<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under (Rule 13d-101) of the Securities Exchange Act of 1934
(Amendment No. 8)
BULL & BEAR U. S. GOVERNMENT SECURITIES FUND, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
12017N105
(CUSIP Number)
George W. Karpus, President
Karpus Management, Inc. d/b/a
Karpus Investment Management
14 Tobey Village Office Park
Pittsford, New York 14534
(716) 586-4680
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 8, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of the Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
(page 1 of 8 Pages)
(continued on following pages)
(1 Exhibit Attached)
<PAGE>
SCHEDULE 13D
CUSIP No. 12017N105 Page 2 of 8 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Karpus Management, Inc. d/b/a karpus Investment Management
I.D.# 16-1290558
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7. SOLE VOTING POWER
119,250 shares
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH 119,250 shares
10. SHARED DISPOSITIVE POWER
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,250 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.28%
14. TYPE OF REPORTING PERSON*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
2 of 7
<PAGE>
ITEM 1 Security and Issuer
Common Stock
Bull & Bear U.S. Government Securities Fund, Inc. ("BBG")
11 Hanover Square
New York, New York 10005
ITEM 2 Identity and Background
a) Karpus Management, Inc. d/b/a Karpus Investment Management
("KIM")
George W. Karpus, President, Director, & controlling stockholder
JoAnn VanDegriff, Vice President and Director
Sophie Karpus, Director
b) 14 Tobey Village Office Park
Pittsford, New York 14534
c) Principal business and occupation - Investment Management for
individuals, pension and profit sharing plans, corporations,
endowments, trusts and others, specializing in conservative
asset management (i.e., fixed income investments).
d) None of George W. Karpus, JoAnn VanDegriff or Sophie Karpus (
the "Principals") or KIM has been convicted in the past 5 years
of any criminal proceeding (excluding traffic violations).
e) During the last five years none of the principals or KIM has
been a party to a civil proceeding as a result of which any of
them is subject to a judgment, decree or final order enjoining
future violations of or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
f) Each of the Principals is a United States citizen. KIM is a New
York State corporation.
ITEM 3 Source and Amount of Funds or Other Considerations.
KIM, an independent investment advisor, has accumulated shares of
BBG on behalf of accounts that are managed by KIM (the "Accounts")
under limited powers of attorney. All funds that have been utilized
in making such purchases are from such Accounts.
ITEM 4 Purpose of Transaction
KIM purchased share of the Fund for investment purposes only. The
profile of the Fund , being a conservative, high credit quality fixed income
fund, met the investment criteria necessary for the Accounts to become
shareholders. In September of 1997, the Fund made public its intentions to
become a "balanced fund." (This was consequently withdrawn.) KIM strongly
voiced opposition to this radical change in investment objective. KIM has
continuously made public its disappointment with the Board of Directors of the
Fund, both for the proposed changes within the Fund and the uncontrolled
expenses which the Board authorizes through the Audit Committee, which is
comprised of the Board of Directors. KIM has been denied access to the list of
shareholders and the Fund's books. The Fund has achieved this temporary
victory by casting alleged violations of securities regulations by KIM. KIM
believes that these
<PAGE>
charges have no merit and are another tactic of entrenchment that the Fund is
utilizing. The Court of the State of Maryland has requested discovery before
judgment is rendered on obtaining the shareholder list and records or
inspection of the books of the Fund. The attorney for the Fund has stated that
this delay will not cause a hardship for KIM in regards for communication
among the shareholders as the Fund Annual Meeting was to be scheduled in
November of 1998. This has indeed caused a hardship for KIM not only because
the Fund called a special meeting well in advance of the Annual Meeting, but
also poses a financial hardship as well. As of this date KIM has spent
approximately $35,000.00 to enforce the rights of inspection for which KIM
believes it is legally entitled. It is quite possible that the Fund may have
spent this or more in the name of protecting the shareholders. If the
shareholders wish to retain the current Board of Directors, the Adviser, and
Manager of the Fund, they will do this through the democratic process of
voting. If the shareholders wish a different Director or Manager of the Fund
then they should be allowed the opportunity to voice that opinion and campaign
for the change within the Fund. It is the belief of KIM that the Adviser of
the Fund should reimburse the Fund for all such frivolous expenditures spent
in entrenchment techniques.
On July 2, 1998 the Fund once again filed with the SEC a preliminary
prospectus which was essentially the same investment criteria change that was
proposed in September of 1997. The Fund is fully aware that the Accounts
managed by KIM are not permitted by their investment guidelines to invest in a
"balanced type fund," nor may own securities of companies which are currently
in bankruptcy. The Management of the Fund has been duly apprised and was in
complete knowledge that this radical change in investment philosophy within
the Fund would force the Account's managed by KIM to sell shares in the open
market, since they would become non-permissible investment vehicles. It is the
opinion of KIM that the Fund is once again ignoring the wishes of
shareholders. If the shareholders of the Fund wanted to own a "balanced fund,"
they would originally purchased one. BBG was purchased, in the opinion of KIM,
by its' shareholders, because it was a conservative, high credit quality fund
comprised of strictly fixed income investments. It is the opinion of KIM that
management is acting without a conscience as to its' responsibilities to
shareholders by recommending such radical changes to the Fund.
KIM has consistently advised management that the Fund has provided
poor investment returns for the shareholders. This is not just the opinion of
KIM. This FACT HAS BEEN DOCUMENTED by sources such as the Wall Street Journal,
Barron's and Lipper Analytical Services Inc. 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. (Also reported in Barron's.) The NAV return
from June 30, 1997 through June 30, 1998 was reported to be 5.40%, which is
the last place performance of 118 closed-end bond funds. (Documented in the
Wall Street Journal Quarterly Closed-End Funds Review. 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.)
<PAGE>
The poor performance of the Fund, coupled with uncontrolled expenses,
and the apparent desire of the Fund to achieve its own agenda has forced KIM
to take steps which may possibly lead to the termination of the Manager of the
Fund. On July 8, 1998 KIM delivered to the Fund by overnight express mail a
proposal to terminate the investment advisory contract between Bull & Bear
Advisers, Inc. and the Fund and to hire KIM as the replacement Manager of the
Fund, at a 5% fee discount from the present management contract with Bull &
Bear Advisers, Inc. KIM will continue to take the necessary steps to represent
what it believes to be in the best interest of the shareholders of the Fund.
ITEM 5 Interest in Securities of the Issuer
a) As of the date of this Report, KIM owns 119,250 Shares which
represents 16.28% of the outstanding Shares. None of the
Principals owns any other Shares.
b) KIM has the sole power to dispose of and to vote all of such
Shares under limited powers of attorney.
c) Open market purchases and sales in the last 60 days for the
Accounts
Price Per
Date Shares Share
4/1/98 1,300 13.3125
5/13/98 700 12.75
5/14/98 1,100 12.75
5/14/98 1,000 12.6875
5/18/98 400 12.6875
5/26/98 200 12.6875
The open market purchase of 4/1/98 was entered on December 16, 1
1997 and executed at a price of $13.3125.
1.)There have been no dispositions and no acquisitions, other than
by such open market purchases, during such period.
2.)The Accounts have the right to receive all dividends from, and
any proceeds from the sale of the Shares. None of the Accounts has
an interest in Shares constituting more than 5% of the Shares
outstanding.
ITEM 6 Contracts, Arrangements, Understandings, or Relationships with
Respect to Securities of the Issuer.
Except as described above, there are no contracts, arrangements
understandings or relationships of any kind among the Principals and
KIM and between any of them and any other person with respect to any
of BBG securities.
ITEM 7 Materials to be Filed as Exhibits
Yes, 1 exhibit attached
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Karpus Management, Inc.
July 9, 1998 By: /s/ George W. Karpus
- ------------ ---------------------------
Date Signature
George W. Karpus, President
---------------------------
Name / Title
<PAGE>
EXHIBIT
July 8, 1998
Mr. Thomas B. Winmill, Co-President
Bull & Bear U. S. Government Securities Fund, Inc.
11 Hanover Square
New York, New York 10005
Re: Bull & Bear U.S. Government Bond Fund, Inc.
Shareholder Proposal
Dear Mr. Winmill:
Karpus Management, Inc. d/b/a Karpus Investment Management (KIM), is the
beneficial owner of 74,850 shares of the Bull & Bear U.S. Government
Securities Fund, Inc. (the Fund) for at least one year or more. We have been
the beneficial owner of the shares valued of more than $2,000 for more than
one year and expect to continue ownership through the date of the Fund's next
shareholder meeting. KIM's first purchase of shares began on December 3, 1996.
All such purchases have been made in the open market.
Pursuant to Rule 14a-8 (b) (2) (ii) of the Securities Exchange Act of 1934, we
(KIM) are hereby submitting the following proposal and supporting statement
for inclusion in proxy material at the next meeting of shareholders. Attached
is our schedule 13D as electronically filed with the Securities and Exchange
Commission.
PROPOSAL
<PAGE>
Karpus Investment Management proposes: The investment advisory contract
between Bull & Bear Advisors, Inc. and Bull & Bear U.S. Government Securities
Fund, Inc. be terminated at the next meeting of shareholders due to sub-par
performance and uncontrolled expenses and Karpus Management Inc., d/b/a Karpus
Investment Management, Inc. be hired as the replacement investment advisor to
the Fund. KIM will reduce investment management fees by 5% from the Fund's
current schedule.
SUPPORTING STATEMENT
October 1996, management of BBG suggested the Fund format be changed from open
end to closed end which was approved by shareholder vote. KIM believes this
was detrimental to shareholder value.
September 1997, management recommended changing the fund from a conservative
bond fund to a balanced fund. KIM protested this change based on the belief
that the discount to NAV could possibly widen further. Management withdrew
this proposal. July , 1998 management has called a special meeting to revisit
this proposal. KIM has voiced strong opposition to the Fund once again.
KIM believes the Fund has generated inadequate investment returns for
shareholders. From October 4, 1996 through June 30, 1998 the annualized return
of the Fund equaled 0.0462% ( including dividends being re-invested). The
simple price appreciation is an annual equivalent of - 11.0169 %. During the
same time period the Merrill Lynch 1-10 year U.S. Treasury Index generated a
7.33% annualized return.
BBG adopted a 8% dividend policy, with 2% paid out quarterly to shareholders.
They have stated this will be paid out from interest, capital gains, and if
this is not adequate to comprise 2% per quarter, the balance will be return of
capital. KIM believes this policy will further deplete future shareholder net
asset value.
The Fund's management is not holding expenses at reasonable levels. Expenses
for the six month period ending December 31, 1997 were $245,504, compared to
$239,566 for the FULL fiscal year ending June 30, 1997. More than 50% of the
interest income for the six month period ending December 31, 1997 was
dedicated to expenses. It is KIM's opinion, a shareholder owning 1,000 Fund
shares, has paid $ 331.91 worth of expenses for this period. (Based on 739,664
shares outstanding) High expenses are depriving investors of additional
investment return.
KIM, located in Pittsford, New York ( suburb of Rochester), is well regarded
for it's expertise in the fixed income market. With over $300,000,000 under
management as of April 1, 1998, KIM is ranked among the "World's Best Money
Mangers" by Nelson's in 8 fixed income categories for the period ending
December 31,1997. KIM is also ranked by Mobius in the top quartile of all
fixed income managers for the quarter, year, 3 year, 5 year, and 10 year
period ending December 31, 1997. KIM is dedicated to controlling
<PAGE>
costs, improving investment returns, and being responsive to the shareholders.
KIM has managed only separate accounts, not mutual funds, however, presently
manages five accounts larger than the Fund.
KIM proposes, if elected as the Investment Manager for the Fund, to reduce
management fees by 5% from the fees presently charged by Bull & Bear Advisors,
Inc. This step should slightly increase returns for shareholders.
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 of the Fund, that should
increase shareholder value.
END OF PROPOSAL
This notice serves as our official proposal which should be included in any
filings that Bull & Bear U.S. Government Securities Fund, Inc. submits to the
Securities and Exchange Commission, along with being included in any proxy
materials.
Sincerely,
George W. Karpus
President
