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.
- -----------------------------------------------------------------
(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:
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:
-------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------
3) Filing Party:
-------------------------------------------------------
4) Date Filed:
-------------------------------------------------------
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
One Commerce Square
Philadelphia, PA 19103
MAY 18, 2000
DEAR SHAREHOLDER:
Annual Meeting Forced to Adjourn Twice for Lack of Quorum -
We Need Your Vote!!
The Annual Shareholders Meeting of Lincoln National Convertible
Securities Fund, Inc. has been forced to adjourn twice for lack
of quorum -- once to Thursday, May 18, 2000 and now to Thursday,
June 1, 2000. You should know that the adjournments of the Fund's
Annual Meeting are the direct result of a dissident group led by
Phillip Goldstein intentionally withholding shares from the
meeting so that they can make additional solicitations in an
attempt to get the Dissident Nominees elected to your Board.
Regrettably, this will cause your Fund to incur additional and,
in our opinion, needless expense to ensure that the requisite
number of shares are represented at the meeting.
You can help. At this point, every vote is critical so that we
can hold the Fund's Annual Meeting. REGARDLESS OF THE NUMBER OF
SHARES YOU OWN, IT IS EXTREMELY IMPORTANT THAT THEY ARE
REPRESENTED AND VOTED AT THE RECONVENED MEETING. PLEASE SIGN,
DATE AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY.
Superior Fund Performance
Your Board of Directors has successfully worked with the Fund s
investment manager to help achieve superior returns on your
behalf. As the attached charts show, the results have been
impressive. As of March 31, 2000, twelve month total return for
your Fund at both market price and net asset value was 68.6%.
These results compare quite favorably with the 40.2% return of
the Lipper Convertible (Open-End) Mutual Fund Average and the
17.9% return of the S&P 500 Index for the same period. As of
the same date, ten-year average annual returns for the Fund were
17.09% at NAV and 16.78% at market price, highly competitive with
all the relevant indices. These returns compare very favorably
to the Lipper Convertible Mutual Fund Average return of 14.4% for
the same period.
Part of the reason your Fund has been able to provide these
attractive returns is that, as a closed-end fund, it is able to
invest in relatively less liquid securities with high growth
potential and is also able to stay more fully invested,
maintaining generally lower cash positions. Your Fund would not
be able to do this if it were required to finance significant
share repurchases or redemptions, as Mr. Goldstein has proposed.
Your Board remains deeply concerned about the Fund's discount to
NAV. The Fund continues to buy back shares at market prices in
an effort to bring down the discount. At the same time, the
Board remains committed to positioning the Fund to provide
superior long-term performance.
Proposed Dissident Actions
We believe that the actions proposed by Mr. Goldstein in the
Dissident Proxy Statement are not in your long-term best
interests. Your Board of Directors strongly cautions you not to
be misled by the Dissident Proxy Statement. Mr. Goldstein cites
three courses of action he would encourage the Board to implement
if the Dissident Nominees are elected: significant perpetual
repurchases of shares in the market; conducting a tender offer
above the market price; and implementing an open-ending or
conversion to an interval fund.
Upon closer look, the effects of these proposed actions are not
likely to enhance long-term shareholder value. All of these
measures would require your Fund to liquidate portfolio
securities, possibly under unfavorable market conditions, to
finance potentially significant repurchases or redemptions of
Fund shares. As a result of depleted assets, your Fund's expense
ratio could increase and it could lose important investment
opportunities. Under these circumstances, it may not be possible
to "minimize the impact on those investors who choose to remain
invested in with the Fund," as Mr. Goldstein suggests. Your Fund
could even shrink to the point where it may not be financially
prudent for it to continue as a going concern.
Mr. Goldstein fails to appreciate the long-term purpose of your
Fund and appears to only be interested in a short-term windfall.
Your Fund has delivered highly competitive long-term returns to
its shareholders and we believe it can continue to provide very
attractive long-term returns that can fulfill long-term investor
expectations.
Please Return Your Proxy Card Immediately
Because the Dissident Proxies may attempt to further delay the
Fund s Annual Meeting, your vote is critical, no matter how many
shares you own and no matter when you vote them. We hope every
shareholder will vote his or her shares.
Don t risk the future of your investment on the short-sighted
agenda of stock speculators. Please ignore any request from the
Dissident Proxies to return a green proxy card. Sign, date and
mail only the enclosed WHITE management proxy card today.
-----
The adjourned meeting will be held on Thursday, June 1, 2000 at
12 Noon, CDT, at the Chicago Club, 81 East Van Buren Street,
Chicago, Illinois.
Sincerely,
H. Thomas McMeekin
President
--IMPORTANT --
Please make sure your latest dated proxy card is a WHITE card
-----
voting FOR your Board s nominees. A later dated green card, even
---
if marked "withhold authority" to vote for the Dissident
Nominees, may revoke your vote for management. All shareholders
are encouraged to return their proxy cards in the envelope
provided with this mailing. If you are concerned that your vote
may not reach us in time, you may also fax your proxy card to
D.A. King & Co., Inc., our proxy solicitor, at (212) 809-0692.
If you have any questions or need assistance in voting your
shares, please call D.A. King & Co., Inc., at:
1-800-848-3416
<TABLE>
<CAPTION>
TWELVE MONTH RETURN
(Period ending 3/31/2000)
<S> <C> <C> <C> <C> <C> <C> <C>
68.6% 45.8% 43.2% 40.2% 36.1% 17.9% 1.7% -1.0%
LNV First Merrill Lipper Russell S&P Lehman Merrill
(NAV) Boston Lynch Convertible 2000 500 Gov't/
Convertible Convertible Mutual Index Index Corp.
Securities Index Fund Index
Index Average
</TABLE>
<TABLE>
<CAPTION>
TEN YEAR AVERAGE ANNUAL RETURN
(Period ending 3/31/2000)
<S> <C> <C> <C> <C> <C> <C> <C>
18.8% 17.1% 16.9% 15.7% 14.4% 14.4% 11.3% 8.1%
S&P LNV Merrill First Russell Lipper Merrill Lehman
500 (NAV) Lynch Boston 2000 Convertible Lynch Gov't/
Index Convertible Convertible Index Mutual High Corp.
Index Securities Fund Yield Index
Index Average Master
</TABLE>
