<PAGE>
[LOGO OF MENTOR INCOME FUND APPEARS HERE]
Dear Shareholder,
We are pleased to present to you proxy materials for the 1995 Annual
Meeting of Shareholders of Mentor Income Fund, Inc. (the "Fund"). The Meeting
will be held at Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia
23219 on Tuesday, October 17, 1995 at 10:00 a.m. for the following purposes:
1. To elect one Director to hold office for the term specified and until
his successor is duly elected and qualified.
2. To ratify or reject the selection of Coopers & Lybrand as independent
accountants for the Fund for the fiscal year ending October 31, 1995.
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
If you will not be able to attend the Annual Meeting, we urge you to
complete, date and sign the enclosed proxy voting card. A self-addressed,
postage-paid envelope has been provided for your convenience. It is very
important that we receive your voting instructions no later than October 10,
1995. Please submit the proxy card by this date; failure to do so could result
in the Fund incurring further proxy solicitation expenses. If you hold Fund
shares in more than one account, you may receive more than one proxy package.
Please make sure that you return separate proxy cards for the separate
holdings.
We look forward to seeing you at the Annual Meeting and appreciate your
continued interest in the Fund.
Sincerely,
/s/ Weston E. Edwards /s/ Paul F. Costello
Weston E. Edwards Paul F. Costello
Chairman of the Board President
<PAGE>
MENTOR INCOME FUND, INC.
Riverfront Plaza, 901 East Byrd Street
Richmond, Virginia 23219
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
OCTOBER 17, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of Shareholders
of Mentor Income Fund, Inc. (the "Fund"), a Virginia corporation, will be held
at Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia 23219 on
Tuesday, October 17, 1995 at 10:00 a.m. for the following purposes:
1. To elect one Director to hold office for the term specified and until
his successor is duly elected and qualified.
2. To ratify or reject the selection of Coopers & Lybrand as independent
accountants of the Fund for the fiscal year ending October 31, 1995.
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Every shareholder of record as of the close of business on September 15, 1995
will be entitled to vote at the Meeting and any adjournment thereof. Please
respond--your vote is important. Whether or not you plan to attend the
Meeting, please complete, sign and mail the enclosed proxy voting card in the
envelope provided. It is important that your proxy be received no later than
October 10, 1995 to assure that your proxy will be voted.
By Order of the Board of Directors,
/s/ John M. Ivan
John M. Ivan
Secretary
September 22, 1995
<PAGE>
MENTOR INCOME FUND, INC.
Riverfront Plaza, 901 East Byrd Street
Richmond, Virginia 23219
PROXY STATEMENT
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
OCTOBER 17, 1995
This Proxy Statement and Notice of Meeting with accompanying form of proxy
are furnished in connection with the solicitation of proxies by the Board of
Directors of Mentor Income Fund, Inc. (the "Fund"), a Virginia corporation,
for use at the Annual Meeting of Shareholders of the Fund to be held at 10:00
a.m. on Tuesday, October 17, 1995, at Riverfront Plaza, 901 East Byrd Street,
Richmond, Virginia 23219, and any adjournment thereof (the "Meeting"). The
Fund's annual report for the fiscal year ended October 31, 1994, including
financial statements, and semi-annual report for the period ended April 30,
1995, have been previously mailed to shareholders. The annual report and/or
semi-annual report are provided upon request without charge. Such request
should be addressed to Mentor Investment Group, Inc., Investor Relations
Office, Riverfront Plaza, 901 East Byrd Street, Richmond, Virginia 23219-
telephone (800) 825-5353.
The date of mailing of this proxy statement was on or about September 22,
1995.
Shares represented by timely and properly executed proxies will be voted as
specified. Executed proxies that are unmarked will be voted for the election
of the nominee for Director and in favor of the proposal set forth in the
attached Notice of the Meeting. A proxy may be revoked at any time prior to
its use. It may be revoked by filing with the Secretary of the Fund an
instrument of revocation or a duly executed proxy bearing a later date. It may
also be revoked by attendance at the meeting and election to vote in person.
The cost of soliciting proxies will be borne by the Fund. In addition to
solicitation by mail, proxies may be solicited by Directors, Officers and
regular employees and agents of the Fund without compensation therefor. The
Fund may reimburse brokerage firms and others for their expenses in forwarding
proxy materials to the beneficial owners and soliciting them to execute the
proxies.
As of September 8, 1995, there were 11,817,776 shares of the Fund
outstanding. Each share of record as of the close of business on September 15,
1995 will be entitled to one vote on all matters presented at the Meeting. The
shares of the Fund do not have cumulative voting rights. As of September 15,
1995, all the Directors and Officers and the nominee for election as a
Director of the Fund, as a group, owned beneficially 49,257 Fund shares (less
than 1% of the total outstanding shares). As of September 8, 1995, to the
knowledge of management, no person owned beneficially 5% or more of the
outstanding Fund shares.
As of September 8, 1995, the Fund had net assets of $119,216,683.
Shareholder proposals to be presented at the next Annual Meeting of
shareholders must be received at the Fund's office, Riverfront Plaza, 901 East
Byrd Street, Richmond, Virginia 23219, no later than December 29, 1995.
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In the event that a quorum is present at the Meeting but sufficient votes
to approve any of the proposals are not received, the proxy holders may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any adjournment will require the affirmative vote of a majority of
those shares represented at the Meeting in person or by proxy. If a quorum is
present, the proxy holders will vote proxies which vote FOR any proposals in
favor of such an adjournment and will vote those proxies required to be voted
AGAINST any proposals against adjournment. A shareholder vote may be taken on
one or more of the proposals in this Proxy Statement prior to any adjournment
if sufficient votes have been received for approval.
1. ELECTION OF DIRECTOR
The Fund's Articles of Incorporation provide that the Fund's Board of
Directors shall be divided into three classes, each having a term of three
years. Each year the term of office of one class will expire. Mr. Jerry R.
Barrentine has been nominated for a three-year term to expire at the 1998
Annual Meeting of Shareholders and until his successor is duly elected and
qualified. Mr. Barrentine has been a Director of the Fund since 1988. The
nominee has consented to serve as a Director if elected. It is not expected
that the nominee will be unable to serve as a Director; however, if that
should occur for any reason prior to the Meeting, the proxy holders will vote
in their discretion for another person of their choice. The following table
provides information concerning the nominee for election as a Director and
each Director of the Fund.
<TABLE>
<CAPTION>
SHARES OWNED
BENEFICIALLY
NAME, ADDRESS AND DIRECTOR AS OF
OFFICES WITH THE FUND PRINCIPAL OCCUPATION AND AGE SINCE SEPTEMBER 15, 1995
--------------------- ---------------------------- -------- ------------------
CLASS II NOMINEE TO SERVE UNTIL THE 1998 ANNUAL MEETING OF SHAREHOLDERS:
<C> <S> <C> <C>
Jerry R. Barrentine Executive Vice President 1988 3,146**
4828 Parkway Plaza Blvd. and CFO, Barclays
Charlotte, NC 28217 American/Mortgage
Director Corporation (financial
services) (since November
1992); Managing Partner,
Barrentine Lott &
Associates, Inc.
(financial services
consultants) (November
1981-November 1992).
(Age 61)
</TABLE>
Continuing Directors. The balance of the current Directors consists of one
Class I Director and two Class III Directors, none of whom is a nominee for
election at the Meeting and all of whom will continue in office after the
Meeting for the terms shown below. Mr. Edwards was elected at the 1994 Annual
Meeting of Shareholders and Messrs. Nelson and Ludeman were elected at the
1993 Annual Meeting of Shareholders. The Directors are as follows:
<TABLE>
<CAPTION>
CLASS I (TERM EXPIRING IN 1997)
<S> <C> <C> <C>
Weston E. Edwards President, Weston Edwards 1988 36,094**
361 Forest Avenue & Associates (business
Suite 205 brokers and consultants)
Laguna Beach, CA 92651 (September 1994-present
Chairman of the Board and July 1988-June 1993);
President, Smart Mortgage
Access, Inc. (June 1993-
September 1994); Founder
and Chairman, the Housing
Roundtable (since
February 1981). (Age 61)
</TABLE>
2
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<TABLE>
<CAPTION>
SHARES OWNED
BENEFICIALLY
NAME, ADDRESS AND DIRECTOR AS OF
OFFICES WITH THE FUND PRINCIPAL OCCUPATION AND AGE SINCE SEPTEMBER 15, 1995
--------------------- ---------------------------- -------- ------------------
CLASS III (TERM EXPIRING IN 1996)
<C> <S> <C> <C>
J. Garnett Nelson Consultant, Mid-Atlantic 1991 7,017**
101 Shockoe Slip Holdings, L.L.C. (since
Richmond, VA 23219 February 1995); Senior Vice
Director President, The Life
Insurance Company of
Virginia (1990-February
1995); Senior Executive
Director, Aon Advisers, Inc.
(1990-February 1995);
Director, Life of Virginia
Series Fund, Inc. (since
1990); Director, Aon Asset
Management Fund, Inc. (since
1991); Director, Lawyers
Title Corporation (since
1991); Investment Advisory
Board, Virginia Retirement
System (since April 1995).
(Age 56)
Daniel J. Ludeman* Chairman and Chief Executive 1993 3,000**
901 East Byrd Street Officer, Mentor Investment
Richmond, VA 23219 Group, Inc. (since July
Director 1991); Managing Director,
Wheat, First Securities,
Inc. (since August 1989);
Managing Director, Wheat
First Butcher Singer Inc.
(since June 1991); Chairman
and Trustee, Mentor Funds,
Cash Resource Trust and
Mentor Institutional Trust.
(Age 38)
</TABLE>
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* Mr. Ludeman is an "interested person" of the Fund as that term is defined
in the Investment Company Act of 1940 (the "1940 Act") by reason of his
association with Commonwealth Investment Counsel, Inc. Messrs. Barrentine,
Edwards and Nelson are not "interested persons" of the Fund as that term is
defined in the 1940 Act.
** Less than 1% of the total outstanding shares.
REMUNERATION OF DIRECTORS AND OFFICERS
The Fund pays Mr. Edwards, as Chairman of the Board, an annual fee of
$24,000, and pays Messrs. Barrentine and Nelson an annual fee of $16,000, plus
an attendance fee for each Director of $1,000 per meeting plus out-of-pocket
expenses. Mr. Ludeman, as an "interested person" of the Fund, does not receive
a fee for his services as a Director of the Fund. The direct aggregate and
total remuneration (including reimbursement of such expenses) paid to all
Directors as a group for the fiscal year ended October 31, 1994 was $77,167.
The following table sets forth aggregate compensation paid by the Fund to
each non-interested Director during the fiscal year ended October 31, 1994, as
well as the total compensation paid by the Fund and other funds advised by the
Investment Manager to each Director.
<TABLE>
<CAPTION>
PENSION OR RETIREMENT TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED AS FROM FUND
COMPENSATION PART OF FUND COMPLEX PAID
NAME OF DIRECTOR FROM FUND EXPENSES TO DIRECTORS
-------------------- ------------ --------------------- ------------------
<C> <S> <C> <C>
Jerry R. Barrentine $20,000 None $20,000
Weston E. Edwards 28,000 None 28,000
J. Garnett Nelson 19,000 None 19,000
</TABLE>
3
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SUPPLEMENTAL INFORMATION
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the Board. The Officers of the Fund, other than those who are
Directors or a nominee for Director, are as follows: Paul F. Costello (Age
34), President; Terry L. Perkins (Age 48), Treasurer; John M. Ivan (Age 40),
Secretary; Michael A. Wade (Age 28), Assistant Treasurer; and Sander M. Bieber
(Age 45), Assistant Secretary. During the past five years, the principal
occupations of the Officers have been as follows: Paul F. Costello-President
(since June 1994)-Managing Director of Mentor Investment Group, Inc. and Wheat
First Butcher Singer, Inc. (since June 1994); Senior Vice President,
Commonwealth Advisers, Inc. and Mentor Distributors, Inc. (since February
1992); Formerly, Director, President and Chief Executive Officer, First
Variable Life Insurance Company; President and Treasurer, Atlantic Capital &
Research, Inc. (August 1986-February 1992). Terry L. Perkins-Treasurer (since
December 1988)-Vice President of Mentor Investment Group, Inc. (since August
1993); Formerly, Controller (June 1992-August 1993) and Assistant Secretary
and Compliance Officer (December 1988-August 1993), Ryland Capital Management,
Inc. John M. Ivan-Secretary (since June 1994)-Managing Director, Director of
Compliance and Assistant Secretary (since September 1992) and Assistant
General Counsel (since July 1984), Wheat First Butcher Singer, Inc. Michael A.
Wade-Assistant Treasurer (since June 1995)-Associate Vice President of Mentor
Investment Group, Inc. (since April 1994); Formerly, Senior Accountant, Wheat
First Butcher Singer, Inc. (April 1993-March 1994); Audit Senior, BDO Seidman
(July 1989-March 1993). Sander M. Bieber-Assistant Secretary (since December
1994)-Partner with the law firm of Dechert Price & Rhoads, counsel to the
Fund.
The Fund has a standing Audit Committee currently consisting of Messrs.
Barrentine, Edwards and Nelson, each of whom is a Director and not an
interested person of the Fund. The Audit Committee reviews both the audit and
nonaudit work of the Fund's independent accountants, submits a recommendation
to the Board of Directors as to the selection of independent accountants, and
reviews generally the maintenance of the Fund's records and the safekeeping
arrangements of the Fund's custodian. The Fund has no other committees of the
Board of Directors.
Under the securities laws of the United States, the Fund's Directors, its
Officers, and any persons holding more than ten percent of the Fund's common
stock, as well as affiliated persons of the Investment Manager, are required
to report their ownership of the Fund's common stock and any changes in that
ownership to the Securities and Exchange Commission and the New York Stock
Exchange. Specific due dates for these reports have been established and the
Fund is required to report in this proxy statement any failure to file by
these dates during 1994. All of these filing requirements were satisfied by
the Fund's Directors and Officers. In making these statements, the Fund has
relied on the representations of its incumbent Directors and Officers and
copies of the reports that they have filed with the Commission.
During the fiscal year ended October 31, 1994, there were five meetings of
the Board of Directors and two meetings of the Audit Committee. All of the
incumbent Directors attended at least 75% of the Board meetings and all of the
Audit Committee members attended the meetings of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF THE NOMINEE AS A DIRECTOR OF THE FUND.
2. APPROVAL OF INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, 217 E. Redwood Street, Baltimore, Maryland 21202, have
been the independent accountants of the Fund since its inception, and have
audited the Fund's financial statements for the fiscal year ended October 31,
1994. At a meeting held on December 16, 1994, upon recommendation of the
4
<PAGE>
Audit Committee, the Board of Directors, including a majority of those
Directors who are not interested persons of the Fund, recommended the
appointment of Coopers & Lybrand as independent accountants of the Fund for
the fiscal year ending October 31, 1995.
The Fund is advised that neither the firm of Coopers & Lybrand nor any of
its members has any material direct or indirect financial interest in the
Fund. Representatives of Coopers & Lybrand are not expected to be present at
the Annual Meeting, but have been given the opportunity to make a statement if
they so desire, and will be available should any matter arise requiring their
presence.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
COOPERS & LYBRAND AS INDEPENDENT ACCOUNTANTS OF THE FUND FOR THE FISCAL YEAR
ENDING OCTOBER 31, 1995.
3. OTHER BUSINESS
The Board of Directors know of no other business to be presented at the
Meeting. If any additional matters should be properly presented, it is
intended that the enclosed Proxy will be voted in accordance with the best
judgment of the persons named in the Proxy.
THE INVESTMENT MANAGEMENT AGREEMENT
Commonwealth Investment Counsel, Inc. ("CIC" or the "Investment Manager"),
a Virginia corporation, has been Investment Manager of the Fund since August
27, 1993. The Investment Manager is a wholly-owned subsidiary of Mentor
Investment Group, Inc., which, in turn, is a wholly-owned subsidiary of Wheat
First Butcher Singer, Inc. The business address of each of the foregoing is
901 East Byrd Street, Richmond, Virginia 23219.
THE ADMINISTRATOR
Pursuant to an Administration Agreement dated August 27, 1993, Mentor
Investment Group, Inc. serves as the Fund's Administrator.
VOTES REQUIRED
The presence in person or by proxy of the holders of a majority of the
outstanding shares is required to constitute a quorum at the Meeting. The
election of the nominee to the Board of Directors, as set forth in Proposal 1,
will require the vote of the holders of a plurality of the Fund's shares
present or represented by proxy at the Meeting. Ratification of the selection
of the accountants, as set forth in Proposal 2, will require the affirmative
vote of the holders of a majority of the Fund's shares present or represented
by proxy at the Meeting.
If the accompanying form of proxy is executed properly and returned
properly, shares represented by it will be voted at the Meeting in accordance
with the instructions on the proxy. However, if no instructions are specified,
shares will be voted FOR the election of the Director and FOR the other
proposals as set forth herein.
YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
5
<PAGE>
PROXY PROXY
MENTOR INCOME FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 17, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints Weston E. Edwards and J. Garnett
Nelson, and each of them, as proxies to vote for and in the name, place and
stead of the undersigned at the Annual Meeting of Shareholders of MENTOR INCOME
FUND, INC. (the "Fund") to be held at Riverfront Plaza, 901 East Byrd Street,
Richmond, Virginia 23219, on Tuesday, October 17, 1995, at 10:00 a.m., and at
any adjournment thereof, according to the number of votes and as fully as if
personally present, for the purposes listed on the reverse side of this card.
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PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
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Please sign this proxy card exactly as your name or names appear hereon. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------------- --------------------------------------
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<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
FOR WITHHOLD
1. ELECTION OF DIRECTOR: Jerry R. [ ] [ ]
Barrantine for a term expiring
in 1998.
FOR AGAINST ABSTAIN
2. Ratification of the selection of [ ] [ ] [ ]
Coopers & Lybrand as independant
accountants of the Fund for the
fiscal year ending October 31, 1995.
and with discretionary authority to vote on all matters that may properly
come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER (OR NOT VOTED)
AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED FOR
THE NOMINEE FOR DIRECTOR IN ITEM 1 AND IN FAVOR OF ITEM 2.
-------------------------
Please be sure to sign and date this Proxy. Date
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----------------- Shareholder sign here ---------------Co-owner sign here------
Mark the box at right if comments or address change [ ]
have been noted on the reverse side of this card.
RECORD DATE SHARES:
