UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Under Rule 14a-12
Investment Grade Municipal Income Fund Inc.
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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:
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[] Fee paid previously with preliminary materials:
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[] 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.:
_____________________________________________________________________
3) Filing Party:
_____________________________________________________________________
4) Date Filed:
_____________________________________________________________________
INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
----------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 18, 2007
----------------
TO THE SHAREHOLDERS:
The annual meeting of shareholders of Investment Grade Municipal Income Fund
Inc. (the "Fund") will be held on January 18, 2007, at 10:00 a.m., Eastern time,
at 51 West 52nd Street, New York, New York 10019-6114 for the following
purposes:
MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS:
(1) To elect four (4) directors to serve until the annual meeting of
shareholders in 2008, or until their successors are elected and
qualified or until they resign or are otherwise removed; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
MATTERS TO BE VOTED UPON ONLY BY HOLDERS OF AUCTION PREFERRED SHARES:
(3) To elect two (2) directors to serve until the annual meeting of
shareholders in 2008, or until their successors are elected and
qualified or until they resign or are otherwise removed.
You are entitled to vote at the meeting and any adjournments thereof if you
owned Fund shares at the close of business on November 17, 2006. If you attend
the meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED POSTAGE PAID ENVELOPE.
By order of the board of directors,
MARK F. KEMPER
Vice President and Secretary
November 22, 2006
51 West 52nd Street
New York, New York 10019-6114
--------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE
AND SIGN IT, AND RETURN IT IN THE POSTAGE PAID ENVELOPE PROVIDED. If you
sign, date and return the proxy card but give no voting instructions, your
shares will be voted "FOR" the nominees for director for which you are
entitled to cast a vote named in the attached proxy statement and, in the
proxies' discretion, either "FOR" or "AGAINST" any other business that may
properly arise at the annual meeting. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING IN YOUR PROXY CARD PROMPTLY.
--------------------------------------------------------------------------------
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general guidelines for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund in validating your
vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy
card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
Corporate Accounts
(1) ABC Corp. ........................................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp. ........................................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer ................... John Doe
(4) ABC Corp. Profit Sharing Plan ....................... John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership ................................. Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership ................ Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account ................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/18/78 ................. Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o
John B. Smith, Jr. UGMA/UTMA ........................ John B. Smith
(2) Estate of John B. Smith ............................. John B. Smith, Jr., Executor
INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019-6114
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 18, 2007
This proxy statement is furnished to the shareholders of Investment Grade
Municipal Income Fund Inc. (the "Fund") in connection with the board of
directors' solicitation of proxies to be used at the annual meeting of
shareholders of the Fund to be held on January 18, 2007, at 10:00 a.m., Eastern
time, at 51 West 52nd Street, New York, New York 10019-6114, or any adjournment
or adjournments thereof. This proxy statement and the related proxy card will
first be mailed to shareholders on or about November 27, 2006.
A majority of the shares outstanding on November 17, 2006, represented in
person or by proxy, must be present for the transaction of business at the
meeting. In the event that a quorum is not present at the annual meeting
(including a quorum of the Fund's auction preferred shares ("APS") with respect
to the election of the two directors to be elected solely by the APS), or if a
quorum is present at the annual meeting but sufficient votes to approve any of
the proposals are not received, the persons named as proxies may propose one or
more adjournments of the annual meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
those shares represented at the annual meeting in person or by proxy. The
persons named as proxies will vote those proxies which they are entitled to vote
FOR any such proposal in favor of such an adjournment and will vote those
proxies marked WITHHOLD on any such proposal against such adjournment. A
shareholder vote may be taken on one or more of the proposals in this proxy
statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
but will have no effect on Proposals 1 and 3, for which the required vote is a
plurality of the votes cast on the matter.
Except as otherwise indicated herein, all of the outstanding shares of the
Fund's common stock and APS will vote together as a single class. Each full
share of the Fund's common stock or APS is entitled to one vote, and each
fractional share of the Fund's common stock or APS is entitled to a
proportionate share of one vote. However, as described below in connection with
Proposals 1 and 3, the holders of the APS, voting as a separate class, are
entitled to elect two of the Fund's directors.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. With respect to the holders of the APS, if you give no voting
instructions, your shares will be voted FOR the six nominees for director named
herein and, in the proxies' discretion, either FOR or AGAINST any other business
that may properly arise at the annual meeting. With respect to the holders of
the Fund's common stock, if you give no voting instructions, your shares will be
voted FOR the four nominees for director named herein for which the holders of
the common
stock are entitled to vote and, in the proxies' discretion, either FOR or
AGAINST any other business that may properly arise at the annual meeting. You
may revoke any proxy card by giving another proxy or by submitting a written
notice of revocation to the Fund's Secretary, care of UBS Global Asset
Management (Americas) Inc. at 51 West 52nd Street, New York, New York
10019-6114. To be effective, your revocation must be received by the Fund prior
to the meeting and must indicate your name and account number. In addition, if
you attend the annual meeting in person you may, if you wish, vote by ballot at
the meeting, thereby cancelling any proxy previously given.
As of the record date, November 17, 2006, the Fund had outstanding
10,356,667 shares of common stock and 2,200 shares of the APS, representing 800
Series A shares, 800 Series B shares and 600 Series C shares. The solicitation
of proxies, the cost of which will be borne by the Fund, will be made primarily
by mail but also may include telephone or oral communications by regular
employees of UBS Global Asset Management (Americas) Inc. ("UBS Global AM") or
UBS Financial Services Inc., who will not receive any compensation therefore
from the Fund. Each full share of the Fund outstanding is entitled to one vote,
and each fractional share of the Fund outstanding is entitled to a proportionate
share of one vote.
UBS Global AM serves as the Fund's investment advisor and administrator. UBS
Global AM is an indirect wholly owned asset management subsidiary of UBS AG. UBS
AG is an internationally diversified organization with headquarters in Zurich
and Basel, Switzerland. UBS AG operates in many areas of the financial services
industry. The principal business offices of UBS Global AM are located at 51 West
52nd Street, New York, New York 10019-6114 and at One North Wacker Drive,
Chicago, Illinois 60606. The principal business address of UBS AG is
Bahnhofstrasse 45, Zurich, Switzerland.
The Fund's annual report containing financial statements for the fiscal year
ended September 30, 2006, is being mailed to shareholders concurrently with this
proxy statement.
PROPOSALS 1 AND 3. ELECTION OF DIRECTORS
Proposals 1 and 3 relate to the election of directors of the Fund.
Management proposes the election of the six nominees named in the table below.
Each nominee has indicated his or her willingness to serve if elected. If
elected, each nominee will hold office until the next annual meeting of
shareholders or until his or her successor is elected and qualified, or until he
or she resigns or is otherwise removed. Each of the nominees was last elected
director at the annual meeting of shareholders held on February 3, 2006.
Holders of the outstanding shares of the APS, voting as a separate class,
are entitled to elect two of the Fund's directors. Richard R. Burt and Meyer
Feldberg have been nominated as the directors that are to be elected solely by
holders of the APS. The other four directors will be elected by holders of both
the outstanding common stock and APS, voting together as a single class. Richard
Q. Armstrong, Alan S. Bernikow, Bernard H. Garil and Heather R. Higgins have
been nominated as the directors that are to be elected by all common stock and
APS holders. Unless you give contrary instructions on the enclosed proxy card:
if you are a holder of the APS, your APS shares will be voted FOR the election
of all six nominees; and, if you are a holder of the common stock, your shares
of common stock will be voted FOR the four nominees that are to be elected by
all common stock and APS holders. If any of the nominees should withdraw or
otherwise become unavailable for election, your shares will be voted FOR such
other nominee or nominees as management may recommend.
2
Directors, including those who are not "interested persons" of the Fund as
that term is defined in the Investment Company Act of 1940, as amended ("1940
Act") ("Independent Directors"), shall be elected by the affirmative vote of the
holders of a plurality of the shares of the Fund cast in person or by proxy and
entitled to vote thereon, provided a quorum is present. Proxies cannot be voted
for a greater number of persons than the number of nominees named. None of the
current directors and executive officers (20 persons) beneficially owned any
shares of the Fund's common stock or APS on November 3, 2006.
Listed in the table below, for each nominee, is a brief description of the
nominee's experience as a director of the Fund and as a director or trustee of
other funds, as well as other recent professional experience.
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
---------------------- ---- ------ ------------------- ------------------- ---------------
INTERESTED DIRECTOR:
Meyer Feldberg+; 64 Director Since 1992 Professor Feldberg is Professor Feldberg is Professor Feldberg
Morgan Stanley Dean Emeritus and a director or trustee is also a director
1585 Broadway Sanford Bernstein of 29 investment of Primedia Inc.
33rd Floor Professor of Leadership companies (consisting (publishing),
New York, NY 10036 and Ethics at Columbia of 49 portfolios) for Federated Department
Business School, which UBS Global AM Stores, Inc. (operator
although on a two year or one of its affiliates of department stores),
leave of absence. He is serves as investment Revlon, Inc.
also a senior advisor advisor, sub-advisor or (cosmetics) and
to Morgan Stanley manager. SAPPI, Ltd. (producer
(financial services) of paper).
(since March 2005).
Prior to July 2004, he
was Dean and Professor
of Management of the
Graduate School of
Business at Columbia
University (since 1989).
INDEPENDENT DIRECTORS:
Richard Q. Armstrong; 71 Director Since 1995 Mr. Armstrong is Mr. Armstrong is a None
c/o Willkie Farr & and chairman and principal director or trustee of
Gallagher LLP Chairman of R.Q.A. Enterprises 16 investment
787 Seventh Avenue of the (management companies (consisting
New York, NY Board of consulting firm) (since of 36 portfolios) for
10019-6099 Directors April 1991 and which UBS Global AM
principal occupation or one of its affiliates
since March 1995). serves as investment
advisor, sub-advisor or
manager.
3
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
---------------------- ---- ------ ------------------- ------------------- ---------------
Alan S. Bernikow; 65 Director Since 2006 Mr. Bernikow is a Mr. Bernikow is a Mr. Bernikow is also
207 Benedict Ave. consultant on non- director or trustee a director of Revlon,
Staten Island, NY 10314 management matters for of 16 investment Inc. (cosmetics) (and
the firm of Deloitte & companies (consisting serves as the chair of
Touche (international of 36 portfolios) for its audit committee),
accounting and which UBS Global AM a director of
consulting firm) (since or one of its Mack-Cali Realty
June 2003). Previously, affiliates serves as Corporation (real
he was Deputy Chief investment advisor, estate investment
Executive Officer at sub-advisor or trust) (and serves as
Deloitte & Touche. manager. the chair of its
audit committee) and a
director of the Casual
Male Retail Group,
Inc. (menswear).
Richard R. Burt; 59 Director Since 1995 Mr. Burt is chairman Mr. Burt is a director Mr. Burt is also a
1275 Pennsylvania of Diligence Inc. or trustee of 16 director of The
Ave., N.W. (information and risk investment companies Central European
Washington, D.C. 20004 management firm) (consisting of 36 Fund, Inc., The
and IEP Advisors portfolios) for which Germany Fund, Inc.,
(international UBS Global AM or The New Germany
investments and one of its affiliates Fund, Inc., IGT, Inc.
consulting firm). serves as investment (provides technology
advisor, sub-advisor to gaming and
or manager. wagering industry)
and The Protective
Group, Inc. (produces
armor products).
Bernard H. Garil; 66 Director Since 2006 Mr. Garil is retired Mr. Garil is a director Mr. Garil is also a
6754 Casa Grande Way (since 2001). He was a or trustee of 16 director of OFI Trust
Delray Beach, FL 33446 Managing Director at investment companies Company (commercial
PIMCO Advisory (consisting of 36 trust company) and a
Services (from 1999 to portfolios) for which trustee for the
2001) where he served UBS Global AM or Brooklyn College
as President of closed- one of its affiliates Foundation, Inc.
end funds and Vice- serves as investment (charitable
President of the advisor, sub-advisor or foundation).
variable insurance manager.
product funds advised
by OpCap Advisors
(until 2001).
4
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
---------------------- ---- ------ ------------------- ------------------- ---------------
Heather R. Higgins; 47 Director Since 2006 Ms. Higgins is the Ms. Higgins is a None
255 E. 49th St., President and Director director or trustee of
Suite 23D of The Randolph 16 investment
New York, NY 10017 Foundation (charitable companies (consisting
foundation) (since 1991). of 36 portfolios) for
Ms. Higgins also serves which UBS Global AM
on the boards of or one of its affiliates
several non-profit serves as investment
charitable groups, advisor, sub-advisor or
including the manager.
Independent Women's
Forum (chairman),
the Philanthropy
Roundtable (vice
chairman) and the
Hoover Institution
(executive committee).
---------------
* Each director holds office until the next annual meeting of shareholders or
until his or her successor is elected and qualified, or until he or she
resigns or is otherwise removed. Each director who has attained the age of
seventy-four (74) years will be subject to retirement on the last day of
the month in which he or she attains such age.
+ Professor Feldberg is deemed an "interested person" of the Fund as defined
in the 1940 Act because he is a senior advisor to Morgan Stanley, a
financial services firm with which the Fund may conduct transactions.
5
INFORMATION ABOUT NOMINEE BENEFICIAL OWNERSHIP OF FUND SHARES
DOLLAR RANGE AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
OF EQUITY REGISTERED INVESTMENT COMPANIES OVERSEEN BY NOMINEE
SECURITIES FOR WHICH UBS GLOBAL AM OR AN AFFILIATE SERVES AS
NOMINEE IN FUND+ INVESTMENT ADVISOR, SUB-ADVISOR OR MANAGER+
------- -------- -------------------------------------------
INTERESTED DIRECTOR:
Meyer Feldberg ................... None Over $100,000
INDEPENDENT DIRECTORS*:
Richard Q. Armstrong ............. None Over $100,000
Alan S. Bernikow ................. None None
Richard R. Burt .................. None Over $100,000
Bernard H. Garil ................. None Over $100,000
Heather R. Higgins ............... None None
---------------
+ Information regarding ownership of shares of the Fund is as of November 3,
2006; information regarding ownership of shares in all registered
investment companies overseen by nominee for which UBS Global AM or an
affiliate serves as investment advisor, sub-advisor or manager is as of
December 31, 2005.
* To the extent they have not already done so, the Independent Directors have
each agreed to invest the equivalent of a minimum of one year's board
member's fees, in the aggregate, in the funds in the UBS Fund complex. Such
investments may be spread across a number of funds, and they may not
necessarily be made in any one particular fund overseen. The investment
will be made over a period not to exceed three years from (i) the beginning
of 2004 or (ii) the date of the election to the board, whichever is later.
As of December 31, 2005, the Independent Directors or their immediate family
members did not own any securities issued by UBS Global AM or any company
controlling, controlled by or under common control with UBS Global AM.
The board of directors of the Fund met six times during the fiscal year
ended September 30, 2006. Each director attended 75% or more of the board
meetings during the last fiscal year.
The board of directors is not required to attend the Fund's annual meetings,
and no directors attended the annual meeting of shareholders in 2006.
The board has established an Audit Committee that acts pursuant to a written
charter ("Audit Committee Charter") and is responsible for, among other things:
(i) overseeing the scope of the Fund's audit; (ii) overseeing the Fund's
accounting and financial reporting policies, practices and internal controls;
(iii) approving, and recommending to the board for ratification, the selection,
appointment, retention or termination of the Fund's registered public accounting
firm, as well as determining the compensation thereof. A copy of the charter is
attached as Exhibit A. In furtherance of its duties, the Audit Committee is also
responsible for, among other things: receiving reports from the Fund's
independent registered public accounting firm regarding its independence and
discussing any disclosed relationships or services that may diminish the
objectivity and independence of the registered public accounting firm; inquiring
of UBS Global AM and the Fund's independent registered public accounting firm as
to the Fund's qualification under Subchapter M of the Internal Revenue Code and
the amounts distributed and
6
reported to shareholders; and reviewing with the independent registered public
accounting firm any problems or difficulties the independent registered public
accounting firm may have encountered during the conduct of the audit. Although
the Audit Committee has the responsibilities described above, it is not
responsible for planning or conducting the Fund's audit or determining whether
the Fund's financial statements are complete and accurate and are in accordance
with U.S. generally accepted accounting principles. Absent actual knowledge to
the contrary, Audit Committee members are entitled to rely on the accuracy of
the information they receive from persons within and outside the Fund. The Audit
Committee currently consists of Messrs. Armstrong, Bernikow, Burt and Garil, and
Ms. Higgins, none of whom have any relationship to the Fund that may interfere
with the exercise of their independence from management or the Fund and each of
whom is independent as defined under the listing standards of the New York Stock
Exchange ("NYSE") applicable to closed-end funds. Each member of the Fund's
Audit Committee is also a member of a similar committee established by the
boards of certain other investment companies for which UBS Global AM or an
affiliate serves as investment advisor, sub-advisor or manager. The Audit
Committee met five times during the fiscal year ended September 30, 2006. Each
Audit Committee member attended 75% or more of the Audit Committee meetings
during the last fiscal year.
The board has also established a Nominating and Corporate Governance
Committee that acts pursuant to a written charter ("Nominating and Corporate
Governance Committee Charter"). The Nominating and Corporate Governance
Committee is responsible for, among other things, identifying, evaluating and
recommending to the board candidates to be nominated as additional Independent
Directors of the board; making recommendations to the board with respect to
compensation of board and committee members; overseeing an annual evaluation of
the board and its committees; reporting on such evaluation to the board; and
performing such other functions as the board may from time to time delegate to
the Nominating and Corporate Governance Committee. A copy of the Nominating and
Corporate Governance Committee Charter is attached as Exhibit B. The Nominating
and Corporate Governance Committee currently consists of Messrs. Burt and Garil,
and Ms. Higgins, none of whom is an "interested person" for purposes of the 1940
Act, and all of whom are independent as defined under the listing standards of
the NYSE applicable to closed-end funds. The Nominating and Corporate Governance
Committee met once during the fiscal year ended September 30, 2006. Each
Nominating and Corporate Governance Committee member attended 75% or more of the
Nominating and Corporate Governance Committee meetings during the last fiscal
year.
In nominating candidates, the Nominating and Corporate Governance Committee
believes that no specific qualifications or disqualifications are controlling or
paramount, or that specific qualities or skills are necessary for each candidate
to possess. In identifying and evaluating nominees for director, the Nominating
and Corporate Governance Committee takes into consideration such factors as it
deems appropriate. These factors may include: (i) whether or not the person is
an "interested person" as defined in the 1940 Act, meets the independence and
experience requirements of the NYSE applicable to closed-end funds and is
otherwise qualified under applicable laws and regulations to serve as a member
of the board; (ii) whether or not the person has any relationships that might
impair his or her independence, such as any business, financial or family
relationships with Fund management, the investment advisor and/or sub-advisors
of the Fund, Fund service providers or their affiliates; (iii) whether or not
the person is willing to serve, and willing and able to commit the time
necessary for the performance of the duties of a board member; (iv) the person's
judgment, skill, diversity and experience with investment companies and other
organizations of comparable purpose, complexity and size and subject to similar
legal restrictions and oversight; (v) the interplay of the candidate's
experience with the experience of other board members; and (vi) the extent to
which the candidate would be a desirable addition to the board and any
committees thereof.
7
The Nominating and Corporate Governance Committee will consider nominees
recommended by shareholders if a vacancy occurs. In order to recommend a
nominee, a shareholder should send a letter to the chairperson of the Nominating
and Corporate Governance Committee, Mr. Richard Burt, care of the Secretary of
the Fund at UBS Global Asset Management (Americas) Inc., 51 West 52nd Street,
New York, New York 10019-6114 and indicate on the envelope "Nominating and
Corporate Governance Committee." The shareholder's letter should state the
nominee's name and should include the nominee's resume or curriculum vitae, and
must be accompanied by a written consent of the individual to stand for election
if nominated by the board and to serve if elected by shareholders. The board
does not have a standing compensation committee.
Each Independent Director receives, in the aggregate from the UBS Global AM
funds he or she oversees, an annual retainer of $95,000 and a $13,000 fee for
each regular board meeting (and each in-person special board meeting) actually
attended. Independent Directors who participate in previously scheduled
in-person meetings by telephone to accommodate other business obligations are
paid $2,000 for such meetings. Independent Directors who participate in
previously scheduled in-person meetings by telephone because of illness or other
unavoidable circumstances are paid the full meeting fee. Each Independent
Director will receive $2,000 for each special in-person meeting (not held as a
joint meeting) of the Fund's board actually attended where the Fund's board must
meet separately from the regularly scheduled joint board meetings. Independent
Directors who participate in scheduled telephonic meetings of the board(s) of
one or more UBS Funds are paid $1,000 for each such meeting actually attended.
The board's Chairman receives annually an additional $50,000; the chairperson of
the Audit Committee receives annually an additional $35,000; and the chairperson
of the Nominating and Corporate Governance Committee receives annually an
additional $25,000 provided that, if a board member simultaneously holds more
than one such position, he or she is paid only the higher of the fees otherwise
payable for these positions. Independent Directors who are also members of the
Audit Committee and/or Nominating and Corporate Governance Committee are paid
$2,000 for each meeting of such Committee actually attended, provided that such
meeting is not held in conjunction with a regularly scheduled board meeting. The
foregoing fees will be allocated among all such funds (or each relevant fund in
the case of a special meeting) as follows: (i) one-half of the expense will be
allocated pro rata based on the funds' relative net assets at the end of the
calendar quarter preceding the date of payment and (ii) one-half of the expense
will be allocated according to the number of such funds. No officer, director or
employee of UBS Global AM or one of its affiliates presently receives any
compensation from the Fund for acting as a board member or officer. Board
members are reimbursed for expenses incurred in attending meetings. Professor
Feldberg, an interested person of the Fund, is compensated by management.
8
Each director who has attained the age of seventy-four (74) years will be
subject to retirement on the last day of the month in which he or she attains
such age. The table below includes certain information relating to the
compensation of the Fund's directors.
COMPENSATION TABLE+
TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE FUND
FROM AND THE
NAME OF PERSON, POSITION THE FUND* FUND COMPLEX**
------------------------ --------- --------------
Richard Q. Armstrong, Director .......................... $3,650 $164,514
Alan S. Bernikow, Director+++ ........................... 1,817 0
Richard R. Burt, Director ............................... 3,285 142,500
Meyer Feldberg, Director++ .............................. 0 172,983
Bernard H. Garil, Director+++ ........................... 1,570 0
Heather R. Higgins, Director+++ ......................... 1,570 0
---------------
+ Only Independent Directors are compensated by the funds for which UBS
Global AM serves as investment advisor, sub-advisor or manager; directors
who are "interested persons," as defined in the 1940 Act, do not receive
compensation from the UBS Global AM funds.
++ Until March 1, 2005, Professor Feldberg was an Independent Director and was
compensated as such by the funds for which UBS Global AM or an affiliate
served as investment advisor, sub-advisor or manager. Effective March 1,
2005, Professor Feldberg is an "interested person" of the Fund by virtue of
his position as senior advisor with Morgan Stanley. As such, Professor
Feldberg is no longer compensated by the funds for which UBS Global AM
serves as investment advisor, sub-advisor or manager. The compensation
amounts listed in the Compensation Table for Professor Feldberg represent
only those amounts paid by other funds within the Fund Complex but for which
UBS Global AM does not serve as investment advisor, sub-advisor or manager.
+++ Messrs. Bernikow and Garil and Ms. Higgins were elected to the Board in
February 2006 and were not compensated in 2005 as Directors.
* Represents fees paid to each director during the fiscal year ended September
30, 2006.
** Represents fees paid during the calendar year ended December 31, 2005 to
each board member by: (a) 16 investment companies in the case of Messrs.
Armstrong and Burt; and (b) 29 investment companies in the case of
Professor Feldberg for which UBS Global AM or one of its affiliates served
as investment advisor, sub-advisor or manager. No fund within the UBS fund
complex has a bonus, pension, profit sharing or retirement plan.
9
INFORMATION CONCERNING INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Fund's financial statements for the fiscal year ended September 30,
2006, were audited by Ernst & Young LLP ("Ernst & Young"), independent
registered public accounting firm. In addition, Ernst & Young prepares the
Fund's federal and state annual income tax returns and provides certain
non-audit services. The Audit Committee has considered whether the provision of
those non-audit services is compatible with maintaining Ernst & Young's
independence. The board of directors of the Fund has selected Ernst & Young as
the independent registered public accounting firm for the Fund for the fiscal
year ending September 30, 2007. Ernst & Young has been the Fund's independent
registered public accounting firm since July 25, 2001. Ernst & Young has
informed the Fund that it has no material direct or indirect financial interest
in the Fund.
Representatives of Ernst & Young are not expected to be present at the
meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
AUDIT FEES
The aggregate audit fees billed by Ernst & Young for professional services
rendered to the Fund for the audit of each of the last two fiscal years ended
September 30, 2006 and September 30, 2005 were approximately $38,500 and
$28,600, respectively.
Fees included in the audit fees category are those associated with the
annual audits of financial statements and services that are normally provided in
connection with statutory and regulatory filings.
AUDIT-RELATED FEES
The aggregate audit-related fees billed by Ernst & Young for services
rendered to the Fund that are reasonably related to the performance of the
audits of the financial statements, but not reported as audit fees, were
approximately $8,773 and $7,712, respectively, in each of the fiscal years ended
September 30, 2006 and September 30, 2005.
Fees included in the audit-related category are those associated with (1)
the reading and providing of comments on the 2006 and 2005 semiannual financial
statements, (2) review of the consolidated 2005 and 2004 reports on the
profitability of the UBS Funds to UBS Global Asset Management (US) Inc. and its
affiliates to assist the board members in their annual advisory/administration
contract reviews and (3) auction preferred shares testing for the registrant's
fiscal years ended 2006 and 2005.
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no
audit-related fees that were required to be approved by the Audit Committee
pursuant to the de minimis exception for the fiscal years ended September 30,
2006 and September 30, 2005 on behalf of (i) the Fund's service providers that
relate directly to the operations and financial reporting of the Fund, or (ii)
the Fund itself. There were no audit-related fees required to be approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the
fiscal years indicated above.
TAX FEES
The aggregate tax fees billed by Ernst & Young for services rendered to the
Fund for each of the fiscal years ended September 30, 2006 and September 30,
2005 were approximately $8,000 and $11,150, respectively.
10
Fees included in the tax fees category comprise all services performed by
professional staff in the independent accountant's tax division except those
services related to the audits. This category comprises fees for review of tax
compliance, tax return preparation and excise tax calculations.
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no tax
fees that were required to be approved by the Audit Committee pursuant to the de
minimis exception for the fiscal years ended September 30, 2006 and September
30, 2005 on behalf of (i) the Fund's service providers that relate directly to
the operations and financial reporting of the Fund, or (ii) the Fund itself.
There were no tax fees required to be approved pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
ALL OTHER FEES
For the fiscal years ended September 30, 2006 and September 30, 2005, there
were no fees billed by Ernst & Young for other services provided to the Fund.
Fees included in the "all other fees" category would consist of services related
to internal control reviews, strategy and other consulting, financial
information systems design and implementation, consulting on other information
systems, and other tax services unrelated to the Fund.
There were no fees billed by Ernst & Young for the most recent fiscal year
for professional services rendered for financial information systems design and
implementation services provided to the Fund, UBS Global AM and entities that
control, are controlled by or are under common control with UBS Global AM that
provide services to the Fund.
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no fees
within this category that were required to be approved by the Audit Committee
pursuant to the de minimis exception for the fiscal years ended September 30,
2006 and September 30, 2005 on behalf of (i) the Fund's service providers that
relate directly to the operations and financial reporting of the Fund, or (ii)
the Fund itself. There were no "all other fees" required to be approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years
indicated above.
The Audit Committee Charter contains the audit committee's pre-approval
policies and procedures. Reproduced below is an excerpt from the Audit
Committee Charter regarding pre-approval policies and procedures:
The Audit Committee shall:
Pre-approve (a) all audit and permissible non-audit services(1) to be
provided to the Fund and (b) all permissible non-audit services to be
provided by the Fund's independent
--------------
(1) The Committee will not approve non-audit services that the Committee
believes may taint the independence of the auditors. Currently, permissible
non-audit services include any professional services (including tax
services) that are not prohibited services as described below, provided to
the Fund by the independent auditors, other than those provided to the Fund
in connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements of
the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or contribution-in-
kind reports; (iv) actuarial services; (v) internal audit outsourcing
services; (vi) management functions or human resources; (vii) broker or
dealer, investment adviser or investment banking services; (viii) legal
services and expert services unrelated to the audit; and (ix) any other
service the Public Company Accounting Oversight Board determines, by
regulation, is impermissible.
11
auditors to UBS Global [Asset Management (Americas) Inc. ("UBS Global
[AM]")] and any Covered Service Providers, if the engagement relates
directly to the operations and financial reporting of the Fund. In
carrying out this responsibility, the Committee shall seek
periodically from UBS Global [AM] and from the independent auditors a
list of such audit and permissible non-audit services that can be
expected to be rendered to the Fund, UBS Global [AM] or any Covered
Service Providers by the Fund's independent auditors, and an estimate
of the fees sought to be paid in connection with such services. The
Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to a sub-committee consisting
of the Chairperson of the Committee and two other members of the
Committee as the Chairperson, from time to time, may determine and
appoint, and such sub-committee shall report to the Committee, at its
next regularly scheduled meeting after the sub-committee's meeting,
its decision(s). From year to year, the Committee shall report to the
Board whether this system of pre-approval has been effective and
efficient or whether this Charter should be amended to allow for
pre-approval pursuant to such policies and procedures as the Committee
shall approve, including the delegation of some or all of the
Committee's pre-approval responsibilities to other persons (other than
UBS Global [AM] or the Fund's officers).
AGGREGATE NON-AUDIT FEES
For the fiscal years ended September 30, 2006 and September 30, 2005, the
aggregate non-audit fees billed by Ernst & Young of approximately $24,773 and
$72,362, respectively, included non-audit services rendered on behalf of the
Fund of approximately $16,773 and $18,862, respectively, and non-audit services
rendered on behalf of the Fund's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser) and any entity controlling,
controlled by, or under common control with the investment adviser that provides
ongoing services to the Fund of approximately $8,000 and $53,500, respectively.
The Audit Committee was not required to consider whether the provision of
non-audit services that were rendered to the Fund's investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser
that provides ongoing services to the Fund that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining Ernst & Young's independence.
---------------
Pre-approval by the Committee of any permissible non-audit services is not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, UBS Global [AM] and any service
providers controlling, controlled by or under common control with UBS
Global [AM] that provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount of revenues
paid to the independent auditors (during the fiscal year in which the
permissible non-audit services are provided) by (a) the Fund, (b) its
investment adviser and (c) any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services
to the Fund during the fiscal year in which the services are provided that
would have to be approved by the Committee; (ii) the permissible non-audit
services were not recognized by the Fund at the time of the engagement to
be non-audit services; and (iii) such services are promptly brought to the
attention of the Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
12
EXECUTIVE OFFICERS
Officers of the Fund are appointed by the directors and serve at the
pleasure of the board. None of the Fund's officers currently receives any
compensation from the Fund. The executive officers of the Fund are:
TERM OF OFFICE+ PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD AND LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ----------- ----------------------------------
Joseph Allessie*; 41 Vice President Since 2005 Mr. Allessie is a director and deputy general
and Assistant counsel at UBS Global Asset Management (US)
Secretary Inc. and UBS Global AM (collectively, "UBS
Global AM--Americas region") (since 2005).
Prior to joining UBS Global AM--Americas
region, he was senior vice president and
general counsel of Kenmar Advisory Corp.
(from 2004 to 2005). Prior to that Mr.
Allessie was general counsel and secretary
of GAM USA Inc., GAM Investments, GAM
Services, GAM Funds, Inc. and the GAM Avalon
Funds (from 1999 to 2004). Mr. Allessie is a
vice president and assistant secretary of 20
investment companies (consisting of 92
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Rose Ann Bubloski*; 38 Vice President Since 2006 Ms. Bubloski is an associate director and a
and Assistant senior manager (since 2004) of the US mutual
Treasurer fund treasury administration department of
UBS Global AM--Americas region. Ms. Bubloski
is vice president and assistant treasurer
of 20 investment companies (consisting of 92
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Thomas Disbrow*; 40 Vice President Since 2000 Mr. Disbrow is a director (since 2001), and
and Treasurer (Vice head of the US mutual fund treasury
President); administration department (since September 2006)
Since 2004 of UBS Global AM--Americas region. Mr. Disbrow
(Treasurer) is a vice president and treasurer and/or
principal accounting officer of 20 investment
companies (consisting of 92 portfolios) for
which UBS Global AM--Americas region or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
13
TERM OF OFFICE+ PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD AND LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ----------- ----------------------------------
Michael J. Flook*; 41 Vice President Since 2006 Mr. Flook is an associate director and a
and Assistant senior manager of the US mutual fund
Treasurer treasury administration department of UBS
Global AM--Americas region (since 2006).
Prior to joining UBS Global AM--Americas
region, he was a senior manager with The
Reserve (asset management firm) from May
2005 to May 2006. Prior to that he was a
senior manager with PFPC Worldwide since
October 2000. Mr. Flook is a vice president
and assistant treasurer of 20 investment
companies (consisting of 92 portfolios) for
which UBS Global AM--Americas region or one
of its affiliates serves as investment
advisor, sub-advisor or manager.
Elbridge T. Gerry Vice President Since 1996 Mr. Gerry is a managing director--municipal
III*; 49 fixed income of UBS Global AM--Americas
region (since 2001). Mr. Gerry is a vice
president of six investment companies
(consisting of 10 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager.
Mark F. Kemper**; 48 Vice President Since 2004 Mr. Kemper is general counsel of UBS
and Secretary Global AM--Americas region (since 2004).
Mr. Kemper also is a managing director of
UBS Global AM--Americas region (since 2006).
He was deputy general counsel of UBS Global
Asset Management (Americas) Inc. ("UBS
Global AM--Americas") from July 2001 to
July 2004. He has been secretary of UBS
Global AM--Americas since 1999 and assistant
secretary of UBS Global Asset Management
Trust Company since 1993. Mr. Kemper is
secretary of UBS Global AM--Americas region
(since 2004). Mr. Kemper is vice president
and secretary of 20 investment companies
(consisting of 92 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager.
14
TERM OF OFFICE+ PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD AND LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ----------- ----------------------------------
Joanne M. Kilkeary*; 38 Vice President Since 2004 Ms. Kilkeary is an associate director (since
and Assistant 2000) and a senior manager (since 2004) of
Treasurer the US mutual fund treasury administration
department of UBS Global AM--Americas region.
Ms. Kilkeary is a vice president and
assistant treasurer of 20 investment
companies (consisting of 92 portfolios) for
which UBS Global AM--Americas region or one
of its affiliates serves as investment
advisor, sub-advisor or manager.
Tammie Lee*; 35 Vice President Since 2005 Ms. Lee is a director and associate general
and Assistant counsel of UBS Global AM--Americas
Secretary region (since 2005). Prior to joining UBS
Global AM-Americas region, she was vice
president and counsel at Deutsche Asset
Management/Scudder Investments from
2003 to 2005. Prior to that she was assistant
vice president and counsel at Deutsche
Asset Management/Scudder Investments
from 2000 to 2003. Ms. Lee is a vice president
and assistant secretary of 20 investment
companies (consisting of 92 portfolios) for
which UBS Global AM--Americas region
or one of its affiliates serves as investment
advisor, sub-advisor or manager.
Joseph McGill*; 44 Vice President Since 2004 Mr. McGill is a managing director (since
and Chief 2006) and chief compliance officer (since
Compliance 2003) at UBS Global AM--Americas region.
Officer Prior to joining UBS Global AM--Americas
region, he was assistant general counsel at
J. P. Morgan Investment Management (from
1999 to 2003). Mr. McGill is a vice president
and chief compliance officer of 20 investment
companies (consisting of 92 portfolios) for
which UBS Global AM--Americas region
or one of its affiliates serves as investment
advisor, sub-advisor or manager.
15
TERM OF OFFICE+ PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD AND LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ----------- ----------------------------------
Kevin McIntyre*; 40 Vice President Since 2005 Mr. McIntyre is a director (since 2003) and
portfolio manager (since 2005) of UBS Global
AM--Americas region. He is also Head of
Municipal Trading since 2002. Prior to that
he was a trader and assistant portfolio
manager with UBS Global AM--Americas region.
Mr. McIntyre is a vice president of two
investment companies (consisting of two
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Eric Sanders*; 41 Vice President Since 2005 Mr. Sanders is a director and associate
and Assistant general counsel of UBS Global AM--Americas
Secretary region (since 2005). From 1996 until June
2005, he held various positions at Fred
Alger & Company, Incorporated, the most
recent being assistant vice president and
associate general counsel. Mr. Sanders is a
vice president and assistant secretary of 20
investment companies (consisting of 92
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Andrew Shoup*; 50 Vice President Since 2006 Mr. Shoup is a managing director and senior
and Chief member of the Global Treasury Administration
Operating department of UBS Global AM--Americas region
Officer (since July 2006). Prior to joining UBS
Global AM--Americas region, he was Chief
Administrative Officer for the Legg Mason
Partners Funds (formerly Smith Barney, Salomon
Brothers, and CitiFunds mutual funds) from
November 2003 to July 2006. Prior to that, he
held various positions with Citigroup Asset
Management and related companies with their
domestic and offshore mutual funds since 1993.
Additionally, he has worked for another mutual
fund complex as well as spending eleven years
in public accounting. Mr. Shoup is a vice
president and chief operating officer of 20
investment companies (consisting of 92
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
16
TERM OF OFFICE+ PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD AND LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ----------- ----------------------------------
Kai R. Sotorp**; 47 President Since 2006 Mr. Sotorp is the Head of the Americas for
UBS Global Asset Management (since 2004);
a member of the UBS Group Managing Board
(since 2003) and a member of the UBS Global
Asset Management Executive Committee (since
2001). Prior to his current role, Mr. Sotorp
was Head of UBS Global Asset Management--Asia
Pacific (2002-2004), covering Australia, Japan,
Hong Kong, Singapore and Taiwan; Head of UBS
Global Asset Management (Japan) Ltd. (2001-2004);
Representative Director and President of UBS
Global Asset Management (Japan) Ltd. (2000-2004);
and member of the board of Mitsubishi Corp.--UBS
Realty Inc. (2000-2004). Mr. Sotorp is President
of 20 investment companies (consisting of 92
portfolios) for which UBS Global Asset Management
--Americas region or one of its affiliates serves
as investment advisor, sub-advisor or manager.
Keith A. Weller*; 45 Vice President Since 1995 Mr. Weller is an executive director and senior
and Assistant associate general counsel of UBS Global AM--
Secretary Americas region (since 2005) and has been an
attorney with affiliated entities since 1995.
Mr. Weller is a vice president and assistant
secretary of 20 investment companies (consisting
of 92 portfolios) for which UBS Global AM--
Americas region or one of its affiliates serves
as investment advisor, sub-advisor or manager.
---------------
* This person's business address is 51 West 52nd Street, New York, New York
10019-6114.
** This person's business address is One North Wacker Drive, Chicago, Illinois
60606.
+ Officers of the Fund are appointed by the directors and serve at the
pleasure of the board.
17
OTHER INFORMATION
BENEFICIAL OWNERSHIP OF SHARES
As of November 3, 2006, management did not know of any person who owned
beneficially 5% or more of the shares of the Fund.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Fund is not aware of any outstanding report required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 by any board
member or officer.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit proposals to be considered at the
Fund's 2008 annual meeting of shareholders should send such proposals to the
Secretary of the Fund at UBS Global Asset Management (Americas) Inc., 51 West
52nd Street, New York, NY 10019-6114. In order to be considered at that meeting,
shareholder proposals must be received by the Fund no later than July 30, 2007,
and must satisfy the other requirements of the federal securities laws.
OTHER BUSINESS
Management knows of no business to be presented at the meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Fund.
By order of the board of directors,
MARK F. KEMPER
Vice President and Secretary
November 22, 2006
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18
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EXHIBIT A
AUDIT COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MAY 12, 2004
(REVISED AS OF NOVEMBER 6, 2006)
ESTABLISHMENT AND PURPOSE
This document serves as the Charter for the Audit Committee (the
"Committee") of the Board of each fund (the "Fund") advised by UBS Global Asset
Management (Americas) Inc. ("UBS Global") listed on Appendix A hereto (each such
Charter being a separate Charter). The primary purposes of the Committee are to
assist Board oversight of (1) the integrity of the Fund's financial statements,
(2) the Fund's compliance with legal and regulatory requirements, (3) the
independent auditors' qualifications and independence and (4) the performance of
the Fund's independent auditors.
In performing its Board oversight assistance function, the Committee will,
among other things (a) oversee the scope of the Fund's audit, the quality and
objectivity of the Fund's financial statements, the Fund's accounting and
financial reporting policies and practices and its internal controls and, as
appropriate, the internal controls of certain service providers; (b) approve,
and recommend to the Board, for ratification, the selection, appointment,
retention or termination of the Fund's independent auditors, as well as
determining the compensation thereof; and (c) pre-approve all audit and
non-audit services provided to the Fund and certain other persons by such
independent auditors.
DUTIES AND RESPONSIBILITIES
AUDIT OVERSIGHT
The Fund's independent auditors are accountable to the Committee.
The Committee shall:
1. Approve, and recommend to the Board for the Board's ratification, the
selection, appointment, retention or termination of the Fund's
independent auditors, or of any other public accounting firm engaged for
the purpose of performing other audit, review or attest services for the
Fund.
2. Pre-approve (a) all audit and permissible non-audit services(1) to be
provided to the Fund and (b) all permissible non-audit services to be
provided by the Fund's independent auditors to UBS
---------------
(1) The Committee will not approve non-audit services that the Committee
believes may taint the independence of the auditors. Currently, permissible
non-audit services include any professional services (including tax
services) that are not prohibited services as described below, provided to
the Fund by the independent auditors, other than those provided to the Fund
in connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements of
the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services; (viii)
legal services and expert services unrelated to the audit; and (ix) any
other service the Public Company Accounting Oversight Board determines, by
regulation, is impermissible.
A-1
Global and any Covered Service Providers, if the engagement relates
directly to the operations and financial reporting of the Fund. In
carrying out this responsibility, the Committee shall seek periodically
from UBS Global and from the independent auditors a list of such audit
and permissible non-audit services that can be expected to be rendered
to the Fund, UBS Global or any Covered Service Providers by the Fund's
independent auditors, and an estimate of the fees sought to be paid in
connection with such services. The Committee may delegate its
responsibility to pre-approve any such audit and permissible non-audit
services to a sub-committee consisting of the Chairperson of the
Committee and two other members of the Committee as the Chairperson,
from time to time, may determine and appoint, and such sub-committee
shall report to the Committee, at its next regularly scheduled meeting
after the sub-committee's meeting, its decision(s). From year to year,
the Committee shall report to the Board whether this system of
pre-approval has been effective and efficient or whether this Charter
should be amended to allow for pre-approval pursuant to such policies
and procedures as the Committee shall approve, including the delegation
of some or all of the Committee's pre-approval responsibilities to other
persons (other than UBS Global or the Fund's officers).
3. Discuss with the independent auditors any disclosed relationships or
services that may diminish the objectivity and independence of the
independent auditors; receive periodic reports from the independent
auditors regarding the independent auditors' independence (including
receiving the independent auditors' specific representations as to
independence consistent with current statements of the Independence
Standards Board); and discuss such reports with the independent
auditors, and, if so determined by the Committee, recommend that the
Board take appropriate action to ensure the independence of the
independent auditors.
4. Review, in consultation with the independent auditors, the scope of the
Fund's proposed audit each year, including the audit procedures to be
utilized, and certain other matters in connection with the Fund's
financial statements.
5. Inquire of UBS Global and the independent auditors as to the Fund's
qualification under Subchapter M of the Internal Revenue Code and
amounts distributed and reported to shareholders for Federal tax
purposes.
6. [Closed-end Funds only] Review and discuss the Fund's audited annual
financial statements and unaudited semiannual reports with UBS Global
and, in the case of the audited financials, the independent auditors,
including the Fund's disclosure of management's discussion of Fund
performance.
---------------
Pre-approval by the Committee of any permissible non-audit services is not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, UBS Global and any service
providers controlling, controlled by or under common control with UBS
Global that provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount of revenues
paid to the independent auditors (during the fiscal year in which the
permissible non-audit services are provided) by (a) the Fund, (b) its
investment adviser and (c) any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services
to the Fund during the fiscal year in which the services are provided that
would have to be approved by the Committee; (ii) the permissible non-audit
services were not recognized by the Fund at the time of the engagement to
be non-audit services; and (iii) such services are promptly brought to the
attention of the Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
A-2
7. Review with the independent auditors any problems or difficulties the
auditors may have encountered during the conduct of the audit, relating
to the conduct of the audit, including any matters required to be
discussed pursuant to Statement of Auditing Standards No. 61, or any
subsequent Statement, and management's response.
8. Ensure that the independent auditors submit on a periodic basis to the
Committee a formal written statement delineating all relationships of
the auditors consistent with Independence Standards Board Standard
No. 1, or any subsequent Statement.
9. Review, in consultation, as appropriate, with the independent auditors
and Fund service providers, matters relating to internal controls and
disclosure controls and procedures at the Fund and at the Fund's
service providers.
10. Request, receive and/or review from the independent auditors such other
materials as deemed necessary or advisable by the Committee in the
exercise of its duties under this charter; such materials may include,
without limitation, any other material written communications bearing
on the Fund's financial statements, or internal or disclosure controls,
between the independent auditors and the Fund, UBS Global, the Fund's
sub-adviser(s), if any, or other Fund service providers, such as any
management letter or schedule of unadjusted differences, and any
comment or "deficiency" letter received from a regulatory or
self-regulatory organization addressed to the Fund, UBS Global or the
Fund's sub-adviser(s), if any, that relates to services rendered to the
Fund.
11. Establish procedures for the receipt, retention and treatment of
complaints that the Fund may receive regarding Fund accounting,
internal accounting controls or auditing matters, including procedures
(set forth on Appendix C hereto) for the confidential, anonymous
submission by Fund officers or employees and the Fund's investment
adviser (including sub-advisers, if any), administrator(s), principal
underwriter or any other provider of accounting-related services for
the Fund of concerns regarding questionable accounting or auditing
matters related to the Fund.
12. Request that the independent auditors report to the Committee on any
unusual items or matters discovered during the course of any
semi-annual or other reviews.
13. [Closed-end Funds only] Consider and, if appropriate, recommend the
publication of the Fund's annual audited financial statements in the
Fund's annual report in advance of the printing and publication of the
annual report, based on its review and discussions of such annual
report with the independent auditors, the Fund's officers and UBS
Global; and prepare the audit committee report required to be included
in the Fund's proxy statement for its annual meeting of shareholders.
14. [Closed-end Funds only] At least annually, obtain and review a report
by the Fund's independent auditors describing (i) the independent
auditors' internal quality-control procedures; (ii) any material issues
raised by the most recent internal quality-control review, or peer
review, of the independent auditors, or by any inquiry or investigation
by governmental or professional authorities, within the preceding five
years, respecting one or more independent audits carried out by the
independent auditors, and any steps taken to deal with such issues; and
(iii) (to assess the independent auditors' independence) all
relationships between the independent auditor and the Fund.
15. [Closed-end Funds only] Discuss in general the Fund's periodic earnings
releases, as well as any financial information and earnings guidance
provided to analysts and rating agencies.
A-3
16. [Closed-end Funds only] Discuss policies with respect to risk
assessment and risk management.
17. [Closed-end Funds only] Review hiring policies of UBS Global and the
Fund, if any, for employees and former employees of the Fund's
independent auditors.
18. [Closed-end Funds only] Prepare an annual performance evaluation of the
Committee for the Board's review.
19. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
In performing its duties, the Committee shall be provided by UBS Global, the
Fund's sub-advisor(s), if any, or the Fund, as applicable, with such
information, data and services as the Committee shall request to discharge its
duties and responsibilities, shall consult as it deems appropriate with the
members of the Board, officers and employees of the Fund, UBS Global, the Fund's
sub-advisor(s), if any, the Fund's counsel and the Fund's other service
providers and, as it determines necessary to carry out its duties and at the
Fund's expense, may engage outside advisors and consultants. In carrying out its
functions, the Committee shall meet separately, periodically, with management
and with the Fund's independent auditors. The Fund shall provide appropriate
funding for the Committee to carry out its duties and responsibilities.
COMPOSITION
The Committee shall have a minimum of three members and shall be composed of
a number of Board members, each of whom has been determined not to be an
"interested person," as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("1940 Act"), of the Fund (the
"Independent Board Members"), as the Board shall determine from time to time.
Each member of the Committee must also meet the independence and experience
requirements as set forth in Sections 303A.07(a) and 303.01(b)(2)(a) of the New
York Stock Exchange's Listed Company Manual, in each case as applicable to
closed-end Funds. The Committee shall elect a chairperson, who shall preside
over Committee meetings (the "Chairperson"). The Chairperson shall serve for a
term of three years, which term may be renewed from time to time.(2)
In addition, the Board shall use its best efforts to ensure that at least
one member of the Committee is an "audit committee financial expert," as
determined under the rules of the Securities and Exchange Commission. Appendix B
sets forth the audit committee financial expert requirements as of the date of
this amended and restated Charter. In the event that the Committee does not have
at least one such audit committee financial expert, the nominating committee of
the Board shall endeavor to identify and recommend to the Board a candidate that
meets such requirements or, in the event the Board does not, at such time, have
a nominating committee, the Board shall designate the Independent Board Members
as a committee to identify and recommend to the Board a candidate that meets
such requirements.
For those Funds listed on the NYSE, no member of the Committee may serve on
the audit committees of more than three public companies, including all Funds
managed by UBS Global (deemed for these purposes to be a single public company),
unless the Board determines that such simultaneous service would not impair the
ability of such member to serve on the Committee effectively.
---------------
(2) In the case of a newly-organized UBS fund, the Chairperson's term will be
coterminous with those of the other UBS funds listed on Schedule A, even if
such term is shorter than three years.
A-4
MEETINGS
The Committee shall meet on a regular basis, but not less frequently than
twice a year. Special meetings may also be held upon reasonable notice to the
members of the Committee. An agenda shall be established for each meeting.
Additional meetings shall be called as circumstances require. The Committee may
request any officer or employee of the Fund, the Fund's counsel, UBS Global, the
Fund's sub-adviser(s), if any, the Fund's independent auditors or other
interested persons to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee. The Committee will meet with the
Fund's independent auditors at least once a year outside the presence of the
Fund's officers and other parties. The Committee may, in its discretion, also
meet outside the presence of the Fund's officers and other parties at other
times. Meetings of the Committee may be held in person, by telephone or by other
appropriate means.
One-third of the Committee's members shall constitute a quorum. At any
meeting of the Committee, the decision of a majority of the members present and
voting shall be determinative as to any matter submitted to a vote.
REPORTING
The Chairperson shall report to the Board on the result of its deliberations
and make such recommendations as deemed appropriate.
LIMITS ON ROLE OF COMMITTEE
While the Committee has the duties and responsibilities set forth in this
Charter, the Committee is not responsible for planning or conducting the Fund's
audit or for determining whether the Fund's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. In fulfilling their responsibilities hereunder, it is recognized
that the members of the Committee are not full-time employees of the Fund, it is
not the duty or the responsibility of the Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards, and each member of the Committee shall be
entitled to rely on (a) the integrity of those persons within and outside the
Fund from which it receives information; (b) the accuracy of the financial and
other information provided to the Committee absent actual knowledge to the
contrary (which shall be promptly reported to the Board); and (c) statements
made by the officers and employees of the Fund, UBS Global or other third
parties as to any information technology, internal audit and other non-audit
services provided by the independent auditors to the Fund. The review of the
Fund's financial statements by the Committee is not of the same quality as the
audit performed by the independent auditors.
In carrying out its responsibilities, the Committee's policies and
procedures shall be adapted, as appropriate, in order to best react to a
changing environment.
AMENDMENTS
This Charter may be amended by a vote of a majority of the Board members.
A-5
APPENDIX A
UBS Managed Municipal Trust
UBS Series Trust
UBS Investment Trust
UBS Index Trust
UBS Municipal Money Market Series
UBS Money Series
UBS PACE Select Advisors Trust
UBS Cashfund Inc.
UBS RMA Money Fund Inc.
UBS RMA Tax-Free Fund Inc.
UBS Master Series Inc.
*Strategic Global Income Fund, Inc.
*Global High Income Fund Inc.
*Investment Grade Municipal Income Fund Inc.
*Insured Municipal Income Fund Inc.
*Managed High Yield Plus Fund Inc.
---------------
* Closed-end Funds. The duties and responsibilities of any provision
applicable exclusively to closed-end funds apply to these funds only.
A-6
APPENDIX B
AUDIT COMMITTEE FINANCIAL EXPERT REQUIREMENTS
An "audit committee financial expert" is a person who has the following
attributes:
an understanding of generally accepted accounting principles and financial
statements;
the ability to assess the general application of such principles in
connection with the accounting for estimates, accruals and reserves;
experience preparing, auditing, analyzing or evaluating financial statements
that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of issues
that can reasonably be expected to be raised by the registrant's
financial statements, or experience actively supervising one or more
persons engaged in such activities;
an understanding of internal controls and procedures for financial
reporting; and
an understanding of audit committee functions.
A person must have acquired such attributes through one or more of the
following:
education and experience as a principal financial officer, principal
accounting officer, controller, public accountant or auditor or
experience in one or more positions that involve the performance of
similar functions;
experience actively supervising a principal financial officer, principal
accounting officer, controller, public accountant, auditor or person
performing similar functions;
experience overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing or evaluation of
financial statements; or
other relevant experience.
A-7
APPENDIX C
POLICIES OF THE AUDIT COMMITTEE
REGARDING CONCERNS OR COMPLAINTS RELATING TO
ACCOUNTING, INTERNAL ACCOUNTING CONTROLS OR
AUDITING MATTERS OR OTHER MATTERS RELATING
TO THE OPERATIONS OF THE FUND
INTRODUCTION
The following policies are adopted by the Board of each fund ("Fund")
advised by UBS Global Asset Management (Americas) Inc. ("UBS Global AM") listed
on Appendix A to the Fund's Audit Committee Charter ("Charter").
These policies shall constitute an amendment to, and a part of, the Charter
and shall be designated as Appendix C to the Charter. These policies constitute
the procedures to be established pursuant to Item 10 of "Duties and
Responsibilities - Audit Oversight" in the Charter; however, the Board has
decided to extend the benefit of these policies to all Funds, not just those
exchange-listed Funds that are required to establish such procedures pursuant to
Section 301 of the Sarbanes-Oxley Act and Rule 303A of the New York Stock
Exchange Inc. Listed Company Manual.
These policies establish (1) procedures for the receipt, retention and
treatment of complaints received by the Fund (including Fund officers) regarding
accounting, internal accounting controls or auditing matters or other matters
relating to the operations of the Fund, (2) procedures for the confidential,
anonymous submission of concerns regarding questionable accounting or auditing
matters by employees of the investment adviser (and sub-advisor, if applicable),
administrator (and sub-administrator, if applicable), principal underwriter (if
any), or any other provider of accounting related services for the Fund (each a
"Service Provider") and (3) protections for such persons bringing complaints or
concerns to the attention of the Board's Audit Committee (the "Committee").
REPORTING
It is expected that all board members and officers, as well as employees of
each Service Provider, will report promptly any concerns or complaints regarding
accounting, internal accounting controls or auditing matters or other matters
relating to the operations of the Fund. Employees of Service Providers
(including Fund officers) should first consider exhausting any internal
reporting mechanisms at their firm before directly contacting the Chairperson of
the Committee (or in the event of a potential conflict involving such person,
any other member of the Committee). If such a person does not receive a
satisfactory response within a reasonable period of time, or if he or she
believes that utilizing internal reporting mechanisms would be futile or
otherwise undesirable, he or she should (1) in the case of Service Providers
under the supervision of UBS Global AM (e.g., State Street Bank and Trust or
PFPC, Inc.), contact UBS Global AM via the "ethics hotline" and/or mailbox
referenced below (unless such person believes that using such "ethics hotline"
and/or mailbox would be futile or otherwise undesirable, in which case he or she
should report concerns as directed in the remainder of this sentence); or (2) in
the case of all other persons, contact the Chairperson of the Committee directly
(or in the event of a potential conflict involving such person, any other member
of the Committee).
The Committee requests that each Service Provider promptly inform it of
complaints or concerns received from its employees pursuant to these or any
similar policies it may have if such complaints or
A-8
concerns are reasonably believed to relate to accounting, internal accounting
controls or auditing matters or other matters relating to the operations of the
Fund.
The Committee directs UBS Global AM to communicate these policies to its
primary contact(s) at each other Service Provider. Each Service Provider,
including UBS Global AM, shall be directed to make these methods by which
complaints or concerns can be communicated known to its employees who are
primarily involved in accounting, internal accounting controls or auditing
matters or other matters relating to the operations of the Fund that could
reasonably be expected to impact the Fund. If any Service Provider refuses such
request, UBS Global AM shall notify the Committee of the Service Provider's
reasons for non-cooperation, and the Committee shall recommend to the Board such
actions as it believes appropriate.
NON RETALIATION
The Fund prohibits any form of retaliation being taken against any board
member or officer, and shall request that each Service Provider not take any
form of retaliation against its employees, as a result of such person lawfully
engaging in any of the following "Covered Activities":
1. reporting concerns or complaints regarding accounting, internal
accounting controls or auditing matters or other matters relating to
the operations of the Fund; or
2. assisting in an internal or external investigation conducted by the
Fund or a Service Provider regarding such concerns or complaints; or
3. filing, testifying, participating or otherwise assisting in a criminal
or regulatory proceeding relating to the Fund or a Service Provider.
To the extent possible, the Board shall seek assurances from Service
Providers that they shall not discharge, demote, suspend, threaten, harass, or
in any other manner discriminate against an employee in the terms and conditions
of his or her employment because such employee has made a report of a concern or
complaint or engaged in any other Covered Activities under these policies. In
addition, the Board shall seek assurances from Service Providers that they shall
not knowingly, with the intent to retaliate, take any action harmful to any
employee, including interference with the lawful employment or livelihood of any
person, for providing to a law enforcement officer any truthful information
relating to the commission or possible commission of any crime.
CONFIDENTIALITY
Reasonable efforts will be made to keep a reporting person's identity
confidential. In certain circumstances, however, it may be possible that in the
course of the investigation, facts must be disclosed that would require the
identity of the reporting person to be disclosed. Accordingly, in such
circumstances, it is not possible to give a blanket guarantee of
confidentiality. However, the Committee shall take all reasonable steps (and ask
its Service Providers to make reasonable efforts) to attempt to safeguard the
submission of information on a confidential basis.
A Fund Person or Service Provider employee may submit information
anonymously to the Committee through a letter addressed directly to the Chairman
of the Committee (or in the event of a potential conflict involving such person,
to any other member of the Committee at the Chairman's (or other Committee
member's) address as specified in the Fund's Annual Report to Shareholders. The
Committee recognizes that certain Service Providers have established their own
procedures for the confidential, anonymous receipt of concerns or complaints and
requests that Service Providers promptly report to the Committee any concerns or
complaints relating to the matters discussed herein.
A-9
ETHICS HOTLINE & MAILBOX
Where circumstances preclude the use of conventional channels, UBS Global AM
has established an ethics hotline and a physical mailbox to facilitate the
confidential, anonymous submission of concerns regarding potential
legal/regulatory violations and questionable accounting or auditing matters or
other matters relating to the operations of a Fund or other ethical dilemmas.
The hotline is available for leaving a voicemail message 24-hours a day, seven
days a week. In order to protect confidentiality, only the UBS Global AM General
Counsel and Chief Compliance Officer will be authorized to retrieve messages.
Please utilize the hotline and the mailbox only for this stated purpose. The
ethics hotline number is 866-237 1851. Written submissions should be addressed
to: UBS Global Asset Management (US) Inc., Attn: ETHICS, 51 West 52nd Street,
New York, NY 10019-6114.
BREACH OF THIS POLICY
Retaliatory conduct which amounts to a breach of this policy could result in
criminal or regulatory sanctions or civil liability or have an adverse effect on
the Fund's or a Service Provider's reputation. As a result, a breach of this
policy may constitute gross misconduct and may result in disciplinary action up
to and including dismissal from service as a board member or officer, or with
respect to a Service Provider, the Board's decision to terminate any Fund
contracts or other relationships with the Service Provider.
RETENTION AND TREATMENT OF INFORMATION REGARDING CONCERNS AND COMPLAINTS
The Committee minutes shall reflect the receipt, retention and treatment of
information received pursuant to this policy. The Committee shall have the power
to obtain the resources it deems necessary and appropriate to investigate any
information regarding such concerns or complaints, including obtaining the
assistance of special counsel, auditors or other advisors or consultants to
assist it in carrying out its responsibilities.
(May 2004, as revised November 2006)
A-10
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EXHIBIT B
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
AMENDED AND RESTATED AS OF NOVEMBER 10, 2004
(REVISED AS OF NOVEMBER 6, 2006)
ESTABLISHMENT AND PURPOSE
This document serves as the Charter for the Nominating and Corporate
Governance Committee (the "Committee") of the Board of each fund (the "Fund")
advised by UBS Global Asset Management (Americas) Inc. ("UBS Global") listed on
Appendix A hereto (each such Charter being a separate Charter). The primary
purposes of the Committee are to (a) identify individuals qualified to serve as
members of the Board of Directors/Trustees (the "Board") of each Fund; (b) make
recommendations to the Board on the composition of the Board; (c) recommend
committee assignments and responsibilities to the Board; (d) make
recommendations to the Board regarding corporate governance matters and
responsibilities; and (e) periodically assess the functioning of the Board and
its committees (including the Committee).
COMPOSITION
1. The Committee shall consist of three or more Board members who are not
"interested persons" of the Fund, as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended ("1940
Act"), of the Fund (the "Independent Board Members"). Each member of
the Committee must also meet the independence and experience
requirements applicable to closed-end funds as they may be adopted and
modified from time to time by the New York Stock Exchange (the "NYSE").
Each Committee member shall serve until a successor to such member is
duly elected or qualified or until such member's resignation or removal
from the Board or the Committee.
2. The Committee shall elect a chairperson (the "Chairperson") of the
Committee, who shall preside over Committee meetings.
3. The compensation of the Chairperson and the Committee members shall be
as determined by the Board.
NOMINATION AND APPOINTMENT POLICY
1. The Committee believes that it is in the best interests of the Fund and
its shareholders to obtain highly-qualified candidates to serve as
members of the Board.
2. In nominating candidates, the Committee believes that no specific
qualifications or disqualifications are controlling or paramount, or
that specific qualities or skills are necessary for each candidate to
possess. The Committee shall take into consideration such factors as it
deems appropriate. These factors may include:
o whether or not the person is an "interested person" as defined in
the 1940 Act, meets the independence and experience requirements of
the NYSE cited above and is otherwise qualified under applicable
laws and regulations to serve as a member of the Board;
B-1
o whether or not the person has any relationships that might impair
his or her independence, such as any business, financial or family
relationships with Fund management, the investment advisor and/or
sub-advisors of the Fund, Fund service providers or their affiliates;
o whether or not the person is willing to serve, and willing and able
to commit the time necessary for the performance of the duties of a
Board member;
o the person's judgment, skill, diversity and experience with
investment companies and other organizations of comparable purpose,
complexity and size and subject to similar legal restrictions and
oversight,
o the interplay of the candidate's experience with the experience of
other Board members; and
o the extent to which the candidate would be a desirable addition to
the Board and any committees thereof.
3. While the Committee is solely responsible for the selection and
recommendation to the Board of Board candidates, the Committee will
consider nominees recommended by Fund shareholders if a vacancy occurs
among those Board members who are Independent Board Members. Such
recommendations shall be directed to the Secretary of the Fund at such
address as is set forth in the Fund's disclosure documents. The
shareholder's letter should state the nominee's name and should include
the nominee's resume or curriculum vitae, and must be accompanied by a
written consent of the individual to stand for election if nominated
for the Board and to serve if elected by shareholders. The Committee
may also seek such additional information about the nominee as it
considers appropriate, including information relating to such nominee
that is required to be disclosed in solicitations or proxies for the
election of Board members.
4. The Committee may from time to time establish specific requirements
and/or additional factors to be considered for Board candidates as it
deems necessary or appropriate.
DUTIES AND RESPONSIBILITIES
1. The Committee shall identify individuals believed to be qualified to
become Board members and recommend to the Board the nominees to either
(i) be elected by the Board or (ii) stand for election as Board members
at the annual or special meeting of shareholders, as applicable.
2. The Committee shall be responsible for reviewing with the Board the
requisite skills and criteria for new Board members as well as the
composition of the Board as a whole.
3. The Committee shall review, as it deems necessary, and make
recommendations with regard to the tenure of the Board members,
including, as it deems necessary, any term limits and mandatory
retirement age.
4. The Committee shall review, as it deems necessary, and make
recommendations to the Board with regard to the compensation of Board
and committee chairpersons.
5. The Committee shall have the authority to retain and terminate any
search firm to be used to identify Board nominees, subject to the
Board's sole authority to approve the search firm's fees and other
retention terms.
6. The Committee shall be responsible for overseeing an annual evaluation
of the Board and its committees to determine whether the Board and its
committees are functioning effectively. The Committee shall determine
the nature of the evaluation, supervise the conduct of the evaluation
and prepare a summary of the performance of the Board and its
committees, to be discussed with the Board.
B-2
7. The Committee shall have any other duties or responsibilities expressly
delegated to the Committee by the Board from time to time relating to
(a) the nomination of the Board or any committee members, (b) corporate
governance matters and (c) Board and committee evaluation matters.
SUBCOMMITTEES
1. The Committee shall have the authority to delegate all or a portion of
its duties and responsibilities to a subcommittee of the Committee.
MEETINGS
1. The Committee shall meet at such times as it deems necessary or
appropriate to carry out its duties. Meetings of the Committee may be
held in person, by telephone or by other appropriate means. The
Committee may also take action by unanimous written consent.
2. One-half of the Committee's members shall constitute a quorum, if at
least two members are present. At any meeting of the Committee, the
decision of a majority of the members present and voting shall be
determinative as to any matter submitted to a vote.
3. The Committee shall keep written minutes of its meetings, which minutes
shall be maintained within the books and records of the Fund, and the
Committee shall report to the Board on its meetings.
4. The Committee shall, from time to time as it deems appropriate, review
and reassess the adequacy of this Charter and recommend any proposed
changes to the Board for approval.
5. The Committee shall have the resources and authority to make reasonable
expenditures, including expenditures to retain any experts and counsel
related to the aforementioned duties and tasks that will be reimbursed
by the Fund.
REPORTING
1. The Chairperson shall report to the Board on the result of the
Committee's deliberations and make such recommendations as deemed
appropriate.
AMENDMENTS
1. This Charter may be amended by a vote of a majority of the Board
members.
B-3
SCHEDULE A
UBS Managed Municipal Trust
UBS Series Trust
UBS Investment Trust
UBS Index Trust
UBS Municipal Money Market Series
UBS Money Series
UBS PACE Select Advisors Trust
UBS Cashfund Inc.
UBS RMA Money Fund Inc.
UBS RMA Tax-Free Fund Inc.
UBS Master Series Inc.
Strategic Global Income Fund Inc.
Global High Income Fund Inc.
Investment Grade Municipal Income Fund Inc.
Insured Municipal Income Fund Inc.
Managed High Yield Plus Fund Inc.
B-4
------------------
INVESTMENT
GRADE
MUNICIPAL
INCOME FUND INC.
==================
PROXY
STATEMENT
------------------
INVESTMENT
GRADE
MUNICIPAL
INCOME FUND INC.
==================
------------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
JANUARY 18, 2007
AND PROXY
STATEMENT
==================
================================================================================
PROXY - INVESTMENT GRADE MUNICIPAL INCOME FUND INC. COMMON STOCK PROXY
================================================================================
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 18, 2007
The undersigned hereby appoints as proxies Keith A. Weller and Cathleen
Crandall and each of them (with full power of substitution) to vote for the
undersigned all shares of common stock of the undersigned at the aforesaid
meeting and any adjounment thereof with all the power the undersigned would
have if personally present. The shares represented by this proxy will be
voted as instructed.
UNLESS INDICATED TO THE CONTRARY, THIS PROXY SHALL BE DEEMED TO GRANT
AUTHORITY TO VOTE "FOR" ALL PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy on the reverse side
and return it in the enclosed envelope to PFPC Inc., P.O. Box 43111,
Providence, RI 02940-5102. PFPC Inc. has been engaged to forward the
enclosed proxy material and to tabulate proxies returned by mail.
------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
------------- -------------
[BAR CODE]
+
INVESTMENT GRADE MUNICIPAL
INCOME FUND INC.
000000000.000 ext
000000000.000 ext
000004 000000000.000 ext
[BAR CODE] MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 LEAST ADDRESS LINE 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6
[BAR CODE] C 1234567890 J N T
[BAR CODE]
[ ] Mark this box with an X if you have made
changes to your name or address details above.
================================================================================
ANNUAL MEETING PROXY CARD COMMON STOCK PROXY
================================================================================
[A] ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
1. To elect as directors:
01 - Richard Q. Armstrong 02 - Alan S. Bernikow 03 - Bernard H. Garil 04 - Heather Richardson Higgins
[ ] TO VOTE FOR ALL NOMINEES [ ] TO WITHHOLD VOTE FROM ALL NOMINEES
--- --------
[ ] FOR ALL EXCEPT - TO WITHHOLD A VOTE FOR A SPECIFIC NOMINEE, MARK THE
BOX TO THE LEFT WITH AN X AND PLACE AN X IN THE
BOX(ES) BELOW NUMBERED TO CORRESPOND WITH THE NAMES
IN THE LIST ABOVE.
01 - [ ] 02 - [ ] 03 - [ ] 04 - [ ]
Mark this box with an X if you have made comments below. [ ]
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
This proxy will not be voted unless it is dated and signed exactly as
instructed below.
If shares are held by an individual, sign your name exactly as it appears
on this card. If shares are held jointly, either party may sign, but the
name of the party signing should confirm exactly to the name shown on this
proxy card. If shares are held by a corporation, partnership or similar
account, the name and capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example: "ABC Corp.. John Doe, Treasurer".
Sign exactly as name appears hereon.
Signature 2 (if held
Signature 1 - Please keep jointly) - Please keep
Date (mm/dd/yyyy) signature within the box signature within the box
-------------------------- ------------------------- ------------------------
[ ][ ]/[ ][ ]/[ ][ ][ ][ ]
-------------------------- ------------------------- ------------------------
[ ] 0 1 1 2 2 2 1 1 U P X C O Y +
001CD40001 00N53D
================================================================================
PROXY - INVESTMENT GRADE MUNICIPAL INCOME FUND INC. PREFERRED STOCK PROXY
================================================================================
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 18, 2007
The undersigned hereby appoints as proxies Keith A. Weller and Cathleen
Crandall and each of them (with full power of substitution) to vote for the
undersigned all shares of preferred stock of the undersigned at the
aforesaid meeting and any adjounment thereof with all the power the
undersigned would have if personally present. The shares represented by
this proxy will be voted as instructed.
UNLESS INDICATED TO THE CONTRARY, THIS PROXY SHALL BE DEEMED TO GRANT
AUTHORITY TO VOTE "FOR" ALL PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy on the reverse side
and return it in the enclosed envelope to PFPC Inc., P.O. Box 43111,
Providence, RI 02940-5102. PFPC Inc. has been engaged to forward the
enclosed proxy material and to tabulate proxies returned by mail.
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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[BAR CODE]
+
INVESTMENT GRADE MUNICIPAL
INCOME FUND INC.
000000000.000 ext
000000000.000 ext
000004 000000000.000 ext
[BAR CODE] MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 LEAST ADDRESS LINE 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6
[BAR CODE] C 1234567890 J N T
[BAR CODE]
[ ] Mark this box with an X if you have made
changes to your name or address details above.
================================================================================
ANNUAL MEETING PROXY CARD PREFERRED STOCK PROXY
================================================================================
[A] ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
1. To elect as directors:
01 - Richard Q. Armstrong 02 - Alan S. Bernikow 03 - Richard R. Burt 04 - Meyer Feldberg
05 - Bernard H. Garil 06 - Heather Richardson Higgins
[ ] TO VOTE FOR ALL NOMINEES [ ] TO WITHHOLD VOTE FROM ALL NOMINEES
--- --------
[ ] FOR ALL EXCEPT - TO WITHHOLD A VOTE FOR A SPECIFIC NOMINEE, MARK THE
BOX TO THE LEFT WITH AN X AND PLACE AN X IN THE
BOX(ES) BELOW NUMBERED TO CORRESPOND WITH THE NAMES
IN THE LIST ABOVE.
01 - [ ] 02 - [ ] 03 - [ ] 04 - [ ]
05 - [ ] 06 - [ ]
Mark this box with an X if you have made comments below. [ ]
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[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
This proxy will not be voted unless it is dated and signed exactly as
instructed below.
If shares are held by an individual, sign your name exactly as it appears
on this card. If shares are held jointly, either party may sign, but the
name of the party signing should confirm exactly to the name shown on this
proxy card. If shares are held by a corporation, partnership or similar
account, the name and capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration. For
example: "ABC Corp.. John Doe, Treasurer".
Sign exactly as name appears hereon.
Signature 2 (if held
Signature 1 - Please keep jointly) - Please keep
Date (mm/dd/yyyy) signature within the box signature within the box
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