SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as Permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
[PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.]
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
[LOGO OF PIMCO APPEARS HERE]
PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
840 Newport Center Drive, Suite 300
Newport Beach, California 92660
(800) 213-3606
Notice of Annual Meeting of Shareholders
To be held April 12, 2001
To the Shareholders of PIMCO Commercial Mortgage Securities Trust, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of
Shareholders of PIMCO Commercial Mortgage Securities Trust, Inc. (the "Fund")
will be held at 800 Newport Center Drive, 6th Floor, Newport Beach, California
92660, on April 12, 2001 at 10:00 a.m., Pacific time, or as adjourned from
time to time for the following purposes:
(1) To elect the Nominees listed in the Proxy Statement to serve as
members of the Fund's Board of Directors for the terms expiring in 2004,
and until their successors are elected and qualify; and
(2) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
After careful consideration, the Directors of the Fund unanimously approved
the proposal and recommend that shareholders vote "FOR" the proposal. The
matters referred to above are discussed in detail in the proxy statement
attached to this notice. The Board of Directors has fixed the close of
business on March 12, 2001 as the record date for determining shareholders
entitled to notice of and to vote at the Meeting or any adjournment thereof.
Each share of the Fund is entitled to one vote, with fractional votes for
fractional shares.
Regardless of whether you plan to attend the Meeting, PLEASE COMPLETE, SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED, SO
THAT YOU WILL BE REPRESENTED AT THE MEETING. If you have returned a proxy card
and are present at the Meeting, you may change the vote specified in the proxy
at that time. However, attendance in person at the Meeting, by itself, will
not revoke a previously tendered proxy.
By Order of the Board of Directors,
Garlin G. Flynn
Secretary
Newport Beach, California
Dated: March 19, 2001
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. IN
ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
PROXY STATEMENT
PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
840 Newport Center Drive, Suite 300
Newport Beach, California 92660
(800) 213-3606
----------------
Annual Meeting of Shareholders
To be held April 12, 2001
----------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board" or "Directors") of PIMCO
Commercial Mortgage Securities Trust, Inc. (the "Fund"), a Maryland
corporation, for use at the annual meeting of shareholders of the Fund to be
held at 800 Newport Center Drive, 6th Floor, Newport Beach, California 92660,
on April 12, 2001 at 10:00 a.m., Pacific time, or as adjourned from time to
time (the "Meeting") for the purposes set forth in the accompanying notice. It
is anticipated that the first mailing of proxies and proxy statements to
shareholders will be on or about March 19, 2001.
Shareholder Reports. Shareholders can find important information about the
Fund in the annual report dated December 31, 2000 and the semi-annual report
dated June 30, 2000, each of which previously has been furnished to
shareholders. Shareholders may request another copy of these reports by
writing to the Fund at the above address, or by calling the toll-free
telephone number above.
The Board is soliciting proxies from shareholders of the Fund with respect
to the following:
I. To elect certain Directors to the Board of Directors of the Fund; and
II. To transact such other business as may properly come before the
Meeting.
PROPOSAL I: ELECTION OF DIRECTORS
The Fund's Articles of Incorporation provide that the Fund's Board of
Directors shall be divided into three classes, as nearly equal in number as
possible, which shall be designated as Class I, Class II and Class III. The
current terms of the Class I Directors expire this year. The current terms of
the Class II and Class III Directors will expire in 2002 and 2003,
respectively, when their respective successors are elected and qualify. The
effect of these staggered terms is to limit the ability of other entities or
persons to acquire control of the Fund by delaying for up to two years the
replacement of a majority of the Board of Directors. Guilford C. Babcock,
E. Philip Cannon and William J. Popejoy, the current Class I Directors, have
been nominated for re-election by the Board to serve another term, which would
expire in 2004 (Messrs. Babcock, Cannon and Popejoy collectively are the
"Nominees"). The Nominees have indicated their willingness to serve as
Directors. The Board knows of no reason why the Nominees would be unable to
serve, but in the event of any such unavailability, the proxies received will
be voted for such substituted nominee as the Board may recommend.
The persons named as proxies on the enclosed proxy card will vote your
shares for the election of the Nominees unless you withhold authority to vote
for the Nominees in your proxy. If elected by shareholders, the Nominees will
continue to serve as Directors of the Fund until their terms expire in 2004,
unless sooner succeeded as provided in the Fund's Articles of Incorporation.
It is proposed, and the Board recommends, that shareholders elect the
Nominees.
2
The following table sets forth certain information concerning each of the
Directors of the Fund including the Nominees. However, only the Nominees are
standing for election.
The Class I Directors (Nominees) are:
Class I (Term Expiring in 2004):
Shares of Common
Stock Beneficially
Length of Owned and % of Total
Name, Address and Service Current Position Principal Occupation(s) Outstanding
Age on the Board With the Fund During the Past Five Years as of March 12, 2001
----------------- ------------- ---------------- -------------------------- --------------------
Guilford C. Babcock 7/93-Present Director Associate Professor of -0-
1500 Park Place Finance, University of
San Marino, CA 91108 Southern California;
Age 69 Trustee, PIMCO Funds:
Pacific Investment
Management Series;
Trustee, PIMCO Variable
Insurance Trust;
Director, Growth Fund of
America and Fundamental
Investors of the Capital
Group; and Director,
Good Hope Medical
Foundation.
E. Philip Cannon 3/00-Present Director Proprietor, Cannon & -0-
3838 Olympia Company, an affiliate of
Houston, TX 77019 Inverness Management LLC
Age 60 (a private equity
investment firm );
Trustee, PIMCO Funds:
Pacific Investment
Management Series;
Trustee, PIMCO Variable
Insurance Trust; and
Trustee, PIMCO Funds:
Multi-Manager Series.
Formerly, Headmaster,
St. John's School,
Houston, Texas; Trustee,
PIMCO Advisors Funds;
and Trustee, Cash
Accumulation Trust.
William J. Popejoy 7/93-2/95 and Director President, Pacific -0-
29 Chatham Court 8/95-Present Capital Investors;
Newport Beach, CA Chairman, PacPro (vinyl
92660 assembly products;
Age 62 formerly Western
Printing); Trustee,
PIMCO Funds: Pacific
Investment Management
Series; and Trustee,
PIMCO Variable Insurance
Trust. Formerly
Director, California
State Lottery; and Chief
Executive Officer,
Orange County,
California.
3
The Class II Directors are:
Class II (Term Expiring in 2002):
Shares of Common
Stock Beneficially
Length of Owned and % of Total
Name, Address and Service Current Position Principal Occupation(s) Outstanding
Age on the Board With the Fund During the Past Five Years as of March 12, 2001
----------------- ------------ ---------------- -------------------------- --------------------
J. Michael Hagan 3/00-Present Director Private Investor and -0-
6 Merced Business Consultant;
San Clemente, CA Trustee, PIMCO Funds:
92673 Pacific Investment
Age 61 Management Series;
Trustee, PIMCO Variable
Insurance Trust;
Director, Freedom
Communications;
Director, Saint Gobain
Corporation; Director,
Ameron International;
Director, Remedy Temp;
Trustee, South Coast
Repertory; Member of the
Board of Regents, Santa
Clara University; and
Member of the Board,
Taller San Jose.
Formerly, Chairman and
CEO, Furon Company
(manufacturing).
Thomas P. Kemp 7/93-Present Director Private Investor; -0-
1141 Marine Drive Chairman, One Touch
Laguna Beach, CA Technologies LLC
92651 (electronic systems for
Age: 70 long term care
facilities); Trustee,
PIMCO Funds: Pacific
Investment Management
Series; and Trustee,
PIMCO Variable Insurance
Trust. Formerly, Co-
Chairman, U.S. Committee
to Assist Russian
Reform; Director, Union
Financial Corp; and
Chairman, Coca Cola
Bottling Company of Los
Angeles.
Vern O. Curtis 2/95-Present Director Private Investor, 7,500
14158 N.W. Trustee; PIMCO Funds: (0.07%)
Bronson Creek Drive Pacific Investment
Portland, OR Management Series;
97229 Trustee, PIMCO Variable
Age: 66 Insurance Trust;
Director, Public Storage
Business Parks, Inc.
(a Real Estate
Investment Trust); and
Director, Fresh Choice,
Inc. (restaurant
company). Formerly,
charitable work, The
Church of Jesus Christ
of Latter-day Saints.
4
The Class III Directors are:
Class III (Term Expiring in 2003):
Shares of Common
Stock Beneficially
Length of Owned and % of Total
Service Current Position Principal Occupation(s) Outstanding
Name, Address and Age on the Board With the Fund During the Past Five Years as of March 12, 2001
--------------------- -------------- ---------------- -------------------------- --------------------
Brent R. Harris* 6/93-Present Chairman of Managing Director, 15,000
840 Newport Center Drive, the Board PIMCO; Board of (0.14%)
Suite 300 and Director Governors and Executive
Newport Beach, CA Committee, Investment
92660 Company Institute;
Age: 41 Chairman and Trustee,
PIMCO Funds: Pacific
Investment Management
Series; and Chairman and
Trustee, PIMCO Variable
Insurance Trust.
R. Wesley Burns* 11/97-Present President Managing Director, 2,500
840 Newport Center Drive, (since 2/94 as and Director PIMCO; President and (0.02%)
Suite 300 President) Trustee, PIMCO Funds:
Newport Beach, CA Pacific Investment
92660 Management Series; and
Age: 41 President and Trustee,
PIMCO Variable Insurance
Trust. Formerly,
Executive Vice
President, PIMCO; and
Executive Vice
President, PIMCO Funds:
Multi-Manager Series.
- -------
* Mr. Burns and Mr. Harris are "interested persons" of the Fund (as that term
is defined in the Investment Company Act of 1940 as amended ("1940 Act"))
because of their affiliations with Pacific Investment Management Company LLC
("PIMCO").
During the fiscal year ended December 31, 2000, there were five meetings of
the Board. There was 100% attendance by the Directors at the meetings, either
in-person or telephonically, throughout the period.
As of December 31, 2000, the Directors and officers of the Fund, as a group,
owned less than one percent of the outstanding shares of the Fund in
aggregate. Messrs. Curtis and Hagan formerly held units issued by PIMCO
Advisors L.P., the parent of PIMCO.
Board of Directors--Committees
The Fund has a standing Audit Committee that consists of all of the
independent Directors (Messrs. Babcock, Cannon, Curtis, Hagan, Kemp and
Popejoy). The Audit Committee reviews both the audit and non-audit work of the
Fund's independent public accountant, submits a recommendation to the Board as
to the selection of an independent public accountant, and reviews generally
the maintenance of the Fund's records and the safekeeping arrangements of the
Fund's custodian. During the fiscal year ended December 31, 2000, the Audit
Committee met three times. Each member of the Audit Committee attended 100% of
such meetings during the period in which he was a member of the Audit
Committee.
The Fund adopted an Audit Committee Charter on November 14, 2000, a copy of
which is attached to this Proxy Statement as Appendix A. The Audit Committee
has received written disclosures and the letter required by Independence
Standards Board No. 1 from its independent public accountant, and has
discussed with its independent public accountant its independence. The Audit
Committee has also reviewed and discussed the audited financial statements
with Fund
5
management and its independent public accountant, and discussed certain
matters with its independent public accountant addressed by Statements on
Auditing Standards No. 61. Based on the foregoing, the Audit Committee
recommended to the Board that the Fund's audited financial statements be
included in the Fund's Annual Report for the fiscal year ended December 31,
2000.
The Fund also has a Nominating Committee, composed of all of the independent
Directors (Messrs. Babcock, Cannon, Curtis, Hagan, Kemp and Popejoy), that is
responsible for the selection and nomination of candidates to serve as
Directors of the Fund. During the fiscal year ended December 31, 2000, there
were no meetings of the Nominating Committee.
Remuneration of Directors and Officers
The Fund pays each Director who is not an "interested person" of the Fund an
annual retainer of $6,000 plus $1,000 for each regular Board meeting attended
in person and $500 for each meeting attended telephonically, plus
reimbursement of related expenses. In addition, a Director serving as a
Committee Chair, other than those affiliated with PIMCO or its affiliates,
received an additional annual retainer of $500. For the fiscal year ended
December 31, 2000, the Directors who are not "interested persons" of the Fund,
as a group, received compensation in the amount of $59,024.
The following table set forth the compensation paid to each of the
Directors of the Fund for the fiscal year ended December 31, 2000.
Directors who are "interested persons" of the Fund do not receive any
compensation from the Fund.
Aggregate Total Compensation
Compensation from Fund and Fund
Name from Fund Complex*
---- ------------ ------------------
Guilford C. Babcock............................ $10,000 $ 73,250
E. Philip Cannon............................... $ 8,819 $129,376
Vern O. Curtis................................. $11,205 $ 81,574
J. Michael Hagan............................... $ 8,000 $ 58,250
Thomas P. Kemp................................. $10,500 $ 77,500
William J. Popejoy............................. $10,500 $ 77,500
- --------
* Fund complex includes the Fund, PIMCO Funds: Pacific Investment Management
Series, PIMCO Funds: Multi-Manager Series, and PIMCO Variable Insurance
Trust.
For their services as Trustees of the PIMCO Funds: Pacific Investment
Management Series, the Directors listed above received an annual retainer of
$45,000 plus $3,000 for each Board of Trustees meeting attended in person
($500 for each such meeting attended telephonically), plus reimbursement of
related expenses. The Audit Committee Chairman receives annually an
additional $1,500. For the fiscal year ended March 31, 2000, these Trustees,
as a group, received compensation in the amount of $231,546 from PIMCO Funds:
Pacific Investment Management Series.
6
For his services as a Trustee of the PIMCO Funds: Multi-Manager Series, Mr.
Cannon received an annual retainer of $47,000 plus $2,000 for each Board of
Trustees meeting attended in person ($1,000 for each such meeting attended
telephonically), and annual Performance Committee retainer of $2,000 plus
$1,000 for each Performance Committee meeting attended, plus reimbursement of
related expenses. For the fiscal year ended June 30, 2000, Mr. Cannon
received compensation in the amount of $74,196 from PIMCO Funds: Multi-
Manager Series.
For their services as Trustees of the PIMCO Variable Insurance Trust, the
Directors listed above received an annual retainer of $4,000 plus $1,500 for
each Board of Trustees meeting attended in person ($250 for each such meeting
attended telephonically) plus reimbursement of related expenses. The Audit
Committee Chairman receives annually and additional $500. For the fiscal year
ended December 31, 2000, these Trustees, as a group, received compensation in
the amount of $55,274 from PIMCO Variable Insurance Trust.
The following table shows the executive officers of the Fund, other than
those shown above, their ages, positions with the Fund and principal
occupations during the past five years. The executive officers of the Fund are
appointed annually by the Board of Directors.
Principal Occupations
Position with During the Past Five
Name and Age the Fund Years
------------ ------------- ---------------------
Scott A. Mather Senior Vice President Executive Vice President,
Age 32 (Since 2/01) PIMCO. Formerly
Vice President, Goldman
Sachs.
William C. Powers Senior Vice President Managing Director, PIMCO.
Age 42 (Since 7/93)
Jeffrey M. Sargent Senior Vice President, Senior Vice President and
Age 38 formerly Vice President and Manager of Shareholder
Secretary Services, PIMCO; Senior
(Since 6/93) Vice President, PIMCO
Funds: Pacific Investment
Management Series; Senior
Vice President, PIMCO
Variable Insurance Trust;
and Vice President, PIMCO
Funds: Multi-Manager
Series. Formerly, Vice
President, PIMCO.
Henrik P. Larsen Vice President Vice President and
Age 31 (Since 2/99) Manager of Fund
Administration, PIMCO;
Vice President, PIMCO
Funds: Pacific Investment
Management Series; Vice
President, PIMCO Variable
Insurance Trust; and Vice
President, PIMCO Funds:
Multi-Manager Series.
Formerly, Manager, PIMCO.
William S. Thompson, Jr. Vice President Chief Executive Officer
Age 55 (Since 7/93) and Managing Director,
PIMCO; Senior Vice
President, PIMCO Variable
Insurance Trust; and Vice
President, PIMCO Funds:
Pacific Investment
Management Series.
Garlin G. Flynn Secretary Specialist, Fund
Age 54 (Since 8/95) Administration, PIMCO;
Secretary, PIMCO Funds:
Pacific Investment
Management Series;
Secretary, PIMCO Variable
Insurance Trust; and
Assistant Secretary,
PIMCO Funds: Multi-
Manager Series. Formerly,
Senior Fund
Administrator, PIMCO.
7
Position with Principal Occupations
Name and Age the Fund During the Past Five Years
------------ ------------- --------------------------
John P. Hardaway Treasurer Senior Vice President and Manager of
Age 43 (Since 6/93) Fund Accounting, PIMCO; Treasurer,
PIMCO Funds: Pacific Investment
Management Series; Treasurer, PIMCO
Variable Insurance Trust; and
Treasurer, PIMCO Funds; Multi-Manager
Series. Formerly, Vice President,
PIMCO.
Michael J. Willemsen Assistant Secretary Vice President and Manager of
Age 41 (Since 2/95) Shareholder Support, PIMCO; Assistant
Secretary, PIMCO Funds: Pacific
Investment Management Series; and
Assistant Secretary, PIMCO Variable
Insurance Trust. Formerly, Manager,
Shareholder Support and Project Lead,
PIMCO.
Erik C. Brown Assistant Treasurer Vice President and Manager of
Age 33 (Since 2/01) Financial Reporting and Taxation,
PIMCO; Assistant Treasurer, PIMCO
Funds: Pacific Investment Management
Series; and Assistant Treasurer,
PIMCO Variable Insurance Trust.
Formerly, tax consultant with
Deloitte & Touche LLP and
PricewaterhouseCoopers LLP.
Investment Manager and Administrator
PIMCO is located at 840 Newport Center Drive, Suite 300, Newport Beach,
California 92660. PIMCO serves as the investment manager and the administrator
for the Fund. Subject to the supervision of the Board of Directors, PIMCO is
responsible for managing the investment activities of the Fund and the Fund's
business affairs and other administrative matters.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE NOMINEES UNDER PROPOSAL I. UNMARKED PROXIES WILL BE SO VOTED.
INFORMATION ON INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP was selected by the Board on February 28, 2001 as
independent public accountant to examine the financial statements of the Fund
for the fiscal year ending December 31, 2001. Ernst & Young LLP was the Fund's
independent public accountant for the fiscal year ended December 31, 2000.
Audit Fees
The aggregate fees paid to Ernst & Young LLP in connection with the annual
audit of the Fund for the fiscal year ended December 31, 2000 was $21,500.
PricewaterhouseCoopers LLP was not the Fund's independent public accountant
for the fiscal year ended December 31, 2000, and therefore, received no
compensation in connection with the annual audit of the Fund.
8
Financial Information Systems Design and Implementation Fees
There were no fees billed for financial information systems design and
implementation services rendered by Ernst & Young LLP and
PricewaterhouseCoopers LLP to the Fund, its investment manager, and entities
controlling, controlled by or under common control with the investment manager
that provided services to the Fund for the fiscal year ended December 31,
2000.
All Other Fees
The aggregate fees billed for all other non-audit services, including fees
for tax-related services, rendered by Ernst & Young LLP to the Fund, its
investment manager, and entities controlling, controlled by or under common
control with the investment manager that provided services to the Fund for the
fiscal year ended December 31, 2000 was $8,300. The aggregate fees billed for
all other non-audit services, including fees for tax-related services,
rendered by PricewaterhouseCoopers LLP to the Fund, its investment manager,
and entities controlling, controlled by or under common control with the
investment manager that provided services to the Fund for the fiscal year
ended December 31, 2000 was $192,435. The Audit Committee has considered
whether the provision of non-audit services is compatible with maintaining the
independence of Ernst & Young LLP and PricewaterhouseCoopers LLP.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
Section 30(h) of the 1940 Act require the Fund's officers and Directors,
investment manager, affiliates of the investment manager, and persons who
beneficially own more than ten percent of a registered class of the Fund's
securities ("Reporting Persons"), to file reports of ownership of the Fund's
securities and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Reporting Persons are also
required by such regulations to furnish the Fund with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it and
written representation of certain Reporting Persons, the Fund believes that
during fiscal year ended December 31, 2000, its Reporting Persons, except for
an employee of PIMCO, complied with all applicable filing requirements. This
employee failed to file Form 5 on a timely basis with respect to one
transaction in connection with the purchase of Fund shares. As of the date of
this proxy statement, such employee has made all applicable filings.
OTHER BUSINESS
The Directors do not know of any matters to be presented at the Meeting
other than those set forth in this proxy statement. If other business should
properly come before the Meeting, proxies will be voted in accordance with the
judgment of the persons named in the accompanying proxy.
ADDITIONAL INFORMATION
Expenses
The expense of preparation, printing and mailing of the enclosed form of
proxy and accompanying Notice and Proxy Statement will be borne by the Fund.
The Fund will reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Fund. In order to obtain the necessary quorum at the
Meeting, supplementary solicitation may be made by mail, telephone, telegraph,
the Internet or personal interview by officers or agents of the Fund.
9
Quorum and Votes Required
Shareholders of record at the close of business on March 12, 2001 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting. Each
shareholder is entitled to one vote for each full share and an appropriate
fraction of a vote for each fractional share held.
As of the Record Date, 11,009,586 shares of the Fund, representing the same
number of votes, were outstanding. As of December 31, 2000, no persons owned
of record or beneficially 5% or more of the shares of the Fund.
Timely and properly executed proxies will be voted as instructed by
shareholders. A shareholder may revoke his or her proxy at any time prior to
its exercise by written notice addressed to the Secretary of the Fund at
840 Newport Center Drive, Suite 300, Newport Beach, California 92660 or by
voting in person at the Meeting. However, attendance in person at the Meeting,
by itself, will not revoke a previously tendered proxy.
The presence in person or by proxy of the holders of a majority of the
outstanding shares is required to constitute a quorum at the Meeting. Shares
held by shareholders present in person or represented by proxy at the Meeting
will be counted both for the purpose of determining the presence of a quorum
and for calculating the votes cast on the issues before the Meeting.
Abstentions will also be counted for quorum purposes.
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 quorum. Pursuant to the rules and
policies of the New York Stock Exchange (the "Exchange"), members of the
Exchange may vote on the proposals to be considered at the meeting without
instructions from the beneficial owners of the Fund's shares.
In the event that a quorum is present at the meeting but sufficient votes to
approve any proposal are not received, the persons named as proxies may
propose one or more adjournment of the Meeting to permit further solicitation
of proxies or to obtain the vote required for approval of one or more
proposals. Any such adjournment will require the affirmative vote of a
majority of those shares represented at the Meeting in person or by proxy. If
a quorum is present, the persons named as proxies will vote those proxies
which they are entitled to vote FOR the proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST the
proposal against any such adjournment. A shareholder vote may be taken prior
to any adjournment of the Meeting on any proposal for which there is
sufficient votes for approval, even though the Meeting is adjourned as to
other proposals.
Voting
To vote, shareholders may sign and mail the proxy card received with the
proxy statement or attend the Meeting in person.
Required Vote
Election of the Directors (Proposal I) will require the affirmative vote of
the holders of a majority of the Fund's shares present (or represented by
proxy) and voting at the Meeting.
10
Shareholders' Proposals
The Fund holds annual meetings of shareholders. A shareholder's proposal
intended to be presented at the Fund's Annual Meeting of Shareholders in 2002
must be received by the Fund a reasonable time before the mailing of the proxy
statement, in order to be included in the Fund's proxy statement and form of
proxy relating to the meeting. A shareholder who wishes to make a proposal at
the 2002 annual meeting of shareholders without including the proposal in the
Fund's proxy statement must notify the Fund in writing, at the Fund's offices,
of such proposal no later than 60 days before the meeting. If a shareholder
fails to give timely notice, then the persons named as proxies in the proxies
solicited by the Board for the 2002 annual meeting of shareholders may
exercise discretionary voting power with respect to any such proposal.
To ensure the presence of a quorum at the Meeting, prompt execution and
return of the enclosed proxy is requested. A self-addressed, postage-paid
envelope is enclosed for your convenience.
By Order of the Board of Directors
Garlin G. Flynn
Secretary
Newport Beach, California
Dated: March 19, 2001
11
APPENDIX A
PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
AUDIT COMMITTEE CHARTER
1. The Audit Committee of the Fund shall be composed of at least three
independent members of the Board of Directors of the Fund (the "Board"),
each of whom is financially literate and at least one of whom has
accounting or related financial management expertise, as determined by the
Board.
2. The purposes of the Audit Committee are:
(a) to oversee the Fund's accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal
controls of certain service providers;
(b) to oversee the quality and objectivity of the Fund's financial
statements and the independent audit thereof; and
(c) to act as a liaison between the Fund's independent auditors and the full
Board.
Pacific Investment Management Company LLC ("PIMCO") is responsible for
maintaining appropriate systems for accounting and internal controls. The
auditors are responsible for planning and carrying out a proper audit. The
outside auditor ultimately is accountable to the Board and the Audit
Committee. The function of the Audit Committee is oversight. To this end,
the Audit Committee shall have unrestricted access to the Fund's Board, the
independent auditors, and the executive and financial management of the
Fund.
3. To carry out its purposes, the Audit Committee shall have the following
duties and responsibilities:
(a) to recommend the selection, retention or termination of auditors and,
in connection therewith, to evaluate the independence of the auditors,
including whether the auditors provide any consulting services to
PIMCO, and to receive the auditors' specific representations as to
their independence;
(b) to meet with the Fund's independent auditors, including private
meetings, as necessary (i) to review the arrangements for, procedures
to be utilized, and scope of the annual audit and any special audits;
(ii) to discuss any matters of concern relating to the Fund's financial
statements, including any adjustments to such statements recommended by
the auditors, or other results of audit(s); (iii) to review the annual
financial statements of the Fund and significant accounting policies
underlying the statements and their presentation to the public in the
Annual Report and Form N-SAR; (iv) to consider the auditors' comments
with respect to the Fund's financial policies, procedures and internal
accounting controls and PIMCO's responses thereto; and (v) to review
the form of opinion the auditors propose to render to the Board and
shareholders;
(c) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by PIMCO or the auditors;
(d) to review the form of opinion that the auditors propose to submit to the
Board and shareholders;
(e) to ensure that the outside auditor submits periodically to the
Committee a formal written statement delineating all relationships
between the auditor and the Fund; to actively engage in a dialogue with
the outside auditor with respect to any disclosed relationships or
services that may impact the objectivity and independence of the
outside auditor; and to recommend that the Board take appropriate
action in response to the auditor's report to satisfy itself of the
outside auditors' independence;
A-1
(f) to review the fees charged by the auditors for audit and non-audit
services;
(g) to investigate improprieties or suspected improprieties in Fund
operations; and
(h) to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Committee may deem necessary or appropriate.
4. The Committee shall meet regularly, and shall call special meetings when
necessary.
5. The Committee shall meet with the Treasurer of the Fund and service
providers when necessary, including internal auditors, if any, from PIMCO.
6. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain, at the
Fund's expense, special counsel and other experts or consultants when
necessary.
7. The Committee shall review this Charter and recommend any changes to the
full Board annually.
A-2
PIMCO COMMERCIAL MORTGAGE PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
SECURITIES TRUST, INC.
ATTN: GARLIN FLYNN THIS PROXY IS SOLICITED ON BEHALF OF
840 NEWPORT CENTER DRIVE THE BOARD OF DIRECTORS
SUITE 300
NEWPORT BEACH, CA 92660 ANNUAL MEETING OF SHAREHOLDERS-APRIL 12, 2001
The undersigned hereby appoints Jeffrey M. Sargent,
Henrik P. Larsen and Garlin G. Flynn and each of them,
as his/her attorneys and proxies with full power of
substitution to vote and act with respect to all
shares of PIMCO Commercial Mortgage Securities Trust,
Inc. (the "Fund") held by the undersigned at the
Annual Meeting of Shareholders of the Fund to be held
at 800 Newport Center Drive, 6th Floor, Newport Beach,
California 92660, on April 12, 2001 at 10:00 a.m.
Pacific time, or as adjourned from time to time (the
"Meeting"), and instructs them to vote as indicated
on the matters referred to in the Proxy Statement for
the Meeting, receipt of which is hereby acknowledged,
with discretionary power to vote upon such other
business as may properly come before the Meeting.
This proxy will be voted as specified. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
ALL OF THE NOMINEES.
Receipt of the Notice of Annual Meeting and Proxy
Statement is hereby acknowledged.
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PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
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This proxy must be signed by the beneficial owner of
Fund shares. If signing as attorney, executor,
guardian or in some representative capacity or as an
officer of a corporation, please add title as such.
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TO VOTE, MARK BLOCKS BELOW IN BLUE
OR BLACK INK AS FOLLOWS; PIMCO1 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
The Board of Directors recommends that you
vote FOR each of the Nominees.
For Withhold For All To withhold authority to vote,
1. To elect the Nominees listed below All All Except mark "For All Except" and
to serve as members of the Fund's write the nominee's number
Board of Directors for the terms on the line below.
expiring in 2004, and until their
successors are elected and qualify. [_] [_] [_] -------------------------------
01) Guilford C. Babcock
02) E. Philip Cannon
03) William J. Popejoy
2. To transact such other business as may properly come before the Meeting or any adjournment
thereof.
Mark box at right if an address change
or comment has been noted on the reverse
side of this card. [_] Please be sure to sign and date this Proxy.
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
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