SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
The DLB Fund Group
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
The DLB Fund Group
- --------------------------------------------------------------------------------
One Memorial Drive
Cambridge, MA 02142-1300
Telephone: (617) 225-3800
Fax: (617) 225-3801
INFORMATION STATEMENT
JUNE 2, 2004
GENERAL INFORMATION
This information statement, which is first being mailed on or about June 2,
2004, is distributed in connection with actions to be taken by written consent
of the Majority Shareholder (as defined below) of the Funds of The DLB Fund
Group (the "Trust") on or about June 23, 2004, as more fully described below.
This document is required under the federal securities laws and is provided
solely for your information.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
SHARE OWNERSHIP INFORMATION
The Trustees have set June 1, 2004 (the "Record Date") as the record date
for determining the number of shares and the shareholders entitled to give
consent and to receive this information statement. On the Record Date,
72,204,676.448 shares of the Trust were outstanding, attributable to each Fund
as follows:
DLB Fixed Income Fund 1,880,802.029
DLB High Yield Fund 6,257,604.565
DLB Value Fund 4,102,616.627
DLB Core Growth Fund 9,275,489.797
DLB Enhanced Index Core Equity Fund 3,019,856.572
DLB Enhanced Index Growth Fund 2,766,282.388
DLB Enhanced Index Value Fund 2,902,351.296
DLB Small Company Opportunities Fund 31,380,679.152
DLB Small Capitalization Value Fund 7,500,792.230
DLB Emerging Markets Fund 3,118,201.792
Information concerning shareholders who were known to be the record owners
of more than 5% of each Fund's shares as of the Record Date is set forth below.
As of the Record Date, Massachusetts Mutual Life Insurance Company ("MassMutual"
or "Majority Shareholder") owned 61,540,185.149 shares of the Trust, or 85.23%
of the outstanding shares of the Trust.
Fund Name Number of Shares Percent of the Fund
- --------------------------------------------------------------------------------
DLB Fixed Income Fund
MassMutual 1,609,535.246 85.58%
1295 State Street
Springfield, MA 01111
DLB High Yield Fund
MassMutual 5,314,257.616 84.92%
1295 State Street
Springfield, MA 01111
Roman Catholic Bishop of 514,159.667 8.22%
Springfield
Box 1730
Springfield, MA 01102
DLB Core Growth Fund
MassMutual 8,270,730.764 89.17%
1295 State Street
Springfield, MA 01111
1
Fund Name Number of Shares Percent of the Fund
- --------------------------------------------------------------------------------
DLB Value Fund
MassMutual 3,727,154.350 90.85%
1295 State Street
Springfield, MA 01111
Roman Catholic Bishop of 279,962.889 6.82%
Springfield
Box 1730
Springfield, MA 01102
DLB Enhanced Index Core Equity Fund 2,877,713.904 95.29%
MassMutual
1295 State Street
Springfield, MA 01111
DLB Enhanced Index Growth Fund 2,763,277.660 99.89%
MassMutual
1295 State Street
Springfield, MA 01111
DLB Enhanced Index Value Fund 2,901,220.968 99.96%
MassMutual
1295 State Street
Springfield, MA 01111
DLB Small Company Opportunities Fund 25,312,213.737 80.68%
MassMutual
1295 State Street
Springfield, MA 01111
DLB Small Cap Value Fund 5,707,677.926 76.09%
MassMutual
1295 State Street
Springfield, MA 01111
Newton Retirement System 1,453,326.202 19.38%
1000 Commonwealth Avenue
Newton Centre, MA 02549
DLB Emerging Markets Fund 3,056,402.975 98.02%
MassMutual
1295 State Street
Springfield, MA 01111
SHARE OWNERSHIP OF TRUSTEES, NOMINEE AND PRESIDENT
Set forth below is information concerning beneficial ownership, as of June
1, 2004, of the Trust's shares by (i) each Trustee, nominee for Trustee and
President, and (ii) the Trust's Trustees, nominee for Trustee and President as a
group.
As of the Record Date, the Trustees and President of the Trust and Nominee
for Trustee owned the following shares of the Trust:
NAME AND ADDRESS NATURE OF SHARES BENEFICIAL
OF BENEFICIAL OWNER BENEFICIALLY OWNED* OWNERSHIP
- --------------------------------------------------------------------------------
Kevin M. McClintock**
Trustee and President
c/o DLB Fund Group
One Memorial Drive
Cambridge, MA 02142
2
NAME AND ADDRESS NATURE OF SHARES BENEFICIAL
OF BENEFICIAL OWNER BENEFICIALLY OWNED* OWNERSHIP
- --------------------------------------------------------------------------------
Steven A. Kandarian
c/o DLB Fund Group
One Memorial Drive
Cambridge, MA 02142
- --------------------------------------------------------------------------------
Nabil N. El-Hage 709.677 sole voting
c/o DLB Fund Group and
One Memorial Drive investment power
Cambridge, MA 02142
- --------------------------------------------------------------------------------
Richard A. Nenneman
c/o DLB Fund Group
One Memorial Drive
Cambridge, MA 02142
- --------------------------------------------------------------------------------
Maria D. Furman 6,451.613 sole voting
c/o DLB Fund Group and
One Memorial Drive investment power
Cambridge, MA 02142
* On the Record Date, each of the Trustees, Nominee for Trustee and the
President of the Trust beneficially owned less than 1% of the Trust's
outstanding shares, and the Trustees, Nominee and President of the Trust as a
whole beneficially owned less than 1% of the Trust's outstanding shares.
** Mr. McClintock participates in a deferred compensation plan in which over
$100,000 is tied to the performance of shares of the DLB Small Company
Opportunities Fund. Mr. McClintock is neither the record holder nor beneficial
holder of shares of the DLB Small Company Opportunities Fund, although he does
maintain an economic interest in that Fund by virtue of this deferred
compensation plan.
The table below sets forth information regarding the Trustees' and
nominee's beneficial ownership of Fund shares, based on the value of such shares
as of June 1, 2004.
- ------------------------------------ ----------------------------------------------------- --------------------------------
AGGREGATE DOLLAR RANGE OF EQUITY
SECURITIES IN ALL REGISTERED
INVESTMENT COMPANIES OVERSEEN BY
THE DOLLAR RANGE OF EQUITY SECURITIES TRUSTEE OR NOMINEE IN FAMILY OF
NAME OF TRUSTEE OR NOMINEE BENEFICIALLY OWNED IN THE TRUST INVESTMENT COMPANIES
- ------------------------------------ ----------------------------------------------------- --------------------------------
- ------------------------------------ ----------------------------------------------------- --------------------------------
INDEPENDENT TRUSTEES OR NOMINEE
- ------------------------------------ ----------------------------------------------------- --------------------------------
- ------------------------------------ ----------------------------------------------------- --------------------------------
Nabil N. El-Hage DLB Small Company Opportunities Fund $10,001-$50,000 $10,001-$50,000
- ------------------------------------ ----------------------------------------------------- --------------------------------
Steven A. Kandarian
- ------------------------------------ ----------------------------------------------------- --------------------------------
Richard A. Nenneman
- ------------------------------------ ----------------------------------------------------- --------------------------------
Maria D. Furman DLB Small Company Opportunities Fund Over $100,000 Over $100,000
- ------------------------------------ ----------------------------------------------------- --------------------------------
- ------------------------------------ ----------------------------------------------------- --------------------------------
INTERESTED TRUSTEES
- ------------------------------------ ----------------------------------------------------- --------------------------------
- ------------------------------------ ----------------------------------------------------- --------------------------------
Kevin M. McClintock*
- ------------------------------------ ----------------------------------------------------- --------------------------------
* Mr. McClintock participates in a deferred compensation plan in which over
$100,000 is tied to the performance of shares of the DLB Small Company
Opportunities Fund. Mr. McClintock is neither the record holder nor beneficial
holder of shares of the DLB Small Company Opportunities Fund, although he does
maintain an economic interest in that Fund by virtue of this deferred
compensation plan.
REPORTS TO SHAREHOLDERS
FURTHER INFORMATION CONCERNING THE TRUST IS CONTAINED IN ITS MOST RECENT ANNUAL
REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED OCTOBER 31, 2003, WHICH HAS
BEEN MAILED TO SHAREHOLDERS AND WHICH MAY BE MAY BE OBTAINED, FREE OF CHARGE BY
WRITING TO THE DLB FUND GROUP, ATTN: THE DLB FUND GROUP COORDINATOR, C/O DAVID
L. BABSON & COMPANY INC., ONE MEMORIAL DRIVE, CAMBRIDGE, MA 02142, OR BY
TELEPHONING 1-877-766-0014.
3
PROPOSAL
TO ELECT NOMINEES AS TRUSTEES OF THE TRUST
------------------------------------------
Two Trustees are proposed to be elected by the shareholders as Trustees of
the Trust, each to hold office until his or her death, resignation or removal,
or, if sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of such successor.
The two nominees for election as Trustees are Nabil N. El-Hage and Maria D.
Furman. Mr. El-Hage is presently a Trustee of the Trust and has agreed to be
nominated and, if elected, to continue to serve as a Trustee. Ms. Furman has
also agreed to be nominated, and, if elected, to serve as a Trustee. The
remaining Trustees, Messrs. McClintock, Nenneman and Kandarian, have previously
been elected by the shareholders of the Trust and will continue to serve as
Trustees.
Set forth below after the name of each nominee for Trustee and for each
Trustee whose term will continue after this meeting is his or her position(s)
with the Trust; age; term of office and length of time served; principal
occupation during the past five years; certain other of the Trustees'
directorships; and certain other information required to be disclosed in this
Information Statement.
INFORMATION ABOUT NOMINEES
- ---------------------- ---------------- ---------------------- ----------------------------- ------------------- -------------------
NUMBER OF
NAME, ADDRESS POSITION(S) PORTFOLIOS IN FUND
AND AGE HELD TERM OF OFFICE(1) AND PRINCIPAL OCCUPATION(S) COMPLEX OVERSEEN OTHER DIRECTORSHIPS
WITH THE TRUST LENGTH OF TIME SERVED DURING PAST FIVE YEARS BY TRUSTEE(2) HELD BY TRUSTEE(3)
- ---------------------- ---------------- ---------------------- ----------------------------- ------------------- -------------------
- ---------------------- ---------------- ---------------------- ----------------------------- ------------------- -------------------
NABIL N. EL-HAGE Trustee Since 2003 Senior Lecturer, Finance, 10 None.
c/o David L. Babson & Harvard Business School,
Company Inc., January 2003 -present;
One Memorial Drive Audit Committee Since 2003 Chairman (1995-present)
Cambridge, MA 02142 Chairman and CEO (1995-2003),
Age: 45 Jeepers! Inc. (indoor
amusement centers);
Manager, Global Entertainment
Ventures, LLC (single
purpose investment vehicle
(2001-present)).
- ---------------------- ---------------- ---------------------- ----------------------------- ------------------- -------------------
MARIA D. FURMAN Nominee N/A Managing Director, Director, 9 None.
c/o David L. Babson & and Portfolio Manager,
Company Inc., Standish, Ayer and Wood
One Memorial Drive (investment management,
Cambridge, MA 02142 (1976-2002)).
Age: 50
- ---------------------- ---------------- ---------------------- ----------------------------- ------------------- -------------------
1 Each Trustee holds office until his or her death, resignation or removal,
or, if sooner, until the next meeting of Shareholders called for the
purpose of electing Trustees and until the election and qualification of
such successor.
2 Currently there are ten funds in The DLB Fund Group. It is anticipated that
the DLB Emerging Markets Fund will be terminated on or about June 15, 2004,
at which time there will only be nine funds in The DLB Fund Group.
3 Directorships of companies not reported in the "principal occupation"
column that have a class of securities registered or subject to
registration under the Securities Exchange Act of 1934 or are registered as
investment companies under the Investment Company Act of 1940 (the "1940
Act").
4
INFORMATION ABOUT CURRENT TRUSTEES WHO ARE NOT NOMINEES
Each of the following Trustees of the Trust will continue to serve in such
capacity until his or her death, resignation or removal, or, if sooner, until
the next meeting of Shareholders called for the purpose of electing Trustees and
until the election and qualification of such successor.
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
INTERESTED TRUSTEE
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
TERM OF OFFICE NUMBER OF OTHER DIRECTORSHIPS
(1) AND PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND HELD BY TRUSTEE(3)
NAME, ADDRESS POSITION(S) HELD LENGTH OF TIME DURING PAST FIVE YEARS COMPLEX OVERSEEN
AND AGE WITH THE TRUST SERVED BY TRUSTEE(2)
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
KEVIN M. MCCLINTOCK President and Since 2003 Managing Director and Director, 10 None.
(4) David L. Babson & Principal David L. Babson & Company Inc.,
Company Inc., One Executive Officer 1999-present; Managing
Memorial Drive Director, S.I. International
Cambridge, MA 02142 Trustee Since 1999 Assets (formerly known as
Age: 42 Babson-Stewart Ivory
International), 1999-present;
Director of Equities and Fixed
Income, Dreyfus Corporation,
1995-1999
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
INDEPENDENT TRUSTEES
(5)
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
STEVEN A. KANDARIAN Trustee Since 2002 Former Director, Pension 12 Trustee, MassMutual
c/o David L. Babson & Benefit Guaranty Corp. (a federal Participation Investors
Company Inc., One pension agency), December and MassMutual Corporate
Memorial Drive Nominating and Since 2003 2001-February 2004; Managing Investors (closed-end
Cambridge, MA 02142 Governance Director, Orion Partners, L.P. (a mutual funds) since
Age: 52 Committee private equity fund), February 2002.
Chairman 1993-November 2001.
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
RICHARD NENNEMAN Trustee Since 1994 Retired. Currently sits on boards 10 None.
c/o David L. Babson & of various civic associations.
Company Inc., One
Memorial Drive
Cambridge, MA 02142
Age: 74
- --------------------- ----------------- -------------- --------------------------------- ------------------ ------------------------
1 Each Trustee holds office until his or her death, resignation or removal,
or, if sooner, until the next meeting of Shareholders called for the
purpose of electing Trustees and until the election and qualification of
such successor.
2 Currently there are ten funds in the Trust. It is anticipated that the DLB
Emerging Markets Fund will be terminated on or about June 15, 2004, at
which time there will only be nine funds in the Trust.
3 Directorships of companies that are required to report to the Securities
and Exchange Commission or are registered as investment companies under
the1940 Act. MassMutual Participation Investors and MassMutual Corporate
Investors are deemed to be a part of the Fund Complex because they are also
managed by the investment adviser of the Trust.
4 Mr. McClintock is an "Interested Person" as that term is defined in the
1940 Act, through his employment with the Funds' investment adviser.
5 Trustees who are not "interested persons" of the Trust as defined in
Section 2(a)(19) of the 1940 Act, as amended (each, an "Independent
Trustee").
5
EXECUTIVE OFFICERS WHO ARE NOT TRUSTEES
Set forth below is a list of the Trust's Executive Officers who are not
also Trustees, their age, position with the Trust, principal occupation or
employment for the past five years and term of office and length of time served.
The Trust's Executive Officers are employees of David L. Babson & Company Inc.
or its affiliates.
- -------------------------------- ---------------------------- ---------------------- -----------------------------------------------
TERM OF OFFICE1 AND PRINCIPAL OCCUPATION(S)
NAME, ADDRESS, AND AGE POSITION(S) HELD WITH TRUST LENGTH OF TIME SERVED DURING PAST FIVE YEARS
- -------------------------------- ---------------------------- ---------------------- -----------------------------------------------
DEANNE B. DUPONT Vice President, Treasurer, Since 1996 Managing Director and Treasurer of David L.
David L. Babson & Company Inc., Principal Financial Babson & Company Inc.
One Memorial Drive Officer and Principal
Cambridge, MA 02142 Accounting Officer
Age: 50
- -------------------------------- ---------------------------- ---------------------- -----------------------------------------------
MARY ELLEN WESNESKI Vice President Since 1999 Managing Director of David L. Babson &
David L. Babson & Company Inc., Company Inc. Director of Compliance
One Memorial Drive (1999-present); Senior Manager, Deloitte &
Cambridge, MA 02142 Touche LLP (1996-1999).
Age: 53
- -------------------------------- ---------------------------- ---------------------- -----------------------------------------------
JOHN E. DEITELBAUM Clerk Since 1999 Second Vice President and Associate General
David L. Babson & Company Inc. Counsel, MassMutual (2000-present); Associate
One Memorial Drive Secretary (2003-present) MassMutual
Cambridge, MA 02142 Participation Investors and MassMutual
Age: 35 Corporate Investors (closed end mutual funds)
and Assistant Secretary (2003-present) of
their Sub-trusts; Assistant Clerk, Babson
Securities Corp. (1999-present); Counsel
(2000-present), Assistant Clerk
(1999-present), Vice President and General
Counsel (1998-1999), David L. Babson &
Company Inc.; Counsel, MassMutual (1996-1998).
- -------------------------------- ---------------------------- ---------------------- -----------------------------------------------
1 Officers are elected to hold such office until their respective successors
are chosen and qualified, or until he or she dies, resigns is removed or
becomes disqualified.
COMMITTEES OF THE BOARD OF TRUSTEES
The Board of Trustees of the Trust has an Audit Committee and a Nominating
and Governance Committee, each of which is currently comprised of all of the
Trustees who are Independent Trustees. Currently, Messrs. Nenneman, Kandarian
and El-Hage comprise the Audit Committee and the Nominating and Governance
Committee. If Ms. Furman is elected as Trustee by consent of the Majority
Shareholder, the Audit Committee and Nominating and Governance Committee would
be made up of three of the four Independent Trustees of the Trust until such
time as Ms. Furman may be recommended to the Board for appointment to the Audit
Committee and/or the Nominating and Governance Committee, and such approval is
given by an affirmative vote of the Board.
NOMINATING AND GOVERNANCE COMMITTEE
The Nominating and Governance Committee, pursuant to a Nominating and
Governance Committee Charter adopted by the Board attached hereto as Appendix 1
to this Information Statement, (a) identifies individuals qualified to become
Independent Trustees of the Trust's Board of Trustees in the event that a
position currently filled by an Independent Trustee is vacated or created; (b)
evaluates the qualifications of Independent Trustee candidates; (c) nominates
Independent Trustee nominees for election or appointment to the Board; (d) sets
any standards necessary or qualifications for service on the Board; and (e)
performs the
6
following governance responsibilities: (i) makes nominations for membership on
all committees of the Board (other than the Audit Committee) and reviews such
committee assignments annually; (ii) reviews as necessary the responsibilities
of any committees of the Board (other than the Audit Committee), whether there
is a continuing need for such committee, whether there is a need for additional
committees of the Board, and whether the committees should be combined or
reorganized, and makes such recommendations to the full Board; and (iii)
monitors the independence of legal counsel for the Independent Trustees. The
Nominating and Governance Committee held a meeting on April 29, 2004, at which
it recommended the nomination of Maria D. Furman for election as Trustee.
NOMINATING AND GOVERNANCE COMMITTEE PROCEDURES FOR SHAREHOLDER NOMINATION OF
INDEPENDENT TRUSTEE CANDIDATES
The Nominating and Governance Committee will consider nominee candidates
for Trustee that are recommended by Trust shareholders, as detailed in its
Nominating and Governance Charter. A Trust shareholder's recommendation must be
submitted as described in the Nominating and Governance Charter attached hereto
as Appendix A to be considered properly submitted for purposes of the Nominating
and Governance Committee's consideration.
NOMINATING AND GOVERNANCE COMMITTEE CONSIDERATION OF NOMINEES FOR TRUSTEE
The Nominating and Governance Committee is responsible for identifying and
nominating individuals to serve as Independent Trustees. The Nominating and
Governance Committee Charter contemplates that each nominee for Independent
Trustee must have a college degree or, in the judgment of the Nominating and
Governance Committee, equivalent business experience. In addition, the Committee
may take into account a wide variety of factors in considering a Trustee
candidate, giving such weight to any individual factor(s) as it deems
appropriate, including but not limited to: availability and commitment of a
candidate to attend meetings and perform his or her responsibilities on the
Board; relevant industry and related experience; educational background; depth
and breadth of financial expertise; and an assessment of the candidate's
ability, judgment, expertise, reputation and integrity. In the case of a
candidate properly recommended by a shareholder ("Shareholder Recommended"), the
Committee may also consider any other facts and circumstances attendant to such
shareholder submission as may be deemed appropriate by the Nominating and
Governance Committee. Different factors may assume greater or lesser
significance at particular times, in light of the Board's present composition
and the Nominating and Governance Committee's (or the Board's) perceptions about
future issues and needs.
In identifying potential nominees for an independent Trustee, the
Nominating and Governance Committee may consider candidates recommended by the
Trust's current Trustees; the Trust's officers; the Trust's investment adviser;
the Trust's shareholders; and any other source the Committee deems to be
appropriate. As discussed above, Shareholder Recommendations to fill vacancies
on the Board for an Independent Trustee must be submitted in accordance with the
provisions of the Nominating and Governance Committee Charter, which requires
that Shareholder Recommendations be timely received, and contain biographical
and other necessary information regarding the candidate that would be required
for the Trust to meet its disclosure obligations under the proxy rules. The
Nominating and Governance Committee will evaluate nominee candidates properly
submitted by shareholders in the same manner as it evaluates candidates
recommended by other sources.
Ms. Furman is the only nominee for Trustee who is not currently a Trustee
of the Trust. Ms. Furman was recommended as a candidate to the Nominating and
Governance Committee by an Independent Trustee currently serving on the
Nominating and Governance Committee, although she is also known to the President
of the Trust, a Trustee deemed to be "interested" by virtue of his employment
with the Trust's investment adviser.
AUDIT COMMITTEE
The Audit Committee, pursuant to an Audit Committee Charter adopted by the
Board and attached hereto as Appendix 2, (a) oversees the Fund's accounting and
financial reporting policies and practices, its internal controls and internal
controls of certain service providers; (b) oversees the quality and objectivity
of the Funds' financial statements and the independent audit thereof; (c) acts
as a liaison between the Funds' independent auditors and the full Board of
Trustees; and (d) provides immediate access for the Funds'
7
independent auditors to report any special matters they believe should be
brought to the attention of the full Board of Trustees.
REGULAR AND COMMITTEE MEETINGS FOR FISCAL YEAR 2003
The full Board met four times during the fiscal year ended October 31,
2003. The Nominating Committee held two meetings during the fiscal year ended
October 31, 2003. The Audit Committee held three meetings during the fiscal year
ended October 31, 2003. Each Trustee named herein attended all of the Board and
Committee meetings of which he was a member for the fiscal year ended October
31, 2003.
8
SHAREHOLDER COMMUNICATIONS TO TRUSTEES
--------------------------------------
Shareholder communications to Trustees of the Trust should be addressed to
the Clerk of the Trust at the following address: John Deitelbaum, Clerk, c/o
David L. Babson & Company Inc., One Memorial Drive, Cambridge, MA 02142. The
Clerk will forward shareholder communication specifically directed to a Trustee
to that Trustee. Additionally, any shareholder correspondence related to a
non-routine matter not addressed to a specific Trustee will be forwarded to the
Chairman of the Nominating and Governance Committee.
COMPENSATION OF THE TRUSTEES
----------------------------
The following table lists the compensation paid to each of the Trustees by
the Trust and Fund Complex during the Trust's fiscal year ended October 31,
2003.
COMPENSATION TABLE
Except as noted below, the Trust pays each Independent Trustee a fee for
his services. The fees paid to each Trustee by the Trust for the fiscal year
ended October 31, 2003 are shown below:
- ----------------------- --------------- -------------------------------- ----------------------------
NAME OF TRUSTEE AGGREGATE PENSION OR RETIREMENT BENEFITS TOTAL COMPENSATION FROM FUND
COMPENSATION ACCRUED AS PART AND FUND COMPLEX PAID TO
FROM TRUST(1) OF FUND EXPENSES(5) TRUSTEES
- ----------------------- --------------- -------------------------------- ----------------------------
Nabil N. El-Hage(2) $19,000 N/A $19,000
- ----------------------- --------------- -------------------------------- ----------------------------
Richard A. Nenneman $20,000 N/A $20,000
- ----------------------- --------------- -------------------------------- ----------------------------
Steven A. Kandarian(3) 0 N/A 0
- ----------------------- --------------- -------------------------------- ----------------------------
Kevin M. McClintock(4) 0 N/A 0
- ----------------------- --------------- -------------------------------- ----------------------------
1 Includes an annual retainer payable by the Trust to each of the Independent
Trustees of $16,000 and a per meeting attendance fee of $1,000.
2 Mr. El-Hage was elected as Trustee of the Trust by the Trustees at the
December 2002 Trustee Meeting, effective January 1, 2003. Consequently, he
did not receive the meeting attendance fee for the first meeting of the
fiscal year.
3 Mr. Kandarian, although an Independent Trustee of The DLB Fund Group and
MassMutual Corporate Investors and MassMutual Participation Investors (two
closed-end funds deemed to be a part of the Fund Complex because they are
managed by the investment adviser to the Trust), was not paid an annual
retainer or a per meeting attendance fee from these funds in 2003 due to
his employment with the Pension Benefit Guaranty Corporation ("PBGC"). He
resigned from the PBGC effective February 2004, As a result of Mr.
Kandarian's resignation from the PBGC, the PBGC's ethics rules will no
longer prohibit him from receiving compensation for his services as an
independent Trustee of the Trust, and the Trust will compensate Mr.
Kandarian in accordance with its policies governing independent Trustees
beginning in 2004.
4 Mr. McClintock, as an "interested person" of the Trust, received no
compensation from either the Trust or the Fund Complex for his role as
Trustee to the Trust.
5 The Trust has no retirement or pension plan for its Trustees.
ADDITIONAL INFORMATION
----------------------
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND ADMINISTRATOR
-----------------------------------------------------------
INVESTMENT ADVISER: The Trust's investment adviser, David L. Babson & Company
Inc., has its principal offices at One Memorial Drive, Cambridge, Massachusetts
02142, and 1295 State Street, Springfield, Massachusetts 01111.
PRINCIPAL UNDERWRITER: Babson Securities Corp. ("BSC"), a wholly-owned
subsidiary of Babson, serves as the principal underwriter of the Funds. BSC has
its principal office at One Memorial Drive, Cambridge, Massachusetts 02142.
ADMINISTRATOR: Investors Bank and Trust Company ("IBT") serves as Administrator
of the Funds. IBT's principal business address is 200 Clarendon Street, Boston
MA 02116.
SHAREHOLDER CONSENT
-------------------
VOTE REQUIRED: Pursuant to the Bylaws of the Trust, the Trust's Shareholders
vote together as a single class, and election of each of the nominees for
Trustee of the Trust will require an affirmative vote of a plurality of the
shares voted. As stated above, the Majority Shareholder has indicated that, as
permitted by the Trust's Bylaws, it intends to execute a consent to be effective
on or about June 23, 2004, which would by itself constitute the necessary
shareholder approval. No action is required to be taken by you as a shareholder
of the Trust; this Information Statement is furnished to you for your
information only in light of relevant federal securities laws.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
9
APPENDIX 1
THE DLB FUND GROUP
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
ADOPTED AS OF APRIL 29, 2004
I. INTRODUCTION
The Trust's Board of Trustees has adopted this Charter to govern the activities
of its Nominating and Governance Committee (the "Committee").
II. STATEMENT OF PURPOSES AND RESPONSIBILITIES
The primary purposes and responsibilities of the Committee are as follows:
(i) To identify individuals qualified to become independent1 members of
the Trust's Board of Trustees in the event that a position currently
filled by an independent Trustee is vacated or created;
(ii) To evaluate the qualifications of independent Trustee candidates;
(iii) To nominate the Independent Trustee nominees for election or
appointment to the Board;
(iv) To set any necessary standards or qualifications for service on the
Board; and
(v) To perform such governance responsibilities as set forth herein.
The nomination of interested Trustees shall be the responsibility of the entire
Board of Trustees.
III. ORGANIZATION AND GOVERNANCE
(a) Composition. The Committee shall be comprised of as many Trustees as the
Board shall determine, but in any event not less than two (2) Trustees. The
members of the Committee each shall be an Independent Trustee and shall be
appointed annually by the vote of a majority of the Trust's Board of Trustees.
The Board of Trustees may remove or replace any member of the Committee at any
time in its sole discretion. The Board of Trustees may designate a member of the
Committee as the chairperson of the Committee. A Committee member may resign
from the Committee without resigning from the Board.
(b) Meetings. The Committee shall not have regularly scheduled meetings.
Committee meetings shall be held as, and when, the Committee, its chairperson
(if any) or the Trust's Board of Trustees determine, as may be necessary or
appropriate. The chairperson of the Committee shall preside at each meeting and,
in the absence of the chairperson, one of the other members of the Committee
shall be designated as the acting chair of the meeting. The chairperson (or
acting chair) may direct appropriate members of the Trust's management to
prepare draft agendas and related background information for each Committee
meeting.
(c) Meeting Proceedings. All meetings of the Committee shall be held pursuant to
the Trust's By-laws, except as provided by law or the following provisions:
(i) Notice. Notice shall be given as provided for meetings of the full
Board of Trustees of the Trust.
(ii) Quorum. At any Committee meeting, a majority of the Committee members
then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the members voting upon the
question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
- --------
1 For purposes of this Charter, an "Independent Trustee" shall mean a Trustee
who is not an "interested person" of the Trust, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended.
10
(iii) Action by Vote. When a quorum is present at any meeting, a majority
of Committee members may take any action properly before the meeting.
(iv) Action by Writing. Any action required or permitted to be taken at any
Nominating Committee meeting may be taken without a meeting if a
majority of the Committee members consent to the action in writing.
Such written consents shall be filed with the records of the meetings
of the Committee and shall be treated for all purposes as a vote taken
at a Committee meeting.
(v) Presence Through Communications Equipment. The members of the
Committee may participate in a Committee meeting by means of a
conference telephone, or similar communications equipment by means of
which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence
in person at a meeting.
(vi) Minutes. Minutes of the meeting shall be taken and circulated to all
members of the Committee in a timely manner.
(vii) Reports. Reports of meetings of the Committee, and any
recommendations of the Committee, shall be made to the Trust's Board
of Trustees at its next regularly scheduled meeting following the
Committee meeting.
IV. IDENTIFICATION OF INDEPENDENT TRUSTEE NOMINEES
(a) Identification of Independent Trustee Nominees. In identifying potential
nominees for the Board, the Nominating Committee may consider candidates
recommended by one or more of the following sources: (i) the Trust's current
Trustees, (ii) the Trust's officers, (ii) the Trust's investment adviser(s),
(iv) the Trust's shareholders (see below) and (v) any other source the Committee
deems to be appropriate.
(b) Consideration of Independent Trustee Candidates Recommended by Trust
Shareholders. The Committee will consider and evaluate nominee candidates
properly submitted by shareholders in the same manner as it considers and
evaluates candidates recommended by other sources. To be considered properly
submitted, shareholder recommendations for Independent Trustee candidates must
be submitted in accordance with the requirements of Appendix A.
V. QUALIFICATIONS FOR INDEPENDENT TRUSTEE NOMINEES
The Committee requires that all Independent Trustee candidates have a college
degree or, in the judgment of the Committee, equivalent business experience. The
Committee may take into account a wide variety of factors in considering
Independent Trustee candidates, giving such weight to any individual factor(s)
as they deem appropriate, including (but not limited to):
(i) availability and commitment of a candidate to attend meetings and
perform his or her responsibilities on the Board;
(ii) relevant industry and related experience;
(iii) educational background;
(iv) depth and breadth of financial expertise; and
(v) an assessment of the candidate's ability, judgment, expertise,
reputation and integrity.
In the case of a shareholder recommended candidate, the Committee may also
consider any other facts and circumstances attendant to such shareholder
submission as may be deemed appropriate by the Committee,
11
including, without limitation, the amount of the Trust's securities owned by the
shareholder and the length of time such shares have been held by the
shareholder.
Different factors may assume greater or lesser significance at particular times,
in light of the Board's present composition and the Committee's (or the Board's)
perception about future issues and needs.
VI. GOVERNANCE RESPONSIBILITIES
(a) The Committee shall make nominations for membership on all committees
of the Board (other than the Audit Committee) and shall review such
committee assignments at least annually.
(b) The Committee shall review as necessary the responsibilities of any
committees of the Board (other than the Audit Committee), whether
there is a continuing need for each committee, whether there is a need
for additional committees of the Board, and whether committees should
be combined or reorganized. The Committee shall make recommendations
for any such action to the full Board.
(c) The Committee shall monitor the independence of legal counsel for the
independent Trustees.
(d) The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to retain special
counsel and other experts or consultants at the expense of the
appropriate Fund(s).
(e) The Committee shall review this Charter periodically and recommend any
changes to the full Board of Trustees.
12
APPENDIX A
PROCEDURES FOR SHAREHOLDERS TO SUBMIT NOMINEE CANDIDATES
--------------------------------------------------------
A Trust shareholder must follow the following procedures in order to properly
submit a nominee recommendation for the Committee's consideration.
1. The shareholder must submit any such recommendation (a "Shareholder
Recommendation") in writing to the Trust's Nominating Committee, to
the attention of the Clerk, at the address of the principal
executive offices of the Trust.
2. The Shareholder Recommendation must be delivered to or mailed and
received at the principal executive offices of the Trust 60-90
calendar days before the of the meeting at which the Committee is to
select a nominee for independent Trustee.
3. The Shareholder Recommendation must include:
(i) a statement in writing setting forth:
(A) the name, age, date of birth, phone number, business
address, residence address and nationality of the person
recommended by the shareholder (the "Candidate");
(B) the class or series and number of all shares of the Trust
owned of record or beneficially by the Candidate, as
reported to such shareholder by the Candidate;
(C) any other information regarding the Candidate called for
with respect to director nominees by paragraphs (a), (d),
(e) and (f) of Item 401 of Regulation S-K or paragraph (b)
of Item 22 of Rule 14a-101 (Schedule 14A) under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), adopted by the Securities and Exchange Commission (or
the corresponding provisions of any regulation or rule
subsequently adopted by the Securities and Exchange
Commission or any successor agency applicable to the Trust);
(D) any other information regarding the Candidate that would be
required to be disclosed if the Candidate were a nominee in
a proxy statement or other filing required to be made in
connection with solicitation of proxies for election of
Trustees or directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated thereunder;
and
(E) whether the recommending shareholder believes that the
Candidate is or will be an "interested person" of the Trust
(as defined in the Investment Company Act of 1940, as
amended) and, if not an "interested person," information
regarding the Candidate that will be sufficient for the
Trust to make such determination;
(ii) the written and signed consent of the Candidate to be
named as a nominee, for such Candidate's information
submitted in accordance with (i), above, to be disclosed
as may be necessary or appropriate and to serve as a
Trustee if elected;
(iii) the recommending shareholder's name as it appears on the
Trust's books, the number of all shares of the Trust
owned beneficially and of record by the recommending
shareholder;
(iv) a description of all arrangements or understandings
between the recommending shareholder and the Candidate
and any other person or persons (including their names)
pursuant to which the recommendation is being made by
the recommending shareholder; and
(v) such other information as the Committee may require the
Candidate to furnish as it may reasonably require or
deem necessary to determine the eligibility of such
Candidate to serve as a Trustee.
13
APPENDIX 2
THE DLB FUND GROUP
AUDIT COMMITTEE CHARTER
AMENDED AS OF APRIL 29, 2004
1. The Audit Committee shall be composed entirely of Independent Trustees.
2. The purposes of the Audit Committee are:
(a) to oversee the Funds' accounting and financial reporting
policies and practices, its internal controls and, as
appropriate, the internal controls of certain service
providers;
(b) to oversee the quality and objectivity of the Funds'
financial statements and the independent audit thereof;
(c) to act as a liaison between the Funds' independent
auditors and the full Board of Trustees; and
(d) to provide immediate access for the Funds' independent
auditors to report any special matters they believe
should be brought to the attention of the full Board of
Trustees.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, the auditors' responsibility to plan and carry out a proper audit, and
management's and the independent auditors' responsibility to determine that the
Funds' financial statements are accurate and complete and in accordance with
generally accepted accounting principles ("GAAP"). Each member of the Audit
Committee shall be entitled to rely on the accuracy of the financial and other
information provided, and the representations made, to the Audit Committee by
the independent auditors, management and the Funds' investment adviser or its
affiliates.
3. To carry out its purposes and responsibilities, the Audit Committee shall
have the duty and power to:
(a) recommend the selection, retention or termination of
auditors and, in connection therewith, to evaluate the
independence of the auditors, including whether the
auditors' independence is jeopardized by their provision
of services to the Funds' investment adviser or its
affiliates, to request such information as they deem
appropriate in connection therewith, and to receive the
auditors' specific representations as to their
independence;
(b) meet with the Funds' independent auditors, including
private meetings, as necessary (i) to review the
arrangements for and scope of the annual audit and any
special audits; (ii) to discuss any matters of concern
relating to the Funds' financial statements, including
any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iii) to
consider the auditors' comments with respect to the
Funds' financial policies, procedures and internal
accounting controls and management's responses thereto;
and (iv) to review the opinion the auditors propose to
render to the Board of Trustees and shareholders;
(c) consider the effect upon the Funds of any changes in
accounting principles or practices proposed by
management or the auditors;
(d) pre-approve, to the extent required by applicable
regulations, (i) all audit and permitted non-audit
services rendered to the Funds by the auditors and (ii)
all permitted non-audit services that relate directly to
the Funds' operations or financial reporting provided by
the auditors to (A) the Funds' investment adviser or (B)
any entity controlling, controlled by, or under common
control with the investment adviser, if that entity
provides ongoing services to the Funds; and review the
fees charged by the auditors for such audit and
non-audit services; provided, however, that the Audit
Committee may implement policies and procedures pursuant
to which services are pre-approved other than by the
14
full Audit Committee, subject to the requirement that
the full Audit Committee be notified in a timely manner
of each such service;
(e) receive, to the extent required by applicable
regulations, from the Funds' independent auditors
reports regarding (i) all critical accounting policies
and practices to be used in preparing the Funds'
financial statements; (ii) all alternative treatments
within GAAP for policies and practices related to
material items that have been discussed with management
of the Funds, including: (1) ramifications of the use of
such alternative disclosures and treatments; and (2) the
treatment preferred by the independent auditors; (iii)
other material written communications between the
independent auditors and the Funds' management, such as
any management letter or schedule of unadjusted
differences; (iv) non-audit services provided to certain
affiliates of the Funds that were not pre-approved by
the Audit Committee and (v) such other matters as are
required by applicable law or regulation; and to take in
each case such actions as deemed appropriate in
connection therewith;
(f) receive, to the extent required by applicable
regulations, from the Funds' principal executive officer
and principal financial officer disclosure concerning
(i) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the Funds' ability to record, process, summarize
and report financial data; and (ii) any fraud, whether
or not material, that involves management or other
employees who have a significant role in the Funds'
internal controls, and to take such actions as are
deemed appropriate in connection therewith;
(g) review with Fund management, the Funds' independent
auditors and, if appropriate, Fund counsel, any
correspondence with regulators or governmental agencies
that raises material issues regarding the Funds'
financial statements, financial results, accounting
policies or internal controls;
(h) investigate or oversee the investigation of any reported
improprieties or suspected improprieties in Fund
operations;
(i) review such other matters or information that the Audit
Committee believes may be relevant to the auditors, the
audit engagement or the Funds' financial policies and
procedures or internal accounting controls, report its
activities to the full Board of Trustees on a regular
basis and make such recommendations with respect to the
above and other matters as the Audit Committee may deem
necessary or appropriate; and
(j) review the Valuation Committee Charter periodically, and
make such recommendations to the full Board with respect
to amendments to the Valuation Committee Charter or The
DLB Fund Group's Pricing Policies and Procedures
utilized by the Valuation Committee to fair value
securities as it deems necessary.
4. The Audit Committee shall meet on a regular basis, and is empowered
to hold special meetings as circumstances require. In addition, the
Audit Committee shall keep written minutes of its meetings, which
minutes shall be maintained with the Funds' books and records.
5. The Audit Committee shall meet with the Treasurer of the Funds and
with internal auditors, if any, for David L. Babson & Company Inc.,
periodically to review and discuss such matters or information that
the Audit Committee believes may be relevant to the auditors, the
audit engagement, the Funds' financial condition and results or the
Funds' financial policies, procedures and internal controls, or
otherwise necessary or appropriate in connection with the Audit
Committee's duties hereunder. The Audit Committee may request any
officer or employee of the Funds or any of the Funds' service
providers or the Funds' outside counsel or independent auditors to
attend a meeting of the Audit Committee or to meet with any member
of, or consultant to, the Audit Committee.
15
6. The Audit Committee shall have the resources and authority
appropriate to discharge its responsibilities, including the
authority to retain special counsel and other experts or consultants
at the expense of the appropriate Fund(s).
7. The Audit Committee shall review this Charter as necessary and
recommend any changes to the full Board of Trustees.