<PAGE>
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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
TCW Convertible Securities Fund Inc.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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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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Notes:
<PAGE>
[LOGO OF TCW CONVERTIBLE SECURITIES FUND, INC. (R)]
TCW CONVERTIBLE SECURITIES FUND, INC.
865 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JULY 30, 1998
Notice is hereby given that the annual meeting of shareholders of TCW
Convertible Securities Fund, Inc. (the "Fund") will be held in the Glenwood
Room of the Los Angeles Omni Hotel, 930 Wilshire Boulevard, Los Angeles,
California 90017, at 10:00 A.M., Pacific Daylight Time, to consider and vote
on the following matters:
1. Election of eight directors to hold office until the next annual
election of directors;
2. Renewal of the Investment Advisory and Management Agreement;
3. Ratification of the selection of Deloitte & Touche, LLP as independent
auditors for the Fund; and
4. Amendment of the Fund's Articles of Incorporation to increase the number
of authorized shares of common stock; and
5. Such other matters as may properly come before the meeting or any
adjournment or adjournments thereof.
May 29, 1998, has been fixed as the record date for the determination of
shareholders entitled to notice of, and to vote at, the meeting, and only
holders of Common Stock of record at the close of business on that date will
be entitled to vote.
By Order of the Board of Directors
PHILIP K. HOLL
Secretary
June 22, 1998
IT IS REQUESTED THAT YOU PROMPTLY EXECUTE THE ENCLOSED PROXY AND RETURN IT
IN THE ENCLOSED ENVELOPE THUS ENABLING THE FUND TO AVOID UNNECESSARY EXPENSE
AND DELAY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE PROXY
IS REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND
THE MEETING.
<PAGE>
TCW CONVERTIBLE SECURITIES FUND, INC.
865 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of TCW
Convertible Securities Fund, Inc. (the "Fund") in connection with the annual
meeting of shareholders to be held on Thursday, July 30, 1998 at 10:00 A.M.,
Pacific Daylight Time. Any shareholder executing a proxy has the power to
revoke it prior to its exercise by submission of a later proxy, by voting in
person, or by letter to the Secretary of the Fund. Unless the proxy is
revoked, the shares represented thereby will be voted in accordance with
specifications thereon. Proxy solicitation will be principally by mail but may
also be by telephone or personal interview conducted by officers and regular
employees of TCW Funds Management, Inc., the Fund's investment adviser (the
"Adviser") or The Bank of New York, the Fund's transfer agent. The cost of
solicitation of proxies will be borne by the Fund, which will reimburse banks,
brokerage firms, nominees, fiduciaries and other custodians for reasonable
expenses incurred by them in sending the proxy material to beneficial owners
of shares of the Fund. This Proxy Statement was first mailed to shareholders
on or about June 26, 1998.
The Fund's Common Stock is the only class of outstanding voting securities
of the Fund. The record date for determining shareholders entitled to notice
of, and to vote at, the meeting has been fixed at the close of business on May
29, 1998, and each shareholder of record at that time is entitled to cast one
vote for each share of Common Stock registered in his or her name. At May 29,
1998, 38,687,329 shares of Common Stock were outstanding and entitled to be
voted. The Fund's Common Stock does not have cumulative voting rights. At
May 29, 1998, as far as known to the Fund, no person owned beneficially more
than 5% of the outstanding Common Stock of the Fund.
<PAGE>
1. ELECTION OF THE BOARD OF DIRECTORS
At the meeting, eight directors are to be elected to serve until the next
annual meeting of shareholders or until their successors are duly elected and
qualified. Unless otherwise instructed, the proxy holders intend to vote
proxies received by them for the eight nominees named below. The following
schedule sets forth certain information regarding each nominee for election as
director.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
DURING PAST FIVE YEARS SHARES
NAME AND POSITION AND DIRECTORSHIP OF DIRECTOR BENEFICIALLY
WITH THE FUND PUBLIC COMPANIES AGE SINCE OWNED(1)
----------------- ---------------------- --- -------- ------------
<C> <S> <C> <C> <C>
Ernest O. Ellison* Vice Chairman of the Board, 67 1987 14,840
President and Director The TCW Group, Inc.
(formerly TCW Management
Company); Vice Chairman of
the Board and Chairman,
Investment Policy
Committee, Trust Company of
the West; and Chairman,
Investment Policy Committee
of the Adviser and TCW
Asset Management Company.
For more than 10 years
prior to May 1992, Mr.
Ellison served in various
executive positions with
the Fund's Adviser and its
affiliates.
John C. Argue Of Counsel, Argue, Pearson, 66 1997 1,000
Director Harbison & Myers; Director,
Apex Mortgage Capital,
Inc., Avery Dennison
Corporation, CalMat
Company, Nationwide Health
Properties, Inc. and TCW
Galileo Funds, Inc.;
Advisory Director, LAACO
Ltd.; director or trustee
of various business and
not-for-profit
corporations; Trustee,
TCW/DW Funds.
Norman Barker, Jr. Former Chairman of the 75 1987 2,880
Director(2) Board, First Interstate
Bank of California and Vice
Chairman of the Board,
First Interstate Bancorp;
Director, American Health
Properties, Inc., ICN
Pharmaceuticals, Inc., TCW
Galileo Funds, Inc.;
Chairman of the Board,
Fidelity Federal Bank.
Richard W. Call Former President, The 73 1987 12,243
Director(2) Seaver Institute (a private
foundation); Director, TCW
Galileo Funds, Inc. and The
Seaver Institute
Coleman W. Morton Private investor; formerly 78 1987 226,000
Director Member of the Advisory
Board and President and
Director, The Investment
Company of America.
Charles A. Parker Former Director and 63 1988 1,728
Director Executive Vice President,
The Continental
Corporation; Former
Chairman and Chief
Executive Officer,
Continental Asset
Management Corporation; and
Director, Underwriters
Reinsurance Co. and The
Minerva Fund.
Lawrence J. Sheehan* Of Counsel to, and Partner 65 1987 8,000
Director (1968 to 1994) of, the law
firm of O'Melveny & Myers,
legal counsel to the Fund
and the Adviser; Director,
Source Capital, Inc., FPA
Capital Fund, Inc., FPA New
Income Fund, Inc. and FPA
Perennial Fund, Inc.
Robert G. Sims* Private Investor; Director, 67 1991 3,600
Director(2) The TCW Group, Inc.
</TABLE>
2
<PAGE>
- --------
* Directors who are or may be deemed to be "interested persons" to the Fund
as defined in the Investment Company Act of 1940, as amended (the "Act").
Mr. Ellison is an officer of the Fund and a shareholder and director of The
TCW Group, Inc., the parent corporation of the Adviser. Mr. Sims is a
director of the Fund and is a shareholder of and has served as a director
of the parent corporation to the Adviser during the past two years. Mr.
Sheehan is Of Counsel to, and a former partner of, legal counsel to the
Fund and the Adviser.
(1) Direct voting and investment power as of May 29, 1998, except as otherwise
noted in this footnote. Shares held by Mr. Ellison include 12,000 shares
for which he holds voting and investment power as a custodian for a minor
and trustee of a charitable trust. Shares held by Mr. Morton represent
226,000 shares for which he holds voting and investment power as trustee
of four trusts of which he is also beneficiary. All officers and directors
of the Fund as a group owned, as of May 29, 1998, beneficially less than
1% of the outstanding shares of its Common Stock. The column in the above
table also does not include approximately 40,213 shares of Common Stock
which are owned by the Adviser.
(2) Member of the Audit Committee of the Board of Directors.
All nominees have consented to being named in this Proxy Statement and have
indicated their intention to serve if elected. Should any nominee for director
withdraw or otherwise become unavailable for reasons not presently known, it
is intended that the proxy holders will vote for the election of such other
person or persons as the Board of Directors may designate.
The Board of Directors has not designated a nominating committee of the
Board. The Board of Directors has designated the members identified by
footnote (2) to the preceding table as the Audit Committee of the Board. The
Audit Committee makes recommendations to the Board of Directors concerning the
selection of the Fund's independent auditors and reviews with such auditors
the results of the annual audit, including the scope of auditing procedures,
the adequacy of internal controls, and compliance by the Fund with the
accounting, recording and financial reporting requirements of the Act. The
Audit Committee also reviews compliance with the Fund's Code of Ethics by the
executive officers, Directors and investment personnel of the Adviser. The
Audit Committee held two meetings during the last fiscal year.
During 1997, the Board of Directors held four meetings. Each nominee then in
office attended more than 75% of the aggregate of (1) the total number of
meetings of the Board of Directors and (2) if a member of the Audit Committee,
the total number of meetings held by such Committee.
The Fund pays each Independent Director an annual fee of $7,500 plus a per
meeting fee of $750 for meetings of the Board of Directors or Committees of
the Board of Directors attended by the Director. The Fund also reimburses such
Directors for travel and other out-of-pocket expenses incurred by them in
connection with attending such meetings. Directors and officers of the Fund
who are employed by the Adviser or an affiliated company thereof receive no
compensation nor expense reimbursement from the Fund.
The following table illustrates the compensation paid to the Fund's
independent directors (the "Independent Directors") by the Fund for the fiscal
year ended December 31, 1997.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
NAME OF INDEPENDENT DIRECTOR FROM THE FUND
---------------------------- ----------------------
<S> <C>
John C. Argue....................................... $ 5,250
Norman Barker, Jr .................................. 12,750
Richard W. Call..................................... 12,750
Coleman W. Morton................................... 11,250
Charles A. Parker................................... 11,250
</TABLE>
3
<PAGE>
The following table illustrates the compensation paid to Fund's Independent
Directors for the calendar year ended December 31, 1997 by the TCW Galileo
Funds, Inc. in the case of Messrs. Argue, Barker and Call, and, in the case of
Mr. Argue, the TCW/DW Funds, as well as from the Fund. The TCW Galileo Funds,
Inc. and TCW/DW Funds are included solely because the Fund's Adviser, TCW
Funds Management, Inc., also serves as their investment adviser.
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH COMPENSATION
COMPENSATION FROM THE
FROM THE TCW TCW GALILEO
FOR SERVICE AS GALILEO FUNDS, INC.,
NAME OF INDEPENDENT DIRECTOR AND COMMITTEE FUNDS, INC. TCW/DW FUNDS
DIRECTOR MEMBER OF THE FUND AND THE FUND AND THE FUND
------------------- ---------------------- ------------ ------------
<S> <C> <C> <C>
John C. Argue............ $ 5,250 $43,250 $114,375
Norman Barker, Jr. ...... 12,750 50,750 --
Richard W. Call.......... 12,750 50,750 --
</TABLE>
The following information relates to the executive officers of the Fund who
are not directors of the Fund. The business address of each is 865 South
Figueroa Street, Los Angeles, California 90017. Several of such officers own
common stock of The TCW Group, Inc., the parent corporation of the Adviser.
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION OFFICER
WITH THE FUND DURING PAST FIVE YEARS AGE SINCE
----------------- ---------------------- --- -------
<C> <S> <C> <C>
Ronald E. Robison Managing Director, TCW Asset 59 1988
Senior Vice President and Management Company, Trust Company of
Chief Operating Officer the West and the Adviser; Chief
Operating Officer, the Adviser.
Thomas E. Larkin, Jr. Executive Vice President and Director, 58 1989
Senior Vice President The TCW Group, Inc.; Vice Chairman,
TCW Asset Management Company;
President and Director, Trust Company
of the West; Chairman, the Adviser;
President and Director of TCW Galileo
Funds, Inc.; President and Trustee of
TCW/DW Funds
Robert M. Hanisee Managing Director, Trust Company of 59 1992
Senior Vice President the West, TCW Asset Management Company
and the Adviser.
Kevin Hunter Managing Director, Trust Company of 39 1992
Senior Vice President the West, TCW Asset Management
Company, and the Adviser.
Thomas D. Lyon Managing Director, Trust Company of 38 1998
Senior Vice President the West, TCW Asset Management Company
and the Adviser
Michael E. Cahill Managing Director, General Counsel and 47 1992
General Counsel and Secretary, Trust Company of the West,
Assistant Secretary TCW Asset Management Company, the
Adviser and The TCW Group, Inc.
Hilary G. D. Lord Managing Director, Chief Compliance 41 1988
Assistant Secretary Officer and Assistant Secretary, Trust
Company of the West, TCW Asset
Management Company, and the Adviser;
Assistant Secretary, TCW Galileo
Funds, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION OFFICER
WITH THE FUND DURING PAST FIVE YEARS AGE SINCE
----------------- ---------------------- --- -------
<C> <S> <C> <C>
Alvin R. Albe, Jr. Executive Vice President, Finance and 44 1998
Treasurer, Principal Administration, The TCW Group, Inc.,
Accounting Officer and Trust Company of the West, TCW Asset
Assistant Secretary Management Company, and the Adviser;
Senior Vice President and Treasurer, TCW
Galileo Funds, Inc.
Philip K. Holl Vice President, Associate General Counsel 48 1994
Secretary and Assistant Secretary, Trust Company of
the West, TCW Asset Management Company
and the Adviser; Secretary, TCW Galileo
Funds, Inc.; Former Vice President/Legal
Affairs, the Reserve Group of Mutual
Funds.
</TABLE>
2. RENEWAL OF THE INVESTMENT ADVISORY AGREEMENT
TCW Funds Management, Inc. ("Adviser"), 865 South Figueroa Street, Los
Angeles, California 90017, caused the organization of the Fund and provides
investment management and advisory services to the Fund pursuant to an
Investment Advisory and Management Agreement ("Advisory Agreement") dated
February 17, 1987, a copy of which is attached as Exhibit A hereto. The
Advisory Agreement was last approved by the shareholders of the Fund on July
16, 1997. The Advisory Agreement may be continued from year to year by (i) the
Board of Directors of the Fund or by the vote of a majority (as defined in the
Act) of the outstanding voting securities of the Fund and (ii) by the vote of
a majority of directors who are not interested persons (as defined in the Act)
of the Fund or of the Adviser cast in person at a meeting called for the
purpose of voting on such approval. On February 17, 1998, the Board of
Directors and a majority of the directors who are not interested persons of
the Fund or the Adviser voted to continue the Advisory Agreement to April 30,
1999. The information considered by the directors in voting to continue the
Advisory Agreement for another annual period included (1) financial
information concerning the Adviser; (2) a description of the personnel and
services provided; (3) comparative advisory fee, expense and performance data;
(4) a report of communications from shareholders; (5) a description of the
Adviser's various operational policies including its securities allocation
procedures; and (6) information regarding research services received by the
Adviser from brokers in return for brokerage commissions paid by the Fund for
the purchase and sale of portfolio securities. In voting to continue the
Advisory Agreement and recommend its approval by shareholders note was taken
of the experience of the Adviser's personnel, the Fund's long-term performance
record, and its lower overall expense ratio compared to other convertible
funds. The Board of Directors also reviewed the Fund's 1997 performance
record. The Board of Directors recommends approval by shareholders of the
continuance of the Advisory Agreement. Such approval requires the affirmative
vote of (i) 67% or more of the voting securities represented at the meeting,
if more than 50% of the outstanding voting securities are present or
represented by proxy, or (ii) more than 50% of all outstanding voting
securities, whichever is less.
Under the Advisory Agreement, the Fund employs the Adviser to manage the
investment of its assets, to place orders for the purchase and sale of its
portfolio securities, and to administer its day to day operations, subject to
control by the Board of Directors of the Fund. The Adviser is responsible for
obtaining and evaluating economic, statistical, and financial data and for
formulating and implementing investment programs in furtherance of the Fund's
investment objective and policies.
5
<PAGE>
The Adviser furnishes to the Fund office space at such place as may be
agreed upon from time to time and all office facilities, business equipment,
supplies, utilities and telephone service necessary for managing the affairs
and investments and keeping the general accounts and records of the Fund
(exclusive of the necessary records of any transfer agent, registrar, dividend
disbursing or reinvesting agent or custodian) and arranges for officers or
employees of the Adviser to serve, without compensation from the Fund, as
officers, directors or employees of the Fund if desired and reasonably
required by the Fund.
As compensation for the services rendered, facilities provided and expenses
borne, the Adviser receives a monthly fee computed at the annual rate of 0.75%
of the first $100 million of the Fund's average net assets, and 0.50% of the
Fund's average net assets in excess of $100 million. Average net assets are
determined by taking the average of the weekly determinations of net asset
value for each week which ends during the month. In addition, the Fund
reimburses the Adviser for the costs (up to a maximum of $25,000 per year) of
providing accounting services to the Fund, including maintaining the Fund's
financial books and records, calculating its weekly net asset value and
preparing its financial statements. For the year ended December 31, 1997, the
Adviser received from the Fund $1,853,979 in advisory fees and approximately
$25,000 for accounting services. The advisory fees and reimbursement for
accounting services equaled 0.58% of the Fund's average net assets for the
year. The total net assets of the Fund were $355,061,271 on December 31, 1997.
Except for expenses specifically assumed by the Adviser under the Advisory
Agreement, the Fund bears all expenses incurred in its operations. Such Fund
expenses include the fee of the Adviser; compensation and expenses of
directors of the Fund who are not affiliated persons of the Adviser as defined
in the Act; registration, filing and other fees in connection with filings
with regulatory authorities; fees and expenses of listing and maintaining the
listing of the Fund's shares on any national securities exchange; fees and
expenses of independent auditors; the expenses of printing and mailing proxy
statements and shareholder reports; custodian and transfer and dividend
disbursing agent charges; brokerage commissions and securities transaction
costs incurred by the Fund; taxes and corporate fees; legal fees incurred in
connection with the affairs of the Fund; the fees of any trade association of
which the Fund is a member; the cost of stock certificates representing shares
of the Fund; the organizational and offering expenses of the Fund, whether or
not advanced by the Adviser; expenses of shareholder and director meetings;
premiums for the fidelity bond and any errors and omission insurance
maintained by the Fund; interest and taxes; and any other ordinary or
extraordinary expenses incurred by the Fund in the course of its business.
INFORMATION CONCERNING THE ADVISER
The Advisory Agreement permits the Adviser to render advisory services to
others. The Adviser presently serves as investment adviser to 35 other
investment companies or their separate series which are registered under the
Act, and to a number of foreign investment companies. The Adviser serves as
investment adviser to the TCW Galileo Convertible Securities Fund, an open-end
investment company with a similar investment objective to that of the Fund and
which had, as of May 29, 1998, net assets of $35,422,948. For its services as
investment adviser to the TCW Galileo Convertible Securities Fund, the Adviser
receives monthly compensation calculated at a rate of 0.75% of the fund's
average daily net assets.
The Adviser is a wholly owned subsidiary of The TCW Group, Inc. ("The TCW
Group"), a Nevada corporation, whose direct and indirect subsidiaries,
including Trust Company of the West and TCW Asset Management Company, provide
a variety of trust, investment management and investment advisory services.
6
<PAGE>
Ernest O. Ellison, Chairman and President of the Fund, is a shareholder of The
TCW Group. As of March 31, 1998, the Adviser and its affiliated companies had
over $50 billion under management or committed for management in various
fiduciary and advisory capacities.
The directors of the Adviser are Thomas E. Larkin, Jr., Chairman, Marc I.
Stern, President of the Adviser, and Alvin R. Albe, Jr., Executive Vice
President of the Adviser. Mr. Robert Day may be deemed to be a control person
of the Adviser by virtue of the aggregate ownership by Mr. Day and his family
of more than 25% of the outstanding voting stock of The TCW Group. The
principal occupations of Messrs. Albe and Larkin are described in the
preceding tables. Mr. Stern, 54, is President of the Adviser and President and
Director and of The TCW Group. The business address of Messrs. Albe, Day,
Larkin and Stern, and of The TCW Group is 865 South Figueroa Street, Los
Angeles, California 90017.
3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
Shareholders are requested to ratify the selection by the Board of Directors
(including a majority of directors who are not interested persons of the Fund
as that term is defined in the Act) of the firm of Deloitte & Touche LLP
("Deloitte") as independent auditors for the Fund for the fiscal year ending
December 31, 1997. The engagement of such independent auditors is conditioned
upon the right of the Fund, by vote of a majority of its outstanding voting
securities, to terminate such employment forthwith without any penalty.
Representatives of Deloitte are expected to be present at the meeting, with
the opportunity to make a statement if they desire to do so, and such
representatives are expected to be available to respond to any appropriate
questions from shareholders.
4. APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION
Shareholders are requested to approve an amendment to the Fund's Articles of
Incorporation increasing the number of shares of Common Stock which the Fund
is authorized to issue from fifty million (50,000,000) shares to seventy-five
million (75,000,000) shares. In voting to approve the amendment the directors
determined that the current authorized amount may be insufficient in the event
the Fund makes additional offerings of its shares. A copy of the proposed
amendment is attached as Exhibit B.
VOTING REQUIREMENTS
For purposes of this Annual Meeting of Shareholders, a quorum is present to
transact business if the holders of a majority of the outstanding shares of
the Fund entitled to vote at the meeting are present in person or by proxy.
The shares represented by a proxy that is properly executed and returned will
be considered to be present at the meeting even if the proxy is accompanied by
instructions to withhold authority ("non-votes") or is marked with an
abstention. Assuming a quorum is present, the following rules will apply to
each item contained in this Proxy Statement:
(a) Item 1-Election of Directors. The affirmative votes of a plurality of
the votes cast at the meeting are required to elect each of the
directors.
(b) Item 2-Advisory Agreement. The affirmative vote of a majority (as
defined in the Act) of the shares entitled to vote, which means (a)
67% or more of the shares represented at the meeting if more than
7
<PAGE>
50% of the shares entitled to vote are so represented, or (b) more than
50% of the shares entitled to vote, whichever is less, is required to
approve the renewal of the Advisory Agreement.
(c) Item 3-Selection of Auditors. The approval of a majority of the votes
cast at the meeting is required for the ratification of the selection
of independent auditors.
(d) Item 4-Amendment of Articles of Incorporation. The approval of a
majority of the total number of shares outstanding and entitled to vote
at the meeting is required to amend the Articles of Incorporation.
Based on the Fund's interpretation of Maryland law, it is the policy of the
Fund that abstentions do not constitute a vote "for" or "against" a matter and
will be disregarded in determining the "votes cast" on an issue. Broker non-
votes (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owner or other person
entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated the same
as abstentions.
5. OTHER MATTERS
The proxy holders have no present intention of bringing before the meeting
for action any matters other than those specifically referred to in the
foregoing, and in connection with or for the purpose of effecting the same,
nor has the management of the Fund any such intention. Neither the proxy
holders nor the management of the Fund is aware of any matters which may be
presented by others. If any other business shall properly come before the
meeting, the proxy holders intend to vote thereon in accordance with their
best judgment.
SHAREHOLDER PROPOSALS
The date by which any shareholder proposal intended to be presented at the
next annual meeting must be received by the Company for inclusion in the
Fund's proxy statement and form of proxy relating to that meeting is December
31, 1998.
8
<PAGE>
ADJOURNMENT
In the event that sufficient votes in favor of the proposals set forth in
this Notice of Meeting and Proxy Statement are not received by the time
scheduled for the meeting, the persons named as proxies may move one or more
adjournments of the meeting for a period or periods of not more than 30 days
in the aggregate to permit further solicitation of proxies with respect to any
such proposals. Any such adjournment will require the affirmative vote of a
majority of the shares present at the meeting. The persons named as proxies
will vote in favor of such adjournment those shares which they are entitled to
vote which have voted in favor of such proposals. They will vote against any
such adjournment those proxies which have voted against any of such proposals.
By Order of the Board of Directors
PHILIP K. HOLL
Secretary
June 22, 1998
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED REPLY ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
A COPY OF THE FUND'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1996 IS
AVAILABLE WITHOUT CHARGE UPON REQUEST BY WRITING THE FUND AT 865 SOUTH
FIGUEROA STREET, LOS ANGELES, CALIFORNIA 90017 OR TELEPHONING IT AT 1-800-
386-3829.
9
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Agreement made this 17th day of February, 1987 by and between TCW
CONVERTIBLE SECURITIES FUND, INC., a Maryland corporation ("Fund"), and TCW
FUNDS MANAGEMENT, INC., a California corporation ("Adviser").
Whereas, the Fund proposes to engage in business as a closed-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended ("1940 Act");
Whereas, the Adviser proposes to engage in the business of providing
investment advice and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended;
Whereas, the Fund wishes to retain the Adviser to render investment advisory
and management services; and
Whereas, the Adviser is willing to perform such services.
Now, therefore, the Fund and the Adviser agree as follows:
1. Appointment. The Fund hereby employs the Adviser to provide investment
advisory and management services for the period and on the terms set forth in
this Agreement. The Adviser hereby accepts such employment and agrees to
render the services and to assume the obligations herein set forth, for the
compensation herein provided.
2. Advisory and Management Services. The Adviser, subject to the direction
and supervision of the Fund's Board of Directors and in conformity with
applicable laws, the Fund's Articles of Incorporation, Bylaws, Registration
Statement, Prospectus and stated investment objectives, policies and
restrictions, shall:
(a) Manage the investment of the Fund's assets including, by way of
illustration, the evaluation of pertinent economic, statistical, financial
and other data, the determination of the industries and companies to be
represented in the Fund's portfolio, the formulation and implementation of
the Fund's investment program, and the determination from time to time of
the securities and other investments to be purchased, retained or sold by
the Fund;
(b) Place orders for the purchase or sale of portfolio securities for the
Fund's account with broker-dealers selected by the Adviser;
(c) Administer the day to day operations of the Fund;
(d) Maintain the accounts, books and other documents which constitute the
record forming the basis for the Fund's financial statements (exclusive of
the necessary records maintained by the Fund's transfer agent, registrar,
dividend disbursing and reinvestment agent, and custodian), prepare such
financial statements, determine at least weekly the net asset value per
share of the Fund and furnish the Fund's Board of Directors such periodic
and special reports as the Board may request;
(e) Furnish to the Fund office space at such place as may be agreed upon
from time to time, and all office facilities, business equipment, supplies,
utilities and telephone services necessary for managing the
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affairs and investments and keeping the general accounts and records of the
Fund, and arrange for officers or employees of the Adviser to serve,
without compensation from the Fund, as officers, directors or employees of
the Fund, if desired and reasonably required by the Fund.
(f) Pay such expenses as are incurred by it in connection with providing
the foregoing services, except as provided in Section 3 hereof.
3. Fund Expenses. The Fund assumes and shall pay or cause to be paid all
expenses of the Fund, including, without limitation: (a) all costs and
expenses incident to any public offering of securities of the Fund, for cash
or otherwise, including those relating to the registration of its securities
under the Securities Act of 1933, as amended, and any qualification of its
securities under state securities laws; (b) the charges and expenses of any
custodian appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property; (c) the charges and expenses of independent
accountants; (d) the charges and expenses of stock transfer and dividend
disbursing agent or agents and registrar or registrars appointed by the Fund;
(e) brokerage commissions, dealer spreads, and other costs incurred in
connection with proposed or consummated portfolio securities transactions; (f)
all taxes, including securities issuance and transfer taxes, and corporate
fees payable by the Fund to Federal, state, local or other governmental
agencies; (g) the cost and expense of engraving, printing and issuing
certificates representing securities of the Fund; (h) fees involved in
registering and maintaining registrations of the Fund and of its securities
with the Securities and Exchange Commission and various state and other
jurisdictions; (i) all expenses of shareholders and directors meetings, and of
preparing, printing and mailing proxy statements and quarterly, semiannual and
annual reports to shareholders; (j) fees and expenses of directors of the Fund
who are not "affiliated persons" of the Adviser, (k) all fees and expenses
incident to any dividend reinvestment or distribution program; (l) charges and
expenses of legal counsel to the Fund; (m) trade association dues; (n)
interest payable on Fund borrowings; (o) any advertising, public relations,
and shareholder relations expense; (p) fees and expenses incident to the
listing of securities of the Fund on any securities exchange; (q) premiums for
a fidelity bond and any errors and omission insurance maintained by the Fund;
and (r) any other ordinary or extraordinary expenses incurred by the Fund in
the course of its business.
4. Compensation. As compensation for the services performed, the Fund shall
pay the Adviser as soon as practicable after the last day of each month a fee
for such month computed at an annual rate of three quarters of one percent
(.75%) of the first $100,000,000 of the Fund's average net assets and one half
of one percent (.50%) of the Fund's average net assets in excess of
$100,000,000. For the purpose of calculating such fee, the net asset value for
a month shall be the average of the Fund's net asset values as determined on
the last business day of each week which ends during the month. If this
agreement shall become effective subsequent to the first day of a month, or
shall terminate before the last day of a month, the foregoing compensation
shall be prorated. In addition, the Fund will reimburse the Adviser monthly
for the costs (up to a maximum of $25,000 per year) of providing the Fund's
accounting services, including maintaining the Fund's financial books and
records, calculating its net asset value, and preparing its financial
statements and schedules of investments for inclusion in reports to
shareholders and to the Securities and Exchange Commission, the maintenance of
files relating to the foregoing, including rent, personnel costs and other
overhead expenses allocable to the aforementioned services.
5. Services Not Exclusive. The Fund understands that the Adviser and its
affiliates may act in one or more capacities on behalf of other investment
companies and advisory accounts and the Fund consents thereto. While
information and recommendations supplied to the Fund shall, in the Adviser's
judgement, be appropriate under the circumstances and in light of the
investment objectives and policies of the Fund, they may be different from
A-2
<PAGE>
the information and recommendations supplied by the Adviser or its affiliates
to other investment companies and advisory accounts. The Fund shall be
entitled to equitable treatment under the circumstances in receiving
information, recommendations and any other services, but the Fund recognizes
that it is not entitled to receive preferential treatment as compared with the
treatment given by any other investment company or advisory account.
6. Portfolio Transactions and Brokerage. In placing transactions and
selecting brokers or dealers, the Adviser shall endeavor to obtain on behalf
of the Fund the best overall terms available. In assessing the best overall
terms available for any transaction, the Adviser shall consider all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both for
the specific transaction and on a continuing basis. In evaluating the best
overall terms available and in selecting the broker or dealer to execute a
particular transaction, the Adviser may also consider the "brokerage and
research services" provided to the Fund and/or other accounts over which the
Adviser or an affiliate of the Adviser exercises investment discretion. The
Adviser is authorized, subject to review by the Fund's Board of Directors, to
pay a broker or dealer which provides such brokerage and research services a
commission for executing a portfolio transaction for the Fund which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Adviser determines in good
faith that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer-viewed in
terms of that particular transaction or in terms of the overall
responsibilities of the Adviser to the Fund.
7. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-
2 under the 1940 Act the records required to be maintained by Rule 31a-1 under
the 1940 Act.
8. Limitation of Liability. Neither the Adviser, nor any director, officer,
agent or employee of the Adviser, shall be liable or responsible to the Fund
or any of its shareholders for any error of judgement, mistake of law or any
loss arising out of any investment, or for any other act or omission in the
performance by such person or persons of their respective duties, except for
liability resulting from willful misfeasance, bad faith, negligence, reckless
disregard of their respective duties.
9. Nature of Relationship. The Fund and the Adviser are not partners or
joint venturers with each other and nothing herein shall be construed so as to
make them such partners or joint venturers or impose any liability as such on
either of them. The Adviser is an independent contractor and, except as
expressly provided or authorized in this Agreement, shall have no authority to
act for or represent the Fund.
10. Duration and Termination. This Agreement shall become effective upon its
execution and shall continue in effect until the earlier of two years from the
date hereof or the first meeting of the shareholders of the Fund following the
date hereof, and if approved at that meeting by the vote of a "majority of the
outstanding voting securities" of the Fund, this Agreement shall thereafter
continue in effect from year to year, provided its continuance is specifically
approved at least annually (a) by vote of a "majority of the outstanding
voting securities" of the Fund or by vote of the Board of Directors of the
Fund, and (b) by vote of a majority of the Directors of the Fund who are not
parties to this Agreement or "interested persons" of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on
such approval. The Fund (either by
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<PAGE>
vote of its Board of Directors or by vote of a "majority of the outstanding
voting securities" of the Fund) may, at any time and without payment of any
penalty, terminate this Agreement upon sixty days written notice to the
Adviser; this Agreement shall automatically and immediately terminate in the
event of its "assignment;" and the Adviser may terminate this Agreement
without payment of any penalty on ninety days written notice to the Fund.
11. Definitions. For the purposes of this Agreement, the terms "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have their respective meanings defined in the 1940 Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission, or such interpretive positions as
may be taken by the Commission or its staff under said Act, and the term
"brokerage and research services" shall have the meaning given in the
Securities Exchange Act of 1934, as amended, and the Rules and Regulations
thereunder.
12. Notices. Any notice under this Agreement shall be given in writing,
addressed and delivered to the party to this Agreement entitled to receive
such notice at such address as such party may designate in writing.
13. Applicable Law. This Agreement shall be construed in accordance with the
laws of the State of California and the applicable provisions of the 1940 Act.
To the extent applicable law of the State of California, or any of the
provisions herein, conflict with applicable provisions of the 1940 Act, the
latter shall control.
In Witness Whereof, the parties hereto have executed and delivered this
agreement on the day and year first above written in Los Angeles, California.
TCW CONVERTIBLE SECURITIES FUND, INC.
By: /s/ ERNEST O. ELLISON
------------------------------------
President
Attest:
/s/ RICHARD GRANTHAM
- ---------------------------------
Secretary
TCW FUNDS MANAGEMENT, INC.
By: /s/ ERNEST O. ELLISON
------------------------------------
President
Attest:
/s/ RICHARD GRANTHAM
- ---------------------------------
Secretary
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<PAGE>
EXHIBIT B
ARTICLE VI
(1) The total number of shares of capital stock which the Corporation will
have the authority to issue is Seventy Five Million (75,000,000) shares, of
the par value of One Cent ($0.01) per share and of the aggregate par value of
Seven Hundred Fifty Thousand Dollars ($750,000), all of which shares are
designated common stock.
B-1
<PAGE>
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TCW CONVERTIBLE SECURITIES FUND, INC.
P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS for use at an Annual
Meeting of Shareholders to be held in the Glenwood Room of the Los Angeles
Omni Hotel, 930 Wilshire Boulevard, Los Angeles, California 90017, on
Thursday, July 30, 1998, at 10:00 A.M., Pacific Daylight Time.
The undersigned hereby appoints Ernest O. Ellison, Philip K. Holl and Ronald
E. Robison and each of them, with full power of substitution, as proxies of
the undersigned to vote at the above-stated Annual Meeting, and at all
adjournments thereof, all shares of common stock of TCW Convertible Securities
Fund, Inc. held of record by the undersigned on the record date for the
meeting, upon the following matters and upon any other matter which may come
before the meeting, in their discretion.
Every properly signed proxy will be voted in the manner specified thereon
and, in the absence of specification, will be treated as GRANTING authority to
vote FOR the election of the directors named in Proposal 1 and FOR Proposals
2, 3 and 4.
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE.)
TCW CONVERTIBLE SECURITIES FUND, INC.
P.O. BOX 11459
NEW YORK, N.Y. 10203-0459
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
Votes
must be
indicated (X) [X]
in Black or
Blue ink.
1. Election of Directors
Nominees: Ernest O. Ellison, John C. Argue,
Norman Barker, Jr., Richard W. Call, Coleman W.
Morton, Charles A. Parker, Lawrence J. Sheehan,
Robert G. Sims
WITHHOLD
AUTHORITY
FOR TO VOTE FOR
ALL NOMINEES ALL NOMINEES
LISTED BELOW LISTED BELOW *EXCEPTIONS
[_] [_] [_]
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ______________________________________________________________
2. Proposal to renew the Investment Advisory and Management Agreement.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. Proposal to amend the Fund's Articles of Incorporation to increase the
number of authorized shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
5. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOR AGAINST ABSTAIN
[_] [_] [_]
Change of Address and or Comments Mark Here [_]
Receipt of Notice of Annual Meeting and Proxy Statement is hereby
acknowledgment.
Important: Joint owners must EACH sign. When signing as attorney, trustee,
executor, administrator, guardian, or corporate officer, please give your full
title.
Dated ___________________________________________________________________ , 1998
________________________________________________________________________________
Sign here exactly as name(s) appear(s) on left
________________________________________________________________________________
Sign, Date and Return this: Proxy Card Promptly Using the Enclosed Envelope.
- -------------------------------------------------------------------------------
