SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Confidential, for Use of the Commission only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c)
or Sec. 240.14a-12
THE BAIRD FUNDS, INC.
(Name of Registrant as Specified in Its Charter)
__________________Not Applicable___________________
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
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Rules 14a-6(i)(1) and 0-11.
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2) Aggregate number of securities to which transaction
applies:
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computed pursuant to Exchange Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state
how it was determined):
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[ ] Fee paid previously with preliminary materials.
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Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
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THE BAIRD FUNDS, INC.
BAIRD ADJUSTABLE RATE INCOME FUND
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
ON MAY 12, 1999
To the Shareholders of the Baird Adjustable Rate Income Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders
of the Baird Adjustable Rate Income Fund ("Fund") will be held on
Wednesday, May 12, 1999, at 11:00 a.m., Central time, at the
University Club, 924 East Wells Street, Milwaukee, Wisconsin.
The purpose of the meeting is to consider and act upon the
following:
1. To approve a plan of dissolution and liquidation of the
Fund involving the pro rata, "in-kind" distribution of
the Fund's assets to the shareholders.
2. To transact such other business as may properly come
before the meeting.
The meeting is being called at the request of a holder of more
than 10% of the outstanding shares of the Fund, pursuant to the
Wisconsin Business Corporation Law.
All shareholders of the Fund on March 31, 1999 (the record
date) will be entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors
Glen F. Hackmann, Secretary
April 15, 1999
YOUR VOTE IS IMPORTANT -- PLEASE RETURN YOUR PROXY CARD PROMPTLY
THE BAIRD FUNDS, INC.
BAIRD ADJUSTABLE RATE INCOME FUND
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
PRELIMINARY PROXY STATEMENT
DATED APRIL 1, 1999
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of The Baird
Funds, Inc. (the "Company") for use at a Special Meeting of
Shareholders (the "Meeting") of the Baird Adjustable Rate Income
Fund (the "Fund"), a series of the Company. The Meeting will be
held on Wednesday, May 12, 1999 at 11:00 a.m., Central time, at the
University Club, 924 East Wells Street, Milwaukee, Wisconsin 53202.
Purpose. The purpose of the Meeting, as more fully described
below, is to consider and vote on a plan of dissolution and
liquidation of the Fund (the "Dissolution"), a copy of which is
attached as Appendix A. The Dissolution would involve the pro
rata, in-kind distribution of the Fund's assets to shareholders of
the Fund after payment of the Fund's accrued expenses and other
liabilities. The Fund's assets consist of securities and cash or
cash equivalents. The Dissolution will be a taxable event to
shareholders of the Fund. Shareholders will recognize a gain or
loss based on the difference between their tax basis in the Fund
shares owned and the value of the Fund assets they will receive in
the Dissolution. See "Tax Consequences" below.
The Board of Directors is proposing the Dissolution at the
request of Mutual Savings Bank, which holds approximately 69% of
the Fund's outstanding shares. Under Wisconsin law and the
Company's Bylaws, a holder of 10% or more of the outstanding shares
of the Fund has the right to demand that a meeting of shareholders
be called for any purpose. In proposing the Dissolution for
consideration by the Fund's shareholders and soliciting proxies,
the Board of Directors is not making any recommendation with regard
to the proposal.
Vote Requirement. Approval of the Dissolution requires the
affirmative vote of the holders of more than 50% of the outstanding
shares of the Fund. The presence at the Meeting, in person or by
proxy, of shareholders representing a majority of all outstanding
Fund shares will constitute a quorum. Abstentions and broker non-
votes will be treated as present for purposes of determining a
quorum, but will have the effect of a vote against the proposed
Dissolution. Mutual Savings Bank has indicated that it will vote
for the proposed Dissolution.
Shareholders of record of the Fund at the close of business on
March 31, 1999 (the "Record Date") will be entitled to notice of
and to vote at the Meeting or any adjournment thereof. Each such
shareholder will be entitled to one vote for each share (and a
fractional vote for each fractional share) held by such shareholder
on each matter presented at the Meeting. As of the Record Date,
there were 2,296,496.989 shares of the Fund outstanding.
This Proxy Statement was mailed to the shareholders of the
Fund on or about April 15, 1999.
DESCRIPTION OF PLAN OF DISSOLUTION AND LIQUIDATION
Background. On March 19, 1999, Mutual Savings Bank delivered
a notice to the Board of Directors of the Company, demanding that
it call a special meeting of Fund shareholders for the purpose of
considering and voting on the dissolution of the Fund followed by
a pro rata in-kind distribution of the Fund's assets to the
shareholders. Under Wisconsin law and the Company's Bylaws, a
holder or holders of 10% or more of the outstanding shares of the
Fund has the right to demand that a shareholder meeting be called
for any purpose. Mutual Savings Bank holds approximately 69% of
the Fund's outstanding shares.
The Board of Directors of the Fund met on March 31, 1999 to
consider the demand made by Mutual Savings Bank. The Board was
informed that the Fund was required to call a special meeting of
its shareholders as a result of that demand. The Board considered
possible alternatives to the demand, including redeeming in-kind
the Fund shares owned by Mutual Savings Bank. The Board rejected
that alternative because it would have required a special order
from the Securities and Exchange Commission (the "SEC") and because
it may have been inequitable to the remaining shareholders of the
Fund in that the remaining assets of the Fund would bear the Fund's
entire expense load and further reduce the return to shareholders.
The Board also considered the possibility of redeeming Mutual's
shares for cash, but Mutual did not desire this type of redemption
and, in any event, such a redemption could be inequitable to other
shareholders for the same reasons that a redemption of only
Mutual's shares in-kind could be inequitable.
The Fund is a party to a Settlement Agreement dated December
23, 1994. Pursuant to the Settlement Agreement, it was stipulated
by the parties to that agreement that, subject to certain
conditions, it would be the policy of the Fund "to hold the assets
of the fund to maturity or until such time as sales become
available at prices consistent with the liquidation of securities
in the BAR Fund portfolio at par, except to the extent sales of
assets shall be required to fund redemptions...." The Board
considered this provision of the Agreement and, with the advice of
its counsel, concluded that a dissolution and liquidation pursuant
to shareholder vote at a special meeting called pursuant to
Wisconsin Statutes and the Fund's Bylaws upon the demand of a 10%
shareholder, would not be inconsistent with the terms of that
agreement and would be required under Wisconsin law.
The Board then discussed the mechanics of accomplishing the
Dissolution, assuming it would be approved by the shareholders, and
determined how the securities in the Fund's portfolio could be
distributed to the shareholders. Robert W. Baird & Co.
Incorporated ("Baird"), the Fund's investment adviser, informed the
Board that the Fund owned four long-term investments, consisting of
collateralized mortgage obligations ("CMOs") issued by the Federal
National Mortgage Association (FNMA) and the Federal Home Loan
Mortgage Corporation (FHLMC), and short-term investments consisting
of repurchase agreements. Baird further informed the Board that
the CMOs could be divided into small parts, re-designated in the
names of the shareholders, and then distributed, pro rata, to the
shareholders. Baird advised the Board that the short-term
investments should be liquidated prior to the dissolution rather
than divided into smaller parts, and that the Fund's available cash
could then be used to pay accrued expenses and other liabilities
and meet the requests of any shareholders who desired to be
redeemed for cash prior the Dissolution. Any remaining cash would
be distributed to the Fund shareholders, along with the CMOs.
Baird informed the Board that, following their division and
distribution to the Fund shareholders, the CMOs would likely be
less liquid because they would be in smaller denominations than are
customarily traded in the marketplace. The CMOs would thus be more
difficult to sell. These risks would increase in significance in
inverse proportion to the size of the denominations. Baird also
indicated that numerous other fixed income investments are
available to shareholders who elect to redeem their Fund shares,
which provide better yields than the CMOs in the Fund's portfolio
without significantly greater risk.
The Board discussed the possible advantages and disadvantages
of the proposed Dissolution on Fund shareholders, as described
below, but was not required to, and did not, approve or disapprove
the Dissolution or determine whether or not it would be in the best
interests of the Fund and its shareholders. The Board's proposal
of the Dissolution is being made following the demand of Mutual
Savings Bank and should not be considered a recommendation by the
Board.
Summary. If the proposed Dissolution is approved by Fund
shareholders, the Fund would use available cash and would liquidate
sufficient short-term investments to pay its accrued expenses and
other known liabilities and to meet requests of shareholders for
redemption of their shares for cash prior to Dissolution. The Fund
would also make a final distribution of its investment income and
any capital gains to the shareholders. THE FUND WOULD THEN REDEEM
FOR CASH THE SHARES OF ANY SHAREHOLDER OWNING FEWER THAN 500 SHARES
OF THE FUND, AS PERMITTED AND DESCRIBED IN THE FUND'S CURRENT
REGISTRATION STATEMENT.
Within 15 business days following shareholder approval of the
Dissolution or as soon thereafter as practicable, the Fund would
make a pro rata distribution in-kind of its assets to those
shareholders who had not previously redeemed their shares for cash.
Upon the Dissolution, the Fund would request book entry re-
registration of the securities of the Fund in the names of the
remaining shareholders. Unless notified to the contrary in writing
by the shareholder with signature guarantees as described in the
Fund's Registration Statement, each shareholder's pro rata portion
of the securities of the Fund would be re-registered in book entry
form in the name of the shareholder and at the address of the
shareholder indicated on the Fund's records and any remaining cash
assets would be distributed to the shareholder pro rata.
Shareholders who do not wish to receive an in-kind
distribution of the Fund's assets may redeem their shares for cash
at any time up to 10 business days following shareholder approval
of the Dissolution.
In order that shareholders should share equitably in the cost
of the Dissolution, the Board has established a reserve of $35,000
(or approximately $0.02 per share) on March 31, 1999, to provide
for the estimated expenses of the Dissolution of the Fund,
distribution of its assets, and operating expenses of the Fund
through Dissolution. It is anticipated that the reserve will be
sufficient to cover such expenses; however, it is possible that
expenses may be more or less than the amount reserved. To the
extent expenses exceed the reserve, a further charge will be made
to the net asset value of the Fund prior to Dissolution. If the
amount of the reserve is greater than the Fund's actual liquidation
and dissolution expenses, shareholders of record as of March 31,
1999, will receive a pro rata portion of the remaining reserve at
such time as the Board of Directors has determined that all
liabilities of the Fund have been paid or provided for.
The Fund would file Articles of Dissolution with the Wisconsin
Department of Financial Institutions and an Application on Form N-
8F with the SEC to obtain an order from the SEC declaring that the
Company has ceased to be an investment company.
Benefits and Drawbacks. The proposed Dissolution offers
potential benefits and drawbacks to shareholders of the Fund.
The benefits to the Fund shareholders of the proposed
Dissolution include the ability of each shareholder to own a
proportionate share of the Fund's portfolio securities directly
without having to pay the Fund's operating expenses, and the
ability to determine when and whether to dispose of such
securities. In addition, certain shareholders may not need to
recognize gain or loss on the Dissolution for financial reporting
purposes (although gain or loss would need to be recognized for tax
purposes, as described below).
A drawback of the proposed Dissolution is that shareholders
would receive portions of CMOs that may be difficult to sell in the
open market. Shareholders may have to hold these securities until
maturity in order to receive their full par value. As a result, it
is possible that the value of each shareholder's Fund shares may be
worth more than the aggregate value of the Fund's assets received
in the Dissolution unless the shareholder intends to hold such
assets until maturity. Shareholders wishing to avoid the
uncertainties of holding their pro rata share of the Fund's
securities may redeem their Fund shares for cash at any time up to
10 business days following shareholder approval of the Dissolution.
As described in the Fund's Registration Statement, redemption
requests will be honored at the Fund's net asset value per share
next determined after receipt of the request.
Another drawback is that the proposed Dissolution will be a
taxable transaction to each shareholder, although the transaction
will probably result in a capital loss given the likelihood that
the value of the Fund's assets each shareholder receives will be
less than each shareholder's tax basis in their Fund shares.
However, shareholders who do not want to receive the Fund's assets
in-kind are free to redeem their Fund shares and receive their cash
value (which again would be a taxable transaction and likely to
result in a tax loss).
Whether the Fund is dissolved or remains in existence,
shareholders should be aware that the CMOs which comprise the
Fund's portfolio securities are subject to certain risks, as
described in the Fund's Registration Statement, including the fact
that the interest income payable on the CMOs "floats" or is reset
periodically based on changes in the applicable interest rate
index, and is subject to caps above, and floors below, which the
CMOs' interest rate cannot rise or fall. The yields on the CMOs
will fluctuate with interest rate changes. The CMOs, as is the
case with other mortgage-backed securities, are also subject to
prepayment risk because the underlying mortgages can be prepaid at
any time, which may cause portions of the CMOs to be retired
earlier than their stated maturities or final distribution dates.
Based on recent historical prepayment rates on the mortgages
underlying the CMOs in the Fund's portfolio and the scheduled
applications of those prepayments on those CMOs, it is anticipated
that partial prepayments on the CMOs will begin between October
1999 and March 2004 and that such prepayments will continue through
maturity of the CMOs. Of course, general economic conditions and
interest rate fluctuations could affect prepayment rates.
Tax Consequences. The Dissolution will be a taxable
transaction to shareholders. Shareholders will recognize a gain or
loss on the receipt of the Fund's assets received in the
Dissolution, based on the difference between their value and the
shareholder's tax basis in the Fund shares surrendered in the
Dissolution. The gain or loss will be a long-term capital gain or
loss if a shareholder has held the Fund shares as a capital asset
for more than one year. It is expected that most shareholders of
the Fund will recognize a loss given the fact that Fund shares have
generally declined in value since the Fund was closed to new
investment in December 1994.
The deduction of capital losses in excess of capital gains is
limited. All capital gains and losses recognized by a shareholder
in a year must be totaled, and any capital loss will be deductible
only to the extent of capital gains plus, in the case of a non-
corporate taxpayer, up to $3,000 of ordinary income. Non-corporate
shareholders may carry forward their net capital loss in future
years until the loss is exhausted. A corporation may not use a
capital loss to offset ordinary income, but generally may carry a
capital loss back three years and forward for five years.
Immediately prior to the Dissolution, the Fund will make a
final distribution of its net investment income and any short-term
capital gains, which will be taxable to each shareholder as
ordinary income. The Fund will recognize gain or loss on the
distribution of its portfolio securities to the shareholders in the
Dissolution. It is expected that the Fund will have net capital
losses from such distribution. If there are any net capital gains
recognized by the Fund from such distribution, those gains will be
offset by the Fund's capital loss carry forwards and thus will not
need to be recognized by the shareholders for tax purposes. The
balance of the Fund's net capital loss carry forwards after its
portfolio securities are distributed will not carry over or
otherwise be available to offset any capital gains that the Fund
shareholders may have in the future.
The Dissolution will be treated as a plan of complete
liquidation for tax purposes.
Alternatives. If the Dissolution is not approved by the
requisite vote of shareholders (an event that is not likely given
Mutual Savings Bank's intention to vote for the proposal), the Fund
would continue to follow its policy of holding portfolio securities
until maturity or until their values reach par, unless securities
have to be sold to meet redemptions. The Fund would remain closed
to new investment. The Fund would continue to have operating
expenses, which, although modest, would likely increase over time
as a percentage of average net assets, as the Fund's asset size
shrinks from redemptions and/or pay downs on the portfolio
securities. Consequently, the Fund's net asset value per share
would decrease unless the market value of its portfolio securities
were to increase sufficiently to offset such expenses.
If a shareholder does not want to receive an in-kind
distribution of the Fund's assets, that shareholder has the right
to redeem Fund shares for cash, which may be worth more than the
aggregate value of the Fund assets such shareholder would otherwise
receive given the lack of liquidity of those assets.
MISCELLANEOUS
Forms of Solicitation. Proxies will be solicited primarily by
mail. Proxies will also be solicited in person or by telephone or
facsimile. Officers of the Fund, as well as officers and employees
of Baird, will not receive special compensation for their
assistance in soliciting proxies. Expenses incurred in connection
with the solicitation of proxies and the Meeting will be borne by
the Fund. Those expenses are estimated to be $1,000.
Proxy Instructions. Any proxy which is properly executed and
returned in time to be voted at the Meeting will be voted in
accordance with the instructions marked on the proxy. In the
absence of such instructions, the proxy will be treated as an
abstention and will have the effect of a vote against the
Dissolution. Shareholders may revoke their proxies at any time
prior to exercise by delivering written notice of revocation to the
Secretary of the Fund or by executing and delivering a later-dated
proxy to the Fund or by attending the Meeting in person to vote
their shares.
If executing a proxy in a capacity as an officer or other duly
authorized representative, please indicate such capacity on the
proxy.
Principal Shareholders. As of March 31, 1999, the following
persons were known to own beneficially 5% or more of the
outstanding shares of the Fund:
Mutual Savings Bank 1,583,320 shares 68.95%
4949 W. Brown Deer Road
Milwaukee, WI 53223
Abbotsford State Bank 320,738 shares 13.97%
P.O. Box 648
Abbotsford, WI 54405
The directors and officers of the Fund as a group owned less
than 1% of its outstanding shares as of March 31, 1999. Mutual
Savings Bank is presumed to control the Fund by virtue of its
significant ownership of the Fund's outstanding shares.
Service Providers. Robert W. Baird & Co. Incorporated, 777
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, is the Fund's
investment adviser. It is also the Fund's principal distributor,
but the Fund is closed to new investment and its shares are not
offered for sale. Fiduciary Management, Inc., 225 East Mason
Street, Milwaukee, Wisconsin 53202, is the Fund's administrator.
Firstar Bank Milwaukee, N.A., 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, is the Fund's custodian, and Firstar Mutual Fund
Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin
53202, is the Fund's transfer, dividend disbursing and shareholder
servicing agent.
PricewaterhouseCoopers LLP, 100 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, serve as independent accountants and
auditors to the Fund. No representative of PricewaterhouseCoopers
LLP will be present at the Meeting.
Other Matters. The Board of Directors is not aware of any
other matter that will be brought before the Meeting. However,
unless expressly indicated otherwise on the enclosed proxy, proxies
may be voted with discretionary authority on any other matter that
may properly be presented at the Meeting or any adjournment
thereof.
Shareholder Meetings. The Fund is not required to hold annual
meetings of shareholders. The Fund is not required to hold a
shareholder meeting in any year in which the election of directors,
approval of an investment advisory agreement or ratification of the
selection of independent public accountants is not required to be
acted upon. Meetings of shareholders of the Fund will be held when
and as determined to be necessary by the Board of Directors and as
required by the Investment Company Act of 1940. However,
shareholders of the Fund wishing to submit proposals for inclusion
in a proxy statement for any future shareholder meetings should
send their written proposals to the Secretary of the Fund, c/o
Robert W. Baird & Co. Incorporated, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202.
Available Information. You may request a free copy of the
Fund's Annual Report to Shareholders for the year ended September
30, 1998 and the Fund's Registration Statement by calling the
Secretary of the Fund, Glen F. Hackmann, at 1-800-792-2473 or by
writing to him c/o Robert W. Baird & Co. Incorporated, 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202. The SEC also
maintains a website at www.sec.gov that contains documents filed by
the Fund. Shareholders can read and print them by entering the
EDGAR database on the SEC's website and following the directions.
The Fund's Annual Report and Registration Statement are
incorporated into this Proxy Statement by reference and thus
considered part of this Proxy Statement.
APPENDIX A
BAIRD
ADJUSTABLE RATE INCOME FUND, INC.
PLAN OF DISSOLUTION AND LIQUIDATION
The following Plan of Dissolution and Liquidation (the "Plan")
of the Baird Adjustable Rate Income Fund, Inc. (the "Fund"), shall
be effective only upon approval of the Plan at a Special Meeting of
Shareholders by the affirmative vote of the holders of a majority
of the outstanding shares of the Fund as of the record date. The
date of such approval by the shareholders is called the "Effective
Date."
1. Dissolution. As promptly as practicable after the Effective
Date of the Plan and the expiration of 15 business days from
the Effective Date, the Fund shall be dissolved in accordance
with the laws of the State of Wisconsin and the terms of the
Fund's Articles of Incorporation and Bylaws.
2. Cessation of Business. From and after the date on which
definitive proxy materials with respect to the Plan are first
mailed to shareholders of the Fund (the "Release Date"), the
Fund shall not engage in any activities other than for the
purposes of preserving the values of its assets, redeeming any
shares properly presented for redemption, adjusting and
winding up its business and affairs, distributing its assets
in accordance with the Plan, and other activities permitted by
Section 180.1405(1), Wisconsin Statutes. The Directors now in
office and, at their pleasure, the officers, shall continue in
office solely for those purposes. No redemption of shares or
transfer of shares shall be effected if requests therefor are
received more than 10 business days after the Effective Date.
3. Payment of Debts. All known or ascertainable liabilities of
the Fund shall be promptly paid or provided for. A reserve of
$35,000 (or approximately $0.02 per share) was established by
the Board of Directors on March 31, 1999, to provide for the
estimated expenses of Dissolution of the Fund, distribution of
its assets, and operating expenses of the Fund through
Dissolution. The Board of Directors may, if appropriate,
authorize the establishment of an additional reserve to meet
any contingent liabilities of the Fund or to reflect any
expenses of the Fund in excess of any reserve previously
established.
4. Redemption of Shares. Shareholders may continue to redeem
shares for their net asset value, after giving effect to the
reserves described herein, in accordance with the procedures
set forth in the Fund's current Registration Statement, as
amended, through a date which is 10 business days following
the Effective Date.
5. Preservation of Assets. Except to the extent necessary to pay
operating expenses of the Fund, honor redemption requests,
establish reserves related to the Dissolution, or for other
proper purposes, the portfolio securities of the Fund shall be
retained by the Fund in their present form until such assets
are distributed to the shareholders as provided below.
6. Proof of Interest as a Shareholder. All shareholders of
record of the Fund as stated on the books of the Fund's
transfer agent, Firstar Mutual Fund Services, LLC (the
"Transfer Agent"), on the Distribution Date shall be deemed to
have proven their interests as shareholders entitled to a
distribution in connection with the voluntary dissolution of
the Fund. If certificates have been issued for any Fund
shares, those certificates must be properly endorsed or
accompanied by a stock assignment properly endorsed exactly as
the shares are registered, with all signatures guaranteed in
the manner described in the Fund's prospectus, at the time of
redemption of Fund shares or prior to any distribution by the
Transfer Agent as described in Paragraph 7, below.
7. Right to Liquidating Capital Distribution. The Distribution
Date shall be the 15th business day following the Effective
Date or as soon thereafter as practicable. Upon the
Distribution Date, there shall be made for the benefit of each
shareholder a distribution equal to the Liquidation Value of
such shareholder's shares of the Fund. The Liquidation Value
shall consist of a pro rata portion of each of the Fund's net
assets equal in proportion, for each shareholder, to the
percentage which such shareholder's shares bear to the total
number of the Fund's outstanding shares as of the Distribution
Date; provided, however, that cash adjustments may be made if
necessary to accommodate any restrictions or limitations on
the denominations into which portfolio securities may be
divided. Any reserve amounts authorized or established by the
Board of Directors and not previously reflected in the Fund's
net asset value shall be deducted from the assets of the Fund
prior to computation of the Liquidation Value. On the
Distribution Date, or as soon thereafter as is practicable,
the Board of Directors will direct the Transfer Agent to
distribute an amount equal to the Liquidation Value with
respect to each shareholder's interest in the Fund and to mail
such distribution to the address of each shareholder as it
appears on the books of the Fund. Any distributed assets
returned as undeliverable will be held by the Transfer Agent
pending receipt of a proper mailing address. No interest shall
accrue at any time on any cash held for distribution by the
Transfer Agent after the Distribution Date.
8. Final Liquidating Distribution. At such time as the Board of
Directors of the Fund may determine that all liabilities of
the Fund have been paid or provided for, including all costs
of effecting and administering the Plan, and there is no
further need for any reserve amounts referenced in or
established pursuant to Paragraph 3 hereof, the Directors
shall authorize that the remaining amount of such reserve, if
any, be distributed. Such distribution shall be made as soon
as practicable after such authorization on a pro rata basis to
persons who were shareholders of record on the date on which
the reserve to which such remainder may be attributed was
established. If there shall be no reserve amount remaining,
the Fund's President shall certify that fact to the Transfer
Agent.
9. Power of the Board of Directors. The Board of Directors of
the Fund and, subject to the Directors, the officers of the
Fund, shall have authority to effect or authorize all actions
provided for in the Plan and such further actions as they deem
necessary or appropriate to carry out the intent and purposes
of the Plan, including the execution and filing of the
certificates, tax returns and other documents necessary or
appropriate to implement the Plan and to terminate the
registration of the Fund with the Securities and Exchange
Commission and any state in which the shares of the Fund were
registered. The Directors shall have authority to authorize
such variations from or amendments to the provisions of the
Plan as may be necessary or appropriate to effectuate the
liquidation, dissolution and termination of existence of the
Fund and the distribution of its assets to the shareholders in
accordance with the laws of the State of Wisconsin and the
Fund's Articles of Incorporation. The death, resignation or
other disability of any Director or officer of the Fund shall
not impair the authority of the remaining Directors or
officers to exercise any of the powers provided for in the
Plan. Upon such death, resignation or other disability, the
surviving or remaining directors or, if there be none, the
surviving or remaining officers shall have authority to fill
the vacancy or vacancies so created, but the failure to fill
such vacancy or vacancies shall not impair the authority of
the surviving or remaining Directors or officers to exercise
any of the powers provided for in the Plan.
10. Tax Treatment. This Plan is intended to comply with the
requirements of Section 331 of the Internal Revenue Code of
1986, as amended, and related provisions so that all
distributions received by shareholders hereunder shall
constitute distributions in complete liquidation of the Fund.
THE BAIRD FUNDS, INC.
BAIRD ADJUSTABLE RATE INCOME FUND
REVOCABLE PROXY FOR SPECIAL MEETING OF SHAREHOLDERS. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Marcus C. Low, Jr., Mary Ann Taylor and
Glen F. Hackmann, and each of them individually, as proxy, with full power of
substitution, to represent and vote, as designated below, all shares of the
Baird Adjustable Rate Income Fund (the "Fund") that the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund, to be
held at the University Club, 924 East Wells Street, Milwaukee, Wisconsin,
11:00 a. m., Central time, on May 12, 1999, or at any adjournment thereof,
with respect to the matters set forth below and described in the accompanying
Notice of Special Meeting and Proxy Statement, receipt of which is hereby
acknowledged.
Please place an "X" in the desired box for each item. Shares represented by
this Proxy will be voted as directed by the shareholder.
IF NO DIRECTION IS SUPPLIED, THE PROXY WILL BE TREATED AS AN ABSTENTION FOR
PROPOSAL 1 AND WILL HAVE THE EFFECT OF A VOTE AGAINST THE PROPOSAL.
1.Proposal to approve a Plan of Dissolution and FOR /_/
Liquidation involving the pro rata, "in kind" AGAINST /_/
distribution of the Fund's assets to its ABSTAIN /_/
shareholders after payment of accrued
expenses and other liabilities.
2.In their discretion, on such other matters as
may properly come before the meeting or any
adjournment thereof.
(TO BE DATED AND SIGNED ON THE REVERSE SIDE)
DATE: _________________________________, 1999
Please sign exactly as name appears at left
(If this account is owned by more than one
person, all owners should sign. Persons
signing as executors, administrators,
officers, trustees or in similar capacities
should so indicate.)
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY BALLOT PROMPTLY, USING THE
ENCLOSED ENVELOPE.