<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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] 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.
- --------------------------------------------------------------------------------
(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 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:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO APPEARS HERE]
(R)
TCW CONVERTIBLE SECURITIES FUND, INC.
865 South Figueroa Street
Los Angeles, California 90017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on Wednesday, July 21, 1999
Notice is hereby given that the annual meeting of shareholders of TCW
Convertible Securities Fund, Inc. (the "Fund") will be held at The Wilshire
Grand Hotel & Centre, 930 Wilshire Boulevard, Los Angeles, California 90017,
at 11:00 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. Approval of an Amended and Restated Investment Advisory and Management
Agreement;
3. Ratification of the selection of Deloitte & Touche, LLP as independent
auditors for the Fund; and
4. Such other matters as may properly come before the meeting or any
adjournment or adjournments thereof.
May 28, 1999, 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 , 1999
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 Wednesday, July 21, 1999 at 11:00 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 , 1999.
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
28, 1999, 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 28,
1999, shares of Common Stock were outstanding and entitled to be
voted. The Fund's Common Stock does not have cumulative voting rights. At
May 28, 1999, 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)
----------------- ---------------------- --- -------- ------------
<S> <C> <C> <C> <C>
Ernest O. Ellison* Vice Chairman of the Board, 68 1987 14,840
President and Director The TCW Group, Inc.; 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.
John C. Argue Of Counsel, Argue Pearson 67 1997 1,500
Director Harbison & Myers; director,
Apex Mortgage Capital,
Inc., Avery Dennison
Corporation, Nationwide
Health Properties, Inc. and
TCW Galileo Funds, Inc.;
Advisory Director, LAACO
Ltd.; Trustee, TCW/DW
Funds. He is Chairman of
the Ross Hills Foundation.
Norman Barker, Jr. Former Chairman of the 76 1987 3,225
Director(2) Board, First Interstate
Bank of California and Vice
Chairman of the Board,
First Interstate Bancorp;
director, ICN
Pharmaceuticals, Inc., TCW
Galileo Funds, Inc., and
Bank Plus Corp.
Richard W. Call Former President, The 74 1987 12,243
Director(2) Seaver Institute (a private
foundation); director, TCW
Galileo Funds, Inc. and The
Seaver Institute. Mr. Call
is currently involved in
investment in emerging
market countries.
Coleman W. Morton Private investor; formerly 79 1987 226,000
Director Member of the Advisory
Board and President and
director, The Investment
Company of America.
Charles A. Parker Former director and 64 1988 2,073
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 66 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.,
Trustee of World Wide Index
Funds, a mutual fund
complex with thirteen
separate portfolios.
Robert G. Sims* Private Investor; director, 68 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 28, 1999, 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 28, 1999, beneficially less than
1% of the outstanding shares of its Common Stock. The column in the above
table also does not include approximately 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 one meeting 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.
3
<PAGE>
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, 1998.
<TABLE>
<CAPTION>
Aggregate Compensation
Name of Independent Director From the Fund
---------------------------- ----------------------
<S> <C>
John C. Argue....................................... $10,500
Norman Barker, Jr. ................................. 12,750
Richard W. Call..................................... 12,000
Coleman W. Morton................................... 10,500
Charles A. Parker................................... 10,500
</TABLE>
The following table illustrates the compensation paid to Fund's Independent
Directors for the calendar year ended December 31, 1998 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............ $10,500 $50,000 $112,331
Norman Barker, Jr........ 12,750 52,250 --
Richard W. Call.......... 12,000 51,500 --
</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
----------------- ---------------------- --- -------
<S> <C> <C> <C>
Alvin R. Albe, Jr. Executive Vice President, Finance and 45 1998
Senior Vice President Administration, and director, Trust
Company of the West and TCW Asset
Management Company; President and
director, the Adviser and TCW Galileo
Funds, Inc.; Executive Vice President,
Finance and Administration, The TCW
Group, Inc.
Kevin Hunter Managing Director, Trust Company of the 40 1992
Senior Vice President West, TCW Asset Management Company, and
the Adviser.
Thomas E. Larkin, Jr. Executive Vice President and director, 59 1989
Senior Vice President The TCW Group, Inc.; Vice Chairman, TCW
Asset Management Company and the Adviser;
President and director, Trust Company of
the West; Vice Chairman of 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>
Hilary G. D. Lord Managing Director, Chief Compliance 42 1988
Senior Vice President Officer and Assistant Secretary, Trust
and Company of the West, TCW Asset Management
Assistant Secretary Company, and the Adviser; Assistant
Secretary, TCW Galileo Funds, Inc.
Thomas D. Lyon Managing Director, Trust Company of the 40 1998
Senior Vice President West, TCW Asset Management Company and
the Adviser. Prior to joining TCW in
1997, Mr. Lyon was a Vice President and a
Portfolio Manager with Transamerica
Investment Services.
Michael E. Cahill Managing Director, General Counsel and 48 1992
General Counsel and Secretary, Trust Company of the West, TCW
Assistant Secretary Asset Management Company, the Adviser and
The TCW Group, Inc. Mr. Cahill is also
Secretary of Apex Mortgage Capital, Inc.
Philip K. Holl Senior Vice President, Associate General 49 1994
Secretary Counsel and Assistant Secretary, Trust
Company of the West, TCW Asset Management
Company and the Adviser; Secretary, TCW
Galileo Funds, Inc.; Assistant Secretary,
Apex Mortgage Capital, Inc.; Former
General Counsel and Secretary, the
Reserve Group of Mutual Funds.
Peter C. DiBona Senior Vice President, Trust Company of 40 1998
the West, TCW Asset Management Company
and the Adviser; Treasurer, TCW Galileo
Funds, Inc. Prior to joining TCW in July
1994, he was a Vice President with U.S.
Affinity Investments, L.P.
</TABLE>
2. APPROVAL OF AN AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
TCW Funds Management, Inc., a registered investment adviser, currently
serves as the investment adviser to the Fund pursuant to the terms of an
Investment Advisory and Management Agreement. Under the terms of the current
Investment Advisory and Management Agreement (the "Current Agreement"), the
Adviser is responsible for managing the investment of the Fund's assets,
placing orders for the purchase and sale of portfolio securities directly with
the issuers or with brokers or dealers selected by it in its discretion,
administering the day-to-day operations of the Fund, furnishing the Fund with
office space, providing officers and employees, and paying expenses related to
the these services. Currently, the Adviser also provides the Fund with certain
financial reporting and accounting services not otherwise provided by the
Fund's custodian or transfer agent, including: maintaining the accounts, books
and other documents which form the basis of the Fund's financial statements,
preparing the financial statements themselves; and furnishing the Board
periodic and special reports as requested. Under the Current Agreement, the
Adviser receives an accounting fee of $25,000 for providing these services.
Management of the Fund proposed that the Fund contract with an independent
third party to provide the financial reporting and accounting services. In its
proposal, management noted that the $25,000 accounting fee was established in
1987 and never increased, even though the Fund's assets have more than doubled
and new types of securities added to the portfolio including Rule 144A
securities and "synthetic" convertibles.
5
<PAGE>
Management stated that rather than proposing an increase to its accounting
fee, the Fund and its shareholders would be better served if the Fund
contracted with a third party to provide these services. In its proposal
management noted the benefits to the Fund of outsourcing the accounting and
certain administration services.
In considering the benefits of outsourcing accounting and certain
administrative services, the Directors noted that the Fund would benefit in a
number of ways. The new arrangement provides for an expansive disaster
recovery system, critical to securing financial information. The proposed
accounting service provider has a more sophisticated recovery system than the
Adviser currently enjoys. Because the proposed accounting service provider
does similar work for a significant number of other funds, the Fund would
benefit from the "best practices of the industry". Finally, the Fund would
benefit from third party review of daily financial transactions in outsourcing
accounting and administrative services. Therefore, on May 7, 1999, after
considering these and other factors, the Board of Directors, including a
majority of the Directors who are not parties to Investment Advisory and
Management Agreement or interested persons of any such party (the "Independent
Directors"), approved subject to required shareholder approval, an Amended and
Restated Investment Advisory and Management Agreement (the "New Agreement")
between the Company and the Adviser reflecting certain changes described below
and determined to recommend approval of the New Agreement to the shareholders
of the Fund. In reviewing and reaching a decision concerning management's
proposal, the Directors, including the Independent Directors, were advised by
independent counsel. The New Agreement is expected to take effect
approximately October 1, 1999.
The terms and conditions of the New Agreement are identical in all material
respects to those of the current Investment Advisory and Management Agreement,
with the exception of the terms obligating the Adviser to provide accounting
and certain other administrative services, its effective date and termination
date. Under the New Agreement, the Fund will continue to retain the services
of all the Adviser's personnel and employees who now provide investment
management and administrative services to the Fund (with the exception of
accounting and certain administrative services) and there will be no change in
the current responsibilities of those personnel with respect to the Fund. No
change is anticipated in the investment philosophy and practices currently
followed by the Fund nor will any change occur in the advisory fee rate paid
by the Fund.
The Current Investment Advisory and Management Agreement
The Adviser has served as investment adviser to the Fund since the Fund's
commencement of operations on March 5, 1987. The Current Agreement, dated
February 17, 1987, was last continued by the Board of Directors, including a
majority of the Independent Directors, at a meeting held on February 17, 1999.
The Current Agreement was last approved by shareholders at the annual meeting
held on July 30, 1998.
Investment Advisory Services
Under the terms of the Current Agreement, the Adviser is responsible for
making investment decisions and placing orders for the purchase of the Fund's
investments, administering its day-to-day operations, and managing the Fund's
business affairs, subject to the review and control of the Board of Directors.
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.
The Current Agreement provides that neither the Adviser, nor any director,
officer, agent or employee of the Adviser, shall be liable or responsible to
the Company or any of its shareholders for any error of judgement,
6
<PAGE>
mistake of law or any loss arising out of any investment, or for any other act
of omission in the performance by such person or persons of their respective
duties, except for liability resulting from willful misfeasance, bad faith,
gross negligence or reckless disregard of their respective duties.
As compensation of 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 maximum of $25,000 per year) of
providing accounting and administrative services. For the fiscal year ended
December 31, 1998, the Adviser received from the Fund $2,126,460 in advisory
fees and $25,000 for accounting and administrative services. The advisory fee
and reimbursement for accounting services equaled 0.56% of the Fund's average
net assets for the year. The total net assets of the Fund were $393,588,138 on
December 31, 1998.
The New Investment Advisory and Management Agreement
The terms and conditions of the New Agreement are identical to those of the
Current Agreement, with the exception of the terms relating to the provisions
of accounting and certain other administrative services by the Adviser, its
effective date and termination date. Under the New Agreement, the Fund is
responsible for the cost of obtaining necessary accounting and certain other
administrative services, and the Agreement therefore contains no provision for
reimbursing the Adviser for providing these services. A form of Amended and
Restated Investment Advisory and Management Agreement is attached as Exhibit
A. If the New Agreement is approved by shareholders it will become effective
upon execution and will remain in effect, unless earlier terminated, for an
initial two-year term, subject to annual review and continuation thereafter.
In the event shareholders do not approve the New Agreement, the Current
Agreement will remain in effect.
The New Agreement provides that it will continue in effect from year to year
after its initial two-year term, subject to annual approval by the Board or by
vote of the holders of a majority of the outstanding shares of the Fund (as
defined in the Act) and also, in either event, approval by a majority of the
Independent Directors, cast in person at the meeting called for the purpose of
voting on such approval. For this purpose, the vote of the holders of a
majority of the outstanding shares of the Fund means the lesser of either the
vote of (i) 67% or more of the voting securities of the Fund present at the
meeting, if the holders of more than 50% of the outstanding voting securities
of the Fund are present or represented by proxy; or (ii) more than 50% of the
outstanding voting securities of the Fund. The New Agreement will terminate
automatically in the event of its assignment, and may be terminated at any
time, without the payment of any penalty by a vote of a majority of the
outstanding securities (as defined in the Act) of the Fund or by a vote of a
majority of the Fund's Board of Directors on 60 days' written notice to the
Adviser, or by the Adviser on 90 days' written notice to the Fund.
Fund Expenses--Comparison of Current Agreement and New Agreement
The advisory fees under the Amended and Restated Advisory and Management
Agreement will not be higher than the advisory fees under the Current
Agreement. The fees are identical under the New Agreement to those under the
Current Agreement with the exception of the fact the Adviser will no longer
provide accounting and certain administrative services to the Fund and
therefore will not receive fees for accounting and administrative services.
7
<PAGE>
Because the Adviser will no longer provide accounting and certain
administrative services to the Fund, the Fund will have to retain the services
of a fund accounting agent. The total expenses borne by the Fund as a result
may increase since any fees payable to the fund accounting agent may be higher
than the fee the Fund paid to the Adviser for accounting and certain
administrative services under the Current Agreement. The current and pro forma
expenses for the Fund are stated in the table below. The figures shown under
the pro forma expense column reflect the projected changes for the first year
under the new accounting and administrative services agreement based on assets
as of December 31, 1998. The actual expense ratio of the Fund for the current
fiscal year may differ from those shown based on actual asset levels among
other factors:
TCW Convertible Securities Fund, Inc.
<TABLE>
<CAPTION>
Pro
Current Forma
Expense Expense
------- -------
<S> <C> <C>
Annual Fund Operating Expenses
Management Fees.......................................... 0.560% 0.560%
Other Expenses........................................... 0.170% 0.188%
Total Annual Fund Operating Expenses................... 0.730% 0.748%
</TABLE>
Expense Example
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------- --------------- --------------- ---------------
Pro Pro Pro Pro
Current Forma Current Forma Current Forma Current Forma
------- ------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$74.56 $76.39 $233.36 $239.05 $406.01 $415.84 $906.45 $927.93
</TABLE>
The example shows what you could pay in expenses over time. It uses the same
hypothetical conditions that other funds use: $10,000 initial investment, 5%
return annually and no changes in expenses. The figures shown would be the
same whether you sold your shares at the end of a period. Because actual
return and expenses will be different, the example is for comparison purposes
only.
Information Concerning the Adviser
The Advisory Agreement permits the Adviser to render advisory services to
others. The Adviser presently serves as investment adviser to 36 other
registered 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 April 30, 1999, net assets of $43,594,588. 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.
Ernest O. Ellison, Chairman and President of the Fund, is a shareholder of The
TCW Group. As of March 31, 1999, the Adviser and its affiliated companies had
over $55 billion under management or committed for management in various
fiduciary and advisory capacities.
8
<PAGE>
The directors of the Adviser are Thomas E. Larkin, Jr., Marc I. Stern,
Chairman, and Alvin R. Albe, Jr., 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, 55, is Chairman 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, 1999. 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.
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 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.
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.
9
<PAGE>
4. 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 February
, 2000.
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 , 1999
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, 1998 is
available without charge upon request by writing the Fund at 865 South
Figueroa Street, Los Angeles, California 90017 or telephoning it at 1-877-
829-6587.
10
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EXHIBIT A
AMENDED AND RESTATED
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Agreement made this day of , 1999 by and between TCW
CONVERTIBLE SECURITIES FUND, INC., a Maryland corporation ("Fund"), and TCW
FUNDS MANAGEMENT, INC., a California corporation ("Adviser").
Whereas, the Fund is engaged in the 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 is engaged 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) 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 affairs and
investments and keeping the general accounts and records of the Fund that
are not maintained by the Fund's transfer agent, custodian, administrator
or accounting or subaccounting agent, 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.
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(e) 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 or
notification of sale 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) the charges and expenses of any
administrator or accounting or subaccounting agent appointed by the Fund to
provide accounting or administration services to the Fund; (f) brokerage
commissions, dealer spreads, and other costs incurred in connection with
proposed or consummated portfolio securities transactions; (g) all taxes,
including securities issuance and transfer taxes, and corporate fees payable
by the Fund to Federal, state, local or other governmental agencies; (h) the
cost and expense of engraving, printing and issuing certificates representing
securities of the Fund; (i) 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; (j) all
expenses of shareholders and directors meetings, and of preparing, printing
and mailing proxy statements and reports to shareholders; (k) fees and
expenses of directors of the Fund who are not "affiliated persons" of the
Adviser, (l) all fees and expenses incident to any dividend reinvestment or
distribution program; (m) charges and expenses of legal counsel to the
"independent directors" or the Fund; (n) trade association dues; (o) interest
payable on Fund borrowings; (p) any public relations or shareholder relations
expense; (q) fees and expenses incident to the listing of securities of the
Fund on any securities exchange; (r) premiums for a fidelity bond and any
errors and omission insurance maintained by the Fund; and (s) 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.
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 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
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<PAGE>
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 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
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<PAGE>
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 or such interpretive position as may be taken by the Commission or
the staff under the Securities Exchange Act of 1934.
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:
------------------------------------
President
Attest:
- ---------------------------------
Secretary
TCW FUNDS MANAGEMENT, INC.
By:
------------------------------------
President
Attest:
- ---------------------------------
Secretary
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<PAGE>
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 at The Wilshire Grand Hotel, 930 Wilshire
Boulevard, Los Angeles, California 90017, on Wednesday, July 21, 1999, at 11:00
A.M., Pacific Daylight Time.
The undersigned hereby appoints Alvin R. Albe, Jr., Ernest O. Ellison and
Philip K. Holl 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 the Proposal 1 and FOR Proposals
2 and 3.
(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>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
(1) Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below [X] for all nominees listed below [X] [X]
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
(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 approved an Amended and Restated (3) Proposal to ratify the selection of Deloitte & Touche LLP
Investment and Management Agreement. as the Fund's Independent auditors.
FOR [X] AGAINST [X] ABSTAIN [X] FOR [X] AGAINST [X] ABSTAIN [X]
(4) In their discretion, the proxies are authorized to vote
upon such other business as may properly come
before the meeting.
Change of Address and/or Comments
Mark Here
[X]
Receipt of Notice of Annual Meeting and
Proxy Statement is hereby acknowledged.
Important: Joint owners must EACH sign. When
signing as attorney, trustee, executor, administrator
guardian or corporate officer, please give your
full title.
Dated ___________________________, 1999
______________________________________________
Sign here exactly as name(s) appear(s) on left
_______________________________________________
Votes must be indicated
(X) in Black or Blue ink. [X]
</TABLE>
Sign, Date and Return this Proxy Card Promptly Using the Enclosed Envelope.
