14(A)
(AMENDMENT NO. ____)
Preliminary Proxy Statement.
Confidential, for Useuse of the Commission Only (as permitted by Rule 14a-6(e)(2)).
Definitive Proxy Statement.
Definitive Additional Materials.
Soliciting Material Pursuant to §240.14a-12
§240.14a-12.
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FUNDS, INC.
(a Wisconsin Corporation)
777 East Wisconsin Avenue, 29th Floor
Milwaukee, Wisconsin 53202
November 20, 2002
Dear Shareholder:
As a shareholder (the “Funds”) to be held on December 19, 2007 relating to the election of the Baird Core Bond Fund (the “Fund”), you are being askedthree current directors and two director nominees to vote on the proposal described below and in the enclosed materials.
The Board of Directors of the Fund has determined that it would be in the best interests of the Fund and its shareholders if the Fund were to amend its investment objective. Currently, the investment objective of the Fund is to seek an annual rate of total return, before Fund expenses, which outperforms the annual rate of total return of the Lehman Brothers Government/Credit Bond Index (the “Government/Credit Bond Index”). The amendment you are being asked to approve would change the investment objective of the Fund so that instead of seeking to outperform the Government/Credit Bond Index, the Fund would seek to outperform the Lehman Brothers U.S. Universal Bond Index.
The proposed change to the Fund’s investment objective that you are being asked to approve is part of a larger plan to restructure the Fund’s investment policy as it relates to the Fund’s investments in non-investment grade debt securities. Currently, such investments are permitted only under limited circumstances. That is, if a particular security in which the Fund invests were to be downgraded after purchase such that it no longer meets the Fund’s credit quality standards, the Fund may continue to hold the security only so long as less than 5% of the Fund’s net assets are invested in such non-investment grade debt securities. As part of the planned restructuring, the Fund would be permitted to invest up to 20% of its net assets in such non-investment grade securities. Another part of this restructuring involves changing the name of the Fund to the “Baird Core Plus Bond Fund” to better reflect the type of securities in which the Fund will invest. Neither the proposed change in investment policy nor the proposed name change require shareholder approval, and so you are not being asked to approve these changes. However, we do not intend to implement these additional changes if we do not receive the requisite shareholder vote to approve the change in investment objective.
Funds.
directors and director nominees.
envelope provided.
Sincerely,
Baird Funds, Inc.
Enclosures
a series of Baird Funds, Inc.
FUNDS, INC.
The Baird Core Bond Fund (the
Baird Aggregate Bond Fund | Baird Short-Term Bond Fund | |
Baird Core Plus Bond Fund | Baird LargeCap Fund | |
Baird Intermediate Bond Fund | Baird MidCap Fund | |
Baird Intermediate Municipal Bond Fund | Baird SmallCap Fund |
1.
A proposal to approve an amendment to the Fund’s investment objective; and
2.
Any other business properly brought before the meeting (and any adjournments or postponements thereof).
1. | The election of three current directors, John W. Feldt, G. Frederick Kasten, Jr., and Frederick P. Stratton, Jr., and two director nominees, Marlyn J. Spear and Cory L. Nettles, to the Board of Directors to serve until their successors are duly qualified and elected; and |
2. | To consider and act upon any other business that may be properly brought before the meeting or any postponement or adjournment of the meeting. |
Brett R. Meili
9, 2007
9, 2007
1-866-44BAIRD
Relating to a
19, 2007
7, 2007.
Corporation that were entitled to vote at the Meeting was 147,705,673.93, divided by Fund as follows:
Fund Name | Number of Shares | ||
Baird Aggregate Bond Fund | 64,569,696.97 | ||
Baird Core Plus Bond Fund | 9,102,669.23 | ||
Baird Intermediate Bond Fund | 36,296,023.80 | ||
Baird Intermediate Municipal Bond Fund | 9,895,249.87 | ||
Baird Short-Term Bond Fund | 18,648,696.39 | ||
Baird LargeCap Fund | 3,051,410.36 | ||
Baird MidCap Fund | 3,690,700.87 | ||
Baird SmallCap Fund | 2,451,226.44 |
Funds.
Name and Address | Class | Nature of Ownership | Amount (in shares) | Percentage of Class | Percentage of Fund |
John W. Feldt 1848 University Avenue Madison, Wisconsin 53705 | None | — | — | — | — |
George C. Kaiser 759 North Milwaukee Street Milwaukee, Wisconsin 53202 | None | — | — | — | — |
Stephen A. Roell 5757 North Green Bay Avenue Milwaukee, Wisconsin 53201 | None | — | — | — | — |
G. Frederick Kasten, Jr. | None | — | — | — | — |
Mary Ellen Stanek | Institutional | Beneficial | 28,464 | * | * |
Joel D. Vrabel | None | — | — | — | — |
Glen F. Hackmann | None | — | — | — | — |
Russell P. Schwei | None | — | — | — | — |
Leonard M. Rush | None | — | — | — | — |
Brett R. Meili | None | — | — | — | — |
Directors and executive officers as a group (10 persons) | Institutional | Beneficial | 28,464 | * | * |
Band & Co. c/o Firstar Bank P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | Record | 1,097,211 | 23.19% | 23.06% |
Conref & Co. FBO Strattec SEC Corp Ret P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | Record | 927,574 | 19.61% | 19.49% |
Strafe & Co. FBO Reinhart Et Al Pension P.O. Box 160 Westerville, OH 43086-0160 | Institutional | Record | 552,979 | 11.69% | 11.62% |
Seippel Perpetual Ltd. Partnership 111 Henry Street P.O. Box 160 Beaver Dam, WI 53916-0160 | Institutional | Record | 511,279 | 10.81% | 10.75% |
State Street Bank Trust Robert W. Baird & Co. Inc. U/A Dated March 18, 1998 105 Rosemont Road Westwood, MA 02090-2318 | Institutional | Record | 326,216 | 6.90% | 6.86% |
Wabank & Co. P.O. Box 648 Waukesha, WI 53187-0648 | Institutional | Record | 281,638 | 5.95% | 5.92% |
Muggs & Co. c/o Firstar Bank P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | Record | 264,193 | 5.58% | 5.55% |
* Less than 1%
Based on the foregoing, asshares of the Record Date, no person ownedBaird Short-Term Bond Fund.
Fund | Name and Address | Share Class | Number of Shares | Percentage of Class | Percentage of Fund | Percentage of all Funds |
Aggregate Bond Fund | Capinco c/o U.S. Bank P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | 5,703,125 | 8.98% | 8.83% | 3.86% |
Mori & Co. 911 Main Street, Suite 201 Kansas City, MO 64105-5304 | Institutional | 3,866,084 | 6.09% | 5.99% | 2.62% | |
Mitra & Co. c/o Marshall & Ilsley Co. 11270 W. Park Place, Suite 400 Milwaukee, WI 53224-3638 | Institutional | 3,738,696 | 5.89% | 5.79% | 2.53% | |
U.S. Bank FBO MKE FDN Corporation Permanent Fund P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | 3,664,772 | 5.77% | 5.68% | 2.48% | |
Charles Schwab & Co., Inc. For the Sole Benefit of its Customers 101 Montgomery St. San Francisco, CA 94104-4151 | Investor | 630,678 | 58.35%* | 0.98% | 0.43% | |
Lakeview Village Inc. 9011 Park Street Lenexa, KS 66215-3353 | Investor | 363,988 | 33.67%* | 0.56% | 0.25% | |
Core Plus Bond Fund | Charles Schwab & Co., Inc. For the Sole Benefit of its Customers 101 Montgomery St. San Francisco, CA 94104-4151 | Institutional | 2,151,877 | 23.93% | 23.64% | 1.46% |
Strafe & Co. FAO Indian Community School of Milwaukee P.O. Box 160 Westerville, OH 43086-0160 | Institutional | 2,143,983 | 23.85% | 23.55% | 1.45% | |
Associated Trust Co., NA FBO Reinhart, Boerner, Van Deuren S.C. 401(k) Profit Sharing Plan P.O. Box 22037 Green Bay, WI 54305-2037 | Institutional | 1,396,822 | 15.54% | 15.34% | 0.95% | |
Principal Financial Group 711 High Street Des Moines, IA 50309-2732 | Institutional | 554,356 | 6.17% | 6.09% | 0.38% |
Fund | Name and Address | Share Class | Number of Shares | Percentage of Class | Percentage of Fund | Percentage of all Funds |
Core Plus Bond Fund (continued) | National City Bank TTEE FBO Vincentian Collaborative Services TR Attn: Trust Mutual Funds P.O. Box 94984 Cleveland, OH 44101-4984 | Institutional | 521,776 | 5.80% | 5.73% | 0.35% |
Charles Schwab & Co., Inc. For the Sole Benefit of its Customers 101 Montgomery St. San Francisco, CA 94104-4151 | Investor | 28,910 | 25.92%* | 0.32% | 0.02% | |
Stuart M.Krupnick & Rhoda J. Krupnick 1243 Park Plaza Drive Columbus, OH 43213-2649 | Investor | 8,985 | 8.06% | 0.10% | 0.01% | |
Intermediate Bond Fund | State Street Bank & Trust Co. CHP Workers Compensation Self Insurance Trust 615 Elsinore Pl. Cincinnati, OH 45202-1459 | Institutional | 2,670,399 | 7.42% | 7.36% | 0.01% |
Mitra & Co. FBO 98 c/o M&I Trust Company 11270 W. Park Place, Suite 400 Milwaukee, WI 53224-3638 | Institutional | 2,623,932 | 7.29% | 7.23% | 1.78% | |
Wells Fargo Bank, NA FBO Hazelden Investment-Mutual Fund P.O. Box 1533 Minneapolis, MN 55480-1533 | Institutional | 2,420,711 | 6.73% | 6.67% | 1.64% | |
Wells Fargo Bank, NA FBO Strattec Security P.O. Box 1533 Minneapolis, MN 55480-1533 | Institutional | 2,409,663 | 6.70% | 6.64% | 1.63% | |
Capinco c/o U.S. Bank P.O. Box 1787 Milwaukee, WI 53201-1787 | Institutional | 1,831,904 | 5.09% | 5.05% | 1.24% | |
SEI Private Trust Company c/o Harris Bank ID 940 One Freedom Valley Drive Oaks, PA 19456 | Investor | 228,311 | 74.92%* | 0.63% | 0.15% | |
Intermediate Municipal Bond Fund | Northern Trust Company FBO MSE LLC 50 S. La Salle Street Chicago, IL 60603-1006 | Institutional | 966,320 | 9.80% | 9.77% | 0.65% |
National Financial Services LLC FBO LaSalle Bank 135 S. La Salle Street Chicago, IL 60603-4177 | Institutional | 628,108 | 6.37% | 6.35% | 0.43% |
Fund | Name and Address | Share Class | Number of Shares | Percentage of Class | Percentage of Fund | Percentage of all Funds |
Intermediate Municipal Bond Fund (continued) | Maril & Co. c/o M&I Trust Company N.A. 11270 W. Park Place Suite 400 Milwaukee, WI 53224-3638 | Institutional | 6115,114 | 6.24% | 6.22% | 0.42% |
Charles H. Heide & Ann Heide 4020 Chicory Road Racine, WI 53403-4063 | Institutional | 574,251 | 5.82% | 5.80% | 0.39% | |
Charles H. Heide & Kathryn H. Heide 58255 6th Place Kenosha, WI 53144-7216 | Institutional | 574,251 | 5.82% | 5.80% | 0.39% | |
Ben Abrohams 2506 N. Terrace Ave. Milwaukee, WI 53211-3820 | Investor | 10,520 | 29.03%* | 0.11% | 0.01% | |
Timothy J. Bowers & Mary C. Bowers 2307 E. Newberry Blvd. Milwaukee, WI 53211-3763 | Investor | 7,842 | 21.64% | 0.08% | 0.01% | |
Bernard V. Orlov TTEE 1645 Birdsong Ct. Blacklick, OH 43004-9640 | Investor | 7,086 | 19.55% | 0.07% | 0.00% | |
Molly H. Abrohams 2506 N. Terrace Ave. Milwaukee, WI 53221-3820 | Investor | 4,079 | 11.26% | 0.04% | 0.00% | |
Dr. Frank P. Begun & Audrey L. Begun 1004 N. 70th St. Wauwatosa, WI 53213-3106 | Investor | 2,977 | 8.21% | 0.03% | 0.00% | |
Lidia Paz-Baker 3801 Canterbury Road Unit 415 Baltimore, MD 21218-2371 | Investor | 2,304 | 6.36% | 0.02% | 0.00% | |
LargeCap Fund | Principal Financial Group 711 High Street Des Moines, IA 50309-2732 | Institutional | 1,439,627 | 48.52%* | 47.18%* | 0.97% |
Baird Foundation Robert W. Baird & Co. Inc. 777 East Wisconsin Avenue Milwaukee, WI 53202 | Institutional | 940,325 | 31.69%* | 30.82%* | 0.64% | |
Stifel Nicolaus & Co., Inc. Gerald Hallisey TTEE 501 N. Broadway St. Louis, MO 63102-2131 | Investor | 13,628 | 16.15% | 0.45% | 0.01% | |
Stifel Nicolaus & Co., Inc. Anthony J Rizzo 501 N. Broadway St. Louis, MO 63102-2131 | Investor | 9,658 | 11.44% | 0.32% | 0.01% | |
Stifel Nicolaus & Co., Inc. Warren P Jensen TTEE 501 N. Broadway St. Louis, MO 63102-2131 | Investor | 8,186 | 9.70% | 0.27% | 0.01% |
Fund | Name and Address | Share Class | Number of Shares | Percentage of Class | Percentage of Fund | Percentage of all Funds |
MidCap Fund | Regents of the University of Colorado 4840 Pearl East Circle, Suite 103 Boulder, CO 80309-0025 | Institutional | 1,231,655 | 37.93%* | 33.37%* | 0.83% |
Principal Financial Group 711 High Street Des Moines, IA 50309-2732 | Institutional | 716,158 | 22.06% | 19.40% | 0.48% | |
Baird Foundation Robert W. Baird & Co. Inc. 777 East Wisconsin Avenue Milwaukee, WI 53202 | Institutional | 312,865 | 9.64% | 8.48% | 0.21% | |
Calvert Health System 100 Hospital Road Prince Frederick, MD 20678-4017 | Institutional | 283,433 | 8.73% | 7.68% | 0.19% | |
Charles Schwab & Co., Inc. For the Sole Benefit of its Customers 101 Montgomery St. San Francisco, CA 94104-4151 | Investor | 95,452 | 21.51% | 2.59% | 0.06% | |
Stifel Nicolaus & Co., Inc. Gerald Hallisey TTEE 501 N. Broadway St. Louis, MO 63102-2131 | Investor | 43,799 | 9.87% | 1.19% | 0.03% | |
Associated Trust Company FBO Milwaukee Public Museum Inc. P.O. Box 22037 Green Bay, WI 54305-2037 | Investor | 23,272 | 5.24% | 0.63% | 0.02% | |
SmallCap Fund | Principal Financial Group 711 High Street Des Moines, IA 50309-2732 | Institutional | 985,668 | 40.63%* | 40.21%* | 0.67% |
Stifel Nicolaus & Co., Inc. Gerald Hallisey TTEE 501 N. Broadway St. Louis, MO 63102-2131 | Investor | 11,656 | 46.09%* | 0.48% | 0.01% | |
Robert W. Baird & Co. Inc. TTEE FBO John G. Doerr Rollover IRA 23 Annandale Nashville, TN 37215-5820 | Investor | 2,709 | 10.71% | 0.11% | 0.00% | |
Barbara H. Mullett N57W30850 Lakewood Drive Hartland, WI 53029-9304 | Investor | 2,229 | 8.82% | 0.09% | 0.00% | |
LPL Financial Services 9785 Towne Centre Drive San Diego, CA 92121-1968 | Investor | 2,106 | 8.33% | 0.09% | 0.00% | |
MAC & Co. P.O. Box 3198 Pittsburgh, PA 15230-3198 | Investor | 1,397 | 5.52% | 0.06% | 0.00% |
Baird Aggregate Bond, Baird Core Plus Bond, Baird Intermediate Bond and Baird Short-Term Bond Funds. As of the Record Date, the officers and directors as a group owned 1% or more of the outstanding shares of the following Funds:
Fund | Percentage of Institutional Class | Percentage of Fund | |
LargeCap Fund | 1.10% | 1.07% | |
MidCap Fund | 5.75% | 5.07% | |
SmallCap Fund | 2.35% | 2.33% | |
Intermediate Municipal Bond Fund | 4.11% | 4.09% |
Funds.
THESE REPORTS ARE ALSO AVAILABLE ON THE FUNDS’ WEBSITE AT WWW.BAIRDFUNDS.COM.
PROPOSAL 1: TO APPROVE AN AMENDMENT TO
THE FUND’S INVESTMENT OBJECTIVE
The Proposal. The Fund’s current investment objective is to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Lehman Brothers Government/Credit Bond Index (the “Government/Credit Bond Index”). The Government/Credit Bond Index is an unmanaged index representing a market value weighted performance benchmark for government and corporate fixed-rate debt issues with maturities between one and thirty years or more.
The Board of Directors has approved, and recommends that the shareholders of the Fund approve, changing the Fund’s investment objective so that instead of comparing the Fund’s performance to the Government/Credit Bond Index, the Fund’s performance would be compared to the Lehman Brothers U.S. Universal Bond Index (the “Universal Bond Index”). The Universal Bond Index is designed to capture a broad range of fixed-income securities issued in U.S. dollars, including U.S. government and investment grade debt, as well as non-investment grade bonds, Eurobonds, Rule 144A securities (i.e., illiquid securities) and emerging market debt. Please refer to the charts below for comparative data of these two indices. Accordingly, as amended, the Fund’s investment objective would be to provide an annual rate of total return, before Fund expenses, greater than the annual rate of total return of the Universal Bond Index.
Benchmark Comparisons as of 9/30/02 | ||||
Universal | Govt/Credit | |||
Yield to Maturity | 4.83% | 3.99% | ||
Total Return* | 7.69% | 9.15% | ||
Duration | 3.88 years | 5.48 years | ||
Average Maturity | 6.98 years | 8.75 years | ||
Number of Issues | 10,657 | 4,886 | ||
| ||||
* year to date |
Quality Breakdown as of 09/30/02 | Sector Breakdown as of 9/30/02 | ||||||||
Universal | Govt/Credit | Universal | Govt/Credit | ||||||
U.S. Treasury | 20% | 37% | U.S. Treasury | 20% | 37% | ||||
Government Agency | 43% | 19% | Government Agency | 11% | 20% | ||||
Aaa | 6% | 5% | Corporate | 27% | 37% | ||||
Aa | 6% | 8% | International | 7% | 6% | ||||
A | 10% | 16% | Mortgages/CMBS | 34% | 0% | ||||
Baa | 9% | 15% | Asset Backed | 1% | 0% | ||||
Below Baa | 6% | 0% | 100% | 100% | |||||
100% | 100% |
Background and Reasons for the Proposal. The proposal to change the Fund’s investment objective that you are being asked to approve is part of a larger plan to restructure the Fund’s investment policy as it relates to the Fund’s investments in lower-rated debt securities. This plan involves the following three elements:
(1)
a change in the Fund’s investment policy relating to investments in lower-rated debt securities (which are currently permitted only under limited circumstances),
(2)
a change in the benchmark index to which the Fund’s performance is compared to reflect the Fund’s ability to invest in lower-rated debt securities (currently, the Fund’s performance is compared to the Government/Credit Bond Index, which does not include non-investment grade securities), and
(3)
a change in the Fund’s name from the “Baird Core Bond Fund” to the “Baird Core Plus Bond Fund” to better reflect the type of securities in which the Fund will invest.
Of the three changes noted above, the only change that requires shareholder approval is the change in the Fund’s benchmark index, since the benchmark index is included in the Fund’s investment objective. The other changes do not require shareholder approval, and so the Board of Directors is not asking youcurrently consists of four directors, and the directors have determined to vote on these other matters.
Investment Policy relatingincrease the size of the Board to Lower-Rated Debt Securities. Currently,five members.
At the meeting held on November 4, 2002, the Board of Directors approved a change in the Fund’s investment policy relating to lower-rated debt securities that would allow the Fund to invest up to 20% of its net assets in debt securities that are below investment grade. The Board believes that this change will provide the Adviser with additional flexibility in making investment decisions on behalf of the Fund by allowing the Adviser to take advantage of opportunities to invest in securities which have the potential for enhanced returns. The Board also believes that the Adviser’s ability to manage the Fund’s assets in the changing investment environment currently facing the Fund will be enhanced, and that investment management opportunities will be increased by the proposed change. Specifically, the Adviser will be relieved of the pressur e to sell a security in the Fund’s investment portfolio that has been downgraded, at least with respect to 20% of the Fund’s net assets,Funds and the variety of debt securities available for purchase, which would consist of not only investment grade but also non-investment grade securities, will increase substantially.
Risks of Investing in Lower-Rated Debt Securities. While the Board of Directors believes that the change in investment policy described above will provide the Fund with greater flexibility to respond to future investment opportunities, the Board also understands that such added flexibility may result in an increase in the level of risk associated with an investment in the Fund. Specifically, more of the Fund’s assets may be invested in non-investment grade debt securities, which generally offer higher yields than investment grade securities, but which also involve greater risks,two new nominees, including the possibility of default or bankruptcy. In addition, non-investment grade debt securities, which are also sometimes referred to as “junk bonds,” tend to be more sensitive to economic conditions than are higher-rated securities. As a resu lt, they generally involve more credit risk than securities in the higher-rated categories. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of junk bond securities may experience financial stress and may not have sufficient revenues to meet their payment obligations. The risk of loss due to default by an issuer of these securities is significantly greater than issuers of higher-rated securities because such securities are generally unsecured and are often subordinated to other creditors. The Fund may have difficulty disposing of certain junk bond securities because there may be a thin trading market for such securities. To the extent a secondary trading market does exist, it is generally not as liquid as the secondary market for higher-rated securities. Periods of economic uncertainty generally result in increased volatility in the market prices of these securities, which, in turn, would result in increased volatility in the F und's net asset value.
Benchmark Index in Fund’s Investment Objective. Currently, the Fund attempts to seek an annual rate of total return, before Fund expenses, that outperforms the total return of the Government/Credit Bond Index. The Government/Credit Bond Index consists of government and corporate debt securities which are generally high-quality with low risk characteristics. The Fund’s investments are based on, but do not attempt to replicate, the securities included in this Index.principal occupations. In addition, the Fund attempts to keeptable includes information concerning other directorships held by each director or nominee in reporting companies under the durationSecurities Exchange Act of its portfolio securities substantially equal to that of the Government/Credit Bond Index. The term “duration” refers to a measure of a fixed income security’s average life that reflects the present value of the security’s cash flow and, accordingly, is a measure of price sensitivity to int erest rate changes.
Because of the change in the Fund’s1934 or registered investment policy as it relates to lower-rated debt securities discussed above, the Board of Directors determined that it would be in the best interests of the Fund and its shareholders to also change the benchmark index against which the Fund’s performance is measured to provide a more meaningful comparison tool. The Universal Bond Index, which is the new benchmark index that is being proposed, is more diversified than the Government/Credit Bond Index in that it includes a broad range of fixed-income securities issued in U.S. dollars, including U.S. government and investment grade debt, as well as non-investment grade bonds, Eurobonds, Rule 144A securities (i.e., illiquid securities) and emerging market debt. The change in the Fund’s benchmark index is expected to result in an immediate decrease in the dur ation and average maturity range of the Fund’s portfolio as the Adviser adjusts the Fund’s portfolio holdings to better reflect the securities included in the new benchmark index. The reason for this decrease is that the Universal Bond Index includes a mortgage component, while the Government/Credit Bond Index does not. Due to the relatively low duration and average maturity of mortgage-backed securities in today’s low interest rate environment, the Universal Bond Index currently has a lower overall duration and maturity than the Government/Credit Bond Index. There can be no guarantee that this trend will continue in the future, especially if the interest rate environment changes. The change in benchmark index is also expected to result in a modest increase in portfolio turnover and related transaction costs.
As previously noted, the proposed change in the Fund’s benchmark index requires shareholder approval because the benchmark index is part of the Fund’s investment objective.
Fund Name Change. The final element in the plan to restructure the Fund involves changing the name of the Fund to the “Baird Core Plus Bond Fund.” The Board of Directors approved this change at the meeting held on November 4, 2002 because of its belief that the name change would better reflect the change in the Fund’s investment policy relating to lower-rated debt securities. Typically, mutual funds that invest exclusively or primarily in investment grade debt instruments are referred to as “core” funds, while mutual funds that also invest a portion of their net assets (i.e., typically ranging from 10-30%) in non-investment grade debt instruments are referred to as “core plus” funds. The Board felt that the name change would be appropriate based on the change in investment policy described above.
Required Vote. Approval of the proposal to change the investment objective of the Fund requires the affirmative vote of a majority of the outstanding voting securities of the Fund. Undercompanies under the Investment Company Act of 1940, as amended (the “1940 Act”), a “majority. Information is listed separately for the nominee who is an “interested person” (as defined in the 1940 Act) of the outstanding voting securities”Funds (the “Interested Director”) and those directors and nominee who are not considered to be interested persons of the Funds (the “Independent Directors”). The Board’s Nominating Committee, consisting of Messrs. Kaiser, Feldt, and Stratton, selected and nominated Ms. Spear and Mr. Nettles after considering the Adviser’s recommendation. The Nominating Committee also determined to nominate all current directors for election to the Board, other than Mr. Kaiser who will be retiring. As explained following the table, beginning on January 1, 2008 and assuming the three current directors and the two director nominees are elected to the Board of Directors, the Board will consist of five persons, four of whom will be considered Independent Directors (Mr. Feldt, Mr. Kasten, Mr. Stratton and Ms. Spear) and one of whom will be considered an Interested Director (Mr. Nettles).
Name, Address and Age | Position Held with the Funds | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Complex Over- seen by Director (if elected) | Other Directorships Held by Director |
John W. Feldt c/o University of Wisconsin Foundation 1848 University Avenue Madison, WI 53705 Age: 65 | Independent Director | Indefinite; Since September 2000 | Retired; Senior Vice President-Finance, University of Wisconsin Foundation (1985-2006); Vice President-Finance, University of Wisconsin Foundation (1980-1985); Associate Director, University of Wisconsin Foundation (1967- 1980) | 8 | Director of Thompson Plumb Funds, Inc., a mutual fund complex (2 portfolios); Director of Nakoma Mutual Funds, a mutual fund complex (1 portfolio) |
Frederick P. Stratton, Jr. 10134 N. Port Washington Road, #2B Mequon, WI 53092 Age: 68 | Independent Director | Indefinite; Since May 2004 | Retired; Chairman Emeritus, Briggs & Stratton Corporation, a manufacturing company, since 2003; Chairman of the Board, Briggs & Stratton Corporation (2001-2002); Chairman and CEO, Briggs & Stratton Corporation (1986- 2001) | 8 | Director of Weyco Group, Inc., a men’s footwear distributor; Wisconsin Energy Corporation and its subsidiaries Wisconsin Electric Power Company and Wisconsin Gas LLC |
Name, Address and Age | Position Held with the Funds | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Complex Over- seen by Director (if elected) | Other Directorships Held by Director |
Marlyn J. Spear P.O. Box 530 500 Elm Grove Road Elm Grove, WI 53122 Age: 54 | Independent Director Nominee | Indefinite; Length – N/A | Chief Investment Officer, Building Trades United Pension Trust Fund since July 1989; Investment Officer, Northwestern Mutual Financial Network (1988-1989); Assistant Vice-President, Firstar Trust Company (1978-1987); Financial Analyst, Harco Holdings, Inc. (1976- 1978) | 8 | Management Trustee of AFL- CIO Housing Investment Trust |
G. Frederick Kasten, Jr.* 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 68 | Director and Chairman | Indefinite; Since September 2000 | Retired; Chairman, the Adviser (January 2000-December 2005); Chairman and CEO, the Adviser (January 1998-January 2000); President, Chairman and CEO, the Adviser (June 1983-January 1998); President, the Adviser (January 1979-January 1983) | 8 | Director of Regal- Beloit Corporation, a manufacturing company |
*Mr. Kasten is currently considered an “interested person” of the Corporation (as defined in the 1940 Act) because he had served as Chairman of the Board of the Adviser until December 31, 2005. As of January 1, 2008, Mr. Kasten will no longer be deemed an “interested person” because more than two years will have elapsed since he last served as Chairman of the Adviser and he no longer owns any shares of capital stock of the Adviser (or its affiliates), having redeemed his remaining interest in Baird Financial Corporation, the Adviser’s parent company in May 2007. In connection with this sale there was no arrangement or understanding with respect to the composition of the Board of Directors of the Corporation or the Adviser, or with respect to the selection of appointment of any officer of the Corporation or the Adviser. |
Interested Director Nominee | |||||
Name, Address and Age | Position Held with the Funds | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Complex Over- seen by Director (if elected) | Other Directorships Held by Director |
Cory L. Nettles** Generation Growth Capital, Inc. 411 East Wisconsin Avenue, Suite 1710, Milwaukee, WI 53202 Age: 37 | Director Nominee | Indefinite; Length – N/A | Managing Director, Generation Growth Capital, Inc. (since March 2007); Of Counsel, Quarles & Brady LLP (since March 2007); Partner, Quarles & Brady LLP (January 2005 – March 2007); Secretary, Wisconsin Department of Commerce (January 2003 – January 2005); Associate, Quarles & Brady LLP (July 1996 – December 2002) | 8 | Director of Weyco Group, Inc., a men’s footwear distributor; Director of The Private Bank, a financial institution |
Name | Aggregate Compensation From Funds(1) | Pension or Retirement Benefits Accrued as Part of Fund Expenses | Estimated Annual Benefits Upon Retirement | Total Compensation from Funds and Fund Complex Paid to Directors(1) |
John W. Feldt | $22,000 | $0 | $0 | $22,000 |
George C. Kaiser | $22,000 | $0 | $0 | $22,000 |
Frederick P. Stratton, Jr. | $22,000 | $0 | $0 | $22,000 |
Independent Directors and Nominee | |||||||
Name of Fund | John W. Feldt | Frederick P. Stratton, Jr. | Marlyn J. Spear | ||||
LargeCap Fund | None | Over $100,000 | None | ||||
MidCap Fund | $50,001 - $100,000 | Over $100,000 | None | ||||
SmallCap Fund | $10,001 - $50,000 | $50,001 - $100,000 | None | ||||
Intermediate Bond Fund | None | Over $100,000 | None | ||||
Aggregate Bond Fund | None | None | None | ||||
Short-Term Bond Fund | None | None | None | ||||
Intermediate Municipal Bond Fund | None | $50,001 - $100,000 | None | ||||
Core Plus Bond Fund | None | None | None | ||||
Aggregate Dollar Range of Securities Beneficially Owned in All Registered Investment Companies Overseen by Director in Family of Investment Companies | Over $100,000 | Over $100,000 | None |
Interested Director and Nominee | ||||||
Name of Fund | G. Frederick Kasten, Jr.* | Cory L. Nettles | ||||
LargeCap Fund | None | None | ||||
MidCap Fund | None | None | ||||
SmallCap Fund | None | None | ||||
Intermediate Bond Fund | None | None | ||||
Aggregate Bond Fund | None | None | ||||
Short-Term Bond Fund | None | None | ||||
Intermediate Municipal Bond Fund | Over $100,000 | None | ||||
Core Plus Bond Fund | None | None | ||||
Aggregate Dollar Range of Securities Beneficially Owned in All Registered Investment Companies Overseen by Director in Family of Investment Companies | Over $100,000 | None |
Name, Address and Age | Position(s) Held with the Corporation | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years |
Mary Ellen Stanek 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 51 | President | Re-elected by Board annually; Since September 2000 | Managing Director, the Adviser, and Chief Investment Officer, Baird Advisors, a department of the Adviser, since March 2000; President and CEO, Firstar Investment Research & Management Company, LLC (“FIRMCO”) (November 1998-February 2000); President, Firstar Funds, Inc. (December 1998-February 2000); President and Chief Operating Officer, FIRMCO (March 1994-November 1998) |
J. Bary Morgan 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 41 | Senior Vice President | Re-elected by Board annually; Since February 2003 | Chief Investment Officer, Baird Investment Management, a department of the Adviser, since January 2004; Managing Director, the Adviser since January 2001; Director, Baird Investment Management (January 2001-January 2004); Senior Vice President, the Adviser (January 2000-January 2001); First Vice President, the Adviser (January 1996-January 2000) |
Todd S. Nichol 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 45 | Vice President and Chief Compliance Officer | Re-elected by Board annually; Since August 2004 | Chief Compliance Officer, the Adviser since October 2004; Assistant Compliance Director, the Adviser since August 2002; Senior Vice President, the Adviser since January 2005; First Vice President, the Adviser (January 2004-January 2005); Vice President, the Adviser (August 2002-January 2004); Vice President – Risk Management, BNY Clearing Services, LLC, a division of The Bank of New York (August 1995-August 2002) |
Russell P. Schwei 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 48 | Vice President | Re-elected by Board annually; Since September 2000 | Operations Director, the Adviser since July 1992; Managing Director, the Adviser since January 1997; Chief Financial Officer and Managing Director, the Adviser (February 1999-December 1999) |
Leonard M. Rush 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 61 | Treasurer | Re-elected by Board annually; Since September 2000 | Chief Financial Officer, the Adviser since January 2000 |
Charles M. Weber 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 44 | Secretary | Re-elected by Board annually; Since September 2005 | Senior Vice President and Associate General Counsel, the Adviser since July 2005; Partner, Quarles & Brady LLP, a law firm (October 1998-June 2005) |
Laura E. Piotrowski 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 37 | Assistant Treasurer | Re-elected by Board annually; Since August 2007 | Senior Vice President and Controller of Capital Markets and Asset Management, the Adviser since January 2003; First Vice President, the Adviser (January 2001-January 2003); Vice President, the Adviser (January 1999-January 2001) |
Robert A. Johnson 777 East Wisconsin Avenue Milwaukee, WI 53202 Age 44 | AML Compliance Officer | Re-elected by Board annually; Since August 2004 | Compliance Officer, the Adviser since 1998, and AML Compliance Officer, the Adviser since January 2004 |
Bret T. Reese 777 East Wisconsin Avenue Milwaukee, WI 53202 Age: 38 | Assistant Secretary | Re-elected by Board annually; Since August 2006 | Vice President and Staff Attorney, the Adviser since June 2005; Senior Financial Analyst, the Adviser (August 2004-June 2005); Financial Analyst, Stark & Roth, Inc., a hedge fund (June 2001-August 2002) |
If shareholders approve this proposal, the change in the Fund’s investment objective will be implemented as soon as practicable after the Meeting, as will the Fund’s name change and its change in investment policy relating to lower-rated securities. Currently, it is anticipated that the effective dateBoard of these changes will be Tuesday, December 31, 2002. If, on the other hand, shareholders fail to approve this proposal, the Fund’s investment objective will remain unchanged, as will the Fund’s name and investment policy relating to lower-rated securities.
Directors may designate.
Fiscal Year Ended 12/31/06 | Fiscal Year Ended 12/31/05 | |
Audit Fees | $105,000 | $100,000 |
Audit-Related Fees | — | — |
Tax Fees | $25,200 | $24,000 |
All Other Fees | — | — |
PROPOSAL 2: compatible with GT’s independence.
Brett R. Meili
Milwaukee, Wisconsin
November 20, 2002
BAIRD CORE BOND FUND
The votes entitled to be cast by the undersigned will be cast as instructed below. If this proxy is executed, but no instruction is given, the votes entitled to be cast by the undersigned will be cast “FOR” the proposal described in the Proxy Statement and in the discretion of the above-named proxies on any other matter that may properly come before the meeting or any adjournment or postponement thereof.
DATE: , | |
NOTE: Please date and sign exactly as your name appears on the records of the | |
Signature (Title, if applicable) | |
| |
Signature of Joint Owner (if any) |
The Board of Directors recommends a
Please indicate by fillingmarking, signing and dating mailing your proxy card and returning it in the appropriate boxes below.
1.
A proposalpostage-paid envelope we have provided.
FOR
AGAINST
ABSTAIN
investment objective, such that it reads as follows:
[ ]
[ ]
[ ]
“The investment objectiveelectronic delivery of documents if you vote by telephone.
(1) John W. Feldt | (4) Cory L. Nettles | o | FOR all nominees | o | WITHOUT AUTHORITY |
(2) G. Frederick Kasten, Jr. | (5) Marlyn J. Spear | listed (except as | to vote for all nominees | ||
(3) Frederick P. Stratton, Jr. | marked to the | listed at left | |||
contrary below) |
an annual rate of total return, before Fund expenses,
greater thanvote for any indicated nominee, write the annual rate of total return of
Lehman Brothers U.S. Universal Bond Index.”
line above.)
WE NEED YOUR VOTE BEFORE DECEMBER 30, 2002
Your vote
Internet. This consent may be revoked at any time by contacting the Corporation. For more information, please refer to the Proxy Statement. The undersigned’s e-mail address to which documents relating to the Funds may be sent is as follows:
THANK YOU FOR YOUR TIME