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SCHEDULE 14A
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(c)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)(S)240.14a-11(c) or (S)(S)240.14a-12
UAM Funds, Inc. - SEC File Nos. 33-25355, 811-5683
(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:
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UAM FUNDS, INC.
Sterling Partners' Equity Portfolio
UAM Funds Service Center
P.O. Box 419081
Kansas City, MO 64141-6081
(toll-free) 1-877-UAM-Link (826-5465)
January 5, 2001
Dear Stockholder:
Enclosed you will find a proxy statement and proxy card for a special meeting of
stockholders of the Sterling Partners' Equity Portfolio. This is a very
important meeting, which has been called to vote on a proposal to liquidate your
Portfolio.
The Board of Directors of UAM Funds, Inc., after thorough discussion and
consideration, has decided to recommend the liquidation of the Portfolio, but
believes that since this is your investment capital, the final decision on this
matter should be made by you, the stockholders. We are proposing to liquidate
the Portfolio because of its relatively small size and its limited prospects for
growth in assets. The Board's reasons for recommending this course are described
more fully in the enclosed proxy statement, which you should consider carefully.
If the stockholders approve the recommendation to liquidate the Portfolio, the
Portfolio will return to you the proceeds of the liquidation of your account.
Once you receive your proceeds, you may pursue any investment option you wish.
You may easily reinvest your proceeds from the liquidation in shares of another
UAM Fund by contacting a shareholder service representative at 1-877-UAM Link
(826-5465).
The Board of Directors regrets any inconvenience this may cause you. We thank
you, however, for the confidence that you placed in us. We continue to wish you
well in your investments.
Sincerely,
James F. Orr III
Chairman
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UAM FUNDS, INC.
Sterling Partners' Equity Portfolio
UAM Funds Service Center
P.O. Box 419081
Kansas City, MO 64141-6081
(toll free) 1-877-UAM-LINK (826-5465)
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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To Be Held January 26, 2001
TO THE STOCKHOLDERS OF THE
STERLING PARTNERS' EQUITY PORTFOLIO:
Notice is hereby given that a special meeting of stockholders (the "Special
Meeting") of the Sterling Partners' Equity Portfolio (the "Portfolio"), a series
of UAM Funds, Inc. (the "Fund"), will be held on January 26, 2001 at the offices
of UAM Fund Services, Inc., 211 Congress Street, Boston, MA 02110 at 10:00 a.m.
local time. The purpose of the Special Meeting is:
. to consider a proposal to liquidate and dissolve the Portfolio, as set
forth in a Plan of Liquidation and Dissolution adopted by the Board of
Directors of the Fund; and
. to transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please read the enclosed proxy statement carefully for information concerning
the proposal to be placed before the meeting.
Stockholders of record at the close of business on January 2, 2001 will be
entitled to vote at the meeting. You are invited to attend the Special Meeting,
but if you cannot do so, please complete and sign the enclosed proxy, and return
it in the accompanying envelope as promptly as possible. Any stockholder
attending the Special Meeting may vote in person even though a proxy has already
been returned.
By Order of the Board of Directors,
Linda T Gibson, Esq.
Secretary
Boston, Massachusetts
January 5, 2001
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UAM FUNDS, INC.
Sterling Partners' Equity Portfolio
PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of UAM Funds, Inc. (the "Fund") on behalf of the
Sterling Partners' Equity Portfolio (the "Portfolio"), a separate series of the
Fund, for use at a Special Meeting of Stockholders to be held at UAM Fund
Services, Inc., 211 Congress Street, Boston, MA on January 26, 2001 at 10:00
a.m. local time, or at any adjournment thereof (the "Special Meeting").
Proxy Solicitation
All proxies in the enclosed form that are properly executed and returned to the
Portfolio will be voted as provided therein at the Special Meeting or at any
adjournment thereof. A stockholder executing and returning a proxy has the power
to revoke it at any time before it is exercised by giving written notice of such
revocation to the Secretary of the Fund. Signing and mailing the proxy will not
affect your right to give a later proxy or to attend the Special Meeting and
vote your shares in person.
The Board of Directors intends to bring before the Special Meeting the sole
matter set forth in the foregoing notice. The persons named in the enclosed
proxy and acting thereunder will vote with respect to that item in accordance
with the directions of the stockholder as specified on the proxy card. If no
choice is specified, the shares will be voted in favor of:
. the proposal to liquidate and dissolve the Portfolio and return the
proceeds to the stockholders of the Portfolio; and
. any other matter not presently known, but which may properly come before
the meeting or any adjournment thereof.
In accordance with the Articles of Incorporation of the Fund and the General
Laws of the State of Maryland, approval of the proposal requires the affirmative
vote of the holders of a majority of the outstanding shares of common stock of
the Portfolio at a meeting at which a quorum is present. The presence in person
or by proxy of the holders of a majority of the outstanding shares of the
Portfolio will constitute a quorum. For purposes of determining the presence of
a quorum, abstentions, broker non-votes or withheld votes will be counted as
present.
The Portfolio will bear the entire cost of preparing, printing and mailing this
proxy statement, the proxies and any additional materials which may be furnished
to stockholders up to $2,000. Sterling Capital Management Company ("Sterling"),
the Portfolio's investment adviser, will pay any such expenses that are in
excess of $2,000. Solicitation may be undertaken by mail, telephone, telegraph,
and personal contact. It is expected that this Proxy Statement and form of proxy
will be mailed to shareholders on or about January 5, 2001.
Voting Securities and Principal Holders Thereof
Holders of record of the shares of common stock of the Portfolio at the close of
business on January 2, 2001 will be entitled to vote at the Special Meeting or
any adjournment thereof. As of December 27, 2000 the Portfolio had outstanding
_________shares of common stock. The stockholders are entitled to one vote per
share on all business to come before the meeting.
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The officers and Directors of the Fund as a group beneficially own in the
aggregate less than one percent of the outstanding common stock of the
Portfolio. As of December 27, 2000 the following stockholders owned of record or
beneficially more than five percent of the outstanding common stock of the
Portfolio:
[I'll insert list of five percent shareholders]
_______
*Denotes shares held by a trustee or fiduciary for which beneficial ownership is
disclaimed or presumed disclaimed.
PROPOSAL FOR LIQUIDATION OF THE PORTFOLIO
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Background
The Portfolio began operations on May 15, 1991 as a series of the Fund. The
Portfolio has invested primarily in equity securities using a variety of
investment techniques during this period.
Notwithstanding the marketing of the Portfolio's shares, growth in the
Portfolio's assets has been slow. During the period from commencement of
operations through December 15, 2000, the Portfolio's assets reached a level of
$51 million; however, assets have decreased to less than $7 million as of
November 30, 2000. Several marketing efforts were not adequate to significantly
increase the size of the Portfolio, including until recently the assumption of
Portfolio expenses by the Adviser. The Adviser and the Board have regularly
reviewed developments and considered alternatives, including the total asset
level of the Portfolio and the impact on the Portfolio's investment results of
the relatively small size of the Portfolio.
Sales of the Portfolio shares have not been sufficient to allow the Portfolio to
reach a size adequate, in the judgment of the Board, to spread expenses over a
sufficient asset base to provide a satisfactory return to shareholders. Since
the inception of the Portfolio until December 31, 2000, the Adviser waived its
fees and assumed a significant portion of the expenses of the Portfolio. In the
absence of such waiver and assumption, the Portfolio might not be profitable for
shareholders. As a result, the Board instructed the officers of the Fund to
investigate what, if any, additional steps or alternative courses would best
serve the interest of shareholders.
The officers of the Fund sought to determine whether a merger or transfer of
assets would be possible, and if it would produce desirable results for
shareholders. After reviewing current market conditions, the relatively small
size of the Portfolio and the time required to effect a transaction, management
of the Fund believed that the expense of a merger or transfer of assets to
another mutual fund are greater than the benefits stockholders of the Portfolio
could expect to realize from such a transaction. The officers investigated the
steps required for liquidation of the Portfolio, subject to presentation of a
final report to the Board.
At a December 14, 2000 meeting, the Board reviewed the expenses which had been
assumed by the Adviser during the life of the Portfolio, the efforts and
expenses of the Distributor to distribute shares of the Portfolio, and the
effect of the operating expenses on the historic and anticipated returns of
stockholders. The Board considered that the Adviser had not been able to collect
or retain any significant advisory fee during the life of the Portfolio, that
there would be no prospect that this would change in the near future, and that
in the absence of compensation over long periods, the ability of the adviser to
service the needs of the Fund would be impaired. For the most recent fiscal
year, the Portfolio's total expenses were:
<TABLE>
<CAPTION>
Without Waiver or Reimbursement of Expenses With Waiver or Reimbursement of Expenses
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<S> <C> <C>
Institutional Class 1.00% 0.99%
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</TABLE>
2
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The Board concluded that an increase in fund expenses attributable to the likely
discontinuance of the fee waiver and assumption of the expenses in the future,
especially when added to the expenses of the Portfolio presently paid directly
by the Portfolio, would significantly reduce the Portfolio's returns. Moreover,
the presence of larger funds with similar objectives better able to operate on
an efficient basis and provide higher returns to shareholders, made it unlikely
that the Portfolio could achieve a significant increase in asset size and
achieve economies of scale. The Board therefore concluded that it would be in
the interest of the stockholders of the Portfolio to liquidate the Portfolio
promptly, in accordance with a Plan of Liquidation and Dissolution. (See
"General Tax Consequences" below.)
As permitted by the Portfolio's prospectus, the Adviser has taken a very
defensive posture with the assets of the Portfolio, as the Adviser believes it
is increasingly clear that economics are deteriorating rather quickly.
Specifically, corporate earnings are declining at a rapid pace, making equity
valuations highly susceptible to significant contractions. Although the Adviser
believes that the Federal Reserve will eventually act to stimulate the U.S.
economy, it believes that the interim outlook in the stock market is negative.
Therefore, the Adviser has liquidated the Portfolio to U.S. treasury notes to
prevent further erosion of the Portfolio's return.
Plan of Liquidation and Dissolution
The Board of Directors has approved the Plan of Liquidation and Dissolution (the
"Plan") summarized in this section and set forth as Exhibit A to this proxy
statement.
1. Effective Date of the Plan and Cessation of the Portfolio's Business as an
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Investment Company. The Plan will become effective on the date of its adoption
------------------
and approval by a majority of the outstanding shares of the Portfolio.
Following this approval, the Portfolio (i) will cease to invest its assets in
accordance with its investment objective and will sell the portfolio securities
it owns in order to convert the Portfolio's assets to cash; (ii) will not engage
in any business activities except for the purposes of winding up its business
and affairs, preserving the value of its assets and distributing its assets to
stockholders after the payment to (or reservation of assets for payment to) all
creditors of the Portfolio; and (iii) will terminate in accordance with the laws
of the State of Maryland and the Articles of Incorporation of the Fund.
2. Closing of Books and Restriction of Transfer and Redemption of Shares. The
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proportionate interests of stockholders in the assets shall be fixed on the
basis of their respective holdings on the Effective Date of the Plan. On such
date the books of the Portfolio will be closed and the stockholders' respective
assets will not be transferable by the negotiation of share certificates.
(Plan, Section 4)
3. Liquidating Distribution. As soon as possible after approval of the Plan,
------------------------
and in any event within fourteen days thereafter, the Fund on behalf of the
Portfolio will mail the following to each stockholder of record on the effective
date of the Plan: (i) to each stockholder not holding stock certificates of the
Portfolio, liquidating cash distribution equal to the stockholder's
proportionate interest in the net assets of the Portfolio, (ii) to each
stockholder holding stock certificates of the Portfolio, a confirmation showing
such stockholder's proportionate interest in the net assets of the Portfolio
with an advice that such stockholder will be paid in cash upon return of the
stock certificates; and (iii) information concerning the sources of the
liquidating distribution. (Plan, Section 7)
4. Expenses. The Portfolio will bear all expenses incurred by it in carrying
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out the Plan. It is expected that other liabilities of the Portfolio incurred or
expected to be incurred prior to the date of the liquidating distribution will
be paid by the Portfolio, or set aside for payment, prior to the mailing of the
liquidating distribution. The Portfolio's liabilities relating to the Plan are
estimated at no more than $2,000, which includes legal and auditing expenses and
printing, mailing, soliciting and miscellaneous expenses arising from the
liquidation, which the Portfolio normally would not incur if it were to continue
in business. If the Portfolio incurs more than $2,000 in additional liabilities
to liquidate the Portfolio,
3
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such expenses will be paid by the Adviser. The total liabilities of the
Portfolio prior to the liquidating distribution are estimated to be $[___]
(including proxy costs). This amount includes the dissolution expenses referred
to above and amounts accrued, or anticipated to be accrued, for custodial and
transfer agency services, legal audit and directors fees and printing costs. Any
expenses and liabilities attributed to the Portfolio subsequent to the mailing
of the liquidating distribution will be borne by the Adviser. (Plan, Section 6
and 8)
5. Continued Operation of the Portfolio. After the date of mailing of the
------------------------------------
liquidating distribution, the dissolution of the Portfolio will be effected. The
Plan provides that the Directors shall have the authority to authorize such
variations from or amendments of the provisions of the Plan as may be necessary
or appropriate to marshal the assets of the Portfolio and to effect the
dissolution, complete liquidation and termination of the existence of the
Portfolio and the purposes to be accomplished by the Plan. (Plan, Sections 9 and
10)
General Tax Consequences.
Each stockholder who receives a liquidating distribution will recognize gain or
loss for federal income tax purposes equal to the excess of the amount of the
distribution over the stockholder's tax basis in the Portfolio shares. Assuming
that the stockholder holds such shares as capital assets, such gain or loss will
be capital gain or loss and will be long-term or short-term capital gain
depending on the stockholder's holding period for the shares.
The tax consequences discussed herein may affect shareholders differently
depending upon their particular tax situations unrelated to the liquidating
distribution, and accordingly, this summary is not a substitute for careful tax
planning on an individual basis. Shareholders may wish to consult their personal
tax advisers concerning their particular tax situations and the impact thereon
of receiving the liquidating distribution as discussed herein, including any
state and local tax consequences.
The Fund anticipates that it will retain its qualification as a regulated
investment company under the Internal Revenue Code, as amended, during the
liquidation period and, therefore, will not be taxed on any of its net income
from the sale of its assets.
Representatives of PricewaterhouseCoopers LLP, independent accountants for the
Fund, are not expected to be present at the Special Meeting.
If the stockholders do not approve the Plan, the Portfolio will continue to
exist as a registered investment company in accordance with its stated objective
and policies. The Board would meet to consider what, if any, steps to take in
the interest of stockholders.
Stockholders are free to redeem their shares prior to the liquidation.
THE DIRECTORS OF THE FUND RECOMMEND APPROVAL OF THE PLAN.
GENERAL INFORMATION
Investment Adviser, Principal Underwriter and Administrator.
The investment adviser to the Portfolio is Sterling Capital Management Company,
a North Carolina corporation located at One First Union Center, 301 S. College
Street, Suite 3200, Charlotte, North Carolina 28202. The Portfolio's principal
underwriter is UAM Fund Distributors, Inc., 211 Congress Street, Boston, MA
02110. The Portfolio's administrator is UAM Fund Services, Inc., located at 211
Congress Street, Boston, MA 02110. The investment adviser, principal underwriter
and administrator for the Portfolio are subsidiaries of United Asset Management
Corporation, a wholly-owned subsidiary
4
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of Old Mutual, plc. UAM Fund Services, Inc. has contracted with SEI Investments,
Inc., One Freedom Valley Drive, Oaks, PA 19456 to provide administrative
services.
Reports to Stockholders and Financial Statements.
The Annual Report to Stockholders of the Portfolio, including audited financial
statements for the Portfolio for the fiscal year ended October 31, 2000, and the
Semi-Annual report to shareholders for the period ended April 30, 2000 have been
mailed to stockholders. The Annual Report and Semi-Annual Report should be read
in conjunction with this Proxy Statement. You can obtain a copy of the Annual
Report and Semi-Annual Report from the Fund, without charge, by writing to the
Fund at the address on the cover of this Proxy Statement, or by calling 1-877-
UAM-LINK.
OTHER MATTERS
The Portfolio is not aware of any other matter that is anticipated to come
before the Special Meeting or any adjournment thereof other than the matter set
forth herein. Other matters will be considered if notice is given within a
reasonable amount of time prior to the meeting. If any other matter may properly
come before the meeting, or any adjournment thereof, this proxy would confer
discretionary authority on the proxies with respect to acting on any such
matters, and the persons named in the proxy have advised that they intend to
vote, act, or consent thereunder in accordance with their best judgment at that
time with respect to such matters.
By Order of the Board of Directors,
/s/Linda T. Gibson, Esq.
Linda T. Gibson, Esq.
Secretary
Dated: January 5, 2001
5
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THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
OF THE FUND
UAM FUNDS, INC.
Sterling Partners' Equity Portfolio
Proxy for Special Meeting of Stockholders on January 26, 2001
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Gary L. French and Linda T. Gibson, or either of them, with power of
substitution, as attorneys and proxies to appear and vote all of the shares of
stock standing in the name of the undersigned at the Special Meeting of
Stockholders of the Sterling Partners' Equity Portfolio of UAM Funds, Inc. to be
held at the offices of UAM Fund Services, Inc., 211 Congress Street, Boston,
Massachusetts 02110, at 10:00 a.m. local time on September 28, 2000, and at any
and all adjournments thereof; and the undersigned hereby instructs said
attorneys to vote:
1. To approve the liquidation and dissolution of the Sterling Partners' Equity
Portfolio, as set forth in a Plan of Liquidation and Dissolution adopted by
the Board of Directors of UAM Funds, Inc.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. Any other business which may properly come before the meeting or any other
adjournment thereof. The management knows of no other such business.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED IN THE
FOREGOING ITEM 1, BUT IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED FOR
APPROVAL OF ITEM 1.
Dated: _____________, 2001
________________________
Signature of Shareholder(s)
________________________
(Signature of all joint owners is required. Fiduciaries please indicate your
full title.) If any other matters properly come before the meeting about which
the proxy holders were not aware prior to the time of the solicitation,
authorization is given the proxy holders to vote in accordance with the views of
management thereon. The management is not aware of any such matters.
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE.
