SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
[X] Filed by the Registrant
[ ] 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))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
Lincoln National Convertible Securities Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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 proxy 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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H. Thomas McMeekin, President
Lincoln National Convertible Securities Fund, Inc.
One Commerce Square
Philadelphia, PA 19103
April 24, 2000
Dear Shareholder:
You recently received our Proxy Statement for the May 5,
2000 Annual Meeting of Shareholders. I am writing to update you
about some important matters that have occurred since that Proxy
Statement was mailed - an attempt to elect an alternative slate
of dissident directors (the "Dissident Nominees") whose policies
ultimately benefit only short-term market speculators and
arbitrageurs at the expense of long-term shareholders. We are
asking you to support the Fund's Board in its efforts to achieve
long-term value for the Fund's shareholders. PLEASE SIGN, DATE
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AND MAIL THE ENCLOSED WHITE PROXY CARD AS QUICKLY AS YOU CAN.
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YOU CAN ALSO FAX IT IMMEDIATELY TO (212) 809-0692.
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Last week, a proxy statement with a green proxy card (the
"Dissident Proxy") was mailed which, among other things, proposes
to elect two Dissident Nominees to the Fund's Board of Directors.
These individuals are known in the closed-end fund industry for
their attempts to force funds to liquidate, convert to open-end
funds, make significant repurchases of fund shares, conduct
tender offers or convert to interval funds. We believe such
actions could result in the erosion of significant value for the
Fund's long-term investors if the Fund is forced to liquidate
holdings in a down market to cover redemptions or finance tender
offers.
As we reported in the Fund's 1999 annual report, the Fund's
Board has taken significant measures to improve the Fund's
performance and to address the Fund's discount to NAV. In the
last year, the Fund increased its emphasis on the capital
appreciation component of total return, and while this of
necessity resulted in a modest decline in the Fund's dividend,
the Fund's performance as measured by net asset value ("NAV") has
been outstanding. Total return for the Fund (measured by NAV)
was 38.58% for 1999, handily beating both the Lipper Convertible
Mutual Fund Average at 22.33% and the S&P 500 Index at 19.53% for
the same period, and closely competitive with the major
convertible securities indices. The Fund's fourth quarter 1999
NAV total return of 32% beat both the First Boston Convertible
Securities Index at 28.3% and the Merrill Lynch Convertible Index
at 24.8% for that period. The Fund has continued to perform
competitively with its convertible closed-end fund peers, with
first quarter NAV total return of 16.3 % and a discount of 19.1 %
as of March 31, 2000, compared to an average NAV performance of
14.5 % and discount of 19.8 % among its nine Lipper peers for the
same period. (The performance data for Thursday, April 20, 2000
that should have been included in the Monday, April 24, 2000
Wall Street Journal would have shown NAV at $21.97, market price
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at $16.25, discount at 26%, and 52 week market return at 35%).
In addition, this Spring the Fund's Board authorized a measured
share buy-back program, which is progressing well.
We wish we could tell you that all of these measures have
eliminated the Fund's discount, but they haven't. Market
discounts are currently a reality for most closed-end funds,
including closed-end funds on which the Dissident Nominees have
served as directors, and these discounts tend to come and go as
market interest in particular investment styles come in and out
of favor. The Fund's Board remains committed to maximizing long-
term total return for shareholders, which includes taking
appropriate measures to address the discount, but we also believe
it is important not to take shortsighted, desperate measures that
could cripple the Fund in the long run. There is no evidence
that any of the measures advocated by the Dissident Nominees for
ongoing closed-end funds will have any long-term effect on
eliminating NAV discounts. In fact, the measures advocated by
the Dissident Nominees may serve only to drain the assets of the
Fund, forcing the sale of top performing portfolio securities and
limiting the Fund's investment flexibility. Such measures may
benefit short-term speculators looking for a quick profit, but
they do so directly at the expense of long-term holders like you.
We are therefore asking for your help in fighting this
untimely attempt to undermine the Fund. It may help you to know
that the proposals raised in the Dissident Proxy, including the
election of the Dissident Nominees, were filed months after the
published deadline, and therefore these proposals, including the
election of the Dissident Nominees, will not be proper subjects
for action at the May 5, 2000 Annual Meeting, or at any
adjournments. Even so, we still need to obtain sufficient
shareholder votes to establish a quorum and to permit the Fund's
proxy proposals to prevail at the Annual Meeting. To that end,
you can help by doing the following things immediately:
. SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD
. DO NOT RETURN ANY GREEN DISSIDENT PROXY CARD
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You can find more information in the Supplemental Proxy
Statement that is enclosed with this letter.
On behalf of the Fund's Board, we thank you for standing
with us against what we believe is a blatant attempt to benefit
market speculators and arbitrageurs.
Sincerely,
/s/ H. Thomas McMeekin
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H. Thomas McMeekin
President
IMPORTANT: Please make sure that your latest dated proxy
card is a WHITE card voting FOR the Board's nominees. A
later dated card, even if marked "withhold authority" to
vote for the Dissident Nominees, will only serve to revoke
your prior vote for the Board.
If you have any questions or need assistance in voting your
shares, please call our proxy solicitor, D.F. King & Co.,
Inc. toll-free at 1-800-848-3416.
YOU CAN FAX YOUR SIGNED AND DATED WHITE PROXY CARD TO
(212) 809-0692.
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
One Commerce Square
Philadelphia, PA 19103
SUPPLEMENTAL PROXY STATEMENT
APRIL 24, 2000
Annual Meeting of Stockholders to be held on May 5, 2000
The following information supplements the Proxy Statement
dated March 27, 2000 of Lincoln National Convertible Securities
Fund, Inc. (the "Fund") furnished in connection with the
solicitation of proxies by the Board of Directors of the Fund to
be voted at the Annual Meeting of Stockholders of the Fund to be
held on May 5, 2000 at 10:00 a.m. (CDT) at The Chicago Club, 81
East Van Buren Street, Chicago, Illinois and at any adjournments
or postponements thereof (the "Annual Meeting").
Only stockholders of record at the close of business on
March 16, 2000 will be entitled to vote at the meeting or at any
adjournments or postponements thereof.
RECENT DEVELOPMENTS
For a discussion of recent developments, please see the letter of
H. Thomas McMeekin, President of the Fund, that accompanies this
Supplemental Proxy Statement.
PARTICIPANTS
As a result of the proxy contest referred to in Mr.
McMeekin's letter, the SEC requires the Fund to provide
stockholders with certain additional information relating to
"participants," as defined in the SEC's proxy rules. Pursuant to
those rules, the Fund's Directors are, and certain employees and
agents of the Fund may be, deemed to be "participants." Unless
otherwise indicated below, the address of the participants
described below is the address of the Fund's principal executive
offices. Except as indicated below, no participant has purchased
or sold or otherwise acquired or disposed of any shares of Common
Stock of the Fund in the last two years. Information with
respect to the participant's beneficial ownership of Common Stock
of each Fund is as of April 24, 2000.
Thomas L. Bindley is a Director of the Fund. Since 1998,
Mr. Bindley has been President of Bindley Capital Corporation, a
consulting and financial advisory firm located at 707 Skokie
Boulevard, Suite 600, Northbrook, Illinois, 60062. Mr. Bindley
is the beneficial owner of 5,000 shares of Common Stock of the
Fund, which he acquired between December 1 and December 15, 1998.
Richard M. Burridge, Sr. is a Director of the Fund. Since
2000, he has been a Vice President of Paine Webber, an investment
firm with offices at 125 South Wacker Driver, Suite 2600,
Chicago, Illinois, 60606. Mr. Burridge is the beneficial owner
of 5,923 shares of Common Stock of the Fund.
Adela Cepeda is a Director of the Fund. Since 1995, Ms.
Cepeda has been the President of A.C. Advisory, Inc., a financial
advisory firm located at 70 W. Madison Street, Suite 2100,
Chicago, Illinois, 60602. Ms. Cepeda is the beneficial owner of
3,777 shares of Common Stock of the Fund, which includes 2,000
shares of Common Stock she acquired on November 1, 1999.
Roger J. Deshaies is a Director of the Fund. Since 1998,
Mr. Deshaies has been Senior Vice President, Finance of Brigham
and Women's Hospital, located at Executive Offices PBB-Admin. 4,
4020 Shattuck Street Receiving, Boston, Massachusetts, 02115.
Mr. Deshaies is the beneficial owner of 2,317 shares of Common
Stock of the Fund.
Thomas N. Mathers is a Director of the Fund. Since 1989,
Mr. Mathers has been a Vice President and Director of OFC
Meadowood Retirement Community, a retirement community. Mr.
Mathers is the beneficial owner of 1,000 shares of Common Stock
of the Fund.
H. Thomas McMeekin is a Director of the Fund and has been
President of the Fund since 1994. He is also President of
Lincoln Investment Management, Inc., the Fund's investment
adviser, and Executive Vice President and Chief Investment
Officer - Fixed Income of Delaware Management Company, the Fund's
sub-adviser. Mr. McMeekin is the beneficial owner of 1,194
shares of Common Stock of the Fund.
Daniel R. Toll is a Director of the Fund. Mr. Toll is a
corporate and civic director, and his business address is 20
South Clark Street, Suite 2222, Chicago, Illinois, 60603. He is
the beneficial owner of 1,000 shares of Common Stock of the Fund.
SOLICITATION OF PROXIES
This proxy solicitation is being made by the Board of
Directors of the Fund for use at the Annual Meeting. The cost of
this proxy solicitation will be borne by the Fund. In addition
to solicitations by mail, solicitations also may be made by
advertisement, telephone, telegram, facsimile transmission or
other electronic media, or personal contacts. In addition to
solicitation services to be provided by D.F. King & Co., Inc.
("D.F. King"), as described below, proxies may be solicited by
the Fund and its directors, officers and employees (who will
receive no compensation therefor in addition to their regular
salaries) and/or regular employees of the Fund's investment
adviser, administrator, stock transfer agent, or any of their
affiliates. Arrangements also will be made with brokerage houses
and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of the Common
Stock of the Fund, and such persons will be reimbursed for their
expenses. Although no precise estimate can be made at the
present time, it is currently estimated that the aggregate amount
to be spent in connection with the solicitation of proxies by the
Fund (excluding the salaries and fees of officers and employees)
will be approximately $130,000, and that the total cash
expenditure to date relating to the solicitation has been under
$10,000. These estimates include fees for attorneys,
accountants, advisers, proxy solicitors, advertising, printing,
distribution and other costs incidental to the solicitation.
The Fund has retained D.F. King at a fee estimated not to
exceed $40,000, plus reimbursement of reasonable out-of-pocket
expenses, to assist in the solicitation of proxies (which amount
is included in the estimate of total expenses above). The Fund
has also agreed to indemnify D.F. King against certain
liabilities and expenses. D.F. King anticipates that
approximately 25 of its employees may solicit proxies. D.F. King
is located at 77 Water Street, New York, New York 10005.
EXCLUSION OF DISSIDENT PROXY PROPOSALS
In addition to the proposal for the ratification of
independent auditors, the proxy statement with the green proxy
card mailed to stockholders last week (the "Dissident Proxy")
includes proposals for the election of an alternative slate of
dissident directors (the "Dissident Nominees") as well as a
proposal for a bylaw amendment (the proposal to elect the
Dissident Nominees and the bylaw proposal collectively referred
to as the "Dissident Proposals"). The Dissident Proposals were
received several months after the Fund s published deadline for
receipt of shareholder proposals. As a result, the Dissident
Proposals will not be proper subjects for action at the Annual
Meeting on May 5, 2000 and at any adjournments or postponements
thereof, and the Fund s management is not including the Dissident
Proposals in this Supplemental Proxy Statement or on the enclosed
WHITE Proxy Card. Moreover, the Fund did not receive timely
notice of the Dissident Proposals for purposes of the SEC's proxy
rules. Therefore, in the unlikely event that the Dissident
Proposals are properly brought before the Annual Meeting or any
adjournments or postponements thereof, the persons named as
Proxies on Management's Proxy card, voting in their discretion,
will vote against them (or, as applicable, will vote as
previously stated in the Fund's original Proxy Statement). The
persons named as Proxies on Management's Proxy card may also vote
in their discretion on any other proposals that properly come
before the Annual Meeting and any adjournments or postponements
thereof.
VOTING INFORMATION
Your vote is important. Please sign, date and mail promptly
the enclosed WHITE proxy card in the enclosed self-addressed
stamped envelope. Your Board of Directors urges you to vote
"FOR" its nominees on the enclosed WHITE proxy card and "FOR" the
ratification of Pricewaterhouse Coopers as independent auditors
for the Fund. Please do NOT sign and return any green Dissident
card sent to you.
It is not necessary to check any boxes if you wish to vote
in accordance with your Board's recommendations. Simply sign,
date and return the enclosed WHITE proxy card.
YOU CAN ALSO FAX YOUR SIGNED AND DATED PROXY CARD TO D.F. KING AT
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(212) 809-0692.
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If your shares are held in "street name," immediately
instruct your broker or the person responsible for your account
to sign a WHITE proxy card on your behalf. You should also sign,
date and mail your WHITE proxy card immediately upon receipt from
your broker or bank, using the postage-paid envelope provided.
Please do so for each account you maintain. If you have further
questions or need assistance, please call D.F. King TOLL FREE
(800) 848-3416.
Whether or not you plan to attend the Annual Meeting in
person, you are requested to sign, date and mail the enclosed WHITE
Proxy Card in the enclosed envelope which requires no postage if
mailed in the United States. Please act today.
IMPORTANT: Please make sure that your latest proxy card is a
WHITE card voting FOR the Board's nominees. A later dated
card, even if marked "withhold authority" to vote for the
Dissident NOMINEES, will only serve to revoke your prior vote
for the Board.
YOU CAN ALSO FAX YOUR SIGNED AND DATED PROXY CARD TO D.F. KING
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AT (212) 809-0692.
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FOR YOUR CONVENIENCE
YOU MAY FAX YOUR VOTE, DIRECTLY TO OUR PROXY
SOLICITOR, D.F. KING & CO. AT
1-212-809-0692
PLEASE BE SURE TO SIGN AND DATE YOUR CARD.
Please fold and detach card at perforation before mailing.
Please vote by checking (x) the appropriate boxes below.
1. To elect the following nominees as Directors of the Fund.
1) Adela Cepeda 2) Roger J. Deshaies
/ / FOR ALL / / WITHHOLD ALL / / FOR ALL EXCEPT
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If you checked "For All Except," write the withheld
nominee's name above.
2. To ratify the selection of Pricewaterhouse Coopers L.L.P. as
Independent Auditors for the Fund for the fiscal year ending
December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints H. Thomas McMeekin and Eric E.
Miller or either of them, with the right of substitution, proxies
of the undersigned at the Annual Meeting of Stockholders of the
Fund indicated on this form to be held at The Chicago Club, 81
East Van Buren Street, Chicago, Illinois, on Friday, May 5, 2000
at 10:00 A.M. (CDT), or at any postponement or adjournments
thereof, with all the powers which the undersigned would possess
if personally present, and instructs them to vote upon any
matters which may properly be acted upon at this meeting and
specifically as indicated on this form. Please refer to the
proxy statement for a discussion of each of these matters.
BY SIGNING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE EACH
PROPOSAL AS MARKED, OR IF NOT MARKED, TO VOTE "FOR" EACH
PROPOSAL, AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING, OR AT ANY POSTPONEMENT
OR ADJOURNMENT THEREOF. PLEASE COMPLETE AND MAIL THIS CARD AT
ONCE IN THE ENCLOSED ENVELOPE.
THIS PROXY CARD IS ONLY VALID WHEN SIGNED.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND AVOID THE
ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, PLEASE
DATE AND SIGN NAME OR NAMES BELOW AS PRINTED ON THIS CARD TO
AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED. WHERE SHARES
ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN.
PERSONS SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR OTHER
REPRESENTATIVE SHOULD GIVE FULL TITLE AS SUCH.
Date , 2000
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Signature(s) (Joint Owners)
(PLEASE SIGN WITHIN BOX)
DEL533FX
