SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MENTOR INCOME FUND
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
<PAGE>
[LOGO]
INCOME FUND
Dear Shareholder,
We are pleased to present to you proxy materials for the 1996 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 August 28, 1996 at 10:00 a.m. for the following purposes:
1. To elect two Directors to hold office for the term specified and until
their successors are 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, 1996.
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 August 21,
1996. 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
AUGUST 28, 1996
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 August 28, 1996 at 10:00 a.m. for the following purposes:
1. To elect two Directors to hold office for the term specified and until
their successors are 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, 1996.
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 July 19, 1996
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
August 21, 1996 to assure that your proxy will be voted.
By Order of the Board of Directors,
/s/ JOHN M. IVAN
John M. Ivan
SECRETARY
August 2, 1996
<PAGE>
MENTOR INCOME FUND, INC.
Riverfront Plaza, 901 East Byrd Street
Richmond, Virginia 23219
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 28, 1996
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 August 28, 1996 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, 1995, including financial statements, and
semi-annual report for the period ended April 30, 1996, 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 August 2, 1996.
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 nominees 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 July 12, 1996, there were 11,817,776 shares of the Fund outstanding.
Each share of record as of the close of business on July 19, 1996 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 July 12, 1996, all the
Directors and Officers and the nominees for election as a Director of the Fund,
as a group, owned beneficially 51,586 Fund shares (less than 1% of the total
outstanding shares). As of July 12, 1996, to the knowledge of management, no
person owned beneficially 5% or more of the outstanding Fund shares.
As of July 12, 1996 the Fund had net assets of $114,294,615.
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 November 29, 1996.
<PAGE>
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 DIRECTORS
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. Messrs. J. Garnett
Nelson and Daniel J. Ludeman have been nominated for three-year terms to expire
at the 1999 Annual Meeting of Shareholders and until each of their successors is
duly elected and qualified. Mr. Nelson has been a Director of the Fund since
1991. Mr. Ludeman has been a Director of the Fund since 1993. Each nominee has
consented to serve as a Director if elected. It is not expected that either
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 nominees for election as 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 JULY 19, 1996
<S> <C>
CLASS III NOMINEES TO SERVE UNTIL THE 1999 ANNUAL MEETING OF SHAREHOLDERS:
J. Garnett Nelson President, Mid-Atlantic Holdings, L.L.C. (since 1991 7,017**
101 Shockoe Slip February 1995); Senior Vice President, The Life
Richmond, VA 23219 Insurance Company of Virginia (1990- February
Director 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 57)
Daniel J. Ludeman* Chairman and Chief Executive Officer, Mentor 1993 3,000**
901 East Byrd Street Investment Group, Inc. (since July 1991); Managing
Richmond, VA 23219 Director, Wheat First Securities, Inc. (since July
Director 1987); Managing Director, Wheat First Butcher
Singer, Inc.; Chairman and Trustee, Mentor Funds,
Cash Resource Trust and Mentor Institutional
Trust. (Age 39)
</TABLE>
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<PAGE>
CONTINUING DIRECTORS. The balance of the current Directors consists of one
Class I Director and one Class II Director, 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 Mr. Barrentine was elected at the 1995 Annual
Meeting of Shareholders. The Directors are as follows:
<TABLE>
<CAPTION>
SHARES OWNED
BENEFICIALLY
NAME, ADDRESS AND DIRECTOR AS OF
OFFICES WITH THE FUND PRINCIPAL OCCUPATION AND AGE SINCE JULY 19, 1996
<S> <C>
CLASS I (TERM EXPIRING IN 1997)
Weston E. Edwards President, Weston Edwards & Associates (business 1988 36,133**
361 Forest Avenue brokers and consultants) (September 1994-present
Suite 205 and July 1988-July 1993); President, Smart
Laguna Beach, CA 92651 Mortgage Access, Inc. (July 1993-September 1994);
Chairman of the Board Founder and Chairman, the Housing Roundtable
(since February 1981). (Age 62)
<CAPTION>
CLASS II (TERM EXPIRING IN 1998)
<S> <C>
Jerry R. Barrentine Executive Vice President and CFO, Barclays 1988 5,436**
4828 Parkway Plaza Blvd. American/Mortgage Corporation (financial services)
Charlotte, NC 28217 (since November 1992); Managing Partner,
Director Barrentine Lott & Associates, Inc. (financial
services consultants) (November 1981-November
1992). (Age 62)
</TABLE>
* 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, 1995 was $67,000.
The following table sets forth aggregate compensation paid by the Fund to
each non-interested Director during the fiscal year ended October 31, 1995, 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
<S> <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
<PAGE>
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 nominees for Director, are as follows: Paul F. Costello (Age 35),
President; Terry L. Perkins (Age 49), Treasurer; John M. Ivan (Age 41),
Secretary; Michael A. Wade (Age 29), Assistant Treasurer; and Sander M. Bieber
(Age 46), 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)
- -- Executive Vice President and Chief Administrative Officer, America's Utility
Fund, Inc.; Director, Mentor Perpetual Advisers, L.L.C. and Mentor Trust
Company; Formerly, Director, President and Chief Executive Officer, First
Variable Life Insurance Company; President and Chief Financial Officer, Variable
Investors Series Trust; President and Treasurer, Atlantic Capital & Research,
Inc. (August 1986-February 1992). Terry L. Perkins -- Treasurer (since December
1988) -- Senior Vice President, Mentor Investment Group (since April 1996);
Formerly, Vice President of Mentor Investment Group, Inc. (August 1993-April
1996) -- 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) -- Accounting Manager and 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 (since 1981), 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 1995. All of these filing requirements were satisfied by the Fund's
Directors and Officers, except a statement of changes in beneficial ownership of
securities filed on behalf of Mr. Barrentine, which was inadvertently filed
late. 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, 1995, there were four 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 NOMINEES AS DIRECTORS OF THE FUND.
4
<PAGE>
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,
1995. At a meeting held on December 12, 1995, upon recommendation of the 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, 1996.
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, 1996.
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 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. For purposes of determining the presence of a
quorum for transacting business at the Meeting, abstentions and broker
"non-votes" will be treated as Shares that are present but have not been voted.
For this reason, abstentions and broker "non-votes" will be counted as negative
votes for purposes of obtaining approval of Proposal I and Proposal II.
YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY.
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