SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Joint Proxy Statement
[_] Definitive Additional Materials
PIMCO MUNICIPAL INCOME FUND III
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
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)
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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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
________________________________________________________________________________
-------------------------------
NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 13, 2004
-------------------------------
c/o PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, New York 10105
To the Shareholders of 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"):
Notice is hereby given that a Joint Annual Meeting of Shareholders (the
"Meeting") of the Funds will be held at the offices of PIMCO Advisors Fund
Management LLC, 1345 Avenue of the Americas, 49th Floor, New York, New York
10105, on Tuesday, January 13, 2004 at 9:00 a.m., Eastern Time, for the
following purposes, all of which are more fully described in the accompanying
Proxy Statement dated December 1, 2003:
1. To elect four Trustees of the Funds, each to hold office for the term
indicated and until their successors shall have been elected and
qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The Board of Trustees of each Fund has fixed the close of business on
November 21, 2003 as the record date for the determination of Shareholders
entitled to notice of, and to vote at, the Meeting or any postponement or
adjournment thereof. The enclosed proxy is being solicited on behalf of the
Board of Trustees of each Fund.
By order of the Board of Trustees
of each Fund
/s/ NEWTON B. SCHOTT
Newton B. Schott, Jr., Secretary
New York, New York
December 1, 2003
It is important that your shares be represented at the Meeting in person or by
proxy, no matter how many shares you own. If you do not expect to attend the
Meeting, please complete, date, sign and return the applicable enclosed proxy or
proxies in the accompanying envelope, which requires no postage if mailed in the
United States. Please mark and mail your proxy or proxies promptly in order to
save the Funds any additional costs of further proxy solicitations and in order
for the Meeting to be held as scheduled.
PIMCO MUNICIPAL INCOME FUND III ("PMX")
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III ("PZC")
PIMCO NEW YORK MUNICIPAL INCOME FUND III ("PYN")
c/o PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, New York 10105
-----------------
PROXY STATEMENT
-----------------
FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 13, 2004
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Boards of Trustees (each, a "Board") of PMX, PZC and PYN (each a "Fund" and
collectively, the "Funds") of proxies to be voted at the Joint Annual Meeting of
Shareholders of the Funds and any adjournment or postponement thereof (the
"Meeting"). The Meeting will be held at the offices of PIMCO Advisors Fund
Management LLC, 1345 Avenue of the Americas, 49th Floor, New York, New York
10105, on Tuesday, January 13, 2004 at 9:00 a.m., Eastern Time.
The Notice of Joint Annual Meeting of Shareholders (the "Notice"), this
Proxy Statement and the enclosed Proxy Card are first being sent to Shareholders
on or about December 1, 2003.
The Meeting is scheduled as a joint meeting of the respective holders of
common shares (the "Common Shareholders") and preferred shares (the "Preferred
Shareholders" and, together with Common Shareholders, the "Shareholders") of the
Funds because the Shareholders of the Funds are expected to consider and vote on
similar matters. Shareholders of each Fund will vote separately on the Proposal
set forth herein and on any other matters that may arise for that Fund, and an
unfavorable vote on the Proposal by the Shareholders of one Fund will not affect
the implementation of the Proposal by another Fund if the Proposal is approved
by the Shareholders of the other Fund.
The Board of each Fund has fixed the close of business on November 21, 2003
as the record date (the "Record Date") for the determination of Shareholders of
each Fund entitled to notice of, and to vote at, the Meeting, and any
postponement or adjournment thereof. Shareholders of each Fund on the Record
Date will be entitled to one vote on each matter to which they are
entitled to vote and that is to be voted on by Shareholders of that Fund for
each share held, and a fractional vote with respect to fractional shares, with
no cumulative voting rights. The following table sets forth the number of shares
of common stock ("Common Shares") and shares of preferred stock ("Preferred
Shares" and, together with the Common Shares, the "Shares") issued and
outstanding of each Fund at the close of business on the Record Date:
Outstanding Outstanding
Fund Common Shares Preferred Shares
- ---- ------------- ----------------
PMX 31,014,777 10,800
PZC 21,287,764 7,400
PYN 5,442,280 1,800
The classes of stock listed in the table above are the only classes of
stock currently authorized by each Fund.
At the Meeting, Preferred Shareholders of each Fund will have equal voting
rights (i.e., one vote per Share) with the Fund's Common Shareholders and,
except as discussed below, will vote together with Common Shareholders as a
single class on all proposals to be brought before the Meeting applicable to
that Fund. As summarized in the table below, the Preferred Shareholders of each
Fund, voting as a separate class, have the right to vote on the election of
Robert E. Connor as a Trustee. The Common Shareholders of the Funds do not have
the right to vote with respect to the election of Mr. Connor.
Summary
Common Preferred
Proposal Shareholders Shareholders
- -------- ------------ ------------
Election of Trustees
o Election of Robert E. Connor N/A X
o Election of Hans W. Kertess, R. Peter X X
Sullivan III and Stephen J. Treadway
You may vote by mailing the enclosed proxy card. Shares represented by duly
executed and timely delivered proxies will be voted as instructed on the proxy.
If you mail the enclosed proxy and no choice is indicated for the Proposal
listed in the attached Notice, your proxy will be voted in favor of the election
of all nominees. At any time before it has been voted, your proxy may be revoked
in one of the following ways: (i) by delivering a signed, written letter of
revocation to the Secretary of the appropriate Fund at 1345 Avenue of the
Americas, New York, NY 10105, (ii) by properly executing a later-dated proxy, or
(iii) by attending the Meeting, requesting return of any previously delivered
proxy and voting in person. If any proposal, other than
2
the Proposal set forth herein, properly comes before the Meeting, Shares
represented by the proxies will be voted on all such proposals in the discretion
of the person, or persons, voting the proxies.
The principal executive offices of each Fund are located at 1345 Avenue of
the Americas, New York, New York 10105. PIMCO Advisors Fund Management LLC (the
"Manager") serves as the investment manager of each Fund and retains its
affiliate, Pacific Investment Management Company LLC ("PIMCO"), to serve as each
Fund's sub-adviser. Additional information regarding the Manager and PIMCO may
be found under "Additional Information -- Investment Manager and Portfolio
Manager" below.
The solicitation will be by mail and the cost of soliciting proxies for a
Fund will be borne by that Fund. Certain officers of the Funds and certain
officers and employees of the Manager or its affiliates (none of whom will
receive additional compensation therefor) may solicit proxies by telephone,
mail, e-mail and personal interviews. Any out-of pocket expenses incurred in
connection with the solicitation will be borne proportionately by each of the
Funds based upon each Fund's net assets.
As of November 21, 2003, the Trustees and nominees and the officers of each
Fund as a group and individually beneficially owned less than one percent (1%)
of any Fund's outstanding Common Shares and Preferred Shares and, to the
knowledge of each Fund, no person beneficially owned more than five percent (5%)
of the outstanding Shares of any class of any Fund.
PROPOSAL: ELECTION OF TRUSTEES
In accordance with each Fund's Amended and Restated Agreement and
Declaration of Trust (each a "Declaration"), the Trustees of each Fund have been
divided into the following three classes (each a "Class"): Class I, whose term
will expire at the Meeting; Class II, whose term will expire at the Fund's 2005
annual meeting of shareholders; and Class III, whose term will expire at the
Fund's 2006 annual meeting of shareholders. At each annual meeting, successors
to the Class of Trustee whose term expires at that annual meeting shall be
elected for a three-year term.
Robert E. Connor, a Class I Trustee since each Fund's inception, is
nominated for re-election as a Class I Trustee at the Meeting. In October 2003,
after the initial public offerings of the Shares, each Fund's Board approved an
increase in the size of the Boards from three to four members and Hans W.
Kertess was appointed as a Trustee of each Fund to fill the vacancy created by
such action. In accordance with each Fund's Declaration, Mr. Kertess was
designated a Class I Trustee of each Fund to serve until the Meeting, at which
time his initial term will expire. The Boards have since determined to increase
their size from four to six members and R. Peter Sullivan III and Stephen J.
3
Treadway have been nominated to serve as Trustees of each Fund. Mr. Sullivan has
been nominated to serve as a Class II Trustee and Mr. Treadway has been
nominated to serve as a Class III Trustee. Consistent with the Declaration, if
elected, each nominee shall hold office for terms which coincide with the Class
of Trustees to which they have been designated. Therefore, if elected at the
Meeting, Messrs. Connor and Kertess will serve a term coinciding with the Class
I Trustees, which will expire at the Fund's 2007 annual meeting, Mr. Sullivan
will serve a term coinciding with the Class II Trustees, which will expire at
the Funds' 2005 annual meeting and Mr. Treadway will serve a term coinciding
with the Class III Trustees, which will expire at the Funds' 2006 annual
meeting.
All members of the Board are or will be, if elected, "Continuing Trustees,"
as such term is defined in the Declaration, having either served as Trustee
since the inception of each Fund or having been nominated by at least a majority
of the Continuing Trustees then members of the Board.
At any annual meeting of shareholders, any Trustee elected to fill a
vacancy that has arisen since the preceding annual meeting of shareholders where
such vacancy arose other than by an increase in the number of Trustees (whether
or not such vacancy has been filled by election of a new Trustee by the Board of
Trustees) shall hold office for a term that coincides with the remaining term of
the Class of Trustees to which such office was previously assigned, and until
his successor shall be elected and shall qualify.
The following table summarizes, for each Fund, the nominees who will stand
for election at the Meeting, the respective Class of Trustees to which they have
been designated and the expiration of their respective terms if elected:
Trustee Class Expiration of Term if Elected*
- ------- ----- ------------------------------
Robert E. Connor Class I 2007 Annual Meeting
Hans W. Kertess Class I 2007 Annual Meeting
R. Peter Sullivan III Class II 2005 Annual Meeting
Stephen J. Treadway Class III 2006 Annual Meeting
- ------------------
* A Trustee elected at an annual meeting shall hold office until the annual
meeting for the year in which his term expires and until his successor
shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
4
Under this classified Board structure, only those Trustees in a single
Class may be replaced in any one year, and it would require a minimum of two
years to change a majority of the Board of a Fund 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 Trustees
of the Fund and, thus, promotes the continuity of management.
Unless authority is withheld, it is the intention of the persons named in
the enclosed proxy for each Fund to vote each proxy for the persons listed
above. Each of the nominees has indicated he will serve if elected, but if he
should be unable to serve for a Fund, the proxy holders may vote in favor of
such substitute nominee as the Board may designate (or the Board may determine
to leave a vacancy).
5
Information Regarding Trustees and Nominees.
The following table provides information concerning the Trustees of the
Fund. Of the Trustees listed, only Messrs. Connor, Kertess, Sullivan and
Treadway are nominees for election at the Meeting.
Position(s) Term of
Held Office and
Name, with the Length of
Address*, and Age Fund Time Served
- ------------------- ----------- ----------------
Independent
Trustees**
Paul Belica Trustee Since inception
Age 82 (September 2002)
(Class III)
Number of
Portfolios
in Fund Other
Complex Directorships
Overseen by Held by
Name, Principal Occupation(s) Trustee/ Trustee/
Address*, and Age During the Past 5 Years Nominee Nominee
- ------------------- ------------------------------------------------------- ----------- -------------
Independent
Trustees**
Paul Belica Trustee, Fixed Income SHares, PIMCO Municipal Income 16 2
Age 82 Fund, PIMCO California Municipal Income Fund,
(Class III) PIMCO New York Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO Corporate Opportunity
Fund, PIMCO Municipal Income Fund II, PIMCO
California Municipal Income Fund II, PIMCO New York
Municipal Income Fund II, Nicholas-Applegate
Convertible & Income Fund and PIMCO Floating Rate
Income Fund; Director, Municipal Advantage Fund Inc.;
Manager, Stratigos Fund, LLC, Whistler Fund, LLC,
Xanthus Fund, LLC and Wynstone Fund, LLC; Director,
Student Loan Finance Corp., Education Loans, Inc., Goal
Funding, Inc., Goal Funding II, Inc. Formerly, Advisor,
Salomon Smith Barney Inc.; Director, Central European
Value Fund, Inc., and Deck House Inc.
6
Position(s) Term of
Held Office and
Name, with the Length of
Address*, and Age Fund Time Served
- ------------------- ------------ ----------------
Robert E. Connor*** Trustee Since inception
Age 69 (September 2002)
(Class I)
Number of
Portfolios
in Fund Other
Complex Directorships
Overseen by Held by
Name, Principal Occupation(s) Trustee/ Trustee/
Address*, and Age During the Past 5 Years Nominee Nominee
- ------------------- ------------------------------------------------------- ----------- -------------
Robert E. Connor*** Trustee, Fixed Income SHares, PIMCO Municipal Income 18 None.
Age 69 Fund, PIMCO California Municipal Income Fund,
(Class I) PIMCO New York Municipal Income Fund, PIMCO
Corporate Income Fund, PIMCO Corporate Opportunity
Fund, PIMCO Municipal Income Fund II, PIMCO
California Municipal Income Fund II, PIMCO New York
Municipal Income Fund II, Nicholas-Applegate
Convertible & Income Fund, Nicholas-Applegate
Convertible & Income Fund II, PIMCO High Income
Fund and PIMCO Floating Rate Income Fund; Director,
Municipal Advantage Fund, Inc.; Corporate Affairs
Consultant. Formerly, Senior Vice President, Corporate
Office, Salomon Smith Barney Inc.
7
Position(s) Term of
Held Office and
Name, with the Length of
Address*, and Age Fund Time Served
- ----------------------- ----------- ------------------
John J. Dalessandro II+ Trustee Since inception
Age 66 (September 2002)
(Class II)
Hans W. Kertess Trustee Since October 2003
Age 64
(Class I)
Number of
Portfolios
in Fund Other
Complex Directorships
Overseen by Held by
Name, Principal Occupation(s) Trustee/ Trustee/
Address*, and Age During the Past 5 Years Nominee Nominee
- ----------------------- ------------------------------------------------------------ ----------- -------------
John J. Dalessandro II+ President and Director, J.J. Dalessandro II Ltd., registered 15 None.
Age 66 broker-dealer and member of the New York Stock
(Class II) Exchange; Trustee, PIMCO Municipal Income Fund,
PIMCO California Municipal Income Fund, PIMCO New
York Municipal Income Fund, PIMCO Corporate Income
Fund, PIMCO Corporate Opportunity Fund, PIMCO
Municipal Income Fund II, PIMCO California Municipal
Income Fund II, PIMCO New York Municipal Income
Fund II, Nicholas-Applegate Convertible & Income Fund,
Nicholas-Applegate Convertible & Income Fund II,
PIMCO High Income Fund and PIMCO Floating Rate
Income Fund.
Hans W. Kertess President, H. Kertess & Co.; Trustee, PIMCO Municipal 14 None.
Age 64 Income Fund, PIMCO California Municipal Income Fund,
(Class I) PIMCO New York Municipal Income Fund, PIMCO
Municipal Income Fund II, PIMCO California Municipal
Income Fund II, PIMCO New York Municipal Income
Fund II, PIMCO Corporate Income Fund, PIMCO
Corporate Opportunity Fund, PIMCO High Income Fund,
Nicholas-Applegate Convertible & Income Fund II and
PIMCO Floating Rate Income Fund. Formerly, Managing
Director, Royal Bank of Canada Capital Markets.
8
Position(s) Term of
Held Office and
Name, with the Length of
Address*, and Age Fund Time Served
- --------------------- ------------- -------------
R. Peter Sullivan III N/A N/A
Age 62
(Class II)
Number of
Portfolios
in Fund Other
Complex Directorships
Overseen by Held by
Name, Principal Occupation(s) Trustee/ Trustee/
Address*, and Age During the Past 5 Years Nominee Nominee
- --------------------- ----------------------------------------------------- ----------- -------------
R. Peter Sullivan III Trustee, PIMCO Municipal Income Fund, PIMCO 7 None.
Age 62 California Municipal Income Fund, PIMCO New York
(Class II) Municipal Income Fund, PIMCO Municipal Income Fund
II, PIMCO California Municipal Income Fund II, PIMCO
New York Municipal Income Fund II and PIMCO
Corporate Income Fund. Formerly, Managing Partner,
Bear Wagner Specialists LLC.
9
Position(s) Term of
Held Office and
Name, with the Length of
Address*, and Age Fund Time Served
- --------------------- ----------- ------------------
Interested Trustee**
Stephen J. Treadway++ Chairman Chairman, since
2187 Atlantic Street inception
Stamford, CT 06902 (September 2002)
Age 56
(Class III)
Number of
Portfolios
in Fund Other
Complex Directorships
Overseen by Held by
Name, Principal Occupation(s) Trustee/ Trustee/
Address*, and Age During the Past 5 Years Nominee Nominee
- --------------------- ----------------------------------------------------- ------------ -------------
Interested Trustee**
Stephen J. Treadway++ Managing Director, Allianz Dresdner Asset Management 52 None.
2187 Atlantic Street of America L.P. ("ADAM"); Managing Director and
Stamford, CT 06902 Chief Executive Officer, PIMCO Advisors Fund
Age 56 Management LLC and PIMCO Advisors Distributors
(Class III) LLC; Member of the Board of Management of Allianz
Dresdner Asset Management GmbH; Chairman, Fixed
Income SHares, PIMCO Corporate Opportunity Fund,
Nicholas-Applegate Convertible & Income Fund,
Nicholas-Applegate Convertible & Income Fund II and
PIMCO High Income Fund; Trustee, Chairman and
President, PIMCO Advisors VIT; Trustee and Chairman,
PIMCO Funds: Multi-Manager Series, PIMCO Municipal
Income Fund, PIMCO California Municipal Income Fund,
PIMCO New York Municipal Income Fund, PIMCO
Municipal Income Fund II, PIMCO California Municipal
Income Fund II, PIMCO New York Municipal Income
Fund II, PIMCO Corporate Income Fund and PIMCO
Floating Rate Income Fund; Director and Chairman,
Municipal Advantage Fund Inc.
10
- ------------------
* Unless otherwise indicated, the business address of the persons listed
below is c/o PIMCO Advisors Fund Management LLC, 1345 Avenue of the
Americas, New York, New York 10105.
** "Independent Trustees" are those Trustees who are not "interested persons,"
as defined in the Investment Company Act of 1940, as amended (the "1940
Act"), of the Funds. "Interested Trustees" are those who are "interested
persons" of the Funds.
*** In addition to the positions noted, Mr. Connor previously provided
occasional editorial consulting services as an independent contractor to an
administrative unit of Smith Barney, an affiliate of Citigroup Inc., the
parent company of Citigroup Global Markets Inc.
+ Mr. Dalessandro is treated by the Funds as not being an "interested person"
(as defined in Section 2(a)(19) of the 1940 Act) of the Funds, the Manager
or PIMCO, despite his affiliation with J.J. Dalessandro II Ltd., a member
of the New York Stock Exchange, Inc. (the "Exchange") that operates as a
floor broker and effects portfolio transactions for other brokers,
generally other members of the Exchange, and one unrelated investment
adviser.
++ Mr. Treadway is an "interested person" of the Funds due to his affiliation
with the Manager, as set forth above. Mr. Treadway's positions with
affiliated persons of the Funds are set forth in the table above.
The following table states the dollar range of equity securities
beneficially owned as of November 21, 2003 by each Trustee and nominee of each
Fund and, on an aggregate basis, in any registered investment companies overseen
by the Trustee or nominee in the "family of investment companies" including the
Funds.
Aggregate Dollar Range
of Equity Securities in All
Dollar Range Registered Investment
of Equity Companies Overseen by
Name of Securities Trustee/Nominee in the Family
Trustee/Nominee Fund in Fund* of Investment Companies*
- ---------------------- ---- ------------ -----------------------------
Independent Trustees
Paul Belica PMX None. Over $100,000.
PZC None.
PYN None.
Robert E. Connor PMX None. None.
PZC None.
PYN None.
Hans W. Kertess PMX None. None.
PZC None.
PYN None.
R. Peter Sullivan III PMX None. None.
PZC None.
PYN None.
John J. Dalessandro II PMX None. None.
PZC None.
PYN None.
Interested Trustee
- ------------------
Stephen J. Treadway PMX None. Over $100,000.
PZC None.
PYN None.
- ------------------
* Securities are valued as of November 21, 2003.
11
To the knowledge of the Fund, as of November 21, 2003, Trustees and
nominees who are Independent Trustees and their immediately family members did
not own securities of an investment adviser or principal underwriter of a Fund
or a person (other than a registered investment company) directly or indirectly
controlling, controlled by, or under common control with an investment adviser
or principal underwriter of a Fund.
Compensation. The Funds, PIMCO Municipal Income Fund, PIMCO California
Municipal Income, PIMCO New York Municipal Income Fund, PIMCO Municipal Income
Fund II, PIMCO California Municipal Income Fund II, PIMCO New York Municipal
Income Fund II, PIMCO Corporate Income Fund, PIMCO Corporate Opportunity Fund,
Nicholas-Applegate Convertible & Income Fund, Nicholas-Applegate Convertible &
Income Fund II, PIMCO High Income Fund and PIMCO Floating Rate Income Fund
(collectively, the "PIMCO Closed-End Funds") are expected to hold joint meetings
of their Boards of Trustees whenever possible. Each Trustee, other than any
Trustee who is a director, officer, partner or employee of the Manager or PIMCO
or any entity controlling, controlled by or under common control with the
Manager or PIMCO, receives compensation for their attendance at joint meetings
and for their service on Board committees. Trustees will receive up to a maximum
of (i) $25,000 for each quarterly joint meeting for the first four joint
meetings in each year, (ii) $5,000 for each additional joint meeting in such
year if the meetings are attended in person and (iii) $1,000 for joint
telephonic meetings. Each Trustee receives a pro rata percentage of the
aforementioned fees based on the net assets, including assets attributable to
the Fund's Preferred Shares outstanding, of the Funds on which that Trustees
serves. In addition, each Trustee who serves as a member of an Audit Oversight
Committee will receive $1,000 per fund per meeting of the Audit Oversight
Committees for those PIMCO Closed-End Funds for which they serve as Trustee and
Audit Oversight Committee Member. Trustees will also be reimbursed for
meeting-related expenses.
Each Trustee's compensation and other meeting-related expenses are
allocated pro rata among the PIMCO Closed-End Funds on whose Boards the Trustee
serves based on each such Fund's net assets, including assets attributable to
the Fund's Preferred Shares outstanding.
The PIMCO Closed-End Funds do not provide any pension or other retirement
benefits to their Trustees.
The following table provides information concerning the approximate
compensation paid to the Trustees for each during the fiscal year ended
September 30, 2003. For the calendar year ended December 31, 2002, the Trustees
and nominees received the compensation set forth in the following table for
serving as trustees of the Funds and other funds in the same "Fund
12
Complex" as the Funds. Each officer and Trustee, such as Mr. Treadway, who is a
director, officer, partner, member or employee of the Manager or PIMCO, or any
entity controlling, controlled by or under common control with the Manager or
PIMCO, serves without any compensation from the Funds.
Compensation Table
Aggregate
Compensation
from each Fund
for Total Compensation from the Funds
the Fiscal Year and Fund Complex Paid
Ended to Trustees/Nominees for the
September 30, Calendar Year Ended
Name of Trustee 2003 December 31, 2002*
- ------------------------ ----------------- ---------------------------------
Paul Belica PMX $7,582 $78,400
PZC $5,123
PYN $1,323
Robert E. Connor PMX $7,582 $87,170
PZC $5,123
PYN $1,323
Hans W. Kertess PMX n/a $62,000
PZC n/a
PYN n/a
R. Peter Sullivan III PMX n/a $48,925
PZC n/a
PYN n/a
John J. Dalessandro II PMX $7,582 $76,400
PZC $5,123
PYN $1,323
- ------------------
* In addition to the PIMCO Closed-End Funds, during the year ended December
31, 2002, Mr. Belica served as a Trustee of one open-end investment company
(comprising two separate investment portfolios) advised by the Manager, and
Mr. Connor served as a Trustee of one open-end investment company
(comprising two separate investment portfolios) and one closed-end
investment company advised by the Manager. These investment companies are
considered to be in the same "Fund Complex" as the Funds.
The Funds have no employees. Their officers are compensated by the Manager,
PIMCO or one of their affiliates.
Board Committees and Meetings.
Audit Oversight Committee. The Board of each Fund has established an Audit
Oversight Committee in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), consisting of Messrs. Belica,
Connor and Kertess, each of whom is an Independent Trustee. The Audit Oversight
Committees provide oversight with respect to the internal and external
accounting and auditing procedures of the Funds and, among other things,
consider the selection of independent public accountants for the Funds and the
scope of the audit, approve all audit and permitted non-audit services proposed
to be performed by those accountants on behalf of the Funds
13
and certain affiliates, including the Manager and PIMCO and entities in a
control relationship with the Manager or PIMCO that provide services to the
Funds, and the possible effect of those services on the independence of those
accountants.
Each member of the Audit Oversight Committee is "independent," as
independence for audit committee members is defined in the currently applicable
listing standards of the New York Stock Exchange, on which the Common Shares of
each Fund are listed. The Board of each Fund has adopted a written charter for
the Audit Oversight Committee, a copy of which is included as Appendix A to this
Proxy Statement. A joint report of the Audit Oversight Committees of each Fund,
dated November 20, 2003, is attached to this Proxy Statement as Appendix B.
Nominating Committee. The Board of each Fund has a Nominating Committee
composed solely of Independent Trustees, consisting of Messrs. Belica, Connor
and Kertess. The Nominating Committees are responsible for reviewing and
recommending qualified candidates to the Boards in the event that a position is
vacated or created. The Nominating Committee of a Fund will review and consider
nominees recommended by Shareholders to serve as Trustee, provided any such
recommendation is submitted in writing to the Fund, to the attention of the
Secretary, at the address of the principal executive offices of the Fund. The
Nominating Committee has full discretion to reject nominees recommended by
Shareholders, and there is no assurance that any such person so recommended and
considered by the Committee will be nominated for election to the Board of a
Fund.
Valuation Committee. The Board of each Fund has a Valuation Committee,
consisting of Messrs. Belica, Connor and Kertess. The Valuation Committees
review procedures for the valuation of Fund portfolio securities and
periodically review information from the Manager and PIMCO regarding fair value
and liquidity determination made pursuant to Board-approved procedures, and make
related recommendations to the full Boards and assist the full Boards in
resolving particular valuation matters.
Compensation Committee. The Board of each Fund has a Compensation
Committee, consisting of Messrs. Belica, Connor and Kertess. The Compensation
Committees periodically review and set compensation payable to the Trustees of
each Fund who are not directors, officers, partners or employees of the Manager,
PIMCO or any entity controlling, controlled by or under common control with the
Manager or PIMCO.
During the fiscal year ended September 30, 2003, the Board of Trustees of
each Fund held four regular meetings and one special meeting. The Audit
Oversight Committees of these Funds met in separate session one time during such
fiscal year and the Nominating, Valuation and Compensation Committees
14
did not meet in separate session (as each Committee was comprised of all members
of the Board and considered applicable matters during the regular Board
meetings). Each Trustee attended at least 75% of the regular and special
meetings of the Board and meetings of the committees on which such Trustee
served that were held during the fiscal year ended September 30, 2003, except
Mr. Kertess, who was not elected to the Boards until October 2003. Messrs.
Sullivan and Treadway have not served as Trustees of each Fund yet.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 30(h) of
the 1940 Act and Section 16(a) of the 1934 Act require each Fund's Trustees and
officers, investment advisers, affiliated persons of the investment advisers and
persons who own more than 10% of a registered class of the Fund's equity
securities to file forms reporting their affiliation with that Fund and reports
of ownership and changes in ownership of that Fund's shares with the Securities
and Exchange Commission (the "SEC") and the New York Stock Exchange. These
persons and entities are required by SEC regulation to furnish the Fund with
copies of all Section 16(a) forms they file. Based solely on a review of these
forms furnished to each Fund, the Funds believe that each Fund's Trustees and
officers, investment advisers and affiliated persons of the investment advisers
have complied with all applicable Section 16(a) filing requirements during the
fiscal year ended September 30, 2003, except that due to administrative
oversight, one late filing reporting four purchases of PZC was made on an
untimely-filed Form 5 for William C. Powers. To the knowledge of management of
each Fund, no Shareholder beneficially owns more than 10% of a registered class
of such Fund's equity securities.
Required Vote. Election of Messrs. Kertess, Sullivan and Treadway to the
Board of Trustees of each Fund will require the affirmative vote of a plurality
of the votes of Common Shareholders and Preferred Shareholders (voting together
as a single class) of such Fund cast in the election of Trustees at the Meeting,
in person or by proxy. Election of Mr. Connor to the Board of Trustees of each
Fund will require the affirmative vote of a plurality of the votes of the
Preferred Shareholders (voting as a separate class) cast in the election of
Trustees at the Meeting, in person or by proxy.
The Board of Trustees of each Fund Unanimously Recommends that You Vote FOR
this Proposal.
15
ADDITIONAL INFORMATION
Executive and Other Officers of the Fund. The table below provides certain
information concerning the executive officers of each Fund and certain other
officers who perform similar duties. Officers hold office at the pleasure of
each Fund's Board and until their successors are appointed and qualified or
until their earlier resignation or removal. Officers and employees of each Fund
who are principals, officers, members or employees of the Manager or PIMCO are
not compensated by the Funds. Unless otherwise noted, the address of all
officers is c/o PIMCO Advisors Fund Management LLC, 1345 Avenue of the Americas,
New York, New York 10105.
Name, Address Position(s) Held Term of Office and
and Age with Funds Length of Time Served Principal Occupation(s) During the Past 5 Years
- -------------------- ----------------- -------------------------------- --------------------------------------------------------
Stephen J. Treadway Chairman Chairman, since inception See table above under "Information Regarding Trustees
2187 Atlantic Street (September 2002) and Nominees."
Stamford, CT 06902
Age 56
Brian S. Shlissel President and Since inception (September 2002) Senior Vice President, PIMCO Advisors Fund Management
Age 39 Chief Executive LLC; President and Chief Executive Officer, Fixed Income
Officer SHares, PIMCO Municipal Income Fund, PIMCO California
Municipal Income Fund, PIMCO New York Municipal
Income Fund, PIMCO Corporate Income Fund, PIMCO
Corporate Opportunity Fund, PIMCO Municipal Income
Fund II, PIMCO California Municipal Income Fund II,
PIMCO New York Municipal Income Fund II, Nicholas-
Applegate Convertible & Income Fund, PIMCO High
Income Fund, Nicholas-Applegate Convertible & Income
Fund II, PIMCO Floating Rate Income Fund and Municipal
Advantage Fund, Inc.; Executive Vice President, Treasure
and Secretary, PIMCO Advisors VIT (formerly OCC
Accumulation Trust); Formerly, Vice President, Mitchell
Hutchins Asset Management Inc.
16
Name, Address Position(s) Held Term of Office and
and Age with Funds Length of Time Served Principal Occupation(s) During the Past 5 Years
- --------------------- ---------------- -------------------------------- --------------------------------------------------------
Newton B. Schott, Jr. Vice President, Since inception (September 2002) Managing Director, Chief Administrative Officer, General
2187 Atlantic Street Secretary Counsel and Secretary, PIMCO Advisors Distributors LLC;
Stamford, CT 06902 Managing Director, Chief Legal Officer and Secretary,
Age 61 PIMCO Advisors Fund Management LLC; President, Chief
Executive Officer and Secretary, PIMCO Funds: Multi-
Manager Series; Vice President and Secretary, PIMCO
Municipal Income Fund, PIMCO California Municipal
Income Fund, PIMCO New York Municipal Income Fund,
PIMCO Corporate Income Fund, PIMCO Corporate
Opportunity Fund, PIMCO Municipal Income Fund II,
PIMCO California Municipal Income Fund II, PIMCO New
York Municipal Income Fund II, Nicholas-Applegate
Convertible & Income Fund, PIMCO High Income Fund,
Nicholas-Applegate Convertible & Income Fund II, PIMCO
Floating Rate Income Fund and Municipal Advantage Fund,
Inc.; Secretary, Fixed Income SHares. Formerly, Vice
President, PIMCO Advisors Funds.
17
Name, Address Position(s) Held Term of Office and
and Age with Funds Length of Time Served Principal Occupation(s) During the Past 5 Years
- ------------------------ ---------------- -------------------------------- ----------------------------------------------------
Lawrence Altadonna Treasurer; Since inception (September 2002) Treasurer and Principal Financial and Accounting
Age 37 Principal Officer, PIMCO Municipal Income Fund, PIMCO
Financial and California Municipal Income Fund, PIMCO New York
Accounting Municipal Income Fund, PIMCO Corporate Income Fund,
Officer PIMCO Corporate Opportunity Fund, PIMCO Municipal
Income Fund II, PIMCO California Municipal Income
Fund II, PIMCO New York Municipal Income Fund II,
Nicholas-Applegate Convertible & Income Fund, PIMCO
High Income Fund, Nicholas-Applegate Convertible &
Income Fund II, PIMCO Floating Rate Income Fund and
Municip Advantage Fund, Inc.; Treasurer, Fixed
Income Shares Assistant Treasurer, PIMCO Advisors
VIT; Vice Presid PIMCO Advisors Fund Management LLC.
Formerly, Director of Fund Administration,
Prudential Investme
Mark V. McCray Vice President Since inception (September 2002) Executive Vice President, PIMCO; Vice President,
840 Newport Center Drive PIMCO Municipal Income Fund, PIMCO California
Newport Beach, CA 92660 Municipal Income Fund, PIMCO New York Municipal
Age 35 Income Fund, PIMCO Municipal Income Fund II, PIMCO
California Municipal Income Fund II and PIMCO New
York Municipal Income Fund II. Formerly, Vice
President a co-head of municipal bond trading,
Goldman Sachs & Co.
18
Investment Manager and Portfolio Manager. The Manager, located at 1345
Avenue of the Americas, New York, New York 10105, serves as the investment
manager of each Fund. The Manager retains its affiliate, PIMCO, as sub-adviser
to manage each Fund's investments. PIMCO is located at 840 Newport Center Drive,
Newport Beach, California 92660. The Manager and PIMCO are each majority-owned
indirect subsidiaries of Allianz AG, a publicly traded German insurance and
financial services company.
Independent Auditors. PricewaterhouseCoopers LLP ("PwC"), 1177 Avenue of
the Americas, New York, New York 10036, independent accountants, has been
selected by the Board of each Fund as the independent auditors of each Fund for
the current fiscal year ending September 30, 2004.
The Audit Oversight Committee of the Board of each Fund unanimously
recommended the selection of PwC. The Boards unanimously approved such selection
at meetings held on November 20, 2003. PwC also serves as the auditor for
various other investment companies for which the Manager and PIMCO serve as
investment adviser or sub-adviser.
A representative of PwC, if requested by any Shareholder, will be present
via telephone at the Meeting to respond to appropriate questions from
Shareholders and will have an opportunity to make a statement if he or she
chooses to do so.
The following table sets forth the aggregate fees billed for professional
services rendered by PwC to each Fund during the Fund's most recent fiscal year:
Financial Information
Audit Systems Design and All
Fund Fees Implementation Fees Other Fees
- ---- ------- --------------------- ----------
PMX $42,237 N/A $19,871
PZC 32,526 N/A 14,473
PYN 17,987 N/A 6,239
The fees disclosed under the caption "All Other Fees" include fees billed
for services, if any, rendered during the Fund's most recent fiscal year to the
Fund, the Manager, PIMCO, and to any other entity controlling, controlled by or
under common control with the Manager or PIMCO that provides services to the
Fund.
Each Fund's Audit Oversight Committee has adopted a policy to pre-approve
all audit services and permitted non-audit services to be performed for the
Funds by PwC. Under the policy, each Fund's Audit Oversight Committee also
pre-approves any permitted non-audit services provided by PwC to the Manager,
PIMCO and any entity controlling, controlled by, or under common control with
the Manager that provides ongoing services to the Funds, provided, in each case,
that the engagement relates directly to the operations and financial reporting
of the Funds. These pre-approvals are
19
subject to the de minimus exceptions for permitted non-audit services described
in Section 10A of the 1934 Act and applicable regulations.
In approving the selection of PwC for each Fund, the Audit Oversight
Committees considered, in addition to other practices and requirements relating
to the selection of the Fund's auditors, whether the non-audit services covered
in the table above under "All Other Fees" performed by PwC for the Fund, the
Manager, PIMCO and for certain related parties are compatible with maintaining
the independence of PwC as the Fund's principal accountants. Please see the
Joint Report of the Audit Oversight Committees in Appendix B to this Proxy
Statement.
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 as set forth in the Notice. If any other business is properly brought
before the Meeting, or any adjournment thereof, the persons named as proxies
will vote in their sole discretion.
Quorum, Adjournments and Methods of Tabulation. A quorum for each Fund at
the Meeting will consist of the presence in person or by proxy of thirty percent
(30%) of the total Common Shares and Preferred Shares of the Fund entitled to
vote at the Meeting, except that a quorum for the election of Mr. Connor as a
Trustee of a Fund will consist of the presence in person or by proxy of thirty
percent (30%) of the Preferred Shares of the Fund entitled to vote at the
Meeting. In the event that a quorum is not present at the Meeting for a Fund or,
even if a quorum is so present, in the event that sufficient votes in favor of
the Proposal set forth in the Notice are not received by the time scheduled for
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting after the date set for the original Meeting, with no other notice
than announcement at the Meeting, to permit further solicitation of proxies with
respect to the Proposal. In addition, if, in the judgment of the persons named
as proxies, it is advisable to defer action on the Proposal, the persons named
as proxies may propose one or more adjournments of the Meeting with respect to
the Proposal for a reasonable time. Any adjournments with respect to the
Proposal will require the affirmative vote of a plurality of the Shares of the
applicable Fund entitled to vote thereon present in person or represented by
proxy at the session of the Meeting to be adjourned. The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of the Proposal. They will vote against any such
adjournment those proxies required to be voted against the Proposal. The costs
of any additional solicitation and of any adjourned session will be borne by the
applicable Fund. Any proposals for which sufficient favorable votes have been
received by the time of the Meeting will be acted upon and such action will be
final regardless of whether
20
the Meeting is adjourned to permit additional solicitation with respect to any
other proposal.
Votes cast by proxy or in person at the Meeting will be counted by persons
appointed by the Funds as tellers (the "Tellers") for the Meeting. For purposes
of determining the presence of a quorum, the Tellers will count the total number
of votes cast "for" or "against" approval of the Proposal, as well as Shares
represented by proxies that reflect abstentions and "broker non-votes" (i.e.,
shares held by brokers or nominees as to which instructions have not been
received from the beneficial owners or the persons entitled to vote and the
broker or nominee does not have the discretionary voting power on a particular
matter). Abstentions and broker non-votes will have no effect on the outcome of
the Proposal.
Reports to Shareholders. The 2003 Annual Report to Shareholders for each
Fund was mailed to Shareholders on or about November 26, 2003. Additional copies
of the Annual Reports may be obtained without charge from the Funds by calling
1-877-819-2224 or by writing to a Fund at 2187 Atlantic Street, 7th Floor,
Stamford, Connecticut 06902.
Shareholder Proposals for 2005 Annual Meetings. It is currently anticipated
that each Fund's next annual meeting of Shareholders (in 2005) will be held in
January 2005. Proposals of Shareholders intended to be presented at that annual
meeting of the Fund must be received by the Fund no later than August 3, 2004
for inclusion in the Funds' joint proxy statement and proxy card relating to
that meeting. The submission by a Shareholder of a proposal for inclusion in the
proxy materials does not guarantee that it will be included. Shareholder
proposals are subject to certain requirements under the federal securities laws
and must be submitted in accordance with each Fund's Bylaws. Shareholders
submitting any other proposals for the Fund intended to be presented at the 2005
annual meeting (i.e., other than those to be included in the Fund's proxy
materials) must ensure that such proposals are received by the Fund, in good
order and complying with all applicable legal requirements and requirements set
forth in the Fund's Bylaws, no earlier than October 2, 2004 and no later than
October 17, 2004. If a Shareholder who wishes to present a proposal fails to
notify the Fund within these dates, the proxies solicited for the meeting will
have discretionary authority to vote on the Shareholder's proposal if it is
properly brought before the meeting. If a Shareholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules. Shareholder proposals
should be addressed to the attention of the Secretary of the Fund, at the
address of the principal executive offices of the Fund, with a copy to Joseph B.
Kittredge, Jr., at Ropes & Gray LLP, One International Place, Boston,
Massachusetts 02110-2624.
21
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY TO ENSURE THAT A
QUORUM IS PRESENT AT THE ANNUAL MEETING. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE.
December 1, 2003
22
Appendix A
PIMCO MUNICIPAL INCOME FUND III
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III
PIMCO NEW YORK MUNICIPAL INCOME FUND III
AUDIT OVERSIGHT COMMITTEE CHARTER
The Board of Trustees of each of PIMCO Municipal Income Fund III, PIMCO
California Municipal Income Fund III and PIMCO New York Municipal Income Fund
III (each a "Fund") has adopted this Charter to govern the activities of the
Audit Oversight Committee (each a "Committee") of the particular Board. Each
Board of Trustees and each Committee is separately responsible for the
particular Fund it oversees, and not the other Funds. Singular references to the
"Board of Trustees", the "Committee" and the "Fund" hereinafter shall be
interpreted to apply to each Fund individually and not severally.
Statement of Policy
The Committee shall oversee the Fund's accounting and financial reporting
policies and practices and its internal controls. The Committee shall oversee
the quality and objectivity of the Fund's financial statements and the
independent audit of the financial statements. The Committee shall also act as a
liaison between the Fund's independent accountants and the Fund's Board of
Trustees.
The Committee's role is limited to oversight. Fund management is
responsible for Fund accounting and internal control systems, and the
independent accountants are responsible for conducting a proper audit of the
Fund's financial statements. The independent accountants are ultimately
accountable to the Fund's Board of Trustees and the Committee.
Membership
The Committee shall be comprised of as many trustees as the Board of
Trustees shall determine, but in any event not less than (i) two trustees for
the twelve-month period beginning on the date the Fund's shares are first listed
for trading on the New York Stock Exchange ("NYSE") and (ii) three trustees
thereafter. No member shall be an "interested person" of the Fund, as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended. In addition,
each member of the Committee shall also meet the requirements of being
"Independent," as defined in the New York Stock Exchange Listed Company Manual
[sec] 303.01, and shall be free of any relationship that, in the judgment of the
Board of Trustees, may interfere with the exercise of his or her independent
judgment.
A-1
Each member of the Committee shall be financially literate, as such
qualification is interpreted by the Fund's Board of Trustees in its business
judgment under the NYSE listing requirements.
At least one member of the Committee must have accounting or related
financial management expertise, as the Board of Trustees interprets such
qualification in its business judgment under the NYSE listing requirements.
Responsibilities and Duties
The Committee's policies and procedures shall remain flexible to facilitate
the Committee's ability to react to changing conditions and to generally
discharge its functions. The following responsibilities describe areas of
attention in broad terms.
The Committee shall:
1. Recommend the selection, retention or termination of the Fund's
independent accountants based on an evaluation of their independence
and the nature and performance of the audit and other services. The
Board of Trustees, with the assistance of the Committee, shall have
the ultimate authority and responsibility to select, evaluate and,
where appropriate, replace the outside auditor (or to nominate the
outside auditor to be proposed for shareholder approval in any proxy
statement).
2. Receive on a periodic basis formal written disclosures and letters
from the independent accountants as required by the Independence
Standards Board Standard ("ISB") No. 1.(1)
3. Engage in a dialog with the independent accountants and the Board of
Trustees concerning any relationships between the independent
accountants and the Fund or any other relationships that might
adversely affect the objectivity and independence of the independent
accountants.
4. Review the fees charged by the independent accountants for audit and
other services.
5. Review with the independent accountants' arrangements for and the
scope of the annual audit and any special audits including the form of
- ------------------
(1) ISB Standard No. 1 generally requires, among other things, that an auditor
(i) disclose to the Committee, in writing, all relationships between the
auditor and its related entities and the company and its related entities
that in the auditor's professional judgment may reasonably be thought to
bear on independence; (ii) confirm in the letter that, in its professional
judgment, it is independent of the company within the meaning of the
Securities Act of 1933, as amended and the Securities Exchange Act of 1934;
and (iii) discuss the auditor's independence with the audit committee.
A-2
any opinion proposed to be rendered to the Board of Trustees and
shareholders.
6. Review with management and the independent accountants the annual
financial statements, including a discussion with the independent
accountants of matters required by Statement of Accounting Standards
("SAS") No. 61.(2)
7. Discuss with the independent accountants any matters of concern
relating to the Fund's financial statements.
8. Consider with the independent accountants their comments on the Fund's
accounting and financial reporting policies, practices and internal
controls and management's responses thereto, including the effect on
the Fund of any recommendation of changes in accounting principles or
practices by management or the independent accountants.
9. Investigate any improprieties or suspected improprieties in the Fund's
financial and accounting operations.
10. Provide a report in the Fund's proxy statement disclosing whether the
Audit Committee has fulfilled the duties set forth above in items #2,
#3 and #6.
11. Provide a statement whether, based on its review of the Fund's audited
financial statements, the Committee recommends to the Board of
Trustees that the audited financial statements be included in the
Fund's Annual Report.
12. Report to the Board of Trustees regularly on the Committee's
activities and make any necessary recommendations as to the Fund's
accounting and financial reporting policies, practices and its
internal controls.
13. Review and reassess the adequacy of this Charter at least annually and
recommend any changes to the Board of Trustees.
14. Review with counsel legal and regulatory matters that have a material
impact on the Fund's financial and accounting reporting policies and
practices or its internal controls.
15. Perform such other functions consistent with this Charter, the Fund's
Agreement and Declaration of Trust and Bylaws and governing law, as
the Committee or the Board of Trustees deems necessary or appropriate.
- ------------------
(2) SAS No. 61 ("Communication with Audit Committees") requires independent
auditors to inform the audit committee of certain matters, including among
others, (i) methods used to account for significant unusual transactions,
(ii) the process used by management in formulating sensitive accounting
estimates on the basis of the auditors' conclusion as to the reasonableness
of those estimates and (iii) disagreements with management over the
application of accounting principles.
A-3
Meetings
The Committee shall meet at least once annually with the independent
accountants (outside the presence of Fund management) and at least once annually
with the representatives of Fund management responsible for the financial and
accounting operations of the Fund. The Committee shall hold special meetings as
and when it deems necessary or appropriate.
Outside Resources and Assistance from Management
The appropriate officers of the Fund shall provide or arrange to provide
such information, data and services as the Committee may request. The Committee
shall have the authority to discharge its responsibilities, including the
authority to retain counsel and other experts and consultants whose expertise
would be considered helpful to the Committee, at the expense of the Fund.
Dated: September 17, 2002
A-4
Appendix B
Joint Report of Audit Oversight Committee
of the Board of Trustees of
PIMCO Municipal Income Fund III
PIMCO California Municipal Income Fund III
PIMCO New York Municipal Income Fund III
(each, a "Fund" and, collectively, the "Funds")
Dated November 20, 2003
The Audit Oversight Committee (the "Committee") oversees each Fund's
financial reporting process on behalf of the Board of Trustees of the Fund (the
"Board") and operates under a written Charter adopted by the Board. The
Committee meets with the Fund's management ("Management") and independent public
accountants and reports the results of its activities to the Board. Management
has the primary responsibility for the financial statements and the reporting
process, including the system of internal controls. In connection with the
Committee's and independent accountant's responsibilities, Management has
advised that the Fund's financial statements for the fiscal year ended September
30, 2003 were prepared in conformity with the generally accepted accounting
principles.
The Committee has reviewed and discussed with Management and
PricewaterhouseCoopers LLP ("PwC"), the Fund's independent public accountants,
the audited financial statements for the fiscal year ended September 30, 2003.
The Committee has discussed with PwC the matters required to be discussed by
Statements on Auditing Standard No. 61 (SAS 61). SAS 61 requires independent
auditors to communicate to the Committee matters including, if applicable: 1)
methods used to account for significant unusual transactions; 2) the effect of
significant accounting policies in controversial of emerging areas for which
there is a lack of authoritative guidance or consensus; 3) the process used by
management in formulating particularly sensitive accounting estimates and the
basis for the auditor's conclusions regarding the reasonableness of those
estimates; and 4) disagreements with Management over the application of
accounting principles and certain other matters.
With respect to each Fund, the Committee has received the written
disclosure and the letter from PwC required by Independence Standards Board
Standard No. 1 (requiring auditors to make written disclosure to and discuss
with the Committee various matters relating to the auditor's independence), and
has discussed with PwC their independence. The Committee has also reviewed the
aggregate fees billed by PwC for professional services rendered
B-1
to the Fund and for non-audit services provided to PIMCO Advisors Fund
Management LLC ("PAFM"), 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 PAFM 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 auditors, whether the provision of such non-audit services
was compatible with maintaining the independence of PwC.
Based on the foregoing review and discussions, the Committee presents this
Report to the Board of each Fund and recommends that (1) the audited financial
statements for the fiscal year ended September 30, 2003 for each Fund be
included in the Fund's Annual Report to shareholders for such fiscal year, (2)
each such Annual Report be filed with the Securities and Exchange Commission and
the New York Stock Exchange, and (3) PwC be reappointed as each Fund's
independent public accountants for the fiscal year ending September 30, 2004.
Submitted by the Audit Oversight Committees of the Boards of Trustees:
Paul Belica
Robert E. Connor
Hans W. Kertess
B-2
THIS PAGE INTENTIONALLY LEFT BLANK.
PROXY
PIMCO (CALIFORNIA/NEW YORK) MUNICIPAL INCOME FUND III
PREFERRED SHARES
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 13, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
The undersigned holder of preferred shares of PIMCO [California/New York]
Municipal Income Fund III, a Massachusetts business trust (the "Fund"), hereby
appoints Stephen J. Treadway, Newton B. Schott, Jr. and Brian S. Shlissel, or
any of them, as proxies for the undersigned, with full power of substitution in
each of them, to attend the Annual Meeting of Shareholders of the Fund (the
"Annual Meeting") to be held at 9:00 a.m., Eastern Time, January 13, 2004 at the
offices of PIMCO Advisors Fund Management LLC, 1345 Avenue of the Americas, 49th
Floor, New York, New York 10105, and any postponement or adjournment thereof, to
cast on behalf of the undersigned all votes that the undersigned is entitled to
cast at the Annual Meeting and otherwise to represent the undersigned with all
powers possessed by the undersigned if personally present at such Annual
Meeting. The undersigned hereby acknowledges receipt of the Notice of Meeting
and accompanying Proxy Statement and revokes any proxy heretofore given with
respect to the Annual Meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND
WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS
THE PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY
THE UNDERSIGNED WILL BE CAST "FOR" SUCH PROPOSAL.
Please refer to the Proxy Statement for a discussion of the Proposal.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF AND RETURN
THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE: Please sign this proxy exactly as your name(s) appear(s) on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, the signature should
be that of an authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
Please mark
|X| votes as in
this example.
Your Board of Trustees urges you to vote "FOR" the election of all Nominees.
I. Election of Trustees:
(01) Robert E. Connor (Class I), (02) Hans W. Kertess (Class I), (03) R.
Peter Sullivan III (Class II),(04) Stephen J. Treadway (Class III)
--- ---
FOR | | | | WITHHOLD
THE | | | | FROM ALL
NOMINEES --- --- NOMINEES
---
| |
| |
--- -------------------------------------------
For all Nominees except as noted above
- --------------------------------------------------------------------------------
PIMCO [CALIFORNIA/NEW YORK] MUNICIPAL INCOME FUND III
- --------------------------------------------------------------------------------
PREFERRED SHARES
II. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any postponement or adjournment
thereof, in the discretion of the proxy holder(s).
---
Please check box at right if an address change or comment | |
has been made on the reverse side of this card. ---
Please be sure to sign and date this Proxy.
Shareholder Joint Owner
signature:____________ Date:______ (if any) signature:_____________ Date:______
PROXY
PIMCO [CALIFORNIA/NEW YORK] MUNICIPAL INCOME FUND III
COMMON SHARES
PROXY IN CONNECTION WITH THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 13, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
The undersigned holder of common shares of PIMCO [California/New York] Municipal
Income Fund III, a Massachusetts business trust (the "Fund"), hereby appoints
Stephen J. Treadway, Newton B. Schott, Jr. and Brian S. Shlissel, or any of
them, as proxies for the undersigned, with full power of substitution in each of
them, to attend the Annual Meeting of Shareholders of the Fund (the "Annual
Meeting") to be held at 9:00 a.m., Eastern Time, January 13, 2004 at the offices
of PIMCO Advisors Fund Management LLC, 1345 Avenue of the Americas, 49th Floor,
New York, New York 10105, and any postponement or adjournment thereof, to cast
on behalf of the undersigned all votes that the undersigned is entitled to cast
at the Annual Meeting and otherwise to represent the undersigned with all powers
possessed by the undersigned if personally present at such Annual Meeting. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement and revokes any proxy heretofore given with respect
to the Annual Meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED ON THE REVERSE SIDE HEREOF, AND
WILL BE VOTED IN THE DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF. IF THIS PROXY IS PROPERLY EXECUTED BUT NO DIRECTION IS MADE AS REGARDS
THE PROPOSAL INCLUDED IN THE PROXY STATEMENT, SUCH VOTES ENTITLED TO BE CAST BY
THE UNDERSIGNED WILL BE CAST "FOR" SUCH PROPOSAL.
Please refer to the Proxy Statement for a discussion of the Proposal.
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PLEASE VOTE, DATE AND SIGN ON THE REVERSE SIDE HEREOF
AND RETURN THE SIGNED PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
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NOTE: Please sign this proxy exactly as your name(s) appear(s) on the books of
the Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, the signature should
be that of an authorized officer who should state his or her title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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Please mark
|X| votes as in
this example.
Your Board of Trustees urges you to vote "FOR" the election of all Nominees.
I. Election of Trustees:
(01) Hans W. Kertess (Class I),(02)R. Peter Sullivan III (Class II),
(03)Stephen J. Treadway (Class III)
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FOR | | | | WITHHOLD
ALL | | | | FROM ALL
NOMINEES --- --- NOMINEES
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For all Nominees except as noted above
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PIMCO [CALIFORNIA/NEW YORK] MUNICIPAL INCOME FUND III
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COMMON SHARES
II. To vote and otherwise represent the undersigned on any other matter that may
properly come before the Annual Meeting or any postponement or adjournment
thereof, in the discretion of the proxy holder(s).
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Please check box at right if an address change or comment | |
has been made on the reverse side of this card. ---
Please be sure to sign and date this Proxy.
Shareholder Joint Owner
signature:____________ Date:______ (if any) signature:_____________ Date:______