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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] 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>
=====================
M.S.B.
FUND, INC.
=====================
200 PARK AVENUE, 45TH FLOOR
NEW YORK, NEW YORK 10166
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 20, 2000
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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 20, 2000, at 1:00 P.M. for the following purposes:
- to approve amendments to the certificate of incorporation and by-laws
of the Fund (Proposal 1);
- to elect two directors (Proposal 2);
- to consider and vote upon a proposal to ratify the selection of the
firm of Arthur Andersen LLP as independent auditors of the Fund for
the fiscal year ending December 31, 2000 (Proposal 3); 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 22, 2000, will
be entitled to vote at the meeting and 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
/s/ Edward E. Sammons, Jr.
Edward E. Sammons, Jr.
Secretary
February [__], 2000
<PAGE>
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 20, 2000
----------------------------
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 20, 2000, 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 [__], 2000.
You can ensure that your shares are properly voted at the Annual Meeting
by completing, signing, dating and returning the enclosed proxy card in the
envelope provided. You may revoke your proxy at any time prior to the time your
shares actually are voted by (i) filing a written notice of revocation with the
Secretary of the Fund, (ii) presenting another proxy with a later date or (iii)
notifying the inspectors of election at the Annual Meeting of the revocation.
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 each nominee named in Proposal 2 and for
Proposals 1 and 3 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 22, 2000, will
be entitled to vote at the meeting and any adjournment thereof. The Fund had
outstanding [_________] 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.
<PAGE>
A plurality of the votes cast at the Annual Meeting is required to elect a
director. Approval of Proposals 1 and 3 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, 2 and 3. However, stockholders are being asked
on the enclosed proxy card to authorize the persons named therein to vote with
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 which have withheld authority to vote for all nominees in Proposal
2 and those proxies which are required to be voted against or to abstain from
voting on any other 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 ANNUAL 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 Annual Meeting and wish to
vote in person, your proxy will not be used.
<PAGE>
MATTERS TO COME BEFORE THE ANNUAL MEETING
(PROPOSAL NO. 1)
APPROVAL OF AMENDMENTS TO THE FUND'S CERTIFICATE OF
INCORPORATION AND BY-LAWS
Subject to approval by the stockholders, the Board of Directors on
February 14, 2000 approved certain amendments to the certificate of
incorporation and by-laws of the Fund. The primary purpose of the amendments is
to permit the size of the Board of Directors to be reduced. In addition, the
Fund is proposing certain additional non-material changes to the certificate of
incorporation.
Exhibit A to this Proxy Statement sets forth the text of the Fund's
certificate of incorporation and identifies each proposed amendment to the
certificate of incorporation. Deleted language is indicated by the use of the
strikethrough. New language is underscored. Exhibit B sets forth the related
section of the by-laws of the Fund (Section 4 of Article III) as it is proposed
to be amended to permit the reduction in the size of the Board of Directors.
Exhibit C sets forth resolutions that will be proposed for adoption by the
stockholders of the Fund at the Annual Meeting in order to implement the
proposed amendments. The proposed amendments are discussed below.
REDUCTION IN THE MINIMUM SIZE OF THE BOARD OF DIRECTORS
The Board of Directors of the Fund currently consists of ten directors.
Two of the Fund's directors, Norman W. Sinclair and Ian D. Smith, whose terms
expire at the 2000 Annual Meeting, are not eligible for re-election. The Board
of Directors has determined not to nominate candidates to fill the vacancies
created by the expiration of Messrs. Sinclair's and Smith's terms of office and
has determined that the size of the Board of Directors should be reduced from
ten to eight to eliminate those vacancies.
Paragraph 1 of Article SEVENTH of the Fund's certificate of incorporation
and Section 4 of Article III of the Fund's by-laws currently provide that that
the number of directors of the Fund shall be not less than nine nor more than 24
and require that no class of directors may include fewer than three directors.
The proposed amendments to these sections of the certificate of incorporation
and by-laws would permit the size of the Board of Directors to be reduced by
action of the Board of Directors to as few as five. The Board has adopted a
resolution that, upon the effectiveness of the proposed amendments to the
certificate of incorporation and by-laws, will reduce the size of the Board from
ten to eight directors.
The proposed amendments to the certificate of incorporation and by-laws
are set forth on Exhibits A and B, respectively.
The boards of directors of most mutual funds are smaller than the Board of
Directors of the Fund. The proposed amendments permitting the reduction in the
size of the Board of Directors will provide greater flexibility in responding to
the resignation or retirement of directors and will permit the Fund to conform
more closely to the prevailing industry practice as to the size of its Board of
<PAGE>
Directors. Accordingly, the Board of Directors of the Fund believes that the
amendments are in the best interests of the Fund.
OTHER CHANGES
The Board of Directors has also approved, subject to the approval of the
stockholders, other non-material amendments to the Fund's certificate of
incorporation to:
1. correct a misspelling of the word "reacquired" in Section 4(f) of
Article SEVENTH.
2. eliminate inconsistencies in the capitalization of certain terms by (i)
conforming all references to the Fund's by-laws (capitalized variously as
"By-Laws," "By-laws" or "by-laws") to read "by-laws" and (ii) conforming all
references to the Fund's board of directors (capitalized variously as "Board of
Directors" or "board of directors") to read "board of directors".
3. change the address of the Fund's registered agent set forth in Articles
FIFTH and SIXTH to the agent's current address.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
PROPOSED AMENDMENTS TO THE FUND'S CERTIFICATE OF INCORPORATION AND BY-LAWS.
PROPOSAL 2 -- ELECTION OF DIRECTORS
As described above in connection with Proposal 1, the Board of Directors
has approved the reduction in the size of the Board of Directors from ten to
eight directors, subject to the approval of the amendments to the certificate of
incorporation and by-laws described above and the effectiveness of a certificate
of amendment effectuating the foregoing proposed amendments to the certificate
of incorporation.
At the Annual Meeting, two directors will be elected to serve for complete
terms of three years each expiring in 2003. Six directors (Messrs. Delaney,
Doherty, Ficalora, Freer, Gagliardi and McKenna) will continue to serve in
accordance with the terms for which they were previously elected. All directors
shall serve until their respective successors shall have been elected and
qualified.
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.
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.
<PAGE>
The terms of office of the directors are set forth in the following table.
TERMS ENDING IN 2000 TERMS ENDING IN 2001 TERMS ENDING IN 2002
David F. Holland Malcolm J. Delaney Timothy A. Dempsey
Norman W. Sinclair David Freer, Jr. Harry P. Doherty
Ian D. Smith William A. McKenna, Jr. Joseph R. Ficalora
Michael J. Gagliardi
Messrs. Smith and Sinclair, whose terms expire at the 2000 Annual Meeting,
are not eligible for re-election, and the Board of Directors has determined not
to nominate candidates to fill the vacancies created by the expiration of
Messrs. Sinclair's and Smith's terms of office and has determined that the size
of the Board of Directors should be reduced from ten to eight directors to
eliminate those vacancies.
The New York Business Corporation Law requires that the number of
directors in each class must be as nearly equal as possible. Because of the
expiration of the terms of Messrs. Sinclair and Smith and the determination of
the Board of Directors to reduce the size of the Board of Directors rather than
fill the vacancies created by the retirement of Messrs. Sinclair and Smith, the
composition of the three classes of directors would not comply with the
requirements of the Business Corporation Law. In order to satisfy these
requirements, Mr. Timothy A. Dempsey, whose term would otherwise have expired in
2002, has resigned his term of office as director effective as of the Annual
Meeting; and the Board of Directors has nominated Mr. Dempsey for election to a
new term as director expiring in 2003. Mr. Holland also has been nominated for
an additional term as a director.
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 (as of the date of the Annual Meeting), 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 2003
TIMOTHY A. DEMPSEY, age 67
Chairman and Chief Executive Officer
Warwick Community Bancorp
Mr. Dempsey first became a director in 1997. Mr. Dempsey serves
as Chairman of the Board and Chief Executive Officer of Warwick
Community Bancorp, Inc. Mr. Dempsey also serves as Chairman of the
Board of its principal subsidiary, The Warwick Savings Bank, since
1985. Since January 1999, Mr. Dempsey has served as Chairman of the
Board of the Towne Center Bank in Lodi, New Jersey. Mr. Dempsey also
serves as a director of Institutional Investors Capital Appreciation
Fund, Inc., an investment company registered under the Investment
<PAGE>
Company Act of 1940 for which Shay Assets Management, Inc. acts as
investment adviser.
DAVID F. HOLLAND, age 58
Chairman and Chief Executive Officer
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., 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 the Federal Home Loan Bank of Boston and NYCE Corporation. He
was a member of the Thrift Industry Advisory Council from 1995 to 1997 and
served as its President in 1997.
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
MALCOLM J. DELANEY, age 73 Term Expires 2001
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.
<PAGE>
+HARRY P. DOHERTY, age 57 Term Expires 2002
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 adviser and distributor from May 1995 to December
7, 1997. Mr. Doherty also is a director of the Community Bankers
Association of New York State.
*JOSEPH R. FICALORA, age 53 Term Expires 2002
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.
DAVID FREER, JR., age 60 Term Expires 2001
Formerly 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 a director of Budget Payment Corporation, which engaged in the
business of financing insurance premiums until 1999.
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+ 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.
<PAGE>
*MICHAEL J. GAGLIARDI, age 59 Term Expires 2002
Executive Vice President
Richmond County Savings Bank
Mr. Gagliardi first became a director in 1991 and has served as
First Vice President of the Fund since 1997. Mr. Gagliardi is Executive
Vice President of Richmond County Savings Bank. From 1993 through March
1999 he served as President, Chief Executive Officer and a director of
Ironbound Bank located in Newark, NJ, and its holding company, Ironbound
Bankcorp, NJ, which were acquired by Richmond County Financial Corp. 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 Center for the Study of Wilson's Disease.
WILLIAM A. MCKENNA, JR., age 63 Term Expires 2001
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., 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. Since May 1998, Mr. McKenna has served as a trustee of RSI
Trust, an investment company registered under the Investment Company
Act of 1940. In addition, Mr. McKenna serves on the board of a number
of educational and civic organizations, including St. Joseph's College
in Brooklyn, New York, St. Vincent's Services and Boys Hope/Girls Hope.
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
- -----------------------
* 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.
* 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.
<PAGE>
Board of Directors as may be necessary during the intervals between meetings
of the Board of Directors. The Executive Committee did not meet during 1999.
The Fund has a Nominating Committee, composed of Messrs. William A.
McKenna, Jr. (Chairman), Malcolm J. Delaney and Norman W. Sinclair*, 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 1999. 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 2001 Annual Meeting".
The Fund has an Audit Committee composed of Messrs. Timothy A. Dempsey
(Chairman), David F. Holland and Harry P. Doherty+. 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 1999.
The Fund does not have a compensation committee.
During 1999, the Board of Directors met four times; each of the directors
attended at least 75% of the aggregate number of meetings of the Board and
meetings of the Board committees on which they served.
- -----------------------
+ 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."
<PAGE>
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 53 1996
Michael J. Gagliardi First Vice President 59 1997
Norman W. Sinclair Second Vice President 75 1997
Rodger D. Shay Vice President 63 1995
and Assistant Secretary
Edward E. Sammons, Jr. Vice President 60 1995
and Secretary
John J. McCabe Vice President 56 1995
Mark F. Trautman Vice President 34 1995
Steven D. Pierce Treasurer 34 1999
Alaina V. Metz Assistant Secretary 32 1999
</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: Chairman 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 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.
<PAGE>
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. from 1990 through December 1997. These companies
served as the Fund's investment adviser and distributor, respectively,
from 1995 through December 1997. Mr. Sammons has served as Executive Vice
President of Shay Investment Services, Inc., since September 1990. He
serves or has previously served in the following capacities: President and
Treasurer 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 the 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
<PAGE>
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.
STEVEN D. PIERCE
Director of Financial Services
BISYS Fund Services, Inc.
Mr. Pierce has been Director of Financial Services of BISYS Fund
Services, Inc. since 1998. From 1996 to 1998, Mr. Pierce was the
Manager of Financial Operations at CNA Insurance. From 1994 to 1996,
he was a Trust Officer at First Chicago NBC Corporation. From 1989 to
1994, he was a Senior Financial Accountant at Kemper Financial Services.
ALAINA V. METZ
Chief Administrative Officer
BISYS Fund Services, Inc.
Ms. Metz has been the Chief Administrative Officer of the Blue
Sky Compliance Department at BISYS Fund Services, Inc. since 1995.
From 1989 to 1995, Ms. Metz served as Supervisor for Alliance Capital
Management, L.P.
CERTAIN OTHER AFFILIATIONS AND BUSINESS RELATIONSHIPS
Certain officers and directors of the Fund are also officers,
employees, directors or stockholders 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.
Harry P. Doherty, who is a director of the Fund, also is a director of
America's Community Bankers (the "Association"), which, prior to December 1997,
owned a 50% interest in the Fund's investment adviser. 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.
The Fund paid its investment adviser $504,642 for its services as
investment adviser during 1999.
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 in person. 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
<PAGE>
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 1999 was $45,500. The total amount of expenses incurred during
1999 for which the directors were reimbursed was $5,236.22.
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 1999. 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 COMPENSATION
AGGREGATE COMPENSATION FROM THE FUND
NAME OF DIRECTOR FROM THE FUND AND FUND COMPLEX
- ----------------------- ----------------------- -----------------------
<S> <C> <C>
Malcolm J. Delaney.......... $5,000 $5,000
Timothy A. Dempsey.......... $5,000 $10,000*
Harry P. Doherty............ $5,000 $12,000*
Joseph R. Ficalora.......... $6,500 $9,750
David Freer, Jr............. $5,000 $5,000
Michael J. Gagliardi........ $4,500 $4,500
David F. Holland............ $5,000 $17,000*
William A. McKenna, Jr. .... $4,500 $9,500*
Norman W. Sinclair.......... $5,000 $5,000
Ian D. Smith................ $5,000 $5,000
- ----------
<FN>
* Includes compensation of $5,000, $3,250, $12,000 and $5,000 received by
Messrs. Dempsey, Ficalora, 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.
</FN>
</TABLE>
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, 1999. No nominee or continuing director or officer, other than
<PAGE>
David Freer, Jr., beneficially owns more than 1% of the Fund's outstanding
shares. On December 31, 1999, all directors, nominees and officers of the Fund
as a group beneficially owned [170,533] shares (approximately [5.32]% 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,
1999.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENT BENEFICIALLY
NAME COMMON STOCK(1) OWNED OF CLASS
- ------------------------------- ------------------- ---------------------
<S> <C> <C>
DIRECTORS AND NOMINEES
Malcolm J. Delaney............ 4,045<F2> *
Timothy A. Dempsey............ 1,449 *
Harry P. Doherty.............. [5,201]<F2> *
Joseph R. Ficalora............ 2,974 *
David Freer, Jr............... [34,631]<F2><F3> [1.08]%
Michael J. Gagliardi.......... 26,546<F2><F4> *
David F. Holland.............. 1,429 *
William A. McKenna, Jr........ 25,243<F2> *
Norman W. Sinclair............ 4,603 *
Ian D. Smith.................. 8,774<F5> *
EXECUTIVE OFFICERS WHO ARE
NOT ALSO DIRECTORS
Rodger D. Shay................. 7,897<F2> *
Edward E. Sammons, Jr.......... 8,934<F2> *
John J. McCabe................. 20,651 *
Mark F. Trautman............... 16,995<F2><F6> *
Steven D. Pierce............... 0 *
Alaina Metz.................... 0 *
ALL DIRECTORS, EXECUTIVE
OFFICERS AND NOMINEES AS A
GROUP (16 PERSONS) [170,533] [5.32]%
- ----------
<FN>
* Less than 1%.
<F1> Except as otherwise indicated, the beneficial owner has sole voting and
investment power.
<F2> Includes shares owned by, or jointly held with, spouses as follows: Mr.
Delaney -- 4,045 shares jointly owned with Mrs. Delaney; Mr. Doherty --
4,872 shares jointly owned with Mrs. Doherty; Mr. Freer --7,724 shares
jointly owned with Mrs. Freer and 4,331 shares owned by Mrs. Freer; Mr.
Gagliardi -- 2,817 shares jointly owned with Mrs. Gagliardi and 1,043
shares owned by Mrs. Gagliardi; Mr. McKenna -- 25,243 shares jointly owned
with Mrs. McKenna; Mr. Shay -- 13 shares jointly owned with Mrs. Shay; Mr.
Sammons -- [800 shares owned jointly with Mrs. Sammons and] 24 shares
owned [by] Mrs. Sammons; and Mr. Trautman -- 3,332 shares jointly owned
with Mrs. Trautman and 2,296 shares owned by Mrs. Trautman.
<F3> Includes 1,149 shares owned by Double V Enterprises, Inc. which is 100%
owned by Mr. Freer.
<PAGE>
<F4> Includes 786 shares owned and voted by Mr. Gagliardi's children (as to
which Mr. Gagliardi disclaims beneficial ownership).
<F5> Includes 1,501 shares owned by Mr. Smith's children and grandchildren.
<F6> Includes 324 shares held by Mr. Trautman as custodian under the Uniform
Gifts to Minors Act.
</FN>
</TABLE>
<PAGE>
PROPOSAL 3 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Subject to approval by the stockholders, the Board of Directors on January
20, 2000, selected the firm of Arthur Andersen LLP, 425 Walnut Street,
Cincinnati, Ohio, to serve as the Fund's independent auditors for the fiscal
year ending December 31, 2000.
In January 1999 KPMG LLP was terminated as the independent auditors of the
Fund and Arthur Andersen LLP was selected as the Fund's independent auditors.
KPMG LLP served as the independent auditors of the Fund for the fiscal years
1989-1998. None of the reports of KPMG LLP on the financial statements of the
Fund for the fiscal years ending December 31, 1997 and 1998 contained any
adverse opinion or disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles. Moreover, during such fiscal
years, or the interim period between January 1, 1999, through January 21, 1999
(the date the Board of Directors selected Arthur Andersen LLP to replace KPMG
LLP), there were no disagreements between the Fund and KPMG LLP with respect to
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of KPMG LLP, would have caused it to make reference to the
subject matter of the disagreements in connection with its reports. The decision
to change independent auditors from KPMG LLP to Arthur Andersen LLP was
recommended to the Board of Directors by the Audit Committee, and was approved
by the Fund's Board of Directors and stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders.
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 230 West Monroe Street, Suite 2810, Chicago, Illinois 60606. 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, BISYS Fund Services Ohio, Inc., is located at 3435 Stelzer Road,
Columbus, Ohio 43219.
ANNUAL REPORT DELIVERY
The Fund will furnish, without charge, a copy of its Annual Report for the
fiscal year ended December 31, 1999, to any stockholder upon request. Contact
the Fund c/o Shay Financial Services, Inc. at 230 West Monroe Street, Suite
2810, Chicago, Illinois 60606 or call 800-661-3938 to request a copy of the
Annual Report.
<PAGE>
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 2001 Annual
Meeting of the Fund must be received by the Secretary of the Fund at the offices
of its investment adviser, at 230 West Monroe Street, Suite 2810, Chicago,
Illinois 60606 on or before [October 27,] 2000, 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
/s/ Edward E. Sammons, Jr.
Edward E. Sammons, Jr.
Secretary
<PAGE>
EXHIBIT A
PROPOSED AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
Text to be deleted is marked with a strikethrough (e.g.,
"-d-e-l-e-t-e-d-t-e-x-t-").
Text to be added is marked with an underscore (e.g., "new text").
========
TEXT OF THE CERTIFICATE OF INCORPORATION, AS PROPOSED TO BE AMENDED:
FIRST: The name of the Corporation is M.S.B. FUND, INC.
SECOND: The purposes for which it is formed are:
A. To engage generally in the business of an open-end
investment company, as defined in an act of Congress entitled
"Investment Company Act of 1940" and to conduct all activities
generally engaged in by such an investment company.
B. Except as limited by the -B-y- by-laws of the Corporation, to
==
engage in the business of investing in, acquiring, owning, holding,
selling, pledging, hypothecating, exchanging or otherwise disposing of
or realizing upon, and generally dealing in and with securities,
whether shares of stocks, bonds, debentures, notes, warrants, rights,
scrip, rights to receive, purchase or subscribe for any interests,
mortgages, evidences of indebtedness or obligations, secured or
unsecured, or other securities of any description, whether in, of or
made, created or issued by any corporation, company, association,
partnership, trust, syndicate, individual, government, state,
municipality or other political subdivision; to exercise any and all
rights, powers and privileges with reference to such business and in
respect to any and all funds, property and securities owned by the
Corporation including, without limitation, the right to vote thereon,
to consent and otherwise act with respect thereto, to pay assessments,
subscriptions and other sums of money in connection therewith, to
deposit securities, to exercise any option appertaining to securities
and to do any and all acts and things the Corporation may deem
expedient for the protection of its interest as owner or holder of such
securities.
C. To issue and sell shares of stock of the Corporation in
such amounts, on such terms and conditions, for such purposes and for
such consideration, now or hereafter permitted by the laws of New York
and by this Certificate, as its board of directors may determine and
without the vote or consent of the holders of stock of the
Corporation.
D. To acquire through purchase, exchange or otherwise, to
hold, dispose of, transfer, reissue or cancel, its own shares in any
manner and to the extent now or hereinafter permitted by the laws of
New York and by this Certificate.
E. Except as otherwise provided in the -B-y---L-a-w-s- by-laws of
=======
the Corporation, to borrow from any person or corporation for proper
corporate purposes, including the acquisition of funds for investment
in securities, and to issue and deliver notes, drafts, warrants, bonds,
debentures or other obligations of the Corporation to evidence such
<PAGE>
borrowings, containing such terms and conditions and bearing such
interest rates and having such maturities as the board of directors
from time to time may determine, and to secure the same and the
interest thereon by mortgage of, conveyance of, deed of trust of,
pledge of or through lien upon, property, franchises, rights and
privileges of every kind or nature, or any part thereof, then owned or
thereafter acquired by the corporation.
F. To do any and all such further acts and things and to
exercise any and all such further powers as may be necessary,
appropriate or desirable for, or in connection with, or incidental to,
the accomplishment, carrying out or attainment of all or any of the
foregoing purposes and objects.
The foregoing clauses shall be construed as powers as well as objects
and purposes and the matters expressed in each of the foregoing paragraphs,
unless otherwise expressly provided, shall not be limited by inference from
the terms of any other provision of this Certificate, but shall be regarded
as independent objects, purposes and powers and the enumeration of the
specific shall not be deemed to restrict the meaning of the general terms and
powers, nor shall the expression of one thing be deemed to exclude another
not expressed although of like nature.
THIRD: The office of the Corporation is to be located in the City of
New York, County and State of New York.
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 515,000,000 shares of a par value of one
tenth of one cent ($0.001) each, to be divided into five (5) classes
designated and classified as follows:
5,000,000 shares of Class A Stock
5,000,000 shares of Class B Stock
5,000,000 shares of Class C Stock
250,000,000 shares of Class D Stock
250,000,000 shares of Class E Stock
The relative rights, preferences and limitations of the various classes of
stock of the Corporation shall be as follows:
1. The holder of each share of stock of the Corporation shall
be entitled to one vote for each share of stock, irrespective of the
class, then standing in his name on the books of the Corporation, and
each share shall entitle the holder thereof to vote with and in the
same manner as the holder of any other share on matters submitted to a
vote of the stockholders of the Corporation without differentiating
between holders of the various classes of stock; provided, however,
that as to any matter or proposal which does not affect any interest of
a particular class of stock, only holders of such classes as are
affected shall be entitled to vote with respect to such matter or
proposal; and provided, further, that the Board of Directors, in
accordance with the -B-y---L-a-w-s- by-laws of the Corporation, may
=======
determine in the case of any matter or proposal submitted to the
stockholders for approval, that approval of such matter or proposal shall
be conditioned upon the approval of the holders of each class of stock
entitled to vote thereon, voting as a class. The determination of the
Board of Directors of the Corporation as to whether any matter or proposal
submitted to a vote of the stockholders does or does not affect any
<PAGE>
interest of any class of stock shall be conclusive and binding on the
stockholders of all classes for all purposes.
2. All payments received by the Corporation for the issue or
sale of stock of a particular class together with all assets in which
such funds are invested or reinvested and all income, earnings and
profits thereon and proceeds therefrom and any funds derived from any
reinvestment of such proceeds shall belong to the class of stock with
respect to which such payments were received, and are herein referred
to as "assets belonging to" such class. In the event there are assets
not readily identifiable as belonging to a particular class, the value
of such assets shall be allocated to the various classes then existing
in proportion to the aggregate asset values of the outstanding shares
of stock of the respective classes or in such other manner as may be
determined by the Board of Directors in accordance with the
-B-y---L-a-w-s- by-laws of the Corporation. The amount of each such asset
=======
allocated to a particular class shall then belong to such class, and each
such allocation shall be conclusive and binding upon the stockholders of
all classes for all purposes.
3. The assets belonging to each particular class shall be
charged with the liabilities, expenses, costs and reserves of the
Corporation attributable to that class. Any general liabilities,
expenses, costs and reserves of the Corporation which are not readily
identifiable as attributable to a particular class shall be allocated
to the various classes then existing in proportion to the aggregate
asset values of the outstanding shares of stock of the respective
classes or in such other manner as may be determined by the Board of
Directors in accordance with the -B-y---L-a-w-s- by-laws of the
=======
Corporation, and each such allocation shall be conclusive and binding upon
the stockholders of all classes for all purposes.
4. The holders of the outstanding shares of each class of
stock of the Corporation shall be entitled to receive such dividends
and distributions as the Board of Directors may from time to time
determine; provided that any dividends or distributions paid on or with
respect to the shares of any class shall be payable only from and to
the extent of the assets (net of liabilities) belonging to that class.
5. In the event of the liquidation or dissolution of the
Corporation, or the liquidation of any class, holders of the shares of
each class to be liquidated shall be entitled to receive the assets
(less provision for liabilities) belonging to such class with such
assets to be distributed among the stockholders of such class in
proportion to the number of shares of such class held by them.
6. Each holder of shares of any class of stock shall be
entitled at his option, exercisable in accordance with the provisions
hereof and of the -B-y---L-a-w-s- by-laws of the Corporation, to require
=======
the Corporation to redeem or repurchase such stock at the asset value
thereof; provided that any payments made by the Corporation to redeem
or repurchase shares of any class shall be made only from the assets
belonging to such class and otherwise legally available for such
purpose. Payment shall be made in cash or in kind as determined by the
Corporation.
<PAGE>
7. The Corporation shall be entitled at its option, exercisable
in accordance with the provisions hereof and of the -B-y---L-a-w-s-
by-laws of the Corporation, to cause the shares of any class of any
=======
stockholder to be redeemed for an amount equal to the asset value of
such shares, whenever the number of shares of such class owned by such
stockholder or their aggregate asset value is less than any minimum
fixed by the -B-y---L-a-w-s- by-laws or the Board of Directors in
=======
accordance with the -B-y---L-a-w-s- by-laws.
=======
8. Each holder of shares of any class of stock shall be
entitled at his option, exercisable in accordance with the provisions
hereof and of the -B-y---L-a-w-s- by-laws of the Corporation, to convert
=======
such shares into shares of stock of any other class of the Corporation on
the basis of their relative asset values less any applicable conversion
charge or discount determined by the Board of Directors in accordance
with the -B-y---L-a-w-s- by-laws of the Corporation.
=======
FIFTH: The Secretary of State is designated as the agent of the
Corporation upon whom process against it may be served. The post office
address to which the Secretary of State shall mail a copy of any process in
any action or proceeding against the corporation which may be served on him
is c/o CT Corporation System, -1-6-3-3-B-r-o-a-d-w-a-y- 111 Eighth Avenue, New
=================
York, NY -1-0-0-1-9- 10011.
=====
SIXTH: The name and address of the registered agent of the
Corporation is CT CORPORATION SYSTEM located at -1-6-3-3-B-r-o-a-d-w-a-y-
111 Eighth Avenue, New York, NY -1-0-0-1-9- 10011. Said registered agent is to
================= =====
be the agent of the Corporation upon whom process against it may be served.
SEVENTH: In furtherance and not in limitation of powers conferred by
statute and by this Certificate of Incorporation, the following provisions
are inserted for the regulation of the business of the Corporation, its
affairs, its rights and powers and the rights or powers of its stockholders,
directors or officers.
1. The number of directors of the Corporation shall be as fixed from time
to time by or in accordance with the by-laws -t-h-e-B-y---l-a-w-s-, but in
=================================
no event shall the number be less than -n-i-n-e- five nor more than
====
twenty-four. The directors shall be divided into three classes. All
classes shall be as nearly equal in number as possible -a-n-d-n-o-
c-l-a-s-s-s-h-a-l-l-i-n-c-l-u-d-e-l-e-s-s-t-h-a-n-t-h-r-e-e-
d-i-r-e-c-t-o-r-s-. The terms of office of the directors shall be as
follows: that of the first class shall expire at the next annual meeting
of stockholders, the second class at the second succeeding annual meeting
and the third class at the third succeeding annual meeting. At each
annual meeting after such initial classification directors to replace
those whose terms expire at such annual meeting shall be elected to hold
office until the third succeeding annual meeting. Directors must be
stockholders of the Corporation.
2. Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the Board of Directors for any
reason may be filled by vote of a majority of the directors then in
office. Any and all of the directors may be removed for cause by
action of the Board of Directors.
3. No holder of shares shall have any preferential, preemptive or other
right to subscribe for or to purchase any securities of the
Corporation, whether now or hereafter authorized, issued or sold or
<PAGE>
offered for sale by the Corporation other than such rights, if any, as
the board of directors may from time to time determine to offer to
holders of shares at the time outstanding , and the board of directors
may sell or otherwise dispose of securities of the Corporation, except
as herein otherwise required, to any person and upon such terms and
conditions, as the board of directors may deem advisable.
4. The Board of Directors of the Corporation shall have the entire
management and control of the property, business and affairs of the
Corporation and in furtherance thereof, is expressly authorized from
time to time:
a. To authorize the issue and sale from time to time of
shares of stock of the Corporation (now or hereafter authorized)
for such consideration, not less than the asset value per share
of such stock outstanding at the time as of which the last
preceding computation of asset value shall have been made, and
upon such other terms and conditions as may be fixed from time to
time by the board of directors but in no event at less than par
value. All shares so issued for which the full consideration so
fixed shall have been paid shall be deemed to be fully paid and
not liable for any further call or assessment thereon.
b. To authorize the purchase, either directly or through
an agent, of shares of stock of the Corporation, upon tender
thereof by the holder, upon such terms as the board of directors
shall deem expedient, not in excess of the asset value of such
shares as of a time reasonably proximate to such purchase, and to
pay for such shares in cash, securities or other assets owned by
the Corporation, but only to the extent of assets legally
available for such purpose.
c. To determine, in accordance with sound accounting
practice, what constitutes annual or other net profits, and net
assets; to fix and vary from time to time the amount to be
reserved as working capital; to set apart out of any surplus of
the Corporation such reserves in such amount and for such
purposes as it shall determine and to abolish any such reserve or
any part thereof.
d. To distribute dividends in such amounts and in such
manner and to the stockholders of record on such dates as the
board of directors may from time to time determine, but only out
of net profits and surplus, including surplus arising from net
realized gains from the sale or other disposition of assets, or
out of any other funds legally available for the purpose; it
being intended to give to the board of directors the power to
distribute as ordinary dividends and as capital gains
distributions, amounts sufficient to enable the Corporation to
avoid or minimize liability for federal income tax.
e. To authorize the execution of a contract or contracts
(which may be exclusive) whereby, subject to the supervision and
control of the board of directors the other person to such
contract or contracts shall
(i) render managerial, investment advisory,
statistical, research and clerical and bookkeeping services,
or related services to the Corporation, upon such terms and
conditions as may be provided therein;
<PAGE>
(ii) render such other services as may be determined
by the board of directors of the Corporation and agreed upon
in said contract or contracts;
(iii) provide for the sale and repurchase of shares
of stock of the Corporation under such terms as may be
provided in said contract or contracts;
(iv) act as custodian of all or a part of the funds
and securities owned by the Corporation upon such terms as
shall be fixed by the board of directors;
(v) act as transfer agent and registrar of the
shares of stock of the Corporation.
f. To eliminate from the authorized number of shares of
the corporation or to restore to the status of authorized but
unissued shares any shares of stock of the Corporation
theretofore redeemed, purchased or otherwise -r-e-a-q-u-i-r-e-d-
reacquired.
==========
5. For the purposes hereof, the asset value of shares of stock of any
class shall mean the proportionate interest in the net assets of the
Corporation belonging to such class determined by or pursuant to the
direction of the Board of Directors, in accordance with such methods as
shall be set forth in the -B-y---L-a-w-s- by-laws and such regulations as
=======
the Board of Directors may from time to time adopt in order to enable the
Corporation to comply with any provision of applicable law, state or
federal.
<PAGE>
EXHIBIT B
PROPOSED AMENDMENTS TO THE BY-LAWS
Text to be deleted is marked with a strikethrough (e.g.,
"-d-e-l-e-t-e-d-t-e-x-t-").
Text to be added is marked with an underscore (e.g., "new text").
========
TEXT OF SECTION 4 OF ARTICLE III OF THE BY-LAWS AS PROPOSED TO BE AMENDED:
SECTION 4. INCREASE OR DECREASE IN SIZE OF BOARD. The number of
directors -m-a-y-b-e-i-n-c-r-e-a-s-e-d-t-o-t-w-e-n-t-y---f-o-u-r-m-e-m-b-e-r-s-
- -o-r-d-e-c-r-e-a-s-e-d-t-o-n-i-n-e-m-e-m-b-e-r-s- that shall constitute the
=========================
entire Board of Directors may be established by the vote of a majority of the
============================================
entire Board of Directors from time to time but shall not be more than
============================================
twenty-four or less than five. When the number of directors is increased by the
=============================
Board of Directors and newly created directorships are filled by the Board of
Directors, there shall be no classification of the additional directors until
the next annual meeting of stockholders. No decrease in the number of directors
shall shorten the term of any incumbent director.
<PAGE>
EXHIBIT C
RESOLUTIONS FOR ANNUAL MEETING
------------------------------
APPROVAL OF AMENDMENTS TO THE FUND'S CERTIFICATE OF INCORPORATION AND BY-LAWS
-----------------------------------------------------------------------------
CERTIFICATE OF INCORPORATION
- ----------------------------
RESOLVED, that the certificate of incorporation of the Fund be
amended by:
1. amending Articles FIFTH and SIXTH to read in their entirety as
follows:
FIFTH: The Secretary of State is designated as the agent
of the Corporation upon whom process against it may be served.
The post office address to which the Secretary of State shall
mail a copy of any process in any action or proceeding against
the corporation which may be served on him is c/o CT Corporation
System, 111 Eighth Avenue, New York, NY 10011.
SIXTH: The name and address of the registered agent of
the Corporation is CT CORPORATION SYSTEM located at 111 Eighth
Avenue, New York, NY 10011. Said registered agent is to be the
agent of the Corporation upon whom process against it may be
served.
2. amending paragraph 1 of Article SEVENTH to read in its entirety
as follows:
1. The number of directors of the Corporation shall be
as fixed from time to time by or in accordance with the by-laws,
but in no event shall the number be less than five nor more than
twenty-four. The directors shall be divided into three classes.
All classes shall be as nearly equal in number as possible. The
terms of office of the directors shall be as follows: that of
the first class shall expire at the next annual meeting of
shareholders, the second class at the second succeeding annual
meeting and the third class at the third succeeding annual
meeting. At each annual meeting after such initial
classification directors to replace those whose terms expire at
such annual meeting shall be elected to hold office until the
third succeeding annual meeting. Directors must be stockholders
of the Corporation.
3. changing all references to the terms "By-Laws" and "By-laws" to
"by-laws" and changing all references to the term "Board of Directors"
to "board of directors;"
4. changing the word "reaquired" in paragraph 4(f) of Article
SEVENTH to "reacquired."
<PAGE>
BY-LAWS
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RESOLVED, that Section 4 of Article III of the Fund's by-laws be
and hereby is amended to read in its entirety as follows:
SECTION 4. INCREASE OR DECREASE IN SIZE OF BOARD. The
number of directors that shall constitute the entire Board of Directors
may be established by the vote of a majority of the entire Board of
Directors from time to time but shall not be more than twenty-four or
less than five. When the number of directors is increased by the Board
of Directors and newly created directorships are filled by the Board of
Directors, there shall be no classification of the additional directors
until the next annual meeting of stockholders. No decrease in the
number of directors shall shorten the term of any incumbent director.
<PAGE>
PROXY M.S.B. FUND, INC. PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - APRIL 20, 2000
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 22, 2000, at the
Annual Meeting of Stockholders to be held on April 20, 2000, 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>
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 2 AND "FOR" PROPOSALS 1 AND 3. 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>
<CAPTION>
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(AS MARKED
BELOW)
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. The approval of the proposed amendments to the [ ] [ ] [ ]
certificate of incorporation and by-laws.
2. Election of Directors:
Timothy A. Dempsey David F. Holland [ ] [ ] [ ]
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NAME ABOVE.)
FOR AGAINST ABSTAIN
3. The ratification of the selection of Arthur [ ] [ ] [ ]
Andersen LLP as independent
auditors.
4. 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>
