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 he appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CREDIT SUISSE WARBURG PINCUS LONG-SHORT MARKET NEUTRAL FUND, INC.
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(Name of Registrant as Specified In its Charter)
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(Name of Person(s) filing Proxy Statement, if other than 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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
October 23, 2001
Dear Shareholder:
I am writing to inform you about an important matter affecting Credit
Suisse Warburg Pincus Long-Short Market Neutral Fund, Inc.
The Board of Directors of the Fund has unanimously determined that it
is in the best interest of shareholders that the Fund be liquidated. The Fund's
assets have never grown to the size that would permit efficient management and,
in addition, the team responsible for the Fund's day-to-day investment will be
leaving CSAM. In anticipation of the Fund's liquidation, the Fund's Board took
three actions: (1) effective July 30, 2001, the Fund stopped accepting new money
from investors other than through dividend reinvestments; (2) the Fund
liquidated its portfolio holdings and now holds all of its assets in cash and
cash equivalents; and (3) on October 5, 2001, the Fund paid a special dividend
consisting of substantially all of its net investment income and capital gains
through that date.
We are now asking for your approval of the Plan of Liquidation and
Dissolution. Under the Plan, the Fund will be liquidated by selling its
remaining assets and distributing the cash proceeds to shareholders on a pro
rata basis, and thereafter dissolved pursuant to state law. The Plan of
Liquidation and Dissolution is explained in the attached proxy statement.
Liquidation of the Fund requires the affirmative vote of holders of a majority
of the votes entitled to be cast at a special meeting of the Fund (the "Special
Meeting"). Shareholders of record at the close of business on October 17, 2001
will be entitled to vote at the Special Meeting.
The Special Meeting regarding the proposed liquidation of the Fund is
scheduled to take place on December 19, 2001, at 3:00 p.m., Eastern time. I ask
that you take a few moments to review these proxy materials carefully. If you do
not plan to attend the Special Meeting, please complete the proxy card and
return it as soon as possible in the postage-paid envelope. You may also cast
your vote via the internet, by telephone or by facsimile as described in the
enclosed proxy voting materials.
Thank you for taking the time to vote on this matter. We look forward
to helping you pursue your financial goals in the years ahead.
Sincerely,
/s/ James P. McCaughan
James P. McCaughan
Chairman
We urge you to vote by one of the following means to ensure that a quorum is
present at the Special Meeting. Your vote is important regardless of the number
of shares you own. To vote:
By phone: Call toll-free 1-800-714-3312 and follow the automated instructions.
You will need the 14-digit control number located on your proxy card.
By mail: Simply enclose your executed proxy card in the postage-paid
envelope found within your proxy package.
By internet: Visit www.warburg.com and click on the proxy button; once there,
enter the 14-digit control number located on your proxy card.
By fax: Simply fax your executed proxy card to 212-269-2796.
If you have any questions regarding the Special Meeting agenda or the execution
of your proxy, please call 1-800-927-2874.
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. The purpose of the Proxy Statement is to seek shareholder approval of a
plan to liquidate and then dissolve the Fund.
Q. WHY IS THE LIQUIDATION AND DISSOLUTION
BEING PROPOSED?
A. The Board of Directors has recommended that the Fund be liquidated. The
reasons for the recommendation include, among other reasons, the low
level of the Fund's assets and the distributor's belief that
significant net new sales are not likely, as well as the fact that the
expenses of marketing and operating the Fund remain very high as a
result of the Fund's low asset levels. In addition, the Board
considered the fact that the portfolio management team was leaving CSAM
as an important factor in its decision. The Board of Directors believes
that it would be in the best interests of Fund shareholders to approve
the liquidation of the Fund. Accordingly, the Board of Directors has
recommended liquidating the Fund's assets and distributing the proceeds
to Fund shareholders and then dissolving the Fund under state law.
Q. HOW WILL APPROVAL OF THIS PROPOSAL AFFECT ME?
A. If the proposal to liquidate the Fund is approved, the Fund's assets
will be liquidated and the proceeds will be distributed to Fund
shareholders. Shareholders should carefully read and consider the
discussion of the proposal in the Proxy Statement.
Q. IF THE FUND LIQUIDATES, WHAT WILL BE THE FEDERAL
INCOME TAX CONSEQUENCES FOR ME?
A. In connection with the liquidation and dissolution of the Fund, the
Fund will make a liquidating distribution. The liquidating distribution
that you receive will be in exchange for your shares and will generally
be taxable as a capital gain to the extent that the distribution
exceeds your basis in your shares, or capital loss to the extent your
basis in your shares exceeds the distribution. The capital gain or loss
(if any) that you realize in the liquidating distribution will be
recognized by you in your taxable year in which the distribution is
received. Any such capital gain or loss will be a long-term capital
gain or loss if you have owned your shares for more than one year and
will be a short-term capital gain or loss if you have owned your shares
for one year or less. You are urged to consult your own tax advisor
regarding the tax consequences to you, in your particular
circumstances, of the receipt of the liquidating distribution.
Q. MAY I REDEEM MY SHARES PRIOR TO THE LIQUIDATION?
A. Yes. You may redeem all or any portion of your shares at any time
through the date of shareholder approval of the Plan of Liquidation and
Dissolution is obtained, which is expected to occur on or about
December 19, 2001.
Q. WHY DID THE FUND LIQUIDATE ITS EQUITY HOLDINGS PRIOR TO THE APPROVAL
OF THE PROPOSAL?
A. The Fund has liquidated its equity holdings and now holds its assets in
cash and cash equivalents. The Fund followed an investment approach
that is relatively unique and requires special expertise. Because the
Fund's portfolio management team will be leaving CSAM before the date
of the Special Meeting, the Board decided that it would be in the
interest of shareholders to liquidate equity holdings while the team
remained in place.
Q. WHY DID THE FUND DECLARE A SPECIAL DIVIDEND?
A. The Fund declared a special dividend of $.26 per common class share and
$.28 per institutional class share to holders of record on October 5,
2001. This action was taken to prevent a disproportionate tax burden
being placed on non-redeeming shareholders if other shareholders were
to redeem their Fund shares after the announcement of the proposed
liquidation.
Q. HOW CAN I VOTE?
A. Shareholders will be able to vote their shares by touch-tone telephone
or by the Internet by following the instructions on the proxy card
accompanying this Proxy Statement. To vote via the Internet or by
telephone, please access the website or call the toll-free number
listed on your proxy card or noted in the enclosed voting instruction.
To vote via the Internet or by telephone you will need the "control
number" that appears on your proxy card.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Yes. Your vote is needed to ensure that the proposal can be acted
upon. Your immediate response will help save on the costs of any
further solicitations for a shareholder vote. We encourage you to
participate in the governance of the Fund.
Q. HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A. After careful consideration, the Board of Directors unanimously
recommends that you vote "FOR" the proposed liquidation and
dissolution.
Q. HOW DO I CONTACT YOU?
A. If you have any questions, call the Fund toll free at 1-800-927-2874.
PLEASE VOTE.
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN.
CREDIT SUISSE WARBURG PINCUS
LONG-SHORT MARKET NEUTRAL FUND, INC.
466 Lexington Avenue
New York, New York 10017
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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Please take notice that a Special Meeting of shareholders ("Special
Meeting") of Credit Suisse Warburg Pincus Long-Short Market Neutral Fund, Inc.
("Fund") will be held at the offices of Credit Suisse Asset Management, LLC
("CSAM"), 16th Floor, 466 Lexington Avenue, New York, New York 10017, on
December 19, 2001, at 3:00 p.m., Eastern time, for the following purpose:
1. To approve or disapprove the Plan of Liquidation and Dissolution of
the Fund.
The appointed proxies, in their discretion, will vote on any other
business as may properly come before the Special Meeting or any adjournments
thereof.
Holders of record of shares of the Fund at the close of business on
October 17, 2001 are entitled to notice of and to vote at the Special Meeting
with respect to the Fund and at any adjournments thereof. In the event that the
necessary quorum to transact business or the vote required to approve or reject
any proposal is not obtained at the Special Meeting, the persons named as
proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law, to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of the holders of a majority
of the votes entitled to be cast at the Special Meeting. The persons named as
proxies will vote in favor of such adjournment those proxies to be voted in
favor and will vote against any such adjournment those proxies to be voted
against that proposal.
By order of the Board of Directors,
/s/ Hal Liebes
Hal Liebes
Secretary
October 23, 2001
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE CONTINENTAL UNITED
STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH ON
THE FOLLOWING PAGE. YOUR VOTE IS IMPORTANT. We would appreciate your promptly
voting, signing and returning the enclosed proxy, which will help avoid the
additional expense of a second solicitation. You also may return proxies by
touch-tone voting over the telephone, by facsimile or by voting on the internet.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to you
and avoid the time and expense to the Fund involved in validating your vote if
you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration
on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
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Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) Estate of John B. Smith John B. Smith, Jr., Executor
CREDIT SUISSE WARBURG PINCUS
LONG-SHORT MARKET NEUTRAL FUND, INC.
466 Lexington Avenue
New York, New York 10017
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PROXY STATEMENT
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FOR THE SPECIAL MEETING OF SHAREHOLDERS
To Be Held On December 19, 2001
General
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Credit Suisse Warburg
Pincus Long-Short Market Neutral Fund, Inc. (the "Fund") for use at the Special
Meeting of shareholders of the Fund, to be held at the offices of Credit Suisse
Asset Management, LLC, 16th Floor, 466 Lexington Avenue, New York, New York
10017, on December 19, 2001 at 3:00 p.m., Eastern time, and at any and all
adjournments thereof (the "Special Meeting").
This Proxy Statement, the Notice of Special Meeting and proxy card are
first being mailed to shareholders on or about October 23, 2001 or as soon as
practicable thereafter. Any proxy may be revoked at any time prior to exercise
thereof by giving written notice to the Secretary of the Fund at the address
indicated above or by voting in person at the Special Meeting. All properly
executed proxies received in time for the Special Meeting will be voted as
specified in the proxy or, if no specification is made, in favor of the proposal
referred to in the Proxy Statement.
Proxy solicitations will be made primarily by mail, but proxy
solicitations also may be made by telephone, telegraph or personal interviews
conducted by officers and employees of the Fund, Credit Suisse Asset Management,
LLC ("CSAM"), Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), Boston
Financial Data Services ("BFDS"), transfer agent of the Fund and/or their
affiliates. Such representatives and employees will not receive additional
compensation for solicitation activities. The Fund has retained the services of
D.F. King to assist in the solicitation of proxies. The aggregate cost of
solicitation of the shareholders of the Fund is expected to be approximately
$5,000. The costs of the proxy solicitation and expenses incurred in connection
with the preparation of this Proxy Statement and its enclosures will be borne by
CSAM. CSAM will also reimburse expenses of forwarding solicitation materials to
beneficial owners of shares of the Fund.
Shareholders may vote (1) by mail, by marking, signing, dating and
returning the enclosed proxy ballot(s) in the enclosed postage-paid envelope or
via facsimile, (2) by touch-tone voting over the telephone, or (3) by voting
1
via the internet. If the Fund records votes by telephone, fax or internet, it
will use procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions, and to confirm that their instructions have been properly
recorded. Proxies voted by telephone, fax or internet may be revoked at any time
before they are voted in the same manner that proxies voted by mail may be
revoked.
The presence at the Special Meeting, in person or by proxy, of the
holders of one-third of the outstanding shares of the Fund entitled to vote
shall be necessary and sufficient to constitute a quorum for the transaction of
business with respect to the Fund at the Special Meeting. In the event that the
necessary quorum to transact business or the vote required to approve or reject
any proposal is not obtained at the Special Meeting, the stockholders present in
person or the persons named as proxies may propose one or more adjournments of
the Special Meeting in accordance with applicable law to permit further
solicitation of proxies.
In determining whether to adjourn the Special Meeting, the following
factors may be considered: the nature of the proposal that is the subject of the
Special Meeting, the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any such adjournment will require the affirmative vote of a
majority of the Fund's shares present in person or by proxy at the Special
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the proposal and will
vote against any such adjournment those proxies to be voted against the
proposal. For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" will be
treated as shares that are present but which have not been voted. Broker
non-votes are proxies received from brokers or nominees when the broker or
nominee has neither received instructions from the beneficial owner or other
persons entitled to vote nor has discretionary power to vote on a particular
matter. Broker non-votes, as well as abstentions will have the effect of a "NO"
vote for the proposal. Accordingly, shareholders are urged to forward their
voting instructions promptly.
There is one proposal in this Proxy Statement for the Fund (the
"Proposal"), and the Fund does not anticipate that any other proposals will be
presented. However, should additional proposals be properly presented, a
shareholder vote may be taken on one or more proposals prior to any adjournment
if sufficient votes have been received for approval.
The Proposal requires the affirmative vote of a majority of the votes
entitled to be cast at the Special Meeting.
The Board of Directors has fixed the close of business on October 17,
2001 as the record date (the "Record Date") for the determination of
shareholders of the Fund entitled to notice of and to vote at the Special
Meeting. All
2
shareholders holding shares of the Fund will vote together as a single class on
the Proposal for the Fund. Each share is entitled to one vote and any fractional
share is entitled to a fractional vote at the Special Meeting.
As of the close of business on the Record Date, [ ] shares of the
Fund were issued and outstanding.
Listed below are the name, address and share ownership of each person
known to the Fund to own 5% or more of the shares of the Fund as of the Record
Date. The type of ownership of each person listed below is record ownership.
Percentage
Name and Address Shares Held Ownership
---------------- ---------------- --------------
Charles Schwab & Co., Inc. 81,639.7940 27.95%
Special Custody Account for The
Exclusive Benefit of Customers
Attn. Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
Northern Trust Company Cust 49,622.362 16.99%
FBO William and Omalee Doheny 1996
Charitable Remainder Annuity Trust
801 South Canal
PO Box 92956,
Chicago, IL 60675-2956
National Financial Services Corporation 39,341.41 13.41%
FBO Customers
Church Street Station
PO Box 3908
New York, NY 10008-3908
Northern Trust Company Cust 24,857.172 8.51%
FBO Lucy Doheny Washington 1996
Charitable Remainder Annuity Trust
801 South Canal
PO Box 92956,
Chicago, IL 60675-2956
Northern Trust Company Cust 21,157.138 7.24%
FBO Timothy M. Doheny 1996
Charitable Remainder Annuity Trust
A/C 26-09850 801 South Canal
PO Box 92956,
Chicago, IL 60675-2956
3
Percentage
Name and Address Shares Held Ownership
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Sheri C. Sandler Trustee 19,509.462 6.68%
Sheri C. Sandler Lead Trust
UA DTD 03/19/1997
151 Central Park W. #6N
New York, NY 10023-1514
As of the Record Date, the officers and Directors of the Fund as a
group owned less than 1% of each class of the Fund's outstanding shares.
The Fund provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for the Fund and a copy of any more recent semiannual report, without
charge, by calling the Fund at 1-800-927-2874 or by writing to the Fund at 466
Lexington Avenue, New York, New York 10017.
PROPOSAL: APPROVAL OF THE LIQUIDATION AND
DISSOLUTION OF THE FUND
Background
The Fund began operations on September 8, 1998 as a Maryland
corporation.
The Fund maintains long positions in stocks that the manager regards as
attractive and short positions in stocks that the manager has identified as
unattractive. The Fund seeks to minimize net exposure to the general U.S. equity
market and maintain a neutral exposure to any particular industry or
capitalization range.
CSAM receives a monthly advisory fee at an annual rate of 1.50%, as
adjusted pursuant to the application of an adjustment formula based upon the
Fund's investment performance as compared to the Salomon Smith Barney 1-Month
U.S. Treasury Bill Index. From time to time CSAM or its affiliate, CSAMSI, may
waive fees payable to them in whole or in part. Any such waiver will reduce the
expenses of the Fund, and accordingly, have a favorable impact on its
performance.
Reasons for the Proposal
Notwithstanding the marketing of the Fund's shares, growth in the
Fund's assets has been slow. During the period from commencement of operations
through October 17, 2001, assets reached a level of only $4,583,814.99 for the
Fund. Marketing efforts, including the waiver of fees by Fund service providers
and the assumption of Fund expenses by CSAM, did not significantly increase the
size of the Fund.
Sales of the Fund's shares have not been sufficient to allow the Fund
to reach a size adequate, in the judgment of the Board, to spread expenses over
a sufficient asset base to realize a satisfactory Fund expense ratio. Since the
4
inception of the Fund, CSAM and CSAMSI have waived all or a portion of their
fees and CSAM has assumed a significant portion of the expenses of the Fund. In
addition PFPC, the Co-Administrator to the Fund, has waived all or a portion of
its fees. In the absence of such waivers and assumption, the Fund's return to
shareholders would have been significantly lower.
After reviewing current market conditions, the relatively unique
investment strategy of the Fund, the relatively small size of the Fund and the
time required to effect a merger or transfer of assets of the Fund, management
of the Fund believed that the expense of a merger with or transfers of assets to
another mutual fund would be greater than the benefits stockholders of the Fund
could expect to realize from such a transaction, even if a fund with a
comparable investment focus that would be willing to engage in such a
transaction could be identified.
At a July 30, 2001 meeting of the Board of Directors of the Fund, the
Board reviewed the expenses which had been assumed by CSAM during the life of
the Fund, the efforts and expenses of CSAMSI, the Fund's distributor, to
distribute shares of the Fund, and the effect of the operating expenses on the
historic and anticipated returns of shareholders. The Board considered that CSAM
had not been able to collect or retain any significant fees during the life of
the Fund, 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
and willingness of CSAM to service the needs of the Fund would likely be
impaired. For the most recent fiscal year, the Fund's total expenses were:
Common Institutional
Class Class
Shares Shares
-----------------------------------------------------------------------------------
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees 1.50% 1.50%
Service (12b-1) fees 0.25% NONE
Other expenses 4.44% 4.09%
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Total annual fund operating expenses 6.19% 5.59%
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Fee waiver and expense reimbursement by CSAM* 2.39% 2.15%
-----------------------------------------------------------------------------------
Net annual operating expenses 3.80% 3.44%
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* CSAMSI and its predecessor Counselors Fund Securities, Inc. ("CFSI") waived
a portion of its administration fees amounting to $1,060 for the year ended
8/31/00. In addition, CSAM reimbursed expenses amounting to $59,965 for the
year ended 8/31/00.
The Board concluded that an increase in Fund expenses attributable to
the likely discontinuance of the fee waivers and assumption of the expenses at
some point in the future, especially when added to the expenses of the Fund
presently paid directly by the Fund, would significantly reduce the Fund's
return. In addition, the CSAM Structured Equity Team, consisting of Eric Remole,
Marc E.
5
Bothwell and Michael A. Welhoelter, who are responsible for the Fund's
day-to-day investments will be leaving CSAM's employ on October 31, 2001. The
Board considered the unique investment expertise required to manage a fund
having a long-short market neutral strategy and the impact of the absence of the
portfolio management team on CSAM's ability to provide advisory services to the
Fund. After deliberating, the Board concluded that it would be in the best
interests of the shareholders of the Fund to liquidate the Fund promptly.
Accordingly, at the July 30th meeting of the Board of Directors of the
Fund, the Directors approved the liquidation and dissolution of the Fund.
Following that date, two additional actions were taken in anticipation of the
liquidation of the Fund. First, on October 2, 2001 the Board declared a dividend
of $.26 per common class share and $.28 per institutional class share,
consisting of substantially all of the Fund's net investment income from the
beginning of the Fund's fiscal year through that date, payable to shareholders
of record in those respective classes on October 5, 2001. Second, the Fund
liquidated all of its equity holdings and now holds only cash and cash
equivalents.
Plan of Liquidation and Dissolution
The Board of Directors has approved the Plan of Liquidation and
Dissolution (the "Plan") attached as Exhibit A, which is summarized below.
1. Adoption of the Plan and Termination of Business Operations. The
effective date of the Plan (the "Effective Date") shall be the date on
which the Plan is adopted by shareholders. The Fund will cease to
conduct business as soon as reasonably practicable following the
Effective Date.
2. Liquidation and Distribution of Assets. As soon as practicable
after the Effective Date, depending on market conditions and consistent
with the terms of the Plan, CSAM shall have authority to engage in such
transactions as may be appropriate for the Fund's liquidation and
dissolution. The Fund shall set aside a reserve for any liabilities,
including contingent liabilities, that it may incur.
3. Distribution to Shareholders. As soon as practicable after the
Effective Date, the Fund shall liquidate and distribute pro rata on the
date of liquidation to its shareholders of record as of the close of
business on December 19, 2001 all of its remaining assets and pay a
special dividend comprising all of the Fund income accrued to that
point, in complete cancellation and redemption of all outstanding
shares of the Fund.
4. Amendment or Abandonment of the Plan. The Board is authorized to
modify or amend the Plan at any time without shareholder approval if it
determines that such action would be in the best interests of the Fund
and shareholders. However, any amendment which the Board determines
would be materially and adversely prejudicial to the interests of
shareholders will be submitted to the shareholders for approval. In
6
addition, the Board may abandon the Plan without approval at any time
if it determines this to be in the best interests of the Fund and
Shareholders.
5. Expenses. The expenses incurred in carrying out the terms of the Plan
shall be borne by CSAM or its affiliates.
General Tax Consequences
Each shareholder that receives a liquidating distribution will
recognize taxable gain or loss for federal income tax purposes equal to any
difference between the amount of the distribution over the shareholder's tax
basis in Fund shares. Assuming that the shareholder 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 or loss depending on the shareholder'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 or capital gains from the sale of its assets.
If the shareholders do not approve the Plan, the Board will meet to
consider what, if any, steps to take in the interest of shareholders.
This summary is based on the tax laws and regulations in effect on the
date of this proxy statement, all of which are subject to change by legislative
or administrative action, possibly with retroactive effect. The discussion
herein does not address the particular federal income tax consequences that may
apply to certain shareholders such as trusts, estates, tax-exempt organizations,
qualified plans, individual retirement accounts, nonresident aliens, or other
foreign investors. This summary does not address the state, foreign or local tax
consequences of a shareholder's receipt of the liquidating distributions or the
liquidation of the Fund.
Shareholders are free to redeem their shares without a redemption fee
prior to the Effective Date of the Plan.
7
THE DIRECTORS OF THE FUND RECOMMEND
APPROVAL OF THE PLAN.
Description of Credit Suisse Asset Management, LLC
CSAM provides discretionary and non-discretionary portfolio management
services to a wide variety of individual and institutional accounts, including,
but not limited to, banks or thrift institutions, retirement plans, pension and
profit-sharing trusts, estates, charitable organizations, corporations, and
other business entities, registered investment companies and unregistered
domestic and offshore funds.
CSAM is an indirect wholly-owned subsidiary of Credit Suisse Group
("CSG"). CSG is a global financial services company, providing a comprehensive
range of banking and insurance products. Active on every continent and in all
major financial centers, CSG comprises five business units -- Credit Suisse
Asset Management (asset management), of which CSAM is a member; Credit Suisse
First Boston (investment banking); Credit Suisse Private Banking (private
banking); Credit Suisse (retail banking); and Winterthur (insurance). CSG has
approximately $680 billion of global assets under management and employs
approximately 62,000 people worldwide. The principal business address of CSG is
Paradeplatz 8, CH 8070, Zurich, Switzerland. Credit Suisse Asset Management,
which is the institutional asset-management and mutual-fund arm of CSG, manages
$86 billion in the U.S. and, together with its global affiliates, manages assets
of over $280 billion in 14 countries, as of June 30, 2001.
CSAM's sole member is CSAM Americas Holding Corp. located at 466
Lexington Avenue, New York, New York 10017, which is wholly-owned by Credit
Suisse First Boston, Inc., located at 11 Madison Avenue, New York, New York
10010, which is indirectly wholly-owned by CSG.
The Distributor and Co-Administrators
CSAMSI is the principal underwriter and co-administrator of the Fund.
Like CSAM, its principal office is located at 466 Lexington Avenue, New York,
New York 10017. The Fund also employs PFPC, Inc. as co-administrator. PFPC
Inc.'s principal business address is 400 Bellevue Parkway, Wilmington, Delaware
19809.
Required Vote
Approval of the Plan requires the affirmative vote of a majority of the
votes entitled to be cast at the Special Meeting. All shareholders holding
shares of the Fund will vote together as a single class. The Directors of the
Fund, including the non-interested Directors, recommend that the shareholders of
the Fund vote in favor of this Proposal.
8
ADDITIONAL INFORMATION
Proposals of Shareholders
The Fund does not hold regular shareholder meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a shareholder
meeting subsequent to the Special Meeting, if any, should send their written
proposals to the Secretary of the Fund at the address set forth on the cover of
this Proxy Statement. Proposals must be received within a reasonable time before
the solicitation of proxies for such Special Meeting. The timely submission of a
proposal does not guarantee its inclusion.
Other Matters to Come Before the Special Meeting
The Fund does not intend to present any other business at the Special
Meeting, nor is the Fund aware that any shareholder intends to do so. If,
however, any other matters are properly brought before the Special Meeting, the
persons named in the accompanying proxy card will vote thereon in accordance
with their judgment.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE THEREFORE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
By order of the Board of Directors,
/s/ Hal Liebes
Hal Liebes
Secretary
9
Exhibit A
PLAN OF LIQUIDATION AND DISSOLUTION
OF
CREDIT SUISSE WARBURG PINCUS LONG-SHORT MARKET
NEUTRAL FUND, INC.
Credit Suisse Warburg Pincus Long-Short Market Neutral Fund, Inc., a Maryland
corporation (the "Fund"), shall proceed to a complete liquidation of the Fund
according to the procedures set forth in this Plan of Liquidation and
Dissolution (the "Plan"). The Plan has been approved by the Board of Directors
of the Fund (the "Board") as being advisable and in the best interests of the
Fund and its shareholders. The Board has directed that this Plan be submitted to
the holders of the outstanding voting shares of the Fund (each a "Shareholder"
and, collectively, the "Shareholders"), voting in the aggregate without regard
to class, for their adoption or rejection at a special meeting of shareholders
and has authorized the distribution of a Proxy Statement (the "Proxy Statement")
in connection with the solicitation of proxies for such meeting. Upon
Shareholder approval of the Plan, the Fund shall voluntarily dissolve and
completely liquidate in accordance with the requirements of the Maryland General
Corporation Law (the "MGCL") and the Internal Revenue Code of 1986, as amended
(the "Code"), as follows:
1. Adoption of Plan. The effective date of the Plan (the "Effective
Date") shall be the date on which the Plan is adopted by the
Shareholders.
2. Liquidation and Distribution of Assets. As soon as practicable after
the Effective Date and by January 11, 2001 (the "Liquidation Period"),
or as soon thereafter as practicable depending on market conditions
and consistent with the terms of this Plan, the Fund and the Fund's
investment adviser, Credit Suisse Asset Management, LLC ("CSAM"),
shall have the authority to engage in such transactions as may be
appropriate for the Fund's liquidation and dissolution, including,
without limitation, the consummation of the transactions described in
the Proxy Statement.
3. Provisions for Liabilities. The Fund shall pay or discharge or set
aside a reserve fund for, or otherwise provide for the payment or
discharge of, any liabilities and obligations, including, without
limitation, contingent liabilities.
4. Distribution to Shareholders. As soon as practicable after the
Effective Date, the Fund shall liquidate and distribute pro rata on
the date of liquidation (the "Liquidation Date") to its shareholders
of record as of the close of business on December 19, 2001 all of the
remaining assets of the Fund and pay a special dividend comprising all
of the fund income accrued to that point, in complete cancellation and
redemption of all the outstanding shares of the Fund, except for cash,
bank deposits or cash equivalents in an estimated amount necessary to
(i) discharge any unpaid liabilities and obligations of the Fund on
the Fund's books on the
A-1
Liquidation Date, including, but not limited to, income dividends and
capital gains distributions, if any, payable through the Liquidation
Date, and (ii) pay such contingent liabilities as the Board shall
reasonably deem to exist against the assets of the Fund on the Fund's
books.
5. Notice of Liquidation. As soon as practicable after the Effective
Date, the Fund shall mail notice to the appropriate parties that this
Plan has been approved by the Board and the Shareholders and that the
Fund will be liquidating its assets, to the extent such notice is
required under the MGCL.
6. Articles of Dissolution. Subject to shareholder approval, within the
Liquidation Period and pursuant to the MGCL, the Fund shall prepare
and file Articles of Dissolution (the "Articles") with and for
acceptance by the Maryland State Department of Assessments and
Taxation.
7. Amendment or Abandonment of Plan. The Board may modify or amend this
Plan at any time without Shareholder approval if it determines that
such action would be advisable and in the best interests of the Fund
and its Shareholders. If any amendment or modification appears
necessary and in the judgment of the Board will materially and
adversely affect the interests of the Shareholders, such an amendment
or modification will be submitted to the Shareholders for approval. In
addition, the Board may abandon this Plan without Shareholder approval
at any time prior to the filing of the Articles if it determines that
abandonment would be advisable and in the best interests of the Fund
and its Shareholders.
8. Powers of Board and Officers. The Board and the officers of the Fund
are authorized to approve such changes to the terms of any of the
transactions referred to herein, to interpret any of the provisions of
this Plan, and to make, execute and deliver such other agreements,
conveyances, assignments, transfers, certificates and other documents
and take such other action as the Board and the officers of the Fund
deem necessary or desirable in order to carry out the provisions of
this Plan and effect the complete liquidation and dissolution of the
Fund in accordance with the Code and the MGCL, including, without
limitation, filing of a Form N-8F with the Securities and Exchange
Commission, withdrawing any state registrations of the Fund and/or its
shares, withdrawing any qualification to conduct business in any state
in which the Fund is so qualified and the preparation and filing of
any tax returns.
9. Termination of Business Operations. As soon as practicable upon
adoption of this Plan, the Fund shall cease to conduct business except
as shall be necessary in connection with the effectuation of its
liquidation and dissolution.
10. Expenses. The expenses of carrying out the terms of this Plan shall be
borne by CSAM or its affiliates, whether or not the liquidation
contemplated by this Plan is effected.
A-2
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
----------------------------------------
Credit Suisse Warburg Pincus
Long-Short Market Neutral Fund, Inc.
----------------------------------------
VOTE THIS CARD TODAY
By mail; phone (1-800-714-3312); fax (212-269-2796); or
ONLINE at www.warburg.com (click on the proxy button)
CONTROL NUMBER:
Please be sure to sign and date this Proxy. Date ______________
____________________________ __________________________
Shareholder sign here Co-owner sign here
For Against Abstain
1.To approve the liquidation and dissolution of [ ] [ ] [ ]
the Credit Suisse Warburg Pincus Long-Short
Market Neutral Fund, Inc.
Mark box at right if an address change or comment has been [ ]
noted on the reverse side of this card.
RECORD DATE SHARES:
CREDIT SUISSE WARBURG PINCUS
LONG-SHORT MARKET NEUTRAL FUND, INC
PROXY SOLICITED BY THE BOARD OF DIRECTORS
Special Meeting of Shareholders to be held on December 19, 2001 at 3:00 p.m.
The undersigned holder of shares of the Fund referenced above hereby appoints
Hal Liebes and Gregory Bressler, proxies with full powers of substitution and
revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of the Fund to be held at the offices of the Fund, 466
Lexington Avenue, New York, New York 10017 at the date and time indicated above
and at any adjournments thereof. The undersigned hereby acknowledges receipt of
the enclosed Notice of Special Meeting and Proxy Statement and hereby instructs
said attorneys and proxies to vote said shares as indicated herein. In their
discretion, the proxies are authorized to vote on such other business as may
properly come before the Special Meeting. A majority of the proxies present and
acting at the Special 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.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name appears on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
____________________________________ ______________________________
____________________________________ ______________________________
____________________________________ ______________________________