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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 GALILEO FUNDS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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(4) Date Filed:
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Notes:
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TCW GALILEO FUNDS, INC.
TCW GALILEO INTERNATIONAL EQUITIES FUND
865 South Figueroa Street, 18th Floor
Los Angeles, California 90017
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that a Special Meeting of Shareholders of the TCW
Galileo International Equities Fund of TCW Galileo Funds, Inc. (the "Fund") will
be held at the offices of the Fund on December 8, 2000 at 10:00 a.m. (Pacific
time) for the following purpose:
1. To approve an amendment to the Fund's investment policies.
2. To approve an amendment to the Amended and Restated Investment
Advisory and Management Agreement.
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record as of the close of business on October 27, 2000 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
By order of the Board of Directors
Philip K. Holl
Secretary
November 14, 2000
PLEASE EXECUTE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE, THUS ENABLING YOUR 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 GALILEO FUNDS, INC.
TCW GALILEO INTERNATIONAL EQUITIES FUND
865 South Figueroa Street, Suite 1800
Los Angeles, California 90017
SPECIAL MEETING OF SHAREHOLDERS
To Be Held On December 8, 2000
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of TCW Galileo Funds, Inc. ("Company") on
behalf of the TCW Galileo International Equities Fund ("Fund") for use at the
Special Meeting of Shareholders and at any adjournment thereof. A proxy, if
properly executed, duly returned and not revoked, will be voted in accordance
with the specifications thereon. A shareholder may revoke a proxy at any time
prior to its exercise by filing with the Secretary of the Company an instrument
revoking the proxy, or by submitting a proxy bearing a later date, or by
attending and voting at the meeting.
The cost of soliciting proxies for this Special Meeting of Shareholders,
consisting principally of printing and mailing expenses, will be borne by TCW
Investment Management Company ("Adviser"). The solicitation of proxies will be
by mail, which may be supplemented by solicitation by mail, telephone or
otherwise through officers and employees of the Company and its investment
adviser or distributor without special compensation therefor. The first mailing
of this proxy statement is expected to be made on or about November 14, 2000.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Directors has fixed the close of business on October 27, 2000,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Special Meeting of Shareholders or any adjournment. As of
the record date, there were 3,290,349.252 outstanding shares of the Fund. All
full shares of the Fund are entitled to one vote, with proportionate voting for
fractional shares.
As of the record date, the following persons owned of record 5% or more of
the Fund's outstanding shares: First Insurance Company of Hawaii (26.64%);
Northern Trust Company Cust. McCarthy Marital Trust (6.53%); Northern Trust
Company Cust. McCarthy Survivors Trust (6.53%); Salk Institute (30.17%); and The
Barlow Group (7.46%). The officers and directors of the Fund, together, owned
less than 1% of the Fund's outstanding shares on the record date.
If a quorum (more than one third of the outstanding voting shares) is
represented at the meeting, the affirmative vote of a majority of the shares of
the Fund represented at the meeting is required to approve the amendment to the
Amended and Restated Advisory Agreement and Amendment to the Fund's investment
policies. A majority of the outstanding voting shares means (i) 67% or more of
the voting shares represented at the meeting, if more than 50% of the
outstanding voting shares are present or represented by proxy, or (ii) more than
50% of all outstanding voting shares of the Fund.
1. To Approve an Amendment to the Fund's Investment Policies.
The Fund's current investment policies are to invest primarily in equity
markets outside the United States both in developed and emerging markets through
investment in shares of other TCW Galileo Funds. In managing the Fund's assets,
the Adviser allocates its assets, within predetermined percentage ranges, among
certain of the underlying TCW Galileo Funds. The Fund's current percentage
limits are as follows:
1
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<TABLE>
<CAPTION>
Fund Investment Limit
Underlying Galileo Fund (Percent of the Fund's Total Assets)
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<S> <C>
Asia Pacific Equities Funds 50%
Emerging Markets Equities Fund 35%
European Equities Fund 80%
Japanese Equities Fund 75%
Latin American Equities Fund 50%
</TABLE>
The Board of Directors approved changing the Fund's investment policies
from that of a "fund-of-funds" to a fund holding a portfolio of securities of
individual companies and not mutual funds. The principal reason for the Board
of Directors adopting the proposed change is to provide the Adviser with greater
flexibility in managing the Fund's investments. The Board of Directors also
considered the Adviser's separate account strategy experience and performance.
It is management's view that modifying the Fund's investment policies to permit
it to invest in a portfolio of individual securities will provide the Adviser
with the opportunity for incremental returns. Further, management believes that
a fund with individual corporate securities provides better risk control and
superior portfolio design.
If the shareholders approve the amendment changing the Fund from that of a
"fund-of-funds" to a fund holding a portfolio of individual securities, the
conversion will result in the Fund realizing gains of approximately $3.00 per
share based on October 17, 2000 data. Management advised the Board of Directors
that it would use its best efforts to reduce taxable gains taking into account
the Fund's investment policies and market conditions. If approved by
shareholders, the conversion is expected to take place on or about March 1,
2001.
If the amendment to the Fund's investment policies is approved, the Fund
will invest 65% of its assets outside the United States in equity securities of
issuers in both developed and emerging market countries. The Fund will invest
primarily in publicly traded equity securities of issuers located in Europe and
the Pacific region investing in at least three countries.
In allocating investments among countries, the Advisers will attempt to
integrate an assessment of how the global environment effects a particular
country, with an analysis of internal political, market and economic factors.
The Adviser will examine economic variables such as: level of economic activity
or GDP growth, level and direction of local inflation, monetary policy and money
supply growth, and the pace and degree of privatization.
The proposed investment policies will permit the Fund to invest in a
portfolio of generally no more than 40 issuers. In its analysis of individual
companies, the Adviser will look for one or more of the following
characteristics in relation to the price of the company's stock: prospects for
above average earnings growth; return on invested capital; sound balance sheet
and overall financial strength; strong competitive advantages; effective
research, product development and marketing; efficient service; pricing
flexibility; strength of management, and general operating characteristics that
will enable the company to compete successfully in the marketplace.
2
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The Board Directors, including the Independent Directors, unanimously
recommend that the shareholders approve the amendment to the Fund's investment
policies.
2. To Approve an Amendment to the Amended and Restated Investment
Advisory and Management Agreement.
TCW Investment Management Company, a registered investment adviser, serves
as the investment adviser to the Fund pursuant to the terms of an Amended and
Restated Investment Advisory and Management Agreement ("Agreement"). Under the
terms of the Agreement, the Adviser is responsible for managing the Fund's
assets, placing orders for the purchase and sale of portfolio securities and
administering the day-to-day operations of the Fund.
As discussed in more detail above, management of the Fund has proposed, and
the Board of Directors has approved subject to shareholder approval, the
amendment of the Fund's investment policies from that of a "fund-of-funds" to a
fund holding a portfolio of securities of individual companies. In its
recommendation, management informed the Board that the proposed change in
investment policies would provide the Adviser with greater flexibility in
managing the Fund's investments and afford the opportunity for better risk
control and portfolio design. The Board of Directors also considered the
Adviser's separate strategy account experience and performance. Therefore, on
October 18, 2000, after considering these and other factors, the Board of
Directors, including a majority of the Directors who are not parties to the
Agreement or interested persons of any such party (the "Independent Directors"),
approved, subject to required shareholder approval, an amendment to the
Agreement to provide for the payment of an investment advisory fee of 0.75% of
the Fund's average daily net assets. A copy of the amendment is attached as
Exhibit A. Except for the payment of the investment advisory fee, the amendment
does not modify the terms and conditions of the Agreement.
Fund Expenses - Comparison of Amendment to Current Agreement
As noted above, the amendment provides for the payment of an investment
advisory fee of 0.75% as compared to the current Agreement which provides for no
investment advisory fee. The reason why no direct investment advisory fee is
currently charged is because the Fund is a "fund-of-funds" investing in other
TCW Galileo Funds and is charged an investment advisory fee based on its
investment in the other funds as is any other shareholder. If Proposal 1 is
approved, the Fund will become a fund investing in a separate portfolio of
investment securities and not other Galileo mutual funds. As a result, the
Adviser will not receive a fee from the underlying Galileo mutual funds. The
current and pro forma expenses for the Fund is stated in the table below.
Management believes that the expense ratio of the Fund will decline even with
the addition of an advisory fee, taking into account the imbedded expenses of
the underlying funds. However, the actual expense ratio of the Fund may differ
from that shown based on actual asset levels among other factors.
<TABLE>
<CAPTION>
Current Expense Pro forma Expense
--------------- -----------------
<S> <C> <C>
Annual Fund Operating Expenses
Management Fees 0.00 0.75
Distribution (12b-1) Fees 0.00 0.00
Other Expenses 0.23 0.38
Underlying Funds Expenses
Including Advisory Fees 1.14 0
---- ----
Total 1.37 1.13
</TABLE>
3
<PAGE>
The Adviser.
The Adviser, a California corporation, is a wholly-owned subsidiary of The
TCW Group, Inc., a Nevada corporation, 865 South Figueroa Street, Suite 1800,
Los Angeles, California 90017. As of September 30, 2000, the Adviser and its
affiliates had total assets under management or committed to management of
approximately $85 billion. The principal business address of the Adviser is 865
South Figueroa Street, Suite 1800, Los Angeles, California 90017 and its
Principal Executive Officers and directors are as follows: Marc I. Stern,
Chairman; Thomas E. Larkin, Jr., Vice Chairman; Alvin R. Albe, Jr., Director and
President; David DeVito, Managing Director and Chief Financial Officer; and
Hilary G.D. Lord, Managing Director and Chief Compliance Officer.
Mr. Stern is President and a Director of the TCW Group, Inc.; President
and a Vice Chairman of TCW Asset Management Company and a Vice Chairman of Trust
Company of the West. Mr. Larkin is a Vice Chairman of The TCW Group, Inc., TCW
Asset Management Company and Trust Company of the West. Mr. Albe is Executive
Vice President of The TCW Group, Inc. and a Director and Executive Vice
President of TCW Asset Management Company and Trust Company of the West. Mr.
DeVito is Managing Director and Chief Financial Officer of The TCW Group, Inc.,
TCW Asset Management Company and Trust Company of the West. Ms. Lord is Managing
Director and Chief Compliance Officer of The TCW Group, Inc., TCW Asset
Management Company and Trust Company of the West. Mr. Robert Day may be deemed
to be a control person of the Adviser by virtue of the aggregate ownership of
Mr. Robert Day and his family of more than 25% of the outstanding voting stock
of The TCW Group, Inc.
Distributor.
The Distributor of the Fund's shares is TCW Brokerage Services, 865 South
Figueroa Street, Suite 1800, Los Angeles, California 90017.
The Evaluation by the Board of Directors.
At its meeting held on October 18, 2000, the Board of Directors
considered, among other factors, that modifying the Fund's investment policies
would require the Adviser to assume an investment philosophy different from that
currently in place in that a growth stock portfolio is a differentiated product
from a "fund-of-funds". The Board of Directors also considered that in a "fund-
of-funds" structure, the Adviser received its fees from the fund's pro rata
--- ----
payment of each underlying fund's advisory fee, and that it is not unreasonable
for the Adviser to expect payment for its investment advisory services in an
"active" management environment. In reviewing and reaching a decision concerning
management's proposal, the Directors, including the Independent Directors, were
advised by independent counsel. After careful review and consideration of these
and other relevant factors, including applicable legal standards for their
review, the Directors, including the Independent Directors unanimously concluded
the amendment to the Agreement was in the best interests of the Fund's
shareholders and voted to submit it shareholders for their approval.
The Board of Directors, including the Independent Directors, unanimously
recommend that the shareholders approve the amendment to Amended and Restated
Investment Advisory and Management Agreement.
4
<PAGE>
3. Other Business.
Management knows of no other matters which may be presented at the Special
Meeting. However, if any matters not now known properly come before the
meeting, it is intended that the persons named in the attached form of proxy, or
their substitutes, will vote such proxy in accordance with their judgment on
such matters.
Submission of Shareholder Proposals.
The Company does not hold annual shareholders' meetings. Shareholders
wishing to submit proposals for consideration for inclusion in a proxy statement
for a subsequent shareholders' meeting of the Company (if any) should send their
written proposals to the Secretary of the Company at the address set forth on
the cover of this Proxy Statement.
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 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
November 14, 2000
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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.
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Copies of the Fund's Annual Report for the year ended October 31, 1999 are
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.
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5
<PAGE>
EXHIBIT A
AMENDMENT NO. 2 TO
AMENDED AND RESTATED
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
TCW Galileo Funds, Inc. and TCW Investment Management Company hereby agree to
amend the Amended and Restated Investment Advisory and Management Agreement
("Agreement") entered into by the parties and dated March 1, 1999, as follows,
effective March 1, 2001.
All other terms and conditions of the Agreement will remain in full force and
effect, including the existing provisions of Schedule B and any amendments,
thereof.
SCHEDULE B
<TABLE>
<CAPTION>
Annual Fee Rate
(expressed as a
Fund percentage of net assets)
---- -------------------------
<S> <C>
TCW Galileo Concentrated Large Cap Value Fund 0.65%
TCW Galileo Select International Equities Fund 0.75%
</TABLE>
IN WITNESS WHEREOF, the parties have agreed to and executed this amendment to
the Agreement on the day and year written above.
Attest TCW GALILEO FUNDS, INC.
By:
------------------------------- ----------------------------
Secretary Marc I. Stern
Chairman
By:
----------------------------
Alvin R. Albe, Jr.
President
Attest TCW INVESTMENT MANAGEMENT COMPANY
By:
------------------------------- ----------------------------
Assistant Secretary Alvin R. Albe, Jr.
President & Chief Executive
Officer
By:
----------------------------
Michael E. Cahill
Managing Director, General
Counsel
<PAGE>
TCW GALILEO FUNDS, INC.
TCW Galileo International Equities Fund
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 8, 2000
PROXY
The undersigned hereby appoints ALVIN R. ALBE, JR., MICHAEL E. CAHILL,
PHILIP K. HOLL, or any of them, proxies, each with the power of substitution, to
vote on behalf of the undersigned at the Special Meeting of Shareholders of TCW
Galileo Funds, Inc. - TCW Galileo International Equities Fund to be held on
December 8, 2000, at 10:00 a.m., Pacific time, and at any adjournment thereof,
on the proposals set forth in the Notice of Meeting dated November 14, 2000.
This Proxy is solicited by the Directors. If no specification is made
thereon, this Proxy will be voted for the proposal.
1. To Approve an Amendment to the Fund's Investment Policies:
For [ ] Against [ ] Abstain [ ]
2. To Approve an Amendment to the Amended and Restated Investment
Advisory and Management Agreement:
For [ ] Against [ ] Abstain [ ]
3. To Transact Any Other Business as may Properly Come Before the
Meeting:
For [ ] Against [ ] Abstain [ ]
((1)) Please sign personally, If the shares
are registered in more than one name,
each joint owner or each fiduciary
should sign personally. Only authorized
((2)) officers should sign for corporations.
Date:
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Signature
Signature
IMPORTANT: Please Mark, Sign, Date and Return the Proxy Card in the Enclosed
Envelope.
