SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _____)
Filed by the Registrant /X/[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 Rule 14a-6(e)(2))
/X/[X] Definitive Proxy Statement
/_/[_] Definitive Additional Materials
/_/[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PAX WORLD BALANCED FUND, 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/[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 LOGO]
PAX WORLD BALANCED FUND, INC.
--------------
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
--------------
THURSDAY, JUNE 13, 200212, 2003
TABLE OF CONTENTS
Page
----
President's Letter.......................................................... 1Letter........................................................ 3
Notice of Annual Meeting.................................................... 2Meeting.................................................. 5
Proxy Statement............................................................. 3Statement........................................................... 6
Proposal 1 - To Elect a Board of Eight Directors............................ 4Directors..................... 7
Proposal 2 - To Ratify the Selection of
Pannell Kerr Forster PCErnst & Young LLP as Independent Public
Accountants of the Fund.................. 8Fund................................. 19
Proposal 3 - To Amend the By-laws of the Fund
to Permit the Fund to Invest in the
Securities of Other Business.............................................................. 8Registered Investment
Companies (including the Pax World Money
Market Fund), within certain limits..................... 20
Required Vote; Reasons for the Directors' Approval...... 21
Recommendation.......................................... 22
Proposal 4 - To Approve a Change to the Fund's Fundamental
Investment Policies to Permit the Fund to Invest
in the Securities of Other Registered Investment
Companies (including the Pax World Money Market
Fund), within certain limits............................ 22
Required Vote; Reasons for the Directors' Approval...... 23
Recommendation.......................................... 24
Other Business............................................................ 24
Expenses of Proxy Solicitation.............................................. 8Solicitation............................................ 24
Shareholder Proposals..................................................... 25
Security Ownership of Certain Beneficial Owners and Management............ 25
Householding of Annual Reports............................................ 25
Additional Information...................................................... 9Information.................................................... 26
PAX WORLD BALANCED FUND, INC.
222 STATE STREET
PORTSMOUTH, NH 03801-3853
To the Pax World Balanced Fund Shareholders:
As an investor in the Pax World Balanced Fund, Inc. (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 13, 200212, 2003 at the StateSheraton Harborside Portsmouth Hotel and
Conference Center, 250 Market Street, Bank and Trust Company, 225 Franklin
Street, Boston, MA 02110.Portsmouth, NH 03801. 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 Shareholders of the Fund or until a
successor shall have been chosen and shall have qualified, (ii) to ratify the
selection of Pannell Kerr Forster
PCErnst & Young LLP as the independent public accountants of the Fund
for the year ending December 31, 2002,2003, (iii) to amend the By-laws of the Fund to
permit the Fund to invest in the securities of other registered investment
companies (including the Pax World Money Market Fund), within certain limits,
(iv) to approve a change to the Fund's fundamental investment policies to permit
the Fund to invest in the securities of other registered investment companies
(including the Pax World Money Market Fund), within certain limits, and (iii)(v) to
transact such other business as may properly come before the Meeting.
In this year's proxy, we are asking you to vote on an amendment to the
Fund's By-laws and fundamental investment policies. Proposals 3 and 4 concern
the Fund's ability to invest in the securities of other registered investment
companies (including the Pax World Money Market Fund), within certain limits.
During the past year, the Fund identified several attractive investment
opportunities, but was unable to take advantage of them due to the Fund's
restriction on investments in other investment companies, other than the Pax
World Money Market Fund. These opportunities included certain financial service
companies that are either registered investment companies or affiliated with
registered investment companies or were identified in connection with the Fund's
commitment to assist in community development projects and its goal to invest
approximately one percent of its assets in such projects. Given the nature of
certain of these investment opportunities and the Fund's commitment in this
regard, the Board of Directors of the Fund believes that the Fund's inability to
invest in other registered investment companies unduly limits the portfolio
manager's ability to invest the Fund's assets. It is equally important to
stress, however, that nothing will be changed in the social and economic
criteria of the Fund as a result of these proposed changes. The Pax World Fund
Family will continue to be a leader in socially responsible investing. In fact,
the Board of Directors of the Fund believes that the proposed changes to the
Fund's By-laws and fundamental investment policies will enhance the financial
services provided by the Pax World Fund Family. Accordingly, the Board of
Directors of the Fund has approved these changes to the Fund's By-laws and
fundamental investment policies and recommends that the Shareholders similarly
vote in favor. We are asking, therefore, for your approval to permit the Fund to
invest, to the extent permitted by law, in other registered investment companies
(including the Pax World Money Market Fund), within the limits set forth in this
proxy statement.
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 Internet 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
April 19, 200223, 2003
Portsmouth, NH
PAX WORLD BALANCED FUND, INC.
222 STATE STREET
PORTSMOUTH, NH 03801-3853
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 13, 200212, 2003
Notice is hereby given that the annual meeting (the "Meeting") of the
shareholders of Pax World Balanced Fund, Inc. (the "Fund") will be held at 10:45
a.m. on Thursday, June 13, 200212, 2003 at the StateSheraton Harborside Portsmouth Hotel and
Conference Center, 250 Market Street, Bank and Trust Company, 225
Franklin Street, Boston, MA 02110Portsmouth, NH 03801 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 PCErnst &
Young LLP as the independent public accountants of the Fund
for the year ending December 31, 2002;2003;
(3) To amend the By-laws of the Fund to permit the Fund to invest
in the securities of other registered investment companies
(including the Pax World Money Market Fund), within certain
limits;
(4) To approve a change to the Fund's fundamental investment
policies to permit the Fund to invest in the securities of
other registered investment companies (including the Pax World
Money Market Fund), within certain limits; and
(3)(5) To transact such other business as may properly come before
such Meeting or any adjournment thereof.
The close of business on April 18, 200214, 2003 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 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 19, 200223, 2003
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.
-2-
PAX WORLD BALANCED FUND, INC.
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, Inc. (the "Fund") of
proxies to be used at the Annual Meeting of Shareholders to be held at 10:45
a.m. on Thursday, June 13, 200212, 2003 at the StateSheraton Harborside Portsmouth Hotel and
Conference Center, 250 Market Street, Bank and Trust Company, 225
Franklin Street, Boston, MA 02110,Portsmouth, NH 03801, 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 18, 2002,14, 2003, the
record date, are entitled to notice of and to vote at the Meeting. As of such
date, there were 57,822,066.33058,763,243.582 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 Fund's current
independent public accountants, and Ernst & Young LLP, the independent public
accountants selected by the Board of Directors for the year ending December 31,
2003, are expected to be present at the Meeting. They will have the opportunity
to make a statement at the Meeting 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 for Proposals 1, 2, 3, 4 and 35
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 and 3.5. 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 meeting of Shareholders on June 13, 200212, 2003 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 Meeting if a majority of the number of shares of
the Fund represented in person or by proxy at such Meeting voted FOR any of the
Proposals, and otherwise, will vote AGAINST an adjournment of such Meeting.
Votes withheld from any nominee, abstentions, and broker "non-votes" will be
counted as present or represented for purposes of determining the presence or
absence of a quorum for the Meeting. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on one or more proposals
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner.
This Proxy Statement has been mailed on or about the date hereof
pursuant to instructions from the executive offices of the Fund located in
Portsmouth, New Hampshire and has been sent through its transfer agent, PFPC,
Inc. The Fund's Annual Report for the fiscal year that ended December 31, 20012002
has already been mailed to Shareholders. Shareholders who desire an additional
copy of the Annual 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 www.paxfund.comwww.paxworld.com or visiting the
Securities and Exchange Commission's web site at 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.
-3-
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.
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.
The nominees set forth in the first table below (Interested Nominees) are
considered interested persons under the Investment Company Act of 1940, as
amended, by virtue of their position or affiliation with Pax World Management
Corp., the Fund's investment adviser (the "Adviser"), and/or H. G. Wellington &
Co., Inc., the Fund's distributor and a brokerage firm that the Fund may use to
execute brokerage transactions ("H. G. Wellington"). The nominees in the second
table (Disinterested Nominees) are not considered interested persons and have no
affiliation with the Adviser or H. G. Wellington. None of the directors or
officers of the Fund are related to one another by blood, marriage or adoption.
If elected, each nominee will serve
-3-
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 BENEFICIALLY AND/OR
OF RECORD ON APRIL 18,
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION DIRECTOR SINCE 2002
--------------- ---------------------------- --------------------------------------------------------------------------------------------------------------------
Interested Nominees
- --------------------------------------------------------------------------------------------------------------------
Number of
Position(s) Held Portfolios in
with the Pax World the Pax World
Funds; Term of Principal Occupation(s) During Past Fund Family
Office(1) and Length 5 Years and Other Directorships Held Overseen by the
Name, Address and Age of Time Served by the Nominee Nominee
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Carl H. Doerge, Jr., age 63, 867 Remsen Lane, Oyster Bay, NY 11771, 1998 4,002.055
has been a private investor since 1995. Prior to that, Mr. Doerge was
an Executive
Thomas W. Grant (2) Vice President and Managing Director of Smith Barney for
approximately twenty-four years. Mr. Doerge is a memberChairman of the BoardMr. Grant is the Vice Chairman of Trustees, the Deputy Mayor and the Police Commissioner of the
village of Upper Brookville, New York. He is also a member of the
Board of Directors and the chairman of the investment committee of St.
Johnland Nursing Center, Inc. located in Kings Park, New York. 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).
*Thomas W. Grant, age 60,3
14 Wall Street New York, NY 10005, is the 1996 2,379.829
Vice ChairmanBoard of Directors the Board and President of thePax World
New York, NY 10005; and President - Pax Balanced Fund, Inc. (1996-present),
(61) World Balanced Fund, the President of Pax World Growth
Inc. (1996-present); Fund, Inc. (1997-pressent)(1997-present), the President of Pax World
High Yield Fund, Inc.
(1999-present)President; Director (1998-present), the President of Pax World Money
- Pax World Growth Market Fund, Inc. (1998-present),
the President ofFund, Inc. Pax World Management Corp., the Fund's adviser (the "Adviser")
(1997-present); and (1996-present), and the President of H. G. Wellington
& Co., Inc. (1991-present). Mr.
President; Director Grant has been associated with H. G.
- Pax World High Wellington & Co., Inc. since 1991
Yield Fund, Inc. and served previously with the firm
(1999-present). 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- ------------------------------------ ---------------------- -------------------------------------- -----------------
Laurence A. Shadek (2) Chairman of the Mr. Shadek is the Chairman of the 3
14 Wall Street Board of Directors; Board of Directors of Pax World
Growth Fund, Inc. (1997-present) and
Pax World High Yield Fund, Inc. (1999-present).
-4-
APPROXIMATE FUND SHARES
OWNED BENEFICIALLY AND/OR
OF RECORD ON APRIL 18,
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION DIRECTOR SINCE 2002
--------------- ---------------------------
James M. Large, Jr., age 70, c/o Dime Bancorp, Inc., 589 Fifth Avenue, 2001 0.000
New York, NY 10017, is the Chairman Emeritus of Dime Bancorp,10005; Director - Pax World Balanced Fund, Inc. Mr. Large was the Chairman of Dime Bancorp,(1996-present),
(53) Balanced Fund, Inc. from 1997 to 1998,
the Chairman and Chief Executive Officer of Dime Bancorp, Inc. from
1995 to 1996, and the Chairman and Chief Executive Officer of Anchor
Savings Bank / Anchor Bancorp from 1989 to 1995. Mr. Large is also a
member of the Board of Directors of Pax World Growth Fund, Inc.
(2001-present) and Pax World High Yield Fund, Inc. (1999-present).
Mr. Large was elected to the Board of Directors of the Fund on October
2, 2001 and to the Board of Directors of Pax World Growth Fund, Inc.
on December 13, 2001 to fill the vacancy created by the death of Mr.
John L. Kidde.
Joy L. Liechty, age 48, 1403 Ashton Court, Goshen, IN 46526, is a 1991 1,259.486
Client and Sales Advocate and sales conference planner with Mennonite
Mutual Aid (MMA), a faith-based socially responsible investing
financial services and insurance institution located in Goshen,
Indiana. Ms. Liechty has been associated with that organization since
1976, serving as the Manager of Client Services from 1980 to 1989, and
in her current role since 1989. Ms. Liechty is also a member of the
Board of Directors of Pax World Growth Fund, Inc. (1997-present).
*+Laurence A. Shadek, age 52, 14 Wall Street, New York, NY 10005, is 1996 5,385.813
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 ofand Pax World High
Yield Fund, Inc. (1999-present), an
Chairman of the Executive Vice President of Pax
Board of Directors; World Money Market Fund, Inc.
Director - Pax World (1998-present), the Chairman of the
Growth Fund, Inc. Board of the AdviserPax World Management Corp.
(1997-present); and (1996-present), and an Executive
Vice-President of H. G. Wellington &
Chairman of the Co., Inc. (1986-present). Mr.
Board of Directors; Shadek, together with members of his
Director - Pax World family, owns substantially all of
High Yield Fund, the outstanding shares of capital
Inc. (1999-present). stock of the AdviserPax World Management Corp.
and a 25.07% 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 a member of the Board of
Trustees of Franklin & Marshall
College.
- ------------------------------------ ---------------------- -------------------------------------- -----------------
- --------------------------------------------------------------------------------------------------------------------
Disinterested Nominees
- --------------------------------------------------------------------------------------------------------------------
Number of
Position(s) Held Portfolios in
with the Pax World the Pax World
Funds; Term of Principal Occupation(s) During Past Fund Family
Office(1) and Length 5 Years and Other Directorships Held Overseen by the
Name, Address and Age of Time Served by the Nominee Nominee
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Carl H. Doerge, Jr. (3) Director - Pax World Mr. ShadekDoerge has been a private 3
867 Remsen Lane Balanced Fund, Inc. investor since 1995. Prior to that,
Oyster Bay, NY 11771; (64) (1998-present); Mr. Doerge was Executive Vice
President and Managing Director of
Director - Pax World Smith Barney for approximately
Growth Fund, Inc. twenty-four years. Mr. Doerge is a
(1997-present); and Member of the Board of Trustees, the
Deputy Mayor and the Police
Director - Pax World Commissioner of the Village of Upper
High Yield Fund, Brookville, New York. Mr. Doerge
Inc. (1999-present). is also a memberMember of the Board of
Directors and the Chairman of the
Investment Committee of St. Johnland
Nursing Home located in Kings Park,
New York.
- ------------------------------------ ---------------------- -------------------------------------- -----------------
James M. Large, Jr. (3) Director - Pax World Mr. Large is the Chairman Emeritus 3
c/o Dime Bancorp, Inc. Balanced Fund of Dime Bancorp, Inc.
589 Fifth Avenue (2001-present); (1998-present). Prior to that, Mr.
New York, NY 10017; Large was the Chairman (1995-1997)
(70) Director - Pax World and Chief Executive Officer
Growth Fund, Inc. (1997-present)(1995-1996) of Dime Bancorp, Inc.
(2001-present); and and the Chairman and Chief Executive
Officer of Anchor Savings Bank /
Director - Pax World Anchor Bancorp (1989-1995).
High Yield Fund,
Inc. (1999-present).
- ------------------------------------ ---------------------- -------------------------------------- -----------------
-4-
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Joy L. Liechty Director - Pax World Ms. Liechty is a Client and Sales 2
1403 Ashton Court Balanced Fund Advocate and sales conference
Goshen, IN 46526; (1991-present); and planner with the Mennonite Mutual
(49) Aid (MMA) Association, a faith-based
Director - Pax World socially responsible investing
Growth Fund, Inc. financial services and insurance
(1997-present). institution located in Goshen,
Indiana. Ms. Liechty has been
associated with that organization
since 1976, serving as the Manager
of Client Services from 1980 to
1989, and in her current role since
1989.
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Sanford C. Sherman age 65, 91 Hillside Drive, Portsmouth, NH 03801, 1992 1,339.581(3) Director - Pax World Mr. Sherman is a Trustee of the 2
91 Hillside Drive Balanced Fund, Inc. Piscataqua Savings Bank, Portsmouth,
Portsmouth, NH 03801; (1992-present); and New Hampshire (1972-present) and the
(66) Chairman of the Piscataqua Savings
Director - Pax World Bank Trust Committee.Committee
Growth Fund, Inc. (1997-present). Mr. Sherman was the
(1999-present). Chief Executive Officer until
December 31, 2000, and was the
President and Chief Executive
Officer until December 31, 1999, of
the Piscataqua Savings Bank -
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 is also the Vice Chairman of
the Portsmouth Regional Hospital
Board of Trustees and a member of the Board of Directors of Pax World Growth
Fund, Inc. (1999-present).
-5-
APPROXIMATE FUND SHARES
OWNED BENEFICIALLY AND/OR
OF RECORD ON APRIL 18,
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION DIRECTOR SINCE 2002
--------------- ---------------------------
(1997-present).
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Nancy S. Taylor age 46,Director - Pax World Dr. Taylor is the President and a 2
600 Salem End Road Framingham, MA 01702, is the 1997 3,402.118
President and aBalanced Fund, Inc. Minister of the Massachusetts
Framingham, MA 01702; (1997-present); and Conference of the United Church of
(47) Christ (2001-present). Dr. Taylor
Director - Pax World previously served as a Senior
Growth Fund, Inc. Minister with the First
(1997-present). Congregational Church in Boise,
Idaho and has been associated with
that organization since 1992. Prior
to that, Dr. Taylor was an Associate
Minister with the Immanuel
Congregational Church in Hartford,
Connecticut for approximately five
years. Dr. Taylor was a co-founder
of Idaho Voices of Faith for Human
Rights, Inc. and of the Idaho Human
Rights Education Center, and served
as a director of the Ada County
Human Rights Task Force (1994-2001)
and the High Horizon Housing
Corporation.Corporation (1992-2001). Dr. Taylor
is also a member of the Board of
Directors of Pax World Growththe Andover Newton
Theological School (2002-present)
and the Massachusetts Congregational
Fund Inc. (1997-present)(2002-present).
- ------------------------------------ ---------------------- -------------------------------------- -----------------
Esther J. Walls, M.L.S., age 75, Apartment 29-J, 160 West End Avenue, 1981 1,076.558
New York, NY 10023, Director - Pax World Ms. Walls was Associate Director of 3
Apartment 29-J Balanced Fund, Inc. Libraries, State University of New
160 West End Avenue (1981-present); York, StoneyStony Brook, Long Island, NY
New York, which
position she held from 1974 to 1990.NY 10023; (1974-1990). Ms. Walls was also a
(76) Director - Pax World member of the Boards of Directors of
Growth Fund, Inc. UNICEF and the International
(2002-present); and Relations Committee of the American
Library Association.
In 1948,Director - Pax World
High Yield Fund,
Inc. (1999-present).
- ------------------------------------ ---------------------- -------------------------------------- -----------------
(1) Directors of the Fund are elected each year at the Fund's Annual Meeting of
Shareholders and hold office until the next Annual Meeting of Shareholders
of the Fund or until a successor shall have been chosen and shall have
qualified.
(2) Designates a member of the Investment Committee of the Fund. The Investment
Committee has the responsibility of overseeing the Fund's investments.
(3) Designates a member of the Audit Committee of the Fund. The Audit Committee
has the responsibility of overseeing the establishment and maintenance of
an effective financial control environment, for overseeing the procedures
for evaluating the system of internal accounting control and for evaluating
audit performance.
Along with those Directors and Officers mentioned above, the following
are Officers of the Fund.
- ----------------------------------- ------------------------------------ ------------------------------------------
Position(s) Held with the Pax Principal Occupation(s) During Past 5
World Funds; Term of Office(1) and Years and Other Directorships Held by
Name, Address and Age Length of Time Served the Officer
- ----------------------------------- ------------------------------------ ------------------------------------------
Anita D. Green Co-Treasurer - Pax World Balanced Ms. WallsGreen serves as the Director of
c/o Pax World Management Corp. Fund, Inc. (1998-present); Social Research and Corporate Activity
222 State Street for the Pax World Funds and Pax World
Portsmouth, NH 03801-3853; Assistant Treasurer - Pax World Management Corp. (1996-present) and was
(38) Growth Fund, Inc. (1997-present); the first
African American woman atManager - Shareholder Services for
and the University of Iowa to be elected Phi Beta
Kappa.Pax World Funds and Pax World
Management Corp. (1990-2000). Ms. WallsGreen
Assistant Treasurer - Pax World is also a Co-Treasurer of Pax World
High Yield Fund, Inc. Management Corp. (1998-present). Ms.
(1999-present). Green is a member of the Board of
Directors of the Social Investment Forum
(SIF), the steering committee of the SIF
International Working Group, and the
advisory committee of the Shareholder
Action Network.
- ----------------------------------- ------------------------------------ ------------------------------------------
-5-
- ----------------------------------- ------------------------------------ ------------------------------------------
Assistant Treasurer (1997-present) Ms. Guilmette is the Broker/Dealer
Michelle L. Guilmette and Assistant Secretary Representative for the Pax World Funds
c/o Pax World Management Corp. (1999-present) - Pax World and Pax World Management Corp.
222 State Street Balanced Fund, Inc.; (1999-present) and was a Shareholder
Portsmouth, NH 03801-3853; Services Representative for the Pax
(29) Assistant Secretary - Pax World World Funds and Pax World Management
Growth Fund, Inc. (1999-present); Corp. (1992-1999).
and
Assistant Secretary - Pax World
High Yield Fund, Inc.
(2000-present).
- ----------------------------------- ------------------------------------ ------------------------------------------
Janet Lawton Spates Co-Treasurer - Pax World Balanced Ms. Spates is the Chief Financial
c/o Pax World Management Corp. Fund, Inc. (1998-present); Officer for the Pax World Funds and Pax
222 State Street World Management Corp. (1992-present).
Portsmouth, NH 03801-3853; Assistant Treasurer - Pax World Ms. Spates is also a Co-Treasurer of Pax
(33) Growth Fund, Inc. (1997-present); World Management Corp. (1998-present).
and
Assistant Treasurer - Pax World
High Yield Fund, Inc.
(1999-present).
- ----------------------------------- ------------------------------------ ------------------------------------------
Lee D. Unterman Secretary - Pax World Balanced Mr. Unterman is a Partner with the law
c/o Kurzman Karelsen & Frank, LLP Fund, Inc. (1997-present); firm of Kurzman Karelsen & Frank, LLP,
230 Park Avenue New York, NY (2000-present) and was a
New York, NY 10169; Secretary - Pax World Growth Fund, Partner with the law firms of Bresler
(52) Inc. (1997-present); and Goodman & Unterman, LLP, New York, NY
(1997-2000) and Broudy & Jacobson,
Secretary - Pax World High Yield New York, NY (1988-1997).
Fund, Inc. (1999-present).
- ----------------------------------- ------------------------------------ ------------------------------------------
* "Interested person",(1) Officers of the Fund are elected each year at the Fund's Annual Meeting of
the Board of Directors and 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.
OWNERSHIP OF SHARES IN THE PAX WORLD FUND FAMILY
The following table shows the amount of equity securities owned by each
member of the Board of Directors of the Fund (i) in the Fund and (ii) in all
registered investment companies in the Pax World Fund Family overseen by such
member as definedof December 31, 2002:
- --------------------------------------- -------------------------- -------------------------------
Aggregate Dollar Range of
Equity Securities in All
Funds Overseen or to be
Name of Dollar Range of Equity Overseen by the Nominee in
Director Securities in the Fund the Pax World Fund Family
- --------------------------------------- -------------------------- -------------------------------
- --------------------------------------- -------------------------- -------------------------------
Interested Directors
- --------------------------------------- -------------------------- -------------------------------
Mr. Thomas W. Grant $10,001-$50,000 $50,001-$100,000
- --------------------------------------- -------------------------- -------------------------------
Mr. Laurence A. Shadek $10,001-$50,000 over $100,000#
- --------------------------------------- -------------------------- -------------------------------
- --------------------------------------- -------------------------- -------------------------------
Disinterested Directors
- --------------------------------------- -------------------------- -------------------------------
Mr. Carl H. Doerge, Jr. $50,001-$100,000 over $100,000
- --------------------------------------- -------------------------- -------------------------------
Mr. James M. Large, Jr. none none
- --------------------------------------- -------------------------- -------------------------------
Ms. Joy L. Liechty $10,001-$50,000 $10,001-$50,000
- --------------------------------------- -------------------------- -------------------------------
Mr. Sanford C. Sherman $10,001-$50,000 $10,001-$50,000
- --------------------------------------- -------------------------- -------------------------------
Dr. Nancy S. Taylor $50,001-$100,000 $50,001-$100,000
- --------------------------------------- -------------------------- -------------------------------
Ms. Esther J. Walls $10,001-$50,000 $10,001-$50,000
- --------------------------------------- -------------------------- -------------------------------
# Includes shares of the Fund owned of record by the Investment Company Act of 1940, as
amended.
+ "Controlling person" of the Adviser.Adviser and H. G.
Wellington & Co., Inc.
COMPENSATION OF DIRECTORS
The Fund currently pays each unaffiliated Directorof its interested directors a fee of
$2,000.00,$1,000, and each affiliated Directorof its disinterested directors a fee of $1,000.00,$2,000, for attendance
at each meeting of the Board of Directors of the Fund. Members of the Board of
Directors of the Fund plus reimbursementare also reimbursed for their travel expenses incurred in connection withfor
attending such meetings.meetings of the Board of Directors. In addition, the Fund pays $1,000.00$1,000
to each member of theits Audit Committee for attendance at each meeting of theits
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 of Directors of the Fund receives compensation from the
Fund for services performed as membersa member of the Board of Directors of the Fund.
The following table sets forth certain information relating to all
directors of the Fund and for each of the three highest paid executive officers
of the Fund who received aggregate compensation from the Fund for the most
recently completed fiscal year exceeding $60,000:
-6-
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Pension or Total Compensation
Retirement from the Fund and
Aggregate Benefits Accrued Estimated the Pax World Fund
Compensation from as Part of Fund Annual Benefits Family Paid to
Name of Person and Position the Fund Expenses Upon Retirement Directors*
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Interested Directors
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Mr. Thomas W. Grant $4,000 0 0 $6,400 (3)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Mr. Laurence A. Shadek $4,000 0 0 $6,400 (3)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Disinterested Directors
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Mr. Carl H. Doerge, Jr. $10,000 0 0 $20,000 (3)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Mr. James M. Large, Jr. $10,000 0 0 $20,000 (3)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Ms. Joy L. Liechty $8,000 0 0 $12,000 (2)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Mr. Sanford C. Sherman $10,000 0 0 $15,000 (2)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Dr. Nancy S. Taylor $8,000 0 0 $12,000 (2)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
Ms. Esther J. Walls $8,000 0 0 $13,000 (3)
- -------------------------------------- ------------------- ------------------ ----------------- --------------------
* The total compensation paid to such persons by the Fund and the Pax World
Fund Family for the fiscal year ended December 31, 2002. The parenthetical
number represents the number of investment companies (including the Pax
World Money Market Fund) from which such person receives compensation that
are considered part of the Pax World Fund Family, because, among other
things, they have a common investment adviser or sub-adviser.
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 20012002 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 20012002 to members
of the Board of Directors of the Fund are as follows:
PAX WORLD BALANCED PAX WORLD GROWTH PAX WORLD HIGH PAX WORLD MONEY
FUND, INC. FUND, INC. YIELD FUND, INC. MARKET FUND, INC.Pax World Balanced Pax World Growth Pax World High Pax World Money
Fund, Inc. Fund, Inc. Yield Fund, Inc. Market Fund, Inc.
- ------------------------------- --------------------- -------------------- -------------------- --------------------
INTERESTED DIRECTORS
Mr. C. Lloyd Bailey $0Thomas W. Grant $5,479.48 $1,230.30 $1,205.22 Not Applicable
Mr. Laurence A. Shadek $5,017.90 $1,220.88 $1,205.22 Not Applicable
Not ApplicableDISINTERESTED DIRECTORS
Mr. Carl H. Doerge, Jr. $8,000.00 $4,500.00 $5,500.00 Not Applicable
Mr. Thomas W. Grant $4,710.25 $1,214.50 $1,500.00 Not Applicable
Mr. John L. Kidde* $2,000.00 $2,000.00 $3,000.00$10,996.19 $5,020.54 $5,010.27 Not Applicable
Mr. James M. Large, Jr.* $5,000.00 $1,000.00 $4,500.00 $11,398.97 $5,028.76 $5,010.27 Not Applicable
Ms. Joy L. Liechty $8,745.88 $8,515.22$8,688.92 $4,014.06 Not Applicable Not Applicable
-6-
Mr. Laurence A. Shadek $4,102.90 $1,202.10 $1,200.00 Not Applicable
Mr. Sanford C. Sherman $9,055.58 $4,510.13$10,055.58 $5,001.13 Not Applicable Not Applicable
Dr. Nancy S. Taylor $6,000.00$8,000.00 $4,000.00 Not Applicable Not Applicable
Ms. Esther J. Walls $8,484.97 Not Applicable $5,003.28$8,973.24 $1,000.03 $4,005.58 Not Applicable
* 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. Mr.
James M. Large, Jr. was elected to the Board of Directors of the Fund on October
2, 2001 and to the Board of Directors of Pax World Growth Fund, Inc. on December
13, 2001 to fill the vacancy created by the death of Mr. John L. Kidde.
Substantially all of the issued and outstanding shares of capital stock
of Pax World Management Corp., the Fund'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-five and seven one hundredths
percent (25.07%) ownership interest in H. G. Wellington & Co., Inc., a brokerage firm that the Fund may
utilize to execute security transactions ("H. G. Wellington").Wellington. Brokerage commissions
paid by the Fund to H. G. Wellington during 20002001 and 20012002 totaled $225,397$318,150 and
$318,150,$196,212, respectively (31.4%(33% and 32.7%32%, respectively, of total 20002001 and 20012002
commissions). Thomas W. Grant, the President of the Adviser and H. G.
Wellington, has less than a 5% ownership interest in the Adviser and H. G.
Wellington.
The Board of Directors of the Fund held a total of four (4) meetings
during the year ended December 31, 2001.2002. The Board has an Audit Committee
consisting of Messrs. Carl H. Doerge, Jr., James M. Large, Jr. and Sanford C.
Sherman, and an Investment Committee consisting of Messrs. Laurence A. Shadek,
Thomas W. Grant and Christopher H. Brown (Portfolio Manager of the Fund). The
Audit Committee has responsibility for overseeing the establishment and
maintenance of an effective financial control environment, for overseeing the
procedures for evaluating the system of internal accounting control and for
evaluating audit performance. The Fund's Board of Directors has determined that
the Fund has three "financial experts" (as defined under Regulation S-K of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended) serving on its Audit Committee, namely Messrs. Carl H. Doerge, Jr.,
James M. Large, Jr. and Sanford C. Sherman. 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 two (2) meetings
during the year. Each director attended all of the meetings of the Board of
Directors and the committee(s) upon which they served except Dr. Nancy S. Taylor who was unable to attend the June
14, 2001 meeting of the Board of Directors of the Fund.
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 37, c/o Pax World Management Corp. 222 State Street, Portsmouth, NH Co-Treasurer (since
03801-3853, is the Director of Social Research and Corporate Activity for the Pax World 1998)
Fund Family and Pax World Management Corp. (1996-present) and was the Manager - Shareholder
Services for the Pax World Fund Family and Pax World Management Corp. (1990-2000). Ms.
Green is a member of the Board of Directors of the Social Investment Forum (SIF), the
steering committee of the SIF International Working Group, and the advisory committee of
the SIF Shareholder Action Network. Ms. Green is also a Co-Treasurer of Pax World
Management Corp. (1998-present) and the Fund (1998-present) and an Assistant Treasurer of
Pax World Growth Fund, Inc. (1997-present) and Pax World High Yield Fund, Inc.
(1999-present).
served.
-7-
Michelle L. Guilmette, age 28, c/o Pax World Management Corp., 222 State Street, Assistant Treasurer
Portsmouth, NH 03801-3853, is the Dealer Representative for the Pax World Fund Family and (since 1997);
Pax World Management Corp. (1999-present) and was a Shareholder Services Representative for
the Pax World Fund Family and Pax World Management Corp. (1992-1999). Ms. Guilmette is Assistant Secretary
also Assistant Treasurer (1997-present) and an Assistant Secretary (1999-present) of the (since 1999)
Fund and an Assistant Secretary of Pax World Growth Fund, Inc. (1999-present) and the Pax
World High Yield Fund, Inc. (2000-present).
Janet Lawton Spates, age 32, c/o Pax World Management Corp., 222 State Street, Portsmouth, Co-Treasurer (since
NH 03801-3853, is the Chief Financial Officer for the Pax World Fund Family and Pax World 1998)
Management Corp. (1992-present). Ms. Spates is also a Co-Treasurer of Pax World Management
Corp. (1998-present) and the Fund (1998-present) and an Assistant Treasurer of Pax World
Growth Fund, Inc. (1997-present) and Pax World High Yield Fund, Inc. (1999-present).
Lee D. Unterman, age 51, c/o Kurzman Karelsen & Frank, LLP, 230 Park Avenue, New York, NY Secretary (since 1997)
10169, is the Secretary of the Fund (1997-present), Pax World Growth Fund, Inc.
(1997-present) and Pax World 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 PCERNST & YOUNG LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS OF THE FUND
The Board of Directors of the Fund, on the recommendation of the Audit Committee
of the Board of Directors, has unanimously approved the selection of Pannell Kerr Forster PCErnst &
Young LLP ("PKF"EY") as the independent public accountants of the Fund for the
fiscal year ending December 31, 20022003 and hereby seeks shareholder ratification
of such selection. PKFEY has advised the Fund that neither PKFEY nor any of its
members has, or employees has had in the past three years, any financial interest in the Fund or any relation to
the Fund other than their dutiesthe ownership by less than ten EY employees of shares of one
or more funds comprising the Pax World Fund Family, which shares will be
divested by such employees, either prior to or immediately upon EY's selection
as auditorsthe independent public accountants of the Fund, in accordance with the rules
and accountants.regulations promulgated by the Securities and Exchange Commission. At a
meeting of the Board of Directors of the Fund held on March 13, 2003, the Board
of Directors unanimously voted to terminate the retention of Pannell Kerr
Forster, P.C. ("PKF") as the independent public accountants of the Fund as a
result of the Board's concern about the accuracy of certain tax advice provided
by PKF to the Fund and Pax World High Yield Fund, Inc. (the "High Yield Fund")
in prior years. In particular, PKF caused the Fund to pay state income taxes to
the State of New Hampshire for fiscal years 1991 through 2001, inclusive, and
the High Yield Fund to pay such taxes to the State of New Hampshire for fiscal
years 2000 and 2001, even though a statutory exemption was available. An
application for a refund of those taxes has been made to the State of New
Hampshire and the Fund and the High Yield Fund are also seeking reimbursement
from PKF of the amount paid for those taxes. Shareholders should note that there
have been no disagreements between the Fund and PKF on any matter of accounting
principles or practices and PKF has never rendered an adverse or qualified
opinion about the Fund's financials. Under the circumstances, however, and
notwithstanding the fact that the Audit Committee of the Board of Directors and
the Board of Directors of the Fund have been pleased, in general, with the
services rendered by PKF to the Pax World Fund Family for the past twenty years,
the Board of Directors of the Fund, acting upon the recommendation of the Audit
Committee of the Board of Directors, felt it necessary and appropriate to seek
new independent public accountants for the Fund. Representatives of EY and 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.
AUDIT FEES. The aggregate fees billed the Fund by PKF for professional
services rendered by PKF for the audit of the Fund's annual financial statements
for the most recent fiscal year and the review of the financial statements
included in the Fund's interim reports was $56,525.00.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION. The aggregate
fees billed the Fund, the Adviser and each entity controlling, controlled by, or
under common control with the Adviser that provides services to the Fund for
professional services rendered by PKF for financial information systems design
and implementation for the most recent fiscal year was $0.
ALL OTHER FEES. The aggregate fees billed the Fund, the Adviser and
each entity controlling, controlled by, or under common control with the Adviser
that provides services to the Fund for services rendered by PKF, other than the
services described under the captions "Audit Fees" and "Financial Information
Systems Design and Implementation" for the most recent fiscal year was
$5,500.00.
The Audit Committee of the Board of Directors of the Fund considered
whether the provision of the services described under the captions "Audit Fees",
"Financial Information Systems Design and Implementation", and "All Other Fees",
above, is compatible with maintaining PKF's independence and determined that it
was compatible.
The percentage of the hours expended on PKF's engagement to audit the
Fund's financial statements for the most recent fiscal year that were attributed
to work performed by persons other than PKF's full-time, permanent employees was
6.5%.
PROPOSAL 3 -- TO AMEND THE BY-LAWS OF THE FUND TO PERMIT THE FUND TO INVEST IN
THE SECURITIES OF OTHER REGISTERED INVESTMENT COMPANIES (INCLUDING THE PAX WORLD
MONEY MARKET FUND), WITHIN CERTAIN LIMITS
PROPOSAL
Paragraph 4 of Article XXVII of the Fund's By-laws currently prohibits
the Fund, with certain exceptions, from investing any of its assets in the
securities of other investment trusts or companies, other than the Pax World
Money Market Fund.
This proposal seeks shareholder approval of changes to the Fund's
By-laws so as to permit the Fund to invest, to the extent permitted by law, in
the securities of other registered investment companies (including the Pax World
Money Market Fund) subject, however, to the following: the Fund may not invest
in the securities of any registered investment company whose objective is to
invest in securities of issuers primarily designed to support underlying
community development activities targeted to serve low- and moderate- income
individuals such as affordable housing and education (a "Community Development
Issuer") if, as a result, the Fund would then have more than $500,000 invested
in that particular Community Development Issuer or $1,000,000 in the aggregate
in all Community Development Issuers held by the Fund.
This proposal would amend the By-laws of the Fund as may be necessary
to effectuate the intent of this proposal and, in particular Paragraph 4 of
Article XXVII thereof to provide substantially as follows:
-8-
The Balanced Fund may not purchase the securities of any registered
investment company whose objective is to invest in securities of
issuers primarily designed to support underlying community development
activities targeted to serve low- and moderate- income individuals
such as affordable housing and education (a "Community Development
Issuer") if, as a result, the Balanced Fund would then have more than
$500,000 invested in that particular Community Development Issuer or
$1,000,000 in the aggregate in all Community Development Issuers held
by the Balanced Fund.
REQUIRED VOTE; REASONS FOR DIRECTORS' APPROVAL
The Board of Directors of the Fund considered the proposed change to
the Fund's By-laws so as to permit the Fund to purchase the securities
of other registered investment companies at a meeting held on March
13, 2003. The Board of Directors requested and received relevant
information from the Adviser and counsel regarding such change. Among
other things, the Board of Directors considered that the Fund is, from
time to time, unable to take advantage of certain potentially
attractive investment opportunities due to the Fund's prohibition on
purchasing the securities of other investment companies, other than
the Pax World Money Market Fund. These opportunities included certain
financial service companies that are either registered investment
companies or affiliated with registered investment companies or were
identified in connection with the Fund's commitment to assist in
community development projects and its goal to invest approximately
one percent of its assets in such projects. The Board of Directors
also considered the potential risks of investing in the securities of
other registered investment companies (such as the risk that the
adviser(s) to such companies may fail to execute such companies'
strategies effectively or that the investment objectives of such
companies may not be achieved) and the possible duplication of
advisory, administrative, custodial and other fees, costs and
expenses.
After review of the information and representations provided to them,
the Directors determined that the proposed change to the Fund's
By-laws would be in the best interest of the Fund and its
shareholders. Accordingly, the Directors present at a meeting of the
Board of Directors held on March 13, 2003 voted unanimously to approve
the proposed change to the Fund's By-laws, subject to approval by a
majority of the outstanding shares of the Fund as required by the
Fund's By-laws, and recommends that the Shareholders similarly vote in
favor.
RECOMMENDATION
THE BOARD OF DIRECTORS OF THE FUND BELIEVES THAT THE PROPOSED CHANGE TO
THE FUND'S BY-LAWS IS IN THE BEST INTEREST OF THE FUND AND ITS SHAREHOLDERS AND,
ACCORDINGLY, RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE AMENDMENT TO THE BY-LAWS
OF THE FUND DISCUSSED ABOVE.
PROPOSAL 4 -- TO APPROVE CERTAIN CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES TO PERMIT THE FUND TO INVEST IN THE SECURITIES OF OTHER REGISTERED
INVESTMENT COMPANIES (INCLUDING THE PAX WORLD MONEY MARKET FUND), WITHIN CERTAIN
LIMITS
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.
This proposal seeks shareholder approval of changes to the Fund's
fundamental investment policies so as to permit the Fund to invest, to the
extent permitted by law, in the securities of other registered investment
companies (including the Pax World Money Market Fund) subject, however, to the
following: the Fund may not invest in the securities of any registered
investment company whose objective is to invest in securities of issuers
primarily designed to support underlying community development activities
targeted to serve low- and moderate- income individuals such as affordable
housing and education (a "Community Development Issuer") if, as a result, the
Fund would then have more than $500,000 invested in that particular Community
Development Issuer or $1,000,000 in the aggregate in all Community Development
Issuers held by the Fund.
This proposal would amend the fundamental policies of the Fund as may
be necessary to effectuate the intent of this proposal and, in particular,
Number 2 thereof, as set forth in the Fund's Statement of Additional Information
under the heading "Investment Restrictions", to provide that the Fund may not:
2. purchase the securities of any registered investment company
whose objective is to invest in securities of issuers primarily
designed to support underlying community development activities
targeted to serve low- and moderate- income individuals such as
affordable housing and education (a "Community Development
Issuer") if, as a result, the Fund would then have more than
$500,000 invested in that particular Community Development Issuer
or $1,000,000 in the aggregate in all Community Development
Issuers held by the Fund.
REQUIRED VOTE; REASONS FOR DIRECTORS' APPROVAL
-9-
The Board of Directors of the Fund considered the proposed change to
the Fund's fundamental investment policies so as to permit the Fund to purchase
the securities of other registered investment companies at a meeting held on
March 13, 2003. 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 the Fund is, from time to time,
unable to take advantage of certain potentially attractive investment
opportunities due to the Fund's prohibition on purchasing the securities of
other investment companies, other than the Pax World Money Market Fund. These
opportunities included certain financial service companies that are either
registered investment companies or affiliated with registered investment
companies or were identified in connection with the Fund's commitment to assist
in community development projects and its goal to invest approximately one
percent of its assets in such projects. . The Board of Directors also considered
the potential risks of investing in the securities of other registered
investment companies (such as the risk that the adviser(s) to such companies may
fail to execute such companies' strategies effectively or that the investment
objectives of such companies may not be achieved) and the possible duplication
of advisory, administrative, custodial and other fees, costs and expenses.
After review of the information and representations provided to them,
the Directors determined that the proposed change to the Fund's fundamental
investment policies would be in the best interest of the Fund and its
shareholders. Accordingly, the Directors present at a meeting of the Board of
Directors held on March 13, 2003 voted unanimously to approve the proposed
change to the Fund's fundamental investment policies, subject to approval by "a
majority of the Fund's outstanding voting securities" as required by the
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated by the Securities and Exchange Commission thereunder, and recommends
that the Shareholders similarly vote in favor.
RECOMMENDATION
THE BOARD OF DIRECTORS OF THE FUND BELIEVES THAT THE PROPOSED CHANGE TO
THE FUND'S FUNDAMENTAL INVESTMENT POLICIES IS IN THE BEST INTEREST OF THE FUND
AND ITS SHAREHOLDERS AND, ACCORDINGLY, RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
CHANGE TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES 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.
-8-SHAREHOLDER PROPOSALS
If a shareholder of the Fund wants to include a proposal in the Fund's
proxy statement and form of proxy for presentation at the 2004 Annual Meeting of
Shareholders, the proposal must be received by December 20, 2003 and must
otherwise comply with the rules of the Securities and Exchange Commission
relating to the submission of shareholder proposals. Proposals must be mailed to
the Fund's principal executive offices at 222 State Street, Portsmouth, NH
03801-3853 Attention: Secretary. A shareholder proposal not included in the
Fund's proxy statement for the 2004 Annual Meeting of Shareholders will be
ineligible for presentation at that meeting.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
Interested Directors and Officers
Common Stock Mr. Thomas W. Grant 2,875.541 shares of the .005%
Common Stock of the Fund
Common Stock Mr. Laurence A. Shadek 2,776.834 shares of the .005%
Common Stock of the Fund
Disinterested Directors and Officers
Common Stock Mr. Carl H. Doerge, Jr. 4,075.157 shares of the .007%
Common Stock of the Fund
Common Stock Mr. James M. Large, Jr. 0.00 shares of the Common 0%
Stock of the Fund
-10-
Common Stock Ms. Joy L. Liechty 1,282.492 shares of the .002%
Common Stock of the Fund
Common Stock Mr. Sanford C. Sherman 1,364.050 shares of the .002%
Common Stock of the Fund
Common Stock Dr. Nancy S. Taylor 3,464.262 shares of the .006%
Common Stock of the Fund
Common Stock Ms. Esther J. Walls 1,055.737 shares of the .002%
Common Stock of the Fund
HOUSEHOLDING OF ANNUAL REPORTS
The Securities and Exchange Commission permits the delivery of a single
set of annual reports to any household at which two or more shareholders reside,
if the shareholders consent. This procedure, referred to as householding,
reduces the volume of duplicate information you receive, as well as the Fund's
expenses.
If you prefer to receive separate copies of the Fund's annual report,
either now or in the future, the Fund will promptly deliver, upon your written
or oral request, a separate copy of the annual report, as requested, to any
shareholder at such shareholder's address to which a single copy was delivered.
Notice should be given by writing to the Fund at 222 State Street, Portsmouth,
NH 03801-3853 or telephoning the Fund at 1-800-767-1729. If you are currently a
shareholder of the Fund sharing an address with another shareholder of the Fund
and wish to have only one annual report delivered to your household in the
future, please contact us at the same address or telephone number.
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 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.
-9--11-
PROXY PROXY
PAX WORLD BALANCED FUND, INC.
C/O PFPC, INC.
P.O. BOX 9426400 BELLEVUE PARKWAY, SUITE 108
WILMINGTON, DE 1989919809
PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 13, 200212, 2003
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PAX WORLD BALANCED FUND, INC.
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 herein,below, all the shares of
common stock of Pax World Balanced Fund, Inc. held on record by the undersigned
on April 18, 2002,14, 2003, at the annual meeting of shareholders to be held on Thursday,
June 13, 200212, 2003, or at any adjournment or adjournments thereof.
VOTE VIA THE INTERNET: HTTPS:https://VOTE.PROXY-DIRECT.COMvote.proxy-direct.com
VOTE BY TELEPHONE: 1-800-597-78361-866-241-6192
CONTROL NUMBER: 999 9999 9999 999
NOTE: Please sign exactly as your name appears 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
______________________________________, 2002________________________________________, 2003
Date
I plan to attend the Meeting Yes [_] No [_]
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.
PAX WORLD BALANCED FUND, INC.
ANNUAL SHAREHOLDERS MEETING - JUNE 13, 200212, 2003
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 AND 35 AS SAID PROXIES,
AND EACH OF THEM, MAY DETERMINE.
PROPOSALSTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [ ]
1. To elect the following eight nominees as Directors of the Fund:
01 Carl H. Doerge, Jr. 02 Thomas W. Grant 03 James M. Large, Jr.
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 toyour vote for any individual nominee(s), mark the "FOR
ALL EXCEPT" box and write the number(s) of such nominee(s) on the
line provided below:
------------------------------------------------------------------------------------------------------
2. To ratify the selection of Pannell Kerr Forster PCErnst & Young LLP as the independent public
accountants of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To amend the By-laws of the Fund to permit the Fund to invest in the
securities of other registered investment companies (including the Pax
World Money Market Fund), within certain limits.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve a change to the Fund's fundamental investment policies to
permit the Fund to invest in the securities of other registered investment
companies (including the Pax World Money Market Fund), within certain
limits.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, on all other business that may properly come before
the Meeting and any adjournment or adjournments thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR ON THE REVERSE SIDE.INTERNET AS DESCRIBED IN
THE ENCLOSED PAMPHLET.
-2-
YOUREVERY PROXY VOTE IS IMPORTANT!
AND NOW YOU CAN VOTE YOUR PROXY BY TELEPHONE OR ON THE PHONE OR INTERNET.
IT SAVES MONEY! Telephone and Internet voting saves postage costs. Savings thatcosts, which can
help to minimize Fundfund expenses.
IT SAVES TIME! Telephone and Internet voting is instantaneous - 24 hours a day.
IT'S EASY! Just follow these simple steps:
1. Read your Proxy Statementproxy statement and have it at hand.
2. Call toll-free 1-800-597-78361-866-241-6192 or go to website
https://vote.proxy-direct.com.
3. Enter your 14 digit14-digit CONTROL NUMBER from your Proxy Card.proxy card.
4. Follow the recorded or on-screen directions.
5. Do NOT mail your Proxy Cardproxy card when you vote by telephonephone or on the Internet.
I M P O R T A N T
-----------------
PLEASE SEND IN YOUR PROXY...TODAY!
You are urged toPROXY... TODAY!
Please sign and date and sign the enclosed proxy and return it promptly. This will help
save the expense of follow-up letters and telephone calls to shareholders who
have not responded.
COME AND MEET PAX WORLD!
We'd love to meet you! We invite you to join us for the Pax World Annual
Shareholders Meeting on June 12, 2003 in Portsmouth, NH. Come and hear reports
from the Chairman of the Board, President, Portfolio Managers and Director of
Social Research.
(See other side for details.)
PAX WORLD ANNUAL SHAREHOLDERS MEETING
WHERE: Sheraton Harborside Hotel ~ 250 Market Street ~ Portsmouth, NH
WHEN: Thursday, June 12, 2003 - 9:45am - 1:00pm
WHEN YOU VOTE, PLEASE LET US KNOW IF YOU PLAN TO JOIN US FOR THE MEETING!
o Check the RSVP box on your Proxy Vote Card, or
o Click on the RSVP box on the Proxy Vote website (details on the
Proxy Vote Card), or
o RSVP when you vote by phone at 1-866-241-6192
IF YOU PLAN TO VOTE YOUR SHARES AT THE MEETING,
YOU MAY RSVP BY CALLING US AT 1-800-767-1729 OR BY E-MAIL AT info@paxworld.com.
PLEASE RSVP BEFORE JUNE 1ST. Continental Breakfast will be served.