UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14A-11(c) or Section 240.14a-12
KEYCO BOND FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
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CONTROL NUMBER.
SEC 1913 (11-01)
KEYCO BOND FUND, INC.
27777 FRANKLIN ROAD, SUITE 1850
SOUTHFIELD, MICHIGAN 48034
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Keyco
Bond Fund, Inc., a Michigan corporation (the "Company"), will be held at the
principal executive offices of the Company, 27777 Franklin Road, Suite 1850,
Southfield, Michigan, on Thursday, December 12, 2002, at 10:30 a.m., E.S.T., for
the following purposes:
(1) To elect five directors to serve until the next
Annual Meeting of Shareholders;
(2) To consider and act upon a proposal to ratify the
appointment of PricewaterhouseCoopers LLP as independent auditors for
the year ending September 30, 2003; and
(3) To transact such other business as may properly come
before the meeting or any adjournments thereof.
Information with respect to the above matters is set forth in the Proxy
Statement, dated November 22, 2002, which accompanies this Notice.
The Board of Directors has fixed the close of business on November 1, 2002,
as the record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting.
Please execute and promptly return the enclosed Proxy (i.e. yellow sheet).
Your designation of a proxy is revocable and will not affect your right to vote
in person in the event you find it convenient to attend the meeting.
By Order of the Board of Directors
JOEL D. TAUBER
President
Southfield, Michigan
November 22, 2002
KEYCO BOND FUND, INC.
27777 FRANKLIN ROAD, SUITE 1850
SOUTHFIELD, MICHIGAN 48034
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 2002
This Proxy Statement and the accompanying form of proxy are to be first
mailed on or about November 22, 2002 to all shareholders of record on November
1, 2002, and is furnished in connection with the solicitation of proxies by the
Board of Directors of Keyco Bond Fund, Inc., a Michigan corporation (the
"Company"), to be used at the Annual Meeting of Shareholders to be held at 10:30
a.m., E.S.T., on Thursday, December 12, 2002, and at any adjournments thereof.
Shares cannot be voted at the meeting unless the holder is present in
person or represented by proxy. Proxies are revocable by written notice to the
Secretary of the Company at any time prior to their exercise. Proxies may also
be revoked by a shareholder attending and voting in person at the meeting.
Shares of the Company's stock represented by any unrevoked proxy in the enclosed
form, if such proxy is properly executed and is received prior to the meeting,
will be voted in accordance with the specifications made on such proxy or, if no
specification has been made on such proxy, will be voted for the election as
directors of the nominees listed herein and in favor of the proposal to ratify
the selection of auditors. The Board of Directors does not intend to present any
other matters at the Annual Meeting. However, should any other matters properly
come before the Annual Meeting, the proxy holders will have discretionary
authority to vote upon such matters and, in such event, it is the intention of
such proxy holders to vote the proxy in accordance with their best judgment. For
purposes of determining the number of votes cast with respect to any voting
matter, only those cast "for" or "against" are included. Abstentions are counted
only for purposes of determining whether a quorum is present at the Annual
Meeting. Broker non-votes are not counted for any purpose. A majority of the
outstanding shares of the Company, represented in person or by proxy, will
constitute a quorum at the meeting.
The Common Stock of the Company is the only class of securities which is
entitled to vote at the meeting. As of the close of business November 1, 2002,
the record date for determining shareholders who are entitled to receive notice
of and to vote at the meeting, there were 1,267,258 shares of Common Stock
issued and outstanding. Each share is entitled to one vote. The presence at the
meeting, in person or by proxy, of the holders of a majority of shares of stock
of the Company is necessary to constitute a quorum.
The cost of soliciting proxies, which may be conducted by mail, telephone,
in person or otherwise, will be borne by the Company. The mailing address of the
Company's principal executive offices is 27777 Franklin Road, Suite 1850,
Southfield, Michigan 48034.
MATTERS TO COME BEFORE THE MEETING
(1) ELECTION OF DIRECTORS
Five directors are to be elected at the meeting. The directors of the
Company are elected annually by the shareholders, to serve until the next annual
meeting of shareholders or until their death, resignation, or removal. The
nominees named in the table below have each indicated a willingness to serve if
elected. If any nominee should be unable to serve or is otherwise unavailable
for election, and if any other persons are nominated, the persons designated as
"proxies" on the accompanying form of proxy will have discretionary authority to
vote or refrain from voting in accordance with their judgment on such other
nominees unless authority to vote on such matter is withheld. The address for
each Director is care of the Company at 27777 Franklin Road, Suite 1850,
Southfield, MI 48034.
1
NAME (AGE) AND POSITION(s) TERM OF OFFICE PRINCIPAL OCCUPATION(s) DURING PAST FIVE YEARS SHARES OF COMMON
WITH COMPANY AND LENGTH OF AND OTHER DIRECTORSHIPS HELD(2) STOCK BENEFICIALLY
TIME SERVED(1) OWNED
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DISINTERESTED DIRECTORS
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Mark E. Schlussel (62) Since 1979 Of Counsel to the firm of Warner Norcross and None
Trustee Judd, attorneys (since July 2002) (Southfield,
MI); previously Of Counsel to
the firm of Pepper, Hamilton
and Scheetz, attorneys (January
1995 to June 2002) (Detroit,
MI).
David K. Page (69) Since 1989 Partner in the firm of Honigman Miller None
Trustee Schwartz and Cohn, attorneys (Detroit, MI) for
more than five years. Director of Meadowbrook
Insurance Group, Inc.
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INTERESTED DIRECTORS(3)
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Gail A. Dishell (66) Since 1984 Vice President of the Company since September 469,529(4)
Trustee 1979; Investor.
Thomas E. Purther (37) Since 1994 Partner in Key Homes, residential housing 24,715(5)
Trustee builder (since December 1993) (Farmington
Hills, MI); Vice Chairman and
CEO of Paramount Bancorp,
commercial bank holding company
(since February 1998)
(Farmington Hills, MI);
Chairman and CEO of Cambridge
Investors, LLC, real estate
acquisition, development and
management company (since June
2000) (Farmington Hills, MI);
and CEO of Global Commercial
Credit, LLC, business
receivables insurance agency
(since March 1996) (Farmington
Hills, MI).
Ellen T. Horing (40) Since 1995 Portfolio manager of Highgate Partners, an 53,477(6)
Trustee investment partnership (since January 1993)
(Mt. Kisco, NY).
(1) The directors of the Company are elected annually by the shareholders, to
serve until the next meeting of shareholders or until their death,
resignation or removal.
(2) Other directorships includes positions held as a director or trustee of any
company with a class of securities registered with the SEC pursuant to
federal securities laws and any investment company registered with the SEC.
(3) Ms. Dishell, Mr. Purther and Ms. Horing are "interested persons" as defined
in Section 2(a)(19) of the Investment Company Act of 1940 because of their
status as an officer, director, holder of more than 5% of the Company's
Common Stock and/or the immediate family member of any of the foregoing.
(4) Includes certain shares pursuant to which Ms. Dishell is sole trustee. See
"Principal Shareholders." Does not include 1,000 shares held by
Ms. Dishell's husband, as to which she disclaims any beneficial ownership.
(5) These shares are held in a trust for the benefit of Mr. Purther;
Ms. Barbara Keywell (formerly Ms. Barbara J. Purther) serves as the sole
trustee of such trust with voting and dispositive powers. See "Principal
Shareholders."
(6) These shares are held in a trust for the benefit of Ms. Horing;
Ms. Shelby M. Tauber and Mr. Joel D. Tauber serve as co-trustees of such
trust with voting and dispositive powers. See "Principal Shareholders."
All directors and officers of the Company, as a group, beneficially own
1,257,283 shares (99.2%) of the Company's outstanding Common Stock. See
"Principal Shareholders."
All of the nominees were previously elected as directors at the last annual
meeting of shareholders. Shelby M. Tauber, Barbara J. Keywell and Gail A.
Dishell, each of whom is an officer and/or a director and a principal
shareholder, are sisters. In addition, Thomas E. Purther is the son of Ms.
Keywell, and Ms. Horing is the daughter of Ms. Tauber. The Board of Directors
has no committees. Directors who are not "interested persons" of the Company as
defined in the Investment Company Act of 1940 (i.e., Messrs. Schlussel and Page)
(the "Disinterested
2
Directors) were each paid $1,000 for the year ended September 30, 2002. During
the year ended September 30, 2002, the Board of Directors met once and all
directors were present. During the year ended September 30, 2002, no
remuneration of any form was paid to the Company's officers or directors, other
than as described above with respect to the Company's two outside directors and
$25,000 for accounting and administrative services provided by an entity owned
by an officer of the Company.
The nominees receiving a plurality of votes cast at the meeting will be
elected directors.
BOARD OF DIRECTORS REPORT
The Board of Directors received from the independent auditors and reviewed
a formal written statement describing all relationships between the auditors and
the Company that might bear on the auditors' independence consistent with
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," discussed with the auditors any relationships that may impact
their objectivity and independence and satisfied itself as to the auditors'
independence.
The Board of Directors discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements of the Company as of and for the fiscal year ended
September 30, 2002, including the quality of accounting principles and
significant judgments affecting the financial statements.
The Board of Directors, based on the above-mentioned reviews and
discussions with management and the independent auditors, resolved that the
Company's audited financial statements be included in its Annual Report to
Shareholders for the year ended September 30, 2002 for filing with the
Securities and Exchange Commission.
(2) RATIFICATION OF APPOINTMENT OF AUDITORS
The directors of the Company who are not "interested persons" have
unanimously appointed PricewaterhouseCoopers LLP ("PwC"), independent public
accountants, to audit the financial statements of the Company for the current
fiscal year ending September 30, 2003. This firm served in such capacity for the
year ended September 30, 2002, and has no direct or indirect interest in the
Company other than as its auditors and independent accountants. This appointment
will be submitted to shareholders at the meeting for ratification. The
affirmative vote of a majority of the shares of Common Stock present at the
meeting is required to appoint PwC as the Company's auditors. A representative
of PwC is not expected to be present at the meeting.
FEES PAID TO INDEPENDENT AUDITORS
AUDIT FEES. PwC's fee for professional services in connection with the
audit of the Company's fiscal year 2002 financial statements will not exceed
$16,000 plus out-of-pocket expenses.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. PwC did not
bill the Company for operating, designing or supervising the Company's computer,
financial or information systems during fiscal year 2002.
ALL OTHER FEES. PwC's fee for tax consultation services will not exceed
$2,500 plus out-of-pocket expenses for fiscal year 2002.
The Board of Directors does not consider the provision of the services
described above by PwC to be incompatible with the maintenance of PwC's
independence.
3
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information concerning those persons
who were, on November 1, 2002, believed by the Company to be beneficial owners
of more than 5% of the outstanding shares of the Company's Common Stock, and
also sets forth certain information about ownership of shares of Common Stock by
all directors and officers of the Company as a group:
Name and Address Shares Beneficially Owned
of Beneficial Owner Nature of Beneficial Ownership Number Percent
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Shelby M. Tauber Shares as to which Ms. Tauber exercises sole voting and
150 East 69th Street investment powers ......................................... 226,904
Apt. 27
New York, NY Shares held in various trusts pursuant to which Ms. Tauber
and Joel D. Tauber are co-trustees with voting and
investment powers.......................................... 144,186
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371,090 29.3%
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Barbara J. Keywell Shares as to which Ms. Keywell exercises sole voting and
2200 Tottenham investment powers.......................................... 253,882
Bloomfield Hills, MI
Shares held in various trusts pursuant to which Ms. Keywell
is sole trustee with voting and investment powers.......... 96,942
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350,824 27.7%
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Gail A. Dishell Shares as to which Ms. Dishell exercises sole voting and
26721 Carol investment powers.......................................... 251,644
Franklin, MI
Shares held in various trusts pursuant to which Ms. Dishell
is sole trustee with voting and investment powers.......... 217,885
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469,529(1) 37.1%
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Joel D. Tauber Shares as to which Mr. Tauber exercises sole voting and
2991 Long Ridge Ct. investment powers.......................................... 65,840
West Bloomfield, MI
Shares held in various trusts pursuant to which Mr. Tauber
and Shelby M. Tauber are co-trustees with voting and
investment powers.......................................... 144,186
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210,026 16.6%
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(1) Does not include 1,000 shares held by Ms. Dishell's husband, as to
which she disclaims any beneficial ownership.
All directors and officers of the Company, as a group, beneficially own
1,257,283 shares (99.2%) of the Company's outstanding Common Stock.
EXECUTIVE OFFICERS
Set forth below is certain information concerning the Company's executive
officers, including name, age, principal occupation and business experience
during the past five years, and length of service as an officer of the Company:
4
Name and Age Office and Term of Service
Joel D. Tauber, 67 President since October 1995. Also a manufacturing
executive, business consultant and investor since
prior to 1997; Chairman of the Board of Keywell
Corporation (Chicago, IL) since 1996; Co-Manager of
Carolina Precision Plastics, LLC (Asheboro, NC)
since July 2002; Chairman of the Board of North
Carolina Plastics, Inc. (Asheboro, NC) from August
2001 to July 2002; Chairman of the Board of Key
Plastics Holdings, Inc. (Novi, MI) since July 1995;
Chairman of the Board of Complex Tooling & Molding,
Inc. (Boulder, CO) from March 1996 to September
2001; member of Management Committee of Key
Plastics, LLC (Novi, MI) from 1997 to April 2001.
Key Plastics, LLC filed for Chapter 11 bankruptcy
protection on March 23, 2000 in U.S. Bankruptcy
Court, Eastern District of Michigan.
Gail A. Dishell, 66 Vice President since September 1979
Shelby M. Tauber, 67 Treasurer since September 1979
Barbara J. Keywell, 62 Secretary since September 1979
Except as described above, none of the Company's executive officers have
been employed in a principal occupation for the past five years.
INFORMATION CONCERNING INVESTMENT MATTERS
Determination Not to Use Investment Adviser; Termination of Investment
Advisory Contract
At its October 19, 1994 meeting, the Board of Directors decided not to
retain the services of an outside investment adviser and, instead, determined
that the Company, acting through its officers and with review provided by the
Board, will make investment decisions internally on a going-forward basis.
The Board's decision not to retain the services of an investment adviser
was made after careful deliberation and was based upon several factors,
including the following:
- The Company's investment objectives are relatively clear-cut and
uncomplicated. The Company's primary investment objective, as
reported in prior filings with the Securities and Exchange
Commission, is "to receive as high a level of current interest
income exempt from federal income taxes as is available from
Municipal Bonds (as defined therein) and as is consistent with
prudent investment management and preservation of capital, and
capital appreciation will be a minor investment objective of the
Company." As a result of this objective, the Company invests in
high quality bonds which typically have relatively low turnover.
- Given the relatively low turnover in investment securities, the
Board has been able to closely monitor the investment activity of
the Company.
- The fees charged by potential third party investment advisers were
relatively high and, in light of the net benefit to be provided to
the Company, unacceptable.
As a result of its decision not to retain an outside investment adviser,
the Company and Comerica Bank (the "Bank"), effective as of October 19, 1994,
terminated the Management and Custodial Agreement, dated September 5, 1979,
pursuant to which Agreement the Bank had been providing certain investment
advisory and custodial account services to the Company. Following such
termination, however, the Company and the Bank entered into a Custodial Account
Agreement, dated October 19, 1994, pursuant to which the Bank continued to
provide certain custodial account services for the Company.
5
Portfolio -- Allocation and Transactions
The Company's investment portfolio has consisted, and will continue to
consist of, debt obligations issued by states, counties, cities and their
political subdivision or agencies, the interest on which is exempt from federal
income tax in the opinion of bond counsel to the issuer ("Municipal Bonds").
Municipal Bonds are normally traded in the over-the-counter market on a net
basis (without commissions) through dealers acting for their own account and not
as brokers. Because of this fact, there are no stated commissions charged with
respect to trades for transactions in the Company's portfolio securities.
When purchasing or selling Municipal Bonds, the Company seeks to obtain the
prompt execution of orders at the most favorable prices available. To the extent
that, in the Company's experience, the execution capabilities and prices offered
by more than one dealer have been comparable, the Company may, in its
discretion, choose to purchase and sell Municipal Bonds from and to dealers who
provide research, statistical and other information to the Company. However, it
is not the Company's policy to pay a higher price to a dealer solely because it
has supplied these services. Although this type of information is useful to the
Company, it is believed that such services will not reduce the Company's normal
research activities. The Company believes that the types of research services
and information which will be provided by dealers will consist principally of
research reports on particular issues of Municipal Bonds and technical
information concerning general market conditions for Municipal Bonds.
CERTAIN REPORTING REQUIREMENTS
Under the federal securities laws, the Company's directors, its executive
officers, and any persons holding more than 10% of the Company's Common Stock
(collectively, the "Reporting Persons") are required to file reports with the
Securities and Exchange Commission, and to provide the Company with copies of
same, relative to their ownership of the Common Stock, which reports need to be
filed at such time as they first become a Reporting Person and at such time or
times as any changes occur in their beneficial ownership of the Common Stock.
Specific due dates for filing these reports have been established and the
Company is required to disclose in this Proxy Statement any failure to timely
file these reports.
Based on a review of the reports filed by the Reporting Persons, during and
with respect to the fiscal year ended September 30, 2002, and/or on
representations of its Reporting Persons with respect to the fiscal year ended
September 30, 2002, the Company believes that the foregoing reporting
requirements have been satisfied by the Company's Reporting Persons.
OTHER MATTERS AND SHAREHOLDER PROPOSALS
At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the meeting other than those described above.
However, if any other matters should come before the meeting, it is the
intention of the persons named in the accompanying proxy card to vote in
accordance with their judgment on such matters.
Shareholder proposals intended to be presented at the 2003 annual meeting
which are eligible for inclusion in the Company's proxy statement for that
meeting under Rule 14a-8 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), must be received by the Company at its
principal executive offices no later than July 23, 2003. Shareholder proposals
intended to be presented at the 2003 annual meeting which are not eligible for
inclusion in the Company's proxy statement for that meeting under Rule 14a-8 are
considered untimely under Rule 14a-5 promulgated under the Exchange Act unless
received by the Company at its principal executive offices no later than October
8, 2003 and the Company expects the persons named as proxies for the 2003 annual
meeting to use their discretionary voting authority with respect to any proposal
considered untimely at the 2003 annual meeting.
Southfield, Michigan
November 22, 2002
6
KEYCO BOND FUND, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 2002
The undersigned shareholder hereby appoints JOEL D. TAUBER and KENNETH E.
KLUSKA, or either one of them, proxies with the power of substitution to vote,
as designated below, all shares of Common Stock which the undersigned may be
entitled to vote at the Annual Meeting of the Shareholders to be held on
Thursday, December 12, 2002 at 10:30 a.m., or at any adjournment thereof, on the
following matters described in the Proxy Statement dated November 22, 2002.
1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed below or / / WITHHOLD AUTHORITY to
any substitute for any of them. vote for all nominees
listed below.
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY ONE NOMINEE STRIKE
THROUGH HIS OR HER NAME BELOW)
Gail A. Dishell Mark E. Schlussel
Thomas E. Purther David K. Page
Ellen T. Horing
2. RATIFYING THE SELECTION of PricewaterhouseCoopers LLP as independent
auditors for the year ending September 30, 2003.
/ / FOR / / AGAINST / / ABSTAIN
The undersigned instructs the proxies to vote as specified in the proxy on
the matters described in the Proxy Statement dated November 22, 2002. Proxies
will be voted as instructed.
AUTHORITY IS ALSO GRANTED TO SUCH PROXIES TO VOTE IN THEIR DISCRETION UPON
ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING. IF NO
SPECIFICATION IS MADE, PROXIES WILL VOTE AS FOLLOWS: (i) UNDER ITEM 1, FOR
ELECTION OF THE NOMINEES NAMED ABOVE OR ANY SUBSTITUTED FOR ANY OF THEM; AND
(ii) FOR ITEM 2.
Receipt is hereby acknowledged of the Notice of Annual Meeting of Shareholders
and Proxy Statement, each dated November 22, 2002.
Dated: _______________________, 2002
________________________________________
Signature
________________________________________
Signature
Please sign exactly as name appears
hereon. If the stock is registered in
the names of two or more persons, each
should sign. Executors, administrators,
trustees, guardians, attorneys and
corporate officers should add their
titles.