SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
(Amendment No. 4)
Mentor Income Fund, Inc.
(MRF)
(Name of Issuer)
Common Stock
(Title of Class of Securities)
587204108
(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)
August 4, 2000
(Date of Event which Requires Filing of this Statement)
If the 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 Rule 13d-1 (b) (3) or (4), check the following box. [x]
(Page 1 of 11 pages)
Corrected as to Exhibits and Pages.
Contains 3 Exhibits
ITEM 1 Security and Issuer
Common Stock
Evergreen Investment Services, Inc.
Mentor Income Fund
200 Berkley St., 21st Floor
Boston, MA 12116-5034
ITEM 2 Identity and Background
a) Karpus Management, Inc. d/b/a Karpus Investment Management
("KIM")
George W. Karpus, President, Director and 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, trust 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 five years of
any criminal proceeding (excluding traffic violations).
e) During the last five years non-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 corporation.
ITEM 3 Source and Amount of Funds or Other Considerations
KIM, an independent investment advisor, has accumulated shares of MRF
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
a) KIM has purchased Shares for investment purposes. Being primarily a
fixed income manager, with a specialty focus in the closed end fund
sector, the profile of MRF fit the investment guidelines for various
Accounts. Shares have been acquired since December 13, 1993.
b) On July 19, 2000, it was announced that First Union Corporation
(Mentor Investment Advisors, LLC is their subsidiary) had agreed to sell
certain assets of Mentor to U.S. Bank National Association. As a result,
Shareholders must vote upon a new investment advisory agreement. On
July 20, 2000, the Fund filed a PRES14A with the SEC.
c) On July 21, 2000, KIM submitted a Shareholder Proposal to the Fund
(See Exhibit 2)
d) On August 2, 2000 Karpus Investment Management received a letter
addressed to George W. Karpus from Douglas Munn, President of Mentor
Income Fund, Inc. which was on the letterhead of "Evergreen Funds".
This letter was in response to KIM's letter of July 20, 2000 "requesting
that shareholders be allowed to vote on a proposal of a new investment
management contract with Karpus Investment Management".
"Your proposal arrived too late to be considered for inclusion on the
agenda for the next shareholder meeting, which is scheduled for
September 27, 2000" as stated by Mr. Munn.
"You should also be aware that, even if your proposal had been received
timely, the Fund would likely have moved to exclude it pursuant to Rule
14a-8 (i)(9) as also stated by Mr. Munn.
ITEM 5 Interest in Securities of the Issuer
a) As of the date of this Report, KIM owns 565,647 shares, which
represents 4.79% of the outstanding Shares. Sophie P. Karpus,
(Director of KIM) presently owns 800 shares purchased on November 24,
1998 at a price of $8.68 per share. Karpus Investment Management Profit
Sharing Plan presently owns 100 shares purchased on July 31, 2000 at a
price of $7.75 per share. None of the other Principals presently
owns shares.
b) KIM has the sole power to dispose of and to vote all of such Shares
under limited powers of attorney.
c) The first open market purchase occurred on December 13, 1993 as
previously reported. Open market purchases for the last 60 days for
the Accounts. There have been no dispositions and no acquisitions,
other than by such open market purchases, during such period unless
indicated.
DATE
SHARES
PRICE PER
DATE
SHARES
PRICE PER
SHARE
SHARE
6/12/00
-500
7.5
7/7/00
-38750
7.875
6/15/00
25000
5.9375
7/12/00
-200
7.6875
6/26/00
-4100
7.5
7/19/00
10000
7.8125
6/30/00
-1400
7.6875
7/20/00
1200
7.8125
7/21/00
5100
7.8125
7/26/00
3000
7.6875
7/27/00
400
7.6875
7/28/00
200
7.6875
7/31/00
10000
7.75
7/31/00
7800
7.6875
* The 25,000 shares from 06/15 were transferred into our firm.
The Accounts have the right to receive all dividends from, any proceeds
from the sale of the Shares. KIM reserves the right to further accumulate
or sell 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 MRF
securities.
ITEM 7 Materials to be Filed as Exhibits
See attached Exhibits 1, 2, and 3.
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.
August 4, 2000 By:________________________
Date Signature
George W. Karpus, President
Name/Title
Exhibit 1
KARPUS INVESTMENT MANAGEMENT
INTEROFFICE MEMO
TO: George W. Karpus, President Karpus Investment Management, Inc.
FROM: Cody Bartlett Jr.
DATE: August 2, 2000
RE: Schedule 13D & Shareholder Proposal Mailings - Mentor Income Fund
_________________________________________________________________________
I sent a copy of the Schedule 13D that Karpus filed for the Mentor Income Fund
to the address contained in the most recent semi annual report of the Fund
(April 30, 2000), this mailing was postmarked July 10, 2000. This document
was addressed to the Corporate Office in Richmond, Virginia. On July 24,
2000, we received this mailing back with the address crossed off and the
statement "This dept. is closed down also." written on the envelope.
We could find no news announcements regarding either the change of Corporate
Office or a change of the Fund's legal secretary on either the Bloomberg or
the internet. To this date we have not seen a press release regarding these
changes. Due to the lack of clarity as to where the Corporate Office was
located, we sent our Shareholder Proposal to two different addresses
(Richmond, VA & Boston, MA) via both certified and overnight mail.
We were able to locate the Corporate Office after several phone calls. Mr.
Mike Jones informed me that the Corporate Office had been moved to Boston, MA
and was being administered by Evergreen Funds. I spoke with Carol Kosel,
Treasurer of the Fund, who informed me that the new legal Secretary was a Mr.
Douglas Munn. Upon contacting Mr. Munn's office we discovered that the
current Fund Secretary is a Mr. Leonard Davis.
On July 24, 2000, our shareholder proposal was received and signed for by the
Fund at their Boston office.
On August 2, 2000, we sent Mr. Davis a copy of the Schedule 13D document via
certified mail. This schedule 13D was filed on EDGAR July 10, 2000 for period
ending June 30, 2000.
Exhibit 2
July 20, 2000
Mr. Geoffry B. Sale, Secretary
Mentor Income Fund
Mentor Investment Advisors, LLC
Riverfront Plaza,
901 East Byrd Street
Richmond, Virginia 23219
Re: Mentor Income Fund
Dear Mr. Sale:
Karpus Management, Inc d/b/a Karpus Investment Management (KIM), is the
beneficial owner of 6,550 shares of the Mentor Income Fund, Inc. (MRF). We
have been the beneficial owners of shares valued of more than $1,000 for
more than one year and expect to continue ownership through the date
of the next meeting of the Fund be it an annual meeting or special meeting.
Pursuant to Rule 14a-8 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 stockholders.
PROPOSAL
In the event that the existing investment advisory contract shall be
terminated, is terminated, or assigned, the Fund shall enter into a new
investment management contract with Karpus Investment Management.
SUPPORTING STATEMENT
Karpus Investment Management (KIM) is committed to enhancing the value of
Fund's shares. KIM would recommend either, any, or all of the following: an
aggressive share buy back program in the open market, a share repurchase
offer at net asset value, or conversion of the Fund from the current closed
end to an open ended format.
The discount to net asset value at which the Fund has historically traded has
averaged -12.87% from July 3, 1997 through June 30, 2000. It is the opinion of
KIM that the Fund's management should be making recommendations to the
Board to close this wide discount. Shareholders of the Fund are entitled to
have their investment trade at a market value closer to what it is actually
worth (net asset value).
It is the opinion of KIM that the price performance of the Fund should not be
acceptable to the shareholders. From June 30,1997 through June 30, 2000
the simple price appreciation (depreciation) of the Fund has been an annual
equivalent of -6.1866%. If dividends had be re-invested in the Fund
the annual equivalent would be 2.5512%.
It is also the opinion of KIM that the net asset performance of the Fund
should not be acceptable to the shareholders. From June 30, 1997 through
June 30, 2000 the net asset value performance equaled an annual simple price
depreciation equivalent of -3.8187% (with dividends reinvested in the Fund
for the same time period equaled 3.8976%).
Karpus has gained national recognition in being ranked by "A Worlds Best Money
Managers" according to Nelson Information. For U.S. Intermediate Duration
Fixed Income, Karpus was ranked for the 40 quarters ending 3/31/00 8th
out of 94 managers. For the 20 quarters ending 3/31/00 Karpus was ranked
3rd out of 148 managers and for the 12 quarters ending 3/31/00, Karpus was
ranked 8th out of 165 managers.
It is the opinion of Karpus that Fund shareholders' would benefit by the
experience and superior performance that KIM could provide.
Karpus Investment Management is proposing that if approved as the new
investment advisor to the Fund, management fees would be at the same current
rate, however will be based on the lowest value of either net asset value or
market price. This reduction in investment management fees could help
increase shareholder returns. The manager would be rewarded based on market
performance of the Fund. Since the Fund has historically traded at a
discount, the present management in the opinion of KIM has been over-rewarded
for inferior market price performance. Based on the current discount to NAV
there would be a fee reduction of 12.01% (based on NAV 7/6/00 $8.95 and
market price $7.875 7/5/00).
KIM is confident that it can significantly increase the value of the Fund's
shares, while retaining the philosophy of protecting the interest of the
shareholders. A vote [for] the Karpus proposal is a vote for increasing
shareholder value, lowering management fees and improving performance.
END OF PROPOSAL
Should your Board of Directors recommend any new Investment Advisor contract
be approved by the shareholders, this notice serves as our official proposal
which should be included in any filings you make with the SEC and which
should be included in any proxy materials.
Sincerely,
George W. Karpus
President/CEO
cc: NY Stock Exchange
cc: Brent Fields-SEC
Exhibit 3
August 3, 2000
Mr. Doug Munn, President
Mentor Income Fund, Inc.
Evergreen Investment Services, Inc.
200 Berkley St., 21st Floor
Boston, MA 12116-5034
Re: Mentor Income Fund Shareholder Proposal
Dear Mr. Munn:
This letter is in response to your letter received August 3, 2000, in
contention with your point that our proposal did not meet the litmus test for
inclusion of a shareholder proposal for a special meeting, "reasonable time
before the company begins to print and mail its proxy materials". I contend
that it was the administration of the Fund who was not timely in the
dissemination of information that would have allowed a shareholder to submit
a proposal for this special meeting. My contention is based upon the
following grounds:
- The press release (enclosed) announcing the sale of "certain assets" was
made on July 19, 2000. We responded to the press release with a Shareholder
proposal the following day, July 20, 2000. This proposal was sent via
certified and overnight mail to two addresses, and was received and signed
for at your Boston, MA office on July 24, 2000.
- The Fund's corporate office moved between the time of the last semi annual
report (April 30, 2000) and the date of the press release. Also, the Fund
changed legal secretaries during this period. These changes were made
without any public announcement, and even worse, with no forwarding
address for items sent to your old Richmond, VA corporate office. Our
proposal sent to that address was returned to us with the words "This dept.
is closed down also." on the envelope.
- It appears that the Fund has been holding talks with U.S. Bank without
public dissemination of such talks.
- Finally, since the PRES14A was filed the day after the public release of
the proposed sale of assets (July 20, 2000), the Fund must have been
preparing these proxy materials before the press release regarding the sale
of assets. Again, not informing the public and Shareholders.
We believe that the administrators of the Mentor Income Fund are thwarting
Shareholder democracy by delaying the announcement of the sale of assets, by
moving their corporate office and changing legal secretaries without public
knowledge, and by preparing proxy materials before the press release regarding
the sale of assets.
The Fund's assertion that our proposal was not received in a timely manner is
absurd. We submitted our proposal the day after the press release and had to
make several phone calls to obtain the information necessary to submit the
proposal. Information that should be readily accessible to any shareholder.
If the day after your press release is considered by you to be untimely, what
would you consider timely? Do you expect us to be clairvoyant?
As a result of the Fund's evasive actions, we request that the Fund delay the
printing of their proxy materials as well as delay the special meeting
scheduled for September 27, 2000. Since the administrators of the Fund did
not provide Shareholders the opportunity to respond to the proposed sale of
assets, any cost associated with this delay should not be charged to the
Fund. The Fund's Shareholders have been treated unfairly by the current Fund
administration.
We are responding to an agenda item that the administration of the Fund
initiated. As Shareholder's of approximately 5 percent of the Fund's
outstanding shares, we have the right to have our proposal considered at
this special meeting.
Sincerely,
George W. Karpus
President/CEO
cc: NY Stock Exchange
cc: SEC
