<PAGE>
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:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
/ / Definitive Proxy Statement Commission Only (as permitted by
/ / 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.
(1) Amount Previously Paid: Not applicable.
(2) Form, Schedule or Registration Statement No.: Not applicable.
(3) Filing Party: Not applicable.
(4) Date Filed: Not applicable.
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BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.
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PROXY STATEMENT FOR SPECIAL MEETING
OF KARPUS MANAGEMENT, INC. d/b/a
KARPUS INVESTMENT MANAGEMENT
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This Proxy Statement is furnished in connection with a solicitation of
proxies by Karpus Management, Inc. doing business as Karpus Investment
Management ("KIM"), to be used at a Special Meeting of Shareholders of Bull &
Bear U.S. Government Securities Fund, Inc. After reviewing the proxy statement,
PLEASE TAKE THIS OPPORTUNITY TO SIGN AND RETURN THE PROXY CARD TO GEORGESON &
COMPANY, WALL STREET PLAZA, NEW YORK, NEW YORK 10005. YOUR VOTE IS CRITICAL. KIM
RECOMMENDS THAT YOU VOTE AGAINST THE PROPOSALS RECOMMENDED BY THE BOARD OF
DIRECTORS (PROPOSALS 1-3) AND VOTE FOR THE KIM PROPOSALS (PROPOSALS 4 and 5).
A special Meeting of Stockholders of Bull & Bear U.S. Government
Securities Fund, Inc. (the "Fund") will be held at the offices of Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, 34th Floor, New York, New York, on August
31, 1998 at 8:00 a.m. (the "Meeting"). KIM is soliciting proxies for the
following purposes:
TO DEFEAT MANAGEMENT'S PROPOSAL 1.
KIM WANTS TO RETAIN THE FUND'S CURRENT INVESTMENT OBJECTIVE AND
INVESTMENT POLICIES.
A) To Keep The Investment Objective of the Fund As Fundamental
Policy of the Fund.
B) To Prohibit The Fund From Purchasing or Selling Commodities or
Commodity Futures Contracts. (investment restriction No 5 ).
C) To Prohibit the Fund From Investing in Companies, Limited
Partnerships Or Other Entities that Deal in Real Estate and
REITs and to prohibit the Fund From Freedom of Action to Hold
and Sell Real Estate Acquired as a Result of the Fund's
Ownership of Securities ( investment restriction No 6).
D) To Prohibit the Fund From Investing in Equity Securities Which
Would Include Common Stocks, Preferred Stocks and Securities
that are Convertible Into Common Stocks of Domestic and
Foreign Issuers ("convertible securities"), Depository
Receipts, or Warrants to Purchase
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Equity Securities.
E) To Prohibit the Fund from Investing in Below Investment Grade
Securities.
F) To Prohibit the Fund From Investing in Investment Company
Securities.
TO DEFEAT MANAGEMENT'S PROPOSAL 2.
- ----------------------------------
KIM WANTS TO RETAIN THE CURRENT NAME OF THE FUND.
TO DEFEAT MANAGEMENT'S PROPOSAL 3.
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KIM WANTS THE FUND TO REMAIN A DIVERSIFIED INVESTMENT COMPANY .
TO APPROVE KIM'S PROPOSAL 4.
- -----------------------------
KIM WANTS THE SHAREHOLDERS TO TERMINATE THE MANAGEMENT CONTRACT AND
ADVISORY CONTRACT OF BULL & BEAR ADVISER'S, INC. WITH THE FUND.
TO APPROVE KIM'S PROPOSAL 5.
----------------------------
UPON APPROVING KIM'S PROPOSAL 4, KIM WANTS THE SHAREHOLDERS TO
RECOMMEND TO THE BOARD OF DIRECTORS THAT KIM BE NAMED AS THE NEW INVESTMENT
MANAGER AND ADVISOR OF THE FUND AT A FEE REDUCTION OF 5% FROM THE CURRENT
ADVISORS FEE SCHEDULE.
This Proxy Statement is furnished in connection with a solicitation of
proxies by KIM to be used at the Meeting. Stockholders of record at the close of
business on July 6, 1998 ("Record Date") are entitled to be present and to vote
on matters at the Meeting. Stockholders are entitled to one vote for each Fund
share held and fractional votes for each fractional Fund share held.
Stockholders of the Fund will vote as a single class and will vote separately on
each proposal. Shares represented by executed and unrevoked proxies will be
voted in accordance with the specifications made thereon. If no instructions are
given, such shares will be voted AGAINST Proposals 1, 2, and 3 and FOR Proposals
4 and 5, and on any other matter that may properly come before the Meeting. If
the enclosed form or proxy is executed and returned, it nevertheless may be
revoked by another proxy, or by letter, or telegram directed to the Fund, which
must indicate the stockholder's name. To be effective, such revocation must be
received prior to the Meeting. In addition, any stockholder who attends the
Meeting in person may vote
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by ballot at the Meeting, thereby canceling any proxy previously given. As of
the Record Date, the Fund had 747,235.748 shares of common stock issued and
outstanding.
It is estimated that this proxy statement and proxy voting card will be
mailed to stockholders of record on or about____________________, 1998. The
Fund's principal executive offices are located at 11 Hanover Square, New York,
New York 10005. Copies of the Fund's most recent Annual and Semi-Annual Reports
are available without charge upon written request to the Fund at 11 Hanover
Square, New York, New York 10005 or by calling toll-free 1-888-847-4200. Bull &
Bear Advisers, Inc. (the "Investment Manger"), located at 11 Hanover Square, New
York, New York 10005 is the Fund's investment manager.
MANAGEMENT'S PROPOSAL I.
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KIM WANTS TO RETAIN THE FUND'S CURRENT INVESTMENT OBJECTIVE AND
INVESTMENT POLICIES
A) To Keep The Investment Objective of the Fund As Fundamental
Policy of the Fund.
B) To Prohibit The Fund From Purchasing or Selling Commodities or
Commodity Futures Contracts. (investment restriction No 5 ).
C) To Prohibit the Fund From Investing in Companies, Limited
Partnerships Or Other Entities that Deal in Real Estate and
REITs and to prohibit the Fund From Freedom of Action to Hold
and Sell Real Estate Acquired as a Result of the Fund's
Ownership of Securities (investment restriction No 6).
D) To Prohibit the Fund From Investing in Equity Securities Which
Would Include Common Stocks, Preferred Stocks and Securities
that are Convertible Into Common Stocks of Domestic and
Foreign Issuers ("convertible securities"), Depository
Receipts, or Warrants to Purchase Equity Securities.
E) To Prohibit the Fund from Investing in Below Investment Grade
Securities.
F) To Prohibit the Fund From Investing in Investment Company
Securities.
CHANGES TO INVESTMENT OBJECTIVE AND CERTAIN INVESTMENT POLICIES.
The current Management of the Fund, in the opinion of KIM, should not
be given broader investment powers. This is the same Management that recommended
converting the Fund to closed-end format which resulted in the shares selling at
a discount to the net asset value. Once the Fund's fundamental policy is
changed, the
<PAGE>
Fund's Management can purchase a broad range of unrelated securities without any
further approval of the shareholders. THE FUND'S MANAGEMENT SHOULD NOT HAVE THIS
POWER. It is the opinion of KIM that the Fund's Management has consistently made
poor recommendations in the past.
ADDITIONAL PORTFOLIO SECURITIES
Currently the Fund's portfolio is invested in U.S. Treasury Notes and
Bonds and U.S. Government Agency Bonds. This conservative portfolio maintains
the highest possible credit quality. Pursuant to the proposed changes to the
investment objective and management policies, only 50% of the value of the total
assets would be invested in U.S. Government Securities, obligations of other
U.S. Government agencies or instrumentality's, including inflation-indexed
instruments, and money market instruments. This would permit the Fund to invest
in equity securities, such as common or preferred stock, convertible securities,
non-municipal debt securities, mortgage-related securities, asset backed
securities, warrants, loan participation interests, securities of other
investment companies, and securities issued by companies that invest in natural
resources or commodities. Issuers of these securities may include U.S. and
foreign entities, including small capitalization companies and private
companies, and such securities may be denominated in U.S. dollars or foreign
currencies.
If Management's Proposal is approved, the Fund would be permitted to
invest, except where noted, up to 50% of the value of its total assets in the
following Additional Portfolio Securities: equity securities, fixed income
securities, money market instruments, and investment company securities.
This would also allow for investment in securities that are rated lower
than investment grade or non-rated securities. There would be a greater risk of
timely repayment of principal and interest or dividends on these securities.
Securities ratted BB or lower by S&P or Ba by Moody's are often referred to in
the financial press as "junk bonds" and may include issuers that are in default.
It is proposed by management of the Fund that no more than 5% of the total
assets of the Fund may be invested in this manner. The Fund may also invest in
securities that are currently in bankruptcy if the Manager believes that the
issuer will emerge from bankruptcy. THE NEW OBJECTIVE AND POLICIES WOULD BE
NON-FUNDAMENTAL. This would empower the Board of Directors with the authority to
change investment policies at any time.
Management of the Fund, in the opinion of KIM, has previously made
decisions that were not in the best interests of the Fund, for example, the
change in format of the Fund from open-end to closed-end. This decision caused
shareholders invested in the Fund at that time to lose 10% of the market value
of the shares. It is also the opinion of KIM that the 8% distribution policy
adopted by the Fund could possibly erode the net asset value of the Fund in the
future. The 8% distribution policy of the Fund is to pay
<PAGE>
out dividends to the shareholders of 2% of the net asset value of the fund on a
quarterly basis. This dividend is to be comprised of any interest earned,
dividends received, and if this is not sufficient to equal 2%, then the balance
is to be return of principal.
In order to implement its proposal to change the Fund's investment
objective and certain investment policies (Proposal 1A), the Fund's Management
has also proposed to make corresponding changes in investment restrictions
relating to commodities (Proposal 1B) and real estate (Proposal 1C).
KIM RECOMMENDS THAT YOU VOTE AGAINST MANAGEMENT'S PROPOSALS 1A, 1B, AND
1C.
MANAGEMENT'S PROPOSAL 2.
- ------------------------
KIM WANTS TO RETAIN THE CURRENT NAME OF THE FUND.
KIM proposes to continue the current name of the Fund. The name "Bull &
Bear U.S. Government Securities Fund, Inc." ensures investors that 65% of the
assets of the Fund must be invested in U.S. Government Securities. This current
name provides investors with the high quality securities in which they have
originally chosen to invest.
KIM RECOMMENDS THAT YOU VOTE AGAINST MANAGEMENT'S PROPOSAL 2.
MANAGEMENT'S PROPOSAL 3.
- ------------------------
KIM WANTS THE FUND TO REMAIN A DIVERSIFIED INVESTMENT COMPANY.
The Fund currently is classified as a "diversified" investment company,
which by definition of the Investment Company Act of 1940 (the "1940 Act")
generally limits its investment with respect to 75% of its total assets, to not
more than 5% of such assets in the securities of a single issuer and to not more
than 10% of the outstanding voting securities of such issuer.
The possible change to a "non-diversified" investment company would
permit the Fund to allow a relatively high percentage of the Fund's assets to be
invested in the securities of a limited number of issuers and in more than 10%
of the outstanding voting securities of issuers, including small capitalization
companies and private companies.
This change would make the portfolio less liquid, and, in the opinion
of KIM, would substantially increase the volatility and risk level within the
Fund.
KIM RECOMMENDS THAT YOU VOTE AGAINST MANAGEMENT'S PROPOSAL 3.
<PAGE>
KIM'S PROPOSAL 4.
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KIM WANTS THE SHAREHOLDERS TO TERMINATE THE MANAGEMENT CONTRACT AND
ADVISORY CONTRACT OF BULL & BEAR ADVISERS, INC. WITH THE FUND.
KIM is proposing the termination of the management contract and the
advisory contract of Bull & Bear Advisers, Inc. with the Fund due to inferior
investment performance and uncontrolled expenses. KIM believes that the Fund has
generated inadequate investment returns for shareholders. On October 4, 1996,
Fund management recommended the conversion of the Fund from an open-end format
to closed-end format. This was subsequently approved by the shareholders. From
October 4, 1996 through and including June 30, 1998 shares of the Fund have
experienced a -11.7647% price decline. The market price on October 4, 1996 was
$14.75 per share, whereas the June 30, 1998 market price was $13.125 per share.
(Based on closing prices.) The total return of the Fund including dividends
being reinvested in shares equaled an annual equivalent of 0.0462% (10/4/96
through 6/30/98). During this same time period the Merrill Lynch 1-10 Year U.S.
Government Index generated an annualized return of 7.33%.
The net asset value of the Fund has also seriously underperformed
appropriate market indices. As computed on Bloomberg Analytics, the simple price
appreciation or depreciation of the NAV of the Fund, which does not include
dividends being reinvested, from February 7, 1997 (this is the first reported
NAV to Bloomberg) to June 30, 1998 equaled a -1.8573% annual equivalent. With
dividends being reinvested in the security the Fund returned 5.3707% for the
same time period.
As reported in The Wall Street Journal on June 30, 1998 according to
Lipper Analytical Services, Inc., Bull & Bear U.S. Government Securities Fund.
Inc. ranked in the BOTTOM 10 PERFORMERS IN THE CLOSED-END BOND CATEGORY.
Bull & Bear U.S. Government Securities Fund, Inc.'s net asset value
return from June 30, 1997 to June 30, 1998 was reported to be 5.40% which was
the last place performance out of 118 closed-end bond funds in the Wall Street
Journal Quarterly Closed-End Funds Review, published on July 6, 1998. (This
included categories of U.S. Gov't Bond Funds, U.S. Mortgage Bond Funds,
Investment Grade Bond Funds, Loan Participation Funds, High Yield Bond Funds,
and Other Domestic Taxable Bond Funds.)
KIM believes that the Fund's management is not holding expenses at
reasonable levels. Expenses for the six month period ended December 31, 1997
were $245,504, compared to $239,566 for the FULL fiscal year ended June 30,
1997. More than 50% of the income generated by the Fund for the six month period
ended December 31, 1997 was dedicated to expenses. Based on the 747,235.748
outstanding shares as of July 6, 1998, the six month expenses ended December 31,
1997 ($245,504) attributed to a shareholder
<PAGE>
owning 1,000 shares of the Fund would have been $328.55, or approximately $0.33
per share. The Fund's August 23, 1996 proxy statement cited under Reasons for
Conversion: "The Directors believe that the Conversion will provide the Fund
with greater flexibility to seek its investment objective with lower operating
expenses." This did not happen, in fact expenses escalated. High expenses are
depriving investors of additional investment return.
KIM RECOMMENDS THAT YOU VOTE FOR KIM'S PROPOSAL 4 .
KIM'S PROPOSAL 5.
- -----------------
UPON APPROVING KIM'S PROPOSAL 4, KIM WANTS THE SHAREHOLDERS TO
RECOMMEND TO THE BOARD OF DIRECTORS THAT KIM BE NAMED AS THE NEW
INVESTMENT MANAGER AND ADVISOR OF THE FUND AT A FEE REDUCTION OF
5% FROM THE CURRENT ADVISOR'S FEE SCHEDULE.
WHY SHAREHOLDERS SHOULD WANT KARPUS TO MANAGE THE FUND.
Karpus Management, Inc. d/b/a Karpus Investment Management, Inc.
("KIM") is located at 14 A Tobey Village Office Park in Pittsford, New York
14534 (a suburb of Rochester). Formed in May of 1986 by George W. Karpus,
President, KIM specializes in conservative fixed income investment management.
As of May 31, 1998 Karpus currently has approximately $340,000,000 under
management comprised of 176 client relationships, with an average account size
of $1,700,000. KIM currently employs 16 staff members, nine of which are
professionals.
KIM is well regarded for it's expertise in the fixed income market. KIM
is ranked among the "Worlds Best Money Managers", published by Nelson's
Information, Inc., in eight fixed income categories for the period ended
December 31, 1997. KIM is also ranked by Mobius Group in the top quartile of all
fixed income managers for the quarter, year, 3 year, 5 year, and ten year period
ended December 31, 1997.
KIM proposes if selected as the replacing investment manager for the
Fund, that there will be a reduction in management fees by 5 % from the current
level presently charged by Bull & Bear Advisers, Inc. This reduction in fees may
slightly increase returns for shareholders.
KIM presently represents beneficial ownership, on behalf of its
clients, of 119,250 shares of the Fund or approximately 16.12% of the
outstanding shares. As the largest shareholder of the Fund. KIM will dedicate
its efforts to reducing expenses, improving investment returns, lowering
management fees, and being responsive to shareholders of the Fund. KIM will
initiate activities to attempt to close the discount to net asset value
<PAGE>
of the Fund, which may increase shareholder value. These activities may include
instituting share repurchase programs, tender offers, and open ending the Fund.
KIM has no previous experience in managing a mutual fund, however KIM currently
manages five accounts that are larger than the Fund.
The officers of KIM include George W. Karpus, President and CEO and
JoAnn Van Degriff, Senior Vice President . KIM is a privately owned investment
advisor, with no affiliations with any bank or brokerage firm. The largest
shareholder of KIM is George W. Karpus. None of the officers or employees of KIM
presently own shares in the Fund, nor have they owned shares in the past.
IF THE SHAREHOLDERS APPROVE THE NEW INVESTMENT GUIDELINES PROPOSED BY
MANAGEMENT OF THE FUND, KIM WILL BE FORCED TO SELL THE MAJORITY OF ITS CLIENTS'
SHARES. The accounts managed by KIM have investment restrictions which would
preclude owning any type of balanced (equity and fixed income) investment
vehicle. The majority of accounts managed by KIM that hold shares of the Fund
are prohibited in their investment guidelines from owning funds that contain the
investments proposed by the Board of Directors. If this change is approved by
the shareholders it would cause KIM to sell the majority of its clients' shares
of the Fund, which could result in a reduced market price and further widening
of the discount to NAV at which the Fund currently trades. This could cause
investors to see the market value of their shares to decline substantially.
Management of the Fund is fully aware of this fact, which was disclosed to the
Fund in September of 1997 when the Fund previously proposed to become a
"Balanced Fund." If the conversion of the Fund to a balanced format is not
approved by the shareholders, the Accounts would not be forced by investment
restrictions to sell Fund shares in the open market.
It is the opinion of KIM that the market discount to net asset value
may have been wider if it was not for the market participation of KIM. The total
volume traded for the Fund from December 3, 1996 through June 30, 1998 equaled
754,500 shares. The current holding of the Accounts at 119,250 shares that were
purchased from December 3, 1996 through June 30, 1998, represented 15.80% of
this total volume. KIM believes that the activity generated by KIM helped
support the price of the Fund and allowed liquidity for shareholders who wanted
to sell their shares.
KIM RECOMMENDS THAT YOU VOTE FOR KIM'S PROPOSAL 5.
OTHER MATTERS
KIM and the following advisory clients for whom it acts as investment
adviser will bear the cost of soliciting proxies: Acra-Local 725 Pension Trust
of Dade,
<PAGE>
Amalgamated Transit Union Local #1342, Cardinal American Corporation,
Jeffrey I Cooper, Elderwood Affiliates, Inc. Retirement Plan, Seymour Fisher
Marital Tr., Fish Furniture Profit Sharing Tr., The William and Estelle Golub
Foundation, Inc., Hammer Lithograph Corp. Deferred Profit Sharing, Peter Russo,
Trustee U/W William Henderson FBO F. Elizabeth, City of Hialeah Police Pension
Fd., InterMetro Ind. Corp. Salaried Employees Pension Trust, James E. Morris IRA
Rollover, Monro Muffler Brake, Inc. Retirement Plan, Painters Local 150 Annuity
Fund, Plumbers & Pipefitters Local 138 Pension Fund, Roman Catholic Diocese of
Syracuse, Inc., Sheet Metal Workers Local 46 Annuity Fund., Sheet Metal Workers
Local 46 Pension Fund, YWCA of Rochester and Monroe County- Board Designated Fd.
and YWCA of Rochester & Monroe County- Endowment Fund. In addition to the use of
the mails, proxies may be solicited personally, by telephone or by other means
and such clients may pay persons holding Fund shares in their names or those of
their nominees for their expenses in sending soliciting materials to their
principals. Solicitations will be made by regular employees of KIM. In addition,
the Fund will retain Georgeson & Company Inc., Wall Street Plaza, New York, New
York 10005 to solicit proxies on behalf of the Board for a fee estimated at
$20,000 plus expenses. Additional costs and expenditures, including fees for
attorneys, printing, and mailing are anticipated to be approximately $50,000.
KIM intends to seek reimbursement from the Fund to itself and its advisory
clients for some or all of their costs of solicitation from the Fund.
KIM has been advised by The Fund, which advise is applicable to
proxies, as follows:
If a proxy is properly executed and returned accompanied by
instructions to withhold authority to vote, represents a broker
"non-vote" ( that is, a proxy from a broker or nominee indicating that
such person has not received instructions from the beneficial owner or
other person entitled to vote shares of the Fund on a particular matter
with respect to which the broker or nominee does not have discretionary
power) or is marked with an abstention ( collectively "abstentions")
the Fund's shares represented thereby will be considered to be present
at the Meeting for purposes of determining the existence of a quorum
for the transaction of business. Under Maryland law, abstentions do not
constitute a vote "for" or "against" a matter and will be disregarded
in determining "votes cast" on an issue.
In the event that a quorum is not present at the Meeting, or
if a quorum is present but sufficient votes to approve any of the
proposals are not received, the persons names as proxies may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. In determining whether to adjourn the meeting the following
factors may be considered: the nature of the proposals that are the
subject of the Meeting, the percentage of votes actually cast, the
percentage of negative votes cast, the nature of any further
solicitation, and the information to be provided to stockholders with
respect to the reasons for the solicitation. Any adjournment will
require the affirmative vote of a majority of those shares affected by
the adjournment that are represented at the meeting in
<PAGE>
person or by proxy. A stockholder vote may be taken for one or more of
the proposals in this Proxy Statement prior to any adjournment if
sufficient votes have been received for approval. If a quorum is
present, the persons named as management proxies will vote those
proxies which they are entitled to vote "for" a Proposal in favor of
adjournment, and will vote those proxies required to be voted "against"
a Proposal against any adjournment. A quorum is constituted with
respect to the Fund by the presence in person or by proxy of the
holders of a majority of the outstanding shares of the Fund entitled to
vote at the Meeting.
The Fund's Management has alleged that KIM has engaged in improper
actions. They have alleged that KIM has damaged the Fund's trading market and
violated Section 16 (b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder. KIM has repeatedly and vigorously denied these allegations, which
are now pending before the United States District Court, Southern District, New
York. KIM believes that the Fund's Management is using this action to deny KIM
access to the shareholder list and records of the Fund and to force KIM to incur
additional expenses. KIM has fully funded the legal fees needed to promote a
proxy contest, obtain a list of holders of the Fund, along with defending itself
against pending legal action by the Fund. The Board of Directors of the Fund has
continuously approved the Fund's outrageous legal expenses, express mail costs,
and other related expenses through their Audit Committee.
KIM RECOMMENDS THAT YOU VOTE AGAINST ALL PROPOSALS BY THE BOARD OF
DIRECTORS AND THAT YOU VOTE FOR ALL OF KIM's PROPOSALS.
PLEASE VOTE. IF YOU HAVE ANY QUESTIONS, WE URGE YOU TO CONTACT KIM TO DISCUSS
ANY ISSUES WHICH MAY BE OF CONCERN. PLEASE CALL 800-646-4005 ANYTIME BETWEEN
8:30 A.M. AND 5:00 P.M. OR CALL DAVID DRAKE AT GEORGESON & CO. 800-223-2064.
YOUR VOTE IS IMPORTANT, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
KARPUS MANAGEMENT, INC. d/b/a
KARPUS INVESTMENT MANAGEMENT .
14 A Tobey Village Office Park
Pittsford, New York 14534
THIS PROXY IS SOLICITED ON BEHALF OF KARPUS INVESTMENT MANAGEMENT
The undersigned hereby appoints George W. Karpus and Joel Negrin as Proxies,
each with the power to appoint his substitute, and hereby authorizes each of
them to represent and to vote, as designated below, all the shares of common
stock of Bull & Bear U.S. Government Securities Fund, Inc. outstanding in the
name of the undersigned on July 6, 1998, at the special meeting of shareholders
to be held on August 31, 1998 or any adjournment(s) thereof. IF NO DIRECTIONS
ARE GIVEN, THE PROXIES WILL VOTE "AGAINST" PROPOSALS 1, 2, AND 3 AND "FOR"
PROPOSALS 4 AND 5 AND IN THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTIONS CARD PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
KIM RECOMMENDS A VOTE "AGAINST" PROPOSALS 1 A, 1 B, 1 C, 2 AND 3.
1. To Change the Fund's Current Investment Objective and Investment Policies
A. To change the Fund's Investment Objective and Fundamental Policies
concerning investments in U.S. Government Securities.
[_] FOR [_] AGAINST [_] ABSTAIN
B. To Revise Investment Restriction 5 (Commodities).
[_] FOR [_] AGAINST [_] ABSTAIN
C. To Revise Investment Restriction 6 (Real Estate).
[_] FOR [_] AGAINST [_] ABSTAIN
2. To Change the Current Name of the Fund
<PAGE>
[_] FOR [_] AGAINST [_] ABSTAIN
3. To Change the Fund to a Non-Diversified Investment Company.
[_] FOR [_] AGAINST [_] ABSTAIN
KIM RECOMMENDS A VOTE "FOR" PROPOSALS 4 AND 5.
4. To Terminate the Management Contract and Advisory Contract of Bull & Bear
Advisers, Inc. with the Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
5. To Recommend to the Board of Directors that KIM be Named as the New
Investment Manager and Advisor of the Fund at a Fee Reduction of 5% from the
Current Advisor's Fee.
[_] FOR [_] AGAINST [_] ABSTAIN
Remember - The last proxy you sign and date will be the proxy that counts for
your vote. Make sure that you are voting the proposals the way you wish.
---------------------------
Signature
---------------------------
Signature, if held jointly
Dated:_________________, 1998
Please sign exactly as 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 person.
