<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to [SECTION] 240.14a-11(c) or [SECTION]
240.14a-12
UNITED ASSET MANAGEMENT CORPORATION
(Name of Registrant as Specified In Its Charter)
UNITED ASSET MANAGEMENT CORPORATION
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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> 2
UNITED ASSET MANAGEMENT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1996
The Annual Meeting of the Stockholders of United Asset Management
Corporation (the "Company" or "UAM") will be held at The Ritz-Carlton Hotel, 15
Arlington Street, Boston, Massachusetts on Thursday, May 16, 1996 at 9:30 a.m.,
Eastern Daylight Savings Time, for the following purposes:
(1) To fix the number of directors and elect a Board of Directors to
serve until the next Annual Meeting of Stockholders and until their
successors are elected and qualified;
(2) To approve Compensation Arrangements for Certain Executive
Officers;
(3) To approve the selection of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending December 31,
1996; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 20, 1996 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, this meeting. Accordingly, only stockholders of record at the close
of business on that date are entitled to vote at the meeting or at any
adjournment thereof. A list of stockholders entitled to vote will be kept at the
principal offices of the Company at One International Place, Boston,
Massachusetts 02110 for a period of 10 days prior to the meeting.
The business matters enumerated above are discussed more fully in the
accompanying Proxy Statement. Whether or not you plan to attend the meeting, we
urge you to study the Proxy Statement carefully and then fill out, sign and date
the enclosed Proxy. Please mail your Proxy promptly in the enclosed return
envelope, which requires no postage if mailed in the United States. If you do
plan to attend the meeting, please so indicate in the box provided on the
enclosed Proxy.
By Order of the Board of Directors,
JOHN C. VINCENT, JR.
Secretary
March 25, 1996
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY
THE ENCLOSED PROXY, WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
<PAGE> 3
UNITED ASSET MANAGEMENT CORPORATION
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1996
The Proxy accompanying this Proxy Statement is solicited by the Board of
Directors of United Asset Management Corporation (the "Company" or "UAM") to be
voted at the Annual Meeting of Stockholders to be held on Thursday, May 16, 1996
and at any adjournment thereof (the "Meeting").
It is expected that copies of the Notice of Meeting, this Proxy Statement
and the enclosed Proxy card will be mailed on approximately March 25, 1996 to
each stockholder entitled to vote at the Meeting. UAM's Annual Report to
Stockholders for the fiscal year ended December 31, 1995 accompanies this proxy
statement.
ELECTION OF DIRECTORS
The persons named as proxies in the accompanying Proxy card intend (unless
authority to vote therefor is specifically withheld) to vote to fix the number
of directors for the ensuing year at 12, and to vote for the election of the 12
persons named below, being the nominees of the present Board, as directors to
hold office until the next Annual Meeting and until their respective successors
are elected and qualified. If any of the nominees becomes unavailable to serve
as a director, the persons named as proxies have discretionary authority to vote
for a substitute. The Board of Directors has no reason to believe that any of
the nominees will be unavailable to serve if elected.
NOMINEES FOR ELECTION AS DIRECTORS
Information regarding each nominee is presented below.
Mr. Norton H. Reamer, age 60, is the founder of UAM and has been its
President, Chief Executive Officer, and a director since its inception in 1980.
Mr. Reamer is also Chairman, President and a director of UAM Funds, Inc., UAM
Funds Trust and AEW Commercial Mortgage Securities Fund, Inc., each of which is
an investment company, and a trustee or director in the Eaton Vance Group of
Funds, which consists of over 70 investment company portfolios. He is also a
trustee of Radcliffe College and of Union College.
Mr. John F. McNamara, age 54, joined UAM as Executive Vice President in
1992 and was elected a director in July of that year. In 1994, he was named
Chief Operating Officer. Prior to joining UAM, he served since 1990 as Managing
Director and Chief Executive Officer of Baring America Asset Management Co., the
U.S. investment management subsidiary of Baring Brothers, a London-based
investment management firm.
Mr. Harold J. Baxter, age 49, has served as Chairman and Chief Executive
Officer of Pilgrim Baxter & Associates, one of UAM's subsidiaries, for more than
the past five years. He is also the chairman of the board of directors of the
PBHG Funds, Inc., an investment company.
Mr. John K. Dwight, age 51, has served as President of Dwight Asset
Management Company, one of UAM's subsidiaries, for more than the past five
years. Mr. Dwight is also a director of Eastern Bancorp. and the Shelburne
Museum.
Mr. Robert J. Greenebaum, age 78, retired as Treasurer of Inland Steel
Company in 1981. Since then, he has been a business consultant. Mr. Greenebaum
is Chairman and a director of Selected American Shares, Inc., Selected Special
Shares, Inc., and the Selected Capital Preservation Trust Series Funds, and is a
director of the Blue Chip Value Fund, each of which is an investment company. He
has been a director of UAM since 1982.
Professor Jay O. Light, age 54, has been a professor at the Harvard
Business School for more than five years and previously served as a Senior
Associate Dean. His special areas of concentration are capital markets and
investment management. From 1977 to 1979, Professor Light was the Director of
Investment Policies at
<PAGE> 4
the Ford Foundation. Professor Light is also a director of Harvard Management
Company, Inc. and a trustee of the College Retirement Equity Fund (CREF).
Professor Light has been a director of UAM since 1987.
Mr. David I. Russell, age 53, has been an independent financial consultant
since 1989. Prior to 1989, he was a director of Warburg Securities, part of S.G.
Warburg & Co., an international securities brokerage and investment banking
group, and a director of S.G. Warburg & Co., Inc., a U.S. subsidiary of S.G.
Warburg & Co. He has been a director of UAM since 1981.
Mr. Philip Scaturro, age 57, is an Executive Vice President and a Managing
Director of Allen & Company Incorporated, an investment banking firm. He has
been with Allen & Company Incorporated as an Executive Vice President and
Managing Director for more than the past five years. Mr. Scaturro is also a
director of Savoy Pictures Entertainment, Inc. and Intrenet, Inc. He has been a
director of UAM since 1981.
Mr. John A. Shane, age 63, has for more than the past five years been
President of Palmer Service Corporation, a venture capital management company.
Mr. Shane is also a director of Arch Communications Group, Inc., Eastern Bank,
Summa Four, Inc. and Gensym Corporation and a trustee of the TNE Fund Group. He
has been a director of UAM since 1981.
Ms. Barbara S. Thomas, age 49, is an independent financial and media
consultant. Prior to December 1994, she was Director, Business and Legal
Affairs, for News International plc. Prior to joining News International, Ms.
Thomas served as a Managing Director of the investment banking firm Cramer
Rosenthal McGlynn, Inc. from 1990 to 1993. From 1986 to 1990, she served as
Senior Vice President and Group Head of The International Private Banking Group
at Bankers Trust Company. From 1980 to 1983, she served as a Commissioner of the
Securities and Exchange Commission. She has been a director of UAM since 1993.
Mr. C. Giles H. Weaver, age 49, has served as Managing Director of Murray
Johnstone Limited, one of UAM's subsidiaries, since 1993. From 1990 to 1993 he
served as Chief Investment Officer of Murray Johnstone. Mr. Weaver is also a
director of Helical Bar Plc.
Mr. John S. Williams, age 42, has been a Principal of Barrow, Hanley,
Mewhinney & Strauss, Inc., one of UAM's subsidiaries, for more than the past
five years.
Each of the nominees except Messrs. Baxter, Dwight, Weaver and Williams is
presently serving as a director and was elected to that position at the 1995
Annual Meeting. It is the policy of UAM's Board of Directors to nominate for
election to the Board each year several principals of its subsidiaries and to
rotate these seats on the Board annually among such firms. Messrs. Baxter,
Dwight, Weaver and Williams are currently being nominated for these seats.
The Board of Directors met 10 times during 1995 and acted by unanimous
consent on five occasions. The Board of Directors has appointed an Audit
Committee and a Compensation Committee, both of which are reappointed annually.
The Audit Committee, consisting of Mr. Shane, Chairman, Mr. Greenebaum, Mr.
Scaturro and Ms. Thomas, met four times in 1995, and has recommended to the
Board of Directors the selection of Price Waterhouse to serve as the Company's
independent accountants for the year ending December 31, 1996. The Compensation
Committee, consisting of Mr. Scaturro, Chairman, Mr. Shane and Mr. Light, met
four times to consider directors' and officers' compensation and other related
matters. It also acted by unanimous consent 42 times in 1995 in granting stock
options under UAM's stock option plans.
DIRECTORS' FEES
Outside directors (that is, directors other than those employed by UAM or
one of its subsidiaries) receive an annual fee of $24,000, plus $5,000 for each
regular meeting of the Board of Directors attended and an additional fee of
$5,000 for attendance at the Company's Annual Planning Meeting of the Board of
Directors. Each member of either the Audit or Compensation Committee of the
Board receives an additional $8,000 annual fee.
Pursuant to the terms of the Company's 1994 Eligible Directors Stock Option
Plan (the "Directors Option Plan"), each director who is not an officer or
employee of the Company or one of its subsidiaries and who is not eligible to
participate under any other Company stock-related plan and who is then serving
as a director (an "Eligible Director") is granted 5,000 non-incentive stock
options on the 30th day following the Annual Meeting of Stockholders of UAM
during the term of the Directors Option Plan. The exercise price
2
<PAGE> 5
per share for these options is the fair market value on the date of the grant.
Options granted to Eligible Directors are exercisable in full beginning six
months after the date of grant and terminate after five years. Such options
generally cease to be exercisable six months after an Eligible Director ceases
to be a director. In addition, each Eligible Director is entitled under the
Directors Option Plan to elect on a semi-annual basis to receive discounted
stock options in lieu of all or any portion of the annual retainer fee payable
to such director with respect to such six-month period. Discounted options are
exercisable at 75% of the market value of common stock, $.01 par value, of the
Company ("Common Stock") on the grant date. The number of shares of Common Stock
under option will equal the amount of the cash retainer fee foregone divided by
25% of the market value of the Common Stock on the date of grant.
As required by the Securities and Exchange Commission ("SEC") Rules under
Section 16(a) of the Securities Exchange Act of 1934, the Company reports that
Forms 3 for Messrs. Haldeman, Kommerstad and Lardner, a Form 4 with respect to
an option exercise by Mr. Lardner, and a Form 5 with respect to a gift of shares
by Mr. Scaturro were filed after their respective due dates.
CERTAIN TRANSACTIONS
During 1995, Mr. David I. Russell served as a consultant to the Company for
an annual fee of $250,000. He will continue to serve in such capacity during
1996 pursuant to a consulting agreement.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
The executive officers of the Company are elected by the Board of Directors
and hold office until the first meeting of the Board of Directors following the
Annual Meeting. Norton H. Reamer is the Company's President and Chief Executive
Officer and John F. McNamara is an Executive Vice President and the Chief
Operating Officer. Certain information concerning their respective backgrounds
is presented above under Nominees for Election as Directors. The other executive
officers of the Company are:
Mr. William H. Park, age 48, joined UAM as Vice President in 1982 and was
named Senior Vice President and Treasurer in 1985 and Executive Vice President
and Chief Financial Officer in 1994. Mr. Park is also a Vice President of UAM
Funds, Inc., UAM Funds Trust, and AEW Commercial Mortgage Securities Fund, Inc.,
each of which is an investment company.
Mr. Franklin H. Kettle, age 38, joined UAM in September 1986 and was named
Vice President in December of that year; Senior Vice President in 1991; and
Director of Corporate Development in 1994.
Mr. Charles H. Salisbury, age 55, joined UAM as a Senior Vice President in
1994. For more than four years prior to joining UAM, he was a Managing Director
of T. Rowe Price Associates.
Mr. William B. Budd, age 60, joined UAM as a Senior Vice President in 1989.
Prior to joining UAM, he had been with Chemical Investment Management Company,
Inc., where he served as Managing Director in charge of fixed-income
investments.
Mr. George D. McClelland, age 49, joined UAM as a Senior Vice President in
1994. Prior to joining UAM, he worked as a consultant and served briefly as
Chief Administrative Officer of Kendall Square Research Corp. in October 1993.
Prior to that, he held various management positions at subsidiaries and
divisions of Fidelity Investments, including Managing Director of Fidelity
Capital from April 1992 to January 1993, and Managing Director of Fidelity
International, Ltd. and President of Audit Operations and Analysis from February
1990 to April 1992.
SUMMARY COMPENSATION TABLE
The Summary Compensation Table on page 4 shows all compensation paid for
services rendered during the past three years to the chief executive officer of
the Company and each of the Company's four other most highly compensated
executive officers (the "Named Executive Officers").
3
<PAGE> 6
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> ALL OTHER
LONG-TERM COMPENSATION
ANNUAL COMPENSATION COMPENSATION AWARDS (1)
--------------------- ------------------- ------------
NUMBER OF
SHARES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS GRANTED
- --------------------------- ---- --------- -------- -------------------
<S> <C> <C> <C> <C> <C>
Norton H. Reamer............. 1995 $800,000 $638,000 34,000 $58,844
President, Chief Executive 1994 770,000 456,000 29,200 58,844
Officer and Director 1993 720,000 417,200 27,700 38,844
John F. McNamara............. 1995 700,000 510,400 50,000 54,458
Executive Vice President, 1994 670,000 364,800 50,000 55,580
Chief Operating Officer 1993 620,000 357,600 50,000 34,350
and Director
William H. Park.............. 1995 480,000 319,000 18,000 53,451
Executive Vice President 1994 450,000 182,400 15,500 55,055
and Chief Financial Officer 1993 400,000 178,800 15,200 33,675
Franklin H. Kettle........... 1995 370,000 581,958 18,400 51,371
Senior Vice President and 1994 340,000 305,738 13,100 51,948
Director of Corporate 1993 290,000 188,838 13,200 32,135
Development
William B. Budd.............. 1995 330,000 501,958 17,300 58,844
Senior Vice President 1994 310,000 305,738 12,400 58,844
1993 290,000 188,838 13,200 38,844
<FN>
- ---------------
(1) Includes Company-paid life insurance premiums, Company contributions to the
individual's profit sharing retirement plan account and Company
contributions to the individual's Deferred Compensation Plan account,
respectively, in the following amounts for the year ended December 31, 1995:
Mr. Reamer, $8,844, $22,500 and $27,500; Mr. McNamara, $4,458, $22,500 and
$27,500; Mr. Park, $3,451, $22,500 and $27,500; Mr. Kettle, $1,371, $22,500
and $27,500; and Mr. Budd, $8,844, $22,500 and $27,500.
</TABLE>
STOCK OPTIONS
The Company has in effect two stock option plans, the UAM 1994 Stock Option
Plan (the "Stock Option Plan") and the Directors Option Plan, pursuant to which
an aggregate of 3,200,000 shares of common stock, $.01 par value, of the Company
("Common Stock") have been reserved for issuance to directors and executive
officers and other key employees of the Company and its subsidiaries who have
substantial responsibility for the Company's management and growth. As of March
15, 1996, an aggregate of 1,558,599 shares of Common Stock remained available
for issuance under those plans. The tables on pages 4 and 5 show information
relating to grants of options to, and the exercise of options under the Stock
Option Plan and former stock option plans of the Company by, the Named Executive
Officers during the year ended December 31, 1995, as well as information
relating to the unexercised options held by the Named Executive Officers as of
December 31, 1995.
<TABLE>
OPTION GRANTS IN 1995(1)
<CAPTION>
NUMBER OF
SHARES EXERCISE GRANT
UNDERLYING PERCENT OF TOTAL OR BASE DATE
OPTIONS OPTIONS GRANTED TO PRICE EXPIRATION PRESENT
NAME GRANTED EMPLOYEES IN 1995 PER SHARE DATE VALUE(2)
- ---- ---------- ------------------ --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Norton H. Reamer........ 34,000 3.88% $36.00 1/24/2000 $359,553
John F. McNamara........ 50,000 5.70 36.00 1/24/2000 528,755
William H. Park......... 18,000 2.05 36.00 1/24/2000 190,352
Franklin H. Kettle...... 18,400 2.10 36.00 1/24/2000 194,582
William B. Budd......... 17,300 1.97 36.00 1/24/2000 182,949
</TABLE>
4
<PAGE> 7
- ---------------
(1) The per share option exercise price in the table is the fair market value of
the Common Stock on the date of the grant. All options are exercisable 25%
a year over a period of four years. The Company's Stock Option Plan is
administered by the Compensation Committee of the Board of Directors, which
has authority to determine the key employees and executive officers of the
Company and its subsidiaries to whom, and the terms and conditions at
which, options will be granted under the Stock Option Plan.
(2) The Company has used the Black-Scholes Model for option pricing to calculate
present value as of the date of the grant. This Model relies on the
following assumptions, which may prove to be inaccurate in the future:
stock price volatility of .2731; dividend yield of 2.89%; risk-free rate of
return of 7.80%; and exercise date of January 24, 2000. The Model also
assumes a liquid market for options, although the options awarded under the
Company's plans may not be transferred. Further, exchange-traded options
may be exercised immediately; however, the Company's options are subject to
certain vesting rules. For these reasons, the Company believes that the
Model may overstate the value of the options it awards. Their actual value,
if any, will depend on the market price of the Company's Common Stock on
the date of exercise.
<TABLE>
AGGREGATED OPTION EXERCISES
IN 1995 AND OPTION VALUES AT DECEMBER 31, 1995
<CAPTION>
NUMBER OF
SHARES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
DECEMBER 31, OPTIONS AT
1995 DECEMBER 31, 1995(1)
--------------- --------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- --------------- --------------------
<S> <C> <C> <C> <C>
Norton H. Reamer................. 6,854 $140,507 63,900/ 75,000 $ 750,775/$240,713
John F. McNamara................. -- -- 112,500/137,500 1,212,500/ 662,500
William H. Park.................. 16,000 352,000 38,850/ 40,350 477,416/ 132,572
Franklin H. Kettle............... 12,000 241,500 28,625/ 37,075 335,306/ 117,819
William B. Budd.................. -- -- 30,451/ 35,449 372,556/ 115,206
<FN>
- ---------------
(1) An "In-the-Money" option is an option for which the option price of the
underlying stock is less than the December 31, 1995 market price; the value
shown reflects stock price appreciation since the date of the granting of
the option.
</TABLE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors continues to have
primary responsibility for analyzing the compensation of executive officers of
the Company, establishing and, when appropriate, revising performance goals for
executive officers, making recommendations to the full Board of Directors with
respect to such compensation, and administering the Company's stock option
plans.
In recommending salaries for the Company's President and Chief Executive
Officer and the other executive officers for the year ended December 31, 1995,
the Compensation Committee considered the overall performance of the Company,
particularly in terms of revenues, earnings, earnings per share, Operating Cash
Flow (net income plus amortization and depreciation), assets under management
and breadth of operations; the contribution of each officer to such performance;
the responsibilities of each officer and the increase in those responsibilities
during the year as a result of the Company's continued growth; the importance of
individual executive officers to the future growth and profitability of the
Company; the performance of the Company's subsidiaries during 1995 and the
contribution of each executive officer to such performance; cash compensation
levels of competitors in the industry (these competitors are included in the
peer group index appearing in the performance graph on page 7 hereof); and the
success of the management team in achieving the Company's short-term and
long-term goals. Although all of such factors were considered by the Committee
in exercising its judgment as to compensation levels for the President and the
other executive officers, no precise formula has been used to weight the
relative importance of such factors. Based on publicly available information,
the Committee believes that cash compensation of the President and the other
executive officers for 1995 was at or near the median of the range of cash
compensation paid by the Company's competitors in the industry. In allocating
compensation between salary, bonuses and stock options,
5
<PAGE> 8
the Committee sought to provide appropriate balance between current salary and
performance-related compensation, and long-term incentives.
The President's compensation for 1995 reflected the overall improved
performance of the Company as evidenced by the growth in Operating Cash Flow,
revenues and earnings over the past year, and the increase in assets under
management. It also reflected the number and quality of acquisitions completed,
and the growing responsibility of the President in overseeing the successful
operation of an increasing portfolio of affiliated firms and recently organized
support entities. Although the Compensation Committee considered all of such
factors in determining the President's compensation, it did not apply any
precise formula to weight the relative importance of such factors.
Bonus payments to executive officers for the year ended December 31, 1995
were based entirely on the Company's performance. Bonuses for 1995 for executive
officers with broad executive and operating responsibilities were calculated by
multiplying a fixed amount (for example, for the executive officers named in the
Summary Compensation Table, $200,000 for Mr. Reamer, $160,000 for Mr. McNamara,
$100,000 for Mr. Park and $25,000 for Mr. Kettle) by the excess of the Company's
Operating Cash Flow per share each quarter over $.50. The Company's Operating
Cash Flow per share for the year ending December 31, 1995 was $5.20 calculated
on the same basis as earnings per share. The Compensation Committee and the
Board of Directors of the Company consider Operating Cash Flow per share to be
the most important basis for measuring the value of the Company to its
stockholders. Bonuses for executive officers with primary responsibility for
acquisitions (Messrs. Kettle and Budd) were based on the annualized amount of
base revenue sharing that is expected to accrue to the Company for acquisitions
completed during the year. Such base revenue sharing was approximately
$61,594,000 in 1995. Mr. Kettle's bonus is based in part on the cash flow
formula and in part on the acquisition formula, as described above. For 1996,
the Cash Flow Bonus multipliers for certain officers named above have been
increased to the following: Mr. Park, $110,000 and Mr. Kettle, $75,000.
The Revenue Reconciliation Act of 1993 included a provision that
established a limit for the deduction of compensation paid by public companies
to certain executive officers. However, it also provided that amounts paid
pursuant to a performance-based compensation arrangement and any revisions to
such arrangement, in each instance when approved by stockholders, are deductible
even if they result in total compensation over the limit. One policy behind this
provision is to encourage public companies to tie compensation of key executives
to verifiable criteria of performance for the company and to promote stockholder
participation in approving such compensation arrangements. The Compensation
Committee believes that the previously approved bonus arrangements described
above, as modified in the manner described for 1996 executive officer
compensation, continue to appropriately align compensation of UAM's executives
to key measures of value to stockholders and are of the type that the tax
provisions are intended to encourage. As contemplated by such provisions, the
Board is submitting for shareholder approval the material terms of these revised
arrangements.
The Company's Compensation Committee based option grants to executive
officers of the Company for the 1995 fiscal year on the relative base salaries
and bonuses of such officers of the Company, without any adjustment for the size
of previous option grants to any of them, except for the options granted to Mr.
McNamara, which were included in his compensation package when he joined the
Company. Because the Company's stock option awards are based on salary and
bonuses, which are in turn based on the factors set forth above, its stock
option awards are indirectly based on those same factors.
During 1995, the Compensation Committee undertook a thorough review of
executive compensation, and particularly compensation of senior management.
These deliberations resulted in the adoption of guidelines for 1996 executive
compensation that are intended to provide greater emphasis on performance-
related cash bonuses and equity compensation in the form of stock options.
The Committee also initiated UAM Stock ownership guidelines for senior
management (Messrs. Reamer, McNamara, Park and Kettle) to be phased in over five
years beginning in 1996.
Compensation Committee
Philip Scaturro, Chairman
Jay O. Light
John A. Shane
6
<PAGE> 9
COMPANY STOCK PERFORMANCE
<TABLE>
Set forth below is a line graph comparing, over a five-year period
commencing December 31, 1990 (the "Commencement Date"), the total return on the
Company's Common Stock with the cumulative total return of companies in the
Standard & Poor's 500 Stock Index and an asset management industry composite, a
self-constructed peer group index (the "Indexes"). This graph assumes a common
starting point of $100 invested on December 31, 1990. Total return for the
Company's Common Stock as well as for the Indexes is determined on a yearly
basis by adding (a) the cumulative amount of dividends from the Commencement
Date to the end of the year in question (assuming dividend reinvestment) and (b)
the difference between the share price at the Commencement Date and at the end
of such year, the sum of which is then divided by the share price at the
Commencement Date.
CUMULATIVE TOTAL RETURN FOR THE FIVE-YEAR PERIOD ENDING DECEMBER 31, 1995
[GRAPH]
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) UAM S&P 500 PEER GROUP
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 191.66 130.34 189.32
1992 193.24 140.25 210.01
1993 265.60 154.32 284.49
1994 248.02 156.42 239.43
1995 265.70 214.99 340.82
<FN>
* Includes Alliance Capital Management L.P., Atalanta Sosnoff Capital Corp.,
Bull & Bear Group, Inc., Colonial Group, Inc. (included through 1994 only, as
this company was acquired by Liberty Financial Companies, Inc. in 1995),
Dreyfus Corp. (included through 1993 only, as this company was acquired by
Mellon Bank Corp. in 1994), Duff & Phelps Corp. (included through 1994 only,
as this company merged with a unit of Phoenix Home Life Mutual Insurance
Company in 1995), Eaton Vance Corp., Franklin Resources, Inc., New England
Investment Companies, Inc. (formerly Reich & Tang L.P.), Oppenheimer Capital,
L.P., The Pioneer Group, Inc., T. Rowe Price Associates, and PIMCO Advisors,
L.P. (formerly Thomson Advisory Group L.P.).
</TABLE>
7
<PAGE> 10
VOTING SECURITIES
Only the record holders of shares of Common Stock of the Company at the
close of business on March 20, 1996 may vote at the Meeting. Each share of
Common Stock is entitled to one vote on the matters to be voted upon at the
Meeting.
<TABLE>
On March 15, 1996 there were 30,401,182 shares of Common Stock issued and
outstanding. The following table sets forth certain information, as of March 15,
1996, with respect to the beneficial ownership of UAM's Common Stock (i) by each
person or entity that is known by UAM to own beneficially more than 5% of its
Common Stock, (ii) by each of UAM's directors and nominees, (iii) by the Named
Executive Officers and (iv) by all of UAM's executive officers and directors as
a group. Unless otherwise noted, the persons or entities named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by each of them, subject to community property laws,
where applicable. Under the heading "Number of Shares Issuable" are listed (and
under the heading "Total" are included) shares issuable within 60 days of the
date of this Proxy Statement upon the exercise of warrants or stock options
owned by the party indicated. The percentage owned is calculated with respect to
each party by treating its issuable shares as outstanding, in accordance with
rules of the Securities and Exchange Commission.
BENEFICIAL OWNERSHIP OF COMMON STOCK
<CAPTION>
NAME OF BENEFICIAL OWNER (AND ADDRESS OF NO. OF ISSUED NO. OF SHARES
OWNER OF MORE THAN FIVE PERCENT) SHARES ISSUABLE TOTAL PERCENT
---------------------------------------- ------------- ------------- ----- -------
<S> <C> <C> <C> <C>
Norton H. Reamer(1)............................. 1,126,156 64,875 1,191,031 3.91%
Tiger Management Corp.(2)....................... 2,677,200 -- 2,677,200 8.81
101 Park Avenue
New York, NY 10178
FMR Corp.(3).................................... 1,765,800 -- 1,765,800 5.81
82 Devonshire Street
Boston, MA 02109
Harold J. Baxter(4)............................. -- 329,655 329,655 1.07
John K. Dwight(4)............................... -- 110,759 110,759 *
Richard A. Englander(5)......................... 17,501 16,793 34,294 *
Robert J. Greenebaum(6)......................... 15,338 20,231 35,569 *
Charles E. Haldeman, Jr.(5)..................... 36,132 22,500 58,632 *
Robert M. Kommerstad(4)(5)...................... 217,834 107,312 325,146 1.07
M. Thomas Lardner(5)............................ -- 992 992 *
Jay O. Light.................................... 6,000 22,594 28,594 *
John F. McNamara................................ 4,000 175,000 179,000 *
David I. Russell................................ 7,000 19,000 26,000 *
Philip Scaturro(7).............................. 45,932 21,413 67,345 *
John A. Shane(8)................................ 16,200 16,000 32,200 *
Barbara S. Thomas............................... 1,000 16,594 17,594 *
C. Giles H. Weaver.............................. 16,843 2,075 18,918 *
John S. Williams................................ 10,001 16,413 26,414 *
William H. Park(1).............................. 100,253 36,150 136,403 *
Franklin H. Kettle(1)........................... 27,325 30,050 57,375 *
William B. Budd(1).............................. 16,488 29,426 45,914 *
All UAM Executive Officers and Directors as a
Group (17 Persons)............................ 1,643,659 630,705 2,274,364 7.33
<FN>
- ---------------
* Indicates less than 1%
(1) Does not include amounts allocated to the named security holder's account in
the UAM Deferred Compensation Plan as notional shares. Mr. Reamer, Mr. Park
and Mr. Budd each hold 1,536 of such notional shares. Mr. Kettle holds 311
of such notional shares.
</TABLE>
8
<PAGE> 11
(2) The named security holder reported having shared voting power and shared
dispositive power with respect to all such shares as of February 29, 1996.
(3) The named security holder has sole dispositive power with respect to all
such shares and sole voting power with respect to 1,000 of such shares as
of December 31, 1995.
(4) The named security holder is a former owner of a UAM subsidiary, and as such
received (directly or indirectly) a portion of the purchase price paid in
connection with such transaction in UAM Common Stock or warrants to
purchase shares of UAM Common Stock. The security holder had no connection
with UAM prior to such acquisition.
(5) The named security holder is a current director of UAM who is not standing
for reelection.
(6) Includes 7,200 shares owned by Mr. Greenebaum's wife, as to which Mr.
Greenebaum disclaims beneficial ownership.
(7) Does not include 1,116,194 shares of Common Stock owned by entities
affiliated with Allen Holding Inc., of which Mr. Scaturro is an Executive
Vice President and Managing Director. Also does not include 7,500 shares of
Common Stock owned by the Philip Scaturro Foundation, of which Mr. Scaturro
is President, Treasurer and Trustee. Mr. Scaturro disclaims beneficial
ownership of all such shares.
(8) Includes 1,132 shares of Common Stock owned by Palmer Service Corporation,
of which Mr. Shane is President.
APPROVAL OF REVISED COMPENSATION ARRANGEMENTS FOR CERTAIN
EXECUTIVE OFFICERS FOR PURPOSES OF INTERNAL REVENUE CODE SECTION 162(m)
Under applicable provisions of The Revenue Reconciliation Act of 1993,
public companies are not allowed to deduct for income tax purposes annual
compensation paid to certain executive officers in excess of $1,000,000 per
executive unless such excess is paid pursuant to an arrangement tied to
performance and approved by stockholders. Under a bonus arrangement used by
UAM's Compensation Committee for the past several years and revised for 1996, it
is possible that the total compensation payable to Messrs. Reamer, McNamara,
Park and Kettle in 1996 and thereafter will exceed such limitation. In order to
ensure the full deductibility of compensation paid to such officers under the
revised arrangement, the Company is seeking stockholder approval thereof.
Discretionary bonuses under the arrangement as revised would be made in the
manner described in the Compensation Committee Report beginning on page 5 above.
The cash bonus for each individual would be calculated by multiplying (i) the
excess of the Company's Operating Cash Flow per share for each fiscal quarter in
the year for which the bonus is being calculated over $.50 by (ii) a factor of
$200,000 for Mr. Reamer; $160,000 for Mr. McNamara; $110,000 for Mr. Park; and
$75,000 for Mr. Kettle. In addition, Mr. Kettle participates in the Company's
acquisition bonus program, which is calculated by multiplying (i) the annualized
amount of base revenue sharing which is expected to accrue to the Company for
acquisitions completed during the year by (ii) a factor of .0050.
The Compensation Committee will certify in writing after the end of each
fiscal year whether and to what extent the performance goal for the prior year
has been met and award appropriate cash bonuses. The Compensation Committee has
so certified and awarded for 1995 with respect to Messrs. Reamer, McNamara, Park
and Kettle. The Compensation Committee has the discretion to reduce the amount
of the bonus awarded to any individual, or to award bonuses on some other basis,
if the Committee determines such action is appropriate, given the circumstances.
If, however, a bonus is awarded based on some other arrangement that has not
been approved by the stockholders, the Company would not be allowed to deduct
for tax purposes any payments in excess of the limitation. The cash bonuses
earned by Messrs. Reamer, McNamara, Park and Kettle in the fiscal year ending
December 31, 1995 are listed in the Summary Compensation Table on page 4.
9
<PAGE> 12
VOTE REQUIRED
Approval of the revised compensation arrangements described above for
purposes of Internal Revenue Code Section 162(m) requires the affirmative vote
of the holders of at least a majority of the shares of Common Stock present or
represented at the meeting and voting thereon. See "Quorum and Voting
Procedures" below. The Board of Directors recommends a vote FOR approval of such
compensation. Unless there is a change in the material terms of the
arrangements, including a change in the performance goals or the payment
formula, such compensation arrangements will not be resubmitted to the
stockholders for another vote for five years.
SELECTION OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors has
selected the firm of Price Waterhouse LLP ("Price Waterhouse") as independent
accountants of the Company for the year ending December 31, 1996, subject to
ratification by vote of the holders of a majority of the shares of Common Stock
voting thereon at the Annual Meeting. A representative of Price Waterhouse,
which served as independent accountants for 1995, is expected to be present at
the Meeting, with the opportunity to make a statement if he or she desires to do
so, and to be available to respond to appropriate questions.
The persons named as proxies in the accompanying form of Proxy intend
(unless specific contrary instructions are given) to vote for ratification of
the selection of Price Waterhouse as independent accountants for the 1996 fiscal
year.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company at its offices at One
International Place, Boston, Massachusetts 02110 no later than November 22, 1996
in order to be considered for inclusion in the Proxy Statement and form of Proxy
relating to that meeting.
QUORUM AND VOTING PROCEDURES
The By-laws of the Company (the "By-laws") provide that a majority of the
shares of Common Stock issued and outstanding and entitled to vote, present in
person or by proxy, shall constitute a quorum at a meeting of stockholders of
the Company. Shares of Common Stock represented by a properly signed and
returned proxy are considered as present at the Meeting for purposes of
determining a quorum. Abstentions are counted as present for purposes of
determining the existence of a quorum.
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from the owners. If specific
instructions are not received, however, brokers may vote these shares in their
discretion, depending on the type of proposal involved. However, the New York
Stock Exchange can preclude brokers from exercising their voting discretion on
certain proposals. Absent specific instructions from the beneficial owner in
such case, the broker may not vote on that proposal. This results in what is
known as a "broker non-vote" on such a proposal. In the event of a broker
non-vote with respect to any issue coming before the Meeting, the Proxy will
nonetheless be counted as present for purposes of determining the existence of a
quorum. The effect of broker non-votes on each agenda item is described below.
The vote required for the election of directors is the affirmative vote of
a plurality of the shares present or represented at the Meeting and entitled to
vote thereon. Unless authority to vote for any director is withheld in the
Proxy, votes will be cast in favor of election of the nominees listed herein.
Votes withheld from election of directors will be excluded entirely from the
vote and will have no effect.
The vote required for approval of the Compensation Arrangements for Certain
Executive Officers is the affirmative vote of a majority of the shares of Common
Stock present or represented at the Meeting and voting thereon. Neither
abstentions as to this proposal nor broker non-votes will count as votes cast
"for" or
10
<PAGE> 13
"against" this proposal and accordingly, they will not be included in
calculating the number of votes necessary for approval of this proposal. Brokers
have discretionary authority to vote on this proposal.
If a properly signed Proxy is returned to the Company by a stockholder of
record and is not marked, it will be voted in accordance with the Board's
recommendations on all proposals.
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than that shown above. However, if any other
proper business should come before the Meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the Proxies in respect to
any such business in accordance with their best judgment. Matters with respect
to which the enclosed form of Proxy confers such discretionary authority are as
follows: (i) matters which the Board of Directors does not know are to be
presented at the Meeting as of a reasonable time before the mailing of this
Proxy Statement; (ii) approval of the minutes of the prior meeting of
stockholders, such approval not constituting ratification of the action taken at
such meeting; (iii) election of any person as a director if any of the nominees
named herein is unable to serve or for good cause will not serve; and (iv)
matters incident to the conduct of the Meeting.
Any stockholder giving a Proxy in the accompanying form retains the power
to revoke it, by appropriate written notice to the Secretary of the Company or
by the giving of a later-dated Proxy, at any time prior to the exercise of the
powers conferred thereby. Attendance in person at the Meeting will not itself be
deemed to revoke a Proxy unless the stockholder gives an affirmative notice at
the Meeting that the stockholder intends to revoke the Proxy and to vote in
person.
The shares represented by the Proxy will be voted as directed by the
stockholder giving the Proxy.
IF NO CONTRARY INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED (1) TO FIX THE
NUMBER OF DIRECTORS AT 12 AND TO ELECT THE PERSONS NAMED UNDER "ELECTION OF
DIRECTORS"; (2) TO APPROVE THE COMPENSATION ARRANGEMENTS FOR CERTAIN EXECUTIVE
OFFICERS; (3) TO APPROVE THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS FOR 1996; AND (4) IN THE DISCRETION OF THE PROXYHOLDER AS TO ANY
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
OTHER MATTERS
The cost of preparing, assembling and mailing the proxy material will be
borne by the Company. In addition to the use of the mails, certain officers and
regular employees of the Company, without additional compensation, may use their
personal efforts, by telephone or otherwise, to obtain Proxies. The Company will
also request brokerage houses, custodians, nominees and fiduciaries to forward
copies of the proxy material to those persons for whom they hold shares and to
request instructions for voting the Proxies. The Company will reimburse such
brokerage houses and other persons for their reasonable expenses in connection
therewith.
JOHN C. VINCENT, JR.
Secretary
11
<PAGE> 14
UNITED ASSET MANAGEMENT CORPORATION
MEETING OF STOCKHOLDERS - MAY 16, 1996
P THIS PROXY IS BEING SOLICITED ON BEHALF OF THE
R BOARD OF DIRECTORS OF UNITED ASSET MANAGEMENT CORPORATION
O
X The undersigned stockholder in United Asset Management Corporation
Y (the "Company") hereby appoints Norton H. Reamer, John F. McNamara, and
William H. Park, and each of them, attorneys, agents and proxies, with
power of substitution to each, to vote all shares of Common Stock that
the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at The Ritz-Carlton Hotel,
15 Arlington Street, Boston, Massachusetts on May 16, 1996 at 9:30 a.m.,
Eastern Daylight Savings Time, and any adjournments thereof.
Also to vote and act upon any other business which may properly come
before the meeting or any adjournment thereof.
The shares represented by this proxy will be voted as directed by
the undersigned.
IF NO CONTRARY INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED FOR
THE NOMINEES FOR DIRECTORS LISTED ON THE REVERSE SIDE AND IN FAVOR OF
PROPOSALS 2 AND 3.
(PLEASE SIGN AND DATE ON REVERSE)
----------------
SEE REVERSE SIDE
----------------
<PAGE> 15
/ X / Please mark
votes as
in this example.
1. To fix the number of persons constituting the full Board of Directors at
twelve and to elect the following nominees as Directors: Harold J. Baxter,
John K. Dwight, Robert J. Greenebaum, Jay O. Light, John F. McNamara, Norton H.
Reamer, David I. Russell, Philip Scaturro, John A. Shane, Barbara S. Thomas,
C. Giles H. Weaver and John S. Williams.
FOR / / WITHHELD / /
all from all
nominees nominees
MARK HERE IF YOU PLAN / /
TO ATTEND THE MEETING
MARK HERE FOR ADDRESS / /
CHANGE AND NOTE BELOW
/ /
---------------------------------
FOR all nominees except as noted.
to withhold authority to vote for any individual nominee, print that
nominee's name above
2. To approve the compensation FOR AGAINST ABSTAIN
arrangements for certain executive officers as / / / / / /
described in the Company's Proxy Statement.
3. To approve the selection of Price FOR AGAINST ABSTAIN
Waterhouse LLP as independent accountants / / / / / /
of the Company for the current fiscal year
ending December 31, 1996
Please sign exactly as your name is printed hereon. When signing as attorney-in-
fact, executor, administrator, trustee or guardian, please give title.
Signature: Date
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Signature: Date
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