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 þ Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Joint Proxy Statement | |
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¨ | Soliciting Material Under Rule 14a-12 | |
PIMCO MunicipalCorporate & Income Opportunity Fund
PIMCO Corporate & Income Strategy Fund
PIMCO Dynamic Credit Income Fund
PIMCO Dynamic Income Fund
PIMCO Global StocksPLUS® & Income Fund
PIMCO High Income Fund
PIMCO Income Opportunity Fund
PIMCO Strategic Income Fund, Inc.
PCM Fund, Inc.
PIMCO California Municipal Income Fund
PIMCO New York Municipal Income Fund
PIMCOCalifornia Municipal Income Fund II
PIMCO California Municipal Income Fund IIIII
PIMCO New YorkMunicipal Income Fund
PIMCO Municipal Income Fund II
PIMCO Municipal Income Fund III
PIMCO CaliforniaNew York Municipal Income Fund III
PIMCO New York Municipal Income Fund II
PIMCO New York Municipal Income Fund III
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013PIMCO CORPORATE & INCOME OPPORTUNITY FUND
PIMCO CORPORATE & INCOME STRATEGY FUND
PIMCO DYNAMIC CREDIT INCOME FUND
PIMCO DYNAMIC INCOME FUND
PIMCO GLOBAL STOCKSPLUS® & INCOME FUND
PIMCO HIGH INCOME FUND
PIMCO INCOME OPPORTUNITY FUND
PIMCO STRATEGIC INCOME FUND, INC.
PCM FUND, INC.
PIMCO CALIFORNIA MUNICIPAL INCOME FUND (“PMF”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND (“PCQ”)II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
PIMCO MUNICIPAL INCOME FUND
PIMCO MUNICIPAL INCOME FUND II
PIMCO MUNICIPAL INCOME FUND III
PIMCO NEW YORK MUNICIPAL INCOME FUND (“PNF”)
PIMCO MUNICIPAL INCOME FUND II (“PML”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II (“PCK”)
PIMCO NEW YORK MUNICIPAL INCOME FUND II (“PNI”)
PIMCO MUNICIPAL INCOME FUND III (“PMX”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III (“PZC”)
PIMCO NEW YORK MUNICIPAL INCOME FUND III (“PYN”)
1633 Broadway
New York, New York 10019
ToFor proxy information, please call (877) 361-7967
Dear Shareholder:
On behalf of the ShareholdersBoards of Trustees/Directors of PIMCO MunicipalCorporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO Dynamic Credit Income Fund, (“PMF”PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Strategic Income Fund, Inc. (formerly known as PIMCO Strategic Global Government Fund, Inc.), PCM Fund, Inc., PIMCO California Municipal Income Fund, (“PCQ”),PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, (“PNF”), PIMCO Municipal Income Fund II (“PML”), PIMCO California Municipal Income Fund II (“PCK”), PIMCO New York Municipal Income Fund II (“PNI”), PIMCO Municipal Income Fund III (“PMX”), PIMCO California Municipal Income Fund III (“PZC”), and PIMCO New York Municipal Income Fund III (each, a “Fund” and, collectively, the “Funds”), we are pleased to invite you to a Joint Special Meeting of Shareholders (the “Special Meeting”) of each Fund to be held on June 9, 2014, at the offices of Pacific Investment Management Company LLC (“PYN”PIMCO”), at 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019 at 9:30 A.M., Eastern Time.
As discussed in more detail in the enclosed Proxy Statement, at the Special Meeting, the shareholders of each Fund will be asked to approve a new Investment Management Agreement (the “Proposed Agreement”) between the
Fund and PIMCO, which currently serves as sub-adviser to each Fund. Upon shareholder approval and effectiveness of the Proposed Agreement with respect to a Fund, PIMCO will become the Fund’s investment manager and begin providing supervisory and administrative services along with the day-to-day portfolio management services it currently provides to the Fund as its sub-adviser. Upon the effectiveness of the Proposed Agreement for a Fund, the current investment management agreement between the Fund and Allianz Global Investors Fund Management LLC (“AGIFM”) and portfolio management agreement between AGIFM and PIMCO will terminate. If the Proposed Agreement is approved by shareholders with respect to a Fund, the Proposed Agreement will become effective for such Fund at a date and time mutually agreeable to the Fund, PIMCO and AGIFM in order to effect an efficient transition for the Fund and its shareholders.
Your vote is important
After considering the proposal, each Fund’s Board of Trustees/Directors unanimously voted to approve the Proposed Agreement for the Fund and to recommend that the shareholders of the Fund vote in favor of the proposal, as more fully described in the accompanying Proxy Statement.
Now it is your turn to review the proposal and vote. For more information about the issues requiring your vote, please refer to the accompanying Proxy Statement.
No matter how many shares you own, your timely vote is important. If you do not expect to attend the Special Meeting, please complete, sign, date and mail the enclosed proxy card(s) promptly in the accompanying postage-prepaid envelope, or give your voting instructions by telephone or via the Internet, in order to avoid the expense of additional mailings or having our proxy solicitor, AST Fund Solutions, LLC, telephone you, and to ensure that the Special Meeting can be held as scheduled. Please call (877) 361-7967 if you have any questions about the Proxy Statement or the proposal, or if you would like additional information.
Thank you in advance for your participation in this Joint Special Meeting of Shareholders.
Sincerely,
Hans W. Kertess
Chairman of the Boards
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 9, 2014
PIMCO CORPORATE & INCOME OPPORTUNITY FUND
PIMCO CORPORATE & INCOME STRATEGY FUND
PIMCO DYNAMIC CREDIT INCOME FUND
PIMCO DYNAMIC INCOME FUND
PIMCO GLOBAL STOCKSPLUS® & INCOME FUND
PIMCO HIGH INCOME FUND
PIMCO INCOME OPPORTUNITY FUND
PIMCO STRATEGIC INCOME FUND, INC.
PCM FUND, INC.
PIMCO CALIFORNIA MUNICIPAL INCOME FUND
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
PIMCO MUNICIPAL INCOME FUND
PIMCO MUNICIPAL INCOME FUND II
PIMCO MUNICIPAL INCOME FUND III
PIMCO NEW YORK MUNICIPAL INCOME FUND
PIMCO NEW YORK MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND III
1633 Broadway
New York, New York 10019
To the Shareholders of PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO Dynamic Credit Income Fund, PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Strategic Income Fund, Inc. (formerly known as PIMCO Strategic Global Government Fund, Inc.), PCM Fund, Inc., PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II and PIMCO New York Municipal Income Fund III (each, a “Fund” and, collectively, the “Funds”):
Notice is hereby given that a Joint AnnualSpecial Meeting of Shareholders (the “Meeting”“Special Meeting”) of the Funds will be held at the offices of Allianz Global Investors FundPacific Investment Management Company LLC (“AGIFM” or the “Manager”PIMCO”), at 1633 Broadway, between West 50th50th and West 51st51st Streets, 42nd Floor, New York, New York 10019, on Wednesday, December 18, 2013June 9, 2014 at 9:30 A.M., Eastern Time, for the following purposes, which are more fully described in the accompanying Proxy Statement:
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The Board of TrusteesTrustees/Directors of each Fund unanimously recommends that you vote FOR the proposal specified in 1. above.
The Board of Trustees/Directors of each Fund has fixed the close of business on November 1, 2013April 9, 2014 as the record date for the determination of shareholders entitled to receive notice of, and to vote at, the Special Meeting or any adjournment(s) or
postponement(s) thereof. The enclosed proxy is being solicited on behalf of the Board of TrusteesTrustees/Directors of each Fund.
| By order of the Board of |
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| Thomas J. Fuccillo |
| Secretary |
New York, New York
November 19, 2013April 21, 2014
It is important that your shares be represented at the Meeting in person or by proxy, noNo matter how many shares you own.own, your timely vote is important. If you do not expect to attend the Special Meeting, please complete, sign, date sign and returnmail the applicable enclosed proxy or proxiescard(s) promptly in the accompanying postage-prepaid envelope, which requires no postage if mailed inor give your voting instructions by telephone or via the United States. Please mark and mail your proxy or proxies promptlyInternet, in order to saveavoid the Funds anyexpense of additional costs of furthermailings or having our proxy solicitationssolicitor, AST Fund Solutions, LLC, telephone you, and in order forto ensure that the Special Meeting tocan be held as scheduled. Please call (877) 361-7967 if you have any questions about the Proxy Statement or the proposal, or if you would like additional information.
PIMCO CORPORATE & INCOME OPPORTUNITY FUND
PIMCO CORPORATE & INCOME STRATEGY FUND
PIMCO DYNAMIC CREDIT INCOME FUND
PIMCO DYNAMIC INCOME FUND
PIMCO GLOBAL STOCKSPLUS® & INCOME FUND
PIMCO HIGH INCOME FUND
PIMCO INCOME OPPORTUNITY FUND
PIMCO STRATEGIC INCOME FUND, INC.
PCM FUND, INC.
PIMCO CALIFORNIA MUNICIPAL INCOME FUND (“PMF”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND (“PCQ”)II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
PIMCO MUNICIPAL INCOME FUND
PIMCO MUNICIPAL INCOME FUND II
PIMCO MUNICIPAL INCOME FUND III
PIMCO NEW YORK MUNICIPAL INCOME FUND (“PNF”)
PIMCO MUNICIPAL INCOME FUND II (“PML”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II (“PCK”)
PIMCO NEW YORK MUNICIPAL INCOME FUND II (“PNI”)
PIMCO MUNICIPAL INCOME FUND III (“PMX”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III (“PZC”)
PIMCO NEW YORK MUNICIPAL INCOME FUND III (“PYN”)
1633 Broadway
New York, New York 10019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE JOINT ANNUALSPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013JUNE 9, 2014
This Proxy Statementproxy statement (the “Proxy Statement”) and the Annual ReportsReport to Shareholders for the most recently completed fiscal years ended April 30, 2013year for PMF, PCQ and PNF, May 31, 2013 for PML, PCK and PNI, and September 30, 2013 for PMX, PZC and PYNeach of the above listed Funds are also available atus.allianzgi.com/closedendfunds.closedendfunds.
PROXY STATEMENT
November 19, 2013APRIL 21, 2014
FOR THE JOINT ANNUALSPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013JUNE 9, 2014
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the Boards of Trustees (theTrustees/Directors (collectively, the “Board”) of the shareholders of PIMCO Corporate & Income Opportunity Fund (“PTY”), PIMCO Corporate & Income Strategy Fund (“PCN”), PIMCO Dynamic Credit Income Fund (“PCI”), PIMCO Dynamic Income Fund (“PDI”), PIMCO Global StocksPLUS® & Income Fund (“PGP”), PIMCO High Income Fund (“PHK”), PIMCO Income Opportunity
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Fund (“PKO”), PIMCO Strategic Income Fund, Inc. (formerly known as PIMCO Strategic Global Government Fund, Inc.) (“RCS”), PCM Fund, Inc. (“PCM”), PIMCO California Municipal Income Fund (“PCQ”), PIMCO California Municipal Income Fund II (“PCK”), PIMCO California Municipal Income Fund III (“PZC”), PIMCO Municipal Income Fund (“PMF”), PIMCO California Municipal Income Fund II (“PCQ”PML”), PIMCO Municipal Income Fund III (“PMX”), PIMCO New York Municipal Income Fund (“PNF”), PIMCO Municipal Income Fund II (“PML”), PIMCO California Municipal Income Fund II (“PCK”), PIMCO New York Municipal Income Fund II (“PNI”), PIMCO Municipal Income Fund III (“PMX”), PIMCO California Municipal Income Fund III (“PZC”), and PIMCO New York Municipal Income Fund III (“PYN”) (each, a “Fund” and, collectively, the “Funds”) of proxies to be voted at the Joint AnnualSpecial Meeting of Shareholders of the Funds and any adjournment(s) or postponement(s)
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thereof (the “Meeting”“Special Meeting”). The Special Meeting will be held at the offices of Allianz Global Investors FundPacific Investment Management Company LLC (“AGIFM” or the “Manager”PIMCO”), at 1633 Broadway, between West 50th50th and West 51st51st Streets, 42nd Floor, New York, New York 10019, on Wednesday, December 18, 2013June 9, 2014, at 9:30 A.M., Eastern Time.
The Notice of Joint AnnualSpecial Meeting of Shareholders (the “Notice”), this Proxy Statement and the enclosed proxy cards are first being sent to Shareholdersshareholders on or about November 19, 2013.April 21, 2014.
The Special Meeting is scheduled as a joint meeting of the holders of all shares of each Fund, which consists of holders of common shares of beneficial interest (“Common Shares”) of each Fund (the “Common Shareholders”) and holders of preferred shares of each Fundbeneficial interest (“Preferred Shares” and, together with the Common Shares, the “Shares”) of PTY, PCN, PHK, PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN (the “Preferred Shareholders” and, together with the Common Shareholders, the “Shareholders”). The Shareholders of each Fund are expected to consider and vote on similar matters. The Shareholders of each Fund will vote separately on the applicable proposal set forth herein (the “Proposal”) and on any other matters that may properly be presented for a vote by the Shareholders of that Fund. The outcome of voting by the Shareholders of one Fund does not affect the outcome for the other Funds.
The Board of each Fund has fixed the close of business on November 1, 2013 as the record date (the “Record Date”) for the determination of Shareholders of each Fund entitled to notice of, and to vote at, the applicable Meeting. The Shareholders of each Fund on the Record Date will be entitled to one vote per share on each matter to which they are entitled to vote and that is to be voted on by Shareholders of the Fund, and a fractional vote with respect to fractional shares, with no cumulative voting rights in the election of Trustees. 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 each Fund at the close of businessSpecial Meeting. With respect to the Proposal, and on any other matters to properly come before the Record Date:
| Outstanding Common Shares | Outstanding Preferred Shares | |||||||
PMF | 25,357,867 | 7,600 | ||||||
PCQ | 15,548,542 | 6,000 | ||||||
PNF | 7,689,133 | 1,880 | ||||||
PML | 61,004,315 | 14,680 | ||||||
PCK | 31,665,055 | 6,520 | ||||||
PNI | 10,950,964 | 3,160 | ||||||
PMX | 32,498,123 | 7,560 | ||||||
PZC | 22,040,974 | 5,000 | ||||||
PYN | 5,643,907 | 1,280 | ||||||
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The classes of Shares listed for each Fund in the table above are the only classes of Shares currently authorized by that Fund.
At theSpecial Meeting, the election of one Trustee (the “Preferred Shares Trustee”) of each Fund will be voted on exclusively by the Preferred Shareholders of that Fund. On each other proposal to be brought before the Meeting (including the election of the nominee other than the Preferred Shares Trustee), the Preferred Shareholdersa Fund, if any, will have equal voting rights (i.e., one vote per Share) with the applicable Fund’s Common Shareholders and will vote together with Common Shareholders as a single class. The outcome of voting by the Shareholders of one Fund does not affect the outcome for the other Funds.
PMF/PCQ/PNF/PML/PCK/PNI:
The Board of each Fund has fixed the close of business on April 9, 2014 as the record date (the “Record Date”) for the determination of Shareholders entitled to receive notice of, and to vote at, the Special Meeting. As summarized in the table below, the Common and Preferred Shareholders of the Funds, voting together as a single class,each Fund have the right to vote on the re-election of Deborah A. DeCotis, as a Trustee of the Funds; and the Preferred Shareholders of the Funds, voting as a separate class, have the right to vote on the re-election of James A. Jacobson as a Trustee of the Funds.
PMX/PZC/PYN:
As summarized in the table below, the Common and Preferred Shareholders of the Funds, voting together as a single class, have the right to vote on the re-election of Bradford K. Gallagher, as a Trustee of the Funds; and the Preferred Shareholders of the Funds, voting as a separate class, have the right to vote on the re-election of James A. Jacobson, as a Trustee of the Funds.
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| 2. | The transaction of such other business as may properly come before the Special Meeting. |
Section I of this Proxy Statement contains information relating to the Proposal to approve a new Investment Management Agreement between each Fund and PIMCO. Section II contains additional background information about the Funds, their current and proposed investment manager, and other matters. Section III contains general information about the Special Meeting and shareholder voting.
You may vote by mail by returning a properly executed proxy card, by Internet by going to the website listed on the proxy card, by telephone using the toll-free number listed on the proxy card, or in person by attending the Special Meeting. Shares represented by duly executed and timely delivered proxies will be voted as instructed on the proxy. If you execute and mail the enclosed proxy and no choice is indicated for the election of Trustees 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 timely delivering a signed, written letter of revocation to the Secretary of the appropriateapplicable Fund at 1633 Broadway, New York, New York 10019, (ii) by properly executing and timely submitting a later-dated proxy vote, or (iii) by attending the Special Meeting and voting in person. Please call 1-800-254-5197(877) 361-7967 for information on how to obtain directions to be able to attend the Special Meeting and vote in person. If any proposal for a Fund, other than the ProposalsProposal set forth herein, properly comes before the Special Meeting, the persons named as proxies will vote on such proposal in their sole discretion.
The principal executive offices of the Funds are located at 1633 Broadway, New York, New York 10019. AGIFMAllianz Global Investors Fund Management LLC (“AGIFM”) currently serves as the investment manager of each Fund and retains its affiliate, Pacific Investment Management Company LLC (“PIMCO” or the “Sub-Adviser”),PIMCO, to serve as the sub-adviser to the Funds.of each Fund. Additional information regarding the Managerabout AGIFM and the Sub-AdviserPIMCO may be found under “Additional Information — Investment Manager“Information about AGIFM” and Sub-Adviser”“Information about PIMCO,” respectively, below.
Please read the Proxy Statement before voting on the Proposal for your Fund. Please call (877) 361-7967 if you have any questions about the Proxy Statement or the Proposal, or if you would like additional information.
PIMCO (and not the Funds) will bear all expenses associated with the Special Meeting. The solicitationproxy materials sent to each Shareholder will be primarily by mail and the cost of soliciting proxies for a Fund will be borne individually by each Fund. Certain officers of the Funds and certain officers and employees of the Managerinclude that Shareholder’s unique control number needed to vote his, her or its affiliates (none of whom will receiveShares. If you need 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 each Fund based on its relative net assets.
Unless a Fund receives contrary instructions, only one copycopies of this Proxy Statement, will be mailedplease call (877) 361-7967.
Each Fund’s most recent annual and semi-annual reports to Shareholders are available at no cost. You may read, print, or request mail delivery of a given address where twocopy of such reports through our website at us.allianzgi.com/closedendfunds. You may also request reports by calling (877) 361-7967 or more Shareholders share that address. Additional copies of the Proxy Statement will be delivered promptly upon request. Requests may be sentby writing to the Secretary of the Fund c/o Allianz Global Investors Fund Management LLC,Funds at 1633 Broadway, New York, New York, 10019, or by calling 1-800-254-5197 on any business day.10019.
As
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I. PROPOSAL: APPROVAL OF THE PROPOSED INVESTMENT MANAGEMENT AGREEMENT
Overview
The following questions and answers provide an overview of the Record Date,Proposal on which you are being asked to vote. Please read the Trusteesremainder of this Proxy Statement for additional information and nomineesfurther details about the Proposal and the officers of each Fund as a groupBoard’s and individually beneficially owned less than one percent (1%) ofPIMCO’s rationale for recommending it to Shareholders. Your vote is important.
QUESTIONS AND ANSWERS
| Q: | WHAT IS BEING PROPOSED? |
| A: | The Board and PIMCO are recommending that PIMCO, the Funds’ current sub-adviser, replace its affiliate AGIFM as the investment manager of each Fund pursuant to a proposed new investment management agreement between the Fund and PIMCO (the “Proposed Agreement”). Under the Proposed Agreement, PIMCO would continue to provide the day-to-day portfolio management services it currently provides to each Fund as its sub-adviser and would also assume responsibility for the supervisory and administrative services currently provided by AGIFM to each Fund as its investment manager. The same investment professionals who are currently responsible for managing each Fund’s portfolio will continue to do so following the proposed transition, and PIMCO personnel will replace AGIFM personnel as Fund officers and in other roles to provide and/or oversee the administrative, accounting/financial reporting, compliance, legal, marketing, transfer agency, shareholder servicing and other services required for the daily operations of the Funds. |
| Q: | HOW DOES THE BOARD RECOMMEND THAT I VOTE? |
| A: | The Board recommends that you vote “FOR” the Proposal for your Fund, as described in this Proxy Statement. |
| Q: | WHY ARE THE BOARD AND PIMCO RECOMMENDING THIS CHANGE IN THE FUNDS’ MANAGEMENT STRUCTURE AT THIS TIME? |
| A: | AGIFM and PIMCO are affiliates that are part of the global asset management business of Allianz SE (ALV.XE) (“Allianz”); each is a direct or indirect subsidiary of Allianz Asset Management of America L.P. |
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| (“AAM”). Effective January 1, 2012, Allianz reorganized its asset management business under AAM to give better visibility to its two main brands, PIMCO and Allianz Global Investors, and to better enable each asset management business to serve its clients worldwide. Allianz developed this new approach in an effort to move away from a family of boutiques model to a clear “two pillar” structure (i.e., with Allianz Global Investors and PIMCO as the two pillars). The reorganization was also designed to allow for clearer branding and product differentiation between PIMCO and Allianz Global Investors for intermediaries, clients and the investing public to allow for greater focus and exposure for the breadth and strength of products of both the PIMCO and Allianz Global Investors brands worldwide. |
each Fund’s outstanding SharesWhile AGIFM has served the Funds well for many years, the proposal to replace AGIFM with PIMCO as the Funds’ investment manager and assume responsibility for supervisory and administrative services for the Funds is a natural next step in the broader PIMCO/Allianz Global Investors reorganization effort initiated in 2012. Following the proposed transition, PIMCO will assume sole management responsibility for the Funds and AGIFM will continue to serve as manager/administrator for numerous other closed- and open-end funds managed within the knowledgeAllianz Global Investors pillar of the Funds,Allianz asset management business.
As described below, the following entities beneficially owned more than five percent (5%)Board and PIMCO also believe that the Proposal will benefit Shareholders of a class of a Fund:each Fund.
| Q: | WHAT ARE THE EXPECTED BENEFITS TO SHAREHOLDERS OF MOVING TO THE NEW PIMCO-ONLY MANAGEMENT STRUCTURE? |
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ExceptConsistent with the rationale behind the broader Allianz Global Investors/PIMCO restructuring mentioned above, the proposed PIMCO-only management structure for Alan Rappaport, a Trusteethe Funds aligns with the “two pillar” approach adopted by Allianz with respect to other PIMCO and Allianz Global Investors products globally. In this regard, we believe that the change will facilitate clearer branding and marketing of the Funds who owns 1,500 Common Shares of PML, noneand will help to avoid potential confusion among intermediaries, analysts and investors as to whether the Funds are PIMCO and/or Allianz Global Investors products.
| Q: | WILL THE FEES AND EXPENSES CHARGED BY THE FUNDS TO SHAREHOLDERS CHANGE OR INCREASE AS A RESULT OF THE PROPOSAL? |
| A: | In connection with the proposed management transition, the Board and PIMCO are proposing that the Funds adopt a so-called “unified” management fee structure under the Proposed Agreement, consistent with the fee structure in place for other U.S. registered funds and other products managed by PIMCO. |
Currently, each Fund pays an investment management fee under its existing investment management agreement with AGIFM (each, a “Current Agreement,” and, together, the “Current Agreements”), which covers portfolio management services and certain administrative services provided by AGIFM. AGIFM, in turn, retains PIMCO as sub-adviser pursuant to a portfolio management agreement for each Fund between AGIFM and PIMCO (each, a “Portfolio Management Agreement,” and, together, the “Portfolio Management Agreements”) to provide the portfolio management services required under each Current Agreement, and AGIFM compensates PIMCO for such services out of the investment management fees it receives under the Fund’s Current Agreement. In addition to the management fee it pays under its Current Agreement, each Fund directly bears expenses for other Trustees or officers of any Fund owned any ofadministrative services and costs, including expenses associated with various third-party service providers, such Funds’ outstanding Shares.as audit, custodial, legal, transfer agency, printing and other services required by the Funds.
PROPOSAL: ELECTION OF TRUSTEES
In accordance withcontrast, under the Proposed Agreement, each Fund’s AmendedFund would pay PIMCO a management fee that covers the portfolio management and Restatedadministrative services covered under the Current Agreement, and Declaration of Trust (each a “Declaration”), the Trustees have been divided into the following three classes (each a “Class”): Class I, Class IIPIMCO, at its expense, would be required to procure most other supervisory and Class III. The Nominating Committee has recommended the nominees listed herein for re-election as Trusteesadministrative services required by the ShareholdersFunds that are currently paid for or incurred by the Funds directly outside of the applicable Funds.
With respectCurrent Agreements (such fees and expenses, “Operating Expenses”). Operating Expenses include, but are not limited to, all the Funds, the termexpenses of office of the Class II Trustees will expire at the Meeting; the term of office of the Class III Trustees will expire at the 2014-2015 annual meeting of shareholders;most third-party services providers (e.g., audit, custodial, legal, transfer agency, printing) and the term of office of the Class I Trustees will expire at the 2015-2016 annual meeting of shareholders.
PMF/PCQ/PNF/PML/PCK/PNI.Currently, Deborah A. DeCotis and James A. Jacobson are Class II Trustees of PMF, PCQ, PNF, PML, PCK and PNI. The Nominating Committee has recommended to the Board that Ms. DeCotis be nominated for re-election by the Common Shareholders and Preferred Shareholders, votingother expenses, such as a single class, as a Class II Trustee at the Meeting, and that Mr. Jacobson be nominated for re-election by the Preferred Shareholders, voting as a separate class, as a Class II Trustee at the Meeting. Consistentthose associated with each Fund’s Declaration, if re-elected, the nominees shall hold office for terms
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coinciding withinsurance, proxy solicitations and mailings for shareholder meetings, New York Stock Exchange listing and related fees, tax services, valuation services and other services required for the ClassesFunds’ daily operations.
The Board and PIMCO believe that the proposed new “unified” fee structure would be beneficial for Common Shareholders because it provides a unified management fee (including Operating Expenses) structure that is essentially fixed, making it more predictable under ordinary circumstances in comparison to the current fee and expense structure, under which the Funds’ Operating Expenses (including certain third-party fees and expenses) not covered by the Current Agreements can vary over time. The proposed unified fee structure also generally insulates the Funds and Common Shareholders from increases in applicable third-party and certain other expenses because PIMCO, rather than the Funds, would bear the risk of Trustees to which they have been designated. Therefore, if re-electedsuch increases (while at the Meeting, Ms. DeCotissame time PIMCO would benefit from any reductions in such expenses).
Because the proposed unified fee arrangement under the Proposed Agreement covers a greater amount of supervisory and Mr. Jacobson will serve terms consistent withadministrative services and related costs than under the Class II Trustees, which will expire atCurrent Agreements, the Funds’ annual meeting of Shareholdersproposed contractual management fee rates under the Proposed Agreement for each Fund are higher than the 2016-2017 fiscal year.
PMX/PZC/PYN.Currently, Bradford K. Gallaghermanagement fee rates currently imposed under the corresponding Current Agreement (except for PDI and James A. JacobsonPCI, whose proposed management fee rates are Class II Trustees of PMX, PZCthe same under the Proposed Agreement and PYN. The Nominating Committee has recommendedthe corresponding Current Agreements). However, in determining the proposed unified management fee rate to be paid to PIMCO by each Fund under the Board that Mr. Gallagher be nominated for re-electionProposed Agreement, PIMCO reviewed the Fund’s total expenses, including its current contractual management fee and other expenses currently borne by the Fund outside of the applicable Current Agreement, and the Fund’s leverage outstanding during calendar year 2013. Based on this review, PIMCO proposed a management fee rate that PIMCO estimates will result in the Fund’s total expenses paid by Common Shareholders and Preferredbeing lower under the Proposed Agreement than under the corresponding Current Agreement (based on calendar year 2013 expenses). PIMCO therefore estimates that the proposed new arrangement will result in an overall savings to Common Shareholders voting as a single class, as a Class II Trustee at the Meeting, and that Mr. Jacobson be nominated for re-election by the Preferred Shareholders, voting as a separate class, as a Class II Trustee at the Meeting. Consistent with each Fund’s Declaration, if re-elected, the nominees shall hold office for terms coinciding with the Classes of Trustees to which they have been designated. Therefore, if elected at the Meeting, Messrs. Gallagher and Jacobson will serve terms consistent with the Class II Trustees, which will expire at the Funds’ annual meeting of Shareholders for the 2016-2017 fiscal year.
All members of the Board of each Fund areunder ordinary circumstances. In developing the proposed fee structure for each Fund other than PDI and will remain, if elected, “Continuing Trustees,” as such term is defined in the Declaration of the applicable Fund. In the case of PMF, PCQ and PNF, a “Continuing Trustee” is a Trustee that is not a person or an affiliated person of a person who is entering into or proposing to enter into certain transactionsPCI, PIMCO, after discussions with the applicable Fund, as specifiedBoard, determined a 20% reduction to the Fund’s actual Operating Expenses for calendar year 2013, converted that amount to basis points and rounded to the next lowest half or whole basis point in such Fund’s Declaration,arriving at a proposed unified fee rate for the Fund. With respect to PDI and who has either served as a Trustee for a period of at least twelve months or is a successor to a Continuing Trustee. In the case of PML, PCK, PNI, PMX, PZC and PYN, a “Continuing Trustee” is a Trustee that has either served as Trustee since the inception of the Fund or for thirty-six months, or has 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 (whether or not such vacancy has been filled by election of a new Trustee by the Board) shall hold office for a term that coincidesPCI, PIMCO, after discussions with the remaining term ofBoard, determined to propose a unified management fee rate under the Class of Trustees to which such office was previously assigned, if such vacancy arose other than by an increase in the number of Trustees, and until his or her successor shall be elected and shall qualify. In the event such vacancy arose due to an increase in the number of Trustees, any Trustee so elected to fill such vacancy at an annual meeting shall hold office for a term which coincides with that of the Class of Trustee to which such office has been apportioned and until his or her successor shall be elected and shall qualify.
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The following table summarizes the nominees who will stand for electionProposed Agreement at the Meeting,same rate that is currently charged under the respective ClassesCurrent Agreements for those Funds, such that PIMCO will bear all Operating Expenses for those Funds under the proposed new unified fee structure with no increase in the fee rate charged under the current non-unified fee structure.
The proposed fee rates are designed to allow the Funds and their Common Shareholders to share up front in operational efficiencies PIMCO will attempt to realize with respect to the Funds’ Operating Expenses as a result of Trusteesthe proposed transition. The anticipated savings to which they have been designatedeach Fund are reflected in the “Operating Expenses” table below.
There is no assurance that a Fund’s total expenses paid under the Proposed Agreement will not exceed what the Fund would incur under its Current Agreement in certain circumstances, including if the Fund’s Operating Expenses (which are currently borne by the Fund outside of its Current Agreement and would be borne by PIMCO under the expirationProposed Agreement) decline in future periods. Also, the proposed unified fee rates under the Proposed Agreement would be charged for applicable Funds on assets attributable to preferred shares and/or certain other forms of their respective terms if elected:
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Under this classified Board structure, generally only those Trustees in a single Classleverage that may be replaced in any one year,obtained and itutilized by a Fund. Under the Proposed Agreement, because a Fund’s outstanding leverage on which the fee is charged may vary, a Fund’s total expenses paid by Common Shareholders could be higher or lower under the Proposed Agreement than is estimated and could exceed what a Fund would require a minimum of two yearsincur under its Current Agreement.
The Funds would be required to change a majoritydirectly bear certain expenses outside of the BoardProposed Agreement which the Funds also directly bear under normal circumstances. This structure, which may be regarded as an “anti-takeover” provision, may make it more difficult for a Fund’s Shareholders to change the majority of TrusteesCurrent Agreements, including fees and expenses of the Fund and, thus, promotes the continuity of management.
Unless authority is withheld, it is the intentionTrustees/Directors who are not “interested persons” of the persons namedFunds (each, an “Independent Trustee/Director” and, collectively, the “Independent Trustees/Directors”) as defined in the enclosed proxyInvestment Company Act of 1940, as amended (the “1940 Act”), and their counsel, interest expense and other expenses associated with incurring leverage, fees and expenses of any underlying funds or pooled vehicles in which a Fund invests, dividend and interest expense associated with short positions, other portfolio transaction expenses and extraordinary legal expenses, among others. These categories of expenses will be variable under both the Current and Proposed Agreements, and may result in higher or lower total expenses for a Fund in comparison to vote each proxy forcalendar year 2013 or other periods, but would not be expected to differ as between the persons listed above forcurrent and proposed fee and expense structures.
It is noted that Fund. EachPreferred Shareholders of applicable Funds do not bear any portion of a Fund’s management fees or other expenses and therefore should not be impacted economically by the nominees has indicated he or she will serve if elected, but if he or she should be unable to serve for a Fund, the proxy holders may vote in favor of such substitute nominee as the Board may designate (or, alternatively, the Board may determine to leave a vacancy).
Trusteesproposed new fee and Officers
The business of each Fund is managed under the direction of the Fund’s Board of Trustees. Subject to the provisions of each Fund’s Declaration, its By-Laws and applicable state law, the Trustees have all powers necessary and convenient to carry out this responsibility, including the election and removal of the Fund’s officers.
Board Leadership Structure — Currently and, assuming the nominees are elected as proposed, the Board of Trustees of each Fund consists and will continue to consist of seven Trustees, six of whom are not “interested persons”expense structure.
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(withinThe tables below are intended to help you understand how the meaning of Section 2(a)(19)fees and expenses paid by the Funds would differ under each Current Agreement and the Proposed Agreement (i.e., giving effect to the unified fee structure). The “Contractual Management Fee Rates” table shows the contractual management fee rates under the Current Agreements and the proposed contractual management fee rates under the Proposed Agreement.
The “Operating Expenses” table shows each Fund’s actual aggregate Operating Expenses (expressed in dollars) incurred during calendar year 2013 and compares, for each Fund, the actual aggregate Operating Expenses incurred by the Fund in calendar year 2013 plus its management fee paid to AGIFM under the Current Agreements in calendar year 2013 (i.e., essentially the same fees and expenses that are proposed to be covered in return for the unified fee rate under the Proposed Agreement) to estimates of the 1940 Act)aggregate management fee (which includes the Fund’s Operating Expenses) that the Fund would have paid PIMCO under the Proposed Agreement if the Proposed Agreement and unified fee had been in place for calendar year 2013, taking into account the effects of the Fund’s leverage outstanding for calendar year 2013. The “Operating Expenses” table does not reflect fees and expenses paid by the Funds during calendar year 2013 that would not be covered under the unified fee rate, as discussed above.
The “Effective Management Fees and Annual Expenses” table compares the effective management fee rates and total annual expense ratios for each Fund orunder the Current Agreements for calendar year 2013 and estimates under the Proposed Agreement for the same period, taking into account the effects of the Manager (the “Independent Trustees”)Fund’s leverage outstanding for calendar year 2013 (unless otherwise noted).
As discussed below, the management fees with respect to certain Funds are, and would continue to be under the Proposed Agreement, calculated based on the Fund’s average daily “net assets,” which include assets attributable to preferred shares outstanding, while the management fees with respect to certain other Funds are, and under the Proposed Agreement would continue to be, calculated based on the average daily “total managed assets,” which include assets attributable to preferred shares and other types of leverage (such as borrowings, reverse repurchase agreements and/or dollar rolls). An Independent Trustee serves as ChairmanAdditional information about the Current Agreements and Proposed Agreement may be found under “Description of the TrusteesCurrent Agreements” and is selected by a vote“Description of the majorityProposed Agreement,” respectively, in this Proxy Statement. Please see “Description of the Independent Trustees. The Chairman presides at meetings ofProposed Agreement—Annual Expenses andPro Forma Annual Expenses” for additional information regarding fees and expenses under the BoardCurrent and acts as a liaison with service providers, officers, attorneys and other Trustees generally between meetings, and performs such other functions as may be requested by the Board from time to time.
The Board of Trustees meets regularly four times each year to discuss and consider matters concerning the Funds, and also holds special meetings to address matters arising between regular meetings. The Independent Trustees regularly meet outside the presence of management and are advised by independent legal counsel. Regular meetings generally take place in-person; other meetings may take place in-person or by telephone.
The Board of Trustees has established four standing Committees to facilitate oversight of the management of the Funds: the Audit Oversight Committee, the Nominating Committee, the Valuation Committee and the Compensation Committee. The functions and role of each Committee are described below under “— Board Committees and Meetings.” The membership of each Committee consists of all of the Independent Trustees, which the Board believes allows them to participate in the full range of the Board’s oversight duties.
The Board reviews its leadership structure periodically and has determined that its leadership structure, including an Independent Chairman, a supermajority of Independent Trustees and Committee membership limited to Independent Trustees, is appropriate in light of the characteristics and circumstances of each Fund. In reaching this conclusion, the Board considered, among other things, the predominant role of the Manager and Sub-Adviser in the day-to-day management of Fund affairs, the extent to which the work of the Board is conducted through the Committees, the number of portfolios that comprise the Fund Complex (defined below), the variety of asset classes those portfolios include, the net assets of each Fund and the Fund Complex and the management and other service arrangements of each Fund and the Fund Complex. The Board also believes that its structure, including the presence of one Trustee who is an executive with various Manager-affiliated entities, facilitates an efficient flow of information concerning the management of each Fund to the Independent Trustees.
Risk Oversight — Each of the Funds has retained the Manager and the Sub-Adviser to provide investment advisory services, and, in the case of the Manager, administrative services, and these service providers are principallyProposed Agreements.
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responsible for the management of risks that may arise from Fund investments and operations. Some employees of the Manager and its affiliates serve as the Funds’ officers, including the Funds’ principal executive officer and principal financial and accounting officer, chief compliance officer and chief legal officer. The Manager and the Sub-Adviser employ different processes, procedures and controls to identify and manage different types of risks that may affect the Funds. The Board oversees the performance of these functions by the Manager and Sub-Adviser, both directly and through the Committee structure it has established. The Board receives from the Manager and Sub-Adviser a wide range of reports, both on a regular and as-needed basis, relating to the Funds’ activities and to the actual and potential risks of the Funds. These include reports on investment risks, custody and valuation of Fund assets, compliance with applicable laws, and the Funds’ financial accounting and reporting. In addition, the Board meets periodically with the individual portfolio managers of the Funds or their delegates to receive reports regarding the portfolio management of the Funds and their performance, including their investment risks. The Board has emphasized to the Manager and the Sub-Adviser the importance of maintaining vigorous risk-management programs and procedures.Contractual Management Fee Rates
In addition, the Board has appointed a Chief Compliance Officer (“CCO”). The CCO oversees the development of compliance policies and procedures that are reasonably designed to minimize the risk of violations of the federal securities laws (“Compliance Policies”). The CCO reports directly to the Independent Trustees, interacts with individuals within the Manager’s organization, including its Head of Risk Management, and provides presentations to the Board at its quarterly meetings and an annual report on the application of the Compliance Policies. The Board periodically discusses relevant risks affecting the Funds with the CCO at these meetings. The Board has approved the Compliance Policies and reviews the CCO’s reports. Further, the Board annually reviews the sufficiency of the Compliance Policies, as well as the appointment and compensation of the CCO.
Fund | Contractual Management Fee Rate under Current Agreements | Proposed Contractual Management Fee Rate under Proposed Agreement | ||||||
PTY1 | 0.600 | % | 0.650 | % | ||||
PCN1 | 0.750 | % | 0.810 | % | ||||
PCI2 | 1.150 | % | 1.150 | % | ||||
PDI2 | 1.150 | % | 1.150 | % | ||||
PGP3 | 1.000 | % | 1.105 | % | ||||
PHK1 | 0.700 | % | 0.760 | % | ||||
PKO4 | 1.000 | % | 1.055 | % | ||||
RCS1 | 0.850 | % | 0.955 | % | ||||
PCM4 | 0.800 | % | 0.900 | % | ||||
PCQ1 | 0.650 | % | 0.705 | % | ||||
PCK1 | 0.650 | % | 0.705 | % | ||||
PZC1 | 0.650 | % | 0.715 | % | ||||
PMF1 | 0.650 | % | 0.705 | % | ||||
PML1 | 0.650 | % | 0.685 | % | ||||
PMX1 | 0.650 | % | 0.705 | % | ||||
PNF1 | 0.650 | % | 0.770 | % | ||||
PNI1 | 0.650 | % | 0.735 | % | ||||
PYN1 | 0.650 | % | 0.860 | % | ||||
The Board recognizes that the reports it receives concerning risk management matters are, by their nature, typically summaries of the relevant information. Moreover, the Board recognizes that not all risks that may affect the Funds can be identified in advance; that it may not be practical or cost-effective to eliminate or mitigate certain risks; that it may be necessary to bear certain risks (such as investment-related risks) in seeking to achieve the Funds’ investment objectives; and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and for other reasons, the Board’s risk management oversight is subject to substantial limitations.
| 1. | Management fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). |
| 2. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
| 3. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 4. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
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Information Regarding Trustees and Nominees.Operating Expenses
The following table provides information concerning the Trustees/Nominees of the Funds.
Fund | Actual Aggregate Operating Expenses1 in Calendar Year 2013 | Actual Aggregate Operating Expenses Plus Management Fees Paid to AGIFM in Calendar Year 2013 Under Current Agreements | Estimated Pro Forma Aggregate Management Fees PIMCO Would Have Been Paid in Calendar Year 2013 Under Proposed Agreement2 | % Difference Between the Actual Aggregate Operating Expenses Plus Management Fees Paid to AGIFM and Estimated Pro Forma Aggregate Management Fees PIMCO Would Have Been Paid | ||||||||||||
PTY | $ | 988,694 | $ | 9,840,757 | $ | 9,584,004 | -2.6 | % | ||||||||
PCN | $ | 579,060 | $ | 6,432,696 | $ | 6,316,884 | -1.8 | % | ||||||||
PCI3 | $ | 1,275,867 | $ | 46,216,415 | $ | 44,940,548 | -2.8 | % | ||||||||
PDI | $ | 587,028 | $ | 29,969,400 | $ | 29,382,372 | -2.0 | % | ||||||||
PGP | $ | 302,956 | $ | 2,523,081 | $ | 2,453,608 | -2.8 | % | ||||||||
PHK | $ | 1,055,201 | $ | 10,290,448 | $ | 10,026,635 | -2.6 | % | ||||||||
PKO | $ | 449,108 | $ | 6,802,801 | $ | 6,706,622 | -1.4 | % | ||||||||
RCS | $ | 518,635 | $ | 3,791,150 | $ | 3,675,870 | -3.0 | % | ||||||||
PCM | $ | 272,138 | $ | 1,973,519 | $ | 1,914,838 | -3.0 | % | ||||||||
PCQ | $ | 291,863 | $ | 2,902,294 | $ | 2,831,876 | -2.4 | % | ||||||||
PCK | $ | 308,847 | $ | 3,079,960 | $ | 3,005,405 | -2.4 | % | ||||||||
PZC | $ | 274,191 | $ | 2,460,423 | $ | 2,405,585 | -2.2 | % | ||||||||
PMF | $ | 363,725 | $ | 3,675,541 | $ | 3,592,609 | -2.3 | % | ||||||||
PML | $ | 480,320 | $ | 7,449,436 | $ | 7,342,653 | -1.4 | % | ||||||||
PMX | $ | 356,874 | $ | 3,749,931 | $ | 3,678,556 | -1.9 | % | ||||||||
PNF | $ | 204,024 | $ | 1,063,541 | $ | 1,017,449 | -4.3 | % | ||||||||
PNI | $ | 215,462 | $ | 1,489,206 | $ | 1,440,236 | -3.3 | % | ||||||||
PYN | $ | 220,442 | $ | 757,327 | $ | 710,761 | -6.1 | % | ||||||||
| As noted above, “Operating Expenses” do not include certain expenses that would not be covered under the unified fee rate (and which the Funds also directly bear under the Current Agreements), including fees and expenses of the Independent Trustees/Directors of the Funds and their counsel, interest expense and other expenses associated with incurring leverage, fees and expenses of any underlying funds or pooled vehicles in which a Fund invests, dividend and interest expense associated with short positions, other portfolio transaction expenses and extraordinary legal expenses, among others. |
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| assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Proposed Agreement for the particular Fund (as discussed above). |
| 3. | Annualized. PCI commenced operations on January 31, 2013. |
Effective Management Fees and Annual Expenses
(expressed as a percentage of net assets attributable to Common Shares)
| Current Fees and Expenses1 | Proposed Fees and Expenses2 | |||||||||||||||
Fund | Effective Management Fee Rate Paid to AGIFM Under Current Agreements | Total Annual Expenses in Calendar Year 2013 Under Current Agreements | Estimated Pro FormaEffective Management Fee Rate Paid to PIMCO Assuming the Proposed Agreement Had Been in Effect | EstimatedPro FormaTotal Annual Expenses in Calendar Year 2013 Assuming the Proposed Agreement Had Been in Effect | ||||||||||||
PTY3 | 0.770 | % | 0.913 | % | 0.833 | % | 0.891 | % | ||||||||
PCN3 | 0.957 | % | 1.098 | % | 1.033 | % | 1.079 | % | ||||||||
PCI4, 7 | 1.373 | % | 1.540 | % | 1.373 | % | 1.501 | % | ||||||||
PDI4 | 2.099 | % | 3.194 | % | 2.099 | % | 3.152 | % | ||||||||
PGP5 | 1.494 | % | 1.994 | % | 1.652 | % | 1.947 | % | ||||||||
PHK3 | 0.899 | % | 1.106 | % | 0.976 | % | 1.081 | % | ||||||||
PKO6 | 1.493 | % | 1.845 | % | 1.576 | % | 1.822 | % | ||||||||
RCS3 | 0.850 | % | 1.404 | % | 0.955 | % | 1.374 | % | ||||||||
PCM6 | 1.291 | % | 2.053 | % | 1.453 | % | 2.009 | % | ||||||||
PCQ3 | 1.038 | % | 1.355 | %8 | 1.126 | % | 1.327 | %8 | ||||||||
PCK3 | 1.053 | % | 1.399 | %8 | 1.142 | % | 1.370 | %8 | ||||||||
PZC3 | 1.035 | % | 1.380 | %8 | 1.139 | % | 1.354 | %8 | ||||||||
PMF3 | 1.037 | % | 1.288 | %8 | 1.125 | % | 1.262 | %8 | ||||||||
PML3 | 0.989 | % | 1.202 | %8 | 1.042 | % | 1.186 | %8 | ||||||||
PMX3 | 1.019 | % | 1.296 | %8 | 1.105 | % | 1.274 | %8 | ||||||||
PNF3 | 1.009 | % | 1.417 | %8 | 1.194 | % | 1.363 | %8 | ||||||||
PNI3 | 1.090 | % | 1.489 | %8 | 1.232 | % | 1.448 | %8 | ||||||||
PYN3 | 1.062 | % | 1.724 | %8 | 1.405 | % | 1.632 | %8 | ||||||||
| 1. | Except in the case of PCI as noted in footnote 7 below, reflects each Fund’s actual management fees and total expenses during the calendar year ended December 31, 2013. The management fee rates and total expense ratios reflect that the management fee under the Current Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Current Agreement for the particular Fund (as specified in the footnotes below). |
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| 2. | Assumes that the Fund was subject to the Proposed Agreement (rather than its Current Agreement) during the calendar year ended December 31, 2013 and incurred the same level of expenses that are not covered under the proposed unified fee (such as interest expense, fees and expenses of the Independent Trustees/Directors and their counsel and any extraordinary expenses) during the period. Thepro forma management fee rates and total expense ratios also assume that the unified fee under the Proposed Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Proposed Agreement for the particular Fund (as specified in the footnotes below). These expenses are only estimates. The actual expenses could vary and could exceed the amounts shown and/or the amounts the Funds would have incurred under the Current Agreements under certain circumstances. See the discussion above for further information on why these estimates may vary. |
| 3. | Management fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). |
| 4. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
| 5. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 6. | Management fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
| 7. | Annualized. PCI commenced operations on January 31, 2013. |
| 8. | The total annual expense ratio in calendar year 2013 under the Current Agreements and estimatedpro forma total annual expense ratio under the Proposed Agreement reflects the interest expense on inverse floating rate investments deemed to be paid by the Fund for accounting purposes during its most recently completed fiscal year. The interest expenses from inverse floating rate investments incurred during calendar year 2013 may have been, and in the future may be, higher or lower. |
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| Q: | WILL THE FUNDS PAY FOR THIS PROXY SOLICITATION? |
| A: | No. PIMCO (and not the Funds) has agreed to bear all costs relating to the proxy solicitation and related costs in connection with the Proposal. |
| Q: | HOW DO I VOTE MY SHARES? |
| A: | Voting by Internet and Touch-Tone Telephone: You may give your voting instructions via the Internet or by touch-tone telephone by following the instructions on the proxy card. |
Telephone Voting: You may give your voting instructions over the telephone by calling the phone number listed on your proxy card. If you have any questions regarding the Proxy Statement or the Proposal please call (877) 361-7967. When receiving your instructions by telephone, the representative may ask you for your full name and address to confirm that you have received the Proxy Statement in the mail. If the information you provide matches the information provided to AST Fund Solutions, LLC (“AST Fund Solutions”) by the applicable Fund, then a representative can record your instructions over the phone and transmit them to the official tabulator.
As the Special Meeting date approaches, you may receive a call from a representative of AST Fund Solutions if your vote has not yet been received.
Voting by Mail: If you wish to participate in the Special Meeting, but do not wish to give a proxy by telephone or via the Internet, you can still complete, sign and mail the proxy card received with the Proxy Statement by following the instructions on the proxy card, or you can attend the Special Meeting and vote in person.
| Q: | WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE SPECIAL MEETING? |
| A: | As of the date of this Proxy Statement, the Funds’ officers, PIMCO and AGIFM are not aware of any business to come before the Special Meeting other than the Proposal. If any proposal for a Fund, other than the Proposal set forth herein, properly comes before the Special Meeting, the persons named as proxies will vote on such proposal in their sole discretion. |
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The Board’s and PIMCO’s Rationale for the Proposal
Background. AGIFM and PIMCO are affiliates that are part of the global asset management business of Allianz; each is a direct or indirect subsidiary of AAM. Effective January 1, 2012, Allianz reorganized its asset management business under AAM to give better visibility to its two main brands, PIMCO and Allianz Global Investors, and to better enable each asset management business to serve its clients worldwide. Among other significant changes resulting from this reorganization was the establishment of a U.S. registered broker-dealer subsidiary of PIMCO in the United States, known as PIMCO Investments LLC (“PIMCO Investments”), which now distributes all funds managed and administered exclusively by PIMCO in the United States. PIMCO Investments assumed this role from another Allianz affiliate that previously distributed both Allianz Global Investors funds and products and funds and products managed and administered exclusively by PIMCO. PIMCO, through non-U.S. PIMCO affiliates, has also assumed responsibility for distributing PIMCO funds and products outside of the United States. Allianz developed this new approach in an effort to move away from a family of boutiques model to a clear “two pillar” structure (i.e., with Allianz Global Investors and PIMCO as the two pillars). The reorganization was also designed to allow for clearer branding and product differentiation between PIMCO and Allianz Global Investors for intermediaries, clients and the investing public to allow for greater focus and exposure for the breadth and strength of products of both the PIMCO and Allianz Global Investors brands worldwide.
While AGIFM has served the Funds well for many years, the proposal to replace AGIFM with PIMCO as the Funds’ investment manager and assume responsibility for supervisory and administrative services for the Funds is a natural next step in the broader PIMCO/Allianz Global Investors reorganization effort initiated in 2012. Following the proposed transition, PIMCO will assume sole management responsibility for the Funds and AGIFM will continue to serve as manager/administrator for numerous other closed- and open-end funds managed within the Allianz Global Investors pillar of the Allianz asset management business.
Operational and Administrative Efficiencies. The Board and PIMCO believe that the Funds’ Shareholders will benefit by moving to a PIMCO-only management structure due, in part, to the operational and administrative efficiencies that are expected to result from the transition. In coming to this conclusion, the Board and PIMCO considered, among other things, the following factors:
PIMCO can offer the Funds an integrated set of high-quality investment management, administrative and distribution/aftermarket support services under a single platform, which the Board and PIMCO
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believe will allow for greater efficiencies and enhanced coordination among various investment management and administrative functions. |
The fund administration group at PIMCO, currently comprised of approximately 140 professionals worldwide, provides administrative services for approximately $860 billion in assets under management globally (as of October 31, 2013), including over 150 PIMCO open-end funds and exchange-traded funds (“ETFs”) which, like the Funds, are U.S. registered investment companies.
PIMCO has substantial prior experience in the administration of U.S. registered closed-end funds (including RCS and PCM prior to 2009).
The PIMCO fund administration group is well integrated with all critical functions related to the PIMCO funds business, including portfolio management, compliance, legal, accounting and tax, account management, marketing, shareholder communications/services and technology. The Board and PIMCO believe that the Funds and Shareholders will benefit by having all such services provided “under one roof” by the highly experienced team at PIMCO.
Consistent with the rationale behind the broader Allianz Global Investors/PIMCO restructuring mentioned above, the proposed PIMCO-only management structure for the Funds aligns with the “two pillar” approach adopted by Allianz with respect to other PIMCO and Allianz Global Investors products globally. In this regard, the Board and PIMCO believe that the change will facilitate clearer branding and marketing of the Funds and will help to avoid potential confusion among intermediaries, analysts and investors as to whether the Funds are PIMCO and/or Allianz Global Investors products.
The same investment professionals who are currently responsible for managing each Fund’s portfolio will continue to do so following the proposed transition, and each Fund will continue to have the same investment objective(s) and policies following the transition.
Unified Fee. In addition to the expected benefits of the operational and administrative efficiencies described above, the Board and PIMCO also expect that the “unified” fee structure will provide benefits to the Common Shareholders, including, among others:
The unified fee structure provides a management fee (including Operating Expenses) structure that is essentially fixed, making it more predictable under ordinary circumstances in comparison to the current fee and expense rate structure, under which the Funds’ Operating Expenses (including certain third-party fees and expenses) not covered by the Current Agreements can vary over time.
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The unified fee structure generally insulates the Funds and Common Shareholders from increases in applicable third-party and certain other expenses because PIMCO, rather than the Funds, would bear the risk of such increases (while at the same time PIMCO would benefit from any reductions in such expenses).
The unified fee structure limits the potential risk to the Funds’ Common Shareholders of increased expenses resulting from the constantly evolving regulatory environment.
In determining the proposed unified management fee rate to be paid to PIMCO by each Fund under the Proposed Agreement, PIMCO reviewed the Fund’s total expenses, including its current contractual management fee and other expenses currently borne by the Fund outside of the applicable Current Agreement, and the Fund’s leverage outstanding during calendar year 2013. Based on this review, PIMCO proposed a management fee rate that PIMCO estimates will result in the Fund’s total expenses paid by Common Shareholders being lower under the Proposed Agreement than under the corresponding Current Agreement. PIMCO therefore estimates that the proposed new arrangement will result in an overall savings to Common Shareholders of each Fund under ordinary circumstances. The proposed fee rates are designed to allow the Funds and their Common Shareholders to share up front in operational efficiencies PIMCO will attempt to realize with respect to the Funds’ Operating Expenses as a result of the proposed transition. As discussed above in the “Questions and Answers” section, there is no assurance that a Fund’s total expenses paid under the Proposed Agreement will not exceed what the Fund would incur under its Current Agreement in certain circumstances.
Description of the Current Agreements
AGIFM currently serves as the investment manager for each Fund pursuant to the applicable Current Agreement. The Board of each Fund (other than PDI and PCI), including a majority of the Independent Trustees/Directors of each Fund, most recently approved the continuation of each Fund’s Current Agreement on June 25, 2013. The Current Agreement for PDI was last approved by the Board on March 10-11, 2014, and the Current Agreement for PCI was last approved by the Board on December 12, 2012. The following chart provides the date of the Current Agreement with respect to each Fund and the date such agreement was last submitted to such Fund’s Shareholders for approval. The Current Agreement for each Fund (other than PCM and RCS) was last submitted to the Fund’s sole initial Shareholder in connection with such Fund’s organization. The Current Agreements for PCM and RCS were last submitted to Shareholders in connection with AGIFM becoming the investment manager of those Funds in 2008.
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PCN | 12/13/2001 | ||||||||||||||
PCI | 12/17/2012 | 01/25/2013 | |||||||||||||
PDI | 05/16/2012 | 05/23/2012 | |||||||||||||
PGP | 05/16/2005 | 05/23/2005 | |||||||||||||
PHK | 04/08/2003 | 04/08/2003 | |||||||||||||
PKO | 11/20/2007 | 12/20/2007 | |||||||||||||
RCS | 08/27/2008 | 08/27/2008 | |||||||||||||
PCM | 04/24/2008 | 04/23/2008 | |||||||||||||
PCQ | 06/20/2001 | 06/20/2001 | |||||||||||||
PCK | 06/18/2002 | 06/18/2002 | |||||||||||||
PZC | 09/17/2002 | 10/22/2002 | |||||||||||||
PMF | 06/20/2001 | 06/20/2001 | |||||||||||||
PML | 06/18/2002 | 06/18/2002 | |||||||||||||
PMX | 09/17/2002 | 10/22/2002 | |||||||||||||
PNF | 06/20/2001 | 06/20/2001 | |||||||||||||
PNI | 06/18/2002 | 06/18/2002 | |||||||||||||
PYN | 09/17/2002 | 10/22/2002 | |||||||||||||
PIMCO formerly served as the investment manager to PCM and RCS pursuant to separate investment management agreements with those Funds. The investment management agreements between PIMCO and PCM and PIMCO and RCS were terminated on April 23, 2008 and June 10, 2008, respectively, in connection with AGIFM becoming the investment manager, and PIMCO becoming the sub-adviser, to those Funds. Between June 10, 2008 and August 27, 2008, AGIFM and PIMCO served as the investment manager and sub-adviser, respectively, to RCS pursuant to an interim investment management agreement and an interim portfolio management agreement, respectively.
Services. Under the terms of each Current Agreement, AGIFM, subject to the supervision of the Board, is obligated to furnish continuously an investment program for the applicable Fund, to make investment decisions on behalf of the applicable Fund, to place all orders for the purchase and sale of portfolio securities, and to provide administrative services reasonably necessary for the operation of the applicable Fund, including but not limited to furnishing office space and equipment, providing bookkeeping and clerical services (excluding determination of net asset value and shareholder accounting services) and paying all salaries, fees and expenses of the officers and Trustees/Directors of the applicable Fund who are affiliated with AGIFM. Each Current Agreement provides that AGIFM may alternatively, at its expense, select and contract with portfolio managers to perform investment management services for the
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The following table statesapplicable Fund, in which case the dollar rangeobligation of equity securities beneficially owned asAGIFM under a Current Agreement with respect to the investment management of a Fund is to determine and review with the portfolio manager the investment policies of the Record Date by each TrusteeFund. In such cases, the portfolio manager shall have the obligation of furnishing continuously an investment program, making investment decisions and nomineeplacing trades for the Fund, adhering to applicable investment objectives, policies and restrictions, and placing all orders for the purchase and sale of portfolio securities and other investments for the Fund. AGIFM (and not the Fund) is responsible for compensating any such portfolio manager under the Current Agreements. AGIFM, with the Board’s approval, has entered into such agreements (i.e.,the Portfolio Management Agreements) with PIMCO with respect to each Fund, as discussed in more detail below.
Compensation. As compensation for AGIFM’s services rendered, and on an aggregate basis, of any registered investment companies overseenfor the facilities furnished and for the expenses borne by AGIFM, each Fund pays AGIFM a management fee under the Trusteesapplicable Current Agreement. The management fees are accrued daily and paid monthly, at the annual rates set forth in the “family of investment companies,” including the Funds.table below.
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RCS1 | 0.850 | % | |||||
PCM4 | 0.800 | % | |||||
PCQ1 | 0.650 | % | |||||
PCK1 | 0.650 | % | |||||
PZC1 | 0.650 | % | |||||
PMF1 | 0.650 | % | |||||
PML1 | 0.650 | % | |||||
PMX1 | 0.650 | % | |||||
PNF1 | 0.650 | % | |||||
PNI1 | 0.650 | % | |||||
PYN1 | 0.650 | % | |||||
Fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the |
To the knowledge of the Funds, as of the Record Date, Trustees and nominees who are Independent Trustees or Independent Nominees and their immediate family members did not own securities of an investment adviser or principal underwriter of the Funds 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 Funds.
Compensation. Each of the Independent Trustees also serves as a trustee PIMCO Corporate & Income Strategy Fund, PIMCO Corporate & Income Opportunity Fund, PIMCO Income Opportunity Fund, PIMCO Income Strategy Fund, AllianzGI Global Equity & Convertible Income Fund, PIMCO Income Strategy Fund II, AllianzGI Convertible & Income Fund, AllianzGI Convertible & Income Fund II, AllianzGI NFJ Dividend, Interest & Premium Strategy Fund, PIMCO Global StocksPLUS® & Income Fund, AllianzGI Equity & Convertible Income Fund, PCM Fund, Inc., PIMCO Strategic Global Government Fund, Inc., PIMCO High Income Fund, PIMCO Dynamic Credit Income Fund and PIMCO Dynamic Income Fund, each a closed-end fund for which the Manager serves as investment manager and affiliates of the Manager serve as sub-advisers (together, the “Allianz Closed-End Funds”); as well as AllianzGI Managed Accounts Trust, Allianz Funds Multi-Strategy Trust and Premier Multi-Series VIT (together with the Allianz Closed-End Funds, the
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“Allianz Managed Funds”). As indicated below, certain of the officers of the Funds are affiliated with the Manager.
Each of the Allianz Managed Funds is 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, PIMCO or any entity controlling, controlled by or under common control with the Manager or PIMCO, receives annual compensation of $250,000 for service on the Boards of all of the Allianz Managed Funds, which is payable quarterly. The Independent Chairman of the Boards receives an additional $75,000 per year, payable quarterly. The Audit Oversight Committee Chairman receives an additional $50,000 per year, payable quarterly. Trustees are also reimbursed for meeting-related expenses.
Each Trustee’s compensation and other costs in connection with joint meetings are allocated among the Allianz Closed-End Funds, AllianzGI Managed Accounts Trust, Allianz Funds Multi-Strategy Trust, and Premier Multi-Series VIT, as applicable, on the basis of fixed percentages as between such groups of Funds. Trustee compensation and other costs will then be further allocated pro rata among the individual funds within each grouping (such as among the Allianz Closed-End Funds) based on the complexity of issues relating to each such fund and relative time spent by the Trustees in addressing them, and on each such fund’s relative net assets.
Trustees do not currently receive any pension or retirement benefits from the Funds or the Fund Complex.
The following table provides information concerning the compensation paid to the Trustees and nominees for the fiscal years ended April 30, 2013 for PMF, PCQ and PNF; May 31, 2013 for PML, PCK and PNI; and September 30, 2013 for PMX, PZC and PYN. For the calendar year ended December 31, 2012, the Trustees received the compensation set forth in the table below for serving as Trustees of the Funds and other funds in the same “Fund Complex” as the Funds. Each officer and each Trustee who is a director, officer, partner, member or employee of the Manager or the Sub-Adviser, or of any entity controlling, controlled by or under common control with the Manager or the Sub-Adviser, including any Interested Trustee, serves without any compensation from the Funds.
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Compensation Table
Name of Trustee/Nominees | Aggregate Compensation from PMF for the Fiscal Year Ended April 30, 2013 | Aggregate Compensation from PCQ for the Fiscal Year Ended April 30, 2013 | Aggregate Compensation from PNF for the Fiscal Year Ended April 30, 2013 | Aggregate Compensation from PML for the Fiscal Year Ended May 31, 2013 | Aggregate Compensation from PCK for the Fiscal Year Ended May 31, 2013 | |||||||||||||||
Independent Trustees/Nominees |
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Bradford K. Gallagher | $ | 5,088 | $ | 3,955 | $ | 1,318 | $ | 10,608 | $ | 4,251 | ||||||||||
James A. Jacobson | $ | 6,107 | $ | 4,747 | $ | 1,582 | $ | 12,732 | $ | 5,102 | ||||||||||
Hans W. Kertess | $ | 6,616 | $ | 5,143 | $ | 1,714 | $ | 13,794 | $ | 5,528 | ||||||||||
William B. Ogden, IV | $ | 5,091 | $ | 3,957 | $ | 1,319 | $ | 10,615 | $ | 4,254 | ||||||||||
Alan Rappaport | $ | 5,091 | $ | 3,957 | $ | 1,319 | $ | 10,615 | $ | 4,254 | ||||||||||
Deborah A. DeCotis | $ | 5,088 | $ | 3,955 | $ | 1,318 | $ | 10,608 | $ | 4,251 | ||||||||||
Interested Trustee/Nominee |
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John C. Maney | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Name of Trustee/Nominees | Aggregate Compensation from PNI for the Fiscal Year Ended May 31, 2013 | Aggregate Compensation from PMX for the Fiscal Year Ended September 30, 2013 | Aggregate Compensation from PZC for the Fiscal Year Ended September 30, 2013 | Aggregate Compensation from PYN for the Fiscal Year Ended September 30, 2013 | Total Compensation from the Funds and Fund Complex Paid to Trustees/ Nominees for the Calendar Year Ended December 31, 2012* | |||||||||||||||
Independent Trustees/Nominees |
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Bradford K. Gallagher | $ | 1,958 | $ | 5,209 | $ | 3,329 | $ | 819 | $ | 250,000 | ||||||||||
James A. Jacobson | $ | 2,349 | $ | 6,253 | $ | 3,997 | $ | 982 | $ | 300,000 | ||||||||||
Hans W. Kertess | $ | 2,546 | $ | 6,774 | $ | 4,329 | $ | 1,064 | $ | 325,000 | ||||||||||
William B. Ogden, IV | $ | 1,959 | $ | 5,213 | $ | 3,331 | $ | 819 | $ | 250,000 | ||||||||||
Alan Rappaport | $ | 1,959 | $ | 5,213 | $ | 3,331 | $ | 819 | $ | 250,000 | ||||||||||
Deborah A. DeCotis | $ | 1,958 | $ | 5,209 | $ | 3,329 | $ | 819 | $ | 250,000 | ||||||||||
Interested Trustee/Nominee |
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John C. Maney | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
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The Funds have no employees. The Funds’ officers and Mr. Maney are compensated by the Manager, the Sub-Adviser or one of their affiliates.
Trustee Qualifications — The Board has determined that each Trustee is qualified to serve as such based on several factors (none of which alone is decisive). Each Trustee has served in such role for several years and is knowledgeable about the Funds’ business and service provider arrangements, and has also served for several years as trustee or director to a number of other investment companies advised by the Manager and its affiliates. Among the factors the Board considered when concluding that an individual is qualified to serve on the Board were the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s ability to work effectively with other members of the Board; (iii) the individual’s prior experience, if any, serving on the boards of public companies (including, where relevant, other investment companies) and other complex enterprises and organizations; and (iv) how the individual’s skills, experiences and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.
In respect of each current Trustee, the individual’s substantial professional accomplishments and prior experience, including, in some cases, in fields related to the operations of the Funds, were a significant factor in the determination by the Board that the individual is qualified to serve as a Trustee of the Funds. The following is a summary of various qualifications, experiences and skills of each Trustee (in addition to business experience during the past five years set forth in the table above) that contributed to the Board’s conclusion that an individual is qualified to serve on the Board. References to qualifications, experiences and skills are not intended to hold out the Board or individual Trustees as having any special expertise or experience, and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.
Deborah A. DeCotis — Ms. DeCotis has substantial senior executive experience in the investment banking industry, having served as a Managing Director for Morgan Stanley. She has extensive board experience and experience in oversight of investment management functions through her experience as a former Director of the Helena Rubenstein Foundation, Stanford Graduate School of Business and Armor Holdings.
Bradford K. Gallagher — Mr. Gallagher has substantial executive and board experience in the financial services and investment management industries. He has served as director to several other investment companies. Having served on the Operating Committee of Fidelity Investments and as a Managing Director and President of Fidelity Investments Institutional Services
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| 2. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
Company, he provides
| 3. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 4. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
In addition to the Fundsinvestment management fees paid by each Fund under its Current Agreement as described above, the Fund currently directly bears expenses for other administrative services and costs outside of its Current Agreement, including expenses associated with significant asset management industry expertise. He also brings significant securities industry experience, having servedvarious third-party service providers, such as a developeraudit, custodial, legal, transfer agency, printing and founderother services required by the Funds. The fees and expenses for these services are currently included in each Fund’s total expenses and are borne by the Common Shareholders of several enterprisesthe Fund.
Term/Termination/Amendment. Each Current Agreement took full force and private investment vehicles.
James A. Jacobson — Mr. Jacobson has substantial executive and board experience ineffect as to the financial services industry. He servedapplicable Fund for more than 15 years as a senior executive at a New York Stock Exchange (the “NYSE”) specialist firm. He has also served on the NYSE Board of Directors, including terms as Vice Chair. As such, he provides significant expertise on matters relating to portfolio brokerage and trade execution. He also provides the Funds with significant financial expertise, serves as the Audit Oversight Committee’s Chairan initial two-year period, and has been determinedsubject thereafter to annual approval in accordance with the 1940 Act (i.e., approval by the Board of Trustees/Directors, or a majority of the Fund’s outstanding voting securities and, in either event, by the vote cast in person by a majority of the Independent Trustees/Directors). Each Current Agreement can also be terminated without penalty at any time (i) by the applicable Fund (either by vote of a majority of the Fund’s outstanding voting securities or by vote of a majority of Trustees/Directors); or (ii) by AGIFM, in each case on 60 days’ written notice delivered to be an “audit committee financial expert.” He has expertise in investment company matters through his service as a trustee of another fund family.
Hans W. Kertess — Mr. Kertess has substantial executive experiencethe other party. Additionally, each Current Agreement terminates automatically in the investment management industry. Heevent of its assignment (as defined in the 1940 Act). A Current Agreement may not be materially amended unless such material amendment is approved at a meeting by the presidentaffirmative vote of a financial advisory company, H. Kertess & Co.,majority of the outstanding voting securities of the applicable Fund, and formerly served asby the vote, cast in person at a Managing Director of Royal Bank of Canada Capital Markets. He has significant expertise in the investment banking industry.
John C. Maney — Mr. Maney has substantial executive and board experience in the investment management industry. He has served in a variety of senior-level positions with investment advisory firms affiliated with the Manager. Because of his familiarity with the Manager and affiliated entities, he serves as an important information resourcemeeting called for the Independent Trustees and aspurpose of voting on such approval, of a facilitator of communication with the Manager.
William B. Ogden, IV — Mr. Ogden has substantial senior executive experience in the investment banking industry. He served as Managing Director at Citigroup, where he established and led the firm’s efforts to raise capital for, and provide mergers and acquisition advisory services to, asset managers and investment advisers. He also has significant expertise with fund products through his senior-level responsibility for originating and underwriting a broad variety of such products.
Alan Rappaport — Mr. Rappaport has substantial senior executive experience in the financial services industry. He formerly served as Chairman and Presidentmajority of the Private BankIndependent Trustees/Directors of Bank of America and as Vice Chairman of U.S. Trust. He is currently an Advisory Director of an investment firm.the applicable Fund.
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If the Proposal is approved with respect to a Fund, the Fund’s Current Agreement will be terminated in connection with the effectiveness of the Fund’s Proposed Agreement.
Board CommitteesLiability. Each Current Agreement provides that, in the absence of willful misfeasance, bad faith or gross negligence on the part of AGIFM, or reckless disregard of its obligations and Meetings.duties under the applicable Current Agreement, AGIFM, including its officers, directors and partners, will not be subject to any liability to the applicable Fund, or to any shareholder, officer, partner or Trustee/Director thereof, for any act or omission in the course of, or in connection with, rendering services under such Current Agreement.
Audit Oversight Committee. TheDescription of the Portfolio Management Agreements
PIMCO currently serves as the sub-adviser of each Fund pursuant to the applicable Portfolio Management Agreement between AGIFM and PIMCO. If the Proposal is approved with respect to a Fund, the Fund’s Portfolio Management Agreement will terminate in connection with the effectiveness of the Fund’s Proposed Agreement and the Fund will no longer have a sub-adviser. It is expected that, following the approval of the Proposed Agreement, the same PIMCO investment professionals who are currently responsible for managing each Fund’s portfolio will continue to do so in PIMCO’s capacity as investment manager under the Proposed Agreement. For additional information regarding the terms of the Portfolio Management Agreements, please refer toAppendix B.
Description of the Proposed Agreement
At an in-person meeting held on March 10-11, 2014, the Board of each Fund, has established an Audit Oversight Committee in accordance with Section 3(a)(58)(A)including the Independent Trustees/Directors, unanimously approved, subject to the approval of the Securities Exchange ActShareholders of 1934, as amended (the “Exchange Act”). Each Fund’s Audit Oversight Committee currently consists of Messrs. Gallagher, Jacobson, Kertess, Ogden, Rappaport and Ms. DeCotis, each of whom is an Independent Trustee. Mr. Jacobson is the Chairman of each Fund’s Audit Oversight Committee. Each Fund’s Audit Oversight Committee provides oversight with respect toapplicable Fund, the internal and external accounting and auditing procedures of eachProposed Agreement between the Fund and among other things, determines the selectionPIMCO, a form of the independent registered public accounting firm for each 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 each Fund, and approves non-audit services to be performed by the auditors for certain affiliates, including the Manager, the Sub-Adviser and entities in a control relationship with the Manager or the Sub-Adviser that provide services to each 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 Funds’ independent registered public accounting firm.
Each member of each Fund’s Audit Oversight Committee is “independent,” as independence for audit committee members is defined in the currently applicable listing standards of the NYSE, on which the Common Shares of each Fund are listed.
The Board of each Fund has adopted a written charter for its Audit Oversight Committee. A copy of the written charter for each Fund, as amended through June 14, 2011 is attached to this Proxy Statement asExhibitAppendix A. A reportThe description of the Audit Oversight Committee of PMF, PCQ and PNF, dated June 19, 2012,Proposed Agreement below is attachedqualified in its entirety by reference to this Proxy Statement asExhibit B-1. A reportthe actual terms of the Audit Oversight Committeeform of PML, PCK and PNI, dated July 24, 2013, is attached to this Proxy Statement asagreement inExhibit B-2.Appendix A report of the Audit Oversight Committee of PMX, PZC and PYN, dated November 19, 2013, is attached to this Proxy Statement asExhibit B-3.
Nominating Committee. The Board ofServices. Pursuant to the Proposed Agreement, PIMCO shall provide to each Fund has a Nominating Committee composed solelyinvestment guidance and policy direction in connection with the management of Independent Trustees, currently consisting of Messrs. Gallagher, Jacobson, Kertess, Ogden, Rappaportthe Fund, including oral and Ms. DeCotis. The Nominating Committee is responsible for reviewingwritten research, analysis, advice and recommending qualified candidatesstatistical and economic data and information. Consistent with the investment objective(s), policies and restrictions applicable to each Fund, PIMCO will determine the securities and other assets to be purchased or sold or other techniques to be utilized (including, but not limited to, the Board inincurrence of leverage and securities lending) by the event that a position is vacated or created or when Trustees are to be nominated for election by shareholders. The Nominating CommitteeFund and will determine what portion of each Fund has adopted a charter, which is posted on the following website:http://us.allianzgi.com/ClosedEndFund/External%20Documents/nominating_committee_charter.pdf.
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Each memberthe Fund shall be invested in securities or other assets, and what portion, if any, should be held uninvested. Under the Proposed Agreement, each Fund will have the benefit of the investment analysis and research, the review of current economic conditions and trends and the consideration of long-range investment policy generally available to investment advisory clients of PIMCO. If the Proposed Agreement is approved, PIMCO intends for the same teams of investment professionals to continue to manage each Fund’s investment portfolio and, as such, it is not expected that the day-to-day portfolio management services provided to the Funds will change. Unlike the Current Agreements, the Proposed Agreement does not contemplate that PIMCO will select and contract with third-party portfolio managers for the Funds.
In addition, under the terms of the Proposed Agreement, subject to the general supervision of the Board of Trustees/Directors, PIMCO shall provide or cause to be furnished all supervisory and administrative and other services reasonably necessary for the operation of each Fund, including but not limited to the following:
the supervision and coordination of matters relating to the operation of each Fund, including any necessary coordination among the custodian, transfer agent, dividend disbursing agent, and recordkeeping agent (including pricing and valuation of the Fund), accountants, attorneys, auction agents and other parties performing services or operational functions for each Fund;
the provision of adequate personnel, office space, communications facilities, and other facilities necessary for the effective supervision and administration of each Fund, as well as the services of a sufficient number of persons competent to perform such supervisory and administrative and clerical functions as are necessary for compliance with federal securities laws and other applicable laws;
the maintenance of the books and records of each Fund;
the preparation of all federal, state, local and foreign tax returns and reports for each Fund;
the provision of administrative services to Shareholders for each Fund including the maintenance of a shareholder information telephone number, the provision of certain statistical information and performance of the Fund, an internet website (if requested), and maintenance of privacy protection systems and procedures;
the preparation and filing of such registration statements and other documents with such authorities as may be required to register and maintain the listing of the Shares of each Fund;
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the taking of other such actions as may be required by applicable law (including establishment and maintenance of a compliance program for each Fund); and
the preparation, filing and distribution of proxy materials, periodic reports to Shareholders and other regulatory filings.
In addition, under the Proposed Agreement, PIMCO will procure, at its own expense, the following services, and will bear expenses associated with the following for each Fund, which expenses are currently borne directly by the Funds:
a custodian or custodians for the Funds to provide for the safekeeping of the Funds’ assets;
a recordkeeping agent to maintain the portfolio accounting records for the Funds;
a transfer agent for the Funds;
a dividend disbursing agent and/or registrar for the Funds;
all audits by each Fund’s independent public accountants (except fees to auditors associated with satisfying rating agency requirements for preferred shares or other securities issued by the Fund and other related requirements in a Fund’s organizational documents);
valuation services;
maintaining each Fund’s tax records;
all costs and/or fees incident to meetings of each Fund’s Nominating Committeeshareholders, the preparation, printing and mailing of each Fund’s prospectuses, notices and proxy statements, press releases and reports to its Shareholders, the filing of reports with regulatory bodies, the maintenance of the Fund’s existence and qualification to do business, the expense of issuing, redeeming, registering and qualifying for sale, common shares with the federal and state securities authorities, and the expense of qualifying and listing Shares with any securities exchange or other trading system;
legal services (except for extraordinary legal expenses);
costs of printing certificates representing Shares of each Fund;
each Fund’s pro rata portion of its fidelity bond and other insurance premiums; and
association membership dues.
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The Funds (and not PIMCO) will be responsible for certain fees and expenses that are not covered by the unified fee under the Proposed Agreement, which the Funds also directly bear under the Current Agreements. These include, for each Fund, fees and expenses, including travel expenses, and fees and expenses of legal counsel retained for their benefit, of Trustees/Directors who are not officers, employees, partners, shareholders or members of PIMCO or its subsidiaries or affiliates; the salaries and other compensation or expenses, including travel expenses, of the Fund’s executive officers and employees, if any, who are not officers, directors, shareholders, members, partners or employees of PIMCO or its subsidiaries or affiliates; taxes and governmental fees, if any, levied against the Fund; brokerage fees and commissions, and other portfolio transaction expenses incurred by or for the Fund; expenses of the Fund’s securities lending (if any), including any securities lending agent fees, as governed by a separate securities lending agreement; costs, including interest expenses, of borrowing money or engaging in other types of leverage financing; costs, including dividend and/or interest expenses and other costs associated with the Fund’s issuance, offering, redemption and maintenance of Preferred Shares, commercial paper or other senior securities for the purpose of incurring leverage; fees and expenses of any underlying funds or other pooled vehicles in which the Fund invests; dividend and interest expenses on short positions taken by the Fund; organizational and offering expenses of the Fund, including with respect to Share offerings following the Fund’s initial offering, and expenses associated with tender offers and other Share repurchases and redemptions; extraordinary legal costs; and expenses of the Fund which are capitalized in accordance with generally accepted accounting principles.
Compensation. Under the Proposed Agreement, as compensation for PIMCO’s services rendered, and for the facilities furnished and for the expenses borne by PIMCO, each Fund will pay PIMCO a management fee, accrued daily and paid monthly, at the annual rates set forth in the table below.
| Annual Management Fee Rate Under the Proposed Agreement | ||||
PTY1 | 0.650 | % | ||
PCN1 | 0.810 | % | ||
PCI2 | 1.150 | % | ||
PDI2 | 1.150 | % | ||
PGP3 | 1.105 | % | ||
PHK1 | 0.760 | % | ||
PKO4 | 1.055 | % | ||
RCS1 | 0.955 | % | ||
PCM4 | 0.900 | % | ||
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| Annual Management Fee Rate Under the Proposed Agreement | ||||
PCQ1 | 0.705 | % | ||
PCK1 | 0.705 | % | ||
PZC1 | 0.715 | % | ||
PMF1 | 0.705 | % | ||
PML1 | 0.685 | % | ||
PMX1 | 0.705 | % | ||
PNF1 | 0.770 | % | ||
PNI1 | 0.735 | % | ||
PYN1 | 0.860 | % | ||
| 1. | Fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). |
| 2. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
| 3. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 4. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
As is “independent,”the case with the Current Agreements, the Proposed Agreement provides that the assets on which the management fee will be charged include assets attributable to any Preferred Shares issued by a Fund and, with respect to certain Funds, other forms of leverage that may be outstanding (such as independencethrough reverse repurchase agreements, dollar rolls and/or borrowings). The types of leverage upon which the management fee will be charged for nominating committee memberseach Fund (which varies from Fund to Fund as noted in the footnotes to the table above) will be the same under the Proposed Agreement as it is for the Fund under its Current Agreement. However, the contractual management fee rates under the Proposed Agreement are higher for each Fund than under its Current Agreement (except for PDI and PCI, whose proposed management fee rates are the same under the
25
Proposed Agreement and the corresponding Current Agreements) because the unified fee rates under the Proposed Agreement cover the Fund’s Operating Expenses (including certain third-party fees and expenses), which are currently paid for or incurred by the Funds directly outside of the Current Agreements and therefore are not included in the management fee rates under the Current Agreements. Therefore, in general, total expenses payable by Common Shareholders under the Proposed Agreement will vary more with increases and decreases in applicable leverage incurred by a Fund than under the Current Agreements (except with respect to PDI and PCI).
As under the Current Agreements, because the fees to be received by PIMCO under the Proposed Agreement are based on assets attributable to any Preferred Shares, and, with respect to PCI, PDI, PGP, PKO and PCM, certain other forms of leverage (such as reverse repurchase agreements, dollar rolls and/or borrowings) that may be outstanding, PIMCO has a financial incentive for the Funds to issue or maintain Preferred Shares, or, in the case of PCI, PDI, PGP, PKO and PCM, use and/or increase other forms of leverage, which may result in a conflict of interest between PIMCO and the Common Shareholders of the applicable Fund, and this incentive will be greater with respect to each Fund (other than PDI and PCI) under the Proposed Agreement in comparison to the Current Agreements. However, as always, PIMCO will use leverage for the Funds solely as it determines to be in the best interests of the Funds from an investment perspective and without regard to the level of compensation its receives.
Comparison of Fees and Expenses Under the Current Agreements and the Proposed Agreement. The following table provides a comparison of the aggregate fees (expressed in dollars) paid to AGIFM under the CurrentAgreement for each Fund to the aggregate fees that PIMCO would have received under the Proposed Agreement for such Fund if the Proposed Agreement had been in place for the year ended December 31, 2013. The table also compares each Fund’s total expenses (expressed in dollars) incurred during the year ended December 31, 2013 with estimates of total expenses that the Fund would have incurred under the Proposed Agreement and unified fee structure during the same period, assuming that the unified fee was imposed on assets attributable to preferred shares and/or other forms of leverage outstanding, as applicable, during the year ended December 31, 2013.
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| Management Fee Comparison | Total Expense Comparison | |||||||||||||||||||||||
Fund | Aggregate Management Fees Paid to AGIFM under Current Agreements for Calendar Year 2013 | EstimatedPro Forma Aggregate Management Fees PIMCO Would Have Been Paid under the Proposed Agreement for Calendar Year 20131 | % Difference Between the Actual and Estimated Pro Forma Management Fees | Total Expenses for Calendar Year 2013 | EstimatedPro Forma Total Expenses the Fund Would Have Paid had the Proposed Agreement Been in Effect During Calendar Year 20132 | % Difference Between Actual and Estimated Pro Forma Total Expenses | ||||||||||||||||||
PTY | $ | 8,852,063 | $ | 9,584,004 | 8.3 | % | $ | 10,502,786 | $ | 10,246,034 | -2.4 | % | ||||||||||||
PCN | $ | 5,853,636 | $ | 6,316,884 | 7.9 | % | $ | 6,713,453 | $ | 6,597,641 | -1.7 | % | ||||||||||||
PCI3 | $ | 44,940,548 | $ | 44,940,548 | 0.0 | % | $ | 50,421,299 | $ | 49,145,432 | -2.5 | % | ||||||||||||
PDI | $ | 29,382,372 | $ | 29,382,372 | 0.0 | % | $ | 44,715,416 | $ | 44,128,388 | -1.3 | % | ||||||||||||
PGP | $ | 2,220,125 | $ | 2,453,608 | 10.5 | % | $ | 2,962,573 | $ | 2,893,100 | -2.3 | % | ||||||||||||
PHK | $ | 9,235,246 | $ | 10,026,635 | 8.6 | % | $ | 11,366,486 | $ | 11,102,673 | -2.3 | % | ||||||||||||
PKO | $ | 6,353,693 | $ | 6,706,622 | 5.6 | % | $ | 7,849,610 | $ | 7,753,431 | -1.2 | % | ||||||||||||
RCS | $ | 3,272,515 | $ | 3,675,870 | 12.3 | % | $ | 5,408,290 | $ | 5,293,010 | -2.1 | % | ||||||||||||
PCM | $ | 1,701,380 | $ | 1,914,838 | 12.5 | % | $ | 2,706,876 | $ | 2,648,195 | -2.2 | % | ||||||||||||
PCQ | $ | 2,610,431 | $ | 2,831,876 | 8.5 | % | $ | 3,407,484 | 4 | $ | 3,337,066 | 4 | -2.1 | % | ||||||||||
PCK | $ | 2,771,113 | $ | 3,005,405 | 8.5 | % | $ | 3,681,684 | 4 | $ | 3,607,128 | 4 | -2.0 | % | ||||||||||
PZC | $ | 2,186,232 | $ | 2,405,585 | 10.0 | % | $ | 2,915,611 | 4 | $ | 2,860,773 | 4 | -1.9 | % | ||||||||||
PMF | $ | 3,311,816 | $ | 3,592,609 | 8.5 | % | $ | 4,113,194 | 4 | $ | 4,030,262 | 4 | -2.0 | % | ||||||||||
PML | $ | 6,969,117 | $ | 7,342,653 | 5.4 | % | $ | 8,469,570 | 4 | $ | 8,362,787 | 4 | -1.3 | % | ||||||||||
PMX | $ | 3,393,057 | $ | 3,678,556 | 8.4 | % | $ | 4,312,845 | 4 | $ | 4,241,470 | 4 | -1.7 | % | ||||||||||
PNF | $ | 859,518 | $ | 1,017,449 | 18.4 | % | $ | 1,207,071 | 4 | $ | 1,160,979 | 4 | -3.8 | % | ||||||||||
PNI | $ | 1,273,744 | $ | 1,440,236 | 13.1 | % | $ | 1,741,319 | 4 | $ | 1,692,349 | 4 | -2.8 | % | ||||||||||
PYN | $ | 536,885 | $ | 710,761 | 32.4 | % | $ | 872,030 | 4 | $ | 825,464 | 4 | -5.3 | % | ||||||||||
| 1. | Assuming that a Fund was subject to the Proposed Agreement (rather than its Current Agreement) during the entire calendar year ended December 31, 2013. Thepro forma aggregate management fees also assume that the unified fee under the Proposed Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Proposed Agreement for the particular Fund (as discussed above). |
| 2. | Assuming that a Fund was subject to the Proposed Agreement (rather than its Current Agreement) during the calendar year ended December 31, 2013 and incurred the same level of expenses that are not covered under the proposed unified fee (such as interest expense, fees and expenses of the Independent Trustees/Directors and their counsel and any extraordinary expenses) during the period. Thepro forma total expenses also assume that the unified fee under the Proposed Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Proposed Agreement for the particular Fund (as discussed above). These expenses are only estimates. The actual expenses could vary and could exceed the |
27
| amounts shown and/or the amounts the Funds would have incurred under the Current Agreements under certain circumstances. See the discussion above in the “Questions and Answers” section for further information on why these estimates may vary. |
| 3. | Annualized. PCI commenced operations on January 31, 2013. |
| 4. | The total annual expenses in calendar year 2013 under the Current Agreements and estimatedpro forma total annual expenses under the Proposed Agreement reflect the interest expense on inverse floating rate investments deemed to be paid by the Fund for accounting purposes during its most recently completed fiscal year. The interest expenses from inverse floating rate investments incurred during calendar year 2013 may have been, and in the future may be, higher or lower. |
The table below sets forth the total annual expenses incurred by each Fund during the year ended December 31, 2013 (expressed as a percentage of net assets attributable to Common Shares), broken out by category of service/expense, and estimates of thepro forma total annual expenses that each Fund would have incurred during the same period if the Proposed Agreement had been in place. The table illustrates that “Other Expenses” currently payable by the Funds outside of the Current Agreements would be lower under the Proposed Agreement because each Fund’s Operating Expenses, which are currently included in “Other Expenses” under the Current Agreements, would be paid by PIMCO out of the new unified management fee it receives from the Fund under the Proposed Agreement. Although the management fee rates for each Fund shown in the table below are higher under the Proposed Agreement than under the Fund’s Current Agreement (except for PDI and PCI, whose proposed management fee rates are the same under the Proposed Agreement and the corresponding Current Agreement), in determining the proposed unified management fee rate to be paid to PIMCO by each Fund under the Proposed Agreement, PIMCO reviewed the Fund’s total expenses, including its current contractual management fee and other expenses currently borne by the Fund outside of the applicable Current Agreement, and the Fund’s leverage outstanding during calendar year 2013 (unless otherwise noted), and proposed a management fee rate that PIMCO estimates will result in the Fund’s total expenses paid by Common Shareholders being lower under the Proposed Agreement than under the corresponding Current Agreement, as indicated in the table below.
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Annual Expenses andPro Forma Annual Expenses
(expressed as a percentage of net assets attributable to Common Shares)
| PTY | PCN | PCI9 | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | |||||||||||||||||||
Management Fees | 0.770 | %3 | 0.833 | %3 | 0.957 | %3 | 1.033 | %3 | 1.373 | %4 | 1.373 | %4 | ||||||||||||
Interest Payments on Borrowings | 0.003 | % | 0.003 | %7 | 0.004 | % | 0.004 | %7 | 0.119 | % | 0.119 | %7 | ||||||||||||
Other Expenses | 0.141 | % | 0.055 | % | 0.136 | % | 0.042 | % | 0.048 | % | 0.009 | % | ||||||||||||
Total Annual Expenses | 0.913 | % | 0.891 | % | 1.098 | % | 1.079 | % | 1.540 | % | 1.501 | % | ||||||||||||
| PDI | PGP | PHK | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | |||||||||||||||||||
Management Fees | 2.099 | %4 | 2.099 | %4 | 1.494 | %5 | 1.652 | %5 | 0.899 | %3 | 0.976 | %3 | ||||||||||||
Interest Payments on Borrowings | 1.046 | % | 1.046 | %7 | 0.289 | % | 0.289 | %7 | 0.052 | % | 0.052 | %7 | ||||||||||||
Other Expenses | 0.049 | % | 0.007 | % | 0.211 | % | 0.007 | % | 0.156 | % | 0.053 | % | ||||||||||||
Total Annual Expenses | 3.194 | % | 3.152 | % | 1.994 | % | 1.947 | % | 1.106 | % | 1.081 | % | ||||||||||||
| PKO | RCS | PCM | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | |||||||||||||||||||
Management Fees | 1.493 | %6 | 1.576 | %6 | 0.850 | %3 | 0.955 | %3 | 1.291 | %6 | 1.453 | %6 | ||||||||||||
Interest Payments on Borrowings | 0.239 | % | 0.239 | %7 | 0.412 | % | 0.412 | %7 | 0.533 | % | 0.533 | %7 | ||||||||||||
Other Expenses | 0.113 | % | 0.007 | % | 0.142 | % | 0.008 | % | 0.229 | % | 0.023 | % | ||||||||||||
Total Annual Expenses | 1.845 | % | 1.822 | % | 1.404 | % | 1.374 | % | 2.053 | % | 2.009 | % | ||||||||||||
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| PCQ | PCK | PZC | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement | |||||||||||||||||||
Management Fees | 1.038 | %3 | 1.126 | %3 | 1.053 | %3 | 1.142 | %3 | 1.035 | %3 | 1.139 | %3 | ||||||||||||
Interest Payments on Borrowings | 0.097 | %8 | 0.097 | %8 | 0.120 | %8 | 0.120 | %8 | 0.110 | %8 | 0.110 | %8 | ||||||||||||
Other Expenses | 0.220 | % | 0.104 | % | 0.226 | % | 0.108 | % | 0.235 | % | 0.105 | % | ||||||||||||
Total Annual Expenses | 1.355 | % | 1.327 | % | 1.399 | % | 1.370 | % | 1.380 | % | 1.354 | % | ||||||||||||
| PMF | PML | PMX | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | |||||||||||||||||||
Management Fees | 1.037 | %3 | 1.125 | %3 | 0.989 | %3 | 1.042 | %3 | 1.019 | %3 | 1.105 | %3 | ||||||||||||
Interest Payments on Borrowings | 0.035 | %8 | 0.035 | %8 | 0.055 | %8 | 0.055 | %8 | 0.070 | %8 | 0.070 | %8 | ||||||||||||
Other Expenses | 0.216 | % | 0.102 | % | 0.157 | % | 0.089 | % | 0.206 | % | 0.099 | % | ||||||||||||
Total Annual Expenses | 1.288 | % | 1.262 | % | 1.202 | % | 1.186 | % | 1.296 | % | 1.274 | % | ||||||||||||
| PNF | PNI | PYN | ||||||||||||||||||||||
| Under Current Agreement1 | Estimated Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Pro Forma Under Proposed Agreement2 | Under Current Agreement1 | Pro Forma Under Proposed Agreement2 | |||||||||||||||||||
Management Fees | 1.009 | %3 | 1.194 | %3 | 1.090 | %3 | 1.232 | %3 | 1.062 | %3 | 1.405 | %3 | ||||||||||||
Interest Payments on Borrowings | 0.066 | %8 | 0.066 | %8 | 0.095 | %8 | 0.095 | %8 | 0.102 | %8 | 0.102 | %8 | ||||||||||||
Other Expenses | 0.342 | % | 0.102 | % | 0.305 | % | 0.121 | % | 0.561 | % | 0.125 | % | ||||||||||||
Total Annual Expenses | 1.417 | % | 1.363 | % | 1.489 | % | 1.448 | % | 1.724 | % | 1.632 | % | ||||||||||||
| 1. | Except in the case of PCI as noted in footnote 9 below, reflects the Fund’s actual expenses during the calendar year ended December 31, 2013. The management fee rates and total expense ratios reflect that the management fee under the Current Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Current Agreement for the particular Fund (as specified in the footnotes below). |
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| 2. | Assumes that the Fund was subject to the Proposed Agreement (rather than its Current Agreement) during the calendar year ended December 31, 2013 and incurred the same level of expenses that are not covered under the proposed unified fee (such as interest expense, fees and expenses of the Independent Trustees/Directors and their counsel and any extraordinary expenses) during the period. Thepro forma management fee rates and total expense ratios also assume that the unified fee under the Proposed Agreement was imposed, as applicable, on assets attributable to preferred shares and/or other forms of leverage outstanding during the period pursuant to the terms of the Proposed Agreement for the particular Fund (as specified in the footnotes below). These expenses are only estimates. The actual expenses could vary and could exceed the amounts shown and/or the amounts the Funds would have incurred under the Current Agreements under certain circumstances. See the discussion above in the “Questions and Answers” section for further information on why these estimates may vary. |
| 3. | Fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). |
| 4. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
| 5. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 6. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
| 7. | Reflects the Fund’s actual interest payments on borrowings during the calendar year ended December 31, 2013 (except in the case of PCI, as noted in footnote 9 below). The Fund may use forms of leverage other than and/or in addition to the forms of leverage used during the calendar year ended December 31, 2013, which may be subject to different interest expenses than those estimated above. The actual amount of interest expense borne by the Fund will vary over time in accordance with the level of the Fund’s use of leverage and variations in market interest rates. Interest expense is |
31
| required to be treated as an expense of the Fund for accounting purposes. Any associated income or gains (or losses) realized from leverage obtained through such instruments is not reflected in the Annual Expenses table above, but would be reflected in the Fund’s performance results. |
| 8. | Represents the interest expense on inverse floating rate investments deemed to be paid by the Fund for accounting purposes during its most recently completed fiscal year. Accounting rules require the Fund to treat interest paid by trusts issuing certain inverse floating rate investments held by the Fund as having been paid (indirectly) by the Fund. Because the Fund also recognizes a corresponding amount of interest income (also indirectly), the Fund’s net asset value, net investment income and total return are not affected by this accounting treatment. The interest expenses from inverse floating rate investments incurred during calendar year 2013 may have been, and in the future may be, higher or lower. |
| 9. | Annualized. PCI commenced operations on January 31, 2013. |
See alsoAppendix C for an example of the expenses paid by a Shareholder for each Fund under the Current Agreements and the Proposed Agreement, assuming a $1,000 investment, that the Fund’s assets do not increase or decrease from the average assets during the calendar year ended December 31, 2013 (including through the use of leverage), that the Fund’s total expense ratio remains the same as shown in the Annual Expenses andPro Forma Annual Expenses Tables above and a five percent annual return.
It is noted that Preferred Shareholders of applicable Funds do not bear any portion of a Fund’s management fees or other expenses and therefore should not be impacted economically by the proposed new fee and expense structure.
Effective Date. If the Proposed Agreement is approved by a Fund’s Shareholders, it will take effect with respect to that Fund concurrent with the termination of the Current Agreement and Portfolio Management Agreement for the Fund. The actual effective date of the Proposed Agreement for a Fund will be at a date and time mutually agreeable to the Fund, PIMCO and AGIFM in order to effect an efficient transition for the Fund and its Shareholders.
Term/Termination/Amendment. The Proposed Agreement, if approved by Shareholders, will remain in full force and effect as to each Fund, unless sooner terminated by such Fund, for an initialone-year period and shall continue thereafter on an annual basis with respect to each Fund provided that such continuance is specifically approved at least annually (i) by the vote of a majority of the outstanding voting securities (as defined in the currently applicable listing standards1940 Act) of the NYSE,
32
Fund or by the Fund’s Board of Trustees/Directors; and (ii) by the vote, cast in person at a meeting called for such purpose, of a majority of the Fund’s Independent Trustees/Directors. It can also be terminated with respect to a Fund at any time, without the payment of any penalty, by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund or by avote of a majority of the Fund’s entire Boardof Trustees/Directors on60 days’ written notice to PIMCO, or by PIMCO on 60 days’ written notice to the Fund. Additionally, the Proposed Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). The Proposed Agreement may not be materially amended with respect to a Fund or Funds without a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the pertinent Fund or Funds. The Proposed Agreement may be amended from time to time to add new Funds without a vote of the shareholders of any Fund.
Liability. The Proposed Agreement provides that neither PIMCO, nor its members, officers, directors or employees shall be subject to any liability for, or any damages, expenses or losses incurred in connection with, any act or omission or mistake in judgment connected with or arising out of any services rendered under the Proposed Agreement, except by reason of willful misfeasance, bad faith, or gross negligence in performance of PIMCO’s duties, or by reason of reckless disregard of PIMCO’s obligations and duties under the Proposed Agreement.
Trustees/Directors’ Considerations Related to the Proposed Agreement
At a meeting of the Board on December 10, 2013, the Board received a preliminary presentation from PIMCO regarding the proposed transition and agreed that PIMCO should prepare materials regarding the Proposed Agreement and related arrangements for formal consideration at the Board’s next regularly scheduled meeting. On February 4, 2014, the Board held a special in-person meeting with members of PIMCO’s senior management and other PIMCO personnel proposed to serve as officers of the Funds to discuss the proposed transition. On February 25, 2014, the Independent Trustees/Directors met separately via conference call with their counsel to discuss materials provided by PIMCO regarding the Proposed Agreement and related arrangements, and representatives from PIMCO attended a portion of that meeting to respond to questions from the Independent Trustees/Directors and to field requests for supplemental information regarding the proposed arrangements. The Board then held an in-person meeting with management on March 10-11, 2014 to consider approval of the Proposed Agreement and related arrangements (the meetings of the Board discussed herein collectively referred to as the “Meetings”). Following careful consideration of the matter as described in more detail herein, the Board of each Fund, including all of the Independent Trustees/Directors, approved the
33
Proposed Agreement for the Fund for an initial one-year term, subject to Shareholder approval. The information, material factors and conclusions that formed the basis for the Board’s approvals for each Fund are described below. As noted, the Independent Trustees/Directors were assisted in their evaluation of the Proposed Agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from Fund management during the Meetings.
In connection with their deliberations regarding the approval of the Proposed Agreement, the Trustees/Directors, including the Independent Trustees/Directors, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. As described below, the Trustees/Directors considered the nature, quality and extent of the various investment management, administrative and other services to be provided to each Fund by PIMCO under the Proposed Agreement.
In connection with the Meetings, the Trustees/Directors received and relied upon materials provided by PIMCO (or AGIFM, as applicable) which included, among other items: (i) information provided by Lipper Inc. (“Lipper”), an independent third party, on the total return investment performance (based on net assets) of the Funds for various time periods, the investment performance of a group of funds with investment classifications/objectives comparable to those of the Funds identified by Lipper (the “Lipper performance universe”) and, with respect to certain Funds, the performance of an applicable benchmark index, (ii) information provided by Lipper on the Funds’ management fees under the Current Agreements and other expenses and the management fees and other expenses of comparable funds identified by Lipper, (iii) information provided by PIMCO on the Funds’ proposed management fee rates and total expense ratios under the Proposed Agreement in comparison to data provided by Lipper on the management fees and total expense ratios of comparable Funds identified by Lipper, (iv) information on the aggregate management fees and total expenses paid by each Fund under its Current Agreement during calendar year 2013 and thepro forma aggregate management fees and total expenses that would have been paid by each Fund under the Proposed Agreement during calendar year 2013, (v) information regarding the investment performance and fees for other funds and accounts managed by PIMCO, if any, with similar investment strategies to those of the Funds, or information regarding the investment performance and fees for other funds and accounts managed by PIMCO with strategies that have similarities (but are not substantially similar) to those of the Funds, if any, (vi) the estimated profitability to AGIFM as investment manager to the Funds for the one-year period ended December 31, 2012, and to PIMCO as sub-adviser to the Funds for the one-year periods ended December 31, 2012 and
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2013, (vii) estimates of what the profitability to PIMCO would have been under the Proposed Agreement for the one-year period ended December 31, 2013 and what the profitability to PIMCO under the Proposed Agreement is estimated to be for the calendar years ending December 31, 2014, 2015 and 2016, (viii) information provided by PIMCO on each Fund’s risk-adjusted returns, total returns and yield over various time periods, (ix) descriptions of various functions and services to be performed or procured by PIMCO for the Funds under the Proposed Agreement, such as portfolio management, compliance monitoring, portfolio trading, custody, transfer agency, dividend disbursement, recordkeeping, tax, legal, audit, valuation and other administrative and shareholder services and (x) information regarding the overall organization of PIMCO, including information regarding senior management, portfolio managers and other personnel who will provide investment management, administrative and other services to the Funds under the Proposed Agreement. The Trustees noted that because PCI commenced operations on January 31, 2013, certain information provided to the Board with respect to PCI was provided on an annualized basis.
The Trustees’/Directors’ conclusions as to the approval of the Proposed Agreement for each Fund were based on a comprehensive consideration of all information provided to the Trustees/Directors and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’/Directors’ deliberations are described below, although individual Trustees/Directors may have evaluated the information presented differently from one another, attributing different weights to various factors.
As part of their review, the Trustees/Directors examined PIMCO’s ability to provide high quality investment management and other services to the Funds. Among other information, the Trustees/Directors considered the investment philosophy and research and decision-making processes of PIMCO; the experience of key advisory personnel of PIMCO responsible for portfolio management of the Funds; the ability of PIMCO to attract and retain capable personnel; and the capability of the senior management and staff of PIMCO. In addition, the Trustees/Directors reviewed the quality of PIMCO’s services with respect to regulatory compliance and compliance with the investment policies of the Funds and conditions that might affect PIMCO’s ability to provide high quality services to the Funds in the future under the Proposed Agreement, including PIMCO’s financial condition and operational stability. The Trustees/Directors took into account their familiarity and experience with PIMCO as the sub-adviser and portfolio manager for each Fund to date, and noted that the same investment professionals who are currently responsible for managing each Fund’s portfolio will continue to do so following the proposed transition. They further noted that each Fund will continue to have the same investment objective(s) and policies following the proposed transition.
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The Trustees/Directors also considered the nature of certain supervisory and administrative services that PIMCO would be responsible for providing to the Funds under the Proposed Agreement. The Trustees/Directors noted PIMCO’s belief that a number of operational and administrative efficiencies are expected to result from the arrangements under the Proposed Agreement. The Trustees/Directors considered PIMCO’s representation that it could offer the Funds an integrated set of high-quality investment management, administrative and distribution/aftermarket support services under a single platform, which PIMCO believes will allow for greater efficiencies and enhanced coordination among various investment management and administrative functions. The Trustees/Directors also took into account that the fund administration group at PIMCO, currently comprised of approximately 140 professionals worldwide, provides administrative services for approximately $860 billion in assets under management globally (as of October 31, 2013), including over 150 PIMCO open-end funds and ETFs which, like the Funds, are U.S. registered investment companies, and that PIMCO has substantial prior experience in the administration of U.S. registered closed-end funds, including RCS and PCM prior to 2009. The Trustees/Directors also considered PIMCO’s representation that the PIMCO fund administration group is well integrated with all critical functions related to the PIMCO funds business, including portfolio management, compliance, legal, accounting and tax, account management, marketing, shareholder communications/services and technology, and noted PIMCO’s belief that the Funds and Shareholders will benefit by having all such services provided “under one roof” by the highly experienced team at PIMCO. Moreover, the Trustees/Directors noted that the proposed PIMCO-only management structure for the Funds aligns with the “two pillar” approach adopted by Allianz with respect to other PIMCO and Allianz Global Investors products globally, and considered PIMCO’s view that the change will facilitate clearer branding and marketing of the Funds and will help to avoid potential confusion among intermediaries, analysts and investors as to whether the Funds are PIMCO and/or Allianz Global Investors products. Based on the foregoing, the Trustees/Directors concluded that PIMCO’s investment process, research capabilities and philosophy were well suited to each Fund given its investment objective and policies, and that PIMCO would be able to provide high quality supervisory and administrative services to the Funds and meet any reasonably foreseeable obligations under the Proposed Agreement.
In assessing the reasonableness of each Fund’s proposed unified management fee rate under the Proposed Agreement, the Trustees/Directors considered, among other information, (i) each Fund’s current and proposed contractual management fee rate, (ii) each Fund’s total expense ratio under its Current Agreement and under the Proposed Agreement calculated on average net assets and on average managed assets, taking into account the effects of the
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Fund’s leverage outstanding for calendar year 2013, and (iii) the aggregate management fees and estimated total expenses paid by each Fund under its Current Agreement during calendar year 2013 and estimates of thepro forma aggregate management fees and total expenses that would have been paid by each Fund under the Proposed Agreement if it had been in place during calendar year 2013. In this regard, the Trustees/Directors noted that, although the proposed management fee rate to be paid to PIMCO by each Fund under the Proposed Agreement is higher than the management fee rate imposed under the corresponding Current Agreement (except for PDI and PCI, whose proposed management fee rates are the same under the Proposed Agreement and the corresponding Current Agreements), the proposed unified fee arrangement under the Proposed Agreement covers the Fund’s Operating Expenses, which are currently borne directly by the Fund in addition to the management fee paid under the Current Agreement.
In addition, the Trustees/Directors took into account PIMCO’s explanation that, in determining the proposed unified management fee rate to be paid to PIMCO by each Fund under the Proposed Agreement, PIMCO reviewed the Fund’s total expenses, including its current contractual management fee and other expenses currently borne by the Fund outside of the applicable Current Agreement, and the Fund’s leverage outstanding during calendar year 2013, and proposed a management fee rate that PIMCO estimated would result in the Fund’s total expenses paid by Common Shareholders being lower under the Proposed Agreement than under the corresponding Current Agreement (based on calendar year 2013 expenses). The Trustees/Directors noted that PIMCO estimated that the proposed new arrangement would result in an overall savings to Common Shareholders of each Fund under ordinary circumstances. The Trustees/Directors further considered PIMCO’s explanation that, in developing the proposed unified fee structure for each Fund other than PDI and PCI, PIMCO, after discussions with the Board, determined a 20% reduction to the Fund’s actual Operating Expenses for calendar year 2013, converted that amount to basis points and rounded to the next lowest half or whole basis point in arriving at a proposed unified fee rate for the Fund. With respect to PDI and PCI, after discussions with the Trustees, PIMCO determined to propose a unified management fee rate under the Proposed Agreement at the same rate that is currently charged under the Current Agreements for those Funds, such that PIMCO will bear all Operating Expenses for those Funds under the proposed unified fee structure with no increase in the fee rate charged under the current non-unified fee structure. The Board considered PIMCO’s statement that the proposed unified fee rates are designed to allow the Funds and their Common Shareholders to share up front in operational efficiencies PIMCO will attempt to realize with respect to the Funds’ Operating Expenses as a result of the proposed transition.
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The Trustees/Directors also took into account other expected benefits to shareholders of the proposed unified fee structure under the Proposed Agreement. In this regard, the Trustees/Directors noted PIMCO’s view that the proposed new unified fee structure would be beneficial for Common Shareholders because it provides a management fee (including Operating Expenses) structure that is essentially fixed as a percentage of managed assets, making it more predictable under ordinary circumstances in comparison to the current fee and expense structure, under which the Funds’ Operating Expenses (including certain third-party fees and expenses) not covered by the Current Agreements can vary over time. The Trustees/Directors also considered that the proposed unified fee structure generally insulates the Funds and Common Shareholders from increases in applicable third-party and certain other expenses because PIMCO, rather than the Funds, would bear the risk of such increases (though the Trustees/Directors also noted that PIMCO would benefit from any reductions in such expenses).
The Trustees/Directors also considered the management fees charged by PIMCO to other funds and accounts with similar strategies to those of the Funds, if any, including open-end funds and separate accounts advised by PIMCO. With respect to certain Funds, the Trustees/Directors were advised that PIMCO does not manage any funds or accounts, including institutional or separate accounts, with investment strategies or return profiles similar to those of the Funds. However, in such cases, the Trustees/Directors considered the management fees charged by PIMCO to other funds and accounts with strategies that have similarities (but are not substantially similar) to those of the Funds, if any. The Trustees/Directors noted that the management fees proposed to be paid by the Funds are generally higher than the fees paid by such separate account clients. However, the Trustees/Directors were advised by PIMCO that it generally expects to provide broader and more extensive services to the Funds in comparison to separate accounts, and expects to incur additional expenses in connection with the more extensive regulatory regime to which the Funds are subject in comparison to separate accounts generally. The Trustees/Directors noted that the management fees proposed to be paid by the Funds are generally higher than the fees paid by any open-end funds offered for comparison, but were advised by PIMCO that there are additional portfolio management challenges in managing closed-end funds such as the Funds, such as those associated with the use of leverage and attempting to meet a regular dividend. With respect to PGP and PCM, the Trustees/Directors were advised that PIMCO does not manage any funds or accounts which have an investment strategy or return profile bearing any reasonable similarity to those Funds.
The Trustees/Directors also took into account that PTY, PCN, PHK, PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN have Preferred Shares
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outstanding, which increases the amount of management fees payable by those Funds under both the Current Agreements and the Proposed Agreement (because each of PTY’s, PCN’s, PHK’s, PCQ’s, PCK’s, PZC’s, PMF’s, PML’s, PMX’s, PNF’s, PNI’s and PYN’s fees are calculated, and under the Proposed Agreement would continue to be calculated, based on the Fund’s net assets, including any assets attributable to Preferred Shares outstanding). They also took into account that the use of other forms of leverage by PCI, PDI, PGP, PKO and PCM, such as through the use of reverse repurchase agreements, increases the amount of management fees payable by those Funds under both the Current Agreements and the Proposed Agreement (because each of PCI’s, PDI’s, PGP’s, PKO’s and PCM’s fees are calculated, and under the Proposed Agreement would continue to be calculated, based on total managed assets, including assets attributable to certain forms of leverage). They also noted that RCS uses forms of leverage other than preferred shares, but that the use of such leverage by RCS does not increase the management fees payable by RCS (because RCS’s fees are calculated, and under the Proposed Agreement would continue to be calculated, based on the Fund’s net assets, including any preferred shares outstanding (though, as the Directors noted, RCS does not have any preferred shares outstanding)). The Trustees/Directors took into account that, under both the Current Agreements and the Proposed Agreement, PIMCO has a financial incentive for the Funds to have Preferred Shares and/or other forms of leverage outstanding, which may create a conflict of interest between PIMCO, on the one hand, and the Funds’ Common Shareholders, on the other. The Trustees/Directors further noted that this incentive will be greater under the Proposed Agreement in comparison to the Current Agreements (other than with respect to PDI and PCI) because the contractual management fee rates under the Proposed Agreement are higher for each Fund than under its Current Agreement (other than PDI and PCI), and the total fees paid to PIMCO under the Proposed Agreement will therefore vary more with increases and decreases in applicable leverage incurred by a Fund than under the Current Agreements. In this regard, the Trustees/Directors considered information provided by PIMCO and related presentations as to why each Fund’s use of leverage continues to be appropriate and in the best interests of the respective Fund under current market conditions. The Trustees/Directors also reviewed information provided by PIMCO relating to the estimated impact on each applicable Fund’s management fees and Operating Expenses of increasing such Fund’s leverage to the maximum practical level that could be attained without further Board approval, as calculated under both the Current Agreements (pursuant to which the Fund would pay management fees to PIMCO and separately pay Operating Expenses) and the Proposed Agreement (pursuant to which the Fund would pay the unified fee to PIMCO, which includes Operating Expenses), and noted the increase in each Fund’s net expenses under the Proposed Agreement under these circumstances were not substantial. The Trustees/Directors also considered
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PIMCO’s representation that it will use leverage for the Funds solely as it determines to be in the best interests of the Funds from an investment perspective and without regard to the level of compensation PIMCO receives.
With respect to each Fund, the Trustees/Directors reviewed, among other information, comparative information showing the proposed unified fee rate of the Fund under the Proposed Agreement, calculated both on average net assets and on average managed assets, against its Lipper expense group and the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets and average managed assets under the Proposed Agreement against its Lipper expense group. It was noted that the total expense ratio comparisons reflect the effect of expense waivers/reimbursements (although none were proposed for the Funds). The Trustees/Directors noted that only leveraged closed-end funds were considered for inclusion in the Lipper expense groups presented for comparison with the Funds.
The Trustees/Directors noted that, for each Fund other than RCS, the proposed unified fee rate for the Fund was above the median management fee of the other funds in its expense group provided by Lipper, considered both calculated on average net assets and on average managed assets. With respect to RCS, the Directors noted that the proposed unified fee rate for the Fund was below the median management fee of other funds in its expense group provided by Lipper calculated on average net assets (though the Directors noted that, unlike the funds offered for comparison, RCS does not pay fees on assets attributable to the types of leverage that the Fund currently employs) but above the median management fee of the other funds in its expense group provided by Lipper calculated on average managed assets. However, in this regard, the Trustees/Directors took into account that each Fund’s proposed unified management fee rate covers substantially all of the Fund’s Operating Expenses and therefore would tend to be higher than the management fee rates of other funds in the expense groups provided by Lipper, which generally do not have a unified fee structure and bear Operating Expenses separately in addition to the management fee. The Trustees/Directors determined that a review of each Fund’s total expense ratio with the total expense ratios of peer funds would generally provide more meaningful comparisons than considering contractual management fee rates in isolation.
The Trustees/Directors also reviewed, among other information, comparative information showing the total return performance of Common Shares of each Fund (based on net asset value) against its Lipper performance universe for the one-year, three-year, five-year and ten-year periods (to the extent such Fund had been in existence) ended December 31, 2013. For PCI, the Trustees reviewed comparative information showing the performance of PCI’s Common Shares from the period from PCI’s inception (January 31, 2013)
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through December 31, 2013. In addition, with respect to PDI and PCI, the Trustees also reviewed, among other information, supplemental comparative information showing the performance of PDI and PCI against peer funds selected by PIMCO for the one-year period, the period since April 30, 2013 and the period since the inception of the applicable Fund (to the extent the applicable Fund or peer fund was in existence) to February 28, 2014. Fund-specific performance results for the Funds reviewed by the Trustees/Directors are listed.discussed below.
Qualifications, EvaluationThe following summarizes comparative performance and Identificationfee and expense information considered for each Fund. The comparative performance information was prepared and provided by Lipper and, in the case of Trustee/Nominees.the supplemental comparative information for PDI and PCI described above, by PIMCO, and was not independently verified by the Trustees/Directors. Due to the passage of time, these performance results may differ from the performance results for more recent periods.
The Nominating Committee ofcomparative expense information reviewed by the Trustees/Directors was based on information by PIMCO with respect to the Funds and information provided by Lipper with respect to the other funds in the expense groups. With respect to PCI and PDI, PIMCO also provided comparative expense information against peer funds selected by PIMCO. The total expense ratio information for each Fund requiresdiscussed below was estimated by PIMCO assuming that Trustee candidates have a college degree or equivalent business experience. When evaluating candidates, each Fund’s Nominating Committee may takethe Proposed Agreement had been in effect for the 2013 calendar year, taking 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 of each Fund may, but is not required to, retain a third party search firm at the Fund’s expense to identify potential candidates.
Consideration of Candidates Recommended by Shareholders. The Nominating Committee of each Fund will review and consider nominees recommended by Shareholders to serve as Trustees, provided that the recommending Shareholder follows the “Procedures for Shareholders to Submit Nominee Candidates for the Allianz Global Investors Fund Management Sponsored Closed-End Funds,” which are set forth as Appendix B to the Funds’ Nominating Committee Charter. Among other requirements, these procedures provide that the recommending Shareholder must submit any recommendation in writing to the Fund, to the attentioneffects of the Fund’s Secretary, at the address of the principal executive offices of the Fundleverage outstanding for calendar year 2013. The fee and that such submission must be received at such officesexpense information was prepared and provided by Lipper or PIMCO (as noted) and was 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 for each Fund, which is available athttp://us.allianzgi.com/ClosedEndFund/External%20Documents/nominating_committee_charter.pdf, for details.
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The Nominating Committee has full discretion to reject nominees recommended by Shareholders, and there is no assurance that any such person properly recommended and consideredindependently verified by the Committee will be nominated for election to the Board of each Fund.Trustees/Directors.
Diversity. The Nominating Committee takes diversity of a particular nominee and overall diversity of the Board into account when considering and evaluating nominees for Trustee. While the Committee has not adopted a particular definition of diversity, when considering a nominee’s and the Board’s diversity, the Committee generally considers the manner in which each nominee’s professional experience, education, expertise in matters that are relevant to the oversight of the Funds (e.g., investment management, distribution, accounting, trading, compliance, legal), general leadership experience, and life experience are complementary and, as a whole, contribute to the ability of the Board to oversee the Funds.PTY
Valuation Committee. The Board of each Fund has a Valuation Committee currently consisting of Messrs. Gallagher, Jacobson, Kertess, Ogden, Rappaport and Ms. DeCotis. Mr. Ogden is the Chair of each Fund’s Valuation Committee. The Valuation Committee has been delegated responsibility by the Board for overseeing determination of the fair value of each Fund’s portfolio securities on behalf of the Board in accordance with the Fund’s valuation procedures. The Valuation Committee reviews and approves procedures for the fair valuation of each Fund’s portfolio securities and periodically reviews information from the Manager and the Sub-Adviser 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 of each Fund has a Compensation Committee currently consisting of Messrs. Gallagher, Jacobson, Kertess, Ogden, Rappaport and Ms. DeCotis. 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, the Sub-Adviser or any entity controlling, controlled by or under common control with the Manager or the Sub-Adviser.
Meetings. With respect to PMF, PCQ and PNF, during the fiscal year ended April 30, 2013, the Board of Trustees held four regular meetings and two special meetings. The Audit Oversight Committee met in separate session two times, the Nominating Committee met in separate session one time, the Valuation Committee met in separate session four times and the Compensation Committee met in separate session one time. Each Trustee attended in person or via
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teleconference at least 75% of the regular meetings of the Board and meetings of the committees on which such Trustee served for PMF, PCQ and PNF that were held during the fiscal year ended April 30, 2013.
With respect to PML, PCKthe Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had first quintile performance for the one-year, three-year, five-year and PNI, duringten-year periods ended December 31, 2013.
The Trustees noted that the fiscal year ended May 31, 2013,expense group for the BoardFund provided by Lipper consisted of a total of ten closed-end funds, including the Fund. The Trustees held four regular meetings and two special meetings. The Audit Oversight Committee met in separate session three times,also noted that the Nominating Committee met in separate session one time, the Valuation Committee met in separate session four times and the Compensation Committee met in separate session one time. Each Trustee attended in person or via teleconference at least 75%average net assets of the regular meetingscommon shares of the Boardfunds in the group ranged from $243.8 million to $1.956 billion, and meetingsthat two of the committeesfunds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on which such Trustee servedaverage net assets, the Trustees noted that the Fund’s estimated total expense ratio was below the median total expense ratio of the group of funds presented for PML, PCK and PNI that were held during the fiscal year ended May 31, 2013.comparison.
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PCN
With respect to PMX, PZCthe Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had second quintile performance for the one-year period, first quintile performance for the three-year and PYN, duringfive year-periods and second quintile performance for the fiscal yearten-year period ended September 30, 2013, the Board of Trustees held four regular meetings and one special meeting. The Audit Oversight Committee met in separate session three times, the Nominating Committee met in separate session one time, the Valuation Committee met in separate session four times and the Compensation Committee met in separate session one time. Each Trustee attended in person or via teleconference at least 75% of the regular meetings of the Board and meetings of the committees on which such Trustee served for PMX, PZC and PYN that were held during the fiscal year ended September 30,December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of ten closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $243.8 million to $1.956 billion, and that three of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PCI
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had first quintile performance for the period since inception through December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of six closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $122.4 million to $2.745 billion, and that no funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
In addition to the Lipper peer group information, the Board considered fee and expense information for the Fund in comparison to a group of closed-end funds that PIMCO identified as being competitor funds in the marketplace and private funds with similar investment strategies to those of the Fund. The Trustees noted that the Fund’s estimated total expense ratio (excluding interest expense) was below the median total expense (excluding interest expense) ratio of the group of closed-end funds presented for comparison by PIMCO.
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PDI
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had first quintile performance for the one-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of six closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $122.4 million to $1.048 billion, and that no funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
In addition to the Lipper peer group information, the Board considered fee and expense information for the Fund in comparison to a group of closed-end funds that PIMCO identified as being competitor funds in the marketplace and private funds with similar investment strategies to those of the Fund. The Trustees noted that the Fund’s estimated total expense ratio (excluding interest expense) was below the median total expense ratio (excluding interest expense) of the group of closed-end funds presented for comparison by PIMCO.
PGP
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund ranked first out of two funds for the one-year, three-year and five-year periods ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of eight closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $115.5 million to $260.0 million, and that five of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
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PHK
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had first quintile performance for the one-year, three-year and five-year periods and second quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of ten closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $243.8 million to $1.956 billion, and that two of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PKO
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had first quintile performance for the one-year, three-year and five-year periods ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of five closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $122.4 million to $370.2 million, and that no funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
RCS
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Directors noted that the Fund had first quintile performance for the one-year, three-year and five-year periods and ranked first out of three funds for the ten-year period ended December 31, 2013.
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The Directors noted that the expense group for the Fund provided by Lipper consisted of a total of five closed-end funds, including the Fund. The Directors also noted that the average net assets of the common shares of the funds in the group ranged $122.4 million to $379.8 million, and that no funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Directors noted that the Fund’s estimated total expense ratio was below the median total expense ratio of the group of funds presented for comparison.
PCM
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Directors noted that the Fund had first quintile performance for the one-year, three-year, five-year and ten-year periods ended December 31, 2013.
The Directors noted that the expense group for the Fund provided by Lipper consisted of a total of seven closed-end funds, including the Fund. The Directors also noted that the average net assets of the common shares of the funds in the group ranged from $74.6 million to $487.3 million, and that four of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Directors noted that the Fund’s estimated total expense ratio was below the median total expense ratio of the group of funds presented for comparison.
PCQ
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fourth quintile performance for the one-year period and first quintile performance for the three-year, five-year and ten-year periods ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of seven closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $33.1 million to $481.0 million, and that two of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
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PCK
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fifth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of seven closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $33.1 million to $481.0 million, and that two of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PZC
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fourth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of seven closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $33.1 million to $481.0 million, and that two of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PMF
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fifth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and second quintile performance for the ten-year period ended December 31, 2013.
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The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of nine closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $277.2 million to $710.0 million, and that seven of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PML
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had third quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of nine closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $277.2 million to $748.6 million, and that none of the funds in the group were larger in assets size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PMX
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fifth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of nine closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $277.2 million to $710.0 million, and that seven of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
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PNF
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fourth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of six closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $69.1 million to $275.7 million, and that three of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PNI
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had fifth quintile performance for the one-year period, first quintile performance for the three-year and five-year periods and fifth quintile performance for the ten-year period ended December 31, 2013.
The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of six closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $69.1 million to $275.7 million, and that two of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
PYN
With respect to the Fund’s Common Share total return performance (based on net asset value) relative to its respective Lipper performance universe, the Trustees noted that the Fund had third quintile performance for the one-year period, first quintile performance for the three-year period, second quintile performance for the five-year period and fifth quintile performance for the ten-year period ended December 31, 2013.
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The Trustees noted that the expense group for the Fund provided by Lipper consisted of a total of six closed-end funds, including the Fund. The Trustees also noted that the average net assets of the common shares of the funds in the group ranged from $52.4 million to $275.7 million, and that five of the funds in the group were larger in asset size than the Fund. With respect to the Fund’s estimated total expense ratio (excluding interest expense) calculated on average net assets, the Trustees noted that the Fund’s estimated total expense ratio was above the median total expense ratio of the group of funds presented for comparison.
In addition to their review of Fund performance based on net asset value, the Trustees/Directors also considered the market value performance of each Fund’s Common Shares and related share price premium and/or discount information based on the materials provided by Lipper and PIMCO.
The Trustees/Directors also considered profitability analyses provided by PIMCO, which included the estimated profitability to AGIFM as investment manager to the Funds for the one-year period ended December 31, 2012 (such estimate having been prepared by AGIFM); estimated profitability to PIMCO as sub-adviser to the Funds for the one-year periods ended December 31, 2012 and 2013;pro forma estimated profitability to PIMCO for the one-year period ended December 31, 2013 assuming the Proposed Agreement had been in effect; andpro forma estimated profitability to PIMCO under the Proposed Agreement for the calendar years ending December 31, 2014, 2015 and 2016. PIMCO provided profitability estimates under the Proposed Agreement reflecting a range of assumptions as to the allocation of internal expenses to its management of the Funds versus other types of products and services, and also estimated profitability both reflecting and not reflecting the amortization of the initial structuring fee payments and/or ongoing shareholder servicing and support payments PIMCO has made or will make to third parties with respect to the Funds. Based on the profitability analyses provided by PIMCO, the Trustees/Directors determined, taking into account the various assumptions made, that such profitability did not appear to be excessive.
The Trustees/Directors also took into account that, as closed-end Funds, the Funds do not attendcurrently intend to raise additional assets, so the annual shareholder meetings.assets of the Funds will grow (if at all) principally through the investment performance of each Fund. Therefore, the Trustees/Directors did not consider potential economies of scale as a principal factor in assessing the fee rates payable by each Fund under the Proposed Agreement, although they did take into account that the proposed unified fee rates reflect estimated reductions in Operating Expenses designed to allow the Funds to share up front in operational efficiencies PIMCO will attempt to realize as a result of the proposed transition.
Shareholder Communications
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Additionally, the Trustees/Directors considered so-called “fall-out benefits” to PIMCO, such as reputational value derived from serving as investment manager to the Funds and research, statistical and quotation services PIMCO may receive from broker-dealers executing the Funds’ portfolio transactions on an agency basis.
After reviewing these and other factors described herein, the Trustees/Directors concluded, with respect to each Fund, within the Boardcontext of Trustees. The Boardtheir overall conclusions regarding the Proposed Agreement and based upon the information provided and related representations made by PIMCO, that they were satisfied with PIMCO’s responses and efforts relating to the investment management and performance of Trusteesthe Fund. They also concluded that they were satisfied with PIMCO’s information and responses as to its resources and capabilities to serve as investment manager and administrator of each Fund has adopted proceduresunder the Proposed Agreement following the transition. The Trustees/Directors also concluded that the fees payable by which Shareholders may send communications toeach Fund under the Board. Shareholders may mail written communications to the Board to the attentionProposed Agreement represent reasonable compensation in light of the Boardnature, extent and quality of Trustees, [nameservices to be provided or procured by PIMCO under the Proposed Agreement. Based on their evaluation of Fund], c/o Thomas J. Fuccillo, Chief Legal Officer (“CLO”), Allianz Global Investorsfactors that they deemed to be material, including those factors described above, the Trustees/Directors, including the Independent Trustees/Directors, unanimously concluded that the approval of the Proposed Agreement was in the interests of each Fund Management LLC,and its Shareholders, and determined to recommend the same for approval by Shareholders.
Information about AGIFM
AGIFM is located at 1633 Broadway, New York, New York 10019. Shareholder communications must (i) beOrganized in writing2000, AGIFM provides investment management and be signed by the Shareholder and (ii) identify the class andadvisory services to a number of Shares heldclosed-end and open-end investment company clients. As of December 31, 2013, AGIFM and its investment management affiliates had approximately $57.08 billion in assets under management.
AGIFM is a wholly-owned indirect subsidiary of AAM. AAM was organized as a limited partnership under Delaware law in 1987. AAM’s sole general partner is Allianz Asset Management of America LLC. Allianz Asset Management of America LLC has three members, Allianz of America, Inc. (“Allianz of America”), a Delaware corporation that owns a 99.8% non-managing interest, Allianz Asset Management of America Holdings Inc., a Delaware corporation which owns a 0.1% managing interest, and Allianz Asset Management Aktiengesellschaft, which owns a 0.1% non-managing interest. Allianz of America is a wholly-owned indirect subsidiary of Allianz. Allianz Asset Management of America Holdings Inc. is a wholly-owned subsidiary of Allianz Asset Management Aktiengesellschaft, which is an indirect subsidiary of
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Allianz. Allianz indirectly holds a controlling interest in AAM. Allianz is a European-based, multinational insurance and financial services holding company. The address for AAM, Allianz Asset Management of America LLC and Allianz Asset Management of America Holdings Inc. is 680 Newport Center Drive, Suite 250, Newport Beach, California 92660. The address for Allianz Asset Management Aktiengesellschaft is Seidlstrasse 24-24a, D-80335, Munich, Germany. Allianz’ address is Koeniginstrasse 28, D-80802, Munich, Germany.
The principal executive officers and directors of AGIFM are presented inAppendix D.
AGIFM currently serves as investment manager of the Funds. If the Proposed Agreement is approved with respect to a Fund, AGIFM will no longer serve in such capacity and will be replaced by PIMCO, which currently serves as the Shareholder. The CLOsub-adviser of each Fund, or his designee is responsible for reviewing properly submitted shareholder communications. The CLO shall either (i) provideat a copy of each properly submitted shareholder communicationdate and time mutually agreeable to the Board atFunds, PIMCO and AGIFM following such shareholder approval in order to effect an efficient transition for the Fund and its next regularly scheduled Board meeting or (ii) ifShareholders. The approval of the CLO determines that the communication requires more immediate attention, forward the communication to the Trustees promptly after receipt. The CLO may, in good faith, determine that a shareholder communication should not be provided to the Board because it does not reasonably relateProposal with respect to a Fund or its operations,is not contingent upon the approval of the Proposal with respect to any other Fund. See “Description of Current Agreements” above.
Information about PIMCO
PIMCO is located at 840 Newport Center Drive, Newport Beach, California 92660. Organized in 1971, PIMCO provides investment management activities, policies, service providers, Board, officers, shareholders or other mattersand advisory services for a wide range of investors, including public and private pension and retirement plans, educational institutions, foundations, endowments, corporations, financial advisors, individuals and others around the globe. As of December 31, 2013, PIMCO had approximately $1.91 trillion in assets under management.
PIMCO is a majority owned subsidiary of AAM with a minority interest held by PIMCO Partners, LLC. PIMCO Partners, LLC is owned by the current managing directors and executive management of PIMCO. Information relating to anAAM is provided above.
The principal executive officers and directors of PIMCO are presented inAppendix E.
PIMCO currently serves as the sub-adviser of the Funds. If the Proposed Agreement is approved with respect to a Fund, PIMCO will continue to be responsible for the day-to-day management of the Fund’s investment portfolio, and will replace its affiliate, AGIFM, as the investment manager of the Funds.
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investmentThe change will take place at a date and time mutually agreeable to the Funds, PIMCO and AGIFM following such Shareholder approval in the Fund or is otherwise routine or ministerial in nature. These procedures do not applyorder to (i) any communication fromeffect an officer or Trustee of a Fund, (ii) any communication from an employee or agent of a 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. A Fund’s Trustees are not required to attend the Fund’s annual shareholder meetings or to otherwise make themselves available to shareholdersefficient transition for communications, other than by the aforementioned procedures.
Section 16(a) Beneficial Ownership Reporting Compliance. Each Fund’s Trustees and certain officers, investment advisers, certain affiliated persons of the investment advisers and persons who beneficially own more than 10% of any class of outstanding securities of a Fund (i.e., a 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 ownershipits Shareholders. The approval of the Fund’s securitiesProposal with respect to a Fund is not contingent upon the Securities and Exchange Commission (the “SEC”) andapproval of the NYSE. These persons and entities are required by SEC regulationProposal with respect to furnishany other Fund. See “Description of Proposed Agreement” above.
Required Vote
Approval of the Fund with copies of all such forms they file. Based solely on a review of these forms furnished toProposed Agreement for each Fund each Fund believes that each of the Trustees and relevant officers, investment advisers and relevant affiliated persons of the investment advisers and the persons who beneficially own more than 10% of any class of outstanding securities of such Fund has complied with all applicable filing requirements during each Fund’s respective fiscal years ended April 30, 2013, May 31, 2013 and September 30, 2013.
Required Vote. The re-election of Ms. DeCotis to the Board of Trustees of PMF, PCQ, PNF, PML, PCK and PNI and the re-election of Mr. Gallagher to the Board of Trustees of PMX, PZC and PYN, will requirerequires the affirmative vote of a plurality“majority of the votesoutstanding voting securities” of such Fund, which means the affirmative vote of the lesser of (i) more than 50% of the outstanding Shares of the Fund or (ii) 67% or more of the Shares of the Fund present at the Special Meeting or represented by proxy, if more than 50% of the outstanding Shares of the Fund are present or represented by proxy. For each Fund that has Preferred Shares outstanding, the holders of Common ShareholdersShares and Preferred Shareholders (votingPreferredShares of the Fund will have equal voting rights (i.e., one vote per Share) and will vote together as a single class)class with respect to the approval of the relevantProposed Agreement for such Fund. The approval of the Proposal with respect to a Fund castis not contingent upon the approval of the Proposal with respect to any other Fund. If the Shareholders of a Fund do not approve the Proposal, the Fund’s Trustees/Directors will take such further action as they may deem to be in the election of Trustees at the Meeting, in person or by proxy. The re-election of Mr. Jacobson to the Board of Trustees of each Fund will require the affirmative vote of a pluralitybest interests of the votesShareholders of the Preferred Shareholders (voting as a separate class) of the relevant Fund cast in the re-election of the Preferred Shares Trustee at the Meeting, in person or by proxy.Fund.
THE BOARD OF TRUSTEESTRUSTEES/DIRECTORS OF EACH FUND, INCLUDING THE INDEPENDENT TRUSTEES/DIRECTORS, UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.PROPOSAL FOR YOUR FUND.
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ADDITIONALII. FUND INFORMATION
This section provides certain information about each Fund, including information about its current and proposed investment manager and executive officers, as well as the identity of persons holding more than 5% of the outstanding Shares of any class of the Fund.
Current Investment Manager
AGIFM, with principal offices at 1633 Broadway, New York, New York 10019, currently serves as the investment manager for each Fund.
Current Executive and Other Officers of the Funds.Funds
The table below provides certain information concerning the executive officers of the Funds and certain other officers who perform similar duties. Officers of the Funds hold office at the pleasure of the relevant Board and until their successors are chosen and qualified, or in each case until he or she sooner dies, resigns, is removed with or without cause or becomes disqualified. Officers and employees of the Funds who are principals, officers, members or employees of the ManagerAGIFM or the Sub-AdviserPIMCO are not compensated by the Funds. PIMCO intends to recommend that the Board of each Fund approve a new slate of Fund officers, all of whom are employees of PIMCO, to replace the current officers, contingent upon the Proposal being approved by Shareholders, as described under “Proposed Executive and Other Officers of the Funds” below.
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Name, and Year of | Position(s) | Term of Office Length of Time Served | Principal Occupation(s) During | |||
| President & Chief Executive Officer |
| Chairman of the Management Board | |||
Lawrence G. Altadonna 1966 | Treasurer, Principal Financial and Accounting Officer |
PDI — Since inception (2012) PGP — Since inception (2005) PHK — Since inception (2003) PKO — Since inception (2007) RCS & PCM— Since 2008 PTY, PCN, PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2002
| Director and Director of Fund Administration of Allianz Global Investors Fund Management LLC; Treasurer, Principal Financial and Accounting Officer of 85 funds in the Fund Complex and of The Korea Fund, Inc. Formerly, Assistant Treasurer of 50 funds in the Fund Complex (2005-2010). | |||
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Name, and Year of | Position(s) | Term of Office Length of Time Served | Principal Occupation(s) During | |||
Thomas J. Fuccillo 1968 | Vice President, Secretary and Chief Legal Officer | PCI — Since inception (2013) PDI — Since inception (2012) PGP — Since inception (2005) PKO — Since inception (2007) RCS & PCM — Since 2008 PTY, PCN, PHK, PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2004 | Managing Director, Chief Legal Officer and Secretary of Allianz Global Investors Fund Management LLC and Allianz Global Investors Distributors LLC; Managing Director and Chief Regulatory Counsel of Allianz Global Investors U.S. Holdings LLC; Vice President, Secretary and Chief Legal Officer of 85 funds in the Fund Complex; and Secretary and Chief Legal Officer of The Korea Fund, Inc. | |||
Thomas L. Harter, CFA 680 Newport Center Drive, Suite 250 Newport Beach, CA 92660 1975 | Chief Compliance Officer | PTY, PCN, PCI, PDI, PHK, PKO, RCS, PCM PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2013 | Director of Allianz Global Investors U.S. Holdings LLC; | |||
Lagan Srivastava 1977 | Assistant Secretary | PCI — Since inception (2013) PDI — Since inception (2012) PKO — Since inception (2007) RCS & PCM — Since 2008 PTY, PCN, PGP, PHK, PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2006 | Vice President of Allianz Global Investors U.S. Holdings LLC; Assistant Secretary of 85 funds in the Fund Complex and of The Korea Fund, Inc. | |||
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Name, Address* | Position(s) | Term of Office | Principal Occupation(s) During | |||
Scott Whisten 1971 | Assistant Treasurer | PCI — Since inception (2013) PDI — Since inception (2012) PCM — Since 2008 PTY, PCN, PGP, PHK, RCS, PKO, PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2007 | Director of Allianz Global Investors Fund Management LLC; and Assistant Treasurer of 85 funds in the Fund Complex. | |||
Richard J. Cochran 1961 | Assistant Treasurer | PCI — Since inception (2013) PDI — Since inception (2012) PTY, PCN, PKO, PCM, PHK, PGP, RCS PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2008 | Vice President of Allianz Global Investors Fund Management LLC; Assistant Treasurer of 85 funds in the Fund Complex and of The Korea Fund, Inc. | |||
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|
|
| |||||||
Orhan Dzemaili 1974 | Assistant Treasurer | PCI — Since inception (2013) PDI — Since inception (2012) PTY, PCN, PKO, PCM, PGP, PHK, RCS, PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, PYN — Since 2011 | |||||||
| * | Unless otherwise noted, the address of the Funds’ officers is Allianz Global Investors Fund Management LLC, 1633 Broadway, New York, New York 10019. |
Each of the Funds’ executive officers is an “interested person” of each Fund (as defined in Section 2(a)(19) of the 1940 Act) as a result of his or her position(s) set forth in the table above.
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Investment ManagerProposed Executive and Sub-Adviser.Other Officers of the Funds
Contingent upon the Proposal being approved by Shareholders of a Fund, PIMCO intends to recommend that the Board appoint a new slate of Fund officers, all of whom are employees of PIMCO, to replace the current slate of Fund officers upon the effectiveness of such Fund’s Proposed Agreement. The Manager, located at 1633 Broadway, New York, New York 10019, serves astable below provides certain information concerning the investment managerproposed executive officers of the Funds and certain other proposed officers who will perform similar duties. The proposed officers listed below are subject to change and are subject to approval by each Fund’s Board. If approved and appointed, the proposed officers of the Funds will, once they begin their service in such capacities, hold office at the pleasure of the relevant Board and until their successors are chosen and qualified, or in each case until he or she sooner dies, resigns, is responsible for managingremoved with or without cause or becomes disqualified. The proposed officers of the Funds who are principals, officers, members or employees of PIMCO will not be compensated by the Funds. If approved and appointed, it is expected that each officer’s term of office will begin with respect to a Fund upon execution of the Proposed Agreement with such Fund.
Name, Address | Position(s) to be Held with Funds | Principal Occupation(s) During the Past 5 Years | ||
Peter G. Strelow1 1970 | President; Principal Executive Officer | Managing Director, PIMCO. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust and PIMCO ETF Trust. President, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
Youse Guia1 1972 | Chief Compliance Officer | Senior Vice President and Deputy Chief Compliance Officer, PIMCO. Chief Compliance Officer of two Funds in the Fund Complex. Formerly, Head of Compliance, Allianz Global Investors U.S. Holdings LLC and Chief Compliance Officer of the Funds, Allianz Funds, Allianz Multi-Strategy Trust, AllianzGI Managed Accounts Trust, Premier Multi-Series VIT and The Korea Fund, Inc., collectively 82 funds in the Allianz Funds Complex. | ||
Joshua D. Ratner2 1976 | Vice President, Secretary and Chief Legal Officer | Senior Vice President and Attorney, PIMCO. Chief Legal Officer, PIMCO Investments. Vice President - Senior Counsel, Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
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Name, Address | Position(s) to be Held with Funds | Principal Occupation(s) During the Past 5 Years | ||
Eric D. Johnson2 1970 | Vice President | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
William G. Galipeau1 1974 | Treasurer, Principal Financial & Accounting Officer | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. Formerly, Vice President, Fidelity Investments. | ||
Erik C. Brown1 1967 | Vice President | Senior Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
Trent W. Walker1 1974 | Assistant Treasurer | Senior Vice President, PIMCO. Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
Stacie D. Anctil1 1969 | Assistant Treasurer | Senior Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series and PIMCO Equity Series VIT. | ||
Adam Lantz2 1965 | Assistant Secretary | Vice President and Attorney, PIMCO. Formerly, Director and Associate General Counsel, Merrill Lynch. | ||
| 1 | The address of these proposed officers is Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, California 92660. |
| 2 | The address of these proposed officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
Each of the Funds’ business affairs and administrative matters. The Manager retains its affiliate PIMCO as Sub-Adviser to the Funds. PIMCO is located at 840 Newport Center Drive, Newport Beach, CA 92660. The Manager and the Sub-Adviser are each majority-owned indirect subsidiaries of Allianz SE, a publicly traded European insurance and financial services company.
Independent Registered Public Accounting Firm. The Audit Oversight Committee of each Fund’s Board and the full Board unanimously selected PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm for the fiscal years ending April 30, 2014 for PMF, PCQ and PNF, May 31, 2014 for PML, PCK and PNI and September 30, 2014 for PMX, PZC and PYN. PwC served as the independent registered public accounting firmproposed officers will be an “interested person” of each Fund for the last fiscal year and also serves as the independent registered public accounting firm of various other investment companies for which the Manager and the Sub-Adviser serve as investment adviser or sub-adviser. PwC is located at 300 Madison Avenue, New York, New York 10017. None(as defined in Section 2(a)(19) of the Funds knows1940 Act) as a result of any direct financialhis or material indirect financial interest of PwC in the Funds.
A representative of PwC, if requested by any Shareholder, will be present at the Meeting via telephone to respond to appropriate questions from Shareholders and will have an opportunity to make a statement if he or she chooses to do so.
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Pre-approval Policies and Procedures. Each 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 registered public accounting firm. Under the policies, on an annual basis, a Fund’s Audit Oversight Committee reviews and pre-approves proposed audit and permitted non-audit services to be performed by the independent registered public accounting firm on behalf of the Fund. The President of each Fund also pre-approves any permitted non-audit services to be provided to the Fund.
In addition, each Fund’s Audit Oversight Committee pre-approves annually any permitted non-audit services (including audit-related services) to be provided by the independent registered public accounting firm to the Manager, the Sub-Adviser 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 registered public accounting firm 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 registered public accounting firm showing the aggregate fees paid by Accounting Affiliates for such services.
Each 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 each Fund’s Audit Oversight Committee (or any other member of the Committee to whom this responsibility has been delegated) may also pre-approve these 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 by a 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 Funds or their 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
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regulatory filings or engagements. For each Fund’s last two fiscal years, the Audit Fees billed by PwC are shown in the table below:
Fund | Fiscal Year Ended | Audit Fees | ||||||
PMF | April 30, 2013 | $ | 53,460 | |||||
| April 30, 2012 | $ | 49,005 | ||||||
PCQ | April 30, 2013 | $ | 46,649 | |||||
| April 30, 2012 | $ | 42,603 | ||||||
PNF | April 30, 2013 | $ | 29,891 | |||||
| April 30, 2012 | $ | 27,417 | ||||||
PML | May 31, 2013 | $ | 66,065 | |||||
| May 31, 2012 | $ | 57,338 | ||||||
PCK | May 31, 2013 | $ | 40,197 | |||||
| May 31, 2012 | $ | 34,868 | ||||||
PNI | May 31, 2013 | $ | 30,738 | |||||
| May 31, 2012 | $ | 26,819 | ||||||
PMX | September 30, 2013 | $ | 45,000 | |||||
| September 30, 2012 | $ | 57,370 | ||||||
PZC | September 30, 2013 | $ | 43,000 | |||||
| September 30, 2012 | $ | 44,460 | ||||||
PYN | September 30, 2013 | $ | 42,000 | |||||
| September 30, 2012 | $ | 27,170 | ||||||
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, and that include 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 each Fund’s last two fiscal years, the Audit-Related Fees billed by PwC to that Fund. During those fiscal years, there were no Audit-Related Fees billed by PwC to the Funds’ Accounting Affiliates for audit-related services related directly to the operation and financial reporting of the Funds.
Fund | Fiscal Year Ended | Audit-Related Fees | ||||||
PMF | April 30, 2013 | $ | 8,334 | |||||
| April 30, 2012 | $ | 10,293 | ||||||
PCQ | April 30, 2013 | $ | 8,333 | |||||
| April 30, 2012 | $ | 8,949 | ||||||
PNF | April 30, 2013 | $ | 8,333 | |||||
| April 30, 2012 | $ | 5,758 | ||||||
PML | May 31, 2013 | $ | 8,334 | |||||
| May 31, 2012 | $ | 12,043 | ||||||
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Fund | Fiscal Year Ended | Audit-Related Fees | ||||||
PCK | May 31, 2013 | $ | 8,333 | |||||
| May 31, 2012 | $ | 6,313 | ||||||
PNI | May 31, 2013 | $ | 8,333 | |||||
| May 31, 2012 | $ | 5,633 | ||||||
PMX | September 30, 2013 | $ | 8,333 | |||||
| September 30, 2012 | $ | 11,119 | ||||||
PZC | September 30, 2013 | $ | 8,333 | |||||
| September 30, 2012 | $ | 8,617 | ||||||
PYN | September 30, 2013 | $ | 8,333 | |||||
| September 30, 2012 | $ | 5,266 | ||||||
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 each Fund’s last two fiscal years, the aggregate Tax Fees billed by PwC to each Fund. During those fiscal years, there were no Tax Fees billed by PwC to the Funds’ Accounting Affiliates for audit-related services related directly to the operation and financial reporting of the Funds:
Fund | Fiscal Year Ended | Tax Fees | ||||||
PMF | April 30, 2013 | $ | 10,800 | |||||
| April 30, 2012 | $ | 10,450 | ||||||
PCQ | April 30, 2013 | $ | 10,800 | |||||
| April 30, 2012 | $ | 10,450 | ||||||
PNF | April 30, 2013 | $ | 10,800 | |||||
| April 30, 2012 | $ | 10,450 | ||||||
PML | May 31, 2013 | $ | 10,800 | |||||
| May 31, 2012 | $ | 10,800 | ||||||
PCK | May 31, 2013 | $ | 10,800 | |||||
| May 31, 2012 | $ | 10,800 | ||||||
PNI | May 31, 2013 | $ | 10,800 | |||||
| May 31, 2012 | $ | 10,800 | ||||||
PMX | September 30, 2013 | $ | 10,800 | |||||
| September 30, 2012 | $ | 10,800 | ||||||
PZC | September 30, 2013 | $ | 10,800 | |||||
| September 30, 2012 | $ | 10,800 | ||||||
PYN | September 30, 2013 | $ | 10,800 | |||||
| September 30, 2012 | $ | 10,800 | ||||||
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
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each Fund’s last two fiscal years, no such fees were billed by PwC to the Fund or the Fund’s Accounting Affiliates.
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, during each Fund’s last two fiscal years, for services rendered to each Fund and the Fund’s Accounting Affiliates are shown in the table below:
Fund | Fiscal Year Ended | Aggregate Non-Audit Fees for Fund | Non-Audit Fees for Accounting Affiliates | Aggregate Non-Audit Fees | ||||||||||||
PMF | April 30, 2013 | $ | 19,134 | $ | 7,259,653 | $ | 7,278,787 | |||||||||
| April 30, 2012 | $ | 20,743 | $ | 6,339,313 | $ | 6,360,056 | ||||||||||
PCQ | April 30, 2013 | $ | 19,133 | $ | 7,259,654 | $ | 7,278,787 | |||||||||
| April 30, 2012 | $ | 19,399 | $ | 6,340,657 | $ | 6,360,056 | ||||||||||
PNF | April 30, 2013 | $ | 19,133 | $ | 7,259,654 | $ | 7,278,787 | |||||||||
| April 30, 2012 | $ | 16,208 | $ | 6,343,848 | $ | 6,360,056 | ||||||||||
PML | May 31, 2013 | $ | 19,134 | $ | 6,317,716 | $ | 6,336,850 | |||||||||
| May 31, 2012 | $ | 22,843 | $ | 7,151,968 | $ | 7,174,811 | ||||||||||
PCK | May 31, 2013 | $ | 19,133 | $ | 6,317,717 | $ | 6,336,850 | |||||||||
| May 31, 2012 | $ | 18,124 | $ | 7,156,687 | $ | 7,174,811 | ||||||||||
PNI | May 31, 2013 | $ | 19,133 | $ | 6,317,717 | $ | 6,336,850 | |||||||||
| May 31, 2012 | $ | 16,433 | $ | 7,158,378 | $ | 7,174,811 | ||||||||||
PMX | September 30, 2013 | $ | 19,133 | $ | 7,468,750 | $ | 7,487,883 | |||||||||
| September 30, 2012 | $ | 21,919 | $ | 6,877,774 | $ | 6,899,693 | ||||||||||
PZC | September 30, 2013 | $ | 19,133 | $ | 7,468,750 | $ | 7,487,883 | |||||||||
| September 30, 2012 | $ | 19,417 | $ | 6,919,110 | $ | 6,899,693 | ||||||||||
PYN | September 30, 2013 | $ | 19,133 | $ | 7,468,750 | $ | 7,487,883 | |||||||||
| September 30, 2012 | $ | 16,066 | $ | 6,883,627 | $ | 6,899,693 | ||||||||||
Each 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 was compatible with maintaining the independence of PwC as the Fund’s principal auditors.
Other Business. As of the date of this Proxy Statement, each Fund’s officers and the Manager know of no business to come before the Meeting other than asher position(s) set forth in the Notice. Iftable above.
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Interested Trustees/Directors of the Funds
The following table lists the names of each Trustee/Director of the Funds who is also an officer, employee, director, general partner or shareholder of AGIFM or PIMCO:
Name | Position with the Funds | Position with AGIFM or PIMCO | ||
| John C. Maney | Trustee/Director | Member of the Management Board and a Managing Director of AGIFM; Managing Director of AAM (since January 2005) and a member of the Management Board and Chief Operating Officer of AAM (since November 2006). |
Craig A. Dawson, a Managing Director and Head of Strategic Business Management of PIMCO, has been nominated and appointed as an interested Trustee/Director of each Fund, subject to approval by Shareholders of the Proposed Agreement for such Fund. Mr. Dawson would take office as a Trustee/Director for a Fund upon the effectiveness of the Fund’s Proposed Agreement.
Other Funds Managed by PIMCO
PIMCO does not advise or sub-advise any other business is properly brought beforefunds with objectives similar to those of a Fund.
Brokerage and Research Services
The Funds did not pay any commissions to an affiliated broker during the Meeting, the persons named as proxies will vote in their sole discretion.most recently completed fiscal year.
Outstanding Shares, Number of Shares Entitled to Vote and Significant Shareholders
Information about the number of outstanding Shares, the number of Shares entitled to vote and significant Shareholders of the Funds is set forth inAppendix F.
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III. VOTING INFORMATION
Record Date, Quorum Adjournments and Methods of Tabulation.Tabulation
Shareholders of record at the close of business on April 9, 2014 are entitled to notice of, and to vote at, the Special Meeting. A quorum for each Fund at the applicableSpecial Meeting will consist of the presence in person or by proxy
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of thirty percent (30%) of the total Shares of the Fund entitled to vote at such Special Meeting except(except for RCS and PCM, for which a majority of the Shares of the Fund entitled to vote at the Special Meeting will constitute a quorum).
Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote. Shares represented by timely, duly executed proxies will be voted as you instruct.If no specification is made, Shares will be voted in accordance with the recommendation of the Trustees/Directors.Proxies may be revoked at any time before they are exercised by timely delivering a signed, written letter of revocation to the Secretary of the applicable Fund, by properly executing and timely submitting a later-dated proxy vote, or by attending the Special Meeting and voting in person and affirmatively requesting at the Special Meeting that wherea prior proxy be revoked. Valid photo identification and proof of ownership of Shares may be required to attend the Special Meeting in person.
Votes cast by proxy or in person at the Special Meeting will be counted by persons appointed by the Funds as tellers/inspectors of elections both for the purpose of determining the presence of a quorum and for calculating the votes cast on the issues before the Special Meeting. For purposes of determining the presence of a quorum for each Fund, the tellers will include the total number of Shares present at the Special Meeting in person or by proxy, including Shares represented by proxies that reflect abstentions.Abstentions will have the effect of a vote AGAINST the Proposal. As a result, you are urged to complete and send in your proxy or voting instructions so your vote can be counted.
Broker-dealer firms holding Shares in “street name” for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares on the Proposal. Under current interpretations of the New York Stock Exchange (the “NYSE”) rules, broker-dealers that are members of the NYSE and that have not received instructions from a customer may not vote such customer’s Shares on the Proposal. Proxies that reflect abstentions or broker “non-votes” (that is, shares held by brokers or nominees as to which (a) instructions have not been received from the beneficial owner or other persons entitled to vote, and (b) the brokers or nominees do not have discretionary voting power on a particular matter) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a
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quorum.Broker non-votes with respect to the Proposal will have the effect of a vote AGAINST the Proposal. As a result, you are urged to complete and send in your proxy or voting instructions so your vote can be counted.
Broker-dealers who are not members of the NYSE may be subject to other rules, which may or may not permit them to vote your Shares without instruction. Therefore, if you beneficially own Shares that are held in “street name” through a broker-dealer and if you have not given or do not give voting instructions for your Shares, your Shares may not be voted at all or may be voted in a manner that you may not intend.
Preferred Shares held in “street name” as to which voting instructions have not been received from the beneficial owners or persons entitled to vote as of one business day before the Special Meeting, or, if adjourned, one business day before the day to which a Meeting is adjourned for a Fund, and that would otherwise not be counted, may, pursuant to NYSE Rule 452, be voted by the broker in the same proportion as the votes cast by all Preferred Shareholders of such Fund who have voted on that item. Rule 452 permits proportionate voting of Preferred Shares if, among other things, (i) holders of Common Shares approve the Proposal, (ii) a minimum of 30% of the Preferred Shares or Commonoutstanding has been voted by the holders of such Preferred Shares, will vote as separate classes, then 30%and (iii) less than 10% of the sharesPreferred Shares outstanding has been voted by the holders of such Preferred Shares against the Proposal.
Adjournments
With respect to each class entitled to vote will be necessary to constitute a quorum for the transaction of business by that class. InFund, in the event that a quorum is not present at a Meetingfor purposes of acting on the Proposal, or, even if a quorum is present, in the event thatif sufficient votes in favor of the proposal set forth in the NoticeProposal are not received by the time scheduled for aof the Special Meeting, the persons named as proxies may propose one or more adjournments of such Meeting after the date set for the original Meeting, with no other notice than announcement at theSpecial Meeting to permit further solicitation of proxies with respect to the Proposal. In addition, if, in the judgment of the persons named as proxies for a Fund, it is advisable to defer action on the Proposal, the persons named as proxies may propose one or more adjournments of the applicable Meeting with respect to the Proposal for a reasonable time.such Fund. Any adjournments with respect to the Proposalsuch adjournment will require the affirmative vote of a plurality of the Shares of the relevant Fund entitled to vote thereon present in person or represented by proxy at the sessionSpecial Meeting (except for RCS and PCM, for which the affirmative vote of a majority of the Shares of the relevant Fund entitled to vote thereon present in person or represented by proxy at the Special Meeting is required) to be adjourned. In the case of a proposal to elect Trustees recommended by the Nominating Committee, theThe persons named as proxies will vote in favor of such adjournment those proxies which they are entitled to vote in favor of one or more of the nominees.any proposal that has not then been adopted. They will vote against any such adjournment those proxies submittedrequired to be voted against each proposal that instructhas not then been adopted and will not vote any proxies that direct them to withhold all votesabstain from voting on the nominees. The costs ofsuch proposals. For each Fund, any additional solicitation and of any adjourned session will be borne by the applicable Fund. Any proposals properly before a Meetingproposal for which sufficient favorable votes have been received by the time of the Special Meeting will be
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acted upon and such action will be final regardless of whether the Special Meeting is adjourned to permit additional solicitation with respect to another proposal for that Fund or a proposal for any other proposal. In certain circumstancesFund.
Solicitation of Proxies
The solicitation of proxies by personal interview, mail, e-mail and telephone may be made by officers and Trustees/Directors of the Funds and officers and employees of PIMCO, their affiliates and other representatives of the Funds. PIMCO has retained AST Fund Solutions to aid in which a Fund has received sufficient votesthe solicitation of proxies (which is estimated to approve a matter being recommended for approvalcost approximately $525,900), and this cost and the costs of preparing, printing and mailing this Proxy Statement and the cost of holding the Special Meeting (including the costs of any additional solicitation and any adjourned session) will be borne by PIMCO and not by the Fund’s Board, the Fund may request that brokers and nominee entities, in their discretion, withhold or withdraw submissionFunds.
Methods of broker non-votes in order to avoid the need for solicitation of additional votes in favor of the proposal.
Votes cast by proxy or in person at a Meeting will be counted by persons appointed by the Funds as tellers (the “Tellers/Inspectors”) for the Meeting. For purposes of determining the presence of a quorum for each Fund, the Tellers/Inspectors will include the total number of Shares present at a Meeting in person or by proxy, including 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 entitled to vote and the broker or nominee does not have the discretionary voting power on a particular matter). For a proposal requiring approval of a plurality of votes cast, such as the election of Trustees, abstentions and broker non-votes will have no effect on the outcome of any Proposal for the election of Trustees for a Fund.
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Reports to Shareholders. Below are the dates on or about which the Annual Reports to Shareholders for the most recently completed fiscal year of each Fund were or are expected to be mailed:
| ||||
| ||||
| ||||
| ||||
Additional copies of the Funds’ Annual Reports and Semi-Annual Reports may be obtained without charge from the Funds by calling1-800-254-5197 or by writing to the Funds at 1633 Broadway, New York, New York 10019.Voting
Voting by Internet and Touch-Tone Telephone: You may give your voting instructions via the Internet or by touch-tone telephone by following the instructions on the proxy card.
Telephone Voting: You may give your voting instructions over the telephone by calling the phone number listed on your proxy card. If you have any questions regarding the Proxy Statement or the Proposal please call(877) 361-7967. When receiving your instructions by telephone, the representative may ask you for your full name and address to confirm that you have received the Proxy Statement in the mail. If the information you provide matches the information provided to AST Fund Solutions by the applicable Fund, then a representative can record your instructions over the phone and transmit them to the official tabulator.
As the Special Meeting date approaches, you may receive a call from a representative of AST Fund Solutions if your vote has not yet been received.
Voting by Mail: If you wish to participate in the Special Meeting, but do not wish to give a proxy by telephone or via the Internet, you can still complete, sign and mail the proxy card received with the Proxy Statement by following the instructions on the proxy card, or you can attend the Special Meeting and vote in person.
Shareholder Proposals for theeach Fund’s Next Annual Meeting for the 2014-2015 Fiscal Year.
It is currently anticipated that each Fund’sthe next annual meeting of Shareholders after the Special Meeting addressed in this Proxy Statement will be held in July 2014
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for PGP and RCS, December 2014.2014 for PHK, PDI, PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN, and April 2015 for PTY, PCN, PKO, PCI and PCM. Proposals of Shareholders intended to be presented at thatthe annual meeting of eacha Fund must be (or must have been) received by eachthe relevant Fund no later than January 22, 2014 for PGP and RCS, June 30, 2014 for PHK and PDI, July 22, 2014 for PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN, or October 31, 2014 for PTY, PCN, PKO, PCI and PCM for inclusion in eachsuch Fund’s proxy statement and proxy cards relating to that annual meeting. The submission by a Shareholder of a proposal for inclusion in thea Fund’s 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 applicable Fund’s Bylaws. Shareholders submitting any other proposals (including proposals to elect TrusteeTrustee/Director nominees) for eacha Fund intended to be presented at thesuch Fund’s next annual meeting for the 2014-2015 fiscal year (i.ei.e.,., other than those to be included in the Fund’s proxy materials) must ensure that such proposals are received by eachthe relevant Fund, in good order and complying with all applicable legal requirements and requirements set forth in eachsuch Fund’s Bylaws. Each Fund’sThe Bylaws of each Fund other than PCM provide that any such proposal must be received in writing by eachthe relevant Fund not less than 45 days nor more than 60 days prior to the first anniversary date of the date on which eachsuch Fund first mailed its proxy materials for the prior year’s annual shareholder meeting; provided that, if, in accordance with applicable law, the upcoming annual shareholder meeting is set for a date that is not within 30 days from the anniversary of eachsuch Fund’s prior annual shareholder meeting, such proposal must be received by the later of the close of business on (i) the date 45 days prior to such upcoming annual shareholder meeting date or (ii) the 10th10th business day following the date such upcoming annual shareholder meeting date is first publicly announced or disclosed. PCM’s Bylaws provide that any such proposal must be received in writing by the Fund not less than 60 days nor more than 90 days prior to the first anniversary date of the annual meeting for the prior year; provided that, if, in accordance with applicable law, the annual meeting is not set for a date that is within 30 days from the anniversary of the Fund’s prior shareholder meeting, such proposals must be received by the later of the close of business on (i) the date 60 days prior to such upcoming shareholder meeting date or (ii) the 14th business day following the date such upcoming shareholder meeting date is first publicly announced or disclosed.
Assuming the nexteach Fund’s annual meeting is ultimately scheduled to be within 30 days of the December 18 anniversary of this year’sits most recent annual meeting, such proposals must be (or must have been) received no earlier than March 23, 2014 and no later than April 7, 2014 for PGP and RCS, no earlier than August 29, 2014 and no later than September 13, 2014 for PHK and PDI, no earlier than September 20, 2014 and no later than October 5, 2014 for PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN, no
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2014.earlier than December 30, 2014 and no later than January 14, 2015 for PCN, PTY and PKO and no earlier than November 30, 2014 and no later than December 30, 2014 for PCM. If a Shareholder who wishes to present a proposal fails to notify the relevant Fund within these dates described above, the proxies solicited for thethat annual meeting will be voted on the Shareholder’s proposal, if it is properly brought before thethat annual meeting, in accordance with the judgment of the persons named in the enclosed proxy card(s). for that annual 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 for the upcoming annual shareholder meetings should be addressed to the attention of the Secretary of the applicable Fund, at the address of the principal executive offices of thesuch Fund, with a copy to David C. Sullivan, Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199-3600.
Other Matters
As of the date of this Proxy Statement, each Fund’s officers, PIMCO and AGIFM know of no business to come before the Special Meeting other than as set forth in the Notice. If any other business is properly brought before the Special Meeting, the persons named as proxies will vote in their sole discretion.
The proxy materials sent to each Shareholder will include that Shareholder’s unique control number needed to vote his, her or its Shares. If you need additional copies of this Proxy Statement, please call(877) 361-7967.
The enclosed proxies are solicited by the Trustees/Directors of each Fund for use at a Joint Special Meeting of Shareholders of the Funds, being held at 9:30 a.m., Eastern time, on June 9, 2014, and at any adjournment(s) or postponement(s) thereof. The Special Meeting is being held at the offices of Pacific Investment Management Company LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019.
This Proxy Statement is being mailed to Shareholders on or about April 21, 2014.
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARDS PROMPTLY TO ENSURE THAT A QUORUM IS PRESENT AT THE ANNUALSPECIAL MEETING. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
November 19, 2013April 21, 2014
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INDEX OF APPENDICES
| APPENDIX A | FORM OF PROPOSED INVESTMENT MANAGEMENT AGREEMENT | |
| APPENDIX B | DESCRIPTION OF PORTFOLIO MANAGEMENT AGREEMENTS | |
| APPENDIX C | EXPENSE EXAMPLE | |
| APPENDIX D | PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF AGIFM | |
| APPENDIX E | PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF PIMCO | |
| APPENDIX F | OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS | |
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ExhibitAppendix A to Proxy Statement
Allianz Global Investors Fund Management Sponsored Closed-End FundsFORM OF PROPOSED
Audit Oversight Committee CharterINVESTMENT MANAGEMENT AGREEMENT
(AdoptedINVESTMENT MANAGEMENT AGREEMENT, made this day of , 2014, between each closed-end management investment company listed on Schedule A attached hereto and made a part hereof, as of January 14, 2004,
assuch Schedule A may be amended through June 14, 2011)
The Board of Trusteesfrom time to time, including to add or Directors (each a “Board”) of each of the registered investment companies listed inAppendix A heretoremove Funds (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”and Pacific Investment Management Company LLC (“PIMCO”) of the particular Board with respect to its oversight of the Fund. This Charter applies separately to.
WHEREAS, 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 assistingregistered 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 registered public accounting firm (“IA”), and the performance of the Fund’s internal control systems and IA. 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(“SEC”) as a closed-end management is responsible for Fund accounting and the implementation and maintenance of the Fund’s internal control systems, and the IA is 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
A-1
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) ofinvestment company under the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (the “Investment Company“1940 Act”),; and must otherwise satisfy the standards for independence of an audit committee member of an
WHEREAS, each Fund desires to retain PIMCO to render investment company issuer as set forth in Rule 10A-3(b) (taking into account any exceptions to those requirements set forth in such rule) under the Securities Exchange Act of 1934, as amended,advisory 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 appointmentsupervisory and administrative services hereunder with respect to the Committee)Fund; 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.
ResponsibilitiesWHEREAS,each Fund engages in the business of investing and Duties
The Committee’s policiesreinvesting its assets in the manner 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 IA 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 IA shall be submitted to the Board for ratification in accordance with the requirements of Section 32(a)investment objective(s), policies and restrictions applicable to the Fund; and
WHEREAS, PIMCO is willing to furnish investment advisory and supervisory and administrative services and/or to arrange for such services in the manner and on the terms hereinafter set forth; and
NOW, THEREFORE, in consideration of the Investment Company Act. The Fund’s IA must report directlypremises and mutual covenants herein contained, the parties agree as follows:
1.Appointment. Each Fund hereby appoints PIMCO to provide the investment advisory services to the Committee, whichFund and to provide or procure the supervisory and administrative and other services for the period and on the terms set forth in this Agreement, as amended or supplemented from time to time. PIMCO accepts such appointment and agrees during such period to render the services herein set forth for the compensation herein provided.
2.Duties. (a) PIMCO shall, at its expense, (i) employ or associate with itself such persons as it believes appropriate to assist it in performing its obligations under this Agreement and (ii) provide all services, equipment and facilities necessary to perform its obligations under this Agreement. PIMCO may from
A-1
time to time seek research assistance and rely on investment management resources available to it through its affiliated companies, but in no case shall such reliance relieve PIMCO of any of its obligations hereunder, nor shall a Fund be responsible for resolutionany additional fees or expenses hereunder as a result.
3.Investment Advisory Services. (a) PIMCO shall provide to each Fund investment guidance and policy direction in connection with the management of disagreements between managementthe Fund, including oral and written research, analysis, advice, and statistical and economic data and information.
Consistent with the investment objective(s), policies and restrictions applicable to each Fund, PIMCO will determine the securities and other assets to be purchased or sold or the other techniques to be utilized (including, but not limited to, the incurrence of leverage and securities lending) by the Fund and will determine what portion of the Fund shall be invested in securities or other assets, and what portion, if any, should be held uninvested.
Each Fund will have the benefit of the investment analysis and research, the review of current economic conditions and trends and the IAconsideration of long-range investment policy generally available to investment advisory clients of PIMCO. It is understood that PIMCO will not, to the extent inconsistent with applicable law, use any material nonpublic information pertinent to investment decisions undertaken in connection with this Agreement that may be in its possession or in the possession of any of its affiliates.
(b) As manager of the assets of each Fund, PIMCO shall make investments for the account of the Fund in accordance with PIMCO’s best judgment and within the investment objective(s), policies and restrictions applicable to the Fund, the 1940 Act, any applicable SEC exemptive relief, no-action letters or other guidance, and the provisions of the Internal Revenue Code of 1986 relating to financial reporting.regulated investment companies, subject to policy decisions adopted by the Fund’s Board of Trustees/Directors.
(c) PIMCO shall furnish to each Fund’s Board of Trustees/Directors periodic reports on the investment performance of the Fund and on the performance of its investment advisory obligations under this Agreement and shall supply such additional reports and information as the Fund’s officers or Board of Trustees/Directors shall reasonably request.
(d) On occasions when PIMCO deems the purchase or sale of a security to be in the best interest of a Fund as well as other of its clients, PIMCO, to the extent permitted by applicable law, may, but shall not be obligated to, aggregate the securities to be so sold or purchased in order to seek to obtain the best execution of the order or lower brokerage commissions or other transaction
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2. To consider the independence of the Fund’s IA at least annually, andcosts, if any. PIMCO may also on occasion purchase or sell a particular security for one or more clients in connection therewith receive on a periodic basis formal written disclosures and letters from the IA as required by Rule 3526 of the Public Company Accounting Oversight Board.
3. To the extent required by applicable regulations, pre-approve (i) all audit and permitted non-audit services rendered by the IA to the Fund and (ii) all non-audit services rendered by the IA 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 IA to the Fund, the investment advisers and certain affiliates of the investment advisers for audit, audit-related and permitted non-audit services.
5. Ifdifferent amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by PIMCO in the manner it considers to be equitable and consistent with its fiduciary obligations to a Fund and to such other customers.
(e) PIMCO may cause each Fund to pay a broker which provides brokerage and research services to PIMCO a commission for effecting a securities transaction in excess of the amount another broker might have charged. Such higher commissions may not be paid unless PIMCO determines in good faith that the Fund intendsamount paid is reasonable in relation to have employees, set clear policies for the hiring by the Fund of employees or former employeesservices received in terms of the Fund’s IA.particular transaction or PIMCO’s overall responsibilities to each Fund and any other of PIMCO’s clients.
6. Obtain and review at least annually a report from(f) PIMCO may itself, or may cause each Fund to, commence, join in, consent to or oppose the IA describing (i)reorganization, recapitalization, consolidation, sale, merger, foreclosure, liquidation or readjustment of the IA’s internal quality-control procedures and (ii)finances of any material issues raised (a) byperson or the IA’s most recent internal quality-control review or peer review or (b) by any governmentalsecurities or other professional inquiryproperty thereof, and to deposit any securities or investigation performed withinother property with any protective, reorganization or similar committee. Without limiting the preceding five years respecting one or more IA carried out by the firm, and any steps taken to address any such issues.
7. Review with the Fund’s IA arrangements for and the scopegenerality of the annual audit and any special audits, including the form of any opinion proposedforegoing, PIMCO may represent each Fund on a creditors’ (or similar) committee.
(g) PIMCO shall have sole authority to be rendered to the Board and shareholders of the Fund.
8. Meet with management and the IA to review and discuss the Fund’s annual audited financial statements, including a review of any specific disclosures of management’s discussion of the Fund’s investment performance; and,exercise whatever powers each Fund may possess with respect to any of the Fund’s audited financial statements, discussassets of the Fund, including, but not limited to, the right to vote proxies, the power to exercise rights, options, warrants, conversion privileges and redemption privileges, and to tender securities pursuant to a tender offer.
4.Supervisory and Administrative Services. Subject to the general supervision of the Board of Trustees/Directors, PIMCO shall provide or cause to be furnished all supervisory and administrative and other services reasonably necessary for the operation of each Fund, but not including underwriting or distribution services.
(a) The supervisory and administrative services to be provided by PIMCO shall include the following:
(i) PIMCO shall supervise and coordinate matters relating to the operation of each Fund, including any necessary coordination among the custodian, transfer agent, dividend disbursement agent and recordkeeping agent (including pricing and valuation of the Fund), accountants, attorneys, auction agents, and other parties performing services or operational functions for the Fund. In connection with the IA 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.
Meet with management to review and discuss the Fund’s unaudited financial statements included in the semi-annual report, including, if any, a review of any specific disclosure of management’s discussion of the Fund’s investment performance.
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9. Discusssupervision of the pricing and valuation of each Fund, PIMCO shall establish such systems and procedures as are necessary to carry out this function, including systems and procedures relating to defaulted securities; forensic reporting and monitoring of securities and derivatives pricing, including checks and balances against internal models and external pricing services; tracking and reviewing fair valued securities; supervising pricing vendors; monitoring for significant events occurring after the close of trading that may affect the value of portfolio holdings; and establishing net asset value estimation processes in the event the custodian cannot produce a net asset value for shares of beneficial interest (“Shares”) of the Fund.
(ii) PIMCO shall provide, or cause a third party to provide, each Fund, at PIMCO’s expense, with managementadequate personnel, office space, communications facilities, and other facilities necessary for the effective supervision and administration of the Fund as needed,contemplated in this Agreement as well as provide, or cause a third party to provide, the IAFund, at PIMCO’s expense, with the services of a sufficient number of persons competent to perform such supervisory and administrative and clerical functions as are necessary for compliance with federal securities laws and other applicable laws.
(iii) PIMCO shall maintain or supervise the maintenance by third parties of such books and records of each Fund as may be required by applicable federal or state law.
(iv) PIMCO shall prepare or supervise the preparation by third parties of all federal, state, local, and foreign tax returns and reports of each Fund required by applicable law.
(v) PIMCO or an appointed third party shall prepare, file, and arrange for the distribution of proxy materials and periodic reports to financial intermediaries who hold shares of a Fund in nominee name or shareholders of each Fund as required by applicable law and/or as agreed to with such financial intermediary or shareholder, as applicable.
(vi) PIMCO or an appointed third party shall prepare and arrange for the filing of such registration statements and other documents with the SEC and other federal and state or other regulatory authorities, securities exchanges and self-regulatory organizations as may be required to register the Shares of each Fund, maintain the listing of the Shares of each Fund that are listed for trading on a securities exchange and qualify each Fund to do business or as otherwise required by applicable law. PIMCO shall maintain registration of each Fund’s Shares in such other jurisdictions as it deems necessary and
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appropriate. PIMCO shall maintain a review and certification program and internal controls and procedures in accordance with relevant provisions of the Sarbanes Oxley Act of 2002 as applicable to registered investment companies. PIMCO shall maintain systems necessary to provide or procure required disclosure in each Fund’s registration statements, shareholder reports, proxy statements, reports to securities exchanges and similar regulatory documents, and Fund proxy voting information.
(vii) PIMCO shall take, or cause a third party to take, such other action with respect to each Fund as may be required by applicable law, including without limitation the rules and regulations of the SEC, the Commodity Futures Trading Commission, securities exchanges on which the Fund’s unaudited financial statements.Shares are listed for trading, state securities commissions and other governmental and regulatory agencies. Such actions shall include, but are not limited to, establishment and maintenance of a compliance program in accordance with Rule 38a-1 under the 1940 Act, support of each Fund’s Chief Compliance Officer, and systems and procedures necessary to effectuate the compliance program.
10. Review(viii) PIMCO shall provide, or cause a third party to provide, each Fund with administrative services to shareholders, including: the maintenance of a shareholder information telephone number; the provision of certain statistical information and performance of the Fund; an internet website (if requested); and maintenance of privacy protection systems and procedures. Notwithstanding the foregoing, PIMCO may procure or delegate provision of these services to third parties.
(b)Other Services. PIMCO shall also procure on behalf of each Fund, and at the expense of PIMCO, the following persons to provide services to the Fund: (i) a custodian or custodians for the Fund to provide for the safekeeping of the Fund’s assets; (ii) a recordkeeping agent to maintain the portfolio accounting records for the Fund; (iii) a transfer agent for the Fund; and (iv) a dividend disbursing agent or registrar for the Fund. Each Fund and/or PIMCO may be a party to any agreement with any of the persons referred to in this Section 4(b).
(c)Personnel. PIMCO shall also make its officers and employees available to the Board of Trustees/Directors and officers of each Fund for consultation and discussions regarding the supervision and administration of the Fund and services provided to the Fund under this Agreement.
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(d)Standards; Reports. In performing these supervisory and administrative services, PIMCO:
(i) shall conform with the IA1940 Act, with all other applicable federal, state and foreign laws and regulations, with all applicable rules and regulations of securities exchanges on which a Fund’s shares are listed for trading, with any audit problemsapplicable procedures adopted by each Fund’s Board of Trustees/Directors, and, to the extent then currently applicable, with the provisions of the Fund’s Registration Statement filed on Form N-2 as supplemented or difficulties encounteredamended from time to time.
(ii) will make available to each Fund, promptly upon request, any of the Fund’s books and records as are maintained under this Agreement, and will furnish to regulatory authorities having the requisite authority any such books and records and any information or reports in connection with PIMCO’s services under this Agreement that may be requested in order to ascertain whether the operations of the Fund are being conducted in a manner consistent with applicable laws and regulations.
(iii) will regularly report to each Fund’s Board of Trustees/Directors on the supervisory and administrative services provided under this Agreement and will furnish the Fund’s Board of Trustees/Directors with respect to the Fund such periodic and special reports as the Trustees/Directors or officers of the Fund may reasonably request.
5.Calculation of Fees. Each Fund will pay to PIMCO as compensation for PIMCO’s services rendered, for the facilities furnished and for the expenses borne by PIMCO pursuant to Section 6, a fee, computed and paid monthly, at the annual rate for each Fund set forth in Schedule A.
The average daily total managed assets or average daily net assets, as applicable, of a Fund shall be determined by taking an average of all the determinations of such amount during such month at the close of business on each business day during such month while this Agreement is in effect. Such fee shall be payable for each month within 5 business days after the end of such month. If the fees payable to PIMCO pursuant to this Section 5 with respect to a Fund begin to accrue before the end of any month or if this Agreement terminates before the end of any month, the fees payable by the Fund for the period from that date to the end of that month or from the beginning of that month to the date of termination, as the case may be, shall be pro-rated according to the proportion which the period bears to the full month in which the effectiveness or termination occurs. For purposes of calculating “total managed assets” or “daily net assets”, the liquidation preference of any preferred shares outstanding shall not be considered a liability. By way of clarification, with
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respect to any reverse repurchase agreement, dollar roll or similar transaction, “total managed assets” includes any proceeds from the sale of an asset of a Fund to a counterparty in such a transaction, in addition to the value of the underlying asset as of the relevant measuring date.
In the event that PIMCO has agreed to a fee waiver or an expense limitation or reimbursement arrangement with a Fund, subject to such terms and conditions as PIMCO and the Fund may set forth in such agreement, the compensation due PIMCO hereunder shall be reduced, and, if necessary, PIMCO shall bear expenses with respect to the Fund, to the extent required by such fee waiver or expense limitation or reimbursement arrangement.
6.Allocation of Expenses. During the term of this Agreement, PIMCO will pay all expenses incurred by it in connection with its obligations under this Agreement with respect to a Fund, except such expenses as are assumed by the Fund under this Agreement. In addition, PIMCO shall bear the following expenses under this Agreement:
(a) Expenses of all audits by each Fund’s independent public accountants;
(b) Expenses of each Fund’s transfer agent, registrar, dividend disbursing agent, and recordkeeping agent;
(c) Expenses of each Fund’s custodial services, including any recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value of each Fund’s net assets;
(e) Expenses of maintaining each Fund’s tax records;
(f) Costs and/or fees, including legal fees, incident to meetings of each Fund’s shareholders, the preparation, printing and mailings of each Fund’s prospectuses, notices and proxy statements, press releases and reports of the Fund to its shareholders, the filing of reports with regulatory bodies, the maintenance of the Fund’s existence and qualification to do business, the expenses of issuing, redeeming, registering and qualifying for sale, common shares with federal and state securities authorities, and the expense of qualifying and listing Shares with any securities exchange or other trading system;
(g) Each Fund’s ordinary legal fees, including the legal fees that arise in the ordinary course of their audit work and management’s responses thereto.business for a Massachusetts business trust or Maryland
11. Review with
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corporation, as applicable, registered as a closed-end management investment company and, as applicable, listed for trading with a securities exchange or other trading system;
(h) Costs of printing certificates representing Shares of each Fund, if any;
(i) Each Fund’s pro rata portion of the IAfidelity bond required by Section 17(g) of the 1940 Act, or other insurance premiums; and
(j) Association membership dues.
Each Fund shall bear the following expenses:
(a) Salaries and other compensation or expenses, including travel expenses, of any of the Fund’s accountingexecutive officers and financial reporting policies, practicesemployees, if any, who are not officers, directors, shareholders, members, partners or employees of PIMCO or its subsidiaries or affiliates;
(b) Taxes and internal controls,governmental fees, if any, levied against the Fund;
(c) Brokerage fees and commissions, and other portfolio transaction expenses incurred by or for the Fund (including, without limitation, fees and expenses of outside legal counsel or third-party consultants retained in connection with reviewing, negotiating and structuring specialized loan and other investments made by the Fund, subject to specific or general authorization by the Fund’s Board of Trustees/Directors);
(d) Expenses of the Fund’s securities lending (if any), including any securities lending agent fees, as governed by a separate securities lending agreement;
(e) Costs, including interest expenses, of borrowing money or engaging in other types of leverage financing including, without limitation, through the effect onuse by the Fund of any recommendation of changes in accounting principles reverse repurchase agreements, tender option bonds, bank borrowings and credit facilities;
(f) Costs, including dividend and/or practices by management or the IA.
12. Discuss with management its policies with respect to risk assessment and risk management.
13. Discuss with management any press releases discussing the Fund’s investment performanceinterest expenses and other financial information about the Fund, as well as any financial information provided by managementcosts (including, without limitation, offering and related legal costs, fees to analystsbrokers, fees to auction agents, fees to transfer agents, fees to ratings agencies and fees to auditors associated with satisfying ratings agency requirements for preferred shares or rating agencies. The Committee may discharge this responsibility by discussing the general types of information to be disclosedother securities issued by the Fund and other related requirements in a Fund’s organizational documents) associated with the formFund’s issuance, offering, redemption and maintenance of presentation (i.e.preferred shares, commercial paper or other senior securities for the purpose of incurring leverage;
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(g) Fees and expenses of any underlying funds or other pooled vehicles in which the Fund invests;
(h) Dividend and interest expenses on short positions taken by the Fund;
(i) Fees and expenses, including travel expenses, and fees and expenses of legal counsel retained for their benefit, of Trustees/Directors who are not officers, employees, partners, shareholders or members of PIMCO or its subsidiaries or affiliates;
(j) Extraordinary expenses, including extraordinary legal expenses, as may arise, including expenses incurred in connection with litigation, proceedings, other claims, and the legal obligations of the Fund to indemnify its Trustees/Directors, officers, employees, shareholders, distributors, and agents with respect thereto;
(k) Organizational and offering expenses of the Fund, including with respect to Share offerings, such as rights offerings and shelf offerings, following the Fund’s initial offering, and expenses associated with tender offers and other Share repurchases and redemptions; and
(f) Expenses of the Fund which are capitalized in accordance with generally accepted accounting principles.
7.Effectiveness and Termination. (a) This Agreement shall take effect with respect to each Fund as of the date indicated above (and, with respect to any amendment, or with respect to any additional fund, the date of the amendment or supplement hereto), and shall remain in effect, unless sooner terminated as provided herein, for one year from such date (or, with respect to any additional Fund, for two years from the date of the supplement), and shall continue thereafter on an annual basis with respect to such Fund provided that such continuance is specifically approved at least annually (i) by the vote of a case-by-case reviewmajority of the outstanding voting securities (as defined in the 1940 Act) of the Fund or by the Fund’s Board of Trustees/Directors; and (ii) by the vote, cast in person at a meeting called for such purpose, of a majority of the Fund’s Trustees/Directors who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party;provided,however, that if the continuance of this Agreement is submitted to the shareholders of a Fund for their approval and such shareholders fail to approve such continuance of this Agreement as provided herein, PIMCO may continue to serve hereunder with respect to such Fund in a manner consistent with the 1940 Act. This Agreement may not required)be materially amended with respect to a Fund or Funds without a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the pertinent Fund or Funds. Schedule A may be amended from time to time to add new Funds without a vote of the shareholders of any Fund.
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(b) This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty, by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund or by a vote of a majority of the Fund’s entire Board of Trustees/Directors on 60 days’ written notice to PIMCO, or by PIMCO on 60 days’ written notice to the Fund. This Agreement shall terminate automatically in the event of its assignment (as defined in the 1940 Act).
8.Liability. PIMCO shall give each Fund the benefit of PIMCO’s best judgment and need not discussefforts in advancerendering services under this Agreement. PIMCO may rely on information reasonably believed by it to be accurate and reliable. As an inducement for PIMCO’s undertaking to render services under this Agreement, each such releaseFund agrees that neither PIMCO nor its members, officers, directors, or employees shall be subject to any liability for, or any damages, expenses or losses incurred in connection with, any act or omission or mistake in judgment connected with or arising out of information.any services rendered under this Agreement, except by reason of willful misfeasance, bad faith, or gross negligence in performance of PIMCO’s duties, or by reason of reckless disregard of PIMCO’s obligations and duties under this Agreement. This provision shall govern only the liability to each Fund of PIMCO and that of its members, officers, directors, and employees, and shall in no way govern the liability to the Fund or PIMCO or provide a defense for any other person including persons that provide services for the Fund as described in this Agreement.
14. Establish procedures9.Non-Exclusivity. The services of PIMCO to each Fund under this Agreement are not to be deemed exclusive as to PIMCO and PIMCO will be free to render similar services to other investment companies and other clients. Except to the extent necessary to perform PIMCO’s obligations under this Agreement, nothing herein shall be deemed to limit or restrict the right of PIMCO, or any affiliate of PIMCO, or any employee of PIMCO, to engage in any other business or to devote time and attention to the management or other aspects of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other corporation, firm, individual or association.
10.Independent Contractor. PIMCO shall for (i)all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided herein or authorized by the receipt, retention,Board of Trustees/Directors of each Fund from time to time, have no authority to act for or represent the Fund in any way or otherwise be deemed its agent.
11.Use of Name. It is understood that the names “Pacific Investment Management Company LLC” or “PIMCO” or any derivative thereof or logo associated with those names and treatmentother servicemarks and trademarks owned by
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PIMCO and its affiliates are the valuable property of complaints receivedPIMCO and its affiliates, and that each Fund may use such names (or derivatives or logos) only as permitted by PIMCO.
12.Several Agreement of Each Fund. This Agreement, including all covenants, representations, warranties, and undertakings of any kind shall be construed so as to give effect to the intention of the parties that this Agreement constitutes a separate agreement between each Fund and PIMCO. The parties acknowledge and agree that the rights and obligations of each Fund hereunder, including as to any fees payable by the Fund regarding accounting, internal accounting controls,to PIMCO or auditing matters; and (ii)liabilities or other obligations of PIMCO to the confidential, anonymous submission by employeesFund or of the Fund the Fund’s investment advisers, administrator, principal underwriter (if any) orto PIMCO, shall be several and independent of one and other and neither joint nor joint and several with respect to any other providerFund. Notwithstanding anything to the contrary contained in this Agreement, each party acknowledges and agrees that the sole source of accounting-related services forpayment of the investment advisers of concerns regarding accounting or auditing matters.
15. Investigate or initiate the investigationobligations of any improprietiesFund hereunder shall be the assets of such Fund, and that PIMCO shall have no right of recourse or suspected improprieties inoffset against the Fund’s accounting operations or financial reporting.revenues and assets of any other Fund.
16. Review with counsel legal and regulatory matters13.Fund Obligation. With respect to those Funds that haveare organized as Massachusetts business trusts, a material impact on the Fund’s financial and accounting reporting policies and practices or its internal controls.
17. Report to the Board on a regular basis (at least annually) on the Committee’s activities.
18. Perform such other functions consistent with this Charter,copy of the Agreement and Declaration of Trust of each Fund that is a Massachusetts business trust is on file with the Secretary of The Commonwealth of Massachusetts, and Bylaws applicable tonotice is hereby given that this instrument is executed on behalf of each Fund by an officer of the Fund as an officer and applicable lawnot individually and that the obligations imposed on each Fund by this Agreement are not binding upon any of the Trustees/Directors, officers or regulation, asshareholders individually but are binding only upon the Committeeassets and property of the Fund.
14.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.
15.Miscellaneous. This Agreement shall be governed by the laws of the State of California, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any rule or order of the SEC thereunder, or the Board deems necessaryCommodity Exchange Act, or appropriate.any rule or order of the Commodity Futures Trading Commission thereunder.
(a) If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable. To the extent that any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise with regard to any party, hereunder, such provisions with respect to other parties hereto shall not be affected thereby.
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(b) The Committee may delegate any portion of its authority and responsibilities as set forthcaptions in this Charter to a subcommittee of one or more membersAgreement are included for convenience only and in no way define any of the Committee.provisions hereof or otherwise affect their construction or effect.
Meetings
At least annually, the Committee shall meet separately with the IA and separately with the representatives(Remainder 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.
Outside Resources and Assistance from Managementpage left intentionally blank.)
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 IA 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.
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Appendix AIN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below on the day and year first above written.
Funds Subject to this Charter
(As of February 1, 2013)
ALLIANZGI NFJ DIVIDEND, INTEREST & PREMIUM STRATEGY FUND (“NFJ”)
ALLIANZGI CONVERTIBLE & INCOME FUND (“NCV”)
ALLIANZGI CONVERTIBLE & INCOME FUND II (“NCZ”)
ALLIANZGI EQUITY & CONVERTIBLE INCOME FUND (“NIE”)
ALLIANZGI GLOBAL EQUITY & CONVERTIBLE INCOME FUND (“NGZ”)
ALLIANZGI INTERNATIONAL & PREMIUM STRATEGY FUND (“NAI”)
PCM FUND, INC. (“PCM”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND (“PCQ”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II (“PCK”)
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III (“PZC”)
PIMCO CORPORATE & INCOME STRATEGY FUND (“PCN”)
PIMCO CORPORATE & INCOME OPPORTUNITY FUND (“PTY”)
PIMCO DYNAMIC CREDIT INCOME FUND (“PCI”)
PIMCO DYNAMIC INCOME FUND (“PDI”)
PIMCO INCOME STRATEGY FUND (“PFL”)
PIMCO INCOME STRATEGY FUND II (“PFN”)
PIMCO GLOBAL STOCKSPLUS & INCOME FUND (“PGP”)
PIMCO HIGH INCOME FUND (“PHK”)
PIMCO INCOME OPPORTUNITY FUND (“PKO”)
PIMCO MUNICIPAL INCOME FUND (“PMF”)
PIMCO MUNICIPAL INCOME FUND II (“PML”)
PIMCO MUNICIPAL INCOME FUND III (“PMX”)
PIMCO NEW YORK MUNICIPAL INCOME FUND (“PNF”)
PIMCO NEW YORK MUNICIPAL INCOME FUND II (“PNI”)
PIMCO NEW YORK MUNICIPAL INCOME FUND III (“PYN”)
PIMCO STRATEGIC GLOBAL GOVERNMENT FUND INC. (“RCS”)
| PCM Fund, Inc. | PIMCO California Municipal Income Fund | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO California Municipal Income Fund II | PIMCO California Municipal Income Fund III | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO Corporate & Income Strategy Fund | PIMCO Corporate & Income Opportunity Fund | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO Dynamic Income Fund | PIMCO Dynamic Credit Income Fund | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO Global StocksPLUS & Income Fund | PIMCO High Income Fund | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO Income Opportunity Fund | PIMCO Municipal Income Fund | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO Municipal Income Fund II | PIMCO Municipal Income Fund III | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
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| PIMCO New York Municipal Income Fund I | PIMCO New York Municipal Income Fund II | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| PIMCO New York Municipal Income Fund III | PIMCO Strategic Income Fund, Inc. | |||||||
| By: | By: | |||||||
| Title: | Title: | |||||||
| Pacific Investment Management Company LLC | ||||||||
| By: | ||||||||
| Title: | ||||||||
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SCHEDULE A
(as of , 2014)
Fund | State of | Fee | ||
| PCM Fund, Inc. | Maryland corporation | 0.900% of total managed assets. Total managed assets includes total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). | ||
| PIMCO California Municipal Income Fund | Massachusetts business trust | 0.705% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO California Municipal Income Fund II | Massachusetts business trust | 0.705% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO California Municipal Income Fund III | Massachusetts business trust | 0.715% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO Corporate & Income Strategy Fund | Massachusetts business trust | 0.810% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO Corporate & Income Opportunity Fund | Massachusetts business trust | 0.650% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
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Fund | State of | Fee | ||
| PIMCO Dynamic Income Fund | Massachusetts business trust | 1.150% of total managed assets. Total managed assets includes total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). | ||
| PIMCO Dynamic Credit Income Fund | Massachusetts business trust | 1.150% of total managed assets. Total managed assets includes total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). | ||
| PIMCO Global StocksPLUS & Income Fund | Massachusetts business trust | 1.105% of total managed assets. Total managed assets includes total assets of the Fund (including assets attributable to any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). | ||
| PIMCO High Income Fund | Massachusetts business trust | 0.760% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
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Fund | State of | Fee | ||
| PIMCO Income Opportunity Fund | Massachusetts business trust | 1.055% of total managed assets. Total managed assets includes total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). | ||
| PIMCO Municipal Income Fund | Massachusetts business trust | 0.705% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO Municipal Income Fund II | Massachusetts business trust | 0.685% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO Municipal Income Fund III | Massachusetts business trust | 0.705% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO New York Municipal Income Fund | Massachusetts business trust | 0.770% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO New York Municipal Income Fund II | Massachusetts business trust | 0.735% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
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Fund | State of | Fee | ||
| PIMCO New York Municipal Income Fund III | Massachusetts business trust | 0.860% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
| PIMCO Strategic Income Fund, Inc. | Maryland corporation | 0.955% of average daily net asset value of the Fund (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). | ||
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Exhibit B-1 to Proxy StatementAppendix B
Report of Audit Oversight Committees
Description of the BoardsPortfolio Management Agreements
PIMCO currently serves as the sub-adviser for each Fund pursuant to the applicable Portfolio Management Agreement. The following chart provides the date of Trustees of
PIMCO Municipal Incomethe Portfolio Management Agreement with respect to each Fund I
PIMCO California Municipal Incomeand the date it was submitted to Shareholders for approval. The Portfolio Management Agreement for each Fund I
PIMCO New York Municipal Income Fund I
(each, a “Fund”(other than PCM and collectively, the “Funds”)
Dated June 18, 2013
The Audit Oversight Committee (the “Committee”) overseesRCS) was last submitted to the Fund’s financial reporting processsole initial Shareholder in connection with such Fund’s organization. The Portfolio Management Agreements for PCM and RCS were last submitted to Shareholders in connection with PIMCO becoming a sub-adviser in connection with AGIFM become the investment manager of those Funds in 2008.
| Date of Portfolio Management Agreement | Date Submitted to Shareholders | |||||||
PTY | 11/19/2002 | 12/16/2002 | ||||||
PCN | 11/13/2001 | 12/13/2001 | ||||||
PCI | 12/17/2012 | 01/25/2013 | ||||||
PDI | 05/07/2012 | 05/23/2012 | ||||||
PGP | 05/16/2005 | 05/23/2005 | ||||||
PHK | 04/08/2003 | 04/08/2003 | ||||||
PKO | 11/20/2007 | 11/20/2007 | ||||||
RCS | 08/28/2008 | 08/27/2008 | ||||||
PCM | 04/23/2008 | 04/23/2008 | ||||||
PCQ | 06/20/2001 | 06/20/2001 | ||||||
PCK | 06/18/2002 | 06/18/2002 | ||||||
PZC | 09/20/2002 | 10/22/2002 | ||||||
PMF | 06/20/2001 | 06/20/2001 | ||||||
PML | 06/18/2002 | 06/18/2002 | ||||||
PMX | 09/20/2002 | 10/22/2002 | ||||||
PNF | 06/20/2001 | 06/20/2001 | ||||||
PNI | 06/18/2002 | 06/18/2002 | ||||||
PYN | 09/20/2002 | 10/22/2002 | ||||||
Services. Under the terms of each Portfolio Management Agreement, PIMCO, subject to the supervision of the Board and of AGIFM, furnishes continuously an investment program for the applicable Fund, makes all related investment decisions on behalf of the Board of Trustees of eachapplicable Fund (the “Board”) and operates under a written Charter adopted by the Board. The Committee meets with the Fund’s management (“Management”) and independent registered public accounting firm and reports the results of its activities to the Board. Management has the primary responsibilityplaces all orders for the financial statementspurchase and sale of portfolio securities and all other investments. PIMCO is responsible for daily monitoring of the reporting process, includinginvestment activities and portfolio holdings of the system of internal controls. InFunds in connection with the Committee’sFunds’ compliance with their respective investment objective(s), policies and independent accountant’s responsibilities, Management has advised that the Fund’s financial statementsrestrictions. PIMCO intends for the fiscal year ended April 30, 2013 were prepared in conformity with the generally accepted accounting principles.
The Committee has reviewed and discussed with Management and PricewaterhouseCoopers LLP (“PwC”), thesame teams of investment professionals to continue to manage each Fund’s independent registered public accounting firm, the audited financial statements for the fiscal year ended April 30, 2013. The Committee has discussed with PwC the matters required to be discussed by Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requires the independent registered public accounting firm 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 or 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 Rule 3526 of the Public Company Accounting Oversight Board (requiring registered public accounting firms to make written disclosure to and discuss with the Committee various matters relating to the auditor’s independence), and has discussed with PwC their
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independence. The Committeeinvestment portfolio and, as such, it is not expected that the day-to-day portfolio management services will change. Rather, the Proposal, if approved, will require PIMCO to provide a broader range of investment management and supervisory and administrative services under the Proposed Agreement as compared to the portfolio management services required by the Portfolio Management Agreements, in replacement of AGIFM as the current investment manager.
Compensation. As compensation for PIMCO’s services rendered under each Portfolio Management Agreement, and for the expenses borne by PIMCO, AGIFM (and not the Funds) pays PIMCO a fee accrued daily and paid monthly, at the annual rates set forth in the table below.
| Annual Management Fee Rate Under each Portfolio Management Agreement | ||||
PTY1 | 0.450 | %5 | ||
PCN1 | 0.420 | % | ||
PCI2 | 1.025 | % | ||
PDI2 | 1.025 | % | ||
PGP3 | 1.025 | % | ||
PHK1 | 0.500 | % | ||
PKO4 | 0.900 | % | ||
RCS1 | 0.725 | % | ||
PCM4 | 0.675 | % | ||
PCQ1 | 0.370 | % | ||
PCK1 | 0.500 | % | ||
PZC1 | 0.500 | % | ||
PMF1 | 0.370 | % | ||
PML1 | 0.500 | % | ||
PMX1 | 0.500 | % | ||
PNF1 | 0.370 | % | ||
PNI1 | 0.500 | % | ||
PYN1 | 0.500 | % | ||
| 1. | Fees calculated based on the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). |
| 2. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). |
| 3. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to |
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| any preferred shares and borrowings that may be outstanding) minus accrued liabilities (other than liabilities representing borrowings). |
| 4. | Fees calculated based on the Fund’s average daily “total managed assets,” which means the total assets of the Fund (including assets attributable to any reverse repurchase agreements, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements and borrowings). |
| 5. | The Portfolio Management Agreement with respect to PTY provides that the portfolio management fee paid by AGIFM to PIMCO shall be at the maximum annual rate of 0.55% of PTY’s average daily net assets, provided that the fee will be reduced to 0.45% if and while AGIFM is obligated to pay a fee to Merrill, Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) pursuant to an Additional Compensation Agreement between AGIFM and Merrill Lynch (the “Additional Compensation Agreement”) with respect to PTY. As of the date of this Proxy Statement, the Additional Compensation Agreement is still in effect. |
Termination/Amendment. Each Portfolio Management Agreement took full force and effect as to the applicable Fund for an initial two-year period, and has also reviewedbeen subject thereafter to annual approval in conformity with the aggregate fees billed1940 Act (i.e., approval by PwC for professional services renderedthe Board of Trustees/Directors, or a majority of the Fund’s outstanding voting securities and, in either event, by the vote cast in person by a majority of the Independent Trustees/Directors). Each Portfolio Management Agreement may be terminated by the applicable Fund either by vote of a majority of the Trustees/Directors, or by the affirmative vote of a majority of the outstanding voting securities of the Fund, without the payment of any penalty, at any time by written notice to AGIFM and PIMCO. AGIFM may at any time terminate a Portfolio Management Agreement by not less than 60 days’ written notice to PIMCO, and PIMCO may at any time terminate a Portfolio Management Agreement by not less than 60 days’ written notice to the Fund and AGIFM. A Portfolio Management Agreement may not be materially amended unless such material amendment is approved at a meeting by the affirmative vote of a majority of the outstanding voting securities of the applicable Fund, and by the vote, cast in person at a meeting called for non-audit services providedthe purpose of voting on such approval, of a majority of the Independent Trustees/Directors of the applicable Fund. Additionally, each Portfolio Management Agreement terminates automatically in the event of its assignment (as defined in the 1940 Act).
If the Proposal is approved with respect to Allianz Global Investorsa Fund, Management LLC (“AGIFM”), the Fund’s investment manager, Pacific InvestmentPortfolio Management Company LLC (“PIMCO”),Agreement will automatically terminate in connection with the Fund’s sub-adviser and any entity controlling, controlled by or under common control with AGIFM or PIMCO that provided services to the Fund. As part of this review, the Committee considered, in addition to other practices and requirements relating to selectiontermination of the Fund’s independent registered public accounting firm, 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 April 30, 2013 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 registered public accounting firm for the fiscal year ending April 30, 2014.
Submitted by the Audit Oversight Committee of the Board of Trustees:
Bradford K. Gallagher
William B. Ogden, IV
James A. Jacobson
Alan Rappaport
Hans W. Kertess
Deborah A. DeCotis
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Exhibit B-2 to Proxy Statement
Report of Audit Oversight Committees
of the Boards of Trustees of
PIMCO Municipal Income Fund II
PIMCO California Municipal Income Fund II
PIMCO New York Municipal Income Fund II
(each, a “Fund” and, collectively, the “Funds”)
Dated July 18, 2013
The Audit Oversight Committee (the “Committee”) oversees the Fund’s financial reporting process on behalf of the Board of Trustees of each Fund (the “Board”) and operates under a written Charter adopted by the Board. The Committee meets with the Fund’s management (“Management”) and independent registered public accounting firm 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 May 31, 2013 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 registered public accounting firm, the audited financial statements for the fiscal year ended May 31, 2013. The Committee has discussed with PwC the matters required to be discussed by Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requires the independent registered public accounting firm 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 or 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 Rule 3526 of the Public Company Accounting Oversight Board (requiring registered public accounting firms to make written disclosure to and discuss with the Committee various matters relating to the auditor’s independence), and has discussed with PwC theirCurrent Agreement.
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independence. The Committee has also reviewedLiability. Each Portfolio Management Agreement provides that, in the aggregate fees billed by PwC for professional services renderedabsence of willful misfeasance, bad faith or gross negligence on the part of PIMCO, or reckless disregard of its obligations and duties under the applicable Portfolio Management Agreement, PIMCO, including its officers, directors and members, will not be subject to any liability to AGIFM, to the applicable Fund, andor to any shareholder, officer, partner or Trustee/Director thereof, for non-audit services provided to Allianz Global Investors Fund Management LLC (“AGIFM”), the Fund’s investment manager, Pacific Investment Management Company LLC (“PIMCO”), the Fund’s sub-adviser and any entity controlling, controlled byact or under common control with AGIFM or PIMCO 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 registered public accounting firm, 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 May 31, 2013 be includedomission in the Fund’s Annual Report to shareholders forcourse of, or in connection with, rendering services under 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 registered public accounting firm for the fiscal year ending May 31, 2014.
Submitted by the Audit Oversight Committee of the Board of Trustees:
Deborah A. DeCotis
Bradford K. Gallagher
Hans W. Kertess
William B. Ogden, IV
James A. Jacobson
Alan RappaportPortfolio Management Agreement.
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Exhibit B-3 to Proxy StatementAppendix C
ReportExpense Example
The following example illustrates a hypothetical Shareholder’s total expenses under both the Current Agreements and the Proposed Agreement on a $1,000 investment in a Fund, assuming (1) that the Fund’s assets do not increase or decrease from the average assets during the calendar year ended December 31, 2013 (including through the use of Audit Oversight Committees
leverage); (2) that the Fund’s total expense ratio remains the same as shown in the Annual Expenses andPro Forma Annual Expenses Tables in the Proxy Statement and (3) a five percent annual return.The example should not be considered a representation of past or future expenses; actual expenses may be greater or less than those shown.The example assumes that the estimated Interest Expenses on Borrowings and Other Expenses set forth in the Annual Expenses andPro Forma Annual Expenses Tables in the Proxy Statement are accurate, that the rate listed under Total Annual Expenses remains the same each year and that all dividends and distributions are reinvested at net asset value. Actual expenses may be greater or less than those assumed. Moreover, each Fund’s actual rate of return may be greater or less than the hypothetical 5% annual return shown in the example. The actual amount of interest expense borne by a Fund will vary over time in accordance with the level of the BoardsFund’s use of Trusteescertain forms of leverage and/or variations in market interest rates.
| 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||||
Fund | Under Current Agreement | Pro Forma Under Proposed Agreement | Under Current Agreement | Pro Forma Under Proposed Agreement | Under Current Agreement | Pro Forma Under Proposed Agreement | Under Current Agreement | Pro Forma Under Proposed Agreement | ||||||||||||||||||||||||
PTY | $ | 9 | $ | 9 | $ | 29 | $ | 28 | $ | 51 | $ | 49 | $ | 112 | $ | 110 | ||||||||||||||||
PCN | $ | 11 | $ | 11 | $ | 35 | $ | 34 | $ | 61 | $ | 59 | $ | 134 | $ | 132 | ||||||||||||||||
PCI | $ | 16 | $ | 15 | $ | 49 | $ | 47 | $ | 84 | $ | 82 | $ | 183 | $ | 179 | ||||||||||||||||
PDI | $ | 32 | $ | 32 | $ | 98 | $ | 97 | $ | 167 | $ | 165 | $ | 350 | $ | 346 | ||||||||||||||||
PGP | $ | 20 | $ | 20 | $ | 63 | $ | 61 | $ | 107 | $ | 105 | $ | 232 | $ | 227 | ||||||||||||||||
PHK | $ | 11 | $ | 11 | $ | 35 | $ | 34 | $ | 61 | $ | 60 | $ | 135 | $ | 132 | ||||||||||||||||
PKO | $ | 19 | $ | 19 | $ | 58 | $ | 57 | $ | 100 | $ | 99 | $ | 216 | $ | 214 | ||||||||||||||||
RCS | $ | 14 | $ | 14 | $ | 44 | $ | 44 | $ | 77 | $ | 75 | $ | 168 | $ | 165 | ||||||||||||||||
PCM | $ | 21 | $ | 20 | $ | 64 | $ | 63 | $ | 110 | $ | 108 | $ | 238 | $ | 234 | ||||||||||||||||
PCQ | $ | 14 | $ | 14 | $ | 43 | $ | 42 | $ | 74 | $ | 73 | $ | 163 | $ | 160 | ||||||||||||||||
PCK | $ | 14 | $ | 14 | $ | 44 | $ | 43 | $ | 77 | $ | 75 | $ | 168 | $ | 165 | ||||||||||||||||
PZC | $ | 14 | $ | 14 | $ | 44 | $ | 43 | $ | 76 | $ | 74 | $ | 166 | $ | 163 | ||||||||||||||||
PMF | $ | 13 | $ | 13 | $ | 41 | $ | 40 | $ | 71 | $ | 69 | $ | 155 | $ | 152 | ||||||||||||||||
PML | $ | 12 | $ | 12 | $ | 38 | $ | 38 | $ | 66 | $ | 65 | $ | 146 | $ | 144 | ||||||||||||||||
PMX | $ | 13 | $ | 13 | $ | 41 | $ | 40 | $ | 71 | $ | 70 | $ | 156 | $ | 154 | ||||||||||||||||
PNF | $ | 14 | $ | 14 | $ | 45 | $ | 43 | $ | 77 | $ | 75 | $ | 170 | $ | 164 | ||||||||||||||||
PNI | $ | 15 | $ | 15 | $ | 47 | $ | 46 | $ | 81 | $ | 79 | $ | 178 | $ | 173 | ||||||||||||||||
PYN | $ | 18 | $ | 17 | $ | 54 | $ | 51 | $ | 94 | $ | 89 | $ | 203 | $ | 193 | ||||||||||||||||
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PIMCO Municipal Income Fund IIIAppendix D
PIMCO California Municipal Income Fund IIIPrincipal Executive Officers and Directors of AGIFM
Julian F. Sluyters, Chairman of Management Board
John C. Carroll, Member of Management Board
David B. Jobson, Member of Management Board
John C. Maney, Member of Management Board
Thomas J. Fuccillo, Managing Director and Chief Legal Officer
Albert Pisano, Director and Chief Compliance Officer
Michael J. Puntoriero, Chief Financial Officer
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Appendix E
Principal Executive Officers and Directors of PIMCO New York Municipal Income Fund III
(each, a “Fund”William H. Gross, Managing Director, Chief Investment Officer and collectively, the “Funds”)Executive Committee Member
Dated November 19, 2013Douglas M. Hodge, Managing Director, Chief Executive Officer and Executive Committee Member
Jay Jacobs, Managing Director, President and Executive Committee Member
Daniel J. Ivascyn, Managing Director, Deputy Chief Investment Officer and Executive Committee Member
Mihir P. Worah, Managing Director, Deputy Chief Investment Officer and Executive Committee Member
William R. Benz, Managing Director and Executive Committee Member
Brent R. Harris, Managing Director and Executive Committee Member
Wendy Cupps, Managing Director and Executive Committee Member
Eric J. Mogelof, Managing Director and Executive Committee Member
David C. Flattum, Managing Director and General Counsel
Jennifer E. Durham, Managing Director and Chief Compliance Officer
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Appendix F
Outstanding Shares and Significant Shareholders
The Audit Oversight Committee (the “Committee”) overseesfollowing table sets forth the Fund’s financial reporting process on behalfnumber of the Board of TrusteesCommon Shares and Preferred Shares issued and outstanding of each Fund (the “Board”at the close of business on the Record Date:
| Outstanding Common Shares | Outstanding Preferred Shares | |||
PTY | 69,978,154 | 13,000 | ||
PCN | 38,371,674 | 6,760 | ||
PCI | 137,221,372 | — | ||
PDI | 45,438,414 | — | ||
PGP | 10,428,581 | — | ||
PHK | 124,151,345 | 11,680 | ||
PKO | 14,930,973 | — | ||
RCS | 41,182,921 | — | ||
PCM | 11,521,899 | — | ||
PCQ | 18,572,365 | 6,000 | ||
PCK | 31,715,864 | 6,520 | ||
PZC | 22,068,592 | 5,000 | ||
PMF | 25,395,563 | 7,600 | ||
PML | 61,112,903 | 14,680 | ||
PMX | 32,544,946 | 7,560 | ||
PNF | 7,695,354 | 1,800 | ||
PNI | 10,977,045 | 3,160 | ||
PYN | 5,651,028 | 1,280 |
The classes of Shares listed for each Fund in the table above are the only classes of Shares currently authorized by that Fund.
As of the Record Date, the Trustees/Directors and the officers of each Fund as a group and individually beneficially owned less than one percent (1%) of each Fund’s outstanding Shares and, operates underto the knowledge of the Funds, the following entities beneficially owned more than five percent (5%) of a written Charter adopted by the Board. The Committee meetsclass of a Fund:
Beneficial Owner | Fund | Percent of Ownership of Class | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PTY | 24.93% of Preferred Shares |
F-1
Beneficial Owner | Fund | Percent of Ownership of Class | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PTY | 38.80% of Preferred Shares | ||
Brigade Capital Management, LLC 399 Park Avenue, 16th Floor, New York, New York 10022 | PTY | 14.70% of Preferred Shares | ||
Citigroup Inc. 399 Park Avenue New York, New York 10043 | PCN | 62.90% Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PCN | 7.03% of Preferred Shares | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PCN | 6.20% of Preferred Shares | ||
Citigroup Inc. 399 Park Avenue New York, New York 10043 Citigroup Global Markets Inc. Citigroup Financial Products Inc. Citigroup Global Markets Holdings Inc. 388 Greenwich Street New York, New York 10013 | PHK | 60.00% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PHK | 14.02% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PCQ | 72.82% of Preferred Shares | ||
First Trust Portfolios L.P. First Trust Advisors L.P. The Charger Corporation 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187 | PCQ | 8.58% of Common Shares | ||
F-2
Beneficial Owner | Fund | Percent of Ownership of Class | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PCK | 57.27% of Preferred Shares | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PCK | 7.20% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PZC | 66.98% of Preferred Shares | ||
First Trust Portfolios L.P. First Trust Advisors L.P. The Charger Corporation 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187 | PZC | 7.54% of Common Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PMF | 73.54% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PML | 63.27% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PMX | 67.76% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PNF | 68.40% of Preferred Shares | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PNF | 13.40% of Preferred Shares | ||
F-3
Beneficial Owner | Fund | Percent of Ownership of Class | ||
First Trust Portfolios L.P. First Trust Advisors L.P. The Charger Corporation 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187 | PNF | 11.66% of Common Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PNI | 62.53% of Preferred Shares | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PNI | 7.50% of Preferred Shares | ||
UBS AG Bahnhofstrasse 45 PO Box CH-8021 Zurich, Switzerland | PYN | 81.09% of Preferred Shares | ||
Bank of America Corporation 100 North Tryon Street, Charlotte, North Carolina 28255 | PYN | 8.40% of Preferred Shares | ||
This information is based on publicly available Schedule 13D and 13G disclosures filed with the Fund’s management (“Management”) and independent registered public accounting firm and reportsSEC.
Persons who own more than 25% of the resultsoutstanding shares of its activitiesbeneficial interest of a Fund may be presumed to “control” the Board. Management hasFund, as that term is defined in the primary responsibility1940 Act. To the extent a Shareholder “controls” a Fund, it may not be possible for matters subject to a vote of a majority of the financial statements andoutstanding voting securities of 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 September 30, 2013 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 registered public accounting firm, the audited financial statements for the fiscal year ended September 30, 2013. The Committee has discussed with PwC the matters requiredFund to be discussedapproved without the affirmative vote of such Shareholder, and it may be possible for such matters to be approved by Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requiressuch Shareholder without the independent registered public accounting firm to communicate to the Committee matters including, if applicable: 1) methods used to account for significant unusual transactions; 2) the effectaffirmative vote of significant accounting policies in controversial or 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 certainany other matters.
With respect to the Fund, the Committee has received the written disclosure and the letter from PwC required by Rule 3526 of the Public Company Accounting Oversight Board (requiring registered public accounting firms to make written disclosure to and discuss with the Committee various matters relating to the auditor’s independence), and has discussed with PwC theirShareholders.
B-5F-4
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 Allianz Global Investors Fund Management LLC (“AGIFM”), the Fund’s investment manager, Pacific Investment Management Company LLC (“PIMCO”), the Fund’s sub-adviser and any entity controlling, controlled by or under common control with AGIFM or PIMCO 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 registered public accounting firm, 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 September 30, 2013 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 registered public accounting firm for the fiscal year ending September 30, 2014.
Submitted by the Audit Oversight Committee of the Board of Trustees:
Deborah A. DeCotis
Bradford K. Gallagher
James A. Jacobson
Hans W. Kertess
William B. Ogden, IV
Alan Rappaport
B-6PROXY_CEF_042114
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YOUR VOTE IS IMPORTANT NO MATTER
OWN.THE MATTERS WE ARE SUBMITTING FOR YOUR
THE FUND AND TO SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!
SHAREHOLDER NAME AND ADDRESS HERE |   | |
PROXY IN CONNECTION WITH THE ANNUALSPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013JUNE 9, 2014
The undersigned holderholder(s) of common shares of PIMCO Municipal Incomethe above-listed Fund, a Massachusetts business trust (the “Fund”), hereby appointsappoint(s) Lawrence G. Altadonna and Thomas J. Fuccillo, and Brian S. Shlissel, or anyeither of them, as proxies for the undersigned,each with full power of substitution, in each of them, toas the proxy or proxies for the undersigned to: (i) attend the AnnualJoint Special Meeting of Shareholdersshareholders of the Fund (the “Annual“Special Meeting”) to be held at 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors FundPacific Investment Management Company LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, on June 9, 2014 beginning at 9:30 A.M. Eastern Time, and any adjournment(s) or postponement(s) thereof, tothereof; and (ii) cast on behalf of the undersigned all votes that the undersigned is entitled to cast at the AnnualSpecial Meeting and otherwise to represent the undersigned with all powers possessed by the undersigned as if personally present at such AnnualSpecial Meeting. The undersigned hereby acknowledges receipt of the Notice of the Special Meeting and the accompanying Proxy Statement anddated April 21, 2014. The undersigned hereby revokes any prior proxy heretofore given with respect to the Annual Meeting.Special Meeting, and ratifies and confirms all that the proxies, or any one of them, may lawfully do.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
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 ANNUALSPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO THEA 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.Proposal.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF
AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUALSPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.JUNE 9, 2014.The Proxy Statement and the Annual Report to Shareholders for the most recently completed fiscal year ended April 30, 2013 for PIMCO Municipal Income Fund areis also available at us.allianzgi.com/closedendfunds.
[PROXY ID NUMBER HERE] | [BAR CODE HERE] | [CUSIP HERE] | ||
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| YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. | ||||
Please sign appear(s) on the |
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| SIGNATURE (AND TITLE IF APPLICABLE) | DATE | |||
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| SIGNATURE (IF HELD JOINTLY) | DATE | |||
TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
| FOR | ABSTAIN | |||||||
| PROPOSAL: | ||||||||
| 1. | ||||||||
| ¡ | ¡ | ||||||
You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
[PROXY ID NUMBER HERE] | [BAR CODE HERE] | [CUSIP HERE] | ||
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YOUR VOTE IS IMPORTANT NO MATTER
OWN.THE MATTERS WE ARE SUBMITTING FOR YOUR
THE FUND AND TO SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!
SHAREHOLDER NAME AND ADDRESS HERE | | |
PROXY IN CONNECTION WITH THE ANNUALSPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013JUNE 9, 2014
The undersigned holderholder(s) of preferred shares of PIMCO Municipal Incomethe above-listed Fund, a Massachusetts business trust (the “Fund”), hereby appointsappoint(s) Lawrence G. Altadonna and Thomas J. Fuccillo, and Brian S. Shlissel, or anyeither of them, as proxies for the undersigned,each with full power of substitution, in each of them, toas the proxy or proxies for the undersigned to: (i) attend the AnnualJoint Special Meeting of Shareholdersshareholders of the Fund (the “Annual“Special Meeting”) to be held at 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors FundPacific Investment Management Company LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, on June 9, 2014 beginning at 9:30 A.M. Eastern Time, and any adjournment(s) or postponement(s) thereof, tothereof; and (ii) cast on behalf of the undersigned all votes that the undersigned is entitled to cast at the AnnualSpecial Meeting and otherwise to represent the undersigned with all powers possessed by the undersigned as if personally present at such AnnualSpecial Meeting. The undersigned hereby acknowledges receipt of the Notice of the Special Meeting and the accompanying Proxy Statement anddated April 21, 2014. The undersigned hereby revokes any prior proxy heretofore given with respect to the Annual Meeting.Special Meeting, and ratifies and confirms all that the proxies, or any one of them, may lawfully do.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
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 ANNUALSPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO THEA 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.Proposal.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF
AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUALSPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.JUNE 9, 2014.The Proxy Statement and the Annual Report to Shareholders for the most recently completed fiscal year ended April 30, 2013 for PIMCO Municipal Income Fund areis also available at us.allianzgi.com/closedendfunds.
[PROXY ID NUMBER HERE] | [BAR CODE HERE] | [CUSIP HERE] | ||
|
| YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. | ||||
Please sign appear(s) on the |
| |||
| SIGNATURE (AND TITLE IF APPLICABLE) | DATE | |||
| ||||
| SIGNATURE (IF HELD JOINTLY) | DATE | |||
TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
| FOR | ABSTAIN | |||||||
| PROPOSAL: | ||||||||
| 1. | ||||||||
| ¡ | ¡ | ||||||
| ¡ | |||||||
You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
[PROXY ID NUMBER HERE] | [BAR CODE HERE] | [CUSIP HERE] | ||
|
| |
YOUR VOTE IS IMPORTANT NO MATTER
OWN.THE MATTERS WE ARE SUBMITTING FOR YOUR
THE FUND AND TO SHAREHOLDER. PLEASE TAKE THE TIME TO READ THE PROXY STATEMENT AND CAST YOUR PROXY VOTE TODAY!
SHAREHOLDER NAME AND ADDRESS HERE | | |
PROXY IN CONNECTION WITH THE ANNUALSPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013JUNE 9, 2014
The undersigned holderholder(s) of common shares of PIMCO California Municipal Incomethe above-listed Fund, a Massachusetts business trustMaryland corporation (the “Fund”), hereby appointsappoint(s) Lawrence G. Altadonna and Thomas J. Fuccillo, and Brian S. Shlissel, or anyeither of them, as proxies for the undersigned,each with full power of substitution, in each of them, toas the proxy or proxies for the undersigned to: (i) attend the AnnualJoint Special Meeting of Shareholdersshareholders of the Fund (the “Annual“Special Meeting”) to be held at 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors FundPacific Investment Management Company LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, on June 9, 2014 beginning at 9:30 A.M. Eastern Time, and any adjournment(s) or postponement(s) thereof, tothereof; and (ii) cast on behalf of the undersigned all votes that the undersigned is entitled to cast at the AnnualSpecial Meeting and otherwise to represent the undersigned with all powers possessed by the undersigned as if personally present at such AnnualSpecial Meeting. The undersigned hereby acknowledges receipt of the Notice of the Special Meeting and the accompanying Proxy Statement anddated April 21, 2014. The undersigned hereby revokes any prior proxy heretofore given with respect to the Annual Meeting.Special Meeting, and ratifies and confirms all that the proxies, or any one of them, may lawfully do.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEESDIRECTORS OF THE FUND, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL.
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 ANNUALSPECIAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO THEA 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.Proposal.
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF
AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THEJOINTANNUAL SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.JUNE 9, 2014.The Proxy Statement and the Annual Report to Shareholders for the most recently completed fiscal year ended April 30, 2013 for PIMCO California Municipal Income Fund areis also available at us.allianzgi.com/closedendfunds.
[PROXY ID NUMBER HERE] | [BAR CODE HERE] | [CUSIP HERE] | ||
|
| YOUR SIGNATURE IS REQUIRED FOR YOUR VOTE TO BE COUNTED. | ||||
Please sign appear(s) on the |
| |||
| SIGNATURE (AND TITLE IF APPLICABLE) | DATE | |||
| ||||
| SIGNATURE (IF HELD JOINTLY) | DATE | |||
TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
| FOR | ABSTAIN | |||||||
| PROPOSAL: | ||||||||
| 1. | ||||||||
| ¡ | ¡ | ||||||
You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO California Municipal Income Fund, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended April 30, 2013 for PIMCO California Municipal Income Fund are also available at us.allianzgi.com/closedendfunds.
[PROXY ID NUMBER HERE] | ||||||
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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[BAR CODE HERE]
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
| [CUSIP HERE] |
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO New York Municipal Income Fund, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended April 30, 2013 for PIMCO New York Municipal Income Fund are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO New York Municipal Income Fund, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended April 30, 2013 for PIMCO New York Municipal Income Fund are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO California Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO California Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO California Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51stStreets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO California Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO New York Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO New York Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO New York Municipal Income Fund II, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51stStreets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended May 31, 2013 for PIMCO New York Municipal Income Fund II are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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| ||||||
You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO California Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO California Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO California Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO California Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of common shares of PIMCO New York Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50thand West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO New York Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
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You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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PROXY IN CONNECTION WITH THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 2013
The undersigned holder of preferred shares of PIMCO New York Municipal Income Fund III, a Massachusetts business trust (the “Fund”), hereby appoints Lawrence G. Altadonna, Thomas J. Fuccillo 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 9:30 a.m., Eastern Time, December 18, 2013 at the offices of Allianz Global Investors Fund Management LLC, 1633 Broadway, between West 50th and West 51st Streets, 42nd Floor, New York, New York 10019, and any adjournment(s) or postponement(s) 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 as 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
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(S) OR POSTPONEMENT(S) THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS TO 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.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 18, 2013.The Proxy Statement and the Annual Report to Shareholders for the fiscal year ended September 30, 2013 for PIMCO New York Municipal Income Fund III are also available at us.allianzgi.com/closedendfunds.
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TO VOTE, MARK ONE CIRCLE IN BLUE OR BLACK INK. Example:l
| ||||||
| ||||||
You can vote on the internet, by telephone or by mail. Please see the reverse side for instructions.
PLEASE VOTE ALL YOUR BALLOTS IF YOU RECEIVED MORE THAN ONE BALLOT DUE TO MULTIPLE INVESTMENTS IN THE FUND. REMEMBER TO SIGN AND DATE ABOVE BEFORE MAILING IN YOUR VOTE. THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
THANK YOU FOR VOTING
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