DGEFV- 425 filed 4/19/05
Filing by Delaware Group Equity Funds V
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: Lincoln National
Convertible Securities Fund, Inc.
Commission File No. 811-04659
[DELAWARE INVESTMENTS LOGO]
LINCOLN NATIONAL CONVERTIBLE SECURITIES FUND, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 2, 2005
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND
AND VOTE ON THE PROPOSED TRANSACTION
Below is a brief overview of the proposal to be voted upon at the upcoming
Special Meeting of Shareholders (the "Meeting"). Please read the full text of
the enclosed Proxy Statement/Prospectus, which you should retain for future
reference. If you need another copy of the Proxy Statement/Prospectus, please
call Delaware Investments at 1-800-523-1918. YOUR VOTE IS IMPORTANT, SO PLEASE
VOTE YOUR SHARES AT YOUR EARLIEST CONVENIENCE.
We appreciate you placing your trust in Delaware Investments and we look
forward to helping you achieve your financial goals.
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
You are being asked to approve a transaction (the "Transaction") that will
result in your Fund, Lincoln National Convertible Securities Fund, Inc. (the
"Company"), being acquired by Delaware Dividend Income Fund ("Dividend Income
Fund"), an "openend" or "mutual" fund that is a series of Delaware Group Equity
Funds V (the "Trust"). If the proposal is approved and the Transaction is
completed, you will receive Class A shares of Dividend Income Fund with an
aggregate net asset value ("NAV") equal to the aggregate NAV of your shares of
the Company. This exchange will occur on a date agreed to between the Company
and the Trust (the "Closing Date"), which is expected to occur on or about June
10, 2005. After the Transaction is completed, the Company will be liquidated and
dissolved.
HOW WILL THE REORGANIZATION BENEFIT SHAREHOLDERS?
The Board of Directors of the Company considered a number of factors before
approving the Transaction. After considering these factors, the Board concluded
that shareholders will potentially benefit from the Transaction in the following
ways:
o Shareholders would benefit from significantly lower operating expenses
as shareholders of Dividend Income Fund.
o Shareholders would benefit from reorganizing the Company with an
open-end fund, which will:
o effectively eliminate the significant discount from the NAV per
share at which the Company's shares have been trading in the
secondary market; and
o permit shareholders to redeem their investment at any time at NAV
in accordance with the requirements of the Investment Company Act
of 1940, as amended (subject to a temporary redemption fee, as
discussed below).
o Dividend Income Fund has an investment objective similar to the
Company's, but has achieved a stronger performance track record than
the Company over the one-year, three-year and five-year periods ended
December 31, 2004. (Of course, past performance is no guarantee of
future results.)
o Shareholders may benefit from an investment in Dividend Income Fund,
which has a broader investment mandate and lower overall risk and
volatility than the Company.
HOW WILL THE TRANSACTION WORK?
If shareholders of the Company vote to approve the Transaction, it will
result in the transfer of substantially all of the Company's net assets to
Dividend Income Fund in exchange for Dividend Income Fund Class A shares of
equivalent aggregate NAV. These Dividend Income Fund Class A shares will then be
distributed to the Company's shareholders on a pro rata basis. This means that
the total net asset value of your investment will be the same immediately before
and after the Transaction, although the number of Dividend Income Fund Class A
shares that you receive will likely be different than the number of Company
shares that you surrender. NO SALES CHARGES WILL BE IMPOSED UPON THE DIVIDEND
INCOME FUND CLASS A SHARES YOU RECEIVE IN CONNECTION WITH THE TRANSACTION.
After the Dividend Income Fund Class A shares are distributed pro rata to
the Company's shareholders, the Company will be completely liquidated and
dissolved. As a result of the Transaction, you will cease to be a shareholder of
the Company and will become a shareholder of Dividend Income Fund. More detailed
information about the Transaction can be found in the Proxy
Statement/Prospectus.
HOW WILL THE TEMPORARY REDEMPTION FEE WORK?
The temporary 2% redemption (exchange) fee will be applicable to any
Dividend Income Fund Class A shares received in connection with the Transaction
that are redeemed or exchanged within three (3) months of the Closing Date. This
temporary redemption (or exchange) fee is designed, in part, to deter arbitrage
trades by investors seeking to profit from the difference between the cost of
purchasing Company shares at a discount to NAV and the proceeds of redeeming
Dividend Income Fund Class A shares at NAV following the Closing Date. To the
extent that arbitrage and other short-term trading still occurs, the temporary
2% redemption (or exchange) fee would protect Dividend Income Fund and its
long-term shareholders by recouping some of the costs of the arbitrage-related
redemptions and exchanges.
WHAT IS THE ANTICIPATED TIMETABLE FOR THE REORGANIZATIONS?
The shareholder meeting is scheduled for June 2, 2005. If approved by
shareholders, it is currently anticipated that the Transaction will take place
on or about June 10, 2005. Whether or not you plan to attend the Meeting, please
vote your shares by mail, by telephone or through the Internet. If you determine
at a later date that you wish to attend this Meeting, you may revoke your proxy
and vote in person, as provided in the Proxy Statement/Prospectus. Your vote is
important, so please act today.
HAS THE BOARD OF DIRECTORS APPROVED THE TRANSACTION?
Yes. The Board of Directors has unanimously approved the Transaction and
recommends that you vote to approve it.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each full Company share
and a fractional vote for each fractional Company share that you own on the
record date. The record date is March 21, 2005.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card(s) and mailing it in the enclosed postage-paid envelope. You may also vote
by touch-tone telephone by calling the toll-free number printed on your proxy
card(s) and following the recorded instructions. In addition, you may also vote
through the Internet by visiting www.delawareinvestments.com and following the
on-line instructions. If you need any assistance, or have any questions
regarding the proposed Transaction or how to vote your shares, please call D.F.
King & Co., Inc., which is assisting your Company, at 1-800-549-6746.
HOW DO I SIGN THE PROXY CARD?
Individual Accounts: Shareholders should sign exactly as their
names appear on the account registration
shown on the card.
Joint Accounts: Either owner may sign, but the name of the
person signing should conform exactly
to a name shown in the registration.
All Other Accounts: The person signing must indicate his or her
capacity. For example, if Ms. Ann B. Collins
serves as a trustee for a trust account or
other type of entity, she should sign "Ann B.
Collins, Trustee."
HOW CAN I FIND MORE INFORMATION ON THE TRANSACTION?
You should read the Proxy Statement/Prospectus that provides details
regarding the proposed Transaction. If you have any questions, please call D.F.
King & Co., Inc., which is assisting your Company, at 1-800-549-6746.
J10111
PXQA-LNCS [--] IVES 4/05