meeting.
3. To elect seven Directors to hold office until their successors are duly elected WITHHOLD AUTHORITY FROM
and qualified. FOR ALL NOMINEES ALL NOMINEES
[_] [_]
NOMINEES: Antoine Bernheim, June Eichbaum, Robert L. Schwartz, William Talcott
May, Marilyn G. Breslow, Thomas R. LeViness and David J. Winkler.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE OUT THE NAME OF SUCH NOMINEE)
4. To ratify or reject the selection of Lopez Edwards Frank & Co., LLP as the FOR AGAINST ABSTAIN
Fund's independent accountants for the fiscal year ending December 31, 1998. [_] [_] [_]
5. To transact such other matters as may properly come before the Meeting or any
adjournment thereof.
</TABLE>
<PAGE>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BEFORE THE
MEETING TO BE HELD ON OCTOBER 28, 1998.
THESE VOTING INSTRUCTIONS ARE SOLICITED BY THE DIRECTORS OF W.P. STEWART & CO.
GROWTH FUND, INC.
A VOTING INSTRUCTIONS CARD IS PROVIDED FOR SHAREHOLDERS OF THE FUND AS OF AUGUST
31, 1998.
The undersigned hereby instructs John C. Russell or Lisa D. Levey, or their
successors to vote the shares of W.P. Stewart & Co. Growth Fund, Inc. (the
"Fund") at the Annual Meeting of Shareholders to be held at 527 Madison Avenue,
New York, N.Y. 10022-4212 at 10:00 a.m., local (New York City) time, October 28,
1998, and any adjournments thereof.
Dated:
PLEASE SIGN IN BOX BELOW
If a shares are held jointly, each shareholder should sign. If only one signs,
his or her signature will be binding. If the shareholder is a corporation, an
authorized officer should sign in his or her own name, indicating title. If the
shareholder is a partnership, a partner should sign in his or her own name,
indicating that he or she is a partner.
[ ]
Signature(s) Title(s), if applicable
[ ]
Signature of Joint Owner, if applicable
