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Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
BARON ASSET FUND
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Persons who are to respond to the collection of information
contained in this form are not required to respond unless
the form displays a currently valid OMB control number.
SEC 1913 (04-04)
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously.Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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SEPTEMBER 2004
PROXY STATEMENT
[REGISTERED LOGO]
B A R O N
F U N D S(r)
> BARON ASSET FUND
> BARON GROWTH FUND
> BARON SMALL CAP FUND
> BARON iOPPORTUNITY FUND
> BARON FIFTH AVENUE GROWTH FUND
Enclosed is a Proxy Statement and Proxy Voting Card for shareholders of our
Funds. We are asking you to vote on the following items:
1. ELECT TRUSTEES. All current trustees are standing for election. In addition
there are two new independent trustee nominees. Mr. Dodge is the former
chairman of American Tower Corporation and Mr. Fuente is the former
chairman of Office Depot. If all the candidates are elected, we will have
three interested trustees and seven -- or 70% -- non-interested,
independent trustees. This will be a first step in our objective to have at
least 75% of the trustees be independent. In August of 2004, the Board
elected Mr. Mathewson, the former chairman of International Game
Technology, Inc. and an independent trustee who has served on the Board for
sixteen years, as its chairman, in advance of the effective date of the
SEC's requirement.
2. NAME CHANGE. The name Baron Asset Fund is currently shared by one of our
mutual funds and the legal trust which has five series funds, which has led
to confusion. We are proposing to change the name of the trust to Baron
Investment Funds Trust.
3. CHANGE IN INVESTMENT RESTRICTIONS. The Baron Asset Fund series has
different investment restrictions than Baron Growth Fund, Baron Small Cap
Fund and Baron iOpportunity Fund. We would like all these series have the
same fundamental investment restrictions.
Please read the enclosed Proxy Statement carefully and please cast your votes,
either electronically, by telephone, or by marking the proxy card and mailing it
to us. Every vote is important to us.
Thank you.
BARON ASSET FUND
BARON GROWTH FUND
BARON SMALL CAP FUND
BARON iOPPORTUNITY FUND
BARON FIFTH AVENUE GROWTH FUND
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------------
To Our Shareholders:
Please take notice that a Special Meeting of Shareholders (the "Meeting")
of Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity
Fund and Baron Fifth Avenue Growth Fund, (each a "Fund", collectively "Funds")
each of which is a separate series of Baron Asset Fund, a Massachusetts business
trust (the "Trust"), will be held at Avery Fisher Hall, Lincoln Center, 10
Lincoln Center Plaza, New York, NY 10023 on October 22, 2004 at 1:00 p.m.
eastern time.
The shareholders of ALL FIVE FUNDS will be asked to consider and vote
together as a single class on the following proposal, which is described in the
accompanying proxy statement:
(1) Election of ten members of the Board of Trustees of the Trust.
The shareholders of ALL FIVE FUNDS of the Trust will be asked to consider
and vote together as a single class on the following proposal, which is
described in the accompanying proxy statement:
(2) Change the name of the Baron Asset Fund Trust to Baron Investment
Funds Trust
The shareholders of the BARON ASSET FUND SERIES will be asked to consider
and vote on the additional following proposal, which is described in the
accompanying proxy statement:
(3) To eliminate the fundamental investment restrictions of the Fund and
replace them with an updated set of fundamental restrictions.
The shareholders of EACH FUND will be asked to consider and vote separately
on the following proposal, which is described in the accompanying proxy
statement:
(4) To transact such other business as may properly come before the
Special Meeting of Shareholders or any adjournment thereof.
Only holders of record of shares of common stock of the Fund at the close
of business on September 8, 2004, are entitled to vote at the Meeting and at any
adjournments thereof.
1
In the event that the necessary quorum to transact business, or if the vote
required to approve a proposal is not obtained at the Meeting, the persons named
on the proxy card as proxies may propose one or more adjournments of the
Meeting, in accordance with applicable law, to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of the holders
of a majority of the Fund's shares present in person or by proxy at the Meeting.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the proposal and will vote
against any such adjournment those proxies to be voted against the proposal.
By order of the Board of Trustees,
/s/ Linda S. Martinson
Linda S. Martinson
Secretary
September 1, 2004
2
IMPORTANT
Your vote is important and, as a shareholder, you are asked to be at the
Meeting either in person or by proxy. If you are unable to attend the meeting in
person we urge you to vote by proxy in case you may not be able to attend in
person since you can always revoke your proxy at the meeting. You can do this
by:
1. Completing, signing, dating and promptly returning the enclosed proxy
card using the enclosed postage prepaid envelope;
2. Calling the toll-free number on your proxy card; or
3. Voting at the Internet web site on your proxy card.
YOUR PROMPT VOTING BY PROXY MAY SAVE THE NECESSITY AND EXPENSE OF FURTHER
SOLICITATIONS TO ENSURE A QUORUM AT THE MEETING. VOTING BY PROXY WILL NOT
PREVENT YOU FROM PERSONALLY VOTING YOUR SHARES AT THE MEETING AND YOU MAY REVOKE
YOUR PROXY BY ADVISING THE SECRETARY OF THE TRUST IN WRITING (BY SUBSEQUENT
PROXY OR THROUGH THE WEB SITE) OR BY TELEPHONE OF SUCH REVOCATION AT ANY TIME
BEFORE THE MEETING.
3
BARON ASSET FUND
BARON GROWTH FUND
BARON SMALL CAP FUND
BARON iOPPORTUNITY FUND
BARON FIFTH AVENUE GROWTH FUND
767 Fifth Avenue, 49th Floor
New York, NY 10153
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PROXY STATEMENT
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GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board") of Baron Asset Fund (the
"Trust"), on behalf of its series, BARON ASSET FUND, BARON GROWTH FUND, BARON
SMALL CAP FUND, BARON iOPPORTUNITY FUND and BARON FIFTH AVENUE GROWTH FUND. This
proxy statement is for use at Special Meeting of Shareholders (the "Meeting"),
to be held at Avery Fisher Hall, Lincoln Center, 10 Lincoln Center Plaza, New
York, NY 10023 on October 22, 2004 at 1:00 p.m., eastern time, and at any and
all adjournments thereof.
This Proxy Statement, the Notice of Special Meeting and the proxy cards are
first being mailed to shareholders on or about September 15, 2004, or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it in person at the Meeting, by mail (addressed to the Secretary at the
principal office of the Funds, 767 Fifth Avenue, 49th floor, New York, NY
10153), by visiting the Internet website on your proxy card, calling the
toll-free number on your proxy card, by executing a superseding proxy, or by
submitting a notice of revocation to the Funds. All properly executed proxies
received in time for the Meeting will be voted as specified in the Proxy
Statement.
A majority of the outstanding shares must be present in person or by proxy
to constitute a quorum for the transaction of business. If the necessary quorum
to transact business or the vote required to approve the proposal is not
obtained at the Meeting, the persons named as proxies on the proxy card may
propose one or more adjournments of the Meeting, in accordance with applicable
law, to permit the further solicitation of proxies. Any such adjournment would
require the affirmative vote of a majority of the shares voting on the
adjournment. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the proposal, and will
vote against any such adjournment those proxies that they have been instructed
to vote against the proposal. For purposes of determining the presence of a
quorum for the Meeting, abstentions will be treated as shares that are
4
present but which have not been voted. Brokers and other nominees may not be
eligible to vote on certain matters shares that are not beneficially owned by
them and as to which they have not received voting instructions; and accordingly
these "broker non-votes" will be disregarded for quorum and voting purposes on
such matters. SHAREHOLDERS ARE URGED TO FORWARD THEIR VOTING INSTRUCTIONS
PROMPTLY.
The Annual Financial Report for the Funds of the Trust for the year ended
September 30, 2003, was mailed to shareholders the last week in November, 2003.
The unaudited Semi-Annual Financial Report for the Funds of the Trust was mailed
to shareholders in May of 2004. Both of these reports are available on the
website of the Securities and Exchange Commission, www.sec.gov, under the name
-----------
Baron Asset Fund. Copies are also available free of charge by calling
1.800.992.2766.
PROPOSALS
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SUMMARY
The following table summarizes the proposals being submitted by the Board
of Trustees for action at the October 22, 2004 Special Meeting of Shareholders
(the "Meeting").
PROPOSALS FUNDS AFFECTED
- --------- --------------
1. Elect ten Board members Baron Asset Fund series
Baron Growth Fund series
Baron Small Cap Fund series
Baron iOpportunity Fund series
Baron Fifth Avenue Growth Fund series
2. Change name of Trust Baron Asset Fund series
Baron Growth Fund series
Baron Small Cap Fund series
Baron iOpportunity Fund series
Baron Fifth Avenue Growth Fund series
3. Change investment restrictions Baron Asset Fund series
Trustees will be elected by plurality vote, with the nominees receiving the
most votes being elected. The change in the name of the Trust requires the
affirmative vote by a majority of the shares present and voting on the proposal,
and the change in investment restrictions of the Baron Asset Fund series
requires the affirmative vote of the lesser of: (a) 67% of the Baron Asset Fund
series' shares present at the Meeting if more than 50% of such shares
outstanding on the record date are present in person or by proxy or (b) more
than 50% of the shares of the Baron Asset Fund series' shares outstanding on the
record date.
5
Holders of record of the shares of the Funds at the close of business on
September 8, 2004, (the "Record Date") will be entitled to one vote per share
for each Fund on all business relevant to that Fund to be conducted at the
Meeting.
PROPOSAL 1 asks shareholders of all five Funds to elect ten Board members
to the Board of Trustees. It is intended that the enclosed proxy will be voted
for the nominees listed below unless such authority has been withheld in the
proxy. Except for Mr. Dodge and Mr. Fuente, all nominees named below are
currently Trustees and have served in that capacity for many years as indicated
below. Mr. Dodge and Mr. Fuente are nominated to fill vacancies. Mr. Dodge and
Mr. Fuente, as well as five other trustees, are independent. Three trustees are
"interested". Each of the current Trustees oversees the five Funds of the Trust.
Charles N. Mathewson, an independent trustee, was elected to serve as Baron
Funds' chairman on August 3, 2004.
The Board of Trustees held four regular quarterly meeting during the fiscal
year that ended September 30, 2003. In addition, it held one special meeting.
The Board of Trustees has established four committees, i.e., Audit,
Executive, Nominating and Independent. There are two members of the Audit
Committee, Norman S. Edelcup, and Raymond Noveck, both Non-Interested Trustees.
The Board has determined that they have at least one independent Audit Committee
financial expert. The Audit Committee recommends to the full Board the
engagement or discharge of the Funds' independent accountants; directs
investigations into matters within the scope of the independent accountants'
duties; reviews with the independent accountants the results of the audits; and
reviews the independence of the independent accountants. For the fiscal year
ended September 30, 2003, each member of the Audit Committee received an
aggregate of $2,500 in annual compensation for serving on the Audit Committee.
The Audit Committee met twice during the fiscal year ended September 30, 2003.
There are three members of the Executive Committee which is empowered to
exercise all of the powers, including the power to declare dividends, of the
full Board of Trustees when the full Board of Trustees is not in session. The
members of the Executive Committee are Ronald Baron, Morty Schaja and Linda S.
Martinson, all of whom serve on the committee without compensation. Mr. Baron,
Mr. Schaja and Ms. Martinson are Interested Trustees. There were four meetings
of the Executive Committee during the fiscal year ended September 30, 2003.
There are five members of the Nominating Committee, Norman S. Edelcup,
Charles N. Mathewson, Harold W. Milner, Raymond Noveck and Dr. David A.
Silverman, all of whom are Non-Interested Trustees and who serve without
compensation. The Nominating Committee does not have a formal charter. There
were no meetings of the Nominating Committee during the fiscal year ended
September 30, 2003.
The Nominating Committee recommends to the full Board those persons to be
nominated for election as Trustees by shareholders and selects and proposes
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nominees for election by Trustees between shareholder meetings. The Nominating
Committee does not normally consider candidates proposed by shareholders for
election as Trustees. It does not consider trustee candidates recommended by
security holders because the Board believes that the Committee itself can more
efficiently find qualified candidates for consideration. The Committee gathers a
list of prospective candidates. The Committee generally requires that any
candidate be a highly experienced, knowledgeable individual with experience
either in the industry or as directors or senior executives of public companies.
The Committee does consider candidates recommended by current Trustees,
including Interested Trustees. The Committee meets privately with all
candidates, questions references, and gathers background information some of
which may be from independent sources. The Committee then meets to consider the
potential nominees and votes to make a nomination. Mr. Dodge and Mr. Fuente were
recommended to the Committee by Ronald Baron, the Trust's president, the
Adviser's chief executive officer and an Interested Trustee, and were approved
by the Nominating Committee.
There are five members of the Independent Committee, all of whom serve on
the Committee without compensation. The members of the Independent Committee are
Norman S. Edelcup, Charles N. Mathewson, Harold W. Milner, Raymond Noveck and
Dr. David A. Silverman, all who are Non-Interested Trustees. The Committee
discusses various Fund matters, including the advisory contract and distribution
plan. This Committee met two times during the fiscal year ended September 30,
2003.
Fund shareholders who wish to send communications to the Board may do so by
sending e-mail to trustees@BaronFunds.com, which e-mail will be promptly
-----------------------
forwarded to each Board member. However, the Secretary reserves the right not to
forward to the Trustees any abusive, threatening or otherwise inappropriate
materials.
7
1. NOMINEES FOR BOARDS OF TRUSTEES
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
INTERESTED:
Ronald Baron President, The term of Chairman, CEO, and Director, All (7) None outside the
767 Fifth Avenue, 49th fl CEO, Chief service is until Baron Capital, Inc. (1982-Present); Baron Funds
New York, NY 10153 Investment cessation; the Baron Capital Management, Inc. Complex.
Age: 61 Officer, length of time (1983-Present); Baron Capital
Portfolio served as Trustee Group, Inc. (1984-Present);
Manager is 16 years. BAMCO, Inc. (1987-Present);
and Trustee Fund (1987-Present); Portfolio
Manager, Baron Growth Fund
(1995-Present); President (2004-
Present), Chairman (1999-2004),
CIO and Trustee (1987-Present), the
Trust; President (2004-Present),
Chairman (1997-2004), CIO and
Trustee (1997-Present), Baron
Capital Funds Trust; President
(2004-Present), Chairman (2003-
2004), CIO and Trustee (2003-
Present), Baron Select Funds.
8
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
INTERESTED:
Linda S. Martinson Vice The term of General Counsel, Vice President & All (7) None outside the
767 Fifth Avenue, 49th fl President, service is until Secretary, Baron Capital, Inc. Baron Funds
New York, NY 10153 Secretary, cessation; the (1983-Present); BAMCO, Inc. Complex.
Age: 49 General length of time (1987-Present); Baron Capital
Counsel served as Trustee Group, Inc. (1984-Present); Baron
and Trustee is 16 years. Capital Management, Inc. (1983-
Present); Vice President, Secretary,
General Counsel and Trustee, the
Trust (1987-Present); Vice
President, Secretary, General
Counsel and Trustee, Baron Capital
Funds Trust (1997-Present); Vice
President, General Counsel,
Secretary and Trustee, Baron Select
Funds (2003-Present).
9
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
INTERESTED:
Morty Schaja Executive The term of President and Chief Operating All (7) None outside the
767 Fifth Avenue, 49th fl Vice service is until Officer, Baron Capital, Inc. (1999- Baron Funds
New York, NY 10153 President, cessation; the Present); Senior Vice President and Complex.
Age: 49 Chief length of time Chief Operating Officer, Baron
Operating served as Trustee Capital, Inc. (1997-1999); Managing
Officer and is 6 years. Director, Vice President, Baron
Trustee Capital, Inc. (1991-1999); Director,
Baron Capital Group, Inc., Baron
Capital Management, Inc., and
BAMCO, Inc. (1997-Present);
Executive Vice President (2004-
Present), President (1999-2004)
COO (1999-Present), and Trustee
(1996-Present), Baron Asset Fund;
Executive Vice President (2004-
Present), President (1999-2004)
COO (1999-Present), and Trustee
(1997-Present), Baron Capital Funds
Trust; Executive Vice President
(2004-Present), President (1999-
2004), COO (1999-Present) and
Trustee (2003-Present) Baron Select
Funds.
10
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
Steven B. Dodge Nominee Term of service is CEO, Windover Development N/A Chairman of the
239 Summer Street until cessation. Corporation (2004-Present)(private (0) Audit Committee,
Manchester, MA 01944 real estate development company); Member of
Age: 59 Founder and Chairman, American Executive and
Tower Corporation (1998-2004); Special
Founder, Chairman and CEO, Independent
American Radio Systems (1988- Committees,
1998); Founder, Chairman and Sotheby's
CEO, American Cablesystems Holdings, Inc.
(1978-1988); Chairman of the Audit (2000-Present);
Committee, Member of Executive Chairman of
and Special Independent Audit Committee
Committees, Sotheby's Holdings, (2000-2004),
Inc. (2000-Present); Chairman of Member of the
Audit Committee (2000-2004), Audit Committee
Member of the Audit Committee (2000-Present)
(2000-Present) Nextel Partners, Inc. Nextel Partners,
Inc.
11
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
Norman S. Edelcup Trustee The term of Senior Vice President & Director, All Director, Florida
244 Atlantic Isles service is until Florida Savings Bancorp (2001- (7) Savings Bancorp
Sunny Isles Beach, cessation; the Present); Mayor (October 2003- (2001-Present);
FL 33160 length of time Present), Commissioner, Sunny Isles Director, Valhi,
Age: 69 served as Trustee Beach, Florida (2001-2003); Senior Inc. (1975-
is 16 years. Vice President, Item Processing of Present).
America (1999-2000) (a subsidiary
of The Intercept Group); Chairman,
Item Processing of America (1989-
1999) (a financial institution service
bureau); Director, Valhi, Inc. (1975-
Present) (diversified company);
Director, Artistic Greetings, Inc.
(1985-1998); Trustee (1987-
Present), Baron Asset Fund; Trustee
(1997-Present), Baron Capital Funds
Trust; Trustee (2003-Present), Baron
Select Funds.
12
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
David I. Fuente Nominee Term of service is Director, (1987-Present), Chairman, N/A Director, (1987-
701 Tern Point Circle until cessation. (1987-2002), and CEO (1987-2000) (0) Present),
Boca Raton, FL 33431 Office Depot; Director, Ryder Chairman, (1987-
Age: 58 System, Inc. (1998-Present); 2002), and CEO
Director, Dick's Sporting Goods, (1987-2000)
Inc. (1993-Present). Office Depot;
Director, Ryder
System, Inc.
(1998-Present);
Director, Dick's
Sporting Goods,
Inc. (1993-
Present).
13
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
Charles N. Mathewson Chairman Term of service is Chairman Emeritus (October 2003- All Chairman
9295 Prototype Road until cessation; Present), Chairman (1986-2003), (7) Emeritus (October
Reno, NV 89521 the length of time International Game Technology, Inc. 2003-Present),
Age: 76 served as (manufacturer of microprocessor- Chairman (1986-
Chairman is since controlled gaming machines and 2003), Inter-
08/04 and as monitoring systems); Chairman, national Game
Trustee is 16 American Gaming Association Technology, Inc.
years. (1994-2002); Chairman (2004- (manufacturer of
Present) and Trustee (1987-Present), microprocessor-
Baron Asset Fund; Chairman (2004- controlled gaming
Present) and Trustee (1997-Present), machines and
Baron Capital Funds Trust; monitoring
Chairman (2004-Present) and systems);
Trustee (2003-Present), Baron Chairman,
Select Funds. American Gaming
Association
(1994-2002).
14
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
Harold W. Milner Trustee Term of service is Retired; President and CEO, Kahler All None outside the
2293 Morningstar Drive until cessation; Realty Corporation (1985-1997) (7) Baron Funds
Park City, UT 84060 the length of time (hotel ownership and management); Complex.
Age: 69 served as Trustee Trustee (1987-Present), Baron Asset
is 16 years. Fund; Trustee (1997-Present), Baron
Capital Funds Trust; Trustee (2003-
Present), Baron Select Funds.
Raymond Noveck Trustee Term of service is Private Investor (1999-Present); All None outside the
31 Karen Road until cessation; President, The Medical Information (7) Baron Funds
Waban, MA 02168 the length of time Line, Inc. (1997-1998) (health care Complex.
Age: 61 served as Trustee information); President, Strategic
is 16 years. Systems, Inc. (1990-1997) (health
care information); Director,
Horizon/CMS Healthcare
Corporation (1987-1997); Trustee
(1987-Present), Baron Asset Fund;
Trustee (1997-Present), Baron
Capital Funds Trust; Trustee (2003-
Present), Baron Select Funds.
15
NUMBER OF
PORTFOLIOS IN OTHER
TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY TRUSTEE
NAME, ADDRESS & AGE WITH FUNDS TIME SERVED DURING PAST FIVE YEARS TRUSTEE OR NOMINEE
- ------------------- ----------- -------------- ----------------------- ------------- -----------------
NON-INTERESTED:
David A. Silverman, MD Trustee Term of service is Physician and Faculty, New York All None outside the
146 Central Park West until cessation; University School of Medicine (7) Baron Funds
New York, NY 10024 the length of time (1976-Present); Trustee (1987- Complex.
Age: 54 served as Trustee Present), Baron Asset Fund; Trustee
is 16 years. (1997-Present), Baron Capital Funds
Trust; Trustee (2003-Present), Baron
Select Funds.
16
The following table shows the dollar range of shares beneficially owned by
each Trustee as of July 31, 2004:
AGGREGATE DOLLAR
RANGE OF EQUITY
DOLLAR RANGE OF EQUITY SECURITIES IN ALL
SECURITIES IN THE FUNDS REGISTERED INVESTMENT
----------------------------------------------------------------------- COMPANIES OVERSEEN BY
BARON BARON BARON BARON BARON TRUSTEE IN FAMILY OF
NAME OF TRUSTEE OR NOMINEE ASSET GROWTH SMALL CAP iOPPORTUNITY FIFTH AVE GROWTH INVESTMENT COMPANIES
- -----------------------------------------------------------------------------------------------------------------------------------
Interested:
Ronald Baron^ >$100,000 >$100,000 >$100,000 >$100,000 >$100,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
$ 10,001- $ 50,000- $ 50,000- $ 10,001-
Linda S. Martinson $ 50,000 $ 100,000 $ 100,000 $0 $ 50,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
Morty Schaja* >$100,000 >$100,000 >$100,000 >$100,000 >$100,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
Non-Interested:
$ 50,000- $ 10,001- $ 10,001-
Norman Edelcup $ 100,000 $ 50,000 $ 50,000 $1-$10,000 $1-$10,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
$ 10,001- $ 10,001-
Charles Mathewson $ 50,000 $ 50,000 $0 $0 >$100,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
$ 50,000- $ 10,001- $ 10,001- $ 10,001-
Harold Milner >$100,000 $100,000 $ 50,000 $ 50,000 $ 50,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
$ 10,001- $ 10,001- $ 10,001-
Raymond Noveck >$100,000 $ 50,000 $ 50,000 $0 $ 50,000 >$100,000
- -----------------------------------------------------------------------------------------------------------------------------------
$ 10,001- $ 10,001-
David Silverman, MD $ 50,000 $0 $0 $0 $0 $ 50,000
- -----------------------------------------------------------------------------------------------------------------------------------
Steven B. Dodge $0 $0 $0 $0 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
$ 50,001-
David I. Fuente $ 100,000 $0 $0 $0 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
^ Ronald Baron, the chairman and chief executive officer of BAMCO, Inc., the
Adviser to the Funds, owns beneficially in excess of $90 million of
registered investment companies managed by BAMCO.
* Morty Schaja, the president of BAMCO, Inc., the Adviser to the Funds, owns
beneficially in excess of $4 million of registered investment companies
managed by BAMCO.
17
The officers of the Trust received no compensation from the Trust for the
fiscal year ended September 30, 2003. The Trustees of the Funds received the
following compensation from the Funds for the fiscal year ended September 30,
2003:
Pension or Total
Retirement Estimated Compensation
Aggregate Benefits Annual From Fund and
Compensation Accrued as Part Benefits Upon Fund Complex
Name From the Funds of Funds Expenses Retirement Paid to Trustees
- ---------------------------------------------------------------------------------------------------
Interested:
Ronald Baron $ 0 N/A N/A $ 0
- ---------------------------------------------------------------------------------------------------
Linda S. Martinson $ 0 N/A N/A $ 0
- ---------------------------------------------------------------------------------------------------
Morty Schaja $ 0 N/A N/A $ 0
- ---------------------------------------------------------------------------------------------------
Non-Interested:
Norman Edelcup $16,250 N/A N/A $16,250
- ---------------------------------------------------------------------------------------------------
Charles Mathewson $ 6,250 N/A N/A $ 6,250
- ---------------------------------------------------------------------------------------------------
Harold Milner $13,750 N/A N/A $13,750
- ---------------------------------------------------------------------------------------------------
Raymond Noveck $15,625 N/A N/A $15,625
- ---------------------------------------------------------------------------------------------------
David Silverman $13,750 N/A N/A $13,750
- ---------------------------------------------------------------------------------------------------
Steven B. Dodge N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
David I. Fuente N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
BOARD OF TRUSTEES RECOMMENDATION
The Board of Trustees of the Trust recommends that each nominee listed
above be elected to serve as a trustee until he or she ceases to be a trustee
(including upon election of a successor at a meeting of shareholders.)
REQUIRED VOTE
Election of individual Trustees requires an affirmative vote of a plurality
of all shares voting if a quorum is present. THE BOARD OF TRUSTEES RECOMMENDS
THAT THE SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF EACH NOMINEE.
PROPOSAL 2 asks shareholders of Baron Asset Fund, Baron Growth Fund, Baron
Small Cap Fund, Baron iOpportunity Fund and Baron Fifth Avenue Growth Fund to
change the name of the Trust from Baron Asset Fund to Baron Investment Funds
Trust.
BOARD OF TRUSTEES RECOMMENDATION
The Board of Trustees of the Trust recommend that the name of the Trust be
changed. Having the same name for both the Trust and one of its series has
caused confusion. The simplest solution would be to rename the Trust.
18
REQUIRED VOTE
Approval of Proposal 2 requires the affirmative vote of a majority of the
shares represented at the Meeting in person or by proxy and voting on the
matter. THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE TRUST VOTE
IN FAVOR OF THIS PROPOSAL 2.
PROPOSAL 3 asks shareholders of the Baron Asset Fund series to eliminate
certain of its fundamental investment restrictions and replace them with new
restrictions. Certain other restrictions would not be changed. The new
restrictions would be the same restrictions that Baron Growth Fund, Baron Small
Cap Fund and Baron iOpportunity Fund have.
PROPOSED RESTRICTIONS
The proposed new restrictions are as follows:
Baron Asset Fund may not:
1. Issue senior securities or borrow money or utilize leverage in excess
of 25% of its net assets (plus 5% for emergency or other short-term
purposes) from banks from time to time.
2. Except as described in the prospectus or SAI, engage in short-sales,
purchase securities on margin or maintain a net short position.
3. Purchase or sell commodities or commodity contracts except for hedging
purposes and in conformity with regulations of the Commodities Futures
Trading Commission such that the Fund would not be considered a
commodity pool.
4. Purchase or sell oil and gas interests or real estate. Debt or equity
securities issued by companies engaged in the oil, gas or real estate
business are not considered oil or gas interests or real estate for
purposes of this restriction. First mortgage loans and other direct
obligations secured by real estate are not considered real estate for
purposes of this restriction.
5. Make loans, except to the extent the purchase of debt obligations of
any type (including repurchase agreements and corporate commercial
paper) are considered loans and except that the Fund may lend
portfolio securities to qualified institutional investors in
compliance with requirements established from time to time by the
Securities and Exchange Commission and the securities exchanges where
such securities are traded.
6. Invest more than 15% of its assets in restricted or illiquid
securities, including repurchase agreements maturing in more than
seven days.
19
These restrictions would replace the following existing restrictions:
Baron Asset Fund may not:
1. Issue senior securities except in connection with any permitted
borrowing where the Fund is deemed to have issued a senior security;
2. Borrow money except from banks for temporary purposes in an amount not
exceeding 5% of the Fund's net assets at the time the borrowing is
made;
3. Purchase securities on margin except for short-term credit necessary
for the clearance of portfolio transactions;
4. Make short sales of securities, maintain a short position, or write
put options;
5. Purchase or sell commodities or commodity contracts;
6. Purchase or sell real estate or real estate mortgage loans or invest
in the securities of real estate companies unless such securities are
publicly traded;
7. Invest in oil, gas or mineral-related programs or leases;
8. Invest more than 10% of the value of the Fund's total assets in
securities which are restricted or illiquid or in repurchase
agreements maturing or terminable in more than seven days;
9. Invest in securities of other open end investment companies (except in
connection with a merger, consolidation or other reorganization and
except for the purchase of shares of registered open-end money market
mutual funds if double advisory fees are not assessed), invest more
than 5% of the value of the Fund's total assets in more than 3% of the
total outstanding voting securities of another investment company or
more than 10% of the value of the Fund's total assets in securities
issued by other investment companies;
10. Make loans to other persons, except up to 10% of the value of the
Fund's total assets in loans of portfolio securities and except to the
extent that the purchase of publicly traded debt securities and the
entry into repurchase agreements in accordance with the Fund's
investment objective and policies may be deemed to be loans;
11. Mortgage, pledge or hypothecate any portfolio securities owned or held
by the Fund, except as may be necessary in connection with permitted
borrowing;
12. Invest more than 5% of its total assets in warrants to purchase common
stock;
13. Purchase securities of any issuer with a record of less than three
years' continuous operation, including predecessors, except
obligations issued or
20
guaranteed by the U.S. Government or its agencies or
instrumentalities, if such purchase would cause the investments of the
Fund in all such issuers to exceed 5% of the value of the total assets
of the Fund; or
14. Purchase or retain any securities of an issuer any of whose officers,
directors, trustees or security holders is an officer or Trustee of
the Fund, or is a member, officer or Director of the Adviser, if after
the purchase of the securities of such issuer by the Fund one or more
of such persons owns beneficially more than 1/2 of 1% of the shares or
securities, or both, all taken at market value, of such issuer, and
such persons owning more than 1/2 of 1% of such shares or securities
together own beneficially more than 5% of such shares or securities,
or both, all taken at market value.
BOARD OF TRUSTEES RECOMMENDATION
The Board of Trustees of the Trust recommend the elimination of the
existing investment restrictions and the adoption of the new investment
restrictions. The Board believes that the new restrictions are reasonable and
fair and that many of the old restrictions are outdated. The Board believes that
this change will allow the Adviser more ability to better manage the portfolio
and will facilitate its administration. The Board does not believe that the
changes will materially increase the risks in connection with, the Fund.
EXPLANATION OF PROPOSED CHANGES AND RISK FACTORS:
PROPOSED ITEM 1 is similar to the existing restriction number 1, except
that is would allow the Fund to borrow up to 30% of its net assets. The Fund is
currently allowed to borrow up to 5% of its net assets for temporary purposes.
To the extent the Fund borrows, it must maintain continuous asset coverage of
300% of the amount borrowed. Such borrowing has special risks. Any amount
borrowed will be subject to interest costs that may or may not exceed the
appreciation of the securities purchased.
PROPOSED ITEM 2 allows the Fund to utilize margin or short sales, if and as
disclosed in the prospectus. Currently the Fund is not authorized to utilize
margin or maintain a short position. The change will allow the Fund to take
advantage of perceived market conditions, but BAMCO, Inc., the adviser to the
Fund (the "Adviser"), does not believe this would be a significant part of the
investment program. The risks associated with margin transactions are the same
as in item 1 above. The Fund has to borrow the security it wishes to sell short.
The market value of the security sold short may increase and the Fund would lose
money because it will have to pay a higher price to repurchase the borrowed
stock when it closes its short position. The loss of value on a short sale is
theoretically unlimited if the Fund is unable to close out a short position at
an acceptable price or time.
21
PROPOSED ITEM 3 allows the Fund to engage in commodities transactions for
hedging purposes only. Currently the Fund cannot engage in commodities
transactions for any purpose. The Adviser does not believe that this would be a
significant part of the Fund's investment program, but would like the ability to
utilize appropriate hedging techniques should market conditions warrant. The
hedging technique may be not be successful and the market conditions could
change, resulting in the hedge reducing the value of the portfolio.
PROPOSED ITEM 4 is similar to the existing restrictions numbers 6 and 7.
The language is different but the restriction is the same, namely that the Fund
may not invest directly in real estate or oil and gas ventures, but it can
purchase securities of companies engaged in those businesses.
PROPOSED ITEM 5 would allow the Fund to loan its portfolio securities to
qualified institutional investors in accordance with then-current Securities and
Exchange Commission requirements. Currently the Fund is allowed to loan up to
10% of its portfolio securities. The Adviser does not believe this would be a
significant part of the Fund's investment program. Historically the Fund has not
engaged in stock loan.
PROPOSED ITEM 6 would increase the percentage of the Fund's assets that
could be invested in restricted or illiquid securities to 15% from 10%. The
Adviser believes that the additional 5% gives it more flexibility in managing
the portfolio and gives it additional investment opportunities. There is also
additional risk. The absence of a trading market could make it difficult to
ascertain a market value for illiquid positions. The Fund's net asset value
could be adversely affected if there were no ready buyer at an acceptable price
at the time the Fund decided to sell. Time consuming negotiations and expenses
could occur in disposing of the shares.
In addition to the revisions described above, existing items 4, 9, 12 and
14 would be eliminated. The reasons are described below.
ITEM 4 prohibits the Fund from engaging in short sales and writing put
options. The short sales are addressed in new item 2. The Fund is currently
authorized to engage in other types of options transactions (it may write
covered call options and purchase put options), but the Adviser would like the
ability to, like the other Baron Funds, write put options and purchase call
options where consistent with the prospectus and where market conditions
warrant. A put option gives the purchaser of the option the right to sell, and
when exercised, obligates the writer to buy, the underlying security at the
exercise price. A call option gives the purchaser of the option the right to
buy, and when exercised, obligates the writer to buy, the underlying security at
the exercise price. Options may fail as hedging techniques in cases where the
price movements of the securities underlying the options do not follow the price
movements of the portfolio securities subject to the hedge. Gains on investments
in options and derivatives depend on the Adviser's ability to anticipate
22
correctly the direction of stock prices, interest rates, and other economic
factors. Options may lose all their value in a relatively short period of time.
ITEM 9 prohibits the Fund from investing in other investment companies. The
Adviser believes that this should not be a fundamental restriction but should be
governed by what the prospectus allows the Fund to do. The Fund has never had
significant investments in other investment companies and the Adviser has no
present intention of changing that policy.
ITEM 12 prohibits the Fund from investing more than 5% of its total assets
in warrants to purchase common stock. The Adviser believes that this should not
be a fundamental restriction, but should be governed by what the prospectus
allows the Fund to do. From time-to-time the Fund has owned warrants, but it is
not a significant part of the management of the portfolio.
ITEM 14 prohibits the Fund from owning securities of an issuer whose
officers, directors, etc. are officers, directors, etc. of the Fund where such
persons own certain percentages of the issuer's securities. The Adviser believes
the Fund should not be restricted from owning shares of an issuer because an
officer or director also owns shares. The restriction was originally adopted
because securities laws at the time required it, but those restrictions are no
longer required and the Adviser believes this should not remain a fundamental
policy of the Fund.
REQUIRED VOTE
Approval of Proposal 3 requires the affirmative vote of the lesser of: (a)
67% of the Baron Asset Fund series' shares present at the Meeting if a majority
of such shares are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Baron Asset Fund series' shares. It is intended that
the enclosed proxy will be voted for the six new investment restrictions
proposed unless authority is withheld in the proxy. If there are not enough
votes to pass any particular restriction, the existing restriction will remain
in effect. THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND
VOTE IN FAVOR OF THIS PROPOSAL 3.
ADDITIONAL INFORMATION
The name and address of the Investment Adviser is BAMCO, Inc., 767 Fifth
Avenue, 49th Floor, New York, New York, 10153. The cost of preparing, printing
and mailing the proxy, notice and Proxy Statement and all other costs incurred
in connection with the solicitation of proxies, including any additional
solicitation made by letter, telephone or other means, will be paid by the
Funds, proportionately.
The name and address of the principal underwriter and distributor is Baron
Capital, Inc., 767 Fifth Avenue, 49th Floor, New York, New York, 10153.
23
It is expected that the solicitation of proxies will be primarily by mail.
A proxy solicitation firm may be engaged to assist in the solicitation of
proxies. To the extent that votes are not received, the proxy solicitation firm
may contact shareholders by telephone. Shareholders may authorize the proxy
solicitation firm to execute proxies on their behalf, by telephone or through
the Internet. Proxies that are obtained by telephone authorization will be
recorded in accordance with procedures that are reasonably designed to ensure
that the identity of the shareholder casting the vote and the voting
instructions of the shareholder are accurately determined.
When soliciting telephonic proxies, the representative is required to ask
for each shareholder's full name, address, social security or tax identification
number, and the number of shares owned to confirm that the shareholder has
received the Proxy Statement and proxy card in the mail. If the information is
consistent, the proxy solicitor would explain the voting process and the
proposals and ask for the shareholder's voting instructions. The proxy solicitor
would not recommend to the shareholder how to vote, other than to read any
recommendations set forth in the Proxy Statement. The proxy solicitation firm
confirms the voting instructions to the shareholder promptly by letter or
mailgram.
Shareholders who want to vote by electronic proxy rather than mailing back
the proxy card, may do so by accessing the Internet website indicated on the
proxy card or by calling the toll-free number referenced on the proxy card. The
shareholder will be prompted to provide his or her control number that appears
on the proxy card. If the information is correctly entered, the shareholder will
be provided with instructions, and the opportunity to enter votes. Confirmation
of telephone voting instructions are done immediately over the phone, while the
shareholder will be sent electronic confirmation of the voting instructions by
e-mail.
Proxies may also be voted by filling out the proxy card sent with the Proxy
Statement and returning it to the Fund. For replacement proxy cards or
additional information, please call the Fund at 1-800-992-2766. Any proxy given
by a shareholder, whether in writing or by telephone, is revocable. Shareholders
may attend the meeting in person.
24
There is only one class of shares for each Fund, and each share is entitled
to one vote. There is no cumulative voting. At the close of business on
September 8, 2004, the record date for determination of shareholders entitled to
notice and to vote at the Meeting, the number of outstanding shares of
beneficial interest for each of the Funds is as follows:
NAME OF FUND SHARES OUTSTANDING
------------ -------------------
Baron Asset Fund ........................ 42,093,741.504
Baron Growth Fund ....................... 79,511,027.241
Baron Small Cap Fund .................... 92,029,086.661
Baron iOpportunity Fund ................. 18,206,263.021
Baron Fifth Avenue Growth Fund .......... 4,555,637.860
As of July 31, 2004, the record date, the following chart lists those
shareholders who beneficially owned as much as 5% of the outstanding shares of
capital stock of each Fund, and also shows the aggregate holdings of persons
affiliated with the Funds and the Adviser:
AFFILIATED
PERSONS'
AGGREGATE
NAME OF OWNERSHIP OWNERSHIP
NAME OF FUND 5% OWNER PERCENTAGE PERCENTAGE
- -------------------- ---------------------------------------------- ------------ ----------------------
BARON ASSET FUND Clients of Charles Schwab & Co., Inc. 32.57% Officers and Trustees
as a group, own less
than 1%.
Clients of National Financial Services Corp. 19.74%
- -------------------------------------------------------------------------------------------------------
BARON GROWTH FUND Clients of Charles Schwab & Co., Inc. 19.70% Officers and Trustees
as a group, own less
than 1%.
Clients of National Financial Services Corp. 31.17%
- -------------------------------------------------------------------------------------------------------
BARON SMALL
CAP FUND Clients of Charles Schwab & Co., Inc. 32.88% Officers and Trustees
as a group, own less
than 1%.
Clients of National Financial Services Corp. 19.61%
- -------------------------------------------------------------------------------------------------------
BARON iOPPORTUNITY Clients of Charles Schwab & Co., Inc. 48.67% Ronald Baron 2.36%
FUND Morty Schaja 1.13%
Officers and Trustees
other than Mr. Baron
and Mr. Schaja, as
a group, own less
than 1%.
- -------------------------------------------------------------------------------------------------------
25
AFFILIATED
PERSONS'
AGGREGATE
NAME OF OWNERSHIP OWNERSHIP
NAME OF FUND 5% OWNER PERCENTAGE PERCENTAGE
- ------------------- ---------------------------------------------- ------------ ----------------------
BARON FIFTH AVENUE
GROWTH FUND Clients of Charles Schwab & Co., Inc. 29.60% Ronald Baron 8.74%*
Charles N. Mathewson Trust U/A07/22/92 13.28% Morty Schaja 2.14%
Clients of National Investors Services Corp. 6.16% Mitch Rubin 2.08%
Theresa Berman & Lyle A. Berman & Officers and Trustees
Sharon Berman Snyder Trust U/A10/10/90 5.31% other than Mr. Baron,
Mr. Schaja and Mr.
Rubin, as a group,
own less than 1%.
- ------------------------------------------------------------------------------------------------------
* The 8.74% reported includes shares controlled by Mr. Baron through his
ownership of BAMCO, Inc.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any other business to be brought before the
Special Meeting. Should any other matters requiring a shareholder vote arise, it
is the intention that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING ARE
URGED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE
ENCLOSED ENVELOPE WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES OR VOTE BY TOLL-FREE TELEPHONE CALL OR AT THE
WEB-SITE. TO AVOID THE EXPENSE OF FURTHER SOLICITATION, PLEASE VOTE PROMPTLY.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be included in the proxy statement for the
Fund's next meeting of shareholders must be received by the Fund within a
reasonable period of time prior to that meeting. The Fund is not required to
hold annual meetings of shareholders and has no current plan to hold a
shareholder meeting in the next year.
By order of the Board of Trustees
/s/ Linda S. Martinson
Linda S. Martinson
Secretary
26
(Proxy Card)
[registered log] BARON FUNDS
B A R O N P.O. BOX 9132
F U N D S(r) HINGHAM, MA 02043-9132
- --------------------------------------------------------------------------------
THREE EASY WAYS TO VOTE THIS FORM
READ THE PROXY STATEMENT AND HAVE THIS FORM AT HAND.
TELEPHONE: Call 1-888-221-0697 and follow the recorded instructions.
INTERNET: Go to www.proxyweb.com and follow the on-screen instructions.
MAIL: Check the appropriate box on the reverse side of this Form, sign
and date below, and return in the postage-paid envelope provided.
IF YOU VOTE BY TELEPHONE OR INTERNET, DO NOT MAIL THIS FORM.
- --------------------------------------------------------------------------------
BARON ASSET FUND o BARON GROWTH FUND o BARON SMALL CAP FUND
BARON iOPPORTUNITY FUND o BARON FIFTH AVENUE GROWTH FUND
FUND NAME PRINTS HERE THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES
The undersigned hereby appoints Ronald Baron, President and CEO and Morty
Schaja, Senior Vice President and COO and each of them, attorneys and proxies of
the undersigned, with full powers of substitution and revocation, to represent
the undersigned and to vote on behalf of the undersigned all shares of Baron
Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund and
Baron Fifth Avenue Growth Fund (the Funds) which the undersigned is entitled to
vote at a Special Meeting of Shareholders of the Fund to be held at Avery Fisher
Hall, Lincoln Center, 10 Lincoln Center Plaza, New York, NY 10023 on October 22,
2004 at 1:00 p.m. eastern time, and any adjournments thereof. The undersigned
hereby acknowledges receipt of the Notice of Special Meeting of Shareholders and
Proxy Statement and hereby instructs said attorneys and proxies to vote said
shares as indicated herein, in their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Meeting.
Either of the proxies present and acting at the Meeting in person or by
substitute shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made as to any Proposal, this proxy
will be voted FOR the Proposal. Please refer to the Proxy Statement for a
discussion of each of the Proposals.
PLEASE VOTE, DATE, AND SIGN BELOW AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
- --------------------------------------------------------------------------
Date
----------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shareholder(s) sign here (Sign in the Box)
Please sign this proxy exactly as your name appears on the books of the Fund.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, the signature should be that of an
authorized officer who should state his or her title.
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) Election of ten members of the Board of Trustees for the Trust (Baron Asset Vote FOR all Vote
Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund and Nominees WITHHELD
Baron Fifth Avenue Growth Fund): (except as FROM ALL
indicated) NOMINEES
Nominees: *(01) Ronald Baron (05) Charles N. Mathewson (09) Steven B. Dodge
*(02) Linda S. Martinson (06) Howard W. Milner (10) David I. Fuente
*(03) Morty Schaja (07) Raymond Noveck
(04) Norman S. Edelcup (08) David Silverman, MD *Interested Trustee [ ] [ ]
- -----------------------------------------------------------------------------------------------
Instructions: To withhold authority to vote FOR any nominee(s), write the
nominee(s) number(s) above.
2) To change the name of the Trust (Baron Asset Fund, Baron Growth Fund, Baron FOR AGAINST ABSTAIN
Small Cap Fund, Baron iOpportunity Fund and Baron Fifth Avenue Growth Fund)
from Baron Asset Fund, to Baron Investment Funds Trust. [ ] [ ] [ ]
3) Only shareholders of the Baron Asset Fund series may vote for this item. To FOR AGAINST ABSTAIN
eliminate the fundamental investment restrictions of the Baron Asset Fund (except
series and replace the restrictions with new restrictions below. as
indicated)
[ ] [ ] [ ]
3a. Leverage up to 25% 3d. Oil and gas interests
3b. Short sales 3e. Loans
3c. Commodities 3f. 15% in restricted or illiquid securities
- -------------------------------------------------------------------------------
Instructions: If you wish to withhold a vote from a particular sub-proposal
please write the number and letter(s) of the sub-proposal on the line above and
indicate a Vote Against or an Abstention. Please refer to Proposal 3 of the
Proxy Statement.
4) To transact such other business as may properly come before the Meeting or FOR AGAINST ABSTAIN
any adjournment thereof.
[ ] [ ] [ ]