NOTICE OF MEETING
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
UNITED SERVICES SPECIAL-TERM GOVERNMENT FUND
Dear Shareholder:
A Special Meeting of Shareholders of the United Services Special-Term
Government Fund (the "Fund"), a series of United Services Funds, a Massachusetts
business trust (the "Trust"), will be held at 7900 Callaghan, San Antonio, Texas
78229 on Monday, December 18, 1995 at 2:00 p.m., local time, for the following
purposes:
1. to consider and vote upon approval of liquidation of the United
Services Special- Term Government Fund, which liquidation is to occur
as soon as practicable following shareholder approval; and
2. to consider and act upon any other matters which may properly come
before the meeting or any adjournments thereof.
On October 25, 1995 the Board of Trustees voted to recommend to
shareholders that they approve liquidation of the Fund. Section 4.2(d) of the
First Amended and Restated Master Trust Agreement requires approval of a
majority of the outstanding voting Shares of the Fund as set forth in the proxy
statement. The Board of Trustees has directed officers of the Trust to take the
steps necessary to obtain shareholder approval.
At the close of business on November 15, 1995 the Fund had 323
shareholders.
We hope you will be represented at the meeting. The vote of every
shareholder is important. If you have questions or comments, contact the
undersigned at any time (1-800-873-8637 or 210-308-1234).
Susan B. McGee
Secretary of the Trust
Dated: November 17, 1995
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PROXY STATEMENT
UNITED SERVICES FUNDS
7900 Callaghan Road
San Antonio, Texas 78229
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS OF
UNITED SERVICES SPECIAL-TERM GOVERNMENT FUND
INTRODUCTION
This proxy statement is furnished to shareholders of the United Services
Special-Term Government Fund (the "Fund"), a series of United Services Funds, a
Massachusetts business trust (the "Trust"), in connection with the solicitation
of proxies by and on behalf of the Board of Trustees of the Trust to be used at
the Special Meeting of Shareholders to be held in the first floor board room at
7900 Callaghan Road, San Antonio, Texas 78229 on Monday, December 18, 1995 at
2:00 p.m., or at any adjournments thereof (the "Meeting").
This proxy statement and the accompanying proxy were mailed to shareholders
on or about November 17, 1995. Shareholders of record at the close of business
on November 15, 1995 shall be entitled to notice of and to vote at the Meeting
or any adjournment thereof.
The Trust is presently composed of thirteen separate funds: U.S. Gold
Shares Fund, U.S. Income Fund, U.S. Global Resources Fund, U.S. Treasury
Securities Cash Fund, U.S. All American Equity Fund, U.S. Tax Free Fund, United
Services Near-Term Tax Free Fund, U.S. World Gold Fund, U.S. Government
Securities Savings Fund, U.S. Real Estate Fund, United Services Intermediate
Treasury Fund, United Services Special-Term Government Fund and China Region
Opportunity Fund.
At November 15, 1995 there were 329,817.947 shares of the Fund outstanding.
Each full share of the Fund outstanding at the close of business on November 15,
1995 is entitled to one full vote and each fractional share outstanding on that
date is entitled to a proportionate share of one vote.
The purpose of this Meeting is: (1) to consider and vote upon approval of
liquidation of the United Services Special-Term Government Fund as approved by
the Board of Trustees on October 25, 1995, which liquidation is to occur as soon
as practicable following shareholder approval; and (2) to consider and act upon
any other matters which may properly come before the meeting or any adjournments
thereof.
All shares represented at the Meeting by properly executed proxies will be
voted in accordance with the instructions thereon, if any, and if no
instructions are given, the proxy will be voted for approval of Fund liquidation
(Proposal One). The Board of Trustees does not know of any action to be
considered at the Meeting other than Proposal One.
The proxy may be revoked at any time before it is exercised by the
subsequent execution and submission of a revised proxy, by written notice of
revocation to the Secretary of the Trust, or by voting in person at the Meeting.
In addition to the solicitation of proxies by mail, officers and employees
of the Trust and United Services Advisors, Inc. ("USAI" or the "Advisor"), the
manager and investment advisor of the Trust, without additional compensation,
may solicit proxies in person or by telephone or other means of communication.
The cost of the solicitation of proxies by the Board of Trustees of the Trust
for this meeting of shareholders will be borne by the Fund of the Trust and will
include any reimbursement paid to fiduciaries, brokerage firms, nominees and
custodians for their expenses in forwarding solicitation material regarding the
Meeting to beneficial owners.
PRINCIPAL SHAREHOLDERS OF THE FUND
At November 15, 1995, the officers and Trustees of the Trust owned less
than 1% of the outstanding shares of the Fund. The Trust is not aware of any
person who owns of record, or beneficially, more than 5% of the outstanding
shares of the Fund as of November 15, 1995.
THE ADVISOR
USAI is a Texas Corporation with its principal executive offices located at
7900 Callaghan Road, San Antonio, Texas 78229. USAI's relationship to the Fund
is discussed in the prospectus and Statement of Additional Information.
PROPOSAL ONE
LIQUIDATION OF THE FUND
It is recommended that shareholders approve liquidation of the Fund.
The Fund commenced operations on February 22, 1993. The Fund, which
currently has total net assets of approximately $5,556,000, has not attracted
the shareholder following that was originally anticipated. Moreover, the Advisor
believes that there is no reasonable prospect for increased investor interest in
the foreseeable future. The Fund's small asset base results in a high per share
expense ratio for the Fund, which adversely affects the Fund's performance. In
addition, the size of the Fund impairs the ability of the Fund to participate in
many attractive investments. For these reasons, the Advisor determined that the
continued operation of the Fund would not be in the best interests of
shareholders and, at a meeting of the Board of Trustees held on October 25,
1995, the Advisor recommended that the Trustees consider the advisability of
liquidating the Fund. On October 25, 1995, the Trustees considered such
information as they deemed reasonably necessary to evaluate the Advisor's
recommendation. Based upon this information, the Trustees determined that it
would be in the best interests of shareholders to liquidate the Fund and voted
unanimously to recommend that shareholders approve a proposal to liquidate the
Fund.
Section 4.2(d) of the First Amended and Restated Master Trust Agreement
("Master Trust Agreement")requires approval by a majority of the outstanding
voting shares of the Fund. Under Section 5.5 of the Master Trust Agreement, such
approval may be obtained without meeting by having a written consent signed by a
majority of shareholders entitled to vote on that matter. Notwithstanding
Section 5.5, in order to give all shareholders an opportunity to be heard, a
meeting is being called.
If the liquidation is approved by shareholders, Fund assets will be sold in
an orderly manner and, after payment of expenses, the remaining cash and other
assets will be distributed to shareholders as soon as practicable. Each share of
the Fund will entitle the holder to receive cash or other assets equal to the
per share net asset value of the Fund at the time of liquidation. For tax
purposes, a shareholder will recognize gain or loss on the liquidating
distribution equal to the difference between (i) the amount of the liquidating
distribution and (ii) the shareholder's adjusted tax basis in shares of the
Fund. Such gain or loss will be treated as a long-term or short-term capital
gain or loss depending on the period of time the shares were held prior to the
liquidation. Distributions on shares held for more than one year will result in
a long-term capital gain or loss and distributions on shares held for one year
or less will result in a short-term capital gain or loss. Liquidating
distributions received by an IRA or Keogh Plan will ordinarily not be subject to
taxation. All shareholders are urged to seek independent advice regarding the
possible federal income tax consequences of the proposed liquidation, as applied
to the shareholder's own special circumstances.
ACTION ON THE PROPOSAL
The Board of Trustees of the Trust considered such information as it deemed
reasonably necessary to enable the Trustees to evaluate the desirability of
liquidating the Fund at its meeting on October 25, 1995.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF
THE FUND VOTE FOR APPROVAL OF PROPOSAL ONE.
In the event shareholders of the Fund do not approve Proposal One, the Fund
will continue operating under its current objectives and policies, and the Board
of Trustees will consider courses of action with respect to the Fund which may
include resubmitting the proposal to shareholders at a future date.
REQUIRED VOTE
Approval of the liquidation of the Fund requires the affirmative vote of
the holders of a majority of the outstanding voting securities of the Fund,
defined under the 1940 Act as the lesser of (i) a majority of the outstanding
shares of a Fund or (ii) 67% or more of the shares of a Fund represented at the
Special Meeting if more than 50% of the outstanding shares of the Fund are
present or represented by Proxy at the Meeting. Abstentions and proxies with
respect to shares held by a broker or other nominee that are not voted because
the nominee lacks discretionary authority to vote the shares will be treated as
follows. With respect to the first alternative, (i) broker "non votes" and
"abstentions" will have the effect of "no" votes. With respect to (ii), broker
"non votes" will have no effect and "abstentions" will have the effect of "no"
votes.
OTHER MATTERS
No business other than the matters set forth in this Proxy Statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interests of the Fund.
The foregoing Notice and Proxy Statement are sent by order of the Board of
Trustees.
Susan B. McGee
Secretary of the Trust
Dated: November 17, 1995
<PAGE>
FORM OF PROXY (FRONT)
PROXY
UNITED SERVICES FUNDS - UNITED SERVICES SPECIAL-TERM GOVERNMENT FUND
7900 CALLAGHAN ROAD AT IH 10 WEST
SAN ANTONIO, TEXAS 78229
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Susan B. McGee and Mary J. Weber and each
of them, proxies with full power of substitution to act for and vote on behalf
of the undersigned all shares of the United Services Special-Term Government
Fund (the "Fund") which the undersigned would be entitled to vote if personally
present at the Special Meeting of the Shareholders of the Fund to be held on
December 18, 1995 (the "Meeting").
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement furnished in connection with the
Meeting and hereby instructs said proxies to vote said shares as indicated
hereon. Both of the proxies present and acting at the meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
IF A CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED AS INDICATED. IF NO
CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL ONE. In their
discretion, the proxies are authorized to vote upon such business as may
properly come before the Meeting. The Board of Trustees recommends a vote FOR
Proposal One.
This proxy may be revoked at any time prior to the exercise of the powers
conferred by the proxy.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
FORM OF PROXY (BACK)
PROXY -- UNITED SERVICES SPECIAL-TERM GOVERNMENT FUND
FOR AGAINST ABSTAIN
1. PROPOSAL ONE: Approve liquidation of / / / / / /
the United Services Special-Term
Government Fund.
2. Transact such other business as may / / / / / /
properly come before the meeting or
any adjournment thereof.
DATED: , 1995
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(Signature)
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(Signature if Held Jointly)
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in the full corporate name by president
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.4
