<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 (S)240.14a-11(c) or (S)240.14a-12
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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 (Set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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
Friday, April 24, 1998 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, 1998.
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 27, 1998 are
entitled to vote at the meeting.
By order of the Board of Directors,
LOGO
Cynthia A. Rose
Secretary
March 24, 1998
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 24, 1998
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 24, 1998 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. DAVID HUMES, 200 EAST BERRY STREET, FORT WAYNE, INDIANA 46802, 1-800-
237-2920.
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 27, 1998 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 24, 1998. 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,
First Chicago Trust Company of New York. 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 except Thomas L. Bindley 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
STOCK
NAME, AGE, POSITION WITH THE FUND, BENEFICIALLY OWNED
BUSINESS EXPERIENCE DURING THE PAST AT DECEMBER 31,
FIVE YEARS AND DIRECTORSHIPS 1997(A)*
----------------------------------- ------------------
<S> <C>
THOMAS L. BINDLEY (54), Executive Vice President and Chief 0
Financial Officer (since April 1992) of Whitman Corpora-
tion, a Fortune 200 company which operates Pepsi-Cola Gen-
eral Bottlers, Midas International and Hussmann Corpora-
tion; Director of Junior Achievement of Chicago; Director
of CYCLE; Chairman, Graduate Advisory Board of Georgetown
University School of Business.
RICHARD M. BURRIDGE (68), Director (since 1986) of the 4,728
Fund; Chairman (since September 1996), prior thereto Pres-
ident (March 1986-September 1996) of The Burridge Group,
Inc. (investment management); Director of Cincinnati Fi-
nancial Corporation and Lincoln National Income Fund,
Inc.; Chairman of the Board of Fort Dearborn Income Secu-
rities, Inc.
ADELA CEPEDA (39), Director (since 1992) of the Fund; Pres- 1,192
ident, 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 Har-
vard Club of Chicago (since 1986); Commissioner of Chicago
Public Building Commission (since March 1992); Director of
Lincoln National Income Fund, Inc.
ROGER J. DESHAIES (48), Director (since 1992) of the Fund; 2,317
Senior Vice President-Finance (1990-present) of Parkview
Health System, Fort Wayne, Indiana; Director of Hospital
Laundry Services, Inc. (since 1995); President and Chair-
man of Hospital Laundry Services, Inc. (February 1993-Feb-
ruary 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 (74), Director (since 1986) of the Fund; 11,500
Chairman Emeritus of the Board of Directors, Success Na-
tional Bank at Lincolnshire (since 1991); Director of Lin-
coln National Income Fund, Inc. and Mathers Fund, Inc.
THOMAS N. MATHERS (83), Director (since 1986) of the Fund; 1,000
self-employed financial consultant; Vice President and Di-
rector of OFC Meadowood Retirement Community (since 1989);
Director of Lincoln National Income Fund, Inc.
H. THOMAS McMEEKIN** (44), President (since May 1994) and 963
Director (since 1990) of the Fund; Executive Vice Presi-
dent 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 Compa-
nies, Inc.; President (since May 1994), and Director
(since May 1991) of Lincoln Investment Management, Inc.
(formerly called Lincoln National Investment Management
Company); 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 Corpora-
tion; Director (since November 1994) of The Lincoln Na-
tional Life Insurance Company; Director of Delaware Man-
agement Holdings, Inc., Lincoln National Investment Compa-
nies, Inc., Lynch & Mayer, Inc. (June 1995-November 1996)
and Vantage Global Advisors, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
NAME, AGE, POSITION WITH THE FUND, BENEFICIALLY OWNED
BUSINESS EXPERIENCE DURING THE PAST AT DECEMBER 31,
FIVE YEARS AND DIRECTORSHIPS 1997(A)*
----------------------------------- ------------------
<S> <C>
DANIEL R. TOLL (70), Director (since 1986) of the Fund; 1,000
Corporate and Civic Director of Brown Group Inc. and Di-
rector of A.P. Green Industries, Inc., Mallinckrodt Inc.,
Lincoln National Income Fund, Inc., Kemper National Insur-
ance Companies and NICOR, Inc.
ANN L. WARNER** (46), Vice President (since 1988) and Di- 200
rector (since 1995) of the Fund; Vice President and Direc-
tor of Risk Management (since November 1997); prior
thereto Senior Vice President and Director of Portfolio
Management (May 1994-November 1997); prior thereto Vice
President and Portfolio Manager (March 1991-May 1994) of
Lincoln Investment Management, Inc.; Director, Lincoln Na-
tional Income Fund, Inc.
</TABLE>
- --------
(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.
** 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
1997, 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, 1997, the directors and officers of the Fund as a group
(14 persons/1/) beneficially owned 24,688 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, 1997.
During the year ended December 31, 1997, 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.
- --------
/1/Includes director Fred Young, who is not standing for re-election to the
Board of Directors this year.
3
<PAGE>
The executive officers of the Fund, other than as shown above, are: David A.
Berry (52), Vice President since 1993; Edward J. Petner (37), Vice President
since 1987; Robert D. Schwartz (39), Vice President since 1993; and David G.
Humes (41), Vice President since 1993, Treasurer since 1997 and Controller
since 1993. 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. Schwartz has been a portfolio manager and
Vice President of Lynch & Mayer since 1993. Prior thereto, he was a portfolio
manager and Vice President of 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). 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, 1997:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-----------------------------------
TOTAL COMPENSATION
AGGREGATE FROM FUND AND FUND
COMPENSATION COMPLEX PAID TO
NAME FROM THE FUND(1) DIRECTORS(2)
---- ---------------- ------------------
<S> <C> <C>
Richard M. Burridge................... $9,000 $20,000
Adela Cepeda.......................... 9,500 21,250
Roger J. Deshaies..................... 9,500 21,750
Charles G. Freund..................... 9,000 20,250
Thomas N. Mathers..................... 9,500 21,750
Daniel R. Toll........................ 9,500 21,250
Fred J. Young(3)...................... 9,500 21,750
</TABLE>
- --------
(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.
(3) Mr. Young is not standing for re-election this year.
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, 1998, and the stockholders are asked to ratify this
selection. Coopers & Lybrand has served as independent auditors of the Fund
since 1993.
4
<PAGE>
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 fiscal 1997 all filing
requirements applicable to the above-mentioned persons were met.
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 24, 1998. 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
Cynthia A. Rose
Secretary
Dated: March 24, 1998
YOU ARE URGED TO SEND IN YOUR EXECUTED PROXY PROMPTLY.
5
<PAGE>
P R O X Y
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 ap-
points Ann L. Warner, H. Thomas McMeekin and Cynthia A. Rose 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 on Friday, April 24, 1998, 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 dis-
cretion, the Proxies may vote upon any other business that properly comes be-
fore the meeting.
If your address differs from that appearing hereon, please advise First Chicago
Trust Company of New York, P.O. Box 2500 Jersey City, New Jersey, 07303-2500 of
your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
-----------
SEE REVERSE
SIDE
-----------
- -------------------------------------------------------------------------------
Please mark votes as in this example. [X] 2533
----
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS AND
FOR PROPOSAL 2.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
- -------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS.
FOR [_] WITHHELD [_]
For all nominees except as listed above
---------------------------------------
Nominees: R. Burridge, A. Cepeda, R. Deshaies, C. Freund, T. Mathers, T.
McMeekin, D. Toll, A. Warner and T. Bindley
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 ex-actly 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(S) DATE
