SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /x/
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/ / Definitive Proxy Statement Commission Only (as permitted by
/x/ Definitive Additional Materials Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.
(Name of Registrant as Specified in Its Charter)
KARPUS MANAGEMENT, INC. d/b/a/ KARPUS INVESTMENT MANAGEMENT
(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 Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: Not
applicable.
(2) Aggregate number of securities to which transaction applies: Not applicable.
(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): Not applicable.
(4) Proposed maximum aggregate value of transaction: Not applicable.
(5) Total fee paid: Not applicable.
/ / 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.
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(4) Date Filed: Not applicable.
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December 8, 1998
Dear Fellow Shareholders:
We need your support. Please help us to help you!
o Fire Bull & Bear Investment Advisers, Inc. as the Fund's investment
manager.
o Do not vote for Frederick A. Parker, Jr. as a member of the Board of
Directors by withholding authority.
o Retain the name of the Fund.
o Refuse to ratify the election of the Fund's auditors.
Why should you help?
The Fund's Investment Manager is responsible for NET ASSET VALUE
PERFORMANCE (NAV). The NAV performance of the Fund was a mere 6.84% for the 12
months ended October 31, 1998. The Fund's Management brags about market
performance, but Karpus Investment Management (KIM) believes that market
conditions and the shareholder activism of the past year has supported the
Fund's market price, not the Investment Manager.
<PAGE>
If we do not have a change in the Board of Directors, the Fund will
continue its erratic course. This is exemplified by:
1. Changing the Fund format from open-end to closed-end.
2. Proposing a change to a more risky non-diversified investment
company.
3. Announcing its intention, without your approval, to invest up
to 35% of its total portfolio in other securities, including
common stock and other equity securities.
We need a Board of Directors that will LISTEN to its owners, the SHAREHOLDERS.
We do not know Frederick A. Parker, Jr. Maybe he is a nice person. What we
do know is that we need a member of the Board that is not chosen by Management.
We want to retain the name of the Fund. The name "U.S. Government
Securities Fund", connotes a feeling of safety and conservative investments. We
oppose any name change in connection with a re-classification of the Fund.
We need to send the message to Management of the Fund that we mean
business. By refusing to ratify the Fund's selection of Tait, Weller & Baker as
the independent auditors we are sending this message. During the past year KIM
has addressed several questions to the Fund's auditors. We are entitled to
explanations. They have NEVER RESPONDED. Why?
<PAGE>
Karpus is not wasting the Fund's money. The Fund has alleged that Karpus
wants to steal the advisors' clients. This is totally wrong. Karpus manages
capital for institutional and high net worth investors is not interested in
stealing Bull & Bear's retail investors. All Karpus wants to do is communicate
with fellow shareholders. The Fund virtually said, "If you want your rights to
communicate with the Fund's shareholders, sue us". Karpus believes that these
expenses should have been charged to the Investment Manager and not to the Fund.
After all, the Investment Manager is the one that benefits by receiving
management fees. Did the Board of Directors authorize these expenses?
Karpus does not want the Fund's money. Karpus is simply seeking
reimbursement to itself and its advisory clients of some or all of its costs of
solicitation of proxies. This is a small fraction of the amounts of the Fund's
assets that the Fund's Management has expended on its entrenchment activities.
Also, KIM is seeking reimbursement from the Fund for amounts KIM believes the
Fund overcharged for postage and handling in 1997.
Karpus is not against the Fund's High Distribution Policy. Karpus is very
much in favor of high distributions. Karpus simply wants the Fund to pay out
what it EARNS, not to return the shareholder's money. By including return of
capital in yield calculations the Fund is deceiving the shareholder into making
them believe that they are receiving more than they are in reality. For the
first six months of 1998 the Fund returned $0.42 of the shareholders money to
them. This $0.42 is 70% of the first six months dividend of $0.60 and this was
money that already belonged to the shareholders. Out of the
<PAGE>
$1.09 that was paid to shareholders for the year ended June 30, 1998 only $0.25
was net investment income, $0.42 was return of capital and $0.42 was capital
gains. If the Fund did not have capital gains and did not return shareholders
their own money, shareholders would have received a mere pittance of $0.25 per
share.
This may be your last chance, as a shareholder, to force the Fund to work
for you. KIM is working for the shareholders.
Please remember to give Karpus the authority to vote "for" other matters
that may come before the Meeting.
PLEASE VOTE THE BLUE PROXY CARD. IF YOU ARE UNSURE OF WHO TO VOTE FOR, DON'T
JUST THROW YOUR CARD OUT AND DO NOTHING! CALL KARPUS AT 800-646-4005 AND WE WILL
GLADLY ANSWER ANY QUESTIONS YOU MAY HAVE.
WE NEED YOUR SUPPORT AS A FELLOW SHAREHOLDER. LET'S SEND THE MESSAGE THAT THE
FUND SHOULD BE RESPONSIBLE TO THE SHAREHOLDERS!
