SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
NICHOLAS-APPELGATE CONVERTIBLE & INCOME FUND
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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)
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
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[_] Fee paid previously with preliminary materials:
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[_] 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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4) Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 29, 2004
----------------
C/O PA FUND MANAGEMENT LLC (FORMERLY PIMCO ADVISORS FUND MANAGEMENT LLC)
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
To the Shareholders of Nicholas-Applegate Convertible & Income Fund (the
"Fund"):
Notice is hereby given that an Annual Meeting of Shareholders (the
"Meeting") of the Fund will be held at the offices of PA Fund Management LLC,
1345 Avenue of the Americas, 49th Floor, New York, New York 10105, on Tuesday,
June 29, 2004 at 4:00 p.m., Eastern Time, for the following purposes, all of
which are more fully described in the accompanying Proxy Statement dated May
17, 2004:
1. To elect three Trustees of the Fund, each to hold office for the term
indicated and until their successors shall have been elected and
qualified; and
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Trustees of the Fund has fixed the close of business on May
7, 2004 as the record date for the determination of shareholders entitled to
notice of, and to vote at, the Meeting or any postponement or adjournment
thereof. The enclosed proxy is being solicited on behalf of the Board of
Trustees of the Fund.
By order of the Board of
Trustees of the Fund
/s/ Newton B. Schott, Jr.,
------------------------------------
Newton B. Schott, Jr., Secretary
New York, New York
May 17, 2004
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN PERSON OR BY
PROXY, NO MATTER HOW MANY SHARES YOU OWN. IF YOU DO NOT EXPECT TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE APPLICABLE ENCLOSED PROXY
OR PROXIES IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. PLEASE MARK AND MAIL YOUR PROXY OR PROXIES PROMPTLY IN ORDER
TO SAVE THE FUND ANY ADDITIONAL COSTS OF FURTHER PROXY SOLICITATIONS AND IN
ORDER FOR THE MEETING TO BE HELD AS SCHEDULED.
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
C/O PA FUND MANAGEMENT LLC
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 29, 2004
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Trustees (the "Board") of Nicholas-Applegate Convertible & Income
Fund ("NCV" or the "Fund") of proxies to be voted at the Annual Meeting of
Shareholders of the Fund and any adjournment or postponement thereof (the
"Meeting"). The Meeting will be held at the offices of PA Fund Management LLC,
1345 Avenue of the Americas, 49th Floor, New York, New York 10105, on Tuesday,
June 29, 2004 at 4:00 p.m., Eastern Time.
The Notice of Annual Meeting of Shareholders (the "Notice"), this Proxy
Statement and the enclosed Proxy Card are first being sent to Shareholders on
or about May 20, 2004.
The Meeting is scheduled as a meeting of the holders of common shares (the
"Common Shareholders") and preferred shares (the "Preferred Shareholders" and,
together with Common Shareholders, the "Shareholders") of the Fund because the
Shareholders of the Fund are expected to consider and vote on similar matters.
Shareholders of the Fund will vote on the Proposal set forth herein and on any
other matters that may properly come before the Meeting.
The Board has fixed the close of business on May 7, 2004 as the record
date (the "Record Date") for the determination of Shareholders of the Fund
entitled to notice of, and to vote at, the Meeting, and any postponement or
adjournment thereof. Shareholders of the Fund on the Record Date will be
entitled to one vote on each matter to which they are entitled to vote and that
is to be voted on by Shareholders of the Fund for each share held, and a
fractional vote with respect to fractional shares, with no cumulative voting
rights. The following table sets forth the number of shares of common stock
("Common Shares") and shares of preferred stock ("Preferred Shares" and,
together with the Common Shares, the "Shares") issued and outstanding of the
Fund at the close of business on the Record Date:
OUTSTANDING OUTSTANDING
COMMON SHARES PREFERRED SHARES
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66,193,927 21,000
The classes of stock listed in the table above are the only classes of
stock currently authorized by the Fund.
At the Meeting, Preferred Shareholders of the Fund will have equal voting
rights (i.e., one vote per Share) with the Fund's Common Shareholders and,
except as discussed below, will vote together with
Common Shareholders as a single class on all proposals to be brought before the
Meeting. As summarized in the table below, (i) the Preferred Shareholders,
voting as a separate class, have the right to vote on the election on Robert E.
Connor as a Trustee of the Fund, and (ii) the Common and Preferred
Shareholders, voting together as a single class, have the right to vote on the
election of Hans W. Kertess and R. Peter Sullivan III as Trustees of the Fund.
SUMMARY
PROPOSAL COMMON SHAREHOLDERS PREFERRED SHAREHOLDERS
-------------------------------------------------------------- --------------------- -----------------------
ELECTION OF TRUSTEES
o Election of Hans W. Kertess and R. Peter Sullivan III..... X X
o Election of Robert E. Connor ............................. N/A X
You may vote by mailing the enclosed proxy card. Shares represented by
duly executed and timely delivered proxies will be voted as instructed on the
proxy. If you mail the enclosed proxy and no choice is indicated for the
Proposal listed in the attached Notice, your proxy will be voted in favor of
the election of all nominees. At any time before it has been voted, your proxy
may be revoked in one of the following ways: (i) by delivering a signed,
written letter of revocation to the Secretary of the Fund at 1345 Avenue of the
Americas, New York, NY 10105, (ii) by properly executing a later-dated proxy,
or (iii) by attending the Meeting, requesting return of any previously
delivered proxy and voting in person. If any proposal, other than the Proposal
set forth herein, properly comes before the Meeting, Shares represented by the
proxies will be voted on all such proposals in the discretion of the person, or
persons, voting the proxies.
The principal executive offices of the Fund are located at 1345 Avenue of
the Americas, New York, New York 10105. PA Fund Management LLC (the "Manager")
serves as the investment manager of the Fund and retains its affiliate,
Nicholas-Applegate Capital Management LLC ("NACM"), to serve as the Fund's
sub-adviser. Additional information regarding the Manager and NACM may be found
under "Additional Information -- Investment Manager and Portfolio Manager"
below.
The solicitation will be by mail primarily and the cost of soliciting
proxies will be borne by the Fund. Certain officers of the Fund and certain
officers and employees of the Manager or its affiliates (none of whom will
receive additional compensation therefor) may solicit proxies by telephone,
mail, e-mail and personal interviews. Any out-of pocket expenses incurred in
connection with the solicitation will be borne by the Fund.
As of April 30, 2004, the Trustees and nominees and the officers of the
Fund as a group and individually beneficially owned less than one percent (1%)
of the Fund's outstanding Common Shares and Preferred Shares and, to the
knowledge of the Fund, no person beneficially owned more than five percent (5%)
of the outstanding Shares of any class of the Fund.
2
PROPOSAL: ELECTION OF TRUSTEES
In accordance with the Fund's Amended and Restated Agreement and
Declaration of Trust (the "Declaration"), the Trustees have been divided into
the following three classes (each a "Class"): Class I, Class II and Class III.
The term of office of the Class I Trustees will expire at the Meeting; the
term of office of the Class II Trustees will expire at the 2005 annual meeting
of shareholders; and the term of office of the Class III Trustees will expire
at the 2006 annual meeting of shareholders. Accordingly, Shareholders will vote
to elect Class I Trustees at the Meeting for an approximate three-year term
expiring at the 2007 annual meeting of shareholders. The Fund's Nominating
Committee recommended to the Board that Robert E. Connor be nominated for
re-election as a Class I Trustee at the Meeting.
In February 2004, after the initial public offerings of the Shares, the
Board of Trustees approved an increase in the size of the Board from three to
four members and the Fund's Nominating Committee recommended to the Board that
Hans W. Kertess be appointed as a Trustee of the Fund to fill the vacancy
created by such action. In accordance with the Fund's Declaration, Mr. Kertess
was designated a Class I Trustee to serve until the Meeting, at which time his
initial term will expire. The Fund's Nominating Committee recommended to the
Board that Mr. Kertess be nominated for election as a Class I Trustee at the
Meeting. Later in February 2004, the Board determined to increase its size from
four to five members and the Fund's Nominating Committee recommended to the
Board that R. Peter Sullivan III be nominated to serve as a Trustee of the Fund
to fill the vacancy created by such action. Mr. Sullivan has been nominated to
serve as a Class II Trustee. Consistent with the Declaration, if elected, each
nominee shall hold office for terms that coincide with the Class of Trustees to
which they have been designated. Therefore, if elected at the Meeting, Mr.
Kertess will serve a term coinciding with the Class I Trustees, which will
expire at the Fund's 2007 annual meeting and Mr. Sullivan will serve a term
coinciding with the Class II Trustees, which will expire at the Fund's 2005
annual meeting.
All members of the Board are or will be, if elected, "Continuing
Trustees," as such term is defined in the Declaration, having either served as
Trustee since the inception of the Fund or having been nominated by at least a
majority of the Continuing Trustees then members of the Board.
At any annual meeting of shareholders, any Trustee elected to fill a
vacancy that has arisen since the preceding annual meeting of shareholders
where such vacancy arose other than by an increase in the number of Trustees
(whether or not such vacancy has been filled by election of a new Trustee by
the Board of Trustees) shall hold office for a term that coincides with the
remaining term of the Class of Trustees to which such office was previously
assigned, and until his successor shall be elected and shall qualify.
The following table summarizes the nominees who will stand for election at
the Meeting, the respective Class of Trustees to which they have been
designated and the expiration of their respective terms if elected:
TRUSTEE CLASS EXPIRATION OF TERM IF ELECTED*
--------------------------------- ---------- -------------------------------
Robert E. Connor ........... Class I 2007 Annual Meeting
Hans W. Kertess ............ Class I 2007 Annual Meeting
R. Peter Sullivan III ...... Class II 2005 Annual Meeting
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* A Trustee elected at an annual meeting shall hold office until the annual
meeting for the year in which his term expires and until his successor
shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
3
Under this classified Board structure, only those Trustees in a single
Class may be replaced in any one year, and it would require a minimum of two
years to change a majority of the Board under normal circumstances. This
structure, which may be regarded as an "anti-takeover" provision, may make it
more difficult for Shareholders to change the majority of Trustees of the Fund
and, thus, promotes the continuity of management.
Unless authority is withheld, it is the intention of the persons named in
the enclosed proxy for the Fund to vote each proxy for the persons listed
above. Each of the nominees has indicated he will serve if elected, but if he
should be unable to serve for the Fund, the proxy holders may vote in favor of
such substitute nominee as the Board may designate (or the Board may determine
to leave a vacancy).
INFORMATION REGARDING TRUSTEES AND NOMINEES.
The following table provides information concerning the Trustees/Nominees
of the Fund.
NUMBER OF
PORTFOLIOS IN
FUND OTHER
POSITION(S) TERM OF COMPLEX DIRECTORSHIPS
HELD OFFICE AND OVERSEEN BY HELD BY
WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) TRUSTEE/ TRUSTEE/
NAME, ADDRESS*, AND AGE FUND TIME SERVED DURING THE PAST 5 YEARS NOMINEE NOMINEE
------------------------------- ------------- ------------- ------------------------------------- -------------- --------------
INDEPENDENT TRUSTEES/NOMINEES**
Paul Belica Trustee Since Trustee, Fixed Income SHares, 20 None.
Age 82 inception PIMCO Municipal Income Fund,
(March PIMCO California Municipal
Class III 2003) Income Fund, PIMCO New York
Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO
Municipal Income Fund II, PIMCO
California Municipal Income Fund
II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO
New York Municipal Income Fund
III, PIMCO Corporate Opportunity
Fund, PIMCO High Income Fund,
Nicholas-Applegate Convertible &
Income Fund II and PIMCO
Floating Rate Income Fund;
Director, Municipal Advantage Fund
Inc.; Director, Student Loan Finance
Corp., Education Loans, Inc., Goal
Funding, Inc., Goal Funding II, Inc.
Formerly, Senior Executive and
Member of the Board of Smith
Barney, Harris Upham & Co., and
the CEO of five State of New York
agencies.
4
NUMBER OF
PORTFOLIOS IN
FUND OTHER
POSITION(S) TERM OF COMPLEX DIRECTORSHIPS
HELD OFFICE AND OVERSEEN BY HELD BY
WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) TRUSTEE/ TRUSTEE/
NAME, ADDRESS*, AND AGE FUND TIME SERVED DURING THE PAST 5 YEARS NOMINEE NOMINEE
------------------------- ------------- ------------- ---------------------------------- -------------- --------------
Robert E. Connor*** Trustee Since Trustee, Fixed Income SHares, 20 None.
Age 69 inception PIMCO Municipal Income Fund,
(March PIMCO California Municipal
Class I 2003) Income Fund, PIMCO New York
Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO
Municipal Income Fund II, PIMCO
California Municipal Income Fund
II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO
New York Municipal Income Fund
III, PIMCO Corporate Opportunity
Fund, Nicholas-Applegate
Convertible & Income Fund II,
PIMCO High Income Fund and
PIMCO Floating Rate Income Fund;
Director, Municipal Advantage
Fund, Inc.; Corporate Affairs
Consultant. Formerly, Senior Vice
President, Corporate Office,
Salomon Smith Barney Inc.
John J. Dalessandro II+ Trustee Since President and Director, J.J. 15 None.
Age 66 inception Dalessandro II Ltd., registered
(March broker-dealer and member of the
Class II 2003) New York Stock Exchange; Trustee,
PIMCO Municipal Income Fund,
PIMCO California Municipal
Income Fund, PIMCO New York
Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO
Municipal Income Fund II, PIMCO
California Municipal Income Fund
II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO
New York Municipal Income Fund
III, PIMCO Corporate Opportunity
Fund, Nicholas-Applegate
Convertible & Income Fund II,
PIMCO High Income Fund and
PIMCO Floating Rate Income Fund.
5
NUMBER OF
PORTFOLIOS IN
FUND OTHER
POSITION(S) TERM OF COMPLEX DIRECTORSHIPS
HELD OFFICE AND OVERSEEN BY HELD BY
WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) TRUSTEE/ TRUSTEE/
NAME, ADDRESS*, AND AGE FUND TIME SERVED DURING THE PAST 5 YEARS NOMINEE NOMINEE
------------------------- ------------- ------------- ----------------------------------- -------------- --------------
Hans W. Kertess Trustee Since President, H. Kertess & Co.; 15 None.
Age 64 February Trustee, PIMCO Municipal Income
2004 Fund, PIMCO California Municipal
Class I Income Fund, PIMCO New York
Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO
Municipal Income Fund II, PIMCO
California Municipal Income Fund
II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO
New York Municipal Income Fund
III, PIMCO Corporate Opportunity
Fund, PIMCO High Income Fund,
Nicholas-Applegate Convertible &
Income Fund II and PIMCO
Floating Rate Income Fund.
Formerly, Managing Director, Royal
Bank of Canada Capital Markets.
R. Peter Sullivan III N/A N/A Trustee, PIMCO Municipal Income 10 None.
Age 62 Fund, PIMCO California Municipal
Income Fund, PIMCO New York
Class II Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO
Municipal Income Fund II, PIMCO
California Municipal Income Fund
II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California
Municipal Income Fund III and
PIMCO New York Municipal
Income Fund III. Formerly,
Managing Partner, Bear Wagner
Specialists LLC.
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* Unless otherwise indicated, the business address of the persons listed
below is c/o PA Fund Management LLC, 1345 Avenue of the Americas, New
York, New York 10105.
** "Independent Trustees" or "Independent Nominees" are those Trustees or
nominees who are not "interested persons," as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of the Fund.
*** In addition to the positions noted, Mr. Connor previously provided
occasional editorial consulting services as an independent contractor to
an administrative unit of Smith Barney, an affiliate of Citigroup Inc.,
the parent company of Citigroup Global Markets Inc.
+ Mr. Dalessandro is treated by the Fund as not being an "interested
person" (as defined in Section 2(a)(19) of the 1940 Act) of the Fund, the
Manager or NACM, despite his affiliation with J.J. Dalessandro II Ltd., a
member of the New York Stock Exchange, Inc. (the "Exchange") that
operates as a floor broker and effects portfolio transactions for other
brokers, generally other members of the Exchange, and one unrelated
investment adviser.
6
The following table states the dollar range of equity securities
beneficially owned as of April 30, 2004 by each Trustee and nominee of the Fund
and, on an aggregate basis, in any registered investment companies overseen by
the Trustee or nominee in the "family of investment companies" including the
Fund.
DOLLAR RANGE OF AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
EQUITY REGISTERED INVESTMENT COMPANIES OVERSEEN BY
NAME OF TRUSTEE/NOMINEE SECURITIES IN THE FUND* TRUSTEE/NOMINEE IN THE FAMILY OF INVESTMENT COMPANIES*
-------------------------------- ------------------------- -------------------------------------------------------
INDEPENDENT TRUSTEES/NOMINEES
Paul Belica .................... None. Over $100,000.
Robert E. Connor ............... None. None.
Hans W. Kertess ................ None. None.
R. Peter Sullivan III .......... None. None.
John J. Dalessandro II ......... None. None.
----------
* Securities are valued as of April 30, 2004.
To the knowledge of the Fund, as of April 30, 2004, Trustees and nominees
who are Independent Trustees or Independent Nominees and their immediately
family members did not own securities of an investment adviser or principal
underwriter of the Fund or a person (other than a registered investment
company) directly or indirectly controlling, controlled by, or under common
control with an investment adviser or principal underwriter of the Fund.
COMPENSATION. The Fund, PIMCO Municipal Income Fund, PIMCO California
Municipal Income, PIMCO New York Municipal Income Fund, PIMCO Municipal Income
Fund II, PIMCO California Municipal Income Fund II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal Income Fund III, PIMCO California Municipal
Income Fund III, PIMCO New York Municipal Income Fund III, PIMCO Corporate
Income Fund, PIMCO Corporate Opportunity Fund, Nicholas-Applegate Convertible &
Income Fund II, PIMCO High Income Fund and PIMCO Floating Rate Income Fund
(collectively, the "PIMCO Advisors Closed-End Funds") are expected to hold
joint meetings of their Boards of Trustees whenever possible. Each Trustee,
other than any Trustee who is a director, officer, partner or employee of the
Manager or NACM or any entity controlling, controlled by or under common
control with the Manager or NACM, receives compensation for their attendance at
joint meetings and for their service on Board committees. Trustees will receive
up to a maximum of (i) $25,000 for each quarterly joint meeting for the first
four joint meetings in each year, (ii) $5,000 for each additional joint meeting
in such year if the meetings are attended in person and (iii) $1,000 for joint
telephonic meetings. Each Trustee receives a pro rata percentage of the
aforementioned fees based on the net assets, including assets attributable to
the Fund's Outstanding Preferred Shares, of the Funds on which that Trustee
serves. In addition, each Trustee who serves as a member of an Audit Oversight
Committee will receive $1,000 per fund per meeting of the Audit Oversight
Committees for those PIMCO Advisors Closed-End Funds for which they serve as
Trustee and as an Audit Oversight Committee member. The Audit Oversight
Committee Chairman receives $500 annually per Fund for which he serves as
Chairman. Trustees will also be reimbursed for meeting-related expenses.
Each Trustee's compensation and other meeting-related expenses are
allocated pro rata among the PIMCO Advisors Closed-End Funds on whose Boards
the Trustee serves based on each such Fund's net assets, including assets
attributable to the Fund's outstanding Preferred Shares.
7
The PIMCO Advisors Closed-End Funds do not provide any pension or other
retirement benefits to their Trustees.
The following table provides information concerning the compensation paid
to the Trustees and nominees for the Fund's fiscal year ended February 29,
2004. For the fiscal year ended February 29, 2004, the Trustees and nominees
received the compensation set forth in the following table for serving as
trustees of the Fund, if applicable, and other funds in the same "Fund Complex"
as the Fund. Each officer and Trustee or nominee, who is a director, officer,
partner, member or employee of the Manager or NACM, or any entity controlling,
controlled by or under common control with the Manager or NACM, serves without
any compensation from the Fund.
COMPENSATION TABLE
TOTAL COMPENSATION FROM
AGGREGATE COMPENSATION FROM THE FUND AND FUND COMPLEX
THE FUND FOR THE FISCAL YEAR PAID TO TRUSTEES/NOMINEES FOR THE
NAME OF TRUSTEE ENDED FEBRUARY 29, 2004* FISCAL YEAR ENDED FEBRUARY 29, 2004**
-------------------------------- ------------------------------ --------------------------------------
Paul Belica .................... $13,981 $120,043
Robert E. Connor ............... $13,981 $149,050
Hans W. Kertess ................ N/A $ 85,887
R. Peter Sullivan III .......... N/A $ 49,616
John J. Dalessandro II ......... $13,981 $128,500
----------
* The initial fiscal year of the Fund, which ended February 29, 2004,
covered only eleven months. Because these eleven months included all
quarterly Board meetings, the amounts listed above reflect what each
Trustee would have received during a full fiscal year.
** In addition to fifteen PIMCO Advisors Closed-End Funds, during the most
recently completed fiscal year, Mr. Belica and Mr. Connor served as
Trustees of one open-end investment company (comprising four separate
investment portfolios) advised by the Manager and one closed-end
investment company advised by the Manager. These investment companies are
considered to be in the same "Fund Complex" as the Fund.
The Fund has no employees. The Fund's officers are compensated by the
Manager, NACM or one of their affiliates.
BOARD COMMITTEES AND MEETINGS.
AUDIT OVERSIGHT COMMITTEE. The Board has established an Audit Oversight
Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), consisting of Messrs. Belica, Connor
and Kertess, each of whom is an Independent Trustee. The Fund's Audit Oversight
Committee provides oversight with respect to the internal and external
accounting and auditing procedures of the Fund and, among other things,
determines the selection of independent public auditors for the Fund and
considers the scope of the audit, approves all audit and permitted non-audit
services proposed to be performed by those auditors on behalf of the Fund, and
services to be performed by the auditors for certain affiliates, including the
Manager and NACM and entities in a control relationship with the Manager or
NACM that provide services to the Fund where the engagement relates directly to
the operations and financial reporting of the Fund. The Committee considers the
possible effect of those services on the independence of the Fund's auditors.
8
Each member of the Audit Oversight Committee is "independent," as
independence for audit committee members is defined in the currently applicable
listing standards of the New York Stock Exchange, on which the Common Shares of
the Fund are listed.
The Board has adopted a written charter for the Audit Oversight Committee,
a copy of which is included as Exhibit A to this Proxy Statement. The charter
was adopted on January 14, 2004 to conform to newly adopted rules of the New
York Stock Exchange on which the Fund's Common Shares are listed. The Committee
was governed by a different charter prior to that time. A report of the Audit
Oversight Committee, dated April 19, 2004, is attached to this Proxy Statement
as Exhibit B.
NOMINATING COMMITTEE. The Board has a Nominating Committee composed solely
of Independent Trustees, consisting of Messrs. Belica, Connor and Kertess. The
Nominating Committee is responsible for reviewing and recommending qualified
candidates to the Board in the event that a position is vacated or created. The
Nominating Committee has adopted a charter, which is posted on the following
website: www.pimcoadvisors.com.
Qualifications, Evaluation and Identification of Trustee Nominees. The
Nominating Committee of the Fund requires that Trustee candidates have a
college degree or equivalent business experience. When evaluating candidates,
the Fund's Nominating Committee may take into account a wide variety of factors
including, but not limited to: (i) availability and commitment of a candidate
to attend meetings and perform his or her responsibilities on the Board, (ii)
relevant industry and related experience, (iii) educational background, (iv)
financial expertise, (v) an assessment of the candidate's ability, judgment and
expertise and (vi) overall Board composition. The process of identifying
nominees involves the consideration of candidates recommended by one or more of
the following sources: (i) the Fund's current Trustees, (ii) the Fund's
officers, (iii) the Fund's shareholders and (iv) any other source the Committee
deems to be appropriate. The Nominating Committee may, but is not required to,
retain a third party search firm at the applicable Fund's expense to identity
potential candidates.
Consideration of Candidates Recommended by Shareholders. The Nominating
Committee of the Fund will review and consider nominees recommended by
Shareholders to serve as Trustee, provided that the recommending Shareholder
follows the Procedures for Shareholders to Submit Nominee Candidates, which are
set forth as Appendix B to the Fund's Nominating Committee Charter. Among other
requirements, these procedures provide that the recommending Shareholder must
submit any recommendation in writing to the Fund, to the attention of the
Fund's Secretary, at the address of the principal executive offices of the Fund
and that such submission must be received at such offices not less than 45 days
nor more than 75 days prior to the date of the Board or shareholder meeting at
which the nominee would be elected. Any recommendation must include certain
biographical and other information regarding the candidate and the recommending
shareholder, and must include a written and signed consent of the candidate to
be named as a nominee and to serve as a Trustee if elected. The foregoing
description of the requirements is only a summary. Please refer to Appendix B
to the Nominating Committee Charter, which is available at
www.pimcoadvisors.com, for details.
The Nominating Committee has full discretion to reject nominees
recommended by Shareholders, and there is no assurance that any such person
properly recommended and considered by the Committee will be nominated for
election to the Board of the Fund.
Recommendation of Nominees (Other than Nominees Nominated for
Re-Election). The Independent Trustees of the Board recommended Mr. Sullivan to
the Nominating Committee as a candidate for nomination as Trustee and Mr.
Sullivan was nominated by the Nominating Committee and all of the Continuing
Trustees then members of the Board.
9
VALUATION COMMITTEE. The Board has a Valuation Committee, consisting of
Messrs. Belica, Connor, and Kertess. The Board has delegated to the Committee
the responsibility to determine or cause to be determined the fair value of the
Fund's portfolio securities and other assets when market quotations are not
readily available. The Valuation Committee reviews and approves procedures for
the fair valuation of the Fund's portfolio securities and periodically reviews
information from the Manager and NACM regarding fair value and liquidity
determinations made pursuant to Board-approved procedures, and makes related
recommendations to the full Board and assists the full Board in resolving
particular fair valuation and other valuation matters.
COMPENSATION COMMITTEE. The Board has a Compensation Committee, consisting
of Messrs. Belica, Connor and Kertess. The Compensation Committee meets as the
Board deems necessary to review and make recommendations regarding compensation
payable to the Trustees of the Fund who are not directors, officers, partners
or employees of the Manager, NACM or any entity controlling, controlled by or
under common control with the Manager or NACM.
MEETINGS. During the fiscal year ended February 29, 2004, the Board of
Trustees held four regular meetings and two special meetings. The Audit
Oversight Committee met in separate session once during such fiscal year.
Valuation and Compensation Committees did not meet in separate session and the
Nominating Committee met once. Each Trustee attended at least 75% of the
regular and special meetings of the Board and meetings of the committees on
which such Trustee served that were held during the fiscal year ended February
29, 2004, except Mr. Kertess, who was not elected to the Board until February
2004. Mr. Sullivan is not currently a Trustee of the Fund.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF TRUSTEES. The Board of
Trustees has adopted procedures by which Fund Shareholders may send
communications to the Board. Shareholders may mail written communications to
the Board to the attention of the Board of Trustees, Nicholas-Applegate
Convertible & Income Fund, c/o Brian Shlissel, Fund President, PA Fund
Management LLC, 1345 Avenue of the Americas, New York, NY 10105. Shareholder
communications must (i) be in writing and be signed by the Shareholder and (ii)
identify the class and number of Shares held by the Shareholder. The President
of the Fund is responsible for reviewing properly submitted shareholder
communications. The President shall either (i) provide a copy of each properly
submitted shareholder communication to the Board at its next regularly
scheduled Board meeting or (ii) if the President determines that the
communication requires more immediate attention, forward the communication to
the Trustees promptly after receipt. The President may, in good faith,
determine that a shareholder communication should not be provided to the Board
because it does not reasonably relate to the Fund or its operations,
management, activities, policies, service providers, Board, officers,
shareholders or other matters relating to an investment in the Fund or is
otherwise ministerial in nature. These procedures do not apply to (i) any
communication from an officer or Trustee of the Fund, (ii) any communication
from an employee or agent of the Fund, unless such communication is made solely
in such employee's or agent's capacity as a shareholder, or (iii) any
shareholder proposal submitted pursuant to Rule 14a-8 under the Exchange Act or
any communication made in connection with such a proposal. The Fund's Trustees
are not required to attend the Fund's annual shareholder meetings or to
otherwise make themselves available to shareholders for communications, other
than by the aforementioned procedures. The Meeting is the Fund's first annual
meeting of shareholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. The Fund's
Trustees and certain officers, investment advisers, certain affiliated persons
of the investment advisers and persons who own more than 10% of any class of
outstanding securities of the Fund (i.e., the Fund's Common Shares or Preferred
Shares) are required to file forms reporting their affiliation with the Fund
and reports of ownership and changes in ownership of the Fund's securities with
the Securities and Exchange
10
Commission (the "SEC") and the New York Stock Exchange. These persons and
entities are required by SEC regulation to furnish the Fund with copies of all
such forms they file. Based solely on a review of these forms furnished to the
Fund, the Fund believes that each of the Trustees and relevant officers,
investment advisers and relevant affiliated persons of the investment advisers
has complied with all applicable filing requirements during the fiscal year
ended February 29, 2004.
REQUIRED VOTE. Election of Messrs. Kertess and Sullivan to the Board of
Trustees will require the affirmative vote of a plurality of the votes of
Common Shareholders and Preferred Shareholders (voting together as a single
class) cast in the election of Trustees at the Meeting, in person or by proxy.
Election of Mr. Connor to the Board of Trustees will require the affirmative
vote of a plurality of the votes of the Preferred Shareholders (voting as a
separate class) cast in the election of Trustees at the Meeting, in person or
by proxy.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
11
ADDITIONAL INFORMATION
EXECUTIVE AND OTHER OFFICERS OF THE FUND. The table below provides certain
information concerning the executive officers of the Fund and certain other
officers who perform similar duties. Officers hold office at the pleasure of
the Board and until their successors are appointed and qualified or until their
earlier resignation or removal. Officers and employees of the Fund who are
principals, officers, members or employees of the Manager or NACM are not
compensated by the Fund. Unless otherwise noted, the address of all officers is
c/o PA Fund Management LLC, 1345 Avenue of the Americas, New York, New York
10105.
POSITION(S) TERM OF OFFICE
HELD WITH AND LENGTH OF
NAME, ADDRESS AND AGE FUND TIME SERVED PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS
----------------------- ------------- ----------------- -------------------------------------------------------
Stephen J. Treadway Chairman Since inception Managing Director, Allianz Dresdner Asset Management
2187 Atlantic Street (March 2003) of America L.P. ("ADAM"); Managing Director and
Stamford, CT 06902 Chief Executive Officer, PA Fund Management LLC and
Age 56 PA Distributors LLC; Member of the Board of
Management of Allianz Dresdner Asset Management
GmbH; Chairman, Fixed Income SHares, PIMCO
Corporate Opportunity Fund, PIMCO High Income
Fund and Nicholas-Applegate Convertible & Income
Fund II; Trustee, Chairman and President, PIMCO
Advisors VIT; Trustee and Chairman; PIMCO Funds:
Multi-Manager Series, PIMCO Municipal Income Fund,
PIMCO California Municipal Income Fund, PIMCO
New York Municipal Income Fund, PIMCO Corporate
Income Fund, PIMCO Municipal Income Fund II,
PIMCO California Municipal Income Fund II, PIMCO
New York Municipal Income Fund II, PIMCO Municipal
Income Fund III, PIMCO California Municipal Income
Fund III, PIMCO New York Municipal Income Fund III
and PIMCO Floating Rate Income Fund; Director and
Chairman, Municipal Advantage Fund, Inc.
Brian S. Shlissel President Since inception Executive Vice President, PA Fund Management LLC;
Age 39 and Chief (March 2003) President and Chief Executive Officer, Fixed Income
Executive SHares, PIMCO Municipal Income Fund, PIMCO
Officer California Municipal Income Fund, PIMCO New York
Municipal Income Fund, PIMCO Municipal Income
Fund II, PIMCO California Municipal Income Fund II,
PIMCO New York Municipal Income Fund II, PIMCO
Municipal Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO New York
Municipal Income Fund III, PIMCO High Income Fund,
Nicholas-Applegate Convertible & Income Fund II,
PIMCO Floating Rate Income Fund, PIMCO Corporate
Income Fund and PIMCO Corporate Opportunity Fund
and Municipal Advantage Fund, Inc.; Executive Vice
President, Treasurer and Secretary, PIMCO Advisors
VIT; Formerly, Vice President, Mitchell Hutchins Asset
Management Inc.
12
POSITION(S) TERM OF OFFICE
HELD WITH AND LENGTH OF
NAME, ADDRESS AND AGE FUND TIME SERVED PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS
----------------------- --------------- ----------------- ------------------------------------------------------
Newton B. Schott, Jr. Vice Since inception Managing Director, Chief Administrative Officer,
2187 Atlantic Street President, (March 2003) General Counsel and Secretary, PA Distributors LLC;
Stamford, CT 06902 Secretary Managing Director, Chief Legal Officer and Secretary,
Age 61 PA Fund Management LLC; President, Chief Executive
Officer and Secretary, PIMCO Funds: Multi-Manager
Series; Vice President and Secretary, PIMCO Municipal
Income Fund, PIMCO California Municipal Income
Fund, PIMCO New York Municipal Income Fund,
PIMCO Municipal Income Fund II, PIMCO California
Municipal Income Fund II, PIMCO New York Municipal
Income Fund II, PIMCO Municipal Income Fund III,
PIMCO California Municipal Income Fund III, PIMCO
New York Municipal Income Fund III, PIMCO High
Income Fund, Nicholas-Applegate Convertible & Income
Fund II, PIMCO Floating Rate Income Fund, PIMCO
Corporate Income Fund, PIMCO Corporate Opportunity
Fund and Municipal Advantage Fund, Inc.; Secretary,
Fixed Income SHares.
Lawrence Altadonna Treasurer; Since inception Senior Vice President, PA Fund Management LLC;
Age 38 Principal (March 2003) Treasurer and Principal Financial and Accounting
Financial and Officer, PIMCO Municipal Income Fund, PIMCO
Accounting California Municipal Income Fund, PIMCO New York
Officer Municipal Income Fund, PIMCO Municipal Income
Fund II, PIMCO California Municipal Income Fund II,
PIMCO New York Municipal Income Fund II, PIMCO
Municipal Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO New York
Municipal Income Fund III, PIMCO High Income Fund,
Nicholas-Applegate Convertible & Income Fund II,
PIMCO Floating Rate Income Fund, PIMCO Corporate
Income Fund, PIMCO Corporate Opportunity Fund and
Municipal Advantage Fund, Inc.; Treasurer, Fixed
Income SHares; Assistant Treasurer, PIMCO Advisors
VIT. Formerly, Director of Fund Administration,
Prudential Investments.
Douglas Forsyth Vice Since inception Lead Portfolio Manager, Executive Committee, NACM.
600 West Broadway President (March 2003) Vice President, Nicholas-Applegate Convertible &
San Diego, CA 92101 Income Fund II.
Age 35
Jennifer Patula Assistant Since February Assistant Secretary, PIMCO Municipal Income Fund,
Age 25 Secretary 2004 PIMCO California Municipal Income Fund, PIMCO
New York Municipal Income Fund, PIMCO Municipal
Income Fund II, PIMCO California Municipal Income
Fund II, PIMCO New York Municipal Income Fund II,
PIMCO Municipal Income Fund III, PIMCO California
Municipal Income Fund III, PIMCO New York
Municipal Income Fund III, PIMCO Corporate Income
Fund, PIMCO Corporate Opportunity Fund, PIMCO
High Income Fund, Nicholas-Applegate Convertible &
Income Fund II, PIMCO Floating Rate Income Fund
and Municipal Advantage Fund, Inc., Fixed Income
SHares, PIMCO Advisors VIT.
13
INVESTMENT MANAGER AND PORTFOLIO MANAGER. The Manager, located at 1345
Avenue of the Americas, New York, New York 10105, serves as the investment
manager of the Fund. The Manager retains its affiliate, NACM, as sub-adviser to
manage the Fund's investments. NACM is located at 600 West Broadway, San Diego,
CA, 92101. The Manager and NACM are each majority-owned indirect subsidiaries
of Allianz AG, a publicly traded German insurance and financial services
company.
REGULATORY AND LITIGATION MATTERS. On February 12, 2004, the staff of the
SEC informed the Manager and an investment advisory affiliate that it intended
to recommend that the SEC bring civil and administrative actions against the
Manager and the investment advisory affiliate, seeking a permanent injunction
against violations of certain provisions of the federal securities laws,
disgorgement plus prejudgment interest and civil penalties in connection with
the SEC staff's investigation of "market timing" and related trading
activities. On February 17, 2004, the Attorney General of the State of New
Jersey filed a complaint against certain affiliates of the Manager alleging,
among other things, that the defendants failed to disclose that they improperly
allowed certain hedge funds to engage in "market timing" in certain series of
PIMCO Funds: Multi-Manager Series and PIMCO Funds: Pacific Investment
Management Series (collectively, the "PIMCO Funds"). The complaint seeks
injunctive relief, civil monetary penalties, restitution and disgorgement of
profits. On May 6, 2004, the SEC filed a complaint in the U.S. District Court
in the Southern District of New York alleging that the Manager, certain
affiliates of the Manager, Stephen J. Treadway (the chief executive officer of
the Manager as well as the chairman of the Fund) and Kenneth W. Corba (the
former chief executive officer of an investment advisory affiliate of the
Manager as well as a portfolio manager of certain series of the PIMCO Funds)
had, among other things, violated and/or aided and abetted violations of,
various antifraud provisions of the federal securities laws in connection with
the alleged "market timing" arrangements discussed above. The complaint seeks
injunctive relief, disgorgement plus pre-judgment interest, monetary penalties,
and an order permanently enjoining the defendants from serving as investment
advisers, principal underwriters, officers, directors, or members of any
advisory boards to any registered investment companies.
If the New Jersey Attorney General or the SEC were to obtain a court
injunction against the Manager, its affiliates or Mr. Treadway, they and their
affiliates (including NACM) would, in the absence of exemptive relief granted
by the SEC, be barred from serving as an investment adviser/sub-adviser or
principal underwriter for any registered investment company, including the
Fund. In such a case, the Manager and NACM would in turn seek exemptive relief
from the SEC, as contemplated by the1940 Act, although there is no assurance
that such exemptive relief would be granted. The SEC also has the power by
order to prohibit the Manager and its affiliates (including NACM) from serving
as investment advisers, although to date it has not exercised such powers with
respect to market timing arrangements involving other mutual fund complexes.
In November 2003, the SEC settled an enforcement action against an
unaffiliated broker-dealer relating to the undisclosed receipt of fees from
certain mutual fund companies in return for preferred marketing of their funds
and announced that it would be investigating mutual funds and their
distributors generally with respect to compensation arrangements relating to
the sale of mutual fund shares. In that connection, the Manager and certain of
its affiliates are under investigation by the SEC relating to revenue-sharing
arrangements and the use of brokerage commissions to recognize brokers
effecting sales of the PIMCO Funds. In addition, the Attorney General of the
State of California has publicly announced an investigation into the PIMCO
Funds' brokerage recognition and revenue-sharing arrangements.
Since February 2004, the Manager, NACM and certain of their affiliates,
the PIMCO Funds and their trustees (including Mr. Treadway) have been named as
defendants in multiple lawsuits filed in U.S. District Court in the Southern
District of New York, the Central District of California and the Districts
14
of New Jersey and Connecticut. The lawsuits have been commenced as putative
class actions on behalf of investors who purchased, held or redeemed shares of
the PIMCO Funds during specified periods or as derivative actions on behalf of
the PIMCO Funds. These lawsuits, which do not directly involve the Fund,
generally relate to the same facts that are the subject of the regulatory
proceedings discussed above. The lawsuits seek, among other things, unspecified
compensatory damages plus interest and, in some cases, punitive damages, the
rescission of investment advisory contracts, the return of fees paid under
those contracts and restitution. The Manager, NACM and the Fund believe that
other similar lawsuits may be filed in federal or state courts naming the
Manager, NACM, the Fund, Mr. Treadway and/or their affiliates as defendants.
It is possible that these matters and/or other developments resulting from
these matters could lead to a decrease in the market value of the Fund's Shares
or other adverse consequences to the Fund and its Shareholders. However, the
Manager, NACM and the Fund believe that these matters are not likely to have a
material adverse effect on the Manager's or NACM's ability to perform their
respective investment advisory services to the Fund.
The foregoing speaks only as of the date of this Proxy Statement. There
may be additional litigation or regulatory developments in connection with the
matters discussed above.
INDEPENDENT AUDITORS. The Audit Oversight Committee of the Fund's Board
unanimously selected PricewaterhouseCoopers LLP ("PwC") as the independent
auditors for the current fiscal year ending February 28, 2005. PwC served as
the independent auditors of the Fund for the last fiscal year and also serves
as the auditor of various other investment companies for which the Manager and
NACM serve as investment adviser or sub-adviser. PwC is located at 1177 Avenue
of the Americas, New York, New York 10036. The Fund knows of no direct
financial or material indirect financial interest of PwC in the Fund.
A representative of PwC, if requested by any Shareholder, will be present
via a telephone at the Meeting to respond to appropriate questions from
Shareholders and will have an opportunity to make a statement if he or she
chooses to do so.
The Fund's Audit Oversight Committee has adopted written policies relating
to the pre-approval of audit and permitted non-audit services to be performed
by the Fund's independent auditors. Under the policies, on an annual basis, the
Fund's Audit Oversight Committee reviews and pre-approves proposed audit and
permitted non-audit services to be performed by the independent auditors on
behalf of the Fund. The President of the Fund also pre-approves any permitted
non-audit services to be provided to the Fund.
In addition, the Fund's Audit Oversight Committee pre-approves annually
any permitted non-audit services (including audit-related services) to be
provided by the independent auditors to the Manager, NACM and any entity
controlling, controlled by, or under common control with the Manager that
provides ongoing services to the Fund (together, the "Accounting Affiliates"),
provided, in each case, that the engagement relates directly to the operations
and financial reporting of the Fund. Although the Audit Oversight Committee
does not pre-approve all services provided by the independent auditors to
Accounting Affiliates (for instance, if the engagement does not relate directly
to the operations and financial reporting of the Fund), the Committee receives
an annual report from the independent auditors showing the aggregate fees paid
by Accounting Affiliates for such services.
The Fund's Audit Oversight Committee may also from time to time
pre-approve individual non-audit services to be provided to the Fund or an
Accounting Affiliate that were not pre-approved as part of the annual process
described above. The Chairman of the Fund's Audit Oversight Committee (or any
other member of the Committee to whom this responsibility has been delegated)
may also pre-approve these
15
individual non-audit services, provided that the fee for such services does not
exceed certain pre-determined dollar thresholds. Any such pre-approval by the
Chairman (or other delegate) is reported to the full Audit Oversight Committee
at its next regularly scheduled meeting.
The pre-approval policies provide for waivers of the requirement that the
Audit Oversight Committee pre-approve permitted non-audit services provided to
the Fund or its Accounting Affiliates pursuant to de minimis exceptions
described in Section 10A of the Exchange Act and applicable regulations
(referred to herein as the "de minimis exception").
Audit Fees. Audit Fees are fees related to the audit and review of the
financial statements included in annual reports and registration statements,
and other services that are normally provided in connection with statutory and
regulatory filings or engagements. For the Fund's initial fiscal year, the
Audit Fees billed by PwC are shown in the table below:
FISCAL YEAR ENDED AUDIT FEES
------------------ ----------
February 29, 2004 $51,000
Audit-Related Fees. Audit-Related Fees are fees related to assurance and
related services that are reasonably related to the performance of the audit or
review of financial statements, but not reported under "Audit Fees" above,
including accounting consultations, agreed-upon procedure reports (inclusive of
annual review of basic maintenance testing associated with the Preferred
Shares), attestation reports and comfort letters. The table below shows, for
the Fund's initial fiscal year, the Audit-Related Fees billed by PwC to the
Fund and the Audit-Related Fees billed by PwC to the Fund's Accounting
Affiliates for audit-related services related directly to the operations and
financial reporting of the Fund:
FISCAL YEAR ENDED AUDIT-RELATED FEES
------------------- -------------------
Fund February 29, 2004 $48,000
Accounting Affiliates of Fund February 29, 2004 $ 0
Tax Fees. Tax Fees are fees associated with tax compliance, tax advice and
tax planning, including services relating to the filing or amendment of
federal, state or local income tax returns, regulated investment company
qualification reviews, and tax distribution and analysis reviews. The table
below shows, for the Fund's initial fiscal year, the Tax Fees billed by PwC to
the Fund and the Tax Fees billed by PwC to the Fund's Accounting Affiliates
related directly to the operations and financial reporting of the Fund:
FISCAL YEAR ENDED TAX FEES
------------------- ---------
Fund February 29, 2004 $2,600
Accounting Affiliates of Fund February 29, 2004 $ 0
All Other Fees. All Other Fees are fees related to services other than
those reported above under "Audit Fees," "Audit-Related Fees" and "Tax Fees."
For the Fund's initial fiscal year ending February 29, 2004, no such fees were
billed by PwC to the Fund and no such fees were billed by PwC to the Fund's
Accounting Affiliates that were related directly to the operations and
financial reporting of the Fund.
For periods prior to May 6, 2003, the amounts shown above under
"Audit-Related Fees," "Tax Fees" and "All Other Fees" relate to permitted
non-audit services that would have been subject to pre-approval if the SEC
rules relating to the pre-approval of non-audit services had been in effect.
16
During the periods indicated in the tables above, no services described
under "Audit-Related Fees," "Tax Fees" or "All Other Fees" were approved
pursuant to the de minimis exception.
Aggregate Non-Audit Fees. The aggregate non-audit fees billed by PwC, for
the fiscal year indicated, for services rendered to the Fund and the Fund's
Accounting Affiliates is shown in the table below:
FISCAL YEAR ENDED AGGREGATE NON-AUDIT FEES
------------------- -------------------------
Fund February 29, 2004 $ 50,600
Accounting Affiliates of Fund February 29, 2004 $3,698,180
The Fund's Audit Oversight Committee has determined that the provision by
PwC of non-audit services to the Fund's Accounting Affiliates that were not
pre-approved by the Committee (because such services were provided prior to the
effectiveness of SEC rules requiring pre-approval or because such services did
not relate directly to the operations and financial reporting of the Fund) were
compatible with maintaining the independence of PwC as the Fund's principal
auditors. Please see the Report of the Audit Oversight Committee in Exhibit B
to this Proxy Statement.
OTHER BUSINESS. As of the date of this Proxy Statement, the Fund's
officers and the Manager know of no business to come before the Meeting other
than as set forth in the Notice. If any other business is properly brought
before the Meeting, or any adjournment thereof, the persons named as proxies
will vote in their sole discretion.
QUORUM, ADJOURNMENTS AND METHODS OF TABULATION. A quorum at the Meeting
will consist of the presence in person or by proxy of thirty percent (30%) of
the total Common Shares and Preferred Shares of the Fund entitled to vote at
the Meeting, except that a quorum for the election of Mr. Connor as a Trustee
will consist of the presence in person or by proxy of thirty percent (30%) of
the Preferred Shares of the Fund entitled to vote at the Meeting. In the event
that a quorum is not present at the Meeting or, even if a quorum is so present,
in the event that sufficient votes in favor of the Proposal set forth in the
Notice are not received by the time scheduled for the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting after the
date set for the original Meeting, with no other notice than announcement at
the Meeting, to permit further solicitation of proxies with respect to the
Proposal. In addition, if, in the judgment of the persons named as proxies, it
is advisable to defer action on the Proposal, the persons named as proxies may
propose one or more adjournments of the Meeting with respect to the Proposal
for a reasonable time. Any adjournments with respect to the Proposal will
require the affirmative vote of a plurality of the Shares of the Fund entitled
to vote thereon present in person or represented by proxy at the session of the
Meeting to be adjourned. The persons named as proxies will vote in favor of
such adjournment those proxies which they are entitled to vote in favor of the
Proposal. They will vote against any such adjournment those proxies required to
be voted against the Proposal. The costs of any additional solicitation and of
any adjourned session will be borne by the Fund. Any proposals for which
sufficient favorable votes have been received by the time of the Meeting will
be acted upon and such action will be final regardless of whether the Meeting
is adjourned to permit additional solicitation with respect to any other
proposal.
Votes cast by proxy or in person at the Meeting will be counted by persons
appointed by the Fund as tellers (the "Tellers") for the Meeting. For purposes
of determining the presence of a quorum, the Tellers will count the total
number of votes cast "for" or "against" approval of the Proposal, as well as
Shares represented by proxies that reflect abstentions and "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or the persons
17
entitled to vote and the broker or nominee does not have the discretionary
voting power on a particular matter). Abstentions and broker non-votes will
have no effect on the outcome of the Proposal.
REPORTS TO SHAREHOLDERS. The Fund's 2004 Annual Report to Shareholders was
mailed to Shareholders on or about April 29, 2004. ADDITIONAL COPIES OF THE
ANNUAL REPORT AND THE FUND'S SUBSEQUENT SEMI-ANNUAL REPORT, IF ANY, MAY BE
OBTAINED WITHOUT CHARGE FROM THE FUND BY CALLING 1-877-819-2224 OR BY WRITING
TO THE FUND AT 2187 ATLANTIC STREET, 7TH FLOOR, STAMFORD, CT 06902.
SHAREHOLDER PROPOSALS FOR 2005 ANNUAL MEETINGS. It is currently
anticipated that the Fund's next annual meeting of Shareholders (in 2005) will
be held in May 2005. Proposals of Shareholders intended to be presented at that
annual meeting of the Fund must be received by the Fund no later than January
20, 2005 for inclusion in the Fund's proxy statement and proxy card relating to
that meeting. The submission by a Shareholder of a proposal for inclusion in
the proxy materials does not guarantee that it will be included. Shareholder
proposals are subject to certain requirements under the federal securities laws
and must be submitted in accordance with the Fund's Bylaws. Shareholders
submitting any other proposals for the Fund intended to be presented at the
2005 annual meeting (i.e., other than those to be included in the Fund's proxy
materials) must ensure that such proposals are received by the Fund, in good
order and complying with all applicable legal requirements and requirements set
forth in the Fund's Bylaws, no earlier than March 21, 2005 and no later than
April 5, 2005. If a Shareholder who wishes to present a proposal fails to
notify the Fund within these dates, the proxies solicited for the meeting will
have discretionary authority to vote on the Shareholder's proposal if it is
properly brought before the meeting. If a Shareholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules. Shareholder
proposals should be addressed to the attention of the Secretary of the Fund, at
the address of the principal executive offices of the Fund, with a copy to
Joseph B. Kittredge, Jr., at Ropes & Gray LLP, One International Place, Boston,
Massachusetts 02110-2624.
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY TO ENSURE THAT A
QUORUM IS PRESENT AT THE ANNUAL MEETING. A SELF-ADDRESSED, POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
May 17, 2004
18
EXHIBIT A TO PROXY STATEMENT
PIMCO CLOSED-END FUNDS
AUDIT OVERSIGHT COMMITTEE CHARTER
(Adopted as of January 14, 2004)
The Board of Trustees (each a "Board") of each of the registered
investment companies listed in Appendix A hereto (each a "Fund" and,
collectively, the "Funds"), as the same may be periodically updated, has
adopted this Charter to govern the activities of the Audit Oversight Committee
(the "Committee") of the particular Board with respect to its oversight of the
Fund. This Charter applies separately to each Fund and its particular Board and
Committee, and shall be interpreted accordingly. This Charter supersedes and
replaces any audit committee charter previously adopted by the Board or a
committee of the Board.
STATEMENT OF PURPOSE AND FUNCTIONS
The Committee's general purpose is to oversee the Fund's accounting and
financial reporting policies and practices and its internal controls, including
by assisting with the Board's oversight of the integrity of the Fund's
financial statements, the Fund's compliance with legal and regulatory
requirements, the qualifications and independence of the Fund's independent
auditors, and the performance of the Fund's internal control systems and
independent auditors. The Committee's purpose is also to prepare reports
required by Securities and Exchange Commission rules to be included in the
Fund's annual proxy statements, if any.
The Committee's function is oversight. While the Committee has the
responsibilities set forth in this Charter, it is not the responsibility of the
Committee to plan or conduct audits, to prepare or determine that the Fund's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles, or to assure compliance with laws,
regulations or any internal rules or policies of the Fund. Fund management is
responsible for Fund accounting and the implementation and maintenance of the
Fund's internal control systems, and the independent auditors are responsible
for conducting a proper audit of the Fund's financial statements. Members of
the Committee are not employees of the Funds and, in serving on this Committee,
are not, and do not hold themselves out to be, acting as accountants or
auditors. As such, it is not the duty or responsibility of the Committee or its
members to conduct "field work" or other types of auditing or accounting
reviews or procedures. Each member of the Committee shall be entitled to rely
on (i) the integrity of those persons and organizations within management and
outside the Fund from which the Committee receives information and (ii) the
accuracy of financial and other information provided to the Committee by such
persons or organizations absent actual knowledge to the contrary.
MEMBERSHIP
The Committee shall be comprised of as many trustees as the Board shall
determine, but in any event not less than three (3) Trustees. Each member of
the Committee must be a member of the Board. The Board may remove or replace
any member of the Committee at any time in its sole discretion. One or more
members of the Committee may be designated by the Board as the Committee's
chairman or co-chairman, as the case may be.
Each member of the Committee may not be an "interested person" of the
Fund, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and
A-1
must otherwise satisfy the standards for independence of an audit committee
member of an investment company issuer as set forth in Rule 10A-3(b) (taking
into account any exceptions to those requirements set for in such rule) under
the Securities Exchange Act of 1934, as amended, and under applicable listing
standards of the New York Stock Exchange (the "NYSE"). Each member of the
Committee must be "financially literate" (or must become so within a reasonable
time after his or her appointment to the Committee) and at least one member of
the Committee must have "accounting or related financial management expertise,"
in each case as the Board interprets such qualification in its business
judgment under NYSE listing standards.
RESPONSIBILITIES AND DUTIES
The Committee's policies and procedures shall remain flexible to
facilitate the Committee's ability to react to changing conditions and to
generally discharge its functions. The following describe areas of attention in
broad terms. The Committee shall:
1. Determine the selection, retention or termination of the Fund's
independent auditors based on an evaluation of their independence and
the nature and performance of the audit and any permitted non-audit
services. Decisions by the Committee concerning the selection, retention
or termination of the independent auditors shall be submitted to the
Board for ratification in accordance with the requirements of Section
32(a) of the Investment Company Act. The Fund's independent auditors
must report directly to the Committee, which shall be responsible for
resolution of disagreements between management and the independent
auditors relating to financial reporting.
2. To consider the independence of the Fund's independent auditors at least
annually, and in connection therewith receive on a periodic basis formal
written disclosures and letters from the independent auditors as
required by the Independence Standards Board Standard ("ISB") No. 1.
3. To the extent required by applicable regulations, pre-approve (i) all
audit and permitted non-audit services rendered by the independent
auditors to the Fund and (ii) all non-audit services rendered by the
independent auditors to the Fund's investment advisers (including
sub-advisers) and to certain of the investment advisers' affiliates. The
Committee may implement policies and procedures by which such services
are approved other than by the full Committee.
4. Review the fees charged by the independent auditors to the Fund, the
investment advisers and certain affiliates of the investment advisers
for audit, audit-related and permitted non-audit services.
5. If and to the extent that the Fund intends to have employees, set clear
policies for the hiring by the Fund of employees or former employees of
the Fund's independent auditors.
6. Obtain and review at least annually a report from the independent
auditors describing (i) the accounting firm's internal quality-control
procedures and (ii) any material issues raised (a) by the accounting
firm's most recent internal quality-control review or peer review or (b)
by any governmental or other professional inquiry or investigation
performed within the preceding five years respecting one or more
independent audits carried out by the firm, and any steps taken to
address any such issues.
7. Review with the Fund's independent auditors arrangements for and the
scope of the annual audit and any special audits, including the form of
any opinion proposed to be rendered to the Board and shareholders of the
Fund.
A-2
8. Discuss with management and the independent auditors the Fund's audited
financial statements, including any narrative discussion by management
concerning the Fund's financial condition and investment performance;
discuss with the independent auditors matters required by Statement of
Accounting Standards ("SAS") No. 61 and any other matters required to be
reported to the Committee under applicable law; and provide a statement
whether, based on its review of the Fund's audited financial statements,
the Committee recommends to the Board that the audited financial
statements be included in the Fund's Annual Report.
9. Discuss with management and the independent auditors the Fund's
unaudited financial statements.
10. Review with the independent auditors any audit problems or difficulties
encountered in the course of their audit work and management's responses
thereto.
11. Review with management and, as applicable, with the independent auditors
the Fund's accounting and financial reporting policies, practices and
internal controls, management's guidelines and policies with respect to
risk assessment and risk management, including the effect on the Fund of
any recommendation of changes in accounting principles or practices by
management or the independent auditors.
12. Discuss with management any press releases discussing the Fund's
investment performance and other financial information about the Fund,
as well as any financial information provided by management to analysts
or rating agencies. The Committee may discharge this responsibility by
discussing the general types of information to be disclosed by the Fund
and the form of presentation (i.e., a case-by-case review is not
required) and need not discuss in advance each such release of
information.
13. Establish procedures for (i) the receipt, retention, and treatment of
complaints received by the Fund regarding accounting, internal
accounting controls, or auditing matters; and (ii) the confidential,
anonymous submission by employees of the Fund, the Fund's investment
advisers, administrator, principal underwriter (if any) or any other
provider of accounting-related services for the investment advisers of
concerns regarding accounting or auditing matters.
14. Investigate or initiate the investigation of any improprieties or
suspected improprieties in the Fund's accounting operations or financial
reporting.
15. Review with counsel legal and regulatory matters that have a material
impact on the Fund's financial and accounting reporting policies and
practices or its internal controls.
16. Report to the Board on a regular basis (at least annually) on the
Committee's activities.
17. Perform such other functions consistent with this Charter, the Agreement
and Declaration of Trust and Bylaws applicable to the Fund, and
applicable law or regulation, as the Committee or the Board deems
necessary or appropriate.
The Committee may delegate any portion of its authority and responsibilities as
set forth in this Charter to a subcommittee of one or more members of the
Committee.
MEETINGS
At least annually, the Committee shall meet separately with the
independent auditors and separately with the representatives of Fund management
responsible for the financial and accounting operations of the Fund. The
Committee shall hold other regular or special meetings as and when it deems
necessary or appropriate.
A-3
OUTSIDE RESOURCES AND ASSISTANCE FROM MANAGEMENT
The appropriate officers of the Fund shall provide or arrange to provide
such information, data and services as the Committee may request. The Committee
shall have the authority to engage at the Fund's expense independent counsel
and other experts and consultants whose expertise the Committee considers
necessary to carry out its responsibilities. The Fund shall provide for
appropriate funding, as determined by the Committee, for the payment of: (i)
compensation of the Fund's independent auditors for the issuance of an audit
report relating to the Fund's financial statements or the performance of other
audit, review or attest services for the Fund; (ii) compensation of independent
legal counsel or other advisers retained by the Committee; and (iii) ordinary
administrative expenses of the Committee that are necessary or appropriate in
fulfilling its purposes or carrying out its responsibilities under this
Charter.
ANNUAL EVALUATIONS
The Committee shall review and reassess the adequacy of this Charter at
least annually and recommend any changes to the Board. In addition, the
performance of the Committee shall be reviewed at least annually by the Board.
ADOPTION AND AMENDMENTS
The Board shall adopt and approve this Charter and may amend the Charter
at any time on the Board's own motion.
A-4
EXHIBIT A
FUNDS SUBJECT TO THIS CHARTER
(As of January 14, 2004)
PIMCO MUNICIPAL INCOME FUND
PIMCO CALIFORNIA MUNICIPAL INCOME FUND
PIMCO NEW YORK MUNICIPAL INCOME FUND
PIMCO CORPORATE INCOME FUND
PIMCO MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II
PIMCO MUNICIPAL INCOME FUND III
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
PIMCO NEW YORK MUNICIPAL INCOME FUND III
PIMCO CORPORATE OPPORTUNITY FUND
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
PIMCO HIGH INCOME FUND
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND II
PIMCO FLOATING RATE INCOME FUND
A-5
EXHIBIT B TO PROXY STATEMENT
REPORT OF AUDIT OVERSIGHT COMMITTEE
OF THE BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND (THE "FUND")
DATED APRIL 19, 2004
The Audit Oversight Committee (the "Committee") oversees the Fund's
financial reporting process on behalf of the Board of Trustees of the Fund (the
"Board") and operates under a written Charter adopted by the Board. The
Committee meets with the Fund's management ("Management") and independent
public accountants and reports the results of its activities to the Board.
Management has the primary responsibility for the financial statements and the
reporting process, including the system of internal controls. In connection
with the Committee's and independent accountant's responsibilities, Management
has advised that the Fund's financial statements for the fiscal year ended
February 29, 2004 were prepared in conformity with the generally accepted
accounting principles.
The Committee has reviewed and discussed with Management and
PricewaterhouseCoopers LLP ("PwC"), the Fund's independent public accountants,
the audited financial statements for the fiscal year ended February 29, 2004.
The Committee has discussed with PwC the matters required to be discussed by
Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requires independent
auditors to communicate to the Committee matters including, if applicable: 1)
methods used to account for significant unusual transactions; 2) the effect of
significant accounting policies in controversial of emerging areas for which
there is a lack of authoritative guidance or consensus; 3) the process used by
management in formulating particularly sensitive accounting estimates and the
basis for the auditor's conclusions regarding the reasonableness of those
estimates; and 4) disagreements with Management over the application of
accounting principles and certain other matters.
With respect to the Fund, the Committee has received the written
disclosure and the letter from PwC required by Independence Standards Board
Standard No. 1 (requiring auditors to make written disclosure to and discuss
with the Committee various matters relating to the auditor's independence), and
has discussed with PwC their independence. The Committee has also reviewed the
aggregate fees billed by PwC for professional services rendered to the Fund and
for non-audit services provided to PIMCO Advisors Fund Management LLC ("PAFM"),
the Fund's investment manager during portions of the last fiscal year,
Nicholas-Applegate Capital Management LLC ("NACM"), the Fund's sub-adviser, and
any entity controlling, controlled by or under common control with PAFM or NACM
that provided services to the Fund. As part of this review, the Committee
considered, in addition to other practices and requirements relating to
selection of the Fund's independent auditors, whether the provision of such
non-audit services was compatible with maintaining the independence of PwC.
Based on the foregoing review and discussions, the Committee presents this
Report to the Board and recommends that (1) the audited financial statements
for the fiscal year ended February 29, 2004 be included in the Fund's Annual
Report to shareholders for such fiscal year, (2) such Annual Report be filed
with the Securities and Exchange Commission and the New York Stock Exchange,
and (3) PwC be reappointed as the Fund's independent public accountants for the
fiscal year ending February 28, 2005.
Submitted by the Audit Oversight Committee of the Board of Trustees:
Paul Belica
Robert E. Connor
Hans W. Kertess
B-1
PROXY
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
COMMON SHARES
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 29, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
The undersigned holder of common shares of Nicholas-Applegate Convertible &
Income Fund, a Massachusetts business trust (the "Fund"), hereby appoints
Stephen J. Treadway, Newton B. Schott, Jr. and Brian S. Shlissel, or any of
them, as proxies for the undersigned, with full power of substitution in each of
them, to attend the Annual Meeting of Shareholders of the Fund (the "Annual
Meeting") to be held at 4:00 p.m., Eastern Time, June 29, 2004 at the offices of
PIMCO Advisors Fund Management LLC, 1345 Avenue of the Americas, 49th Floor, New
York, New York 10105, and any postponement or adjournment thereof, to cast on
behalf of the undersigned all votes that the undersigned is entitled to cast at
the Annual Meeting and otherwise to represent the undersigned with all powers
possessed by the undersigned if personally present at such Annual Meeting. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement and revokes any proxy heretofore given with respect
to the Annual Meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND
WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS
THE PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY
THE UNDERSIGNED WILL BE CAST "FOR" SUCH PROPOSAL.
Please refer to the Proxy Statement for a discussion of the Proposal.
-----------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN
THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
NOTE: Please sign this proxy exactly as your name(s) appear(s) on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, the signature should
be that of an authorized officer who should state his or her title.
-----------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
---------------------------------- --------------------------------------
---------------------------------- --------------------------------------
---------------------------------- --------------------------------------
Please mark
|X| votes as in
this example.
Your Board of Trustees urges you to vote "FOR" the election of the Nominee.
I. Election of Trustee:
(01) Hans W. Kertess (Class I) and (02) R. Peter Sullivan III (Class II)
--- ---
FOR | | | | WITHHOLD
THE | | | | FROM THE
NOMINEES --- --- NOMINEES
---
| |
| |
--- -------------------------------------------
For all Nominees except as noted above
-----------------------------------------------------------------------------
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
-----------------------------------------------------------------------------
COMMON SHARES
II. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any postponement or adjournment
thereof, in the discretion of the proxy holder(s).
---
Please check box at right if an address change or comment | |
has been made on the reverse side of this card. ---
Please be sure to sign and date this Proxy.
Shareholder Joint Owner
signature:____________ Date:______ (if any) signature:_____________ Date:______
PROXY
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
PREFERRED SHARES
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 29, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
The undersigned holder of preferred shares of Nicholas-Applegate Convertible &
Income Fund, a Massachusetts business trust (the "Fund"), hereby appoints
Stephen J. Treadway, Newton B. Schott, Jr. and Brian S. Shlissel, or any of
them, as proxies for the undersigned, with full power of substitution in each of
them, to attend the Annual Meeting of Shareholders of the Fund (the "Annual
Meeting") to be held at 4:00 p.m., Eastern Time, June 29, 2004 at the offices of
PIMCO Advisors Fund Management LLC, 1345 Avenue of the Americas, 49th Floor, New
York, New York 10105, and any postponement or adjournment thereof, to cast on
behalf of the undersigned all votes that the undersigned is entitled to cast at
the Annual Meeting and otherwise to represent the undersigned with all powers
possessed by the undersigned if personally present at such Annual Meeting. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement and revokes any proxy heretofore given with respect
to the Annual Meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND
WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS
THE PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY
THE UNDERSIGNED WILL BE CAST "FOR" SUCH PROPOSAL.
Please refer to the Proxy Statement for a discussion of the Proposal.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN
THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTE: Please sign this proxy exactly as your name(s) appear(s) on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, the signature should
be that of an authorized officer who should state his or her title.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
---------------------------------- ----------------------------------------
---------------------------------- ----------------------------------------
---------------------------------- ----------------------------------------
Please mark
|X| votes as in
this example.
Your Board of Trustees urges you to vote "FOR" the election of all Nominees.
I. Election of Trustees:
(01) Robert E. Connor (Class I), (02) Hans W. Kertess (Class I) and
(03) R. Peter Sullivan III (Class II)
--- ---
FOR | | | | WITHHOLD
THE | | | | FROM ALL
NOMINEES --- --- NOMINEES
---
| |
| |
--- -------------------------------------------
For all Nominees except as noted above
--------------------------------------------------------------------------------
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
--------------------------------------------------------------------------------
PREFERRED SHARES
II. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any postponement or adjournment
thereof, in the discretion of the proxy holder(s).
---
Please check box at right if an address change or comment | |
has been made on the reverse side of this card. ---
Please be sure to sign and date this Proxy.
Shareholder Joint Owner
signature:____________ Date:______ (if any) signature:_____________ Date:______