Under the Convertible and Income Securities Fund's payout policy, the Fund will pay out a minimum annual distribution of 8% of the average net asset value of the Fund. Pursuant to this policy, the Fund will pay $0.20 per share in each of the first three quarters of the year and an adjusting distribution in the fourth quarter of a sufficient amount to pay 8% of the average net asset value of the Fund, as of the last day of the four preceding calendar quarters, or to satisfy the minimum distribution requirements of the Internal Revenue Code, whichever is greater. Each quarter, the Board of Directors reviews the amount of any potential distribution and the income, capital gain or capital available.

A portion of the distribution may be treated as long-term capital gain and qualifying dividend income for individuals, each subject to the maximum Federal income tax rate, which is currently 15% in taxable accounts for individuals. If the Fund does not generate a total return from dividends and interest received and net realized capital gains equal to or in excess of 8% of the average net asset value of the Fund, then the amount distributed in excess of the Fund's investment income and net realized capital gains would be deemed a non-taxable return of capital. Long-term capital gain, qualifying dividend income, ordinary income and non-taxable return of capital, if any, that is allocable to the common shares will be allocated on a pro-rata basis to all distributions for the year. The final determination of the source of all distributions in 2004 will be made after the 2004 year-end.

The Gabelli Convertible and Income Securities Fund Inc. is a closed-end, diversified management investment company with $145 million in total assets whose primary investment objective is to seek a high level of total return through a combination of current income and capital appreciation. The Fund is managed by Gabelli Funds, LLC, a subsidiary of Gabelli Asset Management Inc. (NYSE:GBL), which is a publicly traded NYSE listed company.