Pax World Announces Successful Shareholder Engagement Initiatives During the 2010 Proxy Season

Corporate governance, gender equality, and the environment see
steady progress under Pax World initiatives

PORTSMOUTH, N.H.///July 27, 2010/// Pax World Management LLC, investment adviser to Pax World Funds (Pax World) and a leader in the field of Sustainable Investing, announced today the results of its shareowner and public policy advocacy during the 2010 proxy season. Pax World focused mainly on gender equality, corporate governance and executive compensation, financial reform, and climate risk reporting. In addition, two of the shareholder proposals that Pax World co-filed achieved majority support from shareholders, indicating broad agreement among investors with the principles outlined in Pax World's requests.

Corporate Governance. On the issue of corporate governance, Pax World's shareholder advocacy focused on giving shareholders a say on executive compensation and independent board leadership, while its public policy advocacy focused on shareholder rights, such as proxy access and improved disclosures in proxy statements. Pax World filed or co-filed five shareholder resolutions requesting an advisory vote on executive compensation, or Say on Pay resolutions, all of which had significant success. Pax World withdrew three of resolutions after the companies involved – Terex Corp. (1.2% Growth Fund)1, PepsiCo (1.5% Balanced Fund; 1.8% Growth Fund; 1.0% Global Women's Equality Fund) (co-filed with Needmor Foundation), and Procter & Gamble (1.4% Growth Fund) (co-filed with Walden Asset Management) – agreed to implement or make substantive progress on the issue. The other two proposals were voted on by the companies' shareholders and both received majority shareholder support: Target Corp. (0.4% Balanced Fund) (co-filed with Responsible Wealth/United for a Fair Economy) and EMC Corp. (2.4% Balanced Fund; 1.5% Growth Fund; 1.4% Global Women's Equality Fund) (co-filed with the Unitarian Universalist Association).

Further, Pax World filed two resolutions calling for an independent chairman of the board; one (XTO Energy) was made moot by a corporate acquisition, and the other (Union Pacific Corp. (0.1% Balanced Fund; 1.7% Growth Fund)) received over 20 percent support—a strong showing for a first-year proposal. A resolution filed by Pax World at CVS Caremark Corp. (0/8% Balanced Fund; 1.0% Growth Fund) calling for greater board scrutiny and reporting of political and trade association spending received shareholder support of 41 percent, which Pax believes is a sign that shareholder concern regarding corporate political contributions is rising in the wake of a recent Supreme Court decision enabling corporations to significantly expand political spending.

Pax World also submitted comments to the U.S. Securities and Exchange Commission (SEC) in August of 2009 supporting independent board leadership and calling for greater disclosure of relevant environmental, social, and governance related (ESG) information in corporate proxies on a variety of issues. These include: board diversity; linking executive compensation with long-term risk; the structure of the summary compensation table in corporate proxies; and disclosures of the use of compensation consultants, among others. In its final rule on proxy disclosure, the SEC cited Pax World's comments four times.

Finally, Pax World sent letters to members of the U.S. House of Representatives, U.S. Senate, and White House in support of key provisions of the financial reform bill, including proxy access.

"In the wake of a devastating financial crisis, investors now more than ever need to overcome short-term thinking and begin asking companies to focus more on long-term outcomes," says Pax World President and Chief Executive Officer Joe Keefe. "Empowered shareholders can make companies more accountable, and ultimately make their business models more sustainable."

Gender Equality. Pax World continues to engage in shareholder advocacy aimed at promoting gender equality. Pax World votes against or withholds proxy votes from all slates of directors that include no women. During the most recent proxy season, this included board slates of 74 companies. Pax World also follows up on each of these abstentions or votes against all-male slates with a letter to the company's board chair and Chief Executive Officer explaining the reason for its opposition, and includes model nominating committee charter language that makes diversity part of every director search.

To further encourage gender equality, Pax World is currently co-leading an investor initiative, in collaboration with the United Nations Principles for Responsible Investment (UNPRI), Calvert and other institutional investors, focusing on gender equality in corporate leadership. The goal of the engagement, which targets companies in 10 countries in North and South America and Europe, is to encourage the representation of women on boards of directors and in senior management and to promote greater disclosure by companies on the topic of gender equality.

Pax World also recently encouraged companies worldwide to endorse and take steps to implement the Women's Empowerment Principles, a joint initiative of the United Nations Development Fund for Women (UNIFEM) and the United Nations Global Compact (UNGC) that include a comprehensive menu of actions to empower women through corporate action. Pax World sent letters to the chief executive officers of all companies held in its Global Women's Equality Fund urging them to embrace these principles. Pax World President and CEO Joe Keefe also sent a CEO Statement of Support for the Women's Empowerment Principles to UNIFEM and UNGC.

Environment. In 2009/10, Pax World paid special attention the environmental impacts of oil sands operations and hydraulic fracturing as a means of natural gas extraction (also known as "fracking"). Pax World, for the second year, co-filed a proposal at ConocoPhillips(0.2% Balanced Fund; 1.0% Growth Fund; 2.0% Global Women's Equality Fund) on oil sands impacts. Led this year by the California State Teachers Retirement System (CalSTRS), the proposal received 27 percent support.

Pax World has also been active in a coalition of investors pushing natural gas companies on their hydraulic fracturing disclosures in the United States. One of the issues is disclosure of the makeup of chemical fluids injected underground to make natural gas extraction easier, and the potential for contamination of community water sources from such fluids. Other key concerns with fracking are local water use and depletion of wells and reservoirs, and employee and community safety. Pax World signed a statement supporting the Environmental Protection Agency's decision to study and assess the environmental impacts from fracking, and has dialogued with companies directly on this issue during 2010. Pax World also worked with a group of other investors, led by Green Century and the Investor Environmental Health Network, to urge companies to be more forthcoming about the environmental risks posed by large-scale use of hydraulic fracturing; as a result of these engagements, several companies agreed to publicly support disclosure of the chemicals used in fracking liquid.

Finally, in response to a petition filed by Pax World and 21 other institutional investment representatives in 2007, the SEC issued interpretive guidance in 2010 to illuminate the importance and breadth of corporate disclosure of the risks posed by climate change. The petition was submitted to the SEC in September of 2007. The petitioners included, in addition to Pax World, the treasurers, comptrollers or other state officials representing California, Florida, Kentucky, Maine, Maryland, New Jersey, New York, North Carolina, Oregon, Rhode Island and Vermont.2

ABOUT PAX WORLD MANAGEMENT LLC
Pax World Management LLC, the investment adviser to Pax World Funds, is a recognized leader in Sustainable Investing, the full integration of environmental, social and governance (ESG) factors into investment analysis and decision making. Pax World launched the financial industry's first socially responsible mutual fund in 1971. Today, Pax World offers a range of investment products including a family of no-load mutual funds, multi-manager asset allocation funds, exchange traded funds (ETFs) and separately managed accounts3 for institutional investors.

For more information, visit www.paxworld.com.

Distributed by: ALPS Distributors, Inc. Member FINRA

1 All portfolio holdings as of 6/30/2010. Holdings are subject to change. XTO Energy is not currently held by the funds.

2 The full list of petitioners includes the California Public Employees' Retirement System, the California State Controller, the California State Teachers' Retirement System, the California State Treasurer, Ceres, Environmental Defense, F&C Management, the Florida Chief Financial Officer, Friends of the Earth, the Kentucky State Treasurer, the Maine State Treasurer, the Maryland State Treasurer, the Nathan Cummings Foundation, the New Jersey State Investment Council, the New York City Comptroller, the New York State Attorney General, the New York State Comptroller, the North Carolina State Treasurer, the Oregon State Treasurer, Pax World Management Corporation, the Rhode Island General Treasurer, and the Vermont State Treasurer.

3 Separately managed accounts and related advisory services are provided by Pax World Management LLC, a federally registered investment adviser. ALPS Distributors, Inc. is not the distributor for Pax World's separately managed accounts.