SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
/_/ Preliminary Proxy Statement /_/ Confidential, For Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/_/ Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
PAX WORLD BALANCED FUND, INCORPORATED
------------------------------------------------------------------------INC.
(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 no.:
-------------------------------------------------------------------------------------------------------------------------------
(3) Filing party:
-------------------------------------------------------------------------------------------------------------------------------
(4) Date filed:
-------------------------------------------------------------------------------------------------------------------------------
-2-
[PAX WORLD BALANCED FUND LOGO]
PAX WORLD BALANCED FUND, INCORPORATEDINC.
--------------
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
--------------
Thursday, June 8, 2000THURSDAY, JUNE 14, 2001
TABLE OF CONTENTS
Page
----
President's Letter ........................................................ 1Letter........................................................... 3
Notice of Annual Meeting .................................................. 3Meeting..................................................... 4
Proxy Statement ...........................................................Statement.............................................................. 5
Proposal 1 - To Elect a Board of Eight Directors .......................... 7Directors............................. 6
Proposal 2 - To Ratify the Selection of Pannell Kerr Forster PC
as Independent Public Accountants of the Fund ................ 10
Proposal 3 - To Amend the Certificate of Incorporation of the Fund
to Change the Name of the Fund to "Pax World Balanced
Fund, Inc." .................................................. 11
Proposal 4 - To Amend the By-laws of the Fund and to Approve Certain
Changes to the Fund's Fundamental Investment Policies to
Prohibit the Fund from Investing in Companies Appearing on the
United States Department of Defense List of 100 Largest
Contractors, if 5% or more of the Gross Sales of such
Companies are Derived from Contracts with the United States
Department of Defense ........................................Fund................... 12
Proposal 5 - To Amend the By-laws of the Fund and to Approve Certain
Changes to the Fund's Fundamental Investment Policies to
Permit the Fund to Invest up to a total of 25% of the Value
of its Assets in Securities of Foreign Issuers ............... 14
Other Business ............................................................ 16Business............................................................... 12
Expenses of Proxy Solicitation ............................................ 16Solicitation............................................... 12
Additional Information .................................................... 17Information....................................................... 13
PAX WORLD BALANCED FUND, INCORPORATEDINC.
222 STATE STREET
PORTSMOUTH, NH 03801-3853
To the Pax World Balanced Fund Shareholders:
As an investor in the Pax World Balanced Fund, IncorporatedInc. (the "Fund"), you are
cordially invited to attend the annual meeting (the "Meeting") of shareholders
of the Fund (the "Shareholders") to be held at 10:45 a.m. on Thursday, June 8, 200014,
2001 at the State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02110. The purpose of the Meeting is for the Shareholders (i) to elect a Board
of eight Directors, each to hold office until the next Annual Meeting of the
Board of Directors of the Fund or until a successor shall have been chosen and
shall have qualified, (ii) to ratify the selection of Pannell Kerr Forster PC as
the independent public accountants of the Fund for the year ending December 31,
2000,2001, and (iii) to amend the Certificate of Incorporation of the
Fund to change the name of the Fund to "Pax World Balanced Fund, Inc.," (iv) to
amend the By-laws of the Fund and to approve certain changes to the Fund's
fundamental investment policies to prohibit the Fund from investing in companies
appearing on the United States Department of Defense list of 100 largest
contractors, if 5% or more of the gross sales of such companies are derived from
contracts with the United States Department of Defense, (v) to amend the By-laws
of the Fund and to approve certain changes to the Fund's fundamental investment
policies to permit the Fund to invest up to a total of 25% of the value of its
assets in securities of foreign issuers, and (vi) to transact such other business as may properly come before the
Meeting.
In this year's proxy, we are asking you to vote on three amendments -
one to the Fund's Certificate of Incorporation and two that affect the Fund's
By-laws and fundamental investment policies.
Proposal 3 is to change the name of the Fund to "Pax World Balanced
Fund, Inc." We have found that some shareholders and prospective shareholders
are unaware that the Fund is a balanced fund, and consequently may think they
are investing in a different type of fund. We believe that inserting the word
"Balanced" into the Fund's name will alleviate this confusion. Additionally, the
proposed name is consistent with how our other mutual funds are named: Pax World
Growth Fund, Inc., Pax World High Yield Fund, Inc., and Pax World Money Market
Fund, Inc.
Proposal 4 addresses a slight change to the Fund's social screens and,
therefore, a word of explanation is in order. Since the Fund's inception in
1971, it has been precluded from investing in any companies appearing on the
United States Department of Defense List of 100 Largest Contractors. However,
some companies on that list are not involved in military activities. For
example, there are health care, telecommunications and overnight package
delivery companies that appear on the list. We believe that excluding such
companies simply because they appear on the list has prevented the Fund's
portfolio manager from making certain investments which would be both
advantageous to the Fund's shareholders and consistent with
-1-
the Fund's goal of investing in companies providing goods and services that
improve the quality of life.
PLEASE BE ASSURED THAT THE FUND IS NOT ALTERING ITS LONG-STANDING
PRACTICE OF EXCLUDING FROM ITS PORTFOLIO COMPANIES THAT ARE IN ANY WAY ENGAGED
IN MILITARY ACTIVITIES. We will continue to adhere to our "zero tolerance"
policy with regard to such companies. We are merely seeking the ability to
invest in companies on the United States Department of Defense List of 100
Largest Contractors, provided that the following two criteria are met: (i) such
companies are not engaged to any degree in military activities, and (ii) such
companies do not derive 5% or more of their gross sales from contracts with the
United States Department of Defense. This policy is identical to the policy
employed by each of the other funds comprising the Pax World Fund Family.
Approval of Proposal 4, therefore, will standardize this social screen among all
of the Pax World funds.
Proposal 5 concerns the Fund's ability to invest in securities issued
by foreign companies. During the past year, the Fund identified several
attractive investment opportunities overseas, but was unable to take advantage
of them due to the Fund's 10% cap on foreign investments. Given the emerging
global economy, we fear that our inability to invest more than 10% of the value
of the Fund's assets in foreign investments unduly limits the portfolio
managers' ability to invest the Fund's assets and could potentially hurt the
Fund's return in the future. We are asking, therefore, for your approval to
increase the Fund's ability to invest in foreign issuers from 10% of the value
of the Fund's assets to a maximum of 25%.
In this regard, enclosed are (1) a Notice of Meeting, (2) a Proxy Statement
that describes the proposals that will be submitted to shareholders for approval
at the Meeting, and (3) a Proxy.
Although we look forward to seeing you at the Meeting, if you cannot attend
the Meeting, we ask that you complete, sign, date and return the accompanying
Proxy in the enclosed postage-paid envelope or vote by telephone or on the
internetInternet as described in the enclosed pamphlet as soon as possible. These
proposals are important and your vote is greatly appreciated.
Sincerely,
/s/ Thomas W. Grant
THOMAS W. GRANT
President
Pax World Fund, Incorporated
April 24, 2000
-2-19, 2001
Portsmouth, NH
-3-
PAX WORLD BALANCED FUND, INCORPORATEDINC.
222 STATE STREET
PORTSMOUTH, NH 03801-3853
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 8, 2000
--------------14, 2001
Notice is hereby given that the annual meeting (the "Meeting") of the
shareholders of Pax World Balanced Fund, IncorporatedInc. (the "Fund") will be held at 10:45
a.m. on Thursday, June 8, 200014, 2001 at the State Street Bank and Trust Company, 225
Franklin Street, Boston, MA 02110 for the following purposes:
(1) To elect a Board of eight Directors, each to hold office until the
next Annual Meeting of the Shareholders of the Fund or until a
successor shall have been chosen and shall have qualified;
(2) To ratify the selection by the Board of Directors of Pannell Kerr
Forster PC as the independent public accountants of the Fund for the
year ending December 31, 2000;2001; and
(3) To amend the Certificate of Incorporation of the Fund to change the
name of the Fund to "Pax World Balanced Fund, Inc.";
(4) To amend the By-laws of the Fund and to approve certain changes to
the Fund's fundamental investment policies to prohibit the Fund from
investing in companies appearing on the United States Department of
Defense List of 100 largest contractors, if 5% or more of the gross
sales of such companies are derived from contracts with the United
States Department of Defense;
(5) To amend the By-laws of the Fund and to approve certain changes to
the Fund's fundamental investment policies to permit the Fund to
invest up to a total of 25% of the value of its assets in securities
of foreign issuers; and
(6) To transact such other business as may properly come before such
annual meetingMeeting or any adjournment thereof.
The close of business on April 20, 200018, 2001 has been fixed as the record date
for the determination of shareholders of the Fund entitled to notice of and to
vote at the Meeting and any
-3-
adjournment or adjournments thereof. Only
shareholders of record at the close of business on such date are entitled to
notice of, and to vote at, the Meeting and any adjournment or adjournments
thereof.
By Order of the Board of Directors
/s/ Lee D. Unterman
LEE D. UNTERMAN
Secretary
April 24, 200019, 2001
Portsmouth, NH
IF YOU CANNOT ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR ON THE
INTERNET AS DESCRIBED IN THE ENCLOSED PAMPHLET.
-4-
PAX WORLD BALANCED FUND, INCORPORATEDINC.
222 STATE STREET
PORTSMOUTH, NH 03801-3853
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Pax World Balanced Fund, IncorporatedInc. (the "Fund") of proxies
to be used at the Annual Meeting of Shareholders to be held at 10:45 a.m. on
Thursday, June 8, 200014, 2001 at the State Street Bank and Trust Company, 225 Franklin
Street, Boston, MA 02110, and at any adjournment or adjournments thereof (the
"Meeting"), for the purposes set forth in the accompanying notice.
Shareholders of record at the close of business on April 20, 2000,18, 2001, the
record date, are entitled to notice of and to vote at the Meeting. As of such
date, there were 47,691,901.19956,019,314.488 shares of Common Stock of the Fund issued and
outstanding, the holders of which are entitled to one vote per share on all
matters brought before the Meeting. If you were a Shareholder as of said date,
you will be entitled to vote at the Meeting and your presence is desired. IF,
HOWEVER, YOU CANNOT BE PRESENT, THE BOARD OF DIRECTORS REQUESTS THAT YOU
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY OR VOTE BY TELEPHONE OR
ON THE INTERNET AS DESCRIBED IN THE ENCLOSED PAMPHLET FOR THIS PURPOSE IN ORDER TO INSURE A
QUORUM AT THE MEETING.
Representatives of Pannell Kerr Forster PC, the Company'sFund's independent public
accountants, are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement at the meetingMeeting if they desire to do so and are
expected to be available to respond to appropriate questions.
The persons named in the accompanying proxy, if properly executed and
returned and unless revoked, will vote the same FORfor Proposals 1, 2 3, 4, 5 and 63 as
indicated herein, unless the proxy contains contrary directions, in which case
the proxy will be voted as directed. If a proxy is executed and returned without
indicating any voting instructions, the shares of the Fund represented by the
proxy will be voted FOR Proposals 1, 2 3,
4, 5 and 6.3. Any shareholder of the Fund giving
a proxy prior to the Meeting may revoke it either by attending the Meeting and
voting his or her shares in person or by delivering to the Fund at the above
address prior to the date of the Meeting a letter of revocation or a later dated
proxy. In the event that the number of shares of the Fund represented at the
meetingMeeting of Shareholders on June 8, 200014, 2001 in person or by proxy is less than a
majority of the number of shares of the Fund issued and outstanding on the
record date, the persons named in the accompanying proxy will vote FOR an
adjournment of such meetingMeeting if a majority of the number of shares of the Fund
represented in person or by proxy at such meetingMeeting voted FOR any of the
Proposals, and otherwise, will vote AGAINST an adjournment of such meeting.Meeting.
This Proxy Statement has been mailed pursuant to instructions from the
executive offices of the Fund located in Portsmouth, New Hampshire and has been
sent through its transfer agent,
-5-
PFPC, Inc. The Fund's Annual Report for the fiscal year which ended December 31,
19992000 has already been mailed to Shareholders. Shareholders who desire an
additional copy of the Annual
-5-
Report may obtain it without charge by writing to
the Fund at 222 State Street, Portsmouth, NH 03801-3853, telephoning the Fund at
1-800-767-1729, visiting the Fund's web site at http://www.paxfund.com or visiting the
Securities and Exchange Commission's web site at http://www.sec.gov for such purpose.
As of the record date, no Shareholder, to the knowledge of the Fund, owned
beneficially more than 5% of the outstanding shares of Common Stock of the Fund.
IF YOU CANNOT ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR VOTE BY
TELEPHONE OR ON THE INTERNET AS DESCRIBED IN THE ENCLOSED PAMPHLET AS PROMPTLY
AS POSSIBLE.
-6-
PROPOSAL 1 -- TO ELECT A BOARD OF EIGHT DIRECTORS
---------------
The purpose of this proposal is to elect a Board of Directors of the Fund.
Pursuant to the provisions of the By-laws of the Fund, the Board of Directors
has determined that the number of Directors shall be fixed at eight. It is
intended that the accompanying proxy will be voted for the election as Directors
of the eight nominees listed below, unless such authority has been withheld in
the proxy, in which case the proxy will be voted as indicated thereon. In the
election of Directors, those eight nominees receiving the highest number of
votes cast at the Meeting, providing a quorum is present, shall be elected.
All of the nominees named below are currently Directors of the Fund and
have served in that capacity continuously since originally elected or appointed.
If elected, each nominee will serve until the next Annual Meeting of
Shareholders of the Fund or until their successor shall have been chosen and
shall have qualified or as otherwise provided in the By-laws of the Fund.
- ---------------------------------------------------------------------------------------------------------------------
Approximate Fund
Shares Owned
Name, Age, Address and Principal Occupation Director Since Beneficially and/or of
Record on April 20,
2000
- ---------------------------------------------------------------------------------------------------------------------
C. Lloyd Bailey, age 82, 1216 Foulkeways, Gwynedd, PA 19436, is an 1970 2,596.923
attorney. From 1959-1979, Mr. Bailey served as the Executive Director of the
United States Committee for UNICEF; from 1980-1981, Mr. Bailey served as
President of that Committee; and from 1981 to 1984, Mr. Bailey served as a
consultant to that Committee. Mr. Bailey is presently retired.
- ---------------------------------------------------------------------------------------------------------------------
Carl H. Doerge, Jr., age 61, 867 Remsen Lane, Oyster Bay, NY 11771, has 1998 1,491.664
been a private investor since 1995. Prior to that, Mr. Doerge was an
Executive Vice President and Managing Director of Smith Barney for
approximately twenty-four years. Mr. Doerge is also a member of the Board
of Directors of Pax World Growth Fund, Inc. and Pax World High Yield Fund,
Inc.
- ---------------------------------------------------------------------------------------------------------------------
*Thomas W. Grant, age 58, 14 Wall Street, New York, NY 10005, the Vice 1996 1,124.437
Chairman of the Board and President of the Fund, is also the President of
Pax World Growth Fund, Inc., the President of Pax World High Yield Fund,
Inc., the President of Pax World Money Market Fund, Inc., the President of
Pax World Management Corp., the Fund's adviser (the "Adviser"), and the
President of H. G. Wellington & Co., Inc. Mr. Grant has been associated with
H. G. Wellington & Co., Inc. since 1991 and served previously with the firm
of Fahnestock & Co. for twenty-six years as a partner, managing director and
senior officer. His duties encompassed branch office management, corporate
finance, syndications and municipal and corporate bonds. Mr. Grant is a
graduate of the University of North Carolina (BA). Mr. Grant is also a
member of the Board of Directors of Pax World Growth Fund, Inc. and Pax
World High Yield Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
APPROXIMATE
FUND SHARES
OWNED
BENEFICIALLY
AND/OR
DIRECTOR OF RECORD ON
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION SINCE APRIL 18, 2001
- --------------------------------------------------------------------------------
Carl H. Doerge, Jr., age 62, 867 Remsen Lane,
Oyster Bay, NY 11771, has been a private investor 1998 3,911
since 1995. Prior to that, Mr. Doerge was an
Executive Vice President and Managing Director of
Smith Barney for approximately twenty-four years.
Mr. Doerge is also a member of the Board of
Directors of Pax World Growth Fund, Inc.
(1997-present) and Pax World High Yield Fund, Inc.
(1999-present).
-6-
APPROXIMATE
FUND SHARES
OWNED
BENEFICIALLY
AND/OR
DIRECTOR OF RECORD ON
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION SINCE APRIL 18, 2001
- --------------------------------------------------------------------------------
*Thomas W. Grant, age 59, 14 Wall Street, New 1996 1,614
York, NY 10005, is the Vice Chairman of the Board
and President of the Fund, the President of Pax
World Growth Fund, Inc. (1997-present), the
President of Pax World High Yield Fund, Inc.
(1999-present), the President of Pax World Money
Market Fund, Inc. (1998-present), the President of
Pax World Management Corp., the Fund's adviser
(the "Adviser") (1996-present), and the President
of H. G. Wellington & Co., Inc. (1991-present).
Mr. Grant has been associated with H. G.
Wellington & Co., Inc. since 1991 and served
previously with the firm of Fahnestock & Co. for
twenty-six years as a partner, managing director
and senior officer. His duties encompassed branch
office management, corporate finance, syndications
and municipal and corporate bonds. Mr. Grant is a
graduate of the University of North Carolina (BA).
Mr. Grant is also a member of the Board of
Directors of Pax World Growth Fund, Inc.
(1997-present) and Pax World High Yield Fund, Inc.
(1999-present).
John L. Kidde, age 66, c/o KDM Development 2001 352
Corporation, Suite 5-D, 209 Cooper Avenue, Upper
Montclair, NJ 07043, is the President of KDM
Development Corporation and has been associated
with that company since 1988. Mr. Kidde is also a
member of the Board of Directors of Pax World
Growth Fund, Inc. (1997-present) and Pax World
High Yield Fund, Inc. (1999-present). Mr. Kidde
was elected to the Board of Directors of the Fund
on April 1, 2001 to fill the vacancy created by
the death of Mr. C. Lloyd Bailey.
-7-
- ---------------------------------------------------------------------------------------------------------------------
Approximate Fund
Shares Owned
Name, Age, Address and Principal Occupation Director Since Beneficially and/or of
Record on April 20,
2000
- ---------------------------------------------------------------------------------------------------------------------
Joy L. Liechty, age 46, 1403 Ashton Court, Goshen, IN 46526, is a Client and 1991 1,094.994
Sales Advocate with the Mennonite Mutual Aid Association in Goshen,
Indiana. Ms. Liechty has been associated with that organization since 1980,
serving as the Manager of Client Services from 1980 to 1989. Ms. Liechty is
also a member of the Board of Directors of Pax World Growth Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
*+Laurence A. Shadek, age 50, 14 Wall Street, New York, NY 10005, the 1996 4,825.374
Chairman of the Board of Directors of the Fund, is also the Chairman of
the Board of Pax World Growth Fund, Inc., the Chairman of the Board of Pax
World High Yield Fund, Inc., an Executive Vice President of Pax World
Money Market Fund, Inc., the Chairman of the Board of the Adviser, and an
Executive Vice-President of H. G. Wellington & Co., Inc..APPROXIMATE
FUND SHARES
OWNED
BENEFICIALLY
AND/OR
DIRECTOR OF RECORD ON
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION SINCE APRIL 18, 2001
- --------------------------------------------------------------------------------
Joy L. Liechty, age 47, 1403 Ashton Court, Goshen, 1991 1,231
IN 46526, is a Client and Sales Advocate with the
Mennonite Mutual Aid Association in Goshen,
Indiana. Ms. Liechty has been associated with that
organization since 1980, serving as the Manager of
Client Services from 1980 to 1989. Ms. Liechty is
also a member of the Board of Directors of Pax
World Growth Fund, Inc. (1997-present).
*+Laurence A. Shadek, age 51, 14 Wall Street, New 1996 5,324
York, NY 10005, is the Chairman of the Board of
the Fund (1996-present), the Chairman of the Board
of Pax World Growth Fund, Inc. (1997-present), the
Chairman of the Board of Pax World High Yield
Fund, Inc. (1999-present), an Executive Vice
President of Pax World Money Market Fund, Inc.
(1998-present), the Chairman of the Board of the
Adviser (1996-present), and an Executive
Vice-President of H. G. Wellington & Co., Inc.
(1986-present). Mr. Shadek, together with members
of his family, owns substantially all of the
outstanding shares of capital stock of the Adviser
and a 26.67% interest in H. G. Wellington & Co.,
Inc. Mr. Shadek has been associated with H. G.
Wellington & Co., Inc. since March 1986 and was
previously associated with Stillman, Maynard &
Co., where he was a general partner. Mr. Shadek's
investment experience includes twelve years as a
limited partner and Account Executive with the
firm Moore & Schley. Mr. Shadek is a graduate of
Franklin & Marshall College (BA) and New York
University, School of Graduate Business
Administration (MBA). Mr. Shadek is also a member
of the Board of Directors of Pax World Growth
Fund, Inc. (1997-present) and Pax World High Yield
Fund, Inc. (1999-present).
Sanford C. Sherman, age 64, 91 Hillside Drive, 1992 1,309
Portsmouth, NH 03801, until December 31, 2000 was
the Chief Executive Officer, and until December
31,
-8-
APPROXIMATE
FUND SHARES
OWNED
BENEFICIALLY
AND/OR
DIRECTOR OF RECORD ON
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION SINCE APRIL 18, 2001
- --------------------------------------------------------------------------------
1999 was the President and CEO, of the Piscataqua
Savings Bank, Portsmouth, NH - positions he held
since April 1981. For 21 years prior thereto, Mr.
Sherman held various other positions with the
bank, including Vice President and Treasurer. Mr.
Sherman also served the bank as a Trustee for 20
years. Mr. Sherman is also a member of the Board
of Directors of Pax World Growth Fund, Inc.
(1999-present).
Nancy S. Taylor, age 45, 5298 N. Riffle Way, 1997 3,325
Boise, ID 83703, is a Senior Minister with the
First Congregational Church in Boise, Idaho and
has been associated with that organization since
1992. Prior to that, Ms. Taylor was an Associate
Minister with the Immanuel Congregational Church
in Hartford, Connecticut for approximately five
years. Ms. Taylor is also a member of the Board of
Directors of Pax World Growth Fund, Inc.
(1997-present).
Esther J. Walls, M.L.S., age 74, Apartment 29-J, 1981 1,052
160 West End Avenue, New York, NY 10023, was
Associate Director of Libraries, State University
of New York, Stoney Brook, Long Island, NY, which
position she held from 1974 to 1990. Ms. Walls is
also a member of the Board of Directors of Pax
World High Yield Fund, Inc. (1999-present).
Mr. Shadek is also a member of the Board of Directors of Pax World Growth
Fund, Inc. and Pax World High Yield Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
Sanford C. Sherman, age 63, 91 Hillside Drive, Portsmouth, NH 03801, is the 1992 1,186.557
Chief Executive Officer, and until December 31, 1999 was the President, of
the Piscataqua Savings Bank, Portsmouth, NH - positions he has held since
April 1981. For 21 years prior thereto, Mr. Sherman held various other
positions with the bank, including Vice President and Treasurer. Mr.
Sherman also served the bank as a Trustee for 20 years. Mr. Sherman is also a
member of the Board of Directors of Pax World Growth Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
Nancy S. Taylor, age 44, 5298 N. Riffle Way, Boise, ID 83703, is a Senior 1997 3,013.485
Minister with the First Congregational Church in Boise, Idaho and has been
associated with that organization since 1992. Prior to that, Ms. Taylor was an
Associate Minister with the Immanuel Congregational Church in Hartford,
Connecticut for approximately five years. Ms. Taylor is also a member of the
Board of Directors of Pax World Growth Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
Esther J. Walls, M.L.S., age 73, Apartment 29-J, 160 West End Avenue, New 1981 975.295
York, NY 10023, was Associate Director of Libraries, State University of New
York, Stoney Brook, Long Island, NY, which position she held from 1974 to
1990. Ms. Walls is also a member of the Board of Directors of Pax World
High Yield Fund, Inc.
- ---------------------------------------------------------------------------------------------------------------------
* "Interested person", as defined by the Investment Company Act of 1940, as
amended.
+ "Controlling person" of the Adviser.
The Fund currently pays each unaffiliated Director a fee of $1,000.00,$2,000.00, and
each affiliated Director a fee of $300.00,$1,000.00, for attendance at each meeting of
the Board of Directors of the Fund, plus reimbursement for travel expenses
incurred in connection with attending such meetings. In addition, the Fund pays
$500.00$1,000.00 to each member of the Audit Committee for attendance at each meeting
of the Audit Committee, plus reimbursement for travel expenses incurred in
connection with attending such meetings. Other than the foregoing amounts, none
of the members of the Board
-8-
of Directors of the Fund receives compensation from
the Fund for services performed as members of the Board of Directors of the
Fund. Director's fees paid by the Fund, Pax World Growth Fund, Inc., Pax World
High Yield Fund, Inc. and Pax World Money Market Fund, Inc. in
1999-9-
2000 and travel expenses reimbursed by the Fund, Pax World Growth Fund, Inc.,
Pax World High Yield Fund, Inc. and Pax World Money Market Fund, Inc. in 19992000 to
members of the Board of Directors are as follows:
PAX WORLD PAX WORLD GROWTH PAX WORLD HIGH PAX WORLD MONEY
BALANCED FUND, INC. FUND, INC. YIELD FUND, INC. MARKET FUND, INC.
- ----------------------------------------------------------------------------------------------------------------------
Pax World Fund, Pax World Growth Pax World High Pax World Money
Incorporated Fund, Inc. Yield Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mr. C. Lloyd Bailey $1,402.00$6,634.02 Not Applicable Not Applicable Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Mr. Carl H. Doerge, Jr. $5,327.00 $4,380.00 $0.00$8,215.53 $5,160.35 $3,000.00 Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Mr. Thomas W. Grant $2,136.00 $1,278.00 $0.00$4,880.98 $1,717.05 $1,200.00 Not Applicable
- ----------------------------------------------------------------------------------------------------------------------Mr. John L. Kidde $0.0* $5,217.06 $4,000.00 Not Applicable
Ms. Joy L. Liechty $5,014.00 $3,224.00$10,269.09 $5,139.59 Not Applicable Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Mr. Laurence A. Shadek $2,136.00 $1,278.00 $0.00$4,880.98 $1,717.05 $1,200.00 Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Mr. Sanford C. Sherman $5,120.00 $2,557.00$6,207.44 $4,009.06 Not Applicable Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Ms. Nancy S. Taylor $5,995.00 $3,333.00$8,702.45 $5,034.74 Not Applicable Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
Ms. Esther J. Walls $4,310.00$7,407.12 Not Applicable $0.00$4,004.50 Not Applicable
- ----------------------------------------------------------------------------------------------------------------------
All* Mr. John L. Kidde was elected to the Board of Directors of the Fund on April
1, 2001 to fill the vacancy created by the death of Mr. C. Lloyd Bailey.
Substantially all of the issued and outstanding shares of capital stock of
Pax World Management Corp., the AdviserFund's adviser (the "Adviser"), are currently
owned by Mr. Laurence A. Shadek and his three siblings, Messrs. Thomas F. Shadek
and James M. Shadek and Ms. Katherine Shadek Boyle. In addition, the Shadek
family has a twenty-six and sixty-seven one hundredths percent (26.67%)
ownership interest in H. G. Wellington & Co., Inc., a brokerage firm that the
Fund may utilize to execute security transactions ("H. G. Wellington").
Brokerage commissions paid by the Fund to H. G. Wellington during 19981999 and 19992000
totaled $140,863$145,892 and $145,892,$225,397, respectively (27.8%(29.7% and 29.7%31.4%, respectively, of
total 19981999 and 19992000 commissions). Thomas W. Grant, the President of the Adviser
and H. G. Wellington, has less than a 5% ownership interest in H. G. Wellington.
The Board of Directors of the Fund held a total of four (4) meetings during
the year ended December 31, 1999.2000. The Board has an Audit Committee consisting of
Messrs. Carl H. Doerge, Jr. and Sanford C. Sherman, and an Investment Committee
consisting of Messrs. Laurence A. Shadek, Thomas W. Grant, Robert P. Colin
(Portfolio Co-Manager of the Fund) and Christopher H. Brown (Portfolio
Co-Manager of the Fund). The Audit Committee has responsibility for overseeing
the establishment and maintenance of an effective financial control environment,
for
-10-
overseeing the procedures for evaluating the system of internal accounting
control and for evaluating audit performance. The Investment Committee has
responsibility for overseeing the investments of the Fund. The Fund has no
nominating committee or other standing committee. The Audit Committee held one (1) meetingtwo
(2) meetings during the year and the Investment Committee held four (4)two (2) meetings
during the year. Each director attended all of the meetings of the Board of
Directors and the committee upon which they served, except Mr. C.
Lloyd Bailey who was
-9-
unable to attend the June and September 1999 meetings of the Board of Directors
and Ms. Esther J. Walls was unable to attend the December 1999 meeting of the
Board of Directors.served.
Along with those Officers and Directors mentioned above, the following
individuals are also Officers of the Fund:
- -------------------------------------------------------------------------------------------------------------------------
Name, Age, Address and Principal Occupation Position
- -------------------------------------------------------------------------------------------------------------------------
Anita D. Green, age 35, c/o Pax World Management Corp. 222 State Street, Portsmouth, NH 03801- Co-Treasurer
3853, serves as Manager-Shareholder Services for the Pax World Fund Family and Pax World (since 1998)
Management Corp. (1990-present). Ms. Green is also Co-Treasurer of Pax World Management
Corp. (1998-present) and the Fund (1998-present) and the Assistant Treasurer of Pax World
Growth Fund, Inc. (1998-present) and Pax World High Yield Fund, Inc. (1999-present).
- -------------------------------------------------------------------------------------------------------------------------
Michelle L. Guilmette, age 26, c/o Pax World Management Corp., 222 State Street, Portsmouth, NH Assistant Treasurer
03801-3853, serves as the Dealer Representative for the Pax World Fund Family and Pax World (since 1997);
Management Corp. (1999-present) and was a Shareholder Services Representative for the Pax World Assistant Secretary
Fund Family and Pax World Management Corp. (1992-1999). Ms. Guilmette is also Assistant (since 1999)
Treasurer (1997-present) and Assistant Secretary (1999-present) of the Fund and Assistant
Secretary of Pax World Growth Fund, Inc. (1999-present).
- -------------------------------------------------------------------------------------------------------------------------
Janet Lawton Spates, age 30, c/o Pax World Management Corp., 222 State Street, Portsmouth, NH Co-Treasurer
03801-3853, serves as Operations Manager for the Pax World Fund Family and Pax World (since 1998)
Management Corp. (1992-present). Ms. Spates is also Co-Treasurer of the Pax World Management
Corp. (1998-present) and the Fund (1998-present) and the Assistant Treasurer of Pax World
Growth Fund, Inc. (1998-present) and Pax World High Yield Fund, Inc. (1999-present).
- -------------------------------------------------------------------------------------------------------------------------
Lee D. Unterman, age 49, c/o Bresler, Goodman & Unterman, LLP, 521 Fifth Avenue, New York, Secretary
NY 10175, serves as Secretary of the Fund (1997-present), Pax World Growth Fund, Inc. (1997- (since 1997)
present) and Pax World High Yield Fund, Inc. (1999-present). Mr. Unterman is a Partner at the
law firm of Bresler Goodman & Unterman, LLP, New York, NY (1997-present) and was a Partner
atNAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION POSITION
- --------------------------------------------------------------------------------
Anita D. Green, age 36, c/o Pax World Management Corp., Co-Treasurer
222 State Street, Portsmouth, NH 03801-3853, serves as (since 1998)
Director of Social Research and Corporate Activities
for the Pax World Fund Family and Pax World Management
Corp. (2000-present) and was the Manager - Shareholder
Services for the Pax World Fund Family and Pax World
Management Corp. (1990-2000). Ms. Green is also
Co-Treasurer of Pax World Management Corp.
(1998-present) and the Fund (1998-present) and the
Assistant Treasurer of Pax World Growth Fund, Inc.
(1997-present) and Pax World High Yield Fund, Inc.
(1999-present).
Michelle L. Guilmette, age 27, c/o Pax World Management Assistant Treasurer
Corp., 222 State Street, Portsmouth, NH 03801-3853, (since 1997);
serves as the Dealer Representative for the Pax World
Fund Family and Pax World Management Corp. Assistant Secretary
(1999-present) and was a Shareholder Services (since 1999)
Representative for the Pax World Fund Family and Pax
World Management Corp. (1992-1999). Ms. Guilmette is
also Assistant Treasurer (1997-present) and Assistant
Secretary (1999-present) of the Fund and Assistant
Secretary of Pax World Growth Fund, Inc. (1999-present)
and Pax World High Yield Fund, Inc. (2000-present).
Janet Lawton Spates, age 31, c/o Pax World Management Co-Treasurer
Corp., 222 State Street, Portsmouth, NH 03801-3853, (since 1998)
serves as Operations Manager for the Pax World Fund
Family and Pax World Management Corp. (1992-present).
Ms. Spates is also Co-Treasurer of Pax World Management
Corp. (1998-present) and the Fund (1998-present) and
the Assistant Treasurer of Pax World Growth Fund, Inc.
(1997-present) and Pax World High Yield Fund, Inc.
(1999-present).
Lee D. Unterman, age 50, c/o Kurzman Karelsen & Frank, Secretary
LLP, 230 Park Avenue, New York, NY 10169, serves as (since 1997)
Secretary of the Fund (1997-present), Pax World Growth
Fund, Inc. (1997-present) and Pax World
-11-
High Yield Fund, Inc. (1999-present). Mr. Unterman is a
Partner with the law firm of Kurzman Karelsen & Frank,
LLP, New York, NY (2000-present) and was a Partner with
the law firms of Bresler Goodman & Unterman, LLP
(1997-2000) and Broudy & Jacobson, New York, NY
(1988-1997).
- -------------------------------------------------------------------------------------------------------------------------
PROPOSAL 2 -- TO RATIFY THE SELECTION OF PANNELL KERR FORSTER PC AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE FUND
---------------
The Board of Directors has unanimously approved the selection of Pannell
Kerr Forster PC ("PKF") as the independent public accountants of the Fund for
the fiscal year ending December 31, 20002001 and hereby seeks shareholder
ratification of such selection. PKF has advised the Fund that neither PKF nor
any of its members has, or has had in the past three years, any financial
interest in the Fund or any relation to the Fund other than their duties as
auditors and accountants. Representatives of PKF are expected to be present at
the Meeting, will be given the opportunity to make a statement if they so desire
and are expected to be available to respond to appropriate questions.
-10-
PROPOSAL 3 -- TO AMEND THE CERTIFICATE OF INCORPORATION
OF THE FUND TO CHANGE THE NAME OF THE FUND TO
"PAX WORLD BALANCED FUND, INC."
---------------
PROPOSAL
The Fund's Certificate of Incorporation provides that the Fund reserves
the right to amend, alter, change or repeal any provision contained in its
Certificate of Incorporation in the manner prescribed by statute. The General
Corporation Law of the State of Delaware states, among other things, that the
Fund may amend its Certificate of Incorporation to change its corporate name if
(i) its board of directors adopts a resolution setting forth the amendment
proposed, declaring its advisability, and directing that the amendment proposed
be considered at the next annual meeting of the stockholders, and (ii) a
majority of the outstanding stock entitled to vote thereon votes in favor of
such amendment. This proposal seeks shareholder approval of an amendment to the
Certificate of Incorporation of the Fund to change the name of the Fund to "Pax
World Balanced Fund, Inc."
In particular, this proposal would amend the title of the Certificate
of Incorporation of the Fund to provide as follows:
Certificate of Incorporation
of
Pax World Balanced Fund, Inc.
and Article "First" of the Certificate of Incorporation of the Fund to provide
as follows:
FIRST: The name of the corporation is PAX WORLD
BALANCED FUND, INC.
REQUIRED VOTE; REASONS FOR THE DIRECTORS' APPROVAL
The Board of Directors of the Fund considered the proposed amendment to
the Fund's Certificate of Incorporation so as to change the name of the Fund to
"Pax World Balanced Fund, Inc." at a meeting held on March 9, 2000. The Board of
Directors requested and received relevant information from the Adviser and
counsel regarding such changes. Among other things, the Board of Directors
considered that (i) the Fund has been a balanced Fund since its inception in
1970, (ii) some shareholders and prospective shareholders are unaware that the
Fund is a balanced fund, and may think they are investing in a different type of
fund; inserting the word "Balanced" into the Fund's name will alleviate this
confusion, and (iii) the proposed name is consistent with how the other mutual
funds comprising the Pax World Fund Family are named: Pax World Growth Fund,
Inc., Pax World High Yield Fund, Inc., and Pax World Money Market Fund, Inc. In
addition, the Board of Directors noted that, as a balanced fund, the Fund
intends to invest about sixty percent (60%) of its assets in common and
preferred stock and/or securities convertible into common stock and forty
percent (40%) in bonds and debentures, which percentage may vary depending upon
market conditions.
-11-
After review of the information and representations provided to them,
the Directors determined that the proposed amendment to the Fund's Certificate
of Incorporation would be in the best interest of the Fund and its shareholders.
The Board of Directors of the Fund believes that the proposed amendment to the
Fund's Certificate of Incorporation will (i) alleviate possible confusion by the
shareholders and potential shareholders concerning the type of fund in which
they have or are considering investing, and (ii) standardize the naming of the
funds comprising the Pax World Fund Family. Accordingly, the Directors present
at the meeting of the Board of Directors held on March 9, 2000 voted unanimously
to approve, subject to approval by a majority of the outstanding shares of the
Fund as required by the Fund's Certificate of Incorporation and the General
Corporation Law of the State of Delaware, the proposed amendment to the Fund's
Certificate of Incorporation, declared such amendment's advisability, directed
that such amendment be considered at the next Annual Meeting of Shareholders of
the Fund and recommends that the Shareholders similarly vote in favor of such
amendment.
RECOMMENDATION
THE DIRECTORS OF THE FUND BELIEVE THAT THE PROPOSED AMENDMENT TO THE
FUND'S CERTIFICATE OF INCORPORATION IS IN THE BEST INTEREST OF THE FUND AND ITS
SHAREHOLDERS AND, ACCORDINGLY, RECOMMEND THAT SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF THE FUND AS DISCUSSED ABOVE.
PROPOSAL 4 -- TO AMEND THE BY-LAWS OF THE FUND AND TO
APPROVE CERTAIN CHANGES TO THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES TO PROHIBIT THE FUND FROM
INVESTING IN COMPANIES APPEARING ON THE UNITED STATES
DEPARTMENT OF DEFENSE LIST OF 100 LARGEST CONTRACTORS,
IF 5% OR MORE OF THE GROSS SALES OF SUCH COMPANIES
ARE DERIVED FROM CONTRACTS WITH
THE UNITED STATES DEPARTMENT OF DEFENSE
---------------
PROPOSAL
The Investment Company Act of 1940, as amended, requires a registered
investment company, including the Fund, to have certain specific investment
policies that cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities. Investment companies may
also elect to designate other policies that may be changed only by a shareholder
vote. Both types of policies are often referred to as "fundamental" policies.
-12-
Paragraph 5 of Article XXVII of the Fund's By-laws, as well as the
Fund's fundamental investment policies, prohibits the Fund from investing in
securities of companies appearing on the United States Department of Defense
list of 100 largest contractors (a copy of which may be obtained from the Office
of the Secretary, Department of Defense, Washington, D.C. 20301).
This proposal seeks shareholder approval of a change to the Fund's
By-laws and these fundamental investment policies so as to prohibit the Fund
from investing in companies appearing on the United States Department of Defense
list of 100 largest contractors, if 5% or more of the gross sales of such
companies are derived from contracts with the United States Department of
Defense.
In particular, this proposal would amend clause (1) of the first
sentence of Paragraph 5 of Article XXVII of the Fund's By-laws to provide that
the Fund shall not directly or indirectly:
(1) invest in the securities of companies appearing on the
United States Department of Defense list of 100 largest
contractors IF FIVE PERCENT (5%) OR MORE OF THE GROSS SALES
OF SUCH COMPANIES ARE DERIVED FROM CONTRACTS WITH THE UNITED
STATES DEPARTMENT OF DEFENSE. Other contracting companies
will not be considered if 5 percent (5%) or more of their
gross sales for their prior fiscal year was derived from
such contracts.
and the fundamental investment policies of the Fund, as set forth in the Fund's
Prospectus under the heading "What are the Principal Investment Strategies of
the Fund", and elsewhere, to provide that
In addition, the policy of the Fund is to exclude from its
portfolio securities of (i) companies engaged in military
activities, [and] (ii) companies appearing on the United States
Department of Defense list of 100 largest contractors (a copy of
which may be obtained from the Office of the Secretary,
Department of Defense, Washington, D.C. 20301), IF FIVE PERCENT
(5%) OR MORE OF THE GROSS SALES OF SUCH COMPANIES ARE DERIVED
FROM CONTRACTS WITH THE UNITED STATES DEPARTMENT OF DEFENSE...
REQUIRED VOTE; REASONS FOR DIRECTORS' APPROVAL
The Board of Directors of the Fund considered the proposed change to
the Fund's By-laws and fundamental investment policies so as to prohibit the
Fund from investing in companies appearing on the United States Department of
Defense list of 100 largest contractors, if 5% or more of the gross sales of
such companies are derived from contracts with the United States Department of
Defense at a meeting held on March 9, 2000. The Board of Directors requested and
received relevant information from the Adviser and counsel regarding such
changes. Among other things, the Board of Directors considered that (i) certain
companies
-13-
appearing on the United States Department of Defense List of 100 Largest
Contractors are not engaged in military activities; for example, there are
health care, telecommunications and overnight package delivery companies on the
list, (ii) excluding such companies simply because they appear on that list is
not consistent with the Fund's goal of investing in companies providing goods
and services that improve the quality of life, and (iii) approval of this change
would not alter the Fund's long-standing practice of excluding from its
portfolio companies that are engaged in military activities; it is merely
seeking the ability to invest in companies on the United States Department of
Defense List of 100 Largest Contractors, provided that the following two
criteria are met: (A) such companies are not engaged in military activities, and
(B) such companies do not derive 5% or more of their gross sales from contracts
with the United States Department of Defense. The Directors were further advised
that the proposed policy is identical to the policy employed by each of the
other funds comprising the Pax World Fund Family.
After review of the information and representations provided to them,
the Directors determined that the proposed changes to the Fund's By-laws and
fundamental investment policies would be in the best interest of the Fund and
its shareholders. Accordingly, the Directors present at the meeting of the Board
of Directors held on March 9, 2000 voted unanimously to approve, subject to
approval by a majority of the outstanding shares of the Fund as required by the
Fund's By-laws, the proposed changes to the Fund's By-laws and fundamental
investment policies and recommends that the Shareholders similarly vote in
favor.
RECOMMENDATION
THE DIRECTORS OF THE FUND BELIEVE THAT THE PROPOSED CHANGES TO THE
FUND'S BY-LAWS AND FUNDAMENTAL POLICIES ARE IN THE BEST INTEREST OF THE FUND AND
ITS SHAREHOLDERS AND, ACCORDINGLY, RECOMMEND THAT SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE BY-LAWS OF THE FUND AND CERTAIN CHANGES TO THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES AS DISCUSSED ABOVE.
PROPOSAL 5 -- TO AMEND THE BY-LAWS OF THE FUND
AND TO APPROVE CERTAIN CHANGES TO THE FUND'S FUNDAMENTAL
INVESTMENT POLICIES TO PERMIT THE FUND TO INVEST
UP TO A TOTAL OF 25% OF THE VALUE OF ITS ASSETS
IN SECURITIES OF FOREIGN ISSUERS
---------------
PROPOSAL
The Investment Company Act of 1940, as amended, requires a registered
investment company, including the Fund, to have certain specific investment
policies that cannot be changed
-14-
without the approval of the holders of a majority of the Fund's outstanding
voting securities. Investment companies may also elect to designate other
policies that may be changed only by a shareholder vote. Both types of policies
are often referred to as "fundamental" policies.
Paragraph 5 of Article XXVII of the Fund's By-laws, as well as the
Fund's fundamental investment policies, currently prohibit the Fund from
investing more than ten percent (10%) of the value of its assets in securities
of foreign issuers under circumstances that would subject it to federal interest
equalization tax or at prices that reflect such tax.
This proposal seeks shareholder approval of changes to the Fund's
By-laws and these fundamental investment policies so as to permit the Fund to
invest up to and including twenty-five percent (25%) of the value of its assets
in securities of foreign issuers without regard to the federal interest
equalization tax or prices that reflect such tax. (Such tax was repealed
effective February 1, 1977 by the Tax Reform Act of 1976, rendering this clause
moot.)
In particular, this proposal would amend clause (13) of the first
sentence of Paragraph 5 of Article XXVII of the Fund's By-laws to provide that
the Fund shall not directly or indirectly:
(13) invest more than twenty-five percent (25%) of the value of its
assets in securities of foreign issuers; to the extent that
such information is available, the Fund will seek to invest
abroad in companies that contribute to improving the standard
of living of peoples in those countries and whose products and
services are consistent with the Fund's objective of
essentially non-military investments.
and Number 13 of the fundamental investment policies of the Fund, as set forth
in the Fund's Statement of Additional Information under the heading "Investment
Restrictions", to provide that the Fund may not:
13. Invest more than twenty-five percent (25%) of the value of its
assets in securities of foreign issuers.
REQUIRED VOTE; REASONS FOR DIRECTORS' APPROVAL
The Board of Directors of the Fund considered the proposed changes to the
Fund's By-laws and fundamental investment policies so as to permit the Fund to
invest up to and including twenty-five percent (25%) of the value of its assets
in securities of foreign issuers at meetings held on December 9, 1999 and March
9, 2000. The Board of Directors requested and received relevant information from
the Adviser and counsel regarding such changes and was advised that as of March
31, 2000 the Fund had 14.02% of its assets (through investments and
appreciation) invested in securities of foreign issuers. Among other things, the
Board of Directors considered that (i) the Fund is, from time to time, unable to
take advantage of certain potentially attractive overseas investment
opportunities due to the Fund's prohibition on investing more than 10% of the
value of its assets in securities of foreign issuers,
-15-
(ii) although the Fund does not intend to limit its foreign investments to
securities of foreign issuers listed on United States based exchanges, such as
the New York Stock Exchange and the National Association of Securities Dealers
Automated Quotation system, the securities of many foreign issuers are now
listed on such exchanges, and as a result, the detail and substance of the
information available to investors with respect to such issuers equals that of
the detail and substance of information available to investors with respect to
securities issued by United States based issuers, and (iii) permitting the Fund
to invest a greater percentage of its assets in securities of foreign issuers
would help the Fund to achieve its objectives by allowing the Fund to
participate, to a greater degree, in the expanding global economy. The Board of
Directors of the Fund also recognized, however, that (i) the Fund's investments
in foreign securities may subject the Fund to the risks of political or economic
instability in the country of the issuer, the possibility of imposition of
exchange controls and the risk of currency fluctuations, and (ii) securities
denominated in a foreign currency will be affected by changes in currency
exchange rates and in exchange control regulations, and costs may be incurred by
the Fund in connection with conversions between currencies.
After review of the information and representations provided to them,
the Directors determined that the proposed changes to the Fund's By-laws and
fundamental investment policies would be in the best interest of the Fund and
its shareholders. Accordingly, the Directors present at meetings of the Board of
Directors held on December 9, 1999 and March 9, 2000 voted unanimously to
approve, subject to approval by a majority of the outstanding shares of the Fund
as required by the Fund's By-laws, the proposed changes to the Fund's By-laws
and fundamental investment policies and recommends that the Shareholders
similarly vote in favor.
RECOMMENDATION
THE DIRECTORS OF THE FUND BELIEVE THAT THE PROPOSED CHANGES TO THE
FUND'S BY-LAWS AND FUNDAMENTAL INVESTMENT POLICIES ARE IN THE BEST INTEREST OF
THE FUND AND ITS SHAREHOLDERS AND, ACCORDINGLY, RECOMMEND THAT SHAREHOLDERS VOTE
FOR THE AMENDMENT TO THE BY-LAWS OF THE FUND AND CERTAIN CHANGES TO THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES AS DISCUSSED ABOVE.
OTHER BUSINESS
The Directors of the Fund are not aware of any other business to be acted
upon at the Meeting other than described herein. It is not anticipated that
other matters will be brought before the Meeting. If, however, other matters are
duly brought before the Meeting, or any adjournments thereof, the persons
appointed as proxies will have discretion to vote or act thereon according to
their best judgment.
EXPENSES OF PROXY SOLICITATION
The cost of the Meeting, including the solicitation of proxies, will be
borne by the Fund. The proposed solicitation of proxies will be made by mail but
supplemental solicitations may be by mail, telephone, or telegraph personally by
shareholder service representatives and/or officers of the Fund who will not be
additionally compensated for providing such services. It is anticipated that the
cost for such supplemental solicitations, if any, would be nominal. The Fund
will forward to any record owners proxy materials for any beneficial owner that
such record owners may request.
-16--12-
ADDITIONAL INFORMATION
The officers of the Fund are responsible for the day-to-day operations of
the Fund and the Board of Directors of the Fund is responsible for the general
policy of the Fund; Pax World Management Corp., 222 State Street, Portsmouth, NH
03801-3853 is the adviser to the Fund; the Fund's shares are distributed through
a distribution expense plan maintained by the Fund pursuant to Rule 12b-1 of the
Act;Investment Company Act of 1940, as amended; and H.G. Wellington & Co., Inc., 14
Wall Street, New York, NY 10005, serves as distributor of the Fund's shares and,
for nominal consideration and as agent for the Fund, solicits orders for the
purchase of Fund shares, provided, however, that orders are not binding on the
Fund until accepted by the Fund as principal.
-17--13-
This page intentionally
left blank.
-14-
PROXY PROXY
PAX WORLD BALANCED FUND, INCORPORATEDINC.
C/O PFPC, INC.
P.O. BOX 9426
WILMINGTON, DE 19899
PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 8, 200014, 2001
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PAX
WORLD BALANCED FUND, INCORPORATEDINC.
The undersigned hereby appoints Laurence A. Shadek and/or Lee D. Unterman
as Proxies, each with full powers to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below,herein, all the shares
of common stock of Pax World Balanced Fund, IncorporatedInc. held on record by the
undersigned on April 20, 2000,18, 2001, at the annual meeting of shareholders to be held
on Thursday, June 8, 200014, 2001 or at any adjournment or adjournments thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA THEBY TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: Please sign exactly as name appears above.on
this proxy card. When shares are held by
joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee
or guardian, 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 name by authorized
person. PLEASE DO NOT INDICATE ADDRESS
CORRECTIONS OR CHANGES, REGISTRATION CHANGES
OR ANY OTHER INFORMATION ON THIS CARD.
-------------------------------------------------------------------------------------------------
Signature
-------------------------------------------------------------------------------------------------
Signature of joint owner, if any
---------------------------------------, 2000
-----------------------------------------------2001
Date
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR ON THE
INTERNET AS DESCRIBED IN THE ENCLOSED PAMPHLET.
-18-
PAX WORLD BALANCED FUND, INCORPORATEDINC.
ANNUAL SHAREHOLDERS MEETING - JUNE 8, 200014, 2001
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ADOPTION OF PROPOSALS 1, 2 3, 4, 5 AND 63 AS SAID PROXIES, AND EACH
OF THEM, MAY DETERMINE.
PROPOSALS:PROPOSALS
1. To elect the following eight nominees as Directors of the Fund:
01 C. Lloyd Bailey 02 Carl H. Doerge, Jr. 0302 Thomas W. Grant 03 John L. Kidde
04 Joy L. Liechty 05 Laurence A. Shadek 06 Sanford C. Sherman
07 Nancy S. Taylor 08 Esther J. Walls
[ ] FOR ALL
[ ] WITHHOLD ALL
[ ] FOR ALL EXCEPT
To withhold authority to vote for any individual nominee(s), mark
the "For All Except""FOR ALL EXCEPT" box and write the number(s) of such
nominee(s) number on the line below:
----------------------------------------------------------------------------------------------------------
2. To ratify the selection of Pannell Kerr Forster PC as the independent
public accountants of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To amend the Certificate of Incorporation of the Fund to change the
name of the Fund to "Pax World Balanced Fund, Inc."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To amend the By-laws of the Fund and to approve certain changes to the
Fund's fundamental investment policies to prohibit the Fund from
investing in companies
-19-
appearing on the United States Department of Defense List of 100
largest contractors, if 5% or more of the gross sales of such
companies are derived from contracts with the United States Department
of Defense.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To amend the By-laws of the Fund and to approve certain changes to the
Fund's fundamental investment policies to permit the Fund to invest up
to and including 25% of the value of its assets in securities of
foreign issuers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, on all other business that may properly come
before the Meeting and any adjournment or adjournments thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Please sign on the reverse side
-20-PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR ON THE INTERNET AS DESCRIBED IN
THE ENCLOSED PAMPHLET.
-2-
Your Proxy vote is important!
And now you can vote your Proxy by TELEPHONE or on theYOUR PROXY VOTE IS IMPORTANT!
AND NOW YOU CAN VOTE YOUR PROXY ON THE PHONE OR ON THE INTERNET.
It saves Money!IT SAVES MONEY! Telephone and internetInternet voting saves postage costs,costs. Savings which
can help to minimize Fund expenses.
It saves Time!IT SAVES TIME! Telephone and internetInternet voting is instantaneous--24instantaneous - 24 hours a day.
It's Easy!IT'S EASY! Just follow these simple steps:
1. Read your Proxy Statement and have it and your Proxy card, on
hand;at hand.
2. Call toll-free 1-800-597-7836 (toll free) or go to the following website:website
https://vote.proxy-direct.com;vote.proxy-direct.com.
3. Enter theyour 14 digit Control Number that appears onCONTROL NUMBER from your Proxy card;Card.
4. Follow the recorded or on-screen instructions; anddirections.
5. DODo NOT mail your Proxy Card when you vote by telephone or on the
internet.
[PAX WORLD LOGO]
-21-Internet.
I M P O R T A N T
-----------------
PLEASE SEND IN YOUR PROXY... TODAY!
You are urged to date and sign the enclosed proxy and return it promptly. This
will help save the expense of follow-up letters and telephone calls to
stockholders who have not responded.
-2-