<PAGE>
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
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
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*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
Notes:
<PAGE>
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of LINCOLN NATIONAL CONVERTIBLE
SECURITIES FUND, INC. (the "Fund") will be held at The Chicago Club, 81 East
Van Buren Street, Second Floor, Rooms D, E and F, Chicago, Illinois 60605, on
Tuesday, April 22, 1997 at 11:30 A.M. CDT, for the following purposes.
1. To elect nine directors.
2. To ratify or reject the selection of Coopers & Lybrand, L.L.P., as
independent auditors for the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the meeting
or any adjournments.
Stockholders of record at the close of business on February 28, 1997 are
entitled to vote at the meeting.
By order of the Board of Directors,
LOGO
C. Suzanne Womack
Secretary
March 18, 1997
YOUR VOTE IS IMPORTANT
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND AVOID THE ADDITIONAL
EXPENSE TO THE FUND OF FURTHER SOLICITATION, PLEASE MARK PREFERENCES, SIGN AND
RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
200 EAST BERRY STREET
FORT WAYNE, INDIANA 46802
PROXY STATEMENT
For Annual Meeting of Stockholders to be held April 22, 1997
The Board of Directors of Lincoln National Convertible Securities Fund, Inc.
(the "Fund") is soliciting proxies for use at the Annual Meeting of
Stockholders to be held on April 22, 1997 at 11:30 A.M. CDT, at The Chicago
Club, 81 East Van Buren Street, Second Floor, Rooms D, E and F, Chicago,
Illinois 60605, or at any adjournment of that meeting. THE FUND WILL FURNISH,
WITHOUT CHARGE, A COPY OF THE ANNUAL REPORT TO A STOCKHOLDER UPON REQUEST MADE
TO MR. SCOTT SCHILLING, 200 EAST BERRY STREET, FORT WAYNE, INDIANA 46802, 1-
800-254-6265.
A proxy may be revoked at any time before it is voted by submission to the
Fund of a later dated proxy, by notice in writing to the Fund, or by the
stockholder's attendance and vote at the Annual Meeting, but if not so revoked
the shares represented by such proxy will be voted according to the
instruction on the proxy card. Pursuant to Maryland law, only votes cast "for"
a matter constitute affirmative votes. Votes "withheld" or abstaining from
voting are counted for quorum purposes, but since they are not cast "for" a
particular matter, they will have the same effect as negative votes or votes
against a particular matter. On the other hand, broker non-votes, if any,
while counted for quorum purposes, are not deemed to be present for any matter
for which a broker does not have authority to vote. Accordingly, broker non-
votes will not have an effect on the outcome of the matters to be considered
at the meeting.
Stockholders of record at the close of business on February 28, 1997 will be
entitled to vote at the meeting or any adjournment thereof. On that date, the
Fund had 6,363,695 shares of common stock outstanding and entitled to vote.
Each share will be entitled to one vote at the meeting.
This proxy statement and accompanying proxy card are being mailed on or
about March 18, 1997. The solicitation of proxies will be largely by mail but
may include telephonic, telegraphic or personal contacts by officers of the
Fund or regular employees of Lincoln Investment Management, Inc. (formerly
named Lincoln National Investment Management Company), the Fund's investment
advisor (the "Advisor"), and/or employees of the Fund's stock transfer agent,
Boston EquiServe (formerly named The First National Bank of Boston). In
addition, the Board of Directors of the Fund has authorized management to
retain Corporate Investors Communications, Inc., a proxy solicitation firm, to
assist in the solicitation of proxies for this meeting. This cost, including
specified expenses, is not expected to exceed $7,000 and will be borne by the
Fund. Any other expenses of solicitation will also be borne by the Fund,
except for the services provided by the Advisor's employees which will be
borne by the Advisor.
The Fund's investment advisor is Lincoln Investment Management, Inc., 200
East Berry Street, Fort Wayne, Indiana 46802, and its sub-advisor is Lynch &
Mayer, Inc., 520 Madison Avenue, 42nd Floor, New York, New York 10022.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, nine directors will be elected to hold office until
their successors are elected and qualified. Except as otherwise directed on
the proxy card, the persons named as proxies will vote for the election of the
nominees for directors listed below. Under Maryland law, the nominees
receiving a plurality of the votes cast at the meeting will be elected.
<PAGE>
Each of the nominees is currently a director of the Fund. Each of the
nominees has consented to be a nominee and to serve as a director if elected.
In the event that any of the nominees should become unavailable for election
as a director, the persons named in the accompanying form of proxy intend to
vote for such substitute as the Board of Directors may select.
<TABLE>
<CAPTION>
SHARES OF COMMON
NAME, AGE, POSITION WITH THE FUND, STOCK BENEFICIALLY
BUSINESS EXPERIENCE DURING THE PAST OWNED AT
FIVE YEARS AND DIRECTORSHIPS DECEMBER 31, 1996(A)*
----------------------------------- ---------------------
<S> <C>
RICHARD M. BURRIDGE (67), Director (since 1986) of the 6,164
Fund; Chairman (since September 1996), prior thereto
President (March 1986-September 1996) of The Burridge
Group, Inc. (investment management); Director of
Computer Access International, Cincinnati Financial
Corporation, Lincoln National Income Fund, Inc., and
St. Joseph Light and Power Company; Chairman of the
Board of Fort Dearborn Income Securities, Inc.
ADELA CEPEDA (38), Director (since 1992) of the Fund; 1,013
President, A.C. Advisory, Inc. (May 1995-present);
Managing Director and co-founder of Abacus Financial
Group, Inc. (July 1991-May 1995); Director and Vice
President of Harvard Club of Chicago (since 1986);
Director of Lincoln National Income Fund, Inc.
ROGER J. DESHAIES (47), Director (since 1992) of the 2,317
Fund; Senior Vice President--Finance (1990-present) of
Parkview Health System, Fort Wayne, Indiana; Director
of Hospital Laundry Services, Inc. (since 1995);
President and Chairman of Hospital Laundry Services,
Inc. (February 1993-February 1995); Director of
Signature Care, Inc. (since 1992); Director and
Treasurer of Pine Valley Country Club (since 1993);
Director of Lincoln National Income Fund, Inc.
CHARLES G. FREUND (73), Director (since 1986) of the 11,500
Fund; Chairman Emeritus of the Board of Directors,
Success National Bank at Lincolnshire (since 1991);
Director of Lincoln National Income Fund, Inc. and
Mathers Fund, Inc.
THOMAS N. MATHERS (82), Director (since 1986) of the 1,000
Fund; self-employed financial consultant; Vice
President and Director of OFC Meadowood Retirement
Community (since 1989); Director of Lincoln National
Income Fund, Inc.
H. THOMAS McMEEKIN** (43), President (since May 1994) 816
and Director (since 1990) of the Fund; Executive Vice
President and Chief Investment Officer (since May
1994), prior thereto Senior Vice President (November
1992-May 1994) of Lincoln National Corporation;
President and Director (June 1995-November 1996) of
Lincoln National Investment Companies, Inc.; President
(since May 1994), prior thereto Executive Vice
President (February 1992-November 1992) and Director
(since May 1991) of Lincoln Investment Management
Inc.; President (since May 1994) and Director (since
1990) of Lincoln National Income Fund, Inc.; President
and Chief Executive Officer (since June 1994) and
Director (since June 1992) of Lincoln National
Mezzanine Corporation; Vice President (January 1990-
November 1992) and Director (since November 1994) of
The Lincoln National Life Insurance Company; Director
of Delaware Management Holdings, Inc., Lincoln
National Investment Companies, Inc., Lynch & Mayer,
Inc. and Vantage Global Advisors, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
NAME, AGE, POSITION WITH THE FUND, STOCK BENEFICIALLY
BUSINESS EXPERIENCE DURING THE PAST OWNED AT
FIVE YEARS AND DIRECTORSHIPS DECEMBER 31, 1996(A)*
----------------------------------- ---------------------
<S> <C>
DANIEL R. TOLL (69), Director (since 1986) of the Fund; 1,000
Corporate and Civic Director of Brown Group Inc., A.P.
Green Industries, Inc., Mallinckrodt Inc., Lincoln
National Income Fund, Inc., Kemper National Insurance
Companies and NICOR, Inc.
ANN L. WARNER** (45), Vice President (since 1988) and 200
Director (since 1995) of the Fund; Senior Vice
President and Director of Portfolio Management (since
May 1994), prior thereto Vice President and Portfolio
Manager (March 1991-May 1994) of Lincoln Investment
Management, Inc.; Director, Lincoln National Income
Fund, Inc.
FRED J. YOUNG (82), Director (since 1986) of the Fund; 9,000
author, lecturer and investor; Director of Lincoln
National Income Fund, Inc.; President of United Wealth
Watchers of America.
</TABLE>
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(a) The shares beneficially owned by each of the directors do not exceed 1.0%
of the outstanding shares of Common Stock of the Fund.
* Each director has sole voting and investment authority over the shares
shown, except as otherwise indicated below. The shares listed for Mr.
Deshaies include 1,530 shares held in trust. The shares listed for Mr.
Young include 1,000 shares owned by his wife, in which Mr. Young disclaims
any beneficial interest, and 8,000 shares held in trust.
**These directors are "interested persons" of the Fund (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")). Mr. McMeekin
is an executive officer of Lincoln National Corporation, of which the
Advisor is a wholly-owned subsidiary, and Ms. Warner is an executive officer
of the Advisor. Both Mr. McMeekin and Ms. Warner acquired shares of common
stock of Lincoln National Corporation in the ordinary course during 1996,
but those transactions involved substantially less than 1.0% of the
outstanding shares of the common stock of Lincoln National Corporation.
As of December 31, 1996, the directors and officers of the Fund as a group
(16 persons) beneficially owned 34,929 shares, representing less than 1.0% of
the shares of Common Stock outstanding.
The members of the nominating, audit and joint transactions committees
consist of all directors except those who may be deemed to be "interested
persons" as indicated above. The nominating committee recommends nominees for
directors and officers for consideration by the full Board. The nominating
committee does not solicit suggestions for nominees for the Board of Directors,
but suggestions accompanied by biographical data will be considered if sent to
the Secretary of the Fund. The audit committee makes recommendations to the
full Board with respect to the engagement of independent auditors and reviews
with the independent auditors the plan and results of the audit engagement and
matters having a material effect upon the Fund's financial operations. Pursuant
to an exemptive order granted by the Securities and Exchange Commission, the
joint transactions committee is responsible for reviewing any investments in
private placement securities by the Fund in which affiliates of the Fund's
investment advisor are also investing. The Board of Directors met five times,
the nominating committee met twice, the audit committee met twice and the joint
transactions committee did not meet during the year ended December 31, 1996.
3
<PAGE>
During the year ended December 31, 1996, all of the directors attended 75%
or more of the aggregate meetings of the Board of Directors and the board
committees of which such directors were members and were eligible to attend.
The executive officers of the Fund, other than as shown above, are: David A.
Berry (51), Vice President since 1993; Edward J. Petner (37), Vice President
since 1987; Bradley A. Roberts (34), Vice President since December 1991;
Robert D. Schwartz (38), Vice President since 1993; David G. Humes (40), Vice
President since 1993 and Controller since 1993; and Harold F. McElraft (52),
Vice President and Treasurer from April 1996 to February 1997. Mr. Berry has
been a Vice President of the Advisor since January 1987. Mr. Petner became an
investment analyst with Lynch & Mayer, Inc. in 1983, Vice President in August
1987, Executive Vice President in January 1993 and President in February 1994.
Mr. Roberts became an investment analyst with Lynch & Mayer, Inc. in June 1988
and became a Vice President in December 1991 and a Senior Vice President in
January 1994. Mr. Schwartz has been a portfolio manager with Lynch & Mayer
since 1993. Prior thereto, he was a portfolio manager with Salomon Brothers
Asset Management (1989-1993). Mr. Humes has been Director of Regulated
Investment Companies since August 1993. Prior thereto, he was Director of
Strategic Planning and Auditing for the Annuities Division of The Lincoln
National Life Insurance Company (1986-August 1993). Mr. McElraft was a Senior
Vice President and Chief Financial Officer of the Advisor from December 1995
to February 1997. Prior thereto, he was President of Rightwaters Association
(August 1994-December 1995), Senior Vice President, GNA Corporation (March
1994-July 1994) and Executive Vice President, Templeton Funds Management, Inc.
(July 1991-March 1994). The executive officers of the Fund are elected
annually by the Board of Directors.
COMPENSATION OF DIRECTORS AND OFFICERS
The Fund pays directors' fees to those directors who are not affiliated with
the Advisor at the rate of $7,000 per year and a $500 fee for attendance at
each Board meeting and reimburses directors for any reasonable travel expenses
incurred to attend each meeting. The Fund pays no other remuneration to its
directors and officers. In addition, the Fund provides no pension or
retirement benefits to its directors or officers.
The following table shows compensation for the independent directors for the
year ended December 31, 1996:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------
TOTAL COMPENSATION
AGGREGATE FROM FUND AND FUND
COMPENSATION COMPLEX PAID TO
NAME FROM THE FUND(1) DIRECTORS(2)
---- ---------------- ------------------
<S> <C> <C>
Adela Cepeda.......................... $9,500 $21,000
Roger J. Deshaies..................... 9,500 21,250
Charles G. Freund..................... 9,500 21,250
Daniel R. Toll........................ 9,500 21,250
Fred J. Young......................... 9,500 21,250
Richard M. Burridge................... 9,500 20,500
Thomas N. Mathers..................... 9,000 20,250
</TABLE>
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(1) Includes the director's fee of $7,000 per year and a $500 fee for
attendance at each Board Meeting.
(2) Each of the independent directors is also a director of Lincoln National
Income Fund, Inc. This information represents the aggregate directors fees
paid to the individual by both Funds.
4
<PAGE>
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The Board of Directors by the unanimous vote of the directors (including
those directors who are not "interested persons") has selected Coopers &
Lybrand, L.L.P. ("Coopers & Lybrand") as auditors for the Fund for the fiscal
year ending December 31, 1997, and the stockholders are asked to ratify this
selection. Coopers & Lybrand has served as independent auditors of the Fund
since 1993.
A representative of Coopers & Lybrand will attend the annual meeting, will
be given an opportunity to make a statement, and will be available to answer
appropriate questions.
Required Approval. The affirmative vote of a majority of the shares present,
in person or by proxy, at the meeting is required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THIS PROPOSAL NO. 2
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Fund's executive officers, directors and 10% stockholders and certain
persons who are directors, officers or affiliated persons of the Advisor are
required under the Securities Exchange Act of 1934 to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Copies of these reports must also be
furnished to the Fund. Based solely on a review of copies of such reports
furnished to the Fund through the date hereof, or written representations that
no reports were required, the Fund believes that during 1996 all filing
requirements applicable to the above-mentioned persons were met with the
exception of one filing by Adela Cepeda, which was filed late.
DATE FOR STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the next annual
meeting and be included in the proxy statement and proxy must be in proper
form and must be received on or before November 18, 1997. All such proposals
should be sent to the Secretary of the Fund, 200 East Berry Street, Fort
Wayne, Indiana 46802. The inclusion of any such proposal is subject to the
applicable requirements of the proxy rules under the Securities Exchange Act
of 1934.
OTHER MATTERS
The Board of Directors does not know of any other matter or business that
may be brought before the meeting. However, if any such matters or business
properly comes before the meeting, it is intended that the persons named as
proxies in the enclosed proxy card will vote in accordance with their best
judgment.
LOGO
C. Suzanne Womack
Secretary
Dated: March 18, 1997
YOU ARE URGED TO SEND IN YOUR EXECUTED PROXY PROMPTLY.
5
<PAGE>
PROXY
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
Proxy Solicitation on behalf of the Board of Directors
The undersigned, hereby acknowledges receipt of the Proxy Statement and
appoints Ann L. Warner, H. Thomas McMeekin and C. Suzanne Womack and each of
them as proxies with full power of substitution to act for the undersigned at
the Fund's Annual Meeting to be held Tuesday, April 22, 1997, and to vote all
the Fund's stock which the undersigned is entitled to vote at said meeting and
at any adjournment thereof as follows:
This proxy will be voted as specified herein. If no specification is made,
it will be voted FOR all nominees for director, FOR Proposal 2, and in their
discretion, the Proxies may vote upon any other business that properly comes
before the meeting.
If your address differs from that appearing hereon, please advise The First
National Bank of Boston, c/o Boston EquiServe, L.P., Investor Relations, Mail
Stop: 45-02-62, P.O. Box 8200, Boston, MA 02102-8200, of your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
-----------
SEE REVERSE
SIDE
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<PAGE>
1. ELECTION OF DIRECTORS.
Nominees: R. Burridge, A. Cepeda, R. Deshaies, C. Freund, T. Mathers,
T. McMeekin, D. Toll, A. Warner, F. Young
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
[_] [_]
[_] _______________________________________________________________________
For all nominees except as noted above
The Board of Directors recommends a vote FOR the following proposal:
2. RATIFICATION OF THE SELECTION OF AUDITORS.
FOR AGAINST ABSTAIN
[_] [_] [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
IMPORTANT: Please sign exactly as your name or names appear hereon and when
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If the signature is by a corporation, sign the full
corporate name by a duly authorized officer.
Signature: _________________________________________ Date______________________
Signature: _________________________________________ Date______________________
