UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
USLIFE Income Fund, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
917324105
(CUSIP Number)
Stephen C. Miller, Esq.
Krassa, Madsen & Miller, LLC
1680 38th Street, Suite 800
Boulder, Colorado 80301
(303) 442-2156
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 9, 1999
(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 which is the subject of
this Schedule 13D, and is filing this schedule because of
ss240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. 0
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all
exhibits. See s240.13d-7 for other parties to whom copies are
to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes).
CUSIP No. 917324105
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities
only)
Ernest Horejsi Trust No. 1B
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) WC OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization Kansas
Number of 7. Sole Voting Power 450,100
Shares Bene-
ficially 8. Shares Voting Power
Owned by Each
Reporting 9. Sole Dispositive Power 450,100
Person With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
450,100
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions)
13. Percent of Class Represented by Amount in Row (11)
7.98%
14. Type of Reporting Person (See Instructions)
OO
CUSIP No. 917324105
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities
only)
Stewart R. Horejsi
2. Check the Appropriate Box if a Member of a Group (See
Instructions)
(A)
(B)
3. SEC Use Only
4. Source of Funds (See Instructions) Not applicable
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of Organization United
States
Number of 7. Sole Voting Power 0
Shares Bene-
ficially 8. Shares Voting Power 0
Owned by Each
Reporting 9. Sole Dispositive Power 0
Person With
10. Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned by Each Reporting
Person
0
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) X
13. Percent of Class Represented by Amount in Row (11)
0%
14. Type of Reporting Person (See Instructions)
IN
Amendment No. 2 to Statement on Schedule 13D
This amended statement on Schedule 13D relates to the Common
Stock, $1.00 par value per share (the "Shares"), USLIFE Income
Fund, Inc., a Maryland corporation (the "Company"). Items 3,
4, 5 and 7 of this statement, previously filed by the Ernest
Horejsi Trust No. 1B (the "Trust"), as the direct beneficial
owner of Shares, and Stewart R. Horejsi, by virtue of the
relationships described previously in this statement, are
hereby amended as set forth below.
Item 3. Source and Amount of Funds or Other Consideration.
No change except for the addition of the following:
The total amount of funds required by the Trust to
purchase the Shares as reported in Item 5(c) was $651,614.15
Such funds were provided by the Trust's cash on hand and from
intertrust advances from the Lola Brown Trust No. 1B. Such
advances bear interest at short term applicable federal rates
and are due monthly.
Item 4. Purpose of Transaction.
No change except for the addition of the following:
The Trust acquired the Shares described in Item 5(c) of
this statement in order to increase its equity interest in the
Company. Depending upon their evaluation of the Company's
investments and prospects, and upon future developments
(including, but not limited to, performance of the Shares in
the market, the effective yield on the Shares, availability of
funds, alternative uses of funds, and money, stock market and
general economic conditions), any of the Reporting Persons or
other entities that may be deemed to be affiliated with the
Reporting Persons may from time to time purchase Shares, and
any of the Reporting Persons or other entities that may be
deemed to be affiliated with the Reporting Persons may from
time to time dispose of all or a portion of the Shares held by
such person, or cease buying or selling Shares. Any such
additional purchases or sales of the Shares may be in open
market or privately-negotiated transactions or otherwise.
As previously reported in this statement, the Trust
solicited proxies in connection with the Company's 1999 annual
meeting of shareholders with respect to (i) the election of
the four directors scheduled to be elected at such meeting
and (ii) a proposal that the Company's board of directors
consider changing the Company's investment policy so as to
invest in equity securities in addition to fixed income
securities. The Trust's Proxy Statement in Opposition to the
Solicitation by the Board of Directors of the Company and an
accompanying letter to the shareholders from Stewart R.
Horejsi is attached as Exhibit 3 to this statement and
incorporated in this statement by reference. The Trust's
proposal and its nominees were defeated in the election.
As previously indicated in this statement, the Reporting
Persons may seek control of the Company. The Trust currently
intends to increase its ownership of Shares until it is able
to influence the Company to implement the change in investment
policy described above.
On December 16, 1999, Stewart R. Horejsi, on behalf of
the Trust, sent a letter to the Directors of the Company
relating to the Trust's concern over the adverse impact on the
Fund of the Fund's expenditures in connection with the proxy
contest. The letter is attached as Exhibit 4 and incorporated
in this statement by reference.
Item 5. Interest in Securities of the Issuer.
No change except for the addition of the following:
(a) The Trust is the direct beneficial owner of 450,100
Shares, or approximately 7.98% of the 5,643,768
Shares outstanding as of November 1, 1999,
according to information contained in the Company's
1999 proxy statement. By virtue of the
relationships reported in this statement, Mr.
Horejsi may be deemed to share indirect beneficial
ownership of the Shares directly beneficially owned
by the Trust. Mr. Horejsi disclaims all such
beneficial ownership.
(c) The table below sets forth purchases of the Shares
by the Trust since October 13, 1999. Such
purchases were effected by the Trust on the New
York Stock Exchange.
Date
Amount of Shares
Approximate Price
Per Share
(exclusive of commissions)
10/14/99
700
$9.1875
10/15/99
1800
$9.1250
10/18/99
6100
$9.1250
10/19/99
2100
$9.1250
10/19/99
200
$9.1250
10/20/99
2700
$9.1250
10/21/99
1600
$9.1250
10/22/99
1400
$9.1250
11/08/99
9400
$9.1250
11/11/99
4000
$9.2500
11/11/99
2600
$9.1875
11/11/99
500
$9.1250
11/18/99
7400
$9.0625
11/19/99
900
$9.0000
11/30/99
4000
$8.6250
11/30/99
2400
$8.6875
12/08/99
3600
$8.6250
12/08/99
1200
$8.5625
12/09/99
8100
$8.5625
12/10/99
800
$8.5000
12/10/99
700
$8.5625
12/13/99
5300
$8.5000
12/14/99
4200
$8.5000
12/15/99
1600
$8.5000
Item 7: Material to Be Filed as Exhibits
Exhibit 3: Proxy Statement in Opposition to the
Management of USLIFE Income Fund, Inc. by the Ernest Horejsi
Trust No. 1B with Accompanying Letter to Shareholders, dated
November 15, 1999, incorporated herein by reference to the
Trust's filing with the SEC on November 17, 1999.
Exhibit 4: Letter to the Board of Directors of
USLIFE Income Fund, Inc. dated December 16, 1999.
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.
Date: December 16, 1999
/s/ Stewart R. Horejsi
Stewart R. Horejsi
/s/ Stephen C. Miller _____
Stephen C. Miller, as Vice
President of Badlands Trust
Company, trustee of the Ernest
Horejsi Trust No. 1B
EXHIBIT 4
STEWART R. HOREJSI
200 SOUTH SANTA FE
SALINA, KANSAS 67401
December 16, 1999
Members of the Board of Directors
USLIFE Income Fund, Inc.
2919 Allen Parkway
Houston, Texas 77019
Ladies and Gentlemen:
I am writing to express the concern of the Ernest
Horejsi Trust No. 1B (the "Trust") about your recent
decisions in connection with the proxy contest that the
Trust conducted for the election of the Fund's directors and
the Trust's proposal to change the Fund's investment
objective.
According to the Fund's November 1, 1999 proxy
statement, the Fund expected to spend an additional $375,000
of the Fund's resources in connection with the proxy
contest. This would appear to be in addition to amounts
that were already spent in an effort to keep the Trust's
proposal from even being voted on by the shareholders. I
note, by way of comparison, that the Trust anticipated
spending $75,000.
During the fiscal year ended June 30, 1999, the Fund's
total expenses were $661,000, including $404,470 for
advisory fees and $31,915 for directors' fees. Increase in
net assets as result of the Fund's operations were only
$460,507. Distributions to shareholders were $0.76 per
share.
The Fund's expenditures on the proxy contest will
likely increase the Fund's expenses during 1999 by more than
50%. The expenses will likely represent almost 80% of the
Fund's 1998-1999 increase in net assets.
In light of these comparisons, the Trust finds your
decision to authorize such a large expenditure on the proxy
contest to be highly questionable. As directors of the
Fund, you owe fiduciary obligations to all shareholders of
the Fund, which obligations require you to make decisions
that are in the best interests of shareholders. The proxy
contest expenditures you approved represent almost $0.07 per
share, or almost 10% of the dividends shareholders received
last year. Expenditures of this magnitude cannot help but
adversely affect the Fund and its shareholders.
In addition, the Trust believes that your actions serve
to protect the interests and fees of the Fund's investment
advisor. As a result, your actions should warrant the
highest level of scrutiny in which any directors having
relationships with the Fund's investment advisor and its
affiliates should not participate in any decision-making.
The independent directors should protect the interests of
the Fund's shareholders in all matters in which the
interested directors and the Fund's investment advisor and
investment manager have an interest.
In conclusion, the Trust urges each of you who are
independent directors of the Fund to consult with
independent legal counsel on these issues and to reconsider
any plans to continue such expenditures in the future.
Sincerely yours,
/s/ Stewart R. Horejsi
Stewart R. Horejsi
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