<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT []
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
M.S.B. FUND, INC.
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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:
<PAGE> 2
===========================
M.S.B.
FUND, INC.
- ---------------------------
==========================================================
- ------------------------------------
======================================================
200 PARK AVENUE, 45TH FLOOR
NEW YORK, NY 10166
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
APRIL 23, 1998
----------------------------------------
To the Stockholders of M.S.B. FUND, INC.:
The Annual Meeting of Stockholders of M.S.B. FUND, INC. (the "Fund") will
be held in the Board Room of the Community Bankers Association of New York
State, 45th Floor, 200 Park Avenue, New York, New York on Thursday, April 23,
1998 at 1:00 P.M. for the following purposes:
- to elect a total of three directors (Proposal 1);
- to consider and vote upon a proposal to ratify the selection of the
firm of KPMG Peat Marwick LLP as independent auditors of the Fund for
the fiscal year ending December 31, 1998 (Proposal 2); and
- to transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on February 26, 1998, will
be entitled to vote at the meeting or any adjournment thereof.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF
PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR THIS PURPOSE. If you
attend the meeting and wish to vote in person, your proxy will not be used.
By Order of the Board of
Directors
Edward E. Sammons, Jr.
Edward E. Sammons, Jr.
Secretary
March 11, 1998
<PAGE> 3
M.S.B. FUND, INC.
200 PARK AVENUE, 45TH FLOOR
NEW YORK, NEW YORK 10166
------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 23, 1998
------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of M.S.B. Fund, Inc. (the "Fund") to
be voted at the Annual Meeting of Stockholders of the Fund to be held in the
Board Room of The Community Bankers Association of New York State, 45th Floor,
200 Park Avenue, New York, New York on Thursday, April 23, 1998, at 1:00 P.M.
and at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders. This Proxy Statement and the
accompanying notice of meeting and proxy card are being mailed to stockholders
for the first time on or about March 11, 1998.
If the enclosed proxy card is executed and returned, it may nevertheless be
revoked at any time insofar as it has not been exercised. Revocation may be made
in writing to the Secretary of the Fund (by execution of a proxy bearing a later
date or otherwise) or orally by a stockholder present at the meeting. Unless so
revoked, the shares represented by a properly executed proxy will be voted at
the meeting and at any adjournment thereof in accordance with the instructions
indicated on that proxy. If no such instructions are specified, the proxy will
be voted for the election of the directors nominated herein (see Proposal 1) and
for Proposal 2 described in this Proxy Statement. Should any nominee for the
office of director become unable to act as a director, the persons named in the
proxy will vote for the election of such other person as the Board of Directors
of the Fund shall recommend.
Stockholders of record at the close of business on February 26, 1998 will
be entitled to vote at the meeting and any adjournment thereof. The Fund had
outstanding 2,775,104 voting shares on such date. Each share held by a
stockholder is entitled to one vote. As to each matter presented to a vote of
stockholders, including the election of directors, shares present at the meeting
in person or represented by proxy which abstain on a matter or are not voted
because the proxyholder has not received necessary authorization will be counted
in determining the presence of a quorum but will not be counted as for or
against the matter and will not be counted in the number of votes cast for
purposes of determining whether the approval of any required percentage of
shares voting at the Annual Meeting has been obtained. Broker non-votes (i.e.
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have not been received from the beneficial owners) will be
treated in the same manner as abstentions.
A plurality of the votes cast at the Annual Meeting is required to elect a
director. Approval of Proposal 2 will require the affirmative vote of a majority
of the votes cast at the Annual Meeting.
Although the Annual Meeting is called to transact any other business that
may properly come before it, the management of the Fund does not intend to
present, and at the date hereof has no information that others will present, any
matters other than Proposals 1 and 2. However, stockholders are being asked on
the enclosed proxy card to authorize the persons named therein to vote with
1
<PAGE> 4
respect to any additional matters that properly come before the Annual Meeting,
including all matters incidental to the conduct of the Annual Meeting. If any
such matters do properly come before the Annual Meeting, it is the intention of
the persons named in the proxies to vote said proxies in accordance with their
best judgment.
A majority of the shares of the Fund outstanding on the record date,
present in person or represented by proxy, constitutes a quorum for the
transaction of business at the Annual Meeting. In the event that a quorum is not
present, or if sufficient votes in favor of any proposal are not received by the
time of the Annual Meeting, the persons named as proxies may propose one or more
adjournments of the Annual Meeting to permit the gathering of additional
proxies. Any such adjournment of the Annual Meeting will require the affirmative
vote of a majority of the shares present in person or represented by proxy at
the session of the Annual Meeting to be adjourned and will not require any
further notice to stockholders other than announcement at the meeting of the
time and place to which the meeting is adjourned. The persons named as proxies
will vote in favor of such adjournment those proxies which they are entitled to
vote in favor of all proposals. They will vote against any such adjournment
those proxies required to be voted against or to abstain from voting on any
proposal.
The solicitation of proxies will be primarily by mail. Supplementary
solicitation may be made by mail, telephone, facsimile transmission or oral
communication by officers of the Fund or employees of Shay Financial Services,
Inc., the Fund's distributor. It is expected that the cost of such supplementary
solicitation, if any, will be nominal. The Fund will bear the cost of this
solicitation.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, THE BOARD OF DIRECTORS
REQUESTS THAT YOU COMPLETE, DATE AND SIGN YOUR PROXY CARD AND RETURN IT PROMPTLY
IN THE ENVELOPE PROVIDED FOR THIS PURPOSE TO ENSURE THAT YOUR SHARES WILL BE
REPRESENTED AT THE MEETING. If you attend the meeting and wish to vote in
person, your proxy will not be used.
2
<PAGE> 5
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 1 -- ELECTION OF DIRECTORS
The by-laws of the Fund provide that the Board of Directors shall consist
of the number of directors established from time to time by vote of a majority
of the entire Board of Directors which number has been set at ten, all of whom
must be stockholders, and shall be divided into three classes, which shall be as
nearly equal in number as possible and no one of which shall include less than
three directors. Directors of each class serve for terms of three years with the
terms of the respective classes expiring at successive annual meetings of the
Fund. As a result of this arrangement, only the directors in a single class may
be changed in any one year, and it would require two years to change a majority
of the Board of Directors.
At the Annual Meeting, three directors will be elected to serve for
complete terms of three years each expiring in 2001. Seven directors will
continue to serve in accordance with the terms for which they were previously
elected. All directors elected shall serve until their successors shall have
been elected and qualified.
Proxies will be voted for the election of each of the nominees unless
instructions are given on the proxy card to withhold authority to vote for one
or more of the nominees. All of the nominees have agreed to serve as directors
of the Fund.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE NOMINEES FOR ELECTION AS DIRECTOR LISTED BELOW.
The name, age, principal occupations for the past five years and other
business experience of each director and nominee for election as a director are
set forth below.
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING 2001
MALCOLM J. DELANEY, age 71
Formerly President and Chief Executive Officer
Eastchester Savings Bank
Mr. Delaney first became a director in 1988. In 1992 Mr. Delaney retired from
Eastchester Savings, a division of Southold Savings Bank. From 1986 through
1992, Mr. Delaney served as President and Chief Executive Officer of Eastchester
Savings Bank which was acquired by Southold Savings Bank, and he had served as a
trustee of the bank since 1981. Mr. Delaney served as a director of North Fork
Bancorporation, Inc. until August 1, 1996.
DAVID FREER, JR., age 58
President and Treasurer
Budget Payment Corporation
Mr. Freer first became a director in 1983. He served as President of the Fund
from 1990 to 1997 and as Vice President of the Fund from 1985 to 1990. Since
January 1, 1990, Mr. Freer has served as President, Treasurer and as a director
of Budget Payment Corporation, which engages in the business of financing
insurance premiums.
WILLIAM A. MCKENNA, JR., age 61
Chairman, President and Chief Executive Officer
Ridgewood Savings Bank
Mr. McKenna first became a director in 1988. Since January 1992, Mr. McKenna has
served as Chairman, President and Chief Executive Officer of Ridgewood Savings
Bank. From January 1985 to January 1992, Mr. McKenna served as President and
Chief Operating Officer of Ridgewood Savings Bank. Mr. McKenna also serves as a
director of Institutional Investors Capital Appreciation Fund, Inc., which is an
investment company registered under the Investment Company Act of 1940 for which
Shay Assets Management, Inc. acts as investment adviser. From September 1993
through February 1995, Mr. McKenna also served as a director of Nationar, which
previously acted as the Fund's investment adviser. In addition, Mr. McKenna
serves on the board of a number of educational and civic organizations,
3
<PAGE> 6
including St. Joseph's College in Brooklyn, New York, St. Vincent's Services and
Boys Hope/Girls Hope.
It is not contemplated that any nominee will be unable to serve. If prior
to the Annual Meeting a nominee should become unable to serve, the shares will
be voted by the proxyholders for such other person that the Board of Directors
recommends.
CONTINUING DIRECTORS
TIMOTHY A. DEMPSEY, age 64
President and Chief Executive Officer Term Expires 1999
The Warwick Savings Bank
Mr. Dempsey first became a director in 1997. Mr. Dempsey serves as President and
Chief Executive Officer and as a director of Warwick Community Bancorp, Inc. and
has been President and Chief Executive Officer of its principal subsidiary, The
Warwick Savings Bank, since 1985. Mr. Dempsey also serves as a director and as
Executive Vice President of Institutional Investors Capital Appreciation Fund,
Inc., which is an investment company registered under the Investment Company Act
of 1940 for which Shay Assets Management, Inc. acts as investment adviser.
+HARRY P. DOHERTY, age 55 Term Expires 1999.
Chairman and Chief Executive Officer
Staten Island Savings Bank
Mr. Doherty first became a director in 1996. Mr. Doherty serves as Chairman and
Chief Executive Officer and as a director of Staten Island Bancorp, Inc. and has
been Chairman and Chief Executive Officer of its principal subsidiary, Staten
Island Savings Bank, since 1990. Mr. Doherty also serves as a director and as
President of Institutional Investors Capital Appreciation Fund, Inc., which is
an investment company registered under the Investment Company Act of 1940 for
which Shay Assets Management, Inc. acts as investment adviser. Mr. Doherty also
serves as a director of America's Community Bankers, which until December 7,
1997, owned through subsidiaries a 50% interest in Shay Assets Management Co.
and Shay Financial Services Co. which served as the Fund's investment advisor
and distributor from May 1995 to December 7, 1997. Mr. Doherty also is Chairman
of Community Bankers Association of New York State.
*JOSEPH R. FICALORA, age 51 Term Expires 1999.
Chairman, President and Chief Executive Officer
Queens County Bancorp, Inc.
Mr. Ficalora first became a director in 1996 and has served as President of the
Fund since 1997. Mr. Ficalora has been Chairman, President and Chief Executive
Officer of Queens County Bancorp, Inc. since its inception in July 1993, and has
been President of Queens County Savings Bank, its principal subsidiary, since
1989. Mr. Ficalora also serves as Chairman of the Board of the New York Savings
Bank Life Insurance Fund, President of the Queens Library Foundation Board,
Executive Vice President of Finance and Board member of Queensborough Boy Scouts
and Vice President and a member of the Board of the Queens Chamber of Commerce.
He also serves on the Board of the following organizations: Queensborough
Community College, Queens Museum, Flushing Cemetery and the Community Bankers
Association of New York State.
*MICHAEL J. GAGLIARDI, age 57 Term Expires 1999.
President and Chief Executive Officer
Ironbound Bank
- ---------------
+ This director may be an "interested person" of the Fund as defined in the
Investment Company Act of 1940 because he is a director of America's
Community Bankers. See "Certain Other Affiliations and Business
Relationships."
* This director is an "interested person" of the Fund as defined in the
Investment Company Act of 1940 because he is an officer of the Fund.
4
<PAGE> 7
Mr. Gagliardi first became a director in 1991 and has served as First Vice
President of the Fund since 1997. Mr. Gagliardi is President, Chief Executive
Officer and a director of Ironbound Bank located in Newark, NJ, and its holding
company, Ironbound Bankcorp, NJ. From January 1992 through February 1993 he
served as Chairman, President and Chief Executive Officer of Green Point Savings
Bank. From 1989 through 1992, Mr. Gagliardi served as President and Chief
Executive Officer, and from 1987 through 1989 he served as Executive Vice
President and Chief Financial Officer of Green Point Savings Bank. He also
serves as a director of the National Association for the Study of Wilsons
Disease.
DAVID F. HOLLAND, age 56
Chairman and Chief Executive Officer Term Expires 2000
Boston Federal Savings Bank
Mr. Holland first became a director in 1997. Mr. Holland has been Chief
Executive Officer of Boston Federal Savings Bank since 1986 and Chairman of the
Board of Boston Federal Savings Bank since 1989 and has been Chairman and Chief
Executive Officer of its holding company, BostonFed Bancorp Inc. since its
inception in 1995. Mr. Holland also serves as a director of Asset Management
Fund, Inc., which is an investment company registered under the Investment
Company Act of 1940 for which Shay Assets Management, Inc. acts as investment
adviser, and formerly served as Chairman of America's Community Banking
Partners, Inc., and as a director of ACB Investment Services, Inc., which, until
December 7, 1997, owned through a subsidiary a 50% interest in Shay Assets
Management Co. and Shay Financial Services Co. which served as the Fund's
investment adviser and distributor from May 1995 to December 7, 1997. Mr.
Holland also is a director of NYCE Corporation. He was a member of the Thrift
Industry Advisory Council from 1995 to 1997 and served as its President in 1997.
*NORMAN W. SINCLAIR, age 73 Term Expires 2000
Formerly Chairman of
Lockport Savings Bank
Mr. Sinclair first became a director in 1988 and has been Second Vice President
of the Fund since 1997. Mr. Sinclair served as Chairman of Lockport Savings Bank
from December 1988 to June 1994. Prior to June 1989, Mr. Sinclair had also
served as Chief Executive Officer of Lockport Savings Bank. Mr. Sinclair is
retired. Mr. Sinclair also serves as Treasurer and Secretary of Townline Bowl
Inc., which owns and operates bowling lanes.
IAN D. SMITH, age 73 Term Expires 2000
Formerly Senior Vice President and Managing
Director of Apple Bank for Savings
Mr. Smith first became a director in 1982. Mr. Smith served as Second Vice
President of the Fund from 1994 to 1997. He previously served as President of
the Fund from March 1985 to March 1987. Mr. Smith is retired. He served as
Senior Vice President and Managing Director of Apple Bank for Savings from July
1989 through August 1991. From 1983 to 1987, Mr. Smith served as Executive Vice
President of Seamen's Bank for Savings, F.S.B.
The Fund's by-laws provide that a director may not continue in office after
the first annual stockholders' meeting following the director's seventy-fifth
birthday, except that this restriction may be waived by the Board of Directors
to permit a director to serve the remainder of his term.
BOARD MEETINGS AND COMMITTEES
The Fund has an Executive Committee, composed of Messrs. Joseph R.
Ficalora* (Chairman), David Freer, Jr., Michael J. Gagliardi* and Ian D. Smith.
Subject to limitations provided by law or the Fund's by-laws, the Executive
Committee is authorized to exercise the power and authority of the Board of
Directors as may be necessary during the intervals between meetings of the Board
of Directors. The Executive Committee met once during 1997.
- ---------------
* This director is an "interested person" of the Fund as defined in the
Investment Company Act of 1940 because he is an officer of the Fund.
5
<PAGE> 8
The Fund has a Nominating Committee, composed of Messrs. William A.
McKenna, Jr. (Chairman), Malcolm J. Delaney and Harry P. Doherty+, whose
function is to recommend nominees for election as directors and officers of the
Fund. The Committee holds informal discussions as necessary concerning its
activities and met once during 1997. The Nominating Committee will consider
nominees proposed by stockholders. Stockholders who desire to propose a nominee
should write to the Secretary of the Fund and furnish adequate biographical data
including information concerning the qualifications of the proposed nominee
prior to the date specified in this Proxy Statement under the caption
"Stockholder Proposals for the 1999 Annual Meeting".
The Fund has an Audit Committee composed of Messrs. Norman W. Sinclair*
(Chairman), David F. Holland and Timothy A. Dempsey. The Audit Committee makes
recommendations to the full Board of Directors with respect to engagement of
independent auditors and reviews with the Fund's independent auditors the scope
and results of the annual audit and matters having a material effect upon the
Fund's financial statements. The Audit Committee met twice during 1997.
The Fund does not have a compensation committee.
During 1997, the Board of Directors met 5 times; each of the directors
attended more than 75% of the aggregate number of meetings of the Board and
meetings of the Board committees on which they served.
EXECUTIVE OFFICERS OF THE FUND
The executive officers of the Fund are appointed to serve for terms of one
year and until their respective successors are chosen and qualified. The
executive officers of the Fund are:
<TABLE>
<CAPTION>
OFFICER
NAME OFFICE AGE SINCE
---- ------ --- -------
<S> <C> <C> <C>
Joseph R. Ficalora............... President 51 1996
Michael J. Gagliardi............. First Vice President 57 1997
Norman W. Sinclair............... Second Vice President 73 1997
Rodger D. Shay................... Vice President and Assistant Secretary 61 1995
Edward E. Sammons, Jr............ Vice President and Secretary 58 1995
John J. McCabe................... Vice President 54 1995
Mark F. Trautman................. Vice President 32 1995
Jay F. Nusblatt.................. Treasurer 36 1995
</TABLE>
The principal occupations during the last five years and other business
experience for each executive officer of the Fund (other than persons who also
serve as directors) are set forth below.
RODGER D. SHAY
Chairman and Director
Shay Assets Management, Inc.
Mr. Shay has been Chairman and the sole director of the Fund's investment
adviser, Shay Assets Management, Inc., since November 1997 and previously served
as its President and as a director from 1990 to 1997. Mr. Shay also has served
as Chairman and the sole director of the Fund's distributor, Shay Financial
Services, Inc., since November 1997 and previously served as its President and
as a director from 1990 to 1997. Mr. Shay held similar positions with Shay
Assets Management Co. and Shay Financial Services Co., which served as the
Fund's investment adviser and distributor, respectively, from 1995 through
December 1997. He serves or has previously served in the following capacities:
President and a Director, Asset Management Fund, Inc., a registered investment
company; Vice President and Assistant Secretary of Institutional Investors
Capital Appreciation Fund, Inc., a registered investment
- ---------------
+ This director may be an "interested person" of the Fund as defined in the
Investment Company Act of 1940 because he is a director of America's
Community Bankers. See "Certain Other Affiliations and Business
Relationships."
* This director is an "interested person" of the Fund as defined in the
Investment Company Act of 1940 because he is an officer of the Fund.
6
<PAGE> 9
company; Director, First Home Savings Bank, S.L.A. since 1990. He previously was
employed by certain subsidiaries of Merrill Lynch & Co. from 1955 to 1981, where
he served in various executive positions including Chairman of the Board of
Merrill Lynch Government Securities, Inc., Chairman of the Board of Merrill
Lynch Money Market Securities, Inc. and Managing Director of the Debt Trading
Division of Merrill Lynch, Pierce, Fenner & Smith Inc.
EDWARD E. SAMMONS, JR.
President
Shay Assets Management, Inc.
Mr. Sammons has been President of the Fund's investment adviser, Shay Assets
Management, Inc., since November 1997 and previously served as its Executive
Vice President from 1990 to 1997. Mr. Sammons also has served as Executive Vice
President of the Fund's distributor, Shay Financial Services, Inc., since 1990.
He also held the position of Executive Vice President with Shay Assets
Management Co. and Shay Financial Services Co., which served as the Fund's
investment adviser and distributor, respectively, from 1990 through December
1997. He serves or has previously served in the following capacities: Vice
President, Treasurer and Secretary of Asset Management Fund, Inc., a registered
investment company; Vice President and Secretary of Institutional Investors
Capital Appreciation Fund, Inc.; Vice President, from 1987 to 1990, Advance
America Funds, Inc.; and Senior Vice President and Manager of Fixed Income
Securities, Republic National Bank in Dallas from 1962 to 1983.
JOHN J. MCCABE
Senior Vice President
Shay Assets Management, Inc.
Mr. McCabe has been a Senior Vice President of Shay Assets Management, Inc.,
since June 1995 and held the comparable position with Shay Assets Management Co.
through December 1997. From August 1991 through May 1995, he was Senior Vice
President and Chief Investment Officer of Nationar. He also serves as a Vice
President of Institutional Investors Capital Appreciation Fund, Inc. He
previously served as Managing Director and Portfolio Manager at Sterling
Manhattan Corporation, an investment banking firm, for approximately three years
and in various positions at Bankers Trust Company, including Director of
Investment Research and Managing Director of the Investment Management Group.
Mr. McCabe is a director and past President of the New York Society of Security
Analysts, a past director of the Financial Analysts Federation and a member and
founding Governor of The Association for Investment Management and Research.
MARK F. TRAUTMAN
Vice President
Shay Assets Management, Inc.
Mr. Trautman has been a Vice President of Shay Assets Management, Inc., since
June 1995 and held the comparable position with Shay Assets Management Co.
through December 1997. He has been Portfolio Manager of the Fund since March
1993. From March 1993 through May 1995, he served as Director of Mutual Funds
Investment of Nationar. He also serves as a Vice President and Portfolio Manager
for Institutional Investors Capital Appreciation Fund, Inc. From January 1992
through March 1993 he served as Senior Equity Analyst for the two funds. From
December 1988 through December 1991, Mr. Trautman was a Senior Associate with
Sterling Manhattan Corporation. From June 1987 through November 1988, Mr.
Trautman held the position of Treasury Analyst at Thomson McKinnon Securities,
Inc., a securities brokerage firm. He is also a member of The New York Society
of Security Analysts and The Association for Investment Management and Research.
JAY F. NUSBLATT
Vice President and Director of Fund Accounting and Administration
PFPC Inc.
Mr. Nusblatt has been Vice President and Director of Fund Accounting and
Administration of PFPC Inc., the Fund's administrator, since March 1993. Mr.
Nusblatt also serves as Treasurer of Institutional Investors Capital
Appreciation Fund, Inc. He was previously employed as an Assistant Vice
President of Fund/Plan Services, Inc., with responsibility for financial
reporting and fund administration from 1989 to 1993.
7
<PAGE> 10
CERTAIN OTHER AFFILIATIONS AND BUSINESS RELATIONSHIPS
Certain officers and directors of the Fund are also officers, employees,
directors or shareholders of Shay Assets Management, Inc. ("SAMI") and Shay
Financial Services, Inc. ("SFSI"). Messrs. Rodger D. Shay, Edward E. Sammons,
Jr., John J. McCabe and Mark F. Trautman, who are officers of the Fund, are
officers and employees of SAMI. Mr. Shay is the sole director of SAMI, SFSI and
Shay Investment Services, Inc. ("SISI"), which is the sole stockholder of SAMI
and SFSI. Mr. Shay also is the majority stockholder of SISI.
Messrs. Harry P. Doherty and David F. Holland, who are directors of the
Fund, also hold or have recently held positions with affiliates of Shay Assets
Management Co., which, prior to December, 1997, served as the Fund's investment
adviser. Mr. Doherty is a director of America's Community Bankers (the
"Association"). Until December of 1997, Mr. Holland held positions with
subsidiaries of the Association, including the position of director of ACB
Investment Services, Inc., which was a general partner in the Fund's prior
investment adviser, Shay Assets Management Co. Mr. Holland also served as a
director and officer of the Association prior to 1996. Mr. Doherty may be
considered an "interested person" as the result of his continued position with
the Association and the interest of the Association in certain royalty and other
payments that will be made by SISI and its affiliates to the Association and its
affiliates. Because Mr. Holland has resigned his positions with the Association
and its affiliates, Mr. Holland will not be deemed to be an "interested person,"
unless the Securities and Exchange Commission by order determines that Mr.
Holland is an "interested person" by virtue of having a material relationship
with the Fund's investment adviser or distributor as a result of his prior
positions with the Association and its affiliates.
The Fund paid its investment adviser $294,823, net of fee waivers of
$35,025, for its services as investment adviser during 1997.
8
<PAGE> 11
COMPENSATION OF OFFICERS AND DIRECTORS
The directors of the Fund receive compensation for their services as
directors of the Fund consisting of a $3,000 annual retainer per director,
payable in four quarterly installments, and a per-meeting fee of $500 for each
meeting of the Board of Directors attended. The Board of Directors holds its
regular meetings quarterly. Directors also are reimbursed their reasonable
expenses incurred in attending meetings or otherwise incurred in connection with
their attention to the affairs of the Fund. In recognition of the additional
responsibilities and duties performed by the President of the Fund, the
President receives an additional annual retainer of $2,000, payable in four
quarterly installments, which is in addition to compensation the President
receives as a director. The other officers of the Fund do not receive any
compensation from the Fund other than the compensation they may receive as
directors of the Fund. Directors serving on a committee of the Board of
Directors receive additional compensation of $250 for each committee meeting
attended in person if the meeting is held on a date on which a meeting of the
Board of Directors is not held. No fee is payable for telephonic meetings of the
Board of Directors or any committee.
The total compensation received by directors and officers of the Fund for
service during 1997 was $58,500. The total amount of expenses incurred during
1997 for which the directors were reimbursed was $6,001.
The following table sets forth the aggregate compensation received by each
director of the Fund from the Fund and any other investment company having the
same investment adviser for services as a director or officer during 1997. Such
compensation does not include reimbursements to the directors for their expenses
incurred in connection with their activities as directors.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE FUND
NAME OF DIRECTOR FROM THE FUND AND FUND COMPLEX
---------------- ------------- ----------------
<S> <C> <C>
Malcolm J. Delaney................. $5,500 $ 5,500
Timothy A. Dempsey................. $4,250 $10,250*
Harry P. Doherty................... $5,000 $12,000*
Joseph R. Ficalora................. $6,500 $ 6,500
David Freer, Jr.................... $6,500 $ 6,500
Michael J. Gagliardi............... $5,500 $ 5,500
David F. Holland................... $4,250 $21,250*
George J. Kelly.................... $4,000 $ 4,000
William A. McKenna, Jr. ........... $5,750 $11,250*
Norman W. Sinclair................. $5,500 $ 5,500
Ian D. Smith....................... $5,750 $ 5,750
</TABLE>
- ---------------
* Includes compensation of $6,000, $17,000 and $5,500 received by Messrs.
Dempsey, Holland and McKenna as directors and $7,000 received by Mr. Doherty
as a director and officer of another investment company with the same
investment adviser as the Fund.
9
<PAGE> 12
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information with respect to shares of the Fund
beneficially owned by each director and each nominee for election as a director
and by all directors, nominees and executive officers as a group as of December
31, 1997. No nominee or continuing director or officer beneficially owns more
than 1% of the Fund's outstanding shares. On December 31, 1997, all directors,
nominees and officers of the Fund as a group beneficially owned 135,625 shares
(approximately 4.9% of the shares outstanding on such date) of the Fund. No
person or group is known to the Fund to be the beneficial owner of more than 5%
of the Fund's outstanding shares. The table below sets forth the shares owned by
the directors of the Fund and the Fund's directors and officers of the Fund as a
group as of December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK PERCENT
NAME BENEFICIALLY OWNED(1) OF CLASS
---- --------------------- --------
<S> <C> <C>
DIRECTORS AND NOMINEES
Malcolm J. Delaney................... 3,002(2) *
Timothy A. Dempsey................... 669 *
Harry P. Doherty..................... 3,059(2) *
Joseph R. Ficalora................... 1,234 *
David Freer, Jr...................... 28,487(2)(3) 1.0%
Michael J. Gagliardi................. 18,699(2)(4) *
David F. Holland..................... 383 *
William A. McKenna, Jr............... 27,549(2)(5) 1.0%
Norman W. Sinclair................... 3,490 *
Ian D. Smith......................... 7,071(6) *
EXECUTIVE OFFICERS WHO ARE
NOT ALSO DIRECTORS
Rodger D. Shay....................... 10,143 *
Edward E. Sammons, Jr................ 7,341 *
John J. McCabe....................... 12,620 *
Mark F. Trautman..................... 11,876(2)(7) *
Jay F. Nusblatt...................... 0 *
ALL DIRECTORS, EXECUTIVE OFFICERS AND
NOMINEES AS A GROUP (15 persons)... 135,625 4.9%
</TABLE>
- ---------------
* Less than 1%.
(1) Except as otherwise indicated, the beneficial owner has sole voting and
investment power.
(2) Includes shares owned by, or jointly held with, spouses as follows: Mr.
Delaney -- 3,002 shares jointly owned with Mrs. Delaney; Mr. Doherty --
2,778 shares jointly owned with Mrs. Doherty; Mr. Freer -- 6,148 shares
jointly owned with Mrs. Freer and 3,488 shares owned by Mrs. Freer; Mr.
Gagliardi -- 1,972 shares jointly owned with Mrs. Gagliardi and 892 shares
owned by Mrs. Gagliardi; Mr. McKenna -- 21,176 shares jointly owned with
Mrs. McKenna; Mr. Shay -- 3,443 shares jointly owned with Mrs. Shay; and Mr.
Trautman -- 2,740 shares jointly owned with Mrs. Trautman and 1,770 shares
owned by Mrs. Trautman.
(3) Includes 941 shares owned by Double V Enterprises, Inc. which is 100% owned
by Mr. Freer.
(4) Includes 673 shares owned and voted by Mr. Gagliardi's son (as to which Mr.
Gagliardi disclaims beneficial ownership).
(5) Includes 5,835 shares held by Mr. McKenna as custodian for his children and
for which Mr. McKenna has sole voting and investment power and 538 shares
owned and voted by Mr. McKenna's children.
(6) Includes 941 shares owned by Mr. Smith's children and grandchildren.
(7) Includes 203 shares held by Mr. Trautman as custodian under the Uniform
Gifts to Minors Act.
10
<PAGE> 13
PROPOSAL 2 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Subject to approval by the stockholders, the Board of Directors has
selected the firm of KPMG Peat Marwick LLP, 1600 Market Street, Philadelphia,
Pennsylvania, as the Fund's independent auditors for the fiscal year ending
December 31, 1998. KPMG Peat Marwick has served as the auditors of the Fund
since 1989.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting with the opportunity to make a statement if such representative
desires to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 2.
ADDITIONAL INFORMATION
ADDRESS OF INVESTMENT ADVISER, DISTRIBUTOR AND ADMINISTRATOR
The principal offices of the Fund's investment adviser, Shay Assets
Management, Inc., and of its distributor, Shay Financial Services, Inc., are
located at 111 East Wacker Drive, Chicago, Illinois 60601. Shay Assets
Management, Inc. also maintains an office located at 200 Park Avenue, 45th
Floor, New York, New York. The principal office of the Fund's administrator,
PFPC Inc., is located at 103 Bellevue Parkway, Wilmington, Delaware 19809.
ANNUAL REPORT DELIVERY
The Fund will furnish, without charge, a copy of its Annual Report for the
fiscal year ended December 31, 1997 to any stockholder upon request. Contact the
Fund c/o Shay Financial Services, Inc. at 111 East Wacker Drive, Chicago,
Illinois 60601 or call 800-661-3938 to request a copy of the Annual Report.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 1999 Annual
Meeting of the Fund must be received by the Fund at the offices of its
administrator, PFPC, Inc., at P.O. Box 8905, Wilmington, Delaware 19809 on or
before November 11, 1998 in order for such proposal to be considered for
inclusion in the Fund's proxy statement and form of proxy relating to that
meeting.
By Order of the Board of Directors
Edward E. Sammons, Jr.
Edward E. Sammons, Jr.
Secretary
11
<PAGE> 14
PROXY M.S.B. FUND, INC. PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - APRIL 23, 1998
The undersigned hereby appoints John J. McCabe and Mark F. Trautman as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated herein, all the shares of capital
stock of M.S.B. Fund, Inc. held of record by the undersigned on February 26,
1998, at the Annual Meeting of Stockholders to be held on April 23, 1998, or
any adjournment thereof.
NOTE: Please sign exactly as your name
appears below. When shares are held by
joint tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized persons.
_______________________________________
Signature
_______________________________________
Authorized signature if held jointly
_______________________________________
Date
<PAGE> 15
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE DIRECTORS
RECOMMEND VOTING "FOR" ALL NOMINEES AND PROPOSALS. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR ALL
NOMINEES" IN PROPOSAL 1 AND "FOR" PROPOSAL 2. PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK. Example: [X]
<TABLE>
<S><C>
1. Election of Directors: FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(as marked below)
Malcolm J. Delaney David Freer, Jr. William A. McKenna, Jr. [ ] [ ] [ ]
(To withhold authority to vote for any individual nominee, strike a line through
the name above.)
2. The ratification of the selection of KPMG Peat Marwick LLP as independent auditors. [ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon such other business as may
properly come before the meeting or any adjournment thereof.
</TABLE>
