UNITED STATES
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. )
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o | Definitive Proxy Statement | ||
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o | Soliciting Material under §240.14a-12 | ||
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THE BOSTON TRUST & WALDEN FUNDS | |||
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The Boston Trust & Walden Funds
3435 Stelzer Road
Columbus, Ohio 43219
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held May 24, 2013July 18, 2016
The Board of Trustees of The Boston Trust & Walden Funds, an open-end investment management company organized as an Massachusetts business trust (the “Trust” and each series thereof, a “Fund”), has called a special meeting of the shareholders of the Trust (the “Meeting”), to be held at the offices of Thompson Hine LLP, 41 S. High Street, Suite 1700,Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, OH 43215Ohio 43219, on May 24, 2013July 18, 2016 at 10:0030 a.m., Eastern Time, for the following purposes:
1. To approve an amendment to each Fund’s fundamental policy regarding loans. (Shareholders of each Fund, voting separately, must approve this proposal with respect to their Fund.) |
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2. To approve an amendment to each Fund’s fundamental policy regarding borrowing. (Shareholders of each Fund, voting separately, must approve this proposal with respect to their Fund.)
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3. To elect Elizabeth McGeveran to the Board of Trustees of the Trust. 4. To transact such other business as may properly come before the Meeting or any adjournments or postponements thereof. |
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Only shareholders of record at the close of business on March 25, 2013June 1, 2016 are entitled to notice of, and to vote at, the special meetingMeeting and any adjournments or postponements thereof. The Notice of Meeting, Proxy Statement and accompanying form of proxy will first be mailed to shareholders on or about April 1, 2013.June [ ], 2016.
By Order of the Board of Trustees
Lucia B. Santini, President
YOUR VOTE IS IMPORTANT
To assure your representation at the meeting,Meeting, please complete, date and sign the enclosed proxy card and return it promptly in the accompanying envelope. You also may vote by telephone by following the instructions on the enclosed proxy card. Whether or not you plan to attend the meetingMeeting in person, please vote your shares; if you attend the meeting,Meeting, you may revoke your proxy and vote your shares in person. For more information or assistance with voting, please call [ ].[1-800-282-8782, x 7050].
The Boston Trust & Walden Funds
3435 Stelzer Road
Columbus, Ohio 43219
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
To Be Held May 24, 2013July 18, 2016
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Trustees (the “Board” or the “Trustees” or the “Board of Trustees”) of The Boston Trust & Walden Funds (the “Trust”) for use at the Special Meeting of Shareholders of the Trust (the “Meeting”) to be held at the offices of Thompson Hine LLP, 41 S. High Street, Suite 1700,Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, OH 43215Ohio 43219 on May 24, 2013July 18, 2016 at 10:0030 a.m., Eastern Time, and at any and all adjournments thereof. The Trust is soliciting proxies on behalf of the Boston Trust Asset Management Fund, Boston Trust Equity Fund, Boston Trust Midcap Fund, Boston Trust SMID Cap Fund and Boston Trust Small Cap Fund (the “Boston Trust Funds”) and the Walden Asset Management Fund, Walden Equity Fund, Walden Midcap Fund, Walden SMID Cap Innovations Fund, and Walden Small Cap Innovations Fund and Walden International Equity Fund (the “Walden Funds” and collectively with the Boston Trust Funds, the “Funds”), each a series of the Trust.
The Board called the Meeting for the following purposes:
1. To approve an amendment to each Fund’s fundamental policy regarding loans. (Shareholders of each Fund, voting separately, must approve this proposal with respect to their Fund.) |
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2. To approve an amendment to each Fund’s fundamental policy regarding borrowing. (Shareholders of each Fund, voting separately, must approve this proposal with respect to their Fund.)
3. To elect Elizabeth McGeveran to the Board of Trustees of the Trust.
4. To transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.
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The Notice of Meeting, Proxy Statement and accompanying form of proxy will be mailed to shareholders on or about April 1, 2013.June [ ], 2016.
The Meeting has been called by the Board of Trustees of the Trust for the election of two Trustees to the Board of Trustees and approval of amendments to certain fundamental investment policies. The Meeting also has been called for the transaction of such other business as may properly come before the Meeting or any adjournments thereof. Only shareholders of record at the close of business on March 25, 2013June 1, 2016 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting and any adjournments or postponements thereof. The Funds are managed by.by Boston Trust Investment Management, Inc. (the “Adviser”), One Beacon Street, 33rd Floor, Boston, MA 02108.
Important Notice Regarding Internet Availability of Proxy Materials
This Proxy Statement is available at www.btim.com. The Trust’s Proxy Statement and annual and semi-annual reports are available at no charge by calling 1-800-282-8782 x7050.[1-800-282-8782 x7050].
PROPOSALS 1-2
APPROVE AMENDMENTS TO
CERTAIN FUNDAMENTAL POLICIES OF EACH FUND
The Board, on behalf of the Trust, has approved the filing of an application (the “Application”) for an order (the “Order”) from the Securities and Exchange Commission (“SEC”) permitting the Funds to participate in an interfund lending facility (the “Facility”) under which the Funds may directly lend to and borrow money from each other for temporary purposes, provided that the loans are made in accordance with the terms and conditions set forth in the Order. Without the relief provided by the Order, certain provisions of the Investment Company Act of 1940, as amended (the “1940 Act”), would prohibit the Funds from borrowing from and lending to each other under the Facility.
Currently, the Funds may invest their daily cash balances in money market funds and other short-term investments with banks or other lenders, or they may borrow money from banks or other lenders for temporary purposes to satisfy redemption requests or for other temporary purposes. If the Order is granted, the Funds would be permitted to lend money directly to, and borrow money directly from, each other for temporary purposes (loans made under the Facility must be paid within seven days). Through the use of the Facility, the Funds intend to: (i) reduce the costs that would be incurred in borrowing from banks and other lenders; (ii) enhance their ability to earn higher interest rates on their otherwise uninvested cash balances that would be available from such short-term investments; and (iii) improve their liquidity.
Currently, the Funds are each subject to a number of “fundamental” investment restrictions, and under the 1940 Act, a fundamental investment restriction may be changed or eliminated only with shareholder approval. Two of the Funds’ fundamental investment restrictions, which relate to each Fund’s abilities to make loans and borrow money, would prohibit the Funds’ from being able to participate in the Facility as contemplated in the Application, even if the Order were granted.
Proposals 1 and 2, therefore, are being proposed to modify those two fundamental investment restrictions so that the Funds may, once the Order is granted, directly lend to and borrow money from each other under the Facility.
The proposed amendments to the Funds’ fundamental investment restrictions will not affect any Fund’s investment goal or its current principal investment strategies. The Board and the Adviser anticipate that the proposed changes in the investment restrictions will not materially change the manner in which the Funds are currently managed and operated. Although the proposed amendments will permit the Funds to participate in the Facility, the Board and the Adviser at this time do not anticipate that the changes, individually or in the aggregate, will result in a material change in the current level of investment risk associated with an investment in any Fund.
Shareholders in each Fund will vote separately on Proposals 1 and 2. If Proposals 1 and 2 are approved by the shareholders of a Fund, the changes will be effective for that Fund as of the date that shareholders are notified that the changes will be made through either (i) a supplement to the prospectus and/or Statement of Additional Information (“SAI”) or (ii) revisions to such
documents at the time of the annual update to the Fund’s registration statement. Neither the Board nor the Adviser know of any contest or dispute as to the actions to be taken under Proposals 1 and 2. If shareholders of a Fund fail to approve either Proposal 1 or 2, none of the changes contemplated by the Proposals will be effective for that Fund.
The Board unanimously recommends that shareholders of each Fund vote “FOR” Proposals 1 and 2.
PROPOSAL 1
ELECTIONAPPROVAL OF TRUSTEESAN AMENDMENT TO EACH FUND’S
FUNDAMENTAL POLICY REGARDING LOANS
Under the 1940 Act, an investment company must describe, and designate as fundamental, its policy with respect to making loans. Each Fund’s current fundamental policy regarding loans is as follows:
The Funds may not:
Make loans to others, except (a) through the purchase of debt securities, (b) by investing in repurchase agreements and (c) by loaning portfolio securities.
As currently written, each Fund’s fundamental policy regarding loans would prohibit the Fund from making loans to another Fund under the Facility, even if the Order was granted. As a result, to permit each Fund to participate in the Facility, it is being proposed that each Fund’s fundamental policy regarding loans be amended to read as follows:
The Funds may not:
Lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements, or to acquisitions of loans, loan participations or other forms of debt instruments.
The proposed investment restriction is substantially the same as the Funds’ current restriction, except that it also permits interfund lending in accordance with the terms and conditions of the Order. Those terms and conditions are anticipated to impose specific limitations on the duration, rates and amounts of loans made under the Facility that are designed to reduce the risk of making such loans and provide more favorable interest rates than would otherwise be available. Those terms and conditions are also anticipated to provide for substantial administrative oversight by the Board, the Trust’s Chief Compliance Officer (“CCO”), the Funds’ independent public accounting firm, and the Funds’ investment adviser. Therefore, adoption of the proposed investment restriction is not expected to introduce additional material risk to the Funds or to affect the ways the Funds are managed.
The Board unanimously recommends that shareholders of each Fund vote “FOR” Proposal 1.
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO EACH FUND’S
FUNDAMENTAL POLICY REGARDING BORROWING
The 1940 Act imposes certain limitations on the borrowing activities of investment companies and those limitations must be fundamental. Borrowing limitations are generally designed to protect shareholders and their investments by restricting an investment company’s ability to subject its assets to the claims of creditors that, under certain circumstances, might have a claim to the fund’s assets that would take precedence over the claims of shareholders upon redemption or liquidation.
Under the 1940 Act, an open-end investment company may borrow up to 33 1/3% of its total assets (including the amount borrowed) from banks and may borrow up to an additional 5% of its total assets for temporary purposes from any other person. Generally, a loan is considered temporary if it is repaid within 60 days. Funds typically borrow money to meet redemptions or for other short-term cash needs in order to avoid forced, unplanned sales of portfolio securities. This technique affords a fund greater flexibility by allowing its investment manager to buy and sell portfolio securities primarily for investment or tax considerations, rather than for cash flow considerations.
Each Fund’s current fundamental policy regarding borrowing is as follows:
The Funds may not:
Borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of a Fund’s total assets at the time the borrowing is made. This limitation does not preclude a Fund from entering into reverse repurchase agreements.
If the Order were granted as contemplated by the Application, a Fund would be permitted to borrow from another Fund on a temporary basis in amounts that exceed 5% of the borrowing Fund’s total assets, subject to certain limitations. In particular, it is anticipated that under the Facility:
(i) Unsecured interfund loans may be made as long as the total borrowing from all sources after the loan does not exceed 10% of the borrower’s total assets; and
(ii) Interfund loans in excess of that amount must be secured by a pledge of segregated collateral with a market value of at least 102% of the outstanding principal amount of the loan; and
(iii) A Fund may not borrow through the Facility if, after the loan, total borrowing from all sources would exceed 33 1/3% of the Fund’s total assets.
As currently written, each Fund’s fundamental policy regarding borrowing would prohibit the Fund from making loans to another Fund to the extent contemplated by the Application, even if the Order were granted. As a result, to permit each Fund to participate in the Facility as contemplated by the Application, it is being proposed that each Fund’s fundamental policy regarding borrowing be amended to read as follows:
The Funds may not:
Borrow money, except that the Fund may borrow money (a) from a bank or from another fund of the Trust, provided that immediately after such borrowing, the aggregate amount of all borrowings does not exceed 33 1/3% of the Fund’s total assets (including the amount borrowed) less liabilities (other than borrowings), or (b) from a bank or other person for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of the Fund’s total assets at the time the borrowing is made. This limitation does not preclude the Fund from entering into reverse repurchase agreements.
The proposed investment restriction is substantially the same as the Funds’ current restriction, except that it also permits borrowing under an interfund lending program in accordance with the terms and conditions of the Order. Those terms and conditions are anticipated to impose specific limitations on the duration, rates and amounts of loans made under the Facility that are designed to reduce the risk of borrowing and provide more favorable interest rates than would otherwise be available. Those terms and conditions are anticipated to provide for substantial administrative oversight by the Board, the Trust’s CCO, the Funds’ independent public accounting firm, and the Adviser. Therefore, adoption of the proposed investment restriction is not expected to introduce additional material risk to the Funds or to affect the ways the Funds are managed.
The Board unanimously recommends that shareholders of each Fund vote “FOR” Proposal 2.
PROPOSAL 3
ELECTION OF TRUSTEE
In this proposal, shareholders of the Fund are being asked to elect Lucia B. Santini and Heidi Soumerai (each a “Nominee,” together the “Nominees”Elizabeth McGeveran (the “Nominee”) to the Board of Trustees of the Trust. Each NomineeBoard. Ms. McGeveran has agreed to serve on the Board of Trustees for an indefinite term.
Ms. SantiniMcGeveran is an incumbent Independent Trustee, having been appointed to that position by the Board on May 19, 2011. December 3, 2015. During a meeting of the Trust’s Nominating Committee held on December 3, 2015, the Trust’s Nominating Committee nominated Ms. McGeveran for appointment to the Board. During a meeting of the Board of Trustees held on the same day, Ms. McGeveran was appointed to the Board by the members of the Board of Trustees who are not “interested persons” as that term is defined in Section 2(a)(19) of the 1940 Act (referred to hereafter as the “Independent Trustees”).
The Investment Company Act of 1940, as amended (the “1940 Act”), requires a certain percentage of the Trustees to have been elected by shareholders before the Board can appoint any new Trustees. Each incumbent Trustee other than Ms. Santini has been elected by shareholders. To facilitate
future compliance with this requirement, the Board of Trustees now proposes to have shareholders elect Ms. SantiniMcGeveran to her current position.
Ms. Soumerai was nominated for election to the Board by the Nominating Committee (the “Committee”) of the Board of Trustees. The Committee consists of the three incumbent Trustees, each of whom is not an “interested person” of the Trust as that term is defined in Section 2(a)(19) of the 1940 Act (referred to hereafter as “Independent Trustees”). An officer of the Trust recommended Ms. Soumerai’s nomination to the Board of Trustees.
At a meeting held on March 1, 2013, the Committee recommended to the Board that Ms. Soumerai and Ms. Santini be nominated for election to the Board of Trustees. The Board approved the nominations. If elected, Ms. Santini and Ms. Soumerai will be considered “interested trustees,” as that term is defined in Section 2(a)(19) of the 1940 Act, because of their affiliation with the Adviser, as discussed below. Even if shareholders do not elect Ms. Santini,McGeveran, she will continue to serve in her current capacity pursuant to her appointment to the Board. If elected, Ms. Soumerai will assume office on or about May 24, 2013.
Information about the NomineesNominee
Below is information about each NomineeMs. McGeveran and the attributes that qualify eachher to serve as a Trustee. The information provided below is not all-inclusive. Many Trustee attributes involve intangible elements, such as intelligence, work ethic and the willingness to work together, as well as the ability to communicate effectively, exercise judgment, ask incisive questions, manage people and problems, and develop solutions. The Board does not believe any one factor is determinative in assessing a Trustee’s qualifications, but that the collective experiences of the NomineesMs. McGeveran makes eachher highly qualified.
The Board believes each Nominee possesses experiences, qualifications, and skills valuable to the Funds. Each Nominee has substantial business experience, effective leadership skills and an ability to critically review, evaluate and assess information.
NewIncumbent Independent Trustee Nominee
The Board believes that Ms. Soumerai is qualified to serveMcGeveran should be elected by shareholders as a Trustee of the Trustprincipally because of her more than 28 years of experience in the investment management industry, including her extensive senior-level business, financial and management experience. Ms. Soumerai is a Senior Vice President and Director of ESG Research for Boston Trust & Investment Management Company (“Boston Trust”), the parent company of the Adviser, and a member of the Board of Directors of Boston Trust. As the firm’s director of ESG research, she oversees the evaluation of existing and potential securities relative to environmental, social and governance (ESG) factors. Ms. Soumerai coordinates and leads a variety of shareholder engagement initiatives to promote greater corporate accountability, including company dialogues, shareholder proposals, and proxy voting. She is a member of Boston Trust’s ESG Research & Engagement Committee and is chair of the firm’s Corporate Governance Committee, which establishes proxy voting guidelines for Boston Trust and Walden Asset Management, an affiliated investment adviser. Ms. Soumerai holds the Chartered Financial Analyst® designation and is a member of the Boston Security Analysts Society and the CFA Institute.
The Board also noted Ms. Soumerai’s extensive socialimpact investing knowledge, as well asexperience, coupled with her ability to think and act independently, her capacity to work in a collegial manner with other Board membersTrustees and her character and integrity. Finally, theThe Board considered whetheralso believes that Ms. Soumerai would bringMcGeveran brings a diversity of gender, viewpoints, background and experiencesexperience to the Board. Since 2014, Ms. Soumerai would be considered an “interested” trustee,McGeveran has served as Director of Impact Investing for The McKnight Foundation, where she is responsible for investing in businesses and funds that term is defined in Section 2(a)(19)are building the low-carbon economy, improving the water quality of the 1940 Act.
Incumbent Interested Trustee Nominee
Ms. Santini was appointedMississippi River, and contributing to the Board of Trustees in 2011 and servesa thriving, sustainable Minnesota. From 1999 until 2013, she served as President of the Trust. Ms. Santini has been a Managing Director of the Adviser since 2001 and Senior Vice President, and Senior Portfolio Manager of Boston Trust since 1993. Ms. Santini also isGovernance & Sustainable Investment, for F&C Asset Management plc, a director of Boston Trust. She brings extensive operational, investment management, regulatory and marketing knowledge toLondon-based, $150-billion asset manager, where she built the Board of Trustees, having occupied a variety of senior management roles at the firm, including chief operating officer, in which capacity she oversaw administration, operations, finance, and compliance. Ms. Santini is a member of the Boston Trust’s Investment Committee and has been responsible for research and analysis in the financial sector. She is also a member of the ESG Research & Engagement Committee and is chair of the Audit & Risk Management Committee. Prior to joining Boston Trust in 1982, Ms. Santini worked for the A.C.H. New England at the Federal Reserve Bank of Boston. She holds the Chartered Financial Analyst® designation and is a member of the Boston Security Analysts Society and the CFA Institute.firm’s market-leading socially
Additional information about Ms. Soumerai and Ms. Santini, as well as the officers of the Trust, is set forth in the following table:
Name, Address(1) |
| Position(s) |
| Term of |
| Principal Occupation(s) |
| Number of |
| Other |
Heidi Soumerai Date of Birth: 9/14/57 |
| Trustee |
| NA |
| Senior Vice President and Director of ESG Research, Boston Trust & Investment Management Company, August 2004 - present; Research Analyst, Boston Trust & Investment Management, January 1985 to present |
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Lucia B. Santini Date of Birth: 10/2/1958
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| Trustee |
| Indefinite/ 05/2011 to present |
| Managing Director, Boston Trust Investment Management, Inc., February, 2001 to present; Senior Vice President and Senior Portfolio Manager, Boston Trust & Investment Management Company (bank trust company), November 1993 to |
| 10 |
| 0 |
(1) The mailing address of Trustee and Nominee is c/o Boston Trust & Walden Funds, 3435 Stelzer Road, Columbus, Ohio 43219.
responsible investment business and served as a senior manager to one of the industry’s largest teams.
The following table provides information regarding the Nominee:
Name, |
| Position(s) |
| Term of | Principal Occupation(s) | Number of | Other | |||
Elizabeth E. McGeveran 3435 Stelzer Road Columbus, Ohio 43219 Year of Birth: 1971 | Trustee | Indefinite; Since April, 2016 | Director of Impact Investing, The McKnight Foundation, September, 2014 to present; Senior Vice President, Governance & Sustainable Investment, F&C Asset Management plc, October, 1999 to April, 2013. | 11 | None |
* Trustees hold their position until their resignation or removal.
** The “Fund Complex” consists of The Boston Trust and Walden Funds.
Independent Trustees
The following table provides information regarding the incumbent Independent Trustees (excluding the Nominee):
Name, Address | Position(s) | Term of |
| Principal Occupation(s) |
| Number of |
| Other | ||
Diane E. Armstrong 3435 Stelzer Road Columbus, OH 43219 Year of Birth: 1964 |
| Trustee |
| Indefinite; Since February, 2005 |
| President, Armstrong Financial Services (financial planning firm), November, 2012 to present; Managing Director of Financial Planning Services, WealthStone (financial planning firm), July, 2008 to November, 2012. | 11 | None | ||
Michael M. Van Buskirk 3435 Stelzer Road Columbus, Ohio 43219 Year of Birth: 1947 | Trustee and Chairman of the Board | Indefinite; Trustee since January, 1992. Chairman since January, 2006. | President and Chief Executive Officer, Ohio Bankers League, May, 1991 to December, 2013. | 11 | None | |||||
James H. Woodward 3435 Stelzer Road Columbus, Ohio 43219 Year of Birth: 1939 | Trustee | Indefinite; Since February, 2006 | Chancellor Emeritus, University of North Carolina at Charlotte, August, 2005 to present. Chancellor, North Carolina State University, June, 2009 to April, 2010. | 11 | None |
* Trustees hold their position until their resignation or removal.
** The “Fund Complex” consists of The Boston Trust and Walden Funds.
Interested Trustees
The following table provides information regarding the incumbent Trustees who are “interested persons” as defined in the 1940 Act:
Name, Address | Position(s) | Term of | Principal Occupation(s) | Number of | Other Trustee During Years | |||||
Lucia B. Santini One Beacon Street, 33rd Floor Boston, MA 02108 Year of Birth: 1958 | Trustee and President | Indefinite; Since June, 2011 | Managing Director and Portfolio Manager, Boston Trust Investment Management, Inc., February, 2001 to present; Senior Vice President and Senior Portfolio Manager, Boston Trust & Investment Management Company (bank trust company), November, 1993 to present. |
| 11 |
| None | |||
Heidi Soumerai One Beacon Street, 33rd Floor Boston, MA 02108 Year of Birth: 1957 |
| Trustee |
| Indefinite, Since May, 2013 |
| Senior Vice President and Director of ESG Research, Boston Trust & Investment Management Company, August 2004 - present; Research Analyst, Boston Trust & Investment Management, January, 1985 to present. |
| 11 |
| None |
* Trustees hold their position until their resignation or removal.
** The “Fund Complex” consists of The Boston Trust and Walden Funds.
Officers
The following table provides information regarding the officers of the Trust who are not Trustees:
Name, Address | Position(s) Held | Term of Office* | Principal Occupation(s) During the Past | |||||||
Jennifer Ellis One Beacon Street, 33rd Floor Boston, MA 02108
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| Treasurer |
| Indefinite; Since |
| Chief Financial Officer/Treasurer, Boston Trust & Investment Management Company, May, 2011 to present; |
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present. | ||||||||||
Curtis Barnes 100 Summer Street Boston, MA 02110
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| Secretary |
| Indefinite; Since |
| Senior Vice President, Citi Fund Services Ohio, Inc. |
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3435 Stelzer Road Columbus, Ohio 43219
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| Chief Compliance Officer |
| Indefinite; Since |
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* Officers hold their position until a successor has been duly elected and qualified.
Incumbent Independent TrusteesTrustee Qualifications
The following tables provide information regardingBelow are summaries of the qualifications of the incumbent Trustees who are not Nominees.
Name, Address(1) |
| Position(s) |
| Term of |
| Principal Occupation(s) |
| Number of |
| Other |
Diane E. Armstrong |
| Trustee |
| Indefinite; |
| President, Armstrong |
| 10 |
| 0 |
(1)candidates being proposed for election at the Meeting. The mailing addressTrust has concluded that each of these Trustees should serve on the Board because of his or her ability to review and understand information about the Trust and the Funds provided by management, to identify and request other information he or she may deem relevant to the performance of the Trustees’ duties, to question management and other service providers regarding material factors bearing on the management and administration of the Trust, and to exercise his or her business judgment in a manner that serves the best interests of the Funds’ shareholders. The experiences, qualifications, attributes and skills of each Trustee, as described below, qualify them to serve as a Trustee of the Trust.
Ms. Armstrong brings investment, auditing, budgeting and Nominee is c/ofinancial reporting skills to the Board of Trustees and her investment management background provides important insights into the needs of Fund shareholders. Ms. Armstrong has been the President of Armstrong Financial Services, a financial planning firm, since 2012, and she served as Managing Director of Financial Planning Services of WealthStone, a financial planning firm, from 2008 to 2012.
Mr. Van Buskirk has deep knowledge of the Trust and its service providers, the creation and distribution of financial products and the regulatory framework under which the Trust operates. From 1993 through 2013, Mr. Van Buskirk served the Chairman and Chief Executive Officer of the Ohio Bankers League, a financial trade association. Before that role, he served as senior executive of a major financial services company.
Mr. Woodward’s strategic planning, organizational and leadership skills help the Board set long-term goals for the Funds and establish processes for overseeing Trust policies and procedures. Mr. Woodward has served as the Chancellor Emeritus of University of North Carolina at Charlotte since 2005.
Ms. Santini brings operational, investment management and marketing knowledge to the Board of Trustees. Ms. Santini has been a Managing Director of the Adviser, since 2001 and Senior Vice President and Senior Portfolio Manager of Boston Trust & Walden Funds, 3435 Stelzer Road, Columbus, Ohio 43219.Investment Management Company, the parent of the Adviser, since 1993.
5Ms. Soumerai has extensive portfolio management experience, including extensive social investing knowledge. Ms. Soumerai is a Senior Vice President and Director of ESG Research for Boston Trust & Investment Management Company, the parent company of the Adviser, and has served in that role since August 2004. As Director of ESG research, she oversees the evaluation of existing and potential securities relative to environmental, social and governance (ESG) factors.
Name, Address(1) |
| Position(s) |
| Term of |
| Principal Occupation(s) |
| Number of |
| Other |
Date of Birth: 7/2/1964 |
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| Since November 2004 |
| Financial Services (financial planning firm), November, 2012 to present; Managing Director of Financial Planning Services, WealthStone (financial planning firm), July, 2008 to November, 2012; Principal of King, Dodson Armstrong Financial Advisors, Inc. August, 2003 to July, 2008. |
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Michael M. Van Buskirk Date of Birth: 2/22/1947
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| Trustee and Chairman of the Board |
| Indefinite; Trustee since January, 1992. Chairman since January, 2006 |
| President and Chief Executive Officer, Ohio Bankers League. May, 1991 to present. |
| 10 |
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James H. Woodward Date of Birth: 11/24/1939
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| Trustee |
| Indefinite; Since February, 2006 |
| Chancellor Emeritus, University of North Carolina at Charlotte, August, 2005 to present. Chancellor, North Carolina State University, June, 2009 to April, 2010. Chancellor, University of North Carolina at Charlotte. July, 1989 to July, 2005. |
| 10 |
| 0 |
Trustee Trust Ownership
Some of the NomineesTrustees own shares of the Trust.Funds. The following table shows the dollar range of the shares beneficially owned by each Nominee and each incumbent Trustee as of December 31, 2013.[ ]:
Name of Trustee |
| Dollar Range of Equity |
| Aggregate Dollar Range of Equity | |
|
|
|
|
| |
|
|
| [None] | ||
Diane E. Armstrong |
|
|
|
| [$10,001 - $50,000] |
Michael M. Van Buskirk |
| [Over |
| [Over | $100,000] |
James H. Woodward |
| [$ |
| [$ | |
Lucia B. Santini |
| [Over $100,000] | [Over $100,000] | ||
Heidi Soumerai | [Over $100,000] | [Over $100,000] |
(1)* Ownership disclosure is made using the following ranges: None; $1 - $10,000; $10,001 - $50,000; $50,001 - $100,000 and over $100,000.
** “Family of Investment Companies” means The Boston Trust and Walden Funds.
Trustee Compensation
The following table sets forth information regarding compensation of Trustees by the Trust for the fiscal year ended March 31, 2013.2016:
Name of Trustee Aggregate Pension or Estimated Total Elizabeth E. McGeveran* $ 0 $ 0 $ 0 $ 0 Diane E. Armstrong $ [ ] $ [ ] $ [ ] $ [ ] Michael M. Van Buskirk $ [ ] $ [ ] $ [ ] $ [ ] James H. Woodward $ [ ] $ [ ] $ [ ] $ [ ] Lucia B. Santini $ 0 $ 0 $ 0 $ 0 Heidi Soumerai $ 0 $ 0 $ 0 $ 0 *Ms. McGeveran joined the Board effective April 1, 2016. |
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Leadership Structure and Board of Trustees
The Board of Trustees has general oversight responsibility with respect to the business and affairs of the Trust and the Funds. The Board has engaged service providers to manage and/or administer the day-to-day operations of the Funds and is responsible for overseeing such service providers. The Trustees also have engaged legal counsel (who is also legal counsel to the Trust) that is independent of the Adviser or its affiliates to advise them on matters relating to their responsibilities in connection with the Trust. In addition to four regularly scheduled meetings per year, the Board holds special meetings or informal conference calls to discuss specific matters that may require action prior to the next regular meeting. The Board is currently composed of foursix Trustees, threefour of whom are not an “interested persons” of the Fund, as that term is defined in the 1940 Act (each an “Independent Trustee”).Independent Trustees. The Chairman of the Board is an Independent Trustee. The Chairman’s responsibilities include, among other things, scheduling Board meetings, setting and prioritizing Board meeting agendas, serving as a point person for the exchange of information between management and the Board of Trustees, coordinating communications among the Trustees, and ensuring that the Board receives reports from
management on essential matters. The Trustees meet separately in an executive session on a quarterly basis and meet separately in executive session with the Funds’ Chief Compliance OfficerTrust’s CCO at least annually. On an annual basis, the Board conducts a self-assessment and evaluates its structure.
Board Oversight of Risk
Mutual funds face a number of risks, including investment risk, compliance risk and valuation risk. The Board oversees management of the Funds’ risks directly and through its committees. While day-to-day risk management responsibilities rest with the Trust’s Chief Compliance Officer,CCO, investment adviser and other service providers, the Board monitors and tracks risk by:
1. Receiving and reviewing quarterly and ad hoc reports related to the performance and operations of the Funds;
2. Reviewing and approving, as applicable, the compliance policies and procedures of the Trust, including the Trust’s valuation policies and transaction procedures;
3. Periodically meeting with portfolio management to review investment strategies, techniques and the processes used to manage related risks;
4. Meeting with representatives of key service providers, including the Fund’s investment adviser, administrator, transfer agent and independent registered public accounting firm to discuss the activities of the Funds;
5. Engaging the services of the Chief Compliance Officer of the TrustTrust’s CCO to test the compliance procedures of the Trust and its service providers;
6. Receiving and reviewing reports from the Trust’s independent registered public accounting firm regarding theeach Fund’s financial condition and the Trust’s internal controls;
7. Receiving reports from the investment adviser’s Chief Compliance OfficerAdviser’s CCO and the Trust’s Anti-Money Laundering Compliance Officer; and
8. Chief Compliance Officer reviewingEngaging the Trust’s CCO to review the adequacy of the Trust’s compliance policies and procedures and the effectiveness of their implementation.
The Board has concluded that its general oversight of the investment adviserAdviser and other service providers as implemented through the reporting and monitoring process outlined above allows the Board to effectively administer its risk oversight function.
Board Committees
The Board has established an Audit Committee, Nominating Committee and Valuation Committee to assist it in performing its oversight function. The Audit Committee, composed entirelycomprised of all the Independent Trustees, oversees the Trust’s accounting and financial reporting policies and practices and the quality and objectivity of the Trust’s financial statements and the independent
audit thereof. The Audit Committee generally is responsible for (i) overseeing and monitoring the Trust’s internal accounting and control structure, its auditing function and its financial reporting process, (ii) selecting and recommending to the full Board of Trustees the appointment of auditors for the Trust, (iii) reviewing audit plans, fees, and other material arrangements with respect to the engagement of auditors, including the performance of permissible non-audit services; (iv) reviewing the qualifications of the
auditor’s key personnel involved in the foregoing activities and (v) monitoring the auditor’s independence. The Audit Committee met two times during the last fiscal year.
The Nominating Committee, also comprised of all of the Independent Trustees, evaluates the qualifications of candidates and makes nominations for independent trustee membership on the Board. The Nominating Committee does not consider nominees recommended by shareholders. During the last fiscal year, the Nominating Committee held one meeting. The Nominating Committee last met on March 1, 2013, at which time it nominated Ms. Soumerai for election to the Board.three meetings.
The purpose of the Valuation Committee, which is comprised of at least two Trustees at all times, one of whom must be an Independent Trustee, is to oversee the implementation of the Trust’s valuation procedures and to make fair value determinations on behalf of the Board as specified in the valuation procedures. The Valuation Committee meets as necessary. During the last fiscal year, the Valuation Committee did not meet.
The Board has determined that leadership by an Independent Trustee and a committee structure that is led by Independent Trustees is appropriate for the Trust and allows the Board to effectively and efficiently evaluate issues that impact the Trust as a whole, as well as issues that are unique to each Fund.
The Board of Trustees, of the Trust, including the Independent Trustees, unanimously recommends that shareholders of eachthe Fund vote “FOR” the election of the NomineesNominee to the Board of Trustees.
PROPOSALS 2 – 8
APPROVE AMENDMENTS TO
CERTAIN FUNDAMENTAL POLICIES OF EACH FUND
The Funds are subject to a number of “fundamental” investment restrictions. Many of these fundamental investment restrictions were adopted to comply with federal or state laws, interpretations of the staff of the Securities and Exchange Commission (“SEC”), or in response to regulatory, business or industry conditions that existed at the time the Funds were created. Since adoption of the policies, certain legal and regulatory requirements applicable to investment companies have changed. As a result, the Funds are now subject to a number of fundamental investment restrictions that: (i) are more restrictive than those required under present federal law or (ii) are no longer reflect SEC staff interpretations.
Under the 1940 Act, a fundamental investment restriction may be changed or eliminated only with shareholder approval. Therefore, the Board of Trustees is recommending that shareholders approve the amendment of certain investment restrictions that are more restrictive than is currently required or do not reflect current industry practice. The Board and the Adviser believe that that removing outdated restrictions will give the Adviser the flexibility to respond to market, industry, regulatory or technical changes and to better manage Fund assets in a changing investment environment.
The proposed fundamental investment policies cover only those areas for which the 1940 Act requires the Funds to have fundamental investment restrictions. The proposed standardized investment restrictions will not affect any Fund’s investment goal or its current principal investment strategies. The Board and the Adviser anticipate that the proposed changes in the investment restrictions will not materially change the manner in which the Funds are currently managed and operated. Although the
proposed amendments may give some Funds greater flexibility to respond to possible future investment opportunities, the Board and the Adviser at this time do not anticipate that the changes, individually or in the aggregate, will result in a material change in the current level of investment risk associated with an investment in a Fund.
Shareholders in each Fund will vote separately on Proposals 2 through 8. If Proposals 2 through 8 are approved by the shareholders of a Fund, the changes will be effective for that Fund as of the date that shareholders are notified that the changes will be made through either (i) a supplement to the prospectus and/or SAI or (ii) revisions to such documents at the time of the annual update to the Fund’s registration statement. If shareholders of a Fund fail to approve any of Proposals 2 through 8, none of the changes contemplated by the Proposals will be effective for that Fund. The Board of Trustees unanimously recommends a vote “FOR” Proposals 2 through 8 for each Fund.
PROPOSAL 2
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Loans
Under the 1940 Act, an investment company must describe, and designate as fundamental, its policy with respect to making loans. In addition to a loan of cash, the term “loan” may, under certain circumstances, be deemed to include certain transactions and investment-related practices. Among those transactions and practices are the lending of portfolio securities, the purchase of certain debt instruments and the entering into of repurchase agreements.
Each Fund’s current fundament policy regarding loans is as follows:
The Funds may not:
Make loans to others, except (a) through the purchase of debt securities in accordance with its investment objectives and policies, or (b) through the entry into repurchase agreements.
The proposed amended fundamental investment restriction regarding loans is as follows:
The Funds may not:
Make loans to others, except (a) through the purchase of debt securities, (b) by investing in repurchase agreements and (c) by loaning portfolio securities.
The proposed investment restriction is substantially the same as the Funds’ current restriction, except that it permits securities lending transactions. Investment companies lend their portfolio securities to generate additional income. Cash received as collateral is generally invested in high quality short-term debt obligations, government obligations, bank guarantees or money market mutual funds. Securities lending involves two primary risks: “investment risk” and “borrower default risk.” Investment risk is the risk that the fund will lose money from the investment of the cash collateral. Borrower default risk is the risk that the fund will lose money due to the failure of a borrower to return a borrowed security in a timely manner. The Funds currently do not lend portfolio securities, but would like the flexibility to do so in the future if it is in the Funds’ best interest to do so. Any loans would be
fully collateralized. In addition, the SEC staff has interpreted lending by an investment company, under certain circumstances, to also give rise to issues relating to the issuance of senior securities. To the extent that a Fund enters into lending transactions under these limited circumstances, the Fund will continue to be subject to the limitations imposed under the 1940 Act regarding the issuance of senior securities, which are discussed below in Proposal 8. Therefore, adoption of the proposed investment restriction is not anticipated to introduce additional material risk to the Fund or to affect the ways the Funds are managed.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 2.
PROPOSAL 3
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Borrowing
The 1940 Act imposes certain limitations on the borrowing activities of investment companies and those limitations must be fundamental. Borrowing limitations are generally designed to protect shareholders and their investments by restricting an investment company’s ability to subject its assets to the claims of creditors that, under certain circumstances, might have a claim to the fund’s assets that would take precedence over the claims of shareholders upon redemption or liquidation.
Under the 1940 Act, an open-end investment company may borrow up to 33 1/3% of its total assets (including the amount borrowed) from banks and may borrow up to an additional 5% of its total assets for temporary purposes from any other person. Generally, a loan is considered temporary if it is repaid within 60 days. Funds typically borrow money to meet redemptions or for other short-term cash needs in order to avoid forced, unplanned sales of portfolio securities. This technique affords a fund greater flexibility by allowing its investment manager to buy and sell portfolio securities primarily for investment or tax considerations, rather than for cash flow considerations.
Each Fund’s current fundament policy regarding borrowing is as follows:
The Funds may not:
a.Borrow money, except from banks for temporary or emergency purposes. Any borrowing will be made only if immediately thereafter there is an asset coverage of at least 300% of all borrowing.
b.Mortgage, pledge or hypothecate any of its assets except in connection with such borrowings
The proposed amended fundamental investment restriction regarding borrowing is as follows:
The Funds may not:
Borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such
temporary borrowings are in an amount not exceeding 5% of a Fund’s total assets at the time the borrowing is made. This limitation does not preclude a Fund from entering into reverse repurchase agreements.
The current investment restrictions relating to borrowing generally (i) are substantially the same as the proposed investment restriction on borrowing set forth above, (ii) limit the purposes for which a Fund may borrow money and (iii) limit the a Fund’s ability to engage in other transactions for which it may be required to post collateral or obtain short-term credit. Because the proposed borrowing restriction would provide the Funds with additional borrowing flexibility, to the extent that a Fund uses such flexibility in the future to borrow, the Fund may be subject to some additional costs and risks inherent in borrowing, such as reduced total return and increased volatility. Borrowing for investment purposes will result in leveraging of a Fund’s assets and may cause a Fund to liquidate portfolio positions when it would not be advantageous to do so. The additional costs and risks to which the Fund may be exposed are limited, however, by the borrowing limitations imposed by the 1940 Act and any rule, exemption or interpretation thereof that may be applicable. In addition, no Fund currently anticipates changing its current borrowing activities.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 3.
PROPOSAL 4
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Underwriting
Under the 1940 Act, an investment company’s policy concerning underwriting is required to be fundamental. Under the federal securities laws, a person or company generally is considered to be an underwriter if the person or company participates in the public distribution of securities of other issuers, which involves purchasing the securities from the issuer with the intention of re-selling the securities to the public. From time to time, an investment company may purchase securities in a private transaction for investment purposes and later sell or redistribute the securities to institutional investors. Under these or other circumstances, a Fund could possibly be considered to be within the technical definition of an underwriter under the federal securities laws. Interpretations by the SEC staff have clarified, however, that re-sales of privately placed securities by institutional investors, such as the Funds, do not necessarily make the institutional investor an underwriter in these circumstances. In addition, under certain circumstances, a Fund may be deemed to be an underwriter of its own securities.
Each Fund’s current fundament policy regarding underwriting is as follows:
The Funds may not:
Purchase securities on margin, participate on a joint or joint and several basis in any securities trading account, or underwrite securities. (The Funds are not precluded from obtaining such short-term credit as may be necessary for the clearance of purchases and sales of its portfolio securities.)
The proposed amended fundamental investment restriction regarding underwritign is as follows:
The Funds may not:
Underwrite securities of other issuers, except to the extent that a Fund may be deemed an underwriter under the Securities Act of 1933 by virtue of disposing of portfolio securities or when selling its own shares.
In addition, an investment company’s policy regarding purchasing securities on margin is not required to be fundamental. Therefore, the Trust and the Adviser propose that the prohibition on purchasing securities on margin be removed from the Funds’ fundamental policies and the following non-fundamental policy be adopted:
The Funds may not sell securities short or purchase securities on margin, This limitation does not preclude a Fund from obtaining such short-term credit as may be necessary for the clearance of purchases and sales of its portfolio securities or depositing or paying initial or variation margin in connection with financial futures contracts, related options transactions or other permissible investments.
The proposed fundamental investment restriction relating to underwriting is substantially similar to the current restrictions in that it prohibits each Fund from engaging in underwriting. The proposed investment restriction, however, clarifies that the Funds may resell portfolio securities that they own and may sell their own shares. The proposed non-fundamental policy is substantially similar to the current fundamental policy. Non-fundamental policies may be changed without a shareholder vote. Adoption of the proposed investment restriction is not anticipated to introduce additional material risk to the Funds or to affect the way the Funds are managed.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 4.
PROPOSAL 5
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Real Estate
The 1940 Act requires that an investment company’s restriction regarding investments in real estate be fundamental. An investment company is not prohibited by the 1940 Act from investing in real estate, either directly or indirectly. The current fundamental investment restrictions relating to real estate generally prohibit the Funds from investing in real estate, although most Funds may invest in marketable securities secured by real estate or interests therein or issued by companies or other entities that invest in real estate or interests therein.
Each Fund’s current fundament policy regarding real estate is as follows:
The Funds may not:
Purchase or sell real estate, commodities or commodity contracts (other than futures contracts for the purposes and under the conditions described in the prospectus and SAI.
The proposed amended fundamental investment restriction regarding real estate is as follows:
The Funds may not:
Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments. This limitation is not applicable to investments in marketable securities that are secured by or represent interests in real estate. This limitation also does not preclude a Fund from investing in mortgage-related securities or investing in companies engaged in the real estate business or that have a significant portion of their assets in real estate, including real estate investment trusts.
The proposed investment restriction is substantially the same as the Funds’ current restriction, except that it clarifies that the Funds may invest in securities that are related to or secured by real estate, such as mortgage-backed securities or loan participations. The Funds currently have no plans to invest in such securities, but would like to the flexibility to so do should the opportunity arise. Adoption of the proposed investment restriction is not anticipated to introduce additional material risk to the Funds or to affect the way the Funds are managed.
In addition, the Trust and the Adviser recommend that the Funds’ policy regarding investments in commodities be separate from the policy regarding real estate. The proposed fundamental policy regarding commodities is discussed in Proposal 6.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 5.
PROPOSAL 6
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Commodities
Under the 1940 Act, an investment company’s policy relating to the purchase and sale of commodities must be fundamental. Under the federal securities and commodities laws, certain financial instruments such as futures contracts and options thereon, including currency futures, stock index futures or interest rate futures, are considered to be commodities under certain circumstances. Funds typically invest in futures contracts and related options on these and other types of commodity contracts for hedging purposes, to implement a tax or cash management strategy, or to enhance investment returns.
The Funds currently do not have a stand-alone policy regarding investments in commodities; rather, the policy is combined with the Funds’ policy on real estate, as discussed in Proposal 5.
The proposed amended fundamental investment restriction regarding commodities is as follows:
The Funds may not:
Purchase or sell commodities or commodity contracts except as may be permitted by the Investment Company Act of 1940, as amended, or unless acquired as a result of ownership of securities or other investments. This limitation does not preclude a Fund from purchasing, selling and entering into financial futures contracts (including futures
contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments, including derivatives related to physical commodities; or purchasing or selling securities or other instruments backed by commodities; or purchasing or selling securities of companies that are engaged in a commodities business or have a significant portion of their assets in commodities.
The proposed commodities restriction is substantially the same as the Funds’ current restrictions, except that it expressly references the categories of investments that are excepted from coverage of the restriction. A Fund may potentially be subject to some additional costs and risks inherent in investing in futures, options on futures and other derivatives, including losses if the prices of its futures and options on futures positions are poorly correlated with its other investments, or if the Fund cannot close out its positions because of an illiquid secondary market. In addition, a Fund will incur transaction costs, including tradingcommissions and option premiums, in connection with its futures and options on futures transactions, and these transactions could significantly increase the Fund’s turnover rate. The Funds currently are subject to these risks to the extent that they enter into futures contracts. No Fund currently anticipates changing its current practices with respect to such investments and the proposed revision is not expected to affect the way the Funds are managed.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 6.
PROPOSAL 7
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Concentration
Under the 1940 Act, an investment company must adopt a fundamental policy regarding concentration of investments in the securities of companies in any particular industry. The SEC staff takes the position that a fund “concentrates” its investments if it invests more than 25% of its net assets (exclusive of certain items such as cash, U.S. government securities, securities of other investment companies, and certain tax-exempt securities) in any particular industry or group of industries. An investment company is not permitted to concentrate its investments in any particular industry or group of industries unless it discloses its intention to do so, and the SEC staff generally takes the position that a fund may not reserve the right to concentrate its investments in the future.
Each Fund’s current fundament policy regarding concentration is as follows:
The Funds may not:
Invest 25% or more of the market value of its assets in the securities of companies engaged in any one industry. (This restriction does not apply to investment in the securities of the U.S. Government, its agencies or instrumentalities.)
The proposed amended fundamental investment restriction regarding concentration is as follows:
The Funds may not:
Invest more than 25% of the market value of its assets in the securities of companies engaged in any one industry or group of industries, except as permitted by the SEC. This restriction does not apply to investments in securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities or repurchase agreements secured thereby.
The proposed standardized concentration restriction is substantially the same as the Funds’ current restrictions, except that (i) it modifies and standardizes the asset measure by which concentration is assessed from “25% or more” to “more than 25%”; and (ii) it expressly references, in a manner consistent with current SEC staff policy, the categories of investments that are excepted from the coverage of the restriction. Adoption of the proposed investment restriction is not anticipated to introduce additional material risk to the Funds or to affect the way the Funds are managed.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 7.
PROPOSAL 8
Approval of an Amendment to Each Fund’s
Fundamental Policy Regarding Senior Securities
The 1940 Act requires an investment company to have an investment policy describing its ability to issue senior securities. A “senior security” is an obligation of an investment company that takes precedence over the claims of shareholders with respect to the company’s earnings or assets. The 1940 Act generally prohibits an open-end investment company from issuing senior securities in order to limit the company’s ability to use leverage. In general, leverage occurs when an investment company borrows money to enter into securities transactions or acquires an asset without being required to make payment until a later time.
SEC staff interpretations allow an open-end investment company under certain conditions to engage in a certain types of transactions that might otherwise be considered to create “senior securities,” such as, short sales, certain options and futures transactions, reverse repurchase agreements and securities transactions that obligate the open-end investment company to pay money at a future date (such as when-issued, forward commitment or delayed delivery transactions). According to SEC staff interpretations, when engaging in these types of transactions, in order to avoid creating a senior security, an open-end investment company must either (i) mark on its books or its custodian’s books, or segregate with its custodian bank, cash or other liquid securities to cover its future obligations; or (ii) otherwise cover such obligation, in accordance with guidance from the SEC. This procedure limits the amount of an investment company’s assets that may be invested in these types of transactions and the company’s exposure to the risks associated with senior securities.
Each Fund’s current fundament policy regarding senior securities is as follows:
The Funds may not:
Issue senior securities, as defined in the 1940 Act, except that this restriction shall not be deemed to prohibit a Fund from (a) making any permitted borrowings, mortgages or pledges, or (b) entering into options, futures, forward or repurchase transactions.
The proposed amended fundamental investment restriction regarding senior securities is as follows:
The Funds may not:
Will not issue senior securities. This limitation is not applicable to activities that may be deemed to involve the issuance or sale of a senior security by a Fund, provided that the Fund’s engagement in such activities is consistent with or permitted by the 1940 Act, as amended, the rules and regulations promulgated thereunder or interpretations of the SEC or its staff.
The proposed restriction would permit a Fund to issue senior securities as permitted under the 1940 Act or any relevant rule, exemption or interpretation thereunder issued by the SEC. The proposed restriction also would clarify that the Funds may, provided that certain conditions are met, engage in those types of transactions that have been interpreted by the SEC Staff as not constituting senior securities, such as covered reverse repurchase transactions, futures, permitted borrowings, short sales and the other investments and strategies previously carved out by the SEC.
None of the Funds has any present intention of changing its current investment strategies regarding transactions that may be interpreted as resulting in the issuance of senior securities. Therefore, the Board of Trustees and the Adviser do not anticipate that amending the current restrictions will result in additional material risk to any Fund. Any additional risks to which a Fund may be exposed would also be limited by the restrictions on issuing senior securities imposed by the 1940 Act and any rule, exemption or interpretation thereof that may be applicable. Also, notwithstanding the flexibility provided by the proposed fundamental investment restriction, any material change in a Fund’s investment strategy would need to be approved by the Board.
The Board of Trustees of the Trust, including the Independent Trustees, unanimously recommends that shareholders of each Fund vote “FOR” the Proposal 8.
OTHER INFORMATION
OPERATION OF THE FUNDS
Each Fund is a series of The Boston Trust & Walden Funds, an open-end investment management company organized as a Massachusetts business trust on January 8, 1992. Prior to August 1, 2011, the Trust was known as The Coventry Group. The Trust’s principal executive offices are located at 3435 Stelzer Road, Columbus, OH 43219. The Board of Trustees supervises the business activities of the Fund. Like other mutual funds, the Trust retains various organizations to perform specialized services. The Trust currently retains Boston Trust Investment Management, Inc., One Beacon Street, 33rd Floor, Boston, MA 02108 as the Fund’sFunds’ investment adviser. Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 is the Trust’s administrator and sub-transfer agent and provides certain fund accounting services. Boston Trust & Investment Management Company, One Beacon Street, 33rd Floor, Boston, MA 02108 serves as transfer agent and dividend disbursing agent and is the Fund’s custodian. Fidelity National Information Services, Inc., 601 Riverside Avenue, Jacksonville, FL 32204 serves as the Trust’s sub-transfer agent. BHIL Distributors, Inc., 4041 N. High Street, Suite 402, Columbus, Ohio 43214 is the Trust’s principal underwriter.
THE PROXY
The Board of Trustees is soliciting proxies so that each shareholder has the opportunity to vote on the proposals to be considered at the Meeting. A proxy card for voting your shares at the Meeting is enclosed. The shares represented by each valid proxy received in time will be voted at the Meeting as specified. If no specification is made, the shares represented by a duly executed proxy will be voted for the election of the Nominees,Proposals 1 and 2, and at the discretion of the holders of the proxy, on any other matter that may come before the Meeting about which the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement. You may revoke your proxy at any time before it is exercised by (i) submitting a duly executed proxy bearing a later date, (ii) submitting a written notice to the Secretary of the Trust revoking the proxy, or (iii) attending and voting in person at the Meeting.
VOTING SECURITIES AND VOTING
As of the Record Date, the following shares of beneficial interest of the Funds were issued and outstanding:
Name of Fund |
| Shares Outstanding | |
Boston Trust Asset Management Fund |
| [ | ] |
Boston Trust Equity Fund |
| [ | ] |
Boston Trust Midcap Fund |
| [ | ] |
Boston Trust SMID Cap Fund |
| [ | ] |
Boston Trust Small Cap Fund |
| [ | ] |
Walden Asset Management Fund |
| [ | ] |
Walden Equity Fund |
| [ | ] |
Walden Midcap Fund |
| [ | ] |
Walden SMID Cap Innovations Fund |
| [ | ] |
Walden Small Cap Innovations Fund |
| [ | ] |
Walden International Equity Fund | [ | ] |
Only shareholders of record on the Record Date are entitled to vote at the Meeting. Each shareholder is entitled to one (1) vote per share held, and fractional votes for fractional shares held, on any matter submitted to a vote at the Meeting. The presence, in person or by proxy, of the holders of a majority of the shares of a Fund entitled to vote is necessary to constitute a quorum at the Meeting.
Approval of ProposalProposals 1 requires the affirmative vote of a plurality of all votes at the Meeting. Under this plurality system, vacant Trustee positions are filled by the nominees who receive the largest number of votes, with no majority approval requirement, until all vacancies are filled.and 2
Approval of Proposals 1 and 2 through 8 require the affirmative vote of “majority of the outstanding voting securities” of each Fund. The 1940 Act defines “majority of the outstanding voting securities” to mean the vote (i) of 67% or more of the voting securities (i.e., shares) present at the Meeting, if the holders of more than 50% of the outstanding voting securities of each Fund are present or represented by proxy; or (ii) of more than 50% of the outstanding voting securities of a Fund, whichever is less. This means that Proposals 1 and 2 through 8 may be approved by less than a majority of the outstanding shares of each the Boston Trust Funds and Walden Funds,Fund, provided a quorum is present at the Meeting.
Shareholders in each Fund will vote separately on Proposals 2 through 8.1 and 2. If Proposals 1 and 2 through 8 are approved by the shareholders of a Fund, the changes will be effective for that Fund as of the date that shareholders are notified that the changes will be made through either (i) a supplement to the prospectus and/or SAI or (ii) revisions to such documents at the time of the annual update to the Fund’s registration statement. If shareholders of any Fund fail to approve anyeither of Proposals 1 or 2, through 8, none of the changes contemplated by Proposals 1 and 2 through 8 will be effective for that Fund.
Abstentions and “broker non-votes” (i.e. shares held by brokers or nominees, typically in “street name,” as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter) will be treated as present for purposes of determining a quorum and as votes against a proposal. In addition, under the rules of the New York Stock Exchange (NYSE)(“NYSE”), if a broker has not received instructions from beneficial owners or persons entitled to vote and the proposal to be voted upon may “affect substantially” a shareholder’s rights or privileges, the broker may not vote the shares as to that proposal even if it has discretionary voting power. The NYSE considers Proposals 1 and 2 to be non-routine matters that affect substantially a shareholder’s rights or privileges. As a result, these shares also will be treated as broker non-votes for purposes of proposals that may affect substantially a shareholder’s rights or privileges (but will not be treated as broker non-votes for other proposals, including adjournment of the special meeting).
Treating broker non-votes as votes against a proposal can have the effect of causing shareholders who choose not to participate in the proxy vote to prevail over shareholders who cast votes or provide voting instructions to their brokers or nominees. Abstentions and “broker non-votes” will be treated as present for purposes of determining a quorum and votes against a proposal.
Approval of Proposal 3
Approval of Proposal 3 requires the affirmative vote of a plurality of all votes at the Meeting. Under this plurality system, vacant Trustee positions are filled by the nominees who receive the largest number of votes, with no majority approval requirement, until all vacancies are filled.
Abstentions and broker non-votes as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter will be treated as present for purposes of determining a quorum and as votes against a proposal. In addition, under the rules of the NYSE, if a broker has not received instructions from beneficial owners or persons entitled to vote and the proposal to be voted upon may “affect substantially” a shareholder’s rights or privileges, the broker may not vote the shares as to that proposal even if it has discretionary voting power. As a result, such shares also will be treated as broker non-votes for purposes of proposals that may “affect substantially” a shareholder’s rights or privileges (but will not be treated as broker non-votes for other proposals, including adjournment of special meetings). The NYSE does not consider the proposalsProposal 3 to be voted upon at the Meeting to bea non-routine mattersmatter that affectaffects substantially a shareholder’s rights or privileges. Consequently, brokers holding shares of the Fund on behalf of clients may vote on the proposalsProposal 3 absent instructions from the beneficial owners of the shares.
Treating broker non-votes as votes against a proposal can have the effect of causing shareholders who choose not to participate in the proxy vote to prevail over shareholders who cast votes or provide voting instructions to their brokers or nominees. Abstentions and “broker non-votes” will be treated as present for purposes of determining a quorum and votes against a proposal. Because Trustees are elected by a plurality, non-votes and abstentions will have no effect on Proposal 1.3.
Other Voting Information
If (i) a quorum is not present at the Meeting, or (ii) a quorum is present but sufficient votes in favor of a proposal have not been obtained, then the Meeting may be adjourned from time to time by the vote of a majority of the shares represented at the Meeting, whether or not a quorum is present, to permit further solicitation of proxies. The persons named as proxies may also adjourn the Meeting for any other reason in their discretion. Any adjourned meeting may be held, within a reasonable time after the date set for the original Meeting, without the necessity of further notice unless a new record date of the adjourned Meeting is fixed. The persons named as proxies will vote those proxies that such persons are required to vote FOR the proposal, as well as proxies for which no vote has been directed, in favor of such an adjournment and will vote those proxies required to be voted AGAINST such proposal against such adjournment. In determining whether to vote for adjournment, the persons named as proxies shall consider all relevant factors, including the nature of the proposal, the percentage of votes then cast, the percentage of negative votes then cast, the nature of the proposed solicitation activities and the nature of the reasons for such further solicitation, in determining that an adjournment and additional solicitation is reasonable and in the interests of shareholders. At any adjourned Meeting, the Trust may transact any business which might have been transacted at the original Meeting.
The individuals named as proxies will vote in accordance with the shareholder’s direction, as indicated thereon, if the proxy card is received and is properly executed. If a shareholder properly executes a proxy and gives no voting instructions with respect to a proposal, the shares will be voted in favor of such proposal. The proxies, in their discretion, may vote upon such other matters as may
properly come before the Meeting. The Board of Trustees of the Trust is not aware of any other matters to come before the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AsTo the knowledge of the Trust’s management, as of the Record Date, the following shareholders were owners of record or beneficial owners, because they possessed voting or investment power with respect to such shares, of 5% or more of the outstanding shares of the Funds listed because they possessed voting or investment power with respect to such shares:below:
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Shareholders owning more than 25% of the shares of thea Fund are considered to “control” the Fund, as that term is defined under the 1940 Act. Persons controlling thea Fund can determine the outcome of any proposal submitted to the shareholders for approval. Ms.[Lucia Santini, President of the Trust and a Trustee, is a Senior Vice President and Senior Portfolio Manager of Boston Trust & Investment Management Company (the “Bank”) and Ms.Heidi Soumerai, a Trustee, is a Senior Vice President of the Bank, which has discretionary voting and investment authority over Fund shares held in client discretionary accounts. Ms. Santini also owns over 10% of the outstanding shares of BTIM, Corp., the holding company for the Bank. Ms. Soumerai serves as the Chairperson of the Bank’s Corporate Governance Committee, which establishes proxy voting policy for the Bank and oversees the discharge of the Bank’s responsibility to vote proxies for its client accounts. As a result, Ms. Santini, Ms. Soumerai and/or the Bank may be deemed to have control over certain Funds.]
SECURITY OWNERSHIP OF MANAGEMENT
[To the best knowledge of the Trust, there were no Trustees Nominees or officers of the Trust who were the owners of more than 1% of the outstanding shares of a Fund on the Record Date.]
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered for presentation at the Meeting. Under the proxy rules of the SEC, shareholder proposals may, under certain conditions, be included in the Trust’s Proxy Statement and proxy for a particular meeting. Under these rules, proposals
submitted for inclusion in the Trust’s proxy materials must be received by the Trust within a reasonable time before the solicitation is made. The fact that the Trust receives a shareholder proposal in a timely manner does not ensure its inclusion in its proxy materials, because there are other requirements in the proxy rules relating to such inclusion. You should be aware that annual meetings of shareholders are not required as long as there is no particular requirement under the 1940 Act that must be met by convening such a shareholder meeting. Any shareholder proposal should be sent to Trust’s Secretary, 100 Summer Street, Suite 1700,1500, Boston, MA 02110. Shareholder proposals may also be raised from the floor at the Meeting without prior notice to the Trust.
Because the Trust has never received a shareholder proposal or a Trustee nomination from a shareholder, the Trust has not adopted a written policy regarding consideration of shareholder proposals or Trustee nominees recommended by shareholders. The Board of Trustees of the Trust is not aware of any other matters to come before the meeting.Meeting.
COST OF SOLICITATION
The Board of Trustees of the Trust is making this proxy solicitation. The cost of preparing and mailing this Proxy Statement, the accompanying Notice of Special Meeting, the proxy card and any additional materials relating to the meeting,Meeting, which is anticipated to total between $15,000$[ ] and $17,000,$[ ], will be borne equally by the Trust and the Adviser. In addition to solicitation by mail, solicitations also may be made by email, facsimile transmission (“fax”) or other electronic media, or personal contacts. The Trust will request that broker/dealer firms, custodians, nominees, and fiduciaries forward proxy materials to the beneficial owners of the shares of record. The [Adviser/Trust] may reimburse broker/Broker/dealer firms, custodians, nominees, and fiduciaries may be reimbursed for their reasonable expenses incurred in connection with such proxy solicitation. In addition officers and employees of the Adviser and its affiliates, without extra compensation, may conduct additional solicitations by telephone, fax, email and personal interviews.
OTHER MATTERS
The Trust’s Board of Trustees knows of no other matters to be presented at the Meeting other than as set forth above. If any other matters properly come before the meeting that the Trust did not have notice of a reasonable time prior to the mailing of this Proxy Statement, the holders of the proxy will vote the shares represented by the proxy on such matters in accordance with their best judgment, and discretionary authority to do so is included in the proxy.
COMMUNICATIONS WITH THE BOARD
A shareholder of the Trust wishing to communicate with the Board may do so in writing, signed by the shareholder and setting forth: (i) the name and address of the shareholder; (ii) the number of shares owned by the shareholder; (iii) the Fund in which the shareholder owns shares; and (iv) if the shares are owned indirectly through a broker or other record owner, the name of the broker or other record owner. These communications should be addressed as follows: Secretary, The Boston Trust & Walden Funds, 100 Summer Street, Boston, MA 02108.
DELIVERY OF VOTING INSTRUCTIONS
If you and another shareholder share the same address, the Trust may only send one Proxy Statement unless you or the shareholder(s) request otherwise. Call or write to the Trust if you wish to receive a separate copy of the Proxy Statement, and the Trust will promptly mail a copy to you. You may also call or write to the Trust if you wish to receive a separate proxy in the future, or if you are
receiving multiple copies now, and wish to receive a single copy in the future. For such requests, call [800 ][1-800-282-8782, x7050] or write to [ ].Boston Trust Investment Management, Inc., One Beacon Street, 33rd Floor, Boston MA 02180.
A copy of the Notice of Shareholder Meeting, the Proxy Statement and the Proxy Card are available at www.btim.com.
BY ORDER OF THE BOARD OF TRUSTEES
LUCIA B. SANTINI
President
Dated [ ], 2013, 2016
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION CARD AND RETURN IT PROMPTLY IN THE ENCLOSED REPLY ENVELOPE. YOU MAY ALSO VOTE BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED VOTING INSTRUCTION CARD. FOR MORE INFORMATION OR ASSISTANCE WITH VOTING, PLEASE CALL[ CALL [1-800 ].800-282-8782, x7050].
THE BOSTON TRUST & WALDEN FUNDS
SPECIAL MEETING OF SHAREHOLDERS
May 24, 2013July 18, 2016
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, revoking all previous proxies, if any, with respect to the Shares (defined below), hereby appoints Curtis Barnes as proxy,Jennifer J. Hankins and Charles Booth proxies, each with full power of substitution, to vote at the Special Meeting of Shareholders (the “Meeting”) of The Boston Trust & Walden Funds (the “Trust”) to be held at the law offices of Thompson Hine LLP, 41 S. High Street, Suite 1700,Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 4321543219 on May 24, 2013July 18, 2016, at 10:0030 a.m., Eastern Time, and any adjournments or postponements thereof, all shares of beneficial interest (“Shares”) on the proposals set forth on the reverse regarding: (i) the approval of amendments to each Fund’s fundamental policies regarding loans and borrowing, (ii) the election of two Trusteesone Trustee to the Board of Trustees (ii) the approval of amendments to the Funds’ fundamental policies and (iii) any other matters properly brought before the Meeting.
This proxy is solicited on behalf of the Trust’s Board of Trustees, and may be revoked prior to its exercise by filing with the Secretary of the Trust an instrument revoking this proxy or a duly executed proxy bearing a later date, or by appearing in person and voting at the Special Meeting.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of Special Meeting of Shareholders and the Proxy Statement. Your signature(s) on this Proxy should be exactly as your name(s) appear on this Proxy. If the shares are held jointly, each holder should sign this Proxy. Attorneys-in-fact, executors, administrators, trustees or guardians should indicate the full title and capacity in which they are signing. |
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Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:
The Notice of Special Meeting and Proxy Statement are available at www.btim.com.
Please fill in box(es) as shown using black or blue ink or number 2 pencil.x
PLEASE DO NOT USE FINE POINT PENS.
1. To elect the following individual as a Trustee:
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(1)Elizabeth McGeveran | o | o | o |
2. To approve an amendment to each Fund’s fundamental policy regarding loans.
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3. To approve an amendment to each Fund’s fundamental policy regarding borrowing
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THIS PROXY WILL, WHEN PROPERLY EXECUTED, BE VOTED AS DIRECTED HEREIN BY THE SIGNING SHAREHOLDER(S). IF NO CONTRARY DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSAL AND WILL BE VOTED IN THE APPOINTED PROXIES’ DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
PLEASE DATE, SIGN AND RETURN THIS CARD USING THE ENCLOSED, POSTAGE-PAID ENVELOPE
VOTE BY PHONE:
1.Read the Proxy Statement and have this card on hand
2.Call toll-free 800-[ ]
3.Follow the recorded instructions
4.Do not return this paper ballot
VOTE BY MAIL:
1.Read the Proxy Statement
2.Check the appropriate boxes on the reverse side
3.Sign and date the Proxy Card
4.Return the Proxy Card in the enclosed postage-paid envelope