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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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USLIFE INCOME FUND, INC.
(Name of Registrant as Specified in Its Charter)
n/a
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(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)(l) 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:
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[FUND LETTERHEAD]
PROTECT YOUR INVESTMENT -- VOTE THE BLUE PROXY CARD TODAY
November 18, 1999
Dear USLIFE Income Fund Shareholder:
Your vote at this year's Annual Meeting of Shareholders is extremely
important. In fact, it could be critical to the future value of your USLIFE
Income Fund shares and the preservation of your Fund's dividend policy. With
your support -- and with your vote on the enclosed BLUE proxy card -- you can
help assure the continuation of your Fund's long-standing investment objective
of providing a high level of current income for all shareholders.
CAUTION: THE HOREJSI GROUP'S INTERESTS ARE VERY
DIFFERENT FROM YOUR INTERESTS
Unfortunately, your Fund has attracted the attention of the Ernest Horejsi
Trust No. 1B and one of its beneficiaries, Stewart R. Horejsi. The Horejsi
group, which owns only 7% of your Fund's shares, has embroiled your Fund in a
proxy contest. These dissidents may be sending you their own proxy statement and
their own white proxy card in an effort to get your vote to place their nominees
on your Fund's Board of Directors. They also want to change your Fund's
investment policy so that it invests in riskier equity securities in addition to
the fixed income securities that the Fund invests in today. IN YOUR OWN BEST
INTERESTS, WE URGE YOU NOT TO SIGN OR RETURN ANY WHITE PROXY CARD THAT MAY BE
SENT TO YOU BY THE HOREJSI GROUP.
This is not the first time the Horejsi group has done this. Recently, they
engaged in a hostile proxy contest with another fixed income fund, the Preferred
Income Management Fund (which has since been renamed the Boulder Total Return
Fund). This is what is happening after the Horesji group took complete control
of that fund:
- They installed a Horejsi affiliate, Boulder Investment Advisers, as that
fund's primary adviser.
- They installed another Horejsi affiliate, Stewart Investment Advisers, as
sub-adviser to manage that fund's newly-created common stock portfolio.
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- Neither Boulder Investment Advisers nor Stewart Investment Advisers has
any prior experience as an investment adviser to a mutual fund or has
managed assets for investors, except for assets of the Horejsi family
itself.
- The advisory fees paid by that fund are increasing from the 61 basis
points paid in 1998 to 100 basis points upon full implementation of that
fund's new investment strategy -- AN INCREASE IN ADVISORY FEES OF 64%.
- The market price of that fund's common shares fell from $15.69 on January
23, 1998, the last trading day before the Horejsi group publicly stated
it was considering seeking seats on that fund's Board, to $10.88 on
November 12, 1999 -- A DECREASE IN MARKET PRICE OF 31%.
- During the same period of time, that fund's discount to net asset value
increased from 2.9% to 21.4%.
THE HOREJSI GROUP NOW SAYS THEY MAY WANT TO TAKE COMPLETE CONTROL OF YOUR FUND.
WE DO NOT BELIEVE THAT THE FUND AND ITS SHAREHOLDERS CAN AFFORD TO LET THAT
HAPPEN. YOU CAN REJECT THE HOREJSI GROUP AND ITS NOMINEES BY SIGNING, DATING AND
MAILING THE ENCLOSED BLUE PROXY CARD TODAY.
THE HOREJSI GROUP:
DECREASED DIVIDENDS; LOWER STOCK PRICE; INCREASED RISK
In public filings required by law, the Horejsi group discloses that its
proposed change in your Fund's investment policy is likely to result in:
1. Decreased Dividends. The Horejsi group acknowledges: "If you have
invested in the Fund seeking a steady return of income, you are likely
to find that the Fund's historic dividend rate decreases significantly.
Traditionally, balanced funds pay a lower dividend rate than funds
investing in fixed income securities."
2. Lower Stock Price. The Horejsi group also acknowledges: "The discount
of the Fund's net asset value from the market price may increase
significantly while these changes in investment policy are being
debated, whether or not they are implemented . . . If the discount to
net asset value of the Fund's common stock increases and you sell your
shares . . . you could realize a loss on your investment in the Fund's
shares . . ."
3. Increased Risk. The Horejsi group further acknowledges: "Because
equity securities are inherently more risky than fixed income
securities, the risk associated with the Fund's shares would increase
in the event the contemplated changes are in fact implemented."
The Horejsi group, with only about 7% of your Fund's shares, wants a full
40% of the seats on your Fund's Board -- so that it can push forward with its
plan
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to dramatically change your Fund's investment policy. This effort, we are
convinced, is intended to be the first step in the Horejsi group's ultimate goal
of taking complete control of your Fund and installing its own inexperienced
affiliates as your Fund's high-priced investment advisers.
THE TIME TO REJECT THE HOREJSI GROUP IS NOW
Your Fund's Board, including the nine directors who are independent of the
Fund and its investment adviser, believes that the Fund's shareholders, with the
exception of the Horejsi group, have invested in the Fund because they want to
allocate a portion of their investment portfolios to fixed income securities.
Investors generally select fixed income securities in order to achieve the
higher current income and lower volatility normally associated with such
securities. Investors -- such as the Horejsi group -- who want to invest in
funds that invest in a combination of fixed income and equity securities may
select any one of the over 1,000 closed-end and open-end funds listed by Lipper
Analytical Services that invest in both types of such securities.
THE TIME TO STOP THE HOREJSI GROUP IS NOW! You can reject the Horejsi group
and its nominees by voting FOR your Board's nominees on the enclosed BLUE proxy
card. Please sign, date and mail your BLUE proxy card today. Even if you have
voted on the Horejsi group's white proxy card, you can easily revoke that vote
by sending in a later-dated BLUE proxy card.
If you have any questions or need assistance in voting your shares, please
call the firm assisting your Fund in the solicitation of proxies, Georgeson
Shareholder Communications, Inc., toll free at 1-800-223-2064.
We thank you for your careful attention to these issues and for your
continued trust and support.
Sincerely,
/s/ Alice T. Kane
Alice T. Kane
President
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IMPORTANT
If your shares are held in your own name, please sign, date and return the
enclosed BLUE proxy card today. If your shares are held in "Street-Name," only
your broker or your bank can vote your shares. Please direct the person
responsible for your account to execute on your behalf a BLUE proxy card with a
vote FOR Proposals 1 and 2.
We urge you not to sign any white proxy card you may receive from the Horejsi
group.
If you have any questions or need assistance in voting your shares, please call
the firm assisting us in the solicitation of proxies:
GEORGESON SHAREHOLDER COMMUNICATIONS, INC.
17 STATE STREET
NEW YORK, NEW YORK 10004
BANKS AND BROKERS CALL COLLECT: (212) 440-9800
ALL OTHERS CALL TOLL FREE: 1 (800) 223-2064
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