The Preferred Shares, which trade on the New York Stock Exchange under the symbol "GCV Pr", are rated 'AAA' by Standard and Poor's and have an annual dividend rate of $2.00 per share. The Preferred Shares were issued on May 16, 1997 at $25.00 per share and pay distributions quarterly.

A portion of this distribution will be treated as long-term capital gains. This has the effect of providing individual shareholders with an ordinary income tax equivalent yield that is higher than the current yield. Long-term capital gains will be allocated to all distributions for the year. The final determination of the source of all distributions in 2002 will be made after year-end.

The Preferred Shares are now callable at any time at the liquidation value of $25.00 per share plus accrued dividends following the expiration of the five-year call protection on May 16, 2002. The Fund redeemed 50% (600,000 Shares) of its outstanding 8.00% Cumulative Preferred Stock on November 12, 2002 at the redemption price of $25.2555 per Preferred Share, which consists of $25.00 per Preferred Share plus accrued dividends through the redemption date of $0.2555 per Preferred Share. The redemption was made pro rata from each Preferred Stock Shareholder based on the respective number of Preferred Shares held by each such holder on the redemption date.

The Gabelli Convertible and Income Securities Fund Inc. is a closed-end, diversified management investment company with $85 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. (GBL - NYSE), which is a publicly traded NYSE listed company.