UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
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 Rule 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):
[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:
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(2) Aggregate number of securities to which transaction applies:
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(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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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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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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KEYCO BOND FUND, INC.
27777 FRANKLIN ROAD, SUITE 1850
SOUTHFIELD, MICHIGAN 48034
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 2004
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 48034, on Friday, December 17, 2004, at 10:30 a.m., Detroit
time, 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 Grant Thornton LLP as the Company's registered
independent auditor for the year ending September 30, 2005; and
(3) To transact such other business as may properly come
before the meeting or any adjournments thereof.
Information with respect to these matters is set forth in the accompanying
Proxy Statement. The Board of Directors has fixed the close of business on
November 1, 2004, 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., the 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 24, 2004
KEYCO BOND FUND, INC.
27777 FRANKLIN ROAD, SUITE 1850
SOUTHFIELD, MICHIGAN 48034
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 2004
This Proxy Statement and the accompanying form of proxy are to be first
mailed on or about November 24, 2004, to all shareholders of record on November
1, 2004, 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., Detroit time, on Friday, December 17, 2004, at the principal executive
offices of the Company, 27777 Franklin Road, Suite 1850, Southfield, Michigan
48034, 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, 2004,
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.
COPIES OF THE COMPANY'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE
AVAILABLE TO SHAREHOLDERS UPON REQUEST. IF YOU WOULD LIKE TO RECEIVE A COPY,
PLEASE CONTACT THE COMPANY AT 27777 FRANKLIN ROAD, SUITE 1850, SOUTHFIELD,
MICHIGAN 48034 AND ONE WILL BE SENT, WITHOUT CHARGE, BY FIRST-CLASS MAIL.
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.
<Table>
<Caption>
SHARES OF
NAME, AGE AND HAS SERVED AS PRINCIPAL OCCUPATION(S) DURING PAST COMMON STOCK
POSITION(s) WITH A DIRECTOR FIVE YEARS AND OTHER DIRECTORSHIPS BENEFICIALLY
COMPANY SINCE HELD(1) OWNED
- ---------------- ------------- ----------------------------------- -------------
DISINTERESTED DIRECTORS
Mark E. Schlussel, 63 1979 Partner in the firm Schlussel & Schefman, None
Director attorneys (Birmingham, MI) since April 2004;
previously of counsel to the firm of Warner
Norcross and Judd, attorneys (Southfield, MI)
July 2002 to March 2004; previously of counsel
to the firm of Pepper, Hamilton and Scheetz,
attorneys (Detroit, MI) January 1995 to June
2002.
David K. Page, 71 1989 Partner in the firm of Honigman Miller Schwartz None
Director and Cohn, attorneys (Detroit, MI) for more than
five years. Director of Meadowbrook Insurance
Group, Inc.
INTERESTED DIRECTORS(2)
Gail A. Dishell, 67 1984 Vice President of the Company since September 1979; 470,529(3)
Director and Vice Investor.
President
Thomas E. Purther, 38 1994 Chairman of Paramount Bank, a commercial bank 24,715(4)
Director and Secretary (Farmington Hills, MI) since February 1998;
Chairman and CEO of Cambridge Investors, LLC,
real estate acquisition, development and
management company (Farmington Hills, MI)
since June 2000; and a partner in Key Homes,
residential housing builder (Farmington
Hills, MI) December 1993 to December 2003.
Ellen T. Horing, 41 1995 Portfolio manager of Highgate Partners, an 53,477(5)
Director and Treasurer investment partnership (Mt. Kisco, NY) since
January 1993; and portfolio advisor and
partner, SP Capital Management, LP (New
York, NY) since January 2003.
</Table>
(1) 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.
2
(2) 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.
(3) Includes certain shares pursuant to which Ms. Dishell is trustee. See
"Principal Shareholders."
(4) 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."
(5) 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."
The nominees receiving a plurality of votes cast at the meeting will be
elected directors. 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 also 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. During the fiscal year ended September 30, 2004, the
Board of Directors had 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 Directors) were each paid $3,000 for the
year ended September 30, 2004. During the year ended September 30, 2004, the
Board of Directors met twice and all directors were present. During the year
ended September 30, 2004, 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 $30,000 for accounting and administrative
services provided by an entity owned by an officer of the Company.
The following table provides certain information relating to the equity
securities beneficially owned by each director or director nominee as of
November 1, 2004, (i) in the Company and (ii) on an aggregate basis, in any
registered investment companies overseen or to be overseen by the director or
nominee within the same family of investment companies as the Company.
<Table>
<Caption>
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL FUNDS
OVERSEEN OR TO BE OVERSEEN BY
DOLLAR RANGE OF EQUITY DIRECTOR OR NOMINEE IN FAMILY
NAME OF DIRECTOR OR NOMINEE SECURITIES IN THE COMPANY OF INVESTMENT COMPANIES
- --------------------------- ------------------------- ------------------------------
INTERESTED DIRECTORS
Gail A. Dishell Over $100,000 None
Thomas E. Purther Over $100,000 None
Ellen T. Horing Over $100,000 None
INDEPENDENT DIRECTORS
Mark E. Schlussel None None
David K. Page None None
</Table>
(2) RATIFICATION OF APPOINTMENT OF AUDITORS
The directors of the Company who are not "interested persons" have
unanimously appointed Grant Thornton LLP ("Grant Thornton"), registered
independent public accountants, to audit the financial statements of the Company
for the current fiscal year ending September 30, 2005. Grant Thornton served in
such capacity for the year ended September 30, 2004. Grant Thornton 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 Grant Thornton as
the Company's auditors. A representative of Grant Thornton is not expected to be
present at the meeting.
3
INDEPENDENT AUDITORS
PREVIOUS INDEPENDENT AUDITORS
On April 12, 2004, PricewaterhouseCoopers LLP ("PwC") notified us that as
of that date, it had resigned as our registered independent accountant.
(i) PwC's report on the financial statements of the Company for the
years ended September 30, 2003 and 2002 did not contain an adverse
opinion or disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope or accounting principles.
(ii) Upon resignation of PwC, the decision to appoint Grant Thornton as
its new independent auditors was recommended for approval by the
directors of the Company who are not "interested persons" on April 14,
2004.
(iii) During the Company's two most recent fiscal years, and through
April 12, 2004, there were no disagreements with PwC on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to
the satisfaction of PwC, would have caused it to make reference to the
subject matter of the disagreements in connection with its report.
(iv) During the Company's two most recent fiscal years, and through
April 12, 2004, PwC did not:
(A) advise the Company that the internal controls necessary
for the Company to develop reliable financial statements did not exist;
(B) advise the Company that information had come to PwC's
attention that had led it to no longer be able to rely on management's
representations, or that had made it unwilling to be associated with
the financial statements prepared by management;
(C) (1) advise the Company of the need to expand significantly
the scope of its audit, or that information had come to PwC's attention
during the Company's two most recent fiscal years, and through April
12, 2004, that if further investigated may (a) materially impact the
fairness or reliability of either: a previously issued audit report or
the underlying financial statements; or the financial statements issued
or to be issued covering the fiscal period(s) subsequent to the date of
the most recent financial statements covered by an audit report
(including information that may prevent it from rendering an
unqualified audit report on those financial statements), or (b) cause
it to be unwilling to rely on management's representations or be
associated with the Company's financial statements, and (2) due to
PwC's resignation, or for any other reason, PwC did not so expand the
scope of its audit or conduct such further investigation; or
(D) (1) advise the Company that information had come to PwC 's
attention that it had concluded materially impacts the fairness or
reliability of either (a) a previously issued audit report or the
underlying financial statements, or (b) the financial statements issued
or to be issued covering the fiscal period(s) subsequent to the date of
the most recent financial statements covered by an audit report
(including information that, unless resolved to PwC 's satisfaction,
would prevent it from rendering an unqualified audit report on those
financial statements), and (2) due to PwC 's resignation, or for any
other reason, the issue has not been resolved to PwC 's satisfaction
prior to its resignation.
As a result of its resignation, we do not anticipate that a PwC
representative will attend the meeting.
4
NEW INDEPENDENT AUDITORS
On April 14, 2004, the directors of the Company who are not "interested
persons" unanimously appointed Grant Thornton as the Company's registered
independent public accountants to audit its financial statements for the year
ended September 30, 2004. Prior to appointing Grant Thornton, the Company did
not consult Grant Thornton regarding:
o the application of accounting principles to a specified
transaction, either completed or proposed; or the type of
audit opinion that might be rendered on the Company's
financial statements, and no written report or oral advice was
provided to the Company that Grant Thornton concluded was an
important factor considered by the Company in reaching a
decision as to the accounting, auditing or financial reporting
issue; or
o any matter that was a subject of a disagreement or a
reportable event.
FEES PAID TO INDEPENDENT AUDITORS
The following table presents the fees paid by us for professional
services rendered by PwC for the fiscal year ended September 30, 2003 and for
Grant Thornton for the fiscal year ended September 30, 2004.
<Table>
<Caption>
FEE CATEGORY 2003 FEES 2004 FEES
------------ --------- ---------
Audit fees ........................................ $ 17,834 $ 15,500
Audit-related fees ................................ 0 0
Tax fees .......................................... 3,885 3,000
All other fees .................................... 0 0
--------- ---------
Total fees ........................................ $ 21,719 $ 18,500
========= =========
</Table>
Tax fees are fees billed for professional services rendered by PwC and
Grant Thornton for tax compliance, tax advice and tax planning. The Board of
Directors does not consider the provision of the services described above by
Grant Thornton to be incompatible with the maintenance of Grant Thornton's
independence.
The Company's Board of Directors pre-approves all audit and permissible
non-audit services rendered to the Company.
REPORT OF BOARD OF DIRECTORS
The Board of Directors received from the independent auditors (Grant
Thornton) 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, 2004, including the quality of accounting principles
and significant judgments affecting the financial statements.
5
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, 2004 for filing with the
Securities and Exchange Commission.
The Board of Directors: Mark E. Schlussel, David K. Page, Gail A.
Dishell, Thomas E. Purther, Ellen T. Horing.
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information concerning those
persons who were, on November 1, 2004, 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:
<Table>
<Caption>
SHARES BENEFICIALLY
OWNED
NAME AND ADDRESS -------------------
OF BENEFICIAL OWNER NATURE OF BENEFICIAL OWNERSHIP NUMBER PERCENT
- ------------------- ------------------------------ ------ -------
Shelby M. Tauber Shares as to which Ms. Tauber exercises sole
150 East 69th Street voting and investment powers ....................... 226,904
Apt. 27H
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
-------
371,090 29.3%
======= ====
Barbara J. Keywell Shares as to which Ms. Keywell exercises sole
2200 Tottenham voting and 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
-------
350,824 27.7%
======= ====
Gail A. Dishell Shares as to which Ms. Dishell exercises sole
26721 Carol voting and investment powers........................ 251,644
Franklin, MI
Shares held in various trusts pursuant to which
Ms. Dishell is a trustee with voting and investment 218,885
-------
powers.............................................. 470,529 37.1%
======= ====
Joel D. Tauber Shares as to which Mr. Tauber exercises sole voting
2991 Long Ridge Ct. and investment powers............................... 65,840
West Bloomfield, MI
Shares held in various trusts pursuant to
which Mr. Tauber and Shelby M. Tauber are 144,186
co-trustees with voting and investment powers....... -------
210,026 16.6%
======= ====
</Table>
6
All directors and officers of the Company, as a group, beneficially own
1,258,283 shares (99.3%) 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:
<Table>
<Caption>
NAME AND AGE OFFICE AND TERM OF SERVICE
- ------------ --------------------------
Joel D. Tauber, 69 President since October 1995. Also a manufacturing executive, business consultant and
investor since prior to 1999; Chairman of the Board of Keywell Corporation (Chicago, IL)
since 1996; Manager of Carolina Precision Plastics, LLC (Asheboro, NC) since June 2004;
Co-Manager of Carolina Precision Plastics, LLC (Asheboro, NC) from July 2002 to June 2004;
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, 67 Vice President since September 1979.
Ellen T. Horing, 41 Treasurer since March 2003. Also a portfolio manager of Highgate Partners, an investment
partnership, (Mt. Kisco, NY) since January 1993; and portfolio advisor and partner, SP
Capital Management, LP (New York, NY) since January 2003.
Thomas E. Purther, 38 Secretary since March 2003. Also Chairman of Paramount Bank, a commercial bank (Farmington
Hills, MI) since February 1998; Chairman and CEO of Cambridge Investors, LLC, real estate
acquisition, development and management company (Farmington Hills, MI) since June 2000; and
a partner in Key Homes, residential housing builder (Farmington Hills, MI) from December
1993 to December 2003.
</Table>
COMMITTEES OF THE BOARD
The Board of Directors as a whole performs the functions of an audit
committee, nominating committee and compensation committee and there are no
separate committees of the Board of Directors. The Company believes that this is
appropriate due to its small size and that more than ninety-nine percent (99%)
of the outstanding voting stock is owned by members of the Keywell family. The
Board of Directors does not have a audit committee charter, a nominating
committee charter or a compensation committee charter.
NOMINATING PROCESS
The Board of Directors as a whole is responsible for the selection and
nomination of directors. The Company does not retain a third party to assist in
the identification of directors. The Board of Directors does not have a formal
policy with regard to the consideration of any director candidates recommended
by shareholders. The Board of Directors will consider director candidates
recommended by shareholders and
7
therefore it does not believe that a formal policy is necessary. The Board of
Directors as a whole selected and approved the director nominees contained in
this proxy statement.
When seeking to identify an individual to become a director, the Board of
Directors will consult with incumbent directors, management and others. The
Board of Directors will consider, among other factors, the background and
reputation of potential candidates in terms of character, personal and
professional integrity, business and financial experience and acumen, how a
person would complement the other directors in providing a diversity of
expertise and experience and a person's availability to devote sufficient time
to Board of Director duties.
To recommend a nominee, shareholders should write to the Company's
Secretary c/o Keyco Bond Fund, Inc., 27777 Franklin Road, Suite 1850,
Southfield, Michigan, 48034. To be considered by the Board of Directors for
nomination and inclusion in the Company's Proxy Statement for its 2005 Annual
Meeting of Shareholders, a shareholder recommendation for a director must be
received by the Company's Secretary no later than July 22, 2005. Any
recommendation must include (i) the name and address of the candidate, (ii) a
brief biographical description, including his or her occupation for at least the
last five years, and a statement of the qualifications of the candidate, taking
into account the qualification requirements summarized above, and (iii) the
candidate's signed consent to be named in the proxy statement and to serve as a
director if elected.
Assuming the appropriate background material is provided for candidates
submitted by shareholders, the process followed by the Board of Directors to
identify and evaluate candidates described above will be used to evaluate those
candidates submitted by shareholders and the Board of Directors will apply
substantially the same criteria.
COMMUNICATIONS WITH DIRECTORS
Stockholders may communicate with the board of directors or any
individual director by sending a letter to Keyco Bond Fund, Inc., 27777 Franklin
Road, Suite 1850, Southfield, Michigan, 48034, Attn: Presiding Director (or any
individual director). The Secretary will receive the correspondence and forward
it to the presiding director or to any individual director or directors to whom
the communication is directed. The Secretary is authorized to review, sort and
summarize all communications received prior to their presentation to the
presiding director or to whichever director(s) the communication is addressed.
If such communications are not a proper matter for board attention, such
individuals are authorized to direct such communication to the appropriate
department. For example, stockholder requests for materials or information will
be directed to investor relations personnel.
INFORMATION CONCERNING INVESTMENT MATTERS
Determination Not to Use Investment Adviser; Termination of Investment Advisory
Contract
The Board of Directors has determined not to retain the services of an
outside investment adviser and, instead, has authorized the officers of the
Company, with review provided by the interested directors of the Company (Gail
Dishell, Ellen Horing and Thomas Purther), to make investment decisions
internally on a going-forward basis.
8
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:
o 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.
o Given the relatively low turnover in investment securities,
the Board has been able to closely monitor the investment
activity of the Company.
o 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.
The Company has entered into a Custodial Account Agreement with Comerica
Bank pursuant to which the Bank provides certain custodial account services for
the Company.
Portfolio -- Brokerage 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.
9
Based on a review of the reports filed by the Reporting Persons, during
and with respect to the fiscal year ended September 30, 2004, and/or on
representations of its Reporting Persons with respect to the fiscal year ended
September 30, 2004, 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 2005 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 22, 2005. Shareholder proposals
intended to be presented at the 2005 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
7, 2005, and the Company expects the persons named as proxies for the 2005
annual meeting to use their discretionary voting authority with respect to any
proposal considered untimely at the 2005 annual meeting.
Southfield, Michigan
November 24, 2004
10
KEYCO BOND FUND, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 2004
The undersigned shareholder hereby appoints JOEL D. TAUBER and DAVID L. SIMON,
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 Friday,
December 17, 2004, at 10:30 a.m., Detroit time, or at any adjournment thereof,
on the following matters described in the Proxy Statement dated November 24,
2004.
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 Grant Thornton LLP as the Company's registered
independent auditor for the year ending September 30, 2005.
[ ] 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 24, 2004. 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 24, 2004.
Dated: , 2004
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Signature
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Signature
Please sign exactly as your name appears
hereon. If your 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.