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 COMMERICAL 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:
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Notes:
[LOGO] Pimco
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, 2002
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, 2002 at 10:00 a.m., Pacific time, or as adjourned from time
to time, for the following purposes:
(1) To elect the Nominees listed below to serve as members of the Fund's
Board of Directors for the terms expiring in 2005, and until their
successors are elected and qualify;
(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 8, 2002 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, 2002
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, 2002
-----------------
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, 2002 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, 2002.
Shareholder Reports. Shareholders can find important information about the
Fund in the annual report dated December 31, 2001 and the semi-annual report
dated June 30, 2001, 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 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 II Directors expire this year. The current terms of
the Class I and Class III Directors will expire in 2004 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. J. Michael Hagan, Thomas P. Kemp and Vern
O. Curtis, the current Class II Directors, have been nominated for re-election
by the Board to serve another term, which would expire in 2005 (Messrs. Hagan,
Kemp and Curtis 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 the next meeting of
shareholders, if any, called for the purpose of electing Directors, 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 are:
Class I Directors (Term Expiring in 2004):
Number of Shares of
Portfolios Common
in Fund Stock
Term of Complex Beneficially
Position Office and Overseen Owned and
Held Length of by Director Other Directorships Held % of Total
With the Time Served Principal Occupation(s) or Nominee by Director or Nominee Outstanding
Name and Age/1/ Fund on the Board/3/ During the Past 5 Years for Director for Director at 3/8/02
- --------------- -------- -------------- ---------------------------- ------------ ---------------------------- ------------
Non-Interested Directors
Guilford C. Babcock Director 7/93-Present Private Investor; Professor 50 Director, Growth Fund of -0-
Age 70 of Finance Emeritus, America and Fundamental
University of Southern Investors Fund of the
California; Trustee, PIMCO Capital Group; and Director,
Funds: Pacific Investment Good Hope Medical
Management Series; and Foundation.
Trustee, PIMCO Variable
Insurance Trust.
E. Philip Cannon Director 3/00-Present Proprietor, Cannon & 85 None -0-
Age 61 Company, an Affiliate of
Inverness Management LLC
(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 Director 7/93-2/95 Managing Member, Pacific 50 None -0-
Age 63 and 8/95- Capital Investors; Trustee,
Present PIMCO Funds: Pacific
Investment Management
Series; and Trustee, PIMCO
Variable Insurance Trust.
Formerly, Chairman PacPro
(vinyl assembly products);
and Director, California
State Lottery.
3
The Class II Directors (Nominees) are:
Class II (Term Expiring in 2005):
Number of Shares of
Portfolios Common
in Fund Stock
Term of Complex Beneficially
Position Office and Overseen Owned and
Held Length of by Director Other Directorships Held % of Total
With the Time Served Principal Occupation(s) or Nominee by Director or Nominee Outstanding
Name and Age/1/ Fund on the Board/3/ During the Past 5 Years for Director for Director at 3/8/02
- --------------- -------- -------------- --------------------------- ------------ ---------------------------- ------------
Non-Interested Directors
J. Michael Hagan Director 3/00-Present Private Investor and 50 Director, Freedom -0-
Age 62 Business Consultant; Communications; Director,
Trustee, PIMCO Funds: Saint Gobain Corporation
Pacific Investment (manufacturing); Director,
Management Series; Ameron International
Trustee, PIMCO Variable (manufacturing); Director,
Insurance Trust; Member of Remedy Temp (temporary
the Board of Regents, Santa employment company); and
Clara University; and Trustee, South Coast
Member of the Board, Repertory (theatre).
Taller San Jose. Formerly,
Chairman and CEO, Furon
Company (manufacturing).
Thomas P. Kemp Director 7/93-Present Private Investor; Trustee, 50 Chairman, OneTouch -0-
Age 71 PIMCO Funds: Pacific Technologies Corp.
Investment Management (electronic systems for long
Series; and Trustee, PIMCO term care facilities).
Variable Insurance Trust.
Formerly, Co-Chairman,
U.S. Committee to Assist
Russian Reform.
Vern O. Curtis Director 2/95-Present Private Investor; Trustee, 50 Director, Public Storage 7,500
Age: 67 PIMCO Funds: Pacific Business Parks, Inc. (a Real (0.07%)
Investment Management Estate Investment Trust);
Series; and Trustee, PIMCO and Director, Fresh Choice,
Variable Insurance Trust. Inc. (restaurant company).
4
The Class III Directors are:
Class III (Term Expiring in 2003):
Number of Shares of
Portfolios Common
in Fund Stock
Term of Complex Beneficially
Position Office and Overseen Owned and
Held Length of by Director Other Directorships Held % of Total
With the Time Served Principal Occupation(s) or Nominee by Director or Nominee Outstanding
Name and Age/1/ Fund on the Board/3/ During the Past 5 Years for Director for Director at 3/8/02
- --------------- -------- -------------- -------------------------- ------------ ------------------------ ------------
Interested Directors
Brent R. Harris/2/ Chairman 6/93-Present Managing Director, 51 Board of Governors and 15,000
Age: 42 of the PIMCO; Chairman and Executive Committee, (0.14%)
Board Trustee, PIMCO Funds: Investment Company
and Pacific Investment Institute.
Director Management Series;
Chairman and Trustee,
PIMCO Variable Insurance
Trust; and Director,
Chairman and President,
PIMCO Strategic Global
Government Fund, Inc.
R. Wesley Burns/2/ President 11/97-Present Managing Director, 59 None 2,500
Age: 42 and (since 2/94 as PIMCO; President and (0.02%)
Director President) Trustee, PIMCO Funds:
Pacific Investment
Management Series;
President and Trustee,
PIMCO Variable Insurance
Trust; Director, PIMCO
Funds: Global Investors
Series plc and PIMCO
Global Advisors (Ireland)
Limited; and Senior Vice
President, PIMCO Strategic
Global Government Fund,
Inc. Formerly, Executive
Vice President, PIMCO; and
Executive Vice President,
PIMCO Funds: Multi-
Manager Series.
- --------
/1/ Directors can be reached at the Fund's address above.
/2/ 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").
/3/ The current terms of the Class I and Class III Directors will expire in
2004 and 2003, respectively.
During the fiscal year ended December 31, 2001, there were seven meetings of
the Board.
5
Listed below for each Director is a dollar range of securities beneficially
owned in the Fund together with the aggregate dollar range of equity securities
in all registered investment companies overseen by each Director that are in
the same family of investment companies as the Fund, as of December 31, 2001.
Aggregate Dollar
Range of Equity
Securities in All Funds
Overseen by Director
Dollar Range of or Nominee in Family
Name of Director or Equity Securities of Investment
Nominee in the Fund Companies*
------------------- ----------------- -----------------------
Guilford C. Babcock..... -0- Over $100,000
R. Wesley Burns......... $10,00-$50,000 Over $100,000
E. Philip Cannon........ -0- Over $100,000
Vern O. Curtis.......... Over $100,000 Over $100,000
J. Michael Hagan........ -0- -0-
Brent R. Harris......... Over $100,000 Over $100,000
Thomas P. Kemp.......... -0- $10,001-$50,000
William J. Popejoy...... -0- -0-
- --------
* Family of Investment Companies includes the Fund, PIMCO Funds: Pacific
Investment Management Series, PIMCO Funds: Multi-Manager Series and PIMCO
Variable Insurance Trust.
Set forth in the table below is information regarding each non-interested
Director's (and his or her immediate family members') share ownership in
securities of the investment adviser of the Fund, the principal underwriter of
the Fund, and any entity controlling, controlled by or under common control
with the investment adviser or principal underwriter of the Fund (not including
registered investment companies), as of March 1, 2002.
Name of
Owners and
Relationships
Name of Director or to Director or Value of Percent of
Nominee Nominee Company Title of Class Securities Class
------------------- -------------- ------- -------------- ---------- ----------
Guilford C. Babcock..... None None None None None
E. Philip Cannon........ None None None None None
Vern O. Curtis.......... None None None None None
J. Michael Hagan........ None None None None None
Thomas P. Kemp.......... None None None None None
William J. Popejoy...... None None None None None
As of December 31, 2001, the Directors and Officers of the Fund, as a group,
owned less than one percent of the outstanding shares of the Fund in the
aggregate. Messrs. Curtis and Hagan formerly held units issued by PIMCO
Advisors a division of Allianz Dresdner Asset Management of America L.P.
(formerly PIMCO Advisors L.P.), the parent of PIMCO.
6
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, 2001, the Audit
Committee met four 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
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, 2001.
The Board has formed a Valuation Committee whose function is to monitor the
valuation of portfolio securities and other investments and, as required by the
Fund's valuation policies, when the Board is not in session it shall determine
the fair value of portfolio holdings after consideration of all relevant
factors, which determinations shall be reported to the full Board. The
Valuation Committee currently consists of all of the Fund's Board members. The
Valuation Committee held two meetings during the last fiscal year.
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. The Nominating Committee does not currently have a
policy regarding whether it will consider nominees recommended by shareholders.
During the fiscal year ended December 31, 2001, 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, receives an
additional annual retainer of $500. For the fiscal year ended December 31,
2001, the Directors who are not "interested persons" of the Fund, as a group,
received compensation in the amount of $70,253.
7
The following table sets forth the compensation paid to each of the
Directors of the Fund for the fiscal year ended December 31, 2001.
Directors who are "interested persons" of the Fund do not receive any
compensation from the Fund.
Total Compensation
Aggregate from
Compensation Fund and Fund
Name from Fund Complex*
---- ------------ ------------------
Guilford C. Babcock..... $11,000 $ 93,750
E. Philip Cannon........ $12,594 $183,464
Vern O. Curtis.......... $12,159 $ 98,723
J. Michael Hagan........ $11,500 $ 95,000
Thomas P. Kemp.......... $11,500 $ 95,000
William J. Popejoy...... $11,500 $ 95,000
- --------
* 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
$60,000 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, 2001, these Trustees,
as a group, received compensation in the amount of $278,079 from PIMCO Funds:
Pacific Investment Management Series.
For his services as a Trustee of the PIMCO Funds: Multi-Manager Series, Mr.
Cannon received an annual retainer of $52,000 plus $3,000 for each Board of
Trustees meeting attended in person ($1,500 for each such meeting attended
telephonically), and $1,500 for each Performance Committee meeting attended,
plus reimbursement of related expenses. For the fiscal year ended June 30,
2001, Mr. Cannon received compensation in the amount of $77,065 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 an additional $500. For the fiscal year
ended December 31, 2001, these Trustees, as a group, received compensation in
the amount of $64,593 from PIMCO Variable Insurance Trust.
8
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.
Term of Office
Position(s) Held and Length of Principal Occupation(s)
Name and Age/1/ with Fund Time Served/1/ During the Past Five Years
------------- ---------------- -------------- -------------------------
Daniel J. Ivascyn Senior Vice President 11/01-present Senior Vice President, PIMCO.
Age 32 Formerly, Vice President, PIMCO.
William C. Powers Senior Vice President 7/93-present Managing Director, PIMCO.
Age 44
Jeffrey M. Sargent Senior Vice President. 6/93-present Senior Vice President and Manager of
Age 39 Formerly, Vice (since 2/99 as Shareholder Services, PIMCO; Senior
President and Secretary. Senior Vice Vice President, PIMCO Funds:
President) Pacific Investment Management
Series; Senior Vice President,
PIMCO Variable Insurance Trust;
Vice President, PIMCO Funds: Multi-
Manager Series; and Senior Vice
President, PIMCO Strategic Global
Government Fund, Inc. Formerly,
Vice President, PIMCO.
Henrik P. Larsen Vice President 2/99-present Vice President and Manager of Fund
Age 32 Administration, PIMCO; Vice
President, PIMCO Funds: Pacific
Investment Management Series; Vice
President, PIMCO Variable Insurance
Trust; Vice President, PIMCO Funds:
Multi-Manager Series; and Vice
President, PIMCO Strategic Global
Government Fund, Inc. Formerly,
Manager, PIMCO.
William S. Thompson, Jr. Vice President 7/93-present Chief Executive Officer and
Age 56 Managing Director, PIMCO; Senior
Vice President, PIMCO Variable
Insurance Trust; and Vice President,
PIMCO Funds: Pacific Investment
Management Series.
9
Term of Office
Position(s) Held and Length of Principal Occupation(s)
Name and Age/1/ with Fund Time Served/1/ During the Past Five Years
--------------- ---------------- -------------- -------------------------
Michael J. Willemsen Vice President. 2/95-present Vice President, Shareholder Support,
Age 42 Formerly Assistant (Since 2/02 PIMCO; Vice President, PIMCO
Secretary. as Vice Funds: Pacific Investment
President) Management Series; Vice President,
PIMCO Variable Insurance Trust;
and Vice President, PIMCO Strategic
Global Government Fund, Inc.
Formerly, Manager, PIMCO.
Garlin G. Flynn Secretary 8/95-present Specialist, Fund Administration,
Age 55 PIMCO; Secretary, PIMCO Funds:
Pacific Investment Management
Series; Secretary, PIMCO Variable
Insurance Trust; Assistant Secretary,
PIMCO Funds: Multi-Manager
Series; and Secretary, PIMCO
Strategic Global Government Fund,
Inc. Formerly, Senior Fund
Administrator, PIMCO.
John P. Hardaway Treasurer 6/93-present Senior Vice President and Manager of
Age 44 Investment Operations Accounting,
PIMCO; Treasurer, PIMCO Funds:
Pacific Investment Management
Series; Treasurer, PIMCO Variable
Insurance Trust; Treasurer, PIMCO
Funds: Multi-Manager Series; and
Treasurer, PIMCO Strategic Global
Government Fund, Inc. Formerly,
Vice President, PIMCO.
10
Term of Office
Position(s) Held and Length of Principal Occupation(s)
Name and Age/1/ with Fund Time Served/1/ During the Past Five Years
- --------------- ---------------- -------------- -------------------------
Erik C. Brown Assistant Treasurer 2/01-present Vice President and Manager of
Age 34 Financial Reporting and Taxation,
PIMCO; Assistant Treasurer, PIMCO
Funds: Pacific Investment
Management Series; Assistant
Treasurer, PIMCO Variable
Insurance Trust; Assistant Treasurer,
PIMCO Funds: Multi-Manager
Series; and Assistant Treasurer,
PIMCO Strategic Global Government
Fund, Inc. Formerly, tax consultant
with Deloitte & Touche LLP and
PricewaterhouseCoopers LLP.
- --------
/1/ The executive officers of the Fund are appointed annually by the Board.
They can be reached at the Fund's address above.
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
of the Fund. Subject to the supervision of the Board, 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 ACCOUNTANT
PricewaterhouseCoopers LLP was selected by the Board on February 26, 2002 as
independent public accountant to examine the financial statements of the Fund
for the fiscal year ending December 31, 2002. A representative of
PricewaterhouseCoopers LLP, if requested by any shareholder, will be present
(via telephone) at the Meeting to respond to appropriate questions from
shareholders.
Audit Fees
The aggregate fees paid to PricewaterhouseCoopers LLP in connection with the
annual audit of the Fund for the fiscal year ended December 31, 2001 was
$12,800.
Financial Information Systems Design and Implementation Fees
There were no fees billed for financial information systems design and
implementation services rendered by PricewaterhouseCoopers LLP to the Fund, its
investment adviser, and entities controlling,
11
controlled by or under common control with the investment adviser that provide
services to the Fund for the fiscal year ended December 31, 2001.
All Other Fees
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 adviser, and entities controlling, controlled by or under common
control with the investment adviser that provide services to the Fund for the
fiscal year ended December 31, 2001 was $905,395. The Audit Committee has
considered whether the provision of non-audit services is compatible with
maintaining the independence of 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 adviser, affiliates of the investment adviser, 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 2001, its Reporting Persons complied with all applicable
filing requirements.
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 preparing, printing and mailing 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, the Internet or
personal interview by officers or agents of the Fund.
Quorum and Votes Required
Shareholders of record at the close of business on March 8, 2002 (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, 11,053,539 shares of the Fund, representing the same
number of votes, were outstanding. As of December 31, 2001, no persons owned of
record or beneficially 5% or more of the shares of the Fund.
12
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.
Shareholders' Proposals
The Fund holds annual meetings of shareholders. A shareholder's proposal
that is intended to be presented at the Fund's Annual Meeting of Shareholders
in 2003 must have been received by the Fund a reasonable time before the
mailing of the proxy statement in order to be included in the Fund's proxy
13
statement and form of proxy relating to the meeting. A shareholder who wishes
to make a proposal at the 2003 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 2003 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, 2002
14
APPENDIX A
PIMCO COMMERCIAL MORTGAGE SECURITIES TRUST, INC.
AUDIT COMMITTEE CHARTER
1. The Audit Committee of the Fund shall be composed of independent members of
the Board of Directors of the Fund (the "Board). Each of these independent
members of the Board shall be financially literate and at least one shall
have 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 at least annually with the Fund's independent auditors,
including private meetings (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;
A-1
(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;
(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.
840 NEWPORT CENTER DRIVE THE PROXY IS SOLICITED ON BEHALF OF
SUITE 300 THE BOARD OF DIRECTORS
NEWPORT BEACH, CA 92660
ANNUAL MEETING OF SHAREHOLDERS - APRIL 12, 2002
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, 2002 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.
--------------------------------------------------
--------------------------------------------------
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.
--------------------------------------------------
TO VOTE BY MAIL
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
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,
All All Except mark "For All Except" and write
1. To elect the Nominees listed below the nominee's number on the line
to serve as members of the Fund's below.
Board of Directors for the terms
expiring in 2005, and until their
successors are elected and qualify. [_] [_] [_] ---------------------------------
01) J. Michael Hagan
02) Thomas P. Kemp
03) Vern O. Curtis
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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