SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
[ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
------------------
EACM Select Managers Equity Fund
------------------------------------------------
(Name of Registrant as Specified in its Charter)
------------------
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:
(4) Proposed maximum aggregate value of transactions:
(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:
-2-
- --------------------------------------------------------------------------------
EACM SELECT MANAGERS EQUITY FUND
200 CONNECTICUT AVENUE, SIXTH FLOOR
NORWALK, CONNECTICUT 06854-1958
- --------------------------------------------------------------------------------
CONSENT STATEMENT
This Consent Statement contains the information you should know before
acting on the proposal summarized below.
INTRODUCTION
This Consent Statement is being used by the Board of Trustees (the
"Board") of EACM Select Managers Equity Fund (the "Fund") to solicit consents
for approval of the proposal set forth herein to liquidate and terminate the
Fund (the "Termination"). The Fund is an open-end diversified management
investment company whose objective is long-term capital appreciation. The Fund
invests primarily in common stocks, and its assets are managed by multiple
subadvisors.
This Consent Statement and the enclosed Consent Form are being mailed to
shareholders on or about September 21, 2004. The Fund will furnish, without
charge, a copy of its most recent annual report and more recent semi-annual
report, if any, to a shareholder upon request. Shareholders may request a copy
of these reports by writing to the Fund at the address set forth above,
attention: Amy Cuccio, or by calling 203-854-7024 (call collect). The annual
report for the Fund for its most recently completed fiscal year was previously
mailed to shareholders.
WHO IS ELIGIBLE TO VOTE
Shareholders of record of the Fund as of the close of business on
September 20, 2004 (the "Record Date") are entitled to act on the proposal
presented herein. Each share is entitled to one vote. Consents may be withdrawn
at any time prior to the date on which consents of shareholders representing
two-thirds of the outstanding shares of the Fund become effective by delivering
written notice to the Fund. Upon the receipt of consents from shareholders
representing two-thirds of the outstanding shares, the proposal will be deemed
adopted. All shares held by a shareholder will be voted as specified by his or
her Consent Form. If you sign a Consent Form, but do not fill in a vote, you
will be deemed to have consented to the proposal to liquidate and terminate the
Fund. If you do not return your Consent Form or you return a form marked
"abstain", you will have effectively not consented to the proposal.
Brokerage firms holding shares in "street name" have the authority to act
with respect to customers' shares on certain "routine" matters; however,
approval of the Termination is not considered to be a "routine" matter.
Therefore, if your shares are held of record by your brokerage firm, your broker
does not have the authority to consent or withhold consent to the
proposal without your instruction. If you fail to provide the broker with
instructions on how to act, the broker will be required to submit a consent form
without specifying how you wish to act with respect to this matter, which will
result in a "broker non-vote." Broker non-votes will have the effect of a vote
against the proposal.
- --------------------------------------------------------------------------------
PROPOSAL 1
APPROVAL OF THE TERMINATION
- --------------------------------------------------------------------------------
At a meeting held on August 31, 2004, the Board, upon the recommendation
of Evaluation Associates Capital Markets, Incorporated, the Funds' investment
adviser (the "Manager"), determined that it would be in the best interests of
the Fund and its shareholders if the Fund were liquidated and terminated in
accordance with the Fund's organizational documents and Massachusetts law.
Accordingly, the Board approved the liquidation and termination of the Fund,
subject to shareholder approval. Termination of the Fund would include
liquidation of the Fund's assets and distribution to Fund shareholders of all of
the proceeds of the liquidation. If the proposal is approved by shareholders of
the Fund, the net proceeds (after deduction for amounts estimated to be
necessary to satisfy the debts and liabilities of the Fund) will be paid pro
rata to those shareholders who remain invested in the Fund as of the Termination
Date (as defined below), in cash, as promptly as possible after the Termination
Date.
Shareholder approval of the Fund's termination is required before the Fund
can be terminated. For the reasons set fort below, the Board has unanimously
recommended that shareholders vote to approve this Proposal 1 calling for the
liquidation and termination of the Fund.
REASONS FOR THE TERMINATION.
On June 10, 2004, the Manager, EACM Partners, L.P., the parent entity of
the Manager (the "Parent"), and Evaluation Associates Capital Markets, LLC
(collectively, the "Sellers") entered into a Purchase Agreement with EACM
Advisors, LLC (the "Buyer"), an indirect wholly-owned subsidiary of the Mellon
Financial Corporation, which provided for the sale to the Buyer of substantially
all of the assets of the Sellers relating to the fund of funds investment
management business of the Sellers (the "Mellon Transaction"). The Mellon
Transaction closed effective July 31, 2004. The Board originally intended to ask
the shareholders of the Fund at a shareholders' meeting to be held on December
17, 2004 to hire the Buyer as the advisor to the Fund. However, on August 27,
2004, the Buyer notified the Board in writing that it was no longer in a
position to enter into a management agreement with the Fund.
Following the notification from the Buyer on August 27, 2004, the Manager
also informed the Fund that it would terminate its Management Agreement with the
Fund as of
-2-
October 29, 2004, the end of the 60-day notice period required for termination
of the Management Agreement by the Manager. The Manager informed the Fund that
in light of its changed circumstances resulting from the Mellon Transaction,
continuing service as advisor to the Fund would no longer be economically
feasible for the Manager. The Trustees considered the following factors among
others. The Manager was instrumental in forming the Fund in 1995 and the
Trustees believed most of the shareholders invested in the Fund because of the
multi-manager investment strategies that the Manager had developed and pursued.
The Trustees also believed that it was likely that once the Manager's decision
to resign was announced, many of the current shareholders would redeem their
shares and operating the Fund economically with significantly reduced assets
would be difficult. The Trustees noted that the Fund has had less than $50
million in assets for over a year, that the Manager heavily subsidized the
expenses of the Fund in order to maintain an expense ratio of 1.25 percent of
the Fund's average daily net assets and that for the last fiscal year of the
Fund the Manager netted approximately $4,000 in fees from the Fund not
considering its overhead or the salaries of its employees serving the Fund.
Thus, the Trustees concluded that it would be more practical for the Fund to be
liquidated rather than for them to attempt to find another advisor prior to
October 29, 2004.
Following receipt of the notices from the Buyer and the Manager, on August
31, 2004, the Board, after due consideration of the relevant information, with a
majority of the trustees who are not "interested persons" as defined in the
Investment Company Act of 1940, as amended, also voting separately, determined
to terminate the Fund as provided in the Fund's Declaration of Trust, as
amended, by signing an appropriate instrument in writing and soliciting the
consent thereto by the holders of not less than two-thirds of the shares of the
Fund. The Board then directed the officers of the Fund to prepare and mail this
Consent Statement.
MECHANICS OF THE TERMINATION.
1. APPROVAL DATE. Approval of the Termination will become effective on
the date that the holders of two-thirds of the outstanding shares of the Fund
have consented to the Termination (the "Approval Date"), provided, however, that
the Fund will not use such consents to effect corporate action prior to October
4, 2004.
Following this approval, on a date ("Termination Date") chosen by officers
of the Fund, which shall be on or after October 4, 2004, the Fund (i) will mail
a notice to all Shareholders of the approval and the Termination Date, (ii) will
cease to invest in accordance with its investment objective and will sell the
portfolio securities it owns in order to convert the Fund's assets to cash or
cash equivalents; (iii) 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 shareholders after the payment to (or
reservation of assets for payment to) all creditors of the Fund; and (iv) will
terminate in accordance with the laws of the Commonwealth of Massachusetts and
the Declaration of Trust of the Fund.
2. LIQUIDATING DISTRIBUTION. As soon as practical following the
liquidation of the Fund's assets, the Fund will mail the following to each
shareholder who remains a shareholder of record on the Termination Date: (i) a
liquidation distribution in cash equal to the shareholder's proportionate
interest in the net assets of the Fund (after giving effect to amounts
-3-
considered necessary to satisfy the Fund's liabilities); and (ii) information
concerning the sources of the liquidating distribution.
3. EXPENSES. The Manager will bear all expenses incurred by the Fund in
carrying out the Termination, including but not limited to, all printing, legal,
accounting, custodian and transfer agency fees, and the expenses of any reports
to or meeting of shareholders. The total liabilities of the Fund prior to the
liquidating distribution include the dissolution expenses referred to above and
amounts accrued, or anticipated to be accrued, for custodial and transfer agency
services, legal, audit and Trustees fees as well as costs incurred in the
preparation and mailing of consent solicitation materials and related printing
costs. Any expenses and liabilities attributed to the Fund subsequent to the
mailing of the liquidating distribution and for which a reserve has not been
established will also be borne by the Manager.
4. IMPLEMENTATION OF TERMINATION. After the date of mailing of the
liquidating distribution, the termination of the Fund will be effected. The
Trustees shall have the authority to authorize such variations from these
procedures as may be necessary or appropriate to marshal the assets of the Fund
and to effect the complete liquidation and termination of the existence of the
Fund.
5. CESSATION OF RIGHTS OF SHAREHOLDERS. Shares of the Fund
automatically liquidated on the Termination Date will no longer be deemed
outstanding as of such time and all rights with respect to those shares will
cease at such time, except the right to receive the liquidation distribution.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.
Each shareholder who receives a liquidating distribution will recognize
gain (or loss) for federal income tax purposes equal to the amount by which the
cash distributed exceeds (or is less than) the shareholder's tax basis in the
Fund shares. Assuming that the shareholder holds such shares as capital assets,
such gain or loss generally will be treated as long-term capital gain or loss if
the shares were held for more than one year and otherwise generally will be
treated as short-term capital gain or loss.
Notwithstanding the foregoing, any loss realized by a shareholder in
respect of Fund shares with a tax holding period of six months or less will be
treated as long-term capital loss to the extent of any capital gain dividends
with respect to such shares. The federal income tax treatment that a Fund
shareholder would receive if such shareholder's entire interest in the Fund were
redeemed prior to the liquidation generally would be identical to the federal
income tax treatment described above to a shareholder in liquidation of the
shareholder's interest in the Fund.
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
-4-
LIQUIDATING DISTRIBUTION AS DISCUSSED HEREIN, INCLUDING ANY STATE, LOCAL AND
FOREIGN 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.
If the holders of two-thirds of the shares of the Fund do not approve the
termination of the Fund, the Fund will continue to exist as a registered
investment company in accordance with its stated objective and policies. In such
a case, the Board would consider what, if any, steps to take concerning the Fund
and its shareholders.
Shareholders are free to redeem their shares prior to the date on which
shareholders approve the liquidation and termination of the Fund.
REQUIRED VOTE.
Approval of the Proposal will require the consent of holders of two-thirds
of the outstanding voting shares of the Fund on the Approval Date.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES OF THE FUND
UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND VOTE IN
FAVOR OF PROPOSAL 1.
-5-
- --------------------------------------------------------------------------------
INFORMATION CONCERNING THE SHAREHOLDERS
- --------------------------------------------------------------------------------
OUTSTANDING SHARES
As of September 20, 2004 (the "Record Date"), there were _______ common
shares of beneficial interest of the Fund outstanding. Only shareholders of
record as of the Record Date are entitled to act on the proposal.
OWNERSHIP OF SHARES OF THE FUND
As of September 17, 2004, the following persons or entities owned
beneficially or of record more than 5% of the outstanding shares of the Fund:
Name and Address of Shareholder Share Ownership as
Percentage of Outstanding Shares
CHARLES SCHWAB & CO., INC. x.x%
100 Montgomery Street
San Francisco, CA 94118
RADFORD UNIVERSITY FOUNDATION, INC. x.x%
7512 Lee Highway
Radford, VA 24142
ING RELIASTAR x.x%
151 Farmington Avenue
Hartford, CT 06156-0001
MARY D. WALSH TRUST x.x%
3392 Barrow Island Road
Jonathan's Island
Juniper, FL 33477-1379
SANDY HILL FOUNDATION x.x%
330 South Street
Morristown, NJ 07962-1975
CARMEN M. NEVARES x.x%
Green Valley K-3
Garden Hills, Guaynado, PR 00966
-6-
AMERICAN EXPRESS TRUST CO. 6.97%
996 AXP Financial Center
Minneapolis, MN 55474-0009
As of September 17, 2004, none of the Trustees and executive officers of
the Trust owned beneficially or of record, as a group, more than 1% of the
outstanding shares of the Fund. Keith Stransky, a trustee and officer of the
Fund, and Andrew R. Mylott, an officer of the Fund, are on the committee
overseeing the Parent's role as Plan Administrator for the EACM 401(k) Plan. As
of September 17, 2004, the EACM 401(k) Plan owned approximately x.x% of the
Funds' shares indirectly through its trustee and custodian, Charles Schwab & Co.
INFORMATION ABOUT THE FUNDS' SERVICE PROVIDERS
The Manager serves as the Fund's investment adviser. The Manager selects,
supervises, and allocates assets among the Fund's subadvisers. The Fund
currently has five subadvisers: Chartwell Investment Partners, Iridian Asset
Management LLC, Goldman Sachs Asset Management, L.P., Mastrapasqua Asset
Management, Inc. and Siphron Capital Management. EACM Securities Inc. serves as
the Fund's principal underwriter. Each of the Manager and EACM Securities Inc.
are located at 200 Connecticut Avenue, Sixth Floor, Norwalk, Connecticut
06854-1958. Van Eck Associates Corporation, 99 Park Avenue, New York, New York
10016 serves as the Fund's administrator.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and does
not currently intend to hold an annual meeting of shareholders in 2004 whether
or not the Fund is liquidated. Shareholder proposals to be presented at any next
meeting of shareholders of a Fund, whenever held, must be received at the Funds'
principal executive offices, 200 Connecticut Avenue, Sixth Floor, Norwalk,
Connecticut 06854-1958, a reasonable time prior to any such Trustees'
solicitation of proxies for any such meeting. The submission by a shareholder of
a proposal for inclusion in a proxy statement does not guarantee that it will be
included. Shareholder proposals are subject to certain regulations under the
federal securities laws.
METHOD OF SOLICITATION AND EXPENSES
The cost of preparing, assembling and mailing this Consent Statement and
the accompanying Consent Form, as well as the costs associated with the consent
solicitation, will be borne by the Manager. In addition to soliciting consents
by mail, the Manager may have one or more of its officers, the Fund's officers,
representatives or compensated third-party agents, aid in the solicitation of
consents by personal interview or telephone and facsimile and may request
brokerage houses and other custodians, nominees and fiduciaries to forward
consent soliciting material to the beneficial owners of the shares held of
record by such persons.
-7-
Persons holding shares as nominees will be reimbursed by the Manager, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
September 21, 2004
-8-
EACM SELECT MANAGERS EQUITY FUND
CONSENT FORM
This Consent Form is being solicited by the Board of Trustees of EACM
Select Managers Equity Fund, a Massachusetts business trust (the "Fund").
The Board of Trustees requests that the Fund's shareholders take the
action indicated below with respect to the proposal set forth below. The
undersigned acknowledges that s/he has received the Consent Statement dated
September 21, 2004 accompanying this Consent Form, which describes in further
detail the proposal and the action to be taken. Please mark one of the choices
to take action with respect to such proposal.
1. To approve the liquidation and termination of EACM Select Mangers
Equity Fund.
CONSENT: ______________ WITHHOLD CONSENT: ______________ ABSTAIN: ______________
THE ACTION TAKEN PURSUANT TO THIS CONSENT FORM WILL APPLY TO ALL SHARES HELD BY
YOU. IF YOU DO NOT RETURN YOUR CONSENT FORM, YOU WILL BE DEEMED TO HAVE NOT
CONSENTED TO THE PROPOSAL. IF THE CONSENT FORM IS COMPLETED AND RETURNED, BUT
THE LINES ABOVE ARE NOT MARKED, YOU WILL BE DEEMED TO HAVE CONSENTED TO THE
PROPOSAL.
TO APPROVE THE PROPOSAL, PLEASE SIGN, DATE AND MAIL THIS CONSENT FORM TO THE
ADDRESS SET FORTH BELOW.
Please return this Consent Form by October 4, 2004 in the postage paid
addressed envelope included with this mailing. If for any reason you do not have
an envelope, kindly send this Consent Form to the Fund at c/o Evaluation
Associates Capital Markets, Incorporated, Attention: Amy Cuccio, 200 Connecticut
Avenue, Sixth Floor, Norwalk, Connecticut 06845-1958 or by facsimile at
203-854-7002. If you have any questions please contact Amy Cuccio at
203-854-7078 (call collect).
Signature instructions: For joint accounts, all joint owners should sign.
When signing as executor, administrator, trustee, guardian, etc., please give
full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership's name by authorized person.
Signature (Title, if any) ___________________________________________________
Signature (if jointly held) ___________________________________________________
Print name of Shareholder ___________________________________________________
Date ___________________________________________________
(Very Important - - Please write date of signature)
-2-