Edgar Filing: INVESTMENT GRADE MUNICIPAL INCOME FUND

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [x]

Filed by a party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))

[x] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to 'SS' 240.14a-12

Investment Grade Municipal Income Fund Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
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previously. Identify the previous filing by registration statement number, or
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INVESTMENT GRADE MUNICIPAL INCOME FUND INC.

----------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 16, 2003

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TO THE SHAREHOLDERS:

The annual meeting of shareholders of Investment Grade Municipal Income Fund
Inc. (the 'Fund') will be held on January 16, 2003 at 10:00 a.m., Eastern time,
at 51 West 52nd Street, 16th Floor, New York, New York 10019-6114 for the
following purposes:

MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS:

(1) To elect ten (10) directors to serve until the annual meeting of
shareholders in 2004, or until their successors are elected and qualified;
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 2004, or until their successors are elected and qualified.

You are entitled to vote at the meeting and any adjournments thereof if you
owned Fund shares at the close of business on November 15, 2002. 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,

AMY R. DOBERMAN
Secretary

November 29, 2002
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 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 'FOR' all other proposals
noticed above. 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
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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

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PROXY STATEMENT

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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 16, 2003

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 16, 2003, or any adjournment or
adjournments thereof. This proxy statement and the related proxy card will first
be mailed to shareholders on or about November 29, 2002.

A majority of the shares outstanding on November 15, 2002, 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 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 twelve 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 ten 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 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 15, 2002, the Fund had outstanding
10,356,667 shares of common stock and 1,600 shares of the APS, representing 800
Series A shares and 800 Series B 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 (US) Inc. ('UBS Global AM,' formerly known as Brinson Advisors,
Inc.) or UBS PaineWebber Inc. ('UBS PaineWebber'sm'*'), who will not receive any
compensation therefor from the Fund. Management does not know of any person who
owns beneficially 5% or more of the shares of the Fund.

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, 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. 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, 2002, 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 twelve nominees named in the table
below. Each nominee, including those who are not 'interested persons' of the
Fund as that term is defined by the Investment Company Act of 1940, as amended
('1940 Act') ('Independent Directors'), 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.

Holders of the outstanding shares of the APS, voting as a separate class,
are entitled to elect two of the Fund's directors. Margo N. Alexander and Meyer
Feldberg have been nominated as the directors that are to be elected solely by
holders of the APS. The other ten directors will be elected by holders of both
the outstanding common stock and APS, voting together as a single class. Richard
Q. Armstrong, David J. Beaubien, E. Garrett Bewkes, Jr., Richard R. Burt, George
W. Gowen, William W. Hewitt, Jr., Morton L. Janklow, Frederic V. Malek, Carl W.
Schafer and William D. White 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 twelve nominees; and, if you
are a holder of the common stock, your shares of common stock will be voted FOR
the ten 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.

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*UBS PaineWebber is a service mark of UBS AG.

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 October 31, 2002.

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.

POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS IN
HELD WITH TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE
---------------------- ---- ------ ------------------- ----------

INTERESTED DIRECTORS:
Margo N. Alexander*'D'; 55 Director Since Mrs. Alexander is an Mrs. Alexander is a
1996 executive vice president director or trustee of 22
of UBS PaineWebber (since investment companies
March 1984). She was (consisting of
chief executive officer 43 portfolios) for which
of UBS Global AM from UBS Global AM or one of
January 1995 to October its affiliates serves as
2000, a director (from investment advisor, sub-
January 1995 to September advisor or manager.
2001) and chairman (from
March 1999 to September
2001).

E. Garrett Bewkes, Jr.**'D'; 76 Director and Since Mr. Bewkes serves Mr. Bewkes is a director
Chairman of 1992 as a consultant to or trustee of 35
the Board of UBS PaineWebber (since investment companies
Directors May 1999). Prior to (consisting of
November 2000, he was a 56 portfolios) for which
director of Paine Webber UBS Global AM or one of
Group Inc. ('PW Group,' its affiliates serves as
formerly the holding investment advisor, sub-
company of advisor or manager.
UBS PaineWebber and
UBS Global AM) and prior
to 1996, he was a
consultant to PW Group.
Prior to 1988, he was
chairman of the board,
president and chief
executive officer of
American Bakeries
Company.

OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE HELD BY NOMINEE
---------------------- ---------------

INTERESTED DIRECTORS:
Margo N. Alexander*'D'; 55 None

E. Garrett Bewkes, Jr.**'D'; 76 Mr. Bewkes is also
a director of
Interstate Bakeries
Corporation.

INDEPENDENT DIRECTORS:

Richard Q. Armstrong; 67 Director Since Mr. Armstrong is chairman Mr. Armstrong is a
R.Q.A. Enterprises 1995 and principal of R.Q.A. director or trustee of 22
One Old Church Road -- Enterprises (management investment companies
Unit # 6 consulting firm) (since (consisting of
Greenwich, CT 06830 April 1991 and principal 43 portfolios) for which
occupation since March UBS Global AM or one of
1995). Mr. Armstrong was its affiliates serves as
chairman of the board, investment advisor, sub-
chief executive officer advisor or manager.
and co-owner of
Adirondack Beverages
(producer and distributor
of soft drinks and
sparkling/still waters)
(October 1993 - March
1995). He was a partner
of The New England
Consulting Group
(management consulting
firm) (December 1992 -
September 1993). He was
managing director of LVMH
U.S. Corporation (U.S.
subsidiary of the French
luxury goods
conglomerate, Louis
Vuitton Moet Hennessey
Corporation)
(1987 - 1991) and
chairman of its wine and
spirits subsidiary,
Schieffelin & Somerset
Company (1987 - 1991).

David J. Beaubien; 68 Director Since Mr. Beaubien is chairman Mr. Beaubien is a
101 Industrial Road 2001 of Yankee Environmental director or trustee of 22
Turners Falls, MA 01376 Systems, Inc., a investment companies
manufacturer of (consisting of
meteorological measuring 43 portfolios) for which
systems. Prior to January UBS Global AM or one of
1991, he was senior vice its affiliates serves as
president of EG&G, Inc., investment advisor, sub-
a company which makes and advisor or manager.
provides a variety of
scientific and
technically oriented
products and services.
From 1985 to January
1995, Mr. Beaubien served
as a director or trustee
on the boards of the
Kidder, Peabody & Co.
Incorporated mutual
funds.

OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE HELD BY NOMINEE
---------------------- ---------------

INDEPENDENT DIRECTORS:

Richard Q. Armstrong; 67 Mr. Armstrong is
R.Q.A. Enterprises also a director of
One Old Church Road -- AlFresh Beverages
Unit # 6 Canada, Inc. (a
Greenwich, CT 06830 Canadian Beverage
subsidiary of
AlFresh Foods Inc.)
(since October
2000).

David J. Beaubien; 68 Mr. Beaubien is
101 Industrial Road also a director of
Turners Falls, MA 01376 IEC Electronics,
Inc., a
manufacturer of
electronic
assemblies.

Richard R. Burt; 55 Director Since Mr. Burt is chairman Mr. Burt is a director or
1275 Pennsylvania Ave., N.W. 1995 of Diligence LLC trustee of 22 investment
Washington, D.C. 20004 (international companies (consisting of
information and security 43 portfolios) for which
firm) and IEP Advisors UBS Global AM or one of
(international its affiliates serves as
investments and investment advisor, sub-
consulting firm). He was advisor or manager.
the chief negotiator in
the Strategic Arms
Reduction Talks with the
former Soviet Union
(1989 - 1991) and the
U.S. Ambassador to the
Federal Republic of
Germany (1985 - 1989).
From 1991 - 1994, he
served as a partner of
McKinsey & Company
(management consulting
firm).

Meyer Feldberg; 60 Director Since Mr. Feldberg is Dean and Dean Feldberg is a
Columbia University 1992 Professor of Management director or trustee of 35
101 Uris Hall of the Graduate School of investment companies
New York, New York 10027 Business, Columbia (consisting of
University. Prior to 56 portfolios) for which
1989, he was president of UBS Global AM or one of
the Illinois Institute of its affiliates serves as
Technology. investment advisor, sub-
advisor or manager.

George W. Gowen; 73 Director Since Mr. Gowen is a partner Mr. Gowen is a director
666 Third Avenue 1996 in the law firm of or trustee of 35
New York, New York 10017 Dunnington, Bartholow & investment companies
Miller. Prior to May (consisting of
1994, he was a partner in 56 portfolios) for which
the law firm of Fryer, UBS Global AM or one of
Ross & Gowen. its affiliates serves as
investment advisor, sub-
advisor or manager.

OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE HELD BY NOMINEE
---------------------- ---------------

Richard R. Burt; 55 Mr. Burt is also a
1275 Pennsylvania Ave., N.W. director of
Washington, D.C. 20004 Hollinger
International Inc.
(publishing), The
Central European
Fund, Inc., The
Germany Fund, Inc.,
IGT, Inc. (provides
technology to
gaming and wagering
industry) (since
July 1999) and
chairman of Weirton
Steel Corp. (makes
and finishes steel
products) (since
April 1996). He is
also a director or
trustee of funds in
the Scudder Mutual
Funds Family
(consisting of
47 portfolios).

Meyer Feldberg; 60 Dean Feldberg is
Columbia University also a director of
101 Uris Hall Primedia Inc.
New York, New York 10027 (publishing),
Federated
Department Stores,
Inc. (operator of
department stores),
Revlon, Inc.
(cosmetics), Select
Medical Inc.
(healthcare
services) and
SAPPI, Ltd.
(producer of
paper).

George W. Gowen; 73 None
666 Third Avenue
New York, New York 10017

William W. Hewitt, Jr.***; 74 Director Since Mr. Hewitt is retired. Mr. Hewitt is a director
c/o UBS Global Asset 2001 From 1990 to January or trustee of 22
Management (US) Inc. 1995, Mr. Hewitt served investment companies
51 West 52nd Street as a director or trustee (consisting of
New York, New York 10019-6114 on the boards of the 43 portfolios) for which
Kidder, Peabody & Co. UBS Global AM or one of
Incorporated mutual its affiliates serves as
funds. From 1986 - 1988, investment advisor, sub-
he was an executive vice advisor or manager.
president and director of
mutual funds, insurance
and trust services of
Shearson Lehman Brothers
Inc. From 1976 - 1986, he
was president of Merrill
Lynch Funds Distributor,
Inc.

Morton L. Janklow; 72 Director Since Mr. Janklow is senior Mr. Janklow is a director
445 Park Avenue 2001 partner of Janklow & or trustee of 22
New York, New York 10022 Nesbit Associates, an investment companies
international literary (consisting of
agency representing 43 portfolios) for which
leading authors in their UBS Global AM or one of
relationships with its affiliates serves as
publishers and motion investment advisor, sub-
picture, television and advisor or manager.
multi-media companies,
and of counsel to the law
firm of Janklow & Ashley.

Frederic V. Malek; 65 Director Since Mr. Malek is chairman of Mr. Malek is a director
1455 Pennsylvania Avenue, N.W. 1996 Thayer Capital Partners or trustee of 22
Suite 350 (merchant bank) and investment companies
Washington, D.C. 20004 chairman of Thayer Hotel (consisting of
Investors III, Thayer 43 portfolios) for which
Hotel Investors II and UBS Global AM or one of
Lodging Opportunities its affiliates serves as
Fund (hotel investment investment advisor, sub-
partnerships). From advisor or manager.
January 1992 to November
1992, he was campaign
manager of Bush-Quayle
'92. From 1990 to 1992,
he was vice chairman and,
from 1989 to 1990, he was
president of Northwest
Airlines Inc. and NWA
Inc. (holding company of
Northwest Airlines Inc.).
Prior to 1989, he was
employed by the Marriott
Corporation (hotels,
restaurants, airline
catering and contract
feeding), where he most
recently was an executive
vice president and
president of Marriott
Hotels and Resorts.

OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE HELD BY NOMINEE
---------------------- ---------------

William W. Hewitt, Jr.***; 74 Mr. Hewitt is also
c/o UBS Global Asset a director or
Management (US) Inc. trustee of Guardian
51 West 52nd Street Life Insurance
New York, New York 10019-6114 Company Mutual
Funds (consisting
of 19 portfolios).

Morton L. Janklow; 72 None
445 Park Avenue
New York, New York 10022

Frederic V. Malek; 65 Mr. Malek is also a
1455 Pennsylvania Avenue, N.W. director of Aegis
Suite 350 Communications,
Washington, D.C. 20004 Inc.
(tele-services),
American Management
Systems, Inc.
(management
consulting and
computer related
services),
Automatic Data
Processing, Inc.
(computing
services), CB
Richard Ellis, Inc.
(real estate
services), FPL
Group, Inc.
(electric
services), Manor
Care, Inc. (health
care), and
Northwest Airlines
Inc.

Carl W. Schafer; 66 Director Since Mr. Schafer is president Mr. Schafer is a director
66 Witherspoon Street 1996 of the Atlantic or trustee of 22
#1100 Foundation (charitable investment companies
Princeton, NJ 08542 foundation). Prior to (consisting of
January 1993, he was 43 portfolios) for which
chairman of the UBS Global AM or one of
Investment Advisory its affiliates serves as
Committee of the Howard investment advisor, sub-
Hughes Medical Institute. advisor or manager.

William D. White; 68 Director Since Mr. White is retired. Mr. White is a director
P.O. Box 199 2001 From February 1989 or trustee of 22
Upper Black Eddy, PA 18972 through March 1994, he investment companies
was president of the (consisting of
National League of 43 portfolios) for which
Professional Baseball UBS Global AM or one of
Clubs. Prior to 1989, he its affiliates serves as
was a television investment advisor, sub-
sportscaster for WPIX-TV, advisor or manager.
New York. Mr. White
served on the Board of
Directors of Centel from
1989 to 1993 and until
recently on the board of
directors of Jefferson
Banks Incorporated,
Philadelphia, PA.

OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE HELD BY NOMINEE
---------------------- ---------------

Carl W. Schafer; 66 Mr. Schafer is also
66 Witherspoon Street a director of Labor
#1100 Ready, Inc.
Princeton, NJ 08542 (temporary
employment),
Roadway Corp.
(trucking),
Guardian Life
Insurance Company
Mutual Funds
(consisting of 19
portfolios), the
Harding, Loevner
Funds (consisting
of 4 portfolios),
E.I.I. Realty
Securities Trust
(investment
company) and
Frontier Oil
Corporation.

William D. White; 68 None
P.O. Box 199
Upper Black Eddy, PA 18972

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* This person's business address is 1285 Avenue of the Americas, 33rd Floor,
New York, NY 10019-6114.

** This person's business address is 51 West 52nd Street, New York, New York
10019-6114.

*** Address for mailing purposes only.

'D' Mrs. Alexander and Mr. Bewkes are 'interested persons' of the Fund as
defined in the 1940 Act by virtue of their positions with UBS Global AM
and/or UBS PaineWebber.

INFORMATION ABOUT NOMINEE OWNERSHIP OF FUND SHARES

AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
DOLLAR RANGE REGISTERED INVESTMENT COMPANIES OVERSEEN BY
OF EQUITY NOMINEE FOR WHICH UBS GLOBAL AM OR AN
SECURITIES AFFILIATE SERVES AS INVESTMENT ADVISOR,
NOMINEE IN FUND'D' SUB-ADVISOR OR MANAGER'D'
------- ---------- -------------------------

INTERESTED DIRECTORS:
Margo N. Alexander..................... None Over $100,000
E. Garrett Bewkes, Jr. ................ None Over $100,000

INDEPENDENT DIRECTORS:
Richard Q. Armstrong................... None Over $100,000
David J. Beaubien...................... None Over $100,000
Richard R. Burt........................ None $10,001 - $50,000
Meyer Feldberg......................... None Over $100,000
George W. Gowen........................ None Over $100,000
William W. Hewitt, Jr. ................ None Over $100,000
Morton L. Janklow...................... None None
Frederic V. Malek...................... None $50,001 - $100,000
Carl W. Schafer........................ None $50,001 - $100,000
William D. White....................... None $1 - $10,000

---------

'D' Information regarding ownership of shares of the Fund is as of October 31,
2002; 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, 2001.

As of December 31, 2001, the Independent Directors 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, 2002. Each director attended 75% or more of the board
meetings during the last fiscal year. The board has established an Audit and
Contract Review Committee that acts pursuant to a written charter and is
responsible for: (i) overseeing the Fund's accounting and financial reporting
policies, practices and internal controls; and (ii) reviewing the performance by
certain of the Fund's service providers of their contracts and arrangements with
the Fund. A copy of the charter is attached as Exhibit A. In fulfilling its
duties, the Audit and Contract Review Committee has: (a) reviewed and discussed
the Fund's audited financial statements with management; (b) discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61; (c) received certain written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1 and discussed the independent auditors' independence with them;
and (d) based upon its review of the above, recommended to the board that the
audited financial statements be included in the Fund's annual report to
shareholders. The Audit and Contract Review Committee currently consists of
Messrs. Armstrong, Beaubien, Burt, Feldberg, Gowen, Hewitt, Janklow, Malek,
Schafer and White, none of whom have any relationship to the Fund that may
interfere with the exercise of their independence from management or the Fund
and who are independent as defined under the listing standards of the New York
Stock Exchange. Each member of the Fund's Audit and Contract Review 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 and Contract Review Committee met twice during the
fiscal year ended September 30, 2002, and each member attended those meetings.

The board has also established a Nominating Committee that acts pursuant to
a written charter. The Nominating Committee is responsible for, among other
things: selecting, evaluating and recommending to the board candidates to be
nominated as additional Independent Directors of the Board; and reviewing the
composition of the board and the compensation arrangements for each of the
directors. The Nominating Committee currently consists of Messrs. Gowen,
Janklow, Schafer and White. The Nominating Committee did not meet during the
fiscal year ended September 30, 2002. The Nominating 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 Committee, Mr. George W. Gowen, care of the Secretary of the Fund at
51 West 52nd Street, New York, New York 10019-6114 and indicate on the envelope
'Nominating Committee.' The shareholder's letter should state the nominee's name
and should include the nominee's resume or curriculum vitae. The board does not
have a standing compensation committee.

Each Independent Director receives, in the aggregate from the
UBS Global AM funds, an annual retainer of $50,000, and a $10,000 fee for each
regular board meeting (and each in-person special board meeting) actually
attended. Each such board member is also entitled to a $2,000 fee for each
special telephonic meeting attended. The chairperson and vice chairperson of the
Audit and Contract Review Committee receives annually $12,500 and $7,500,
respectively. The chairperson of the Nominating Committee receives annually
$5,000. The foregoing fees will be allocated among all such funds (or each
relevant fund in the case of a special meeting) pro rata based on the funds'
relative net assets at the end of the calendar quarter preceding the date of
payment. 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.

Each director who has attained the age of seventy-two (72) years will be
subject to retirement on the later of (a) the last day of the month in which he
or she attains such age or (b) June 30, 2003. The table below includes certain
information relating to the compensation of the Fund's directors.

COMPENSATION TABLE'D'

TOTAL
COMPENSATION
AGGREGATE FROM THE FUND
NAME OF COMPENSATION AND THE
PERSON, POSITION FROM THE FUND* FUND COMPLEX**
---------------- -------------- --------------

Richard Q. Armstrong, Director.............................. $299 $ 94,395
David J. Beaubien, Director***.............................. $299 $ 71,238
Richard R. Burt, Director................................... $299 $ 86,295
Meyer Feldberg, Director.................................... $338 $181,252
George W. Gowen, Director................................... $314 $178,103
William W. Hewitt, Director***.............................. $322 $ 85,616
Morton L. Janklow, Director***.............................. $299 $ 64,988
Federick V. Malek, Director................................. $299 $ 94,395
Carl W. Schafer, Director................................... $299 $ 94,125
William D. White, Director***............................... $299 $ 71,238

(footnotes on next page)

(footnotes from previous page)

'D' Only Independent Directors are compensated by the funds for which
UBS Global AM or an affiliate serves as investment advisor, sub-advisor or
manager; directors who are 'interested persons,' as defined by the 1940
Act, do not receive compensation from the funds.

* Represents fees paid to each director during the fiscal year ended
September 30, 2002.

** Represents fees paid during the calendar year ended December 31, 2001 to
each board member by: (a) 29 investment companies in the case of Messrs.
Armstrong, Burt, Malek and Schafer; (b) 41 investment companies in the case
of Messrs. Feldberg and Gowen; and (c) 22 investment companies in the case
of Messrs. Beaubien, Hewitt, Janklow and White 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.

*** This person did not commence serving on the Fund's board until September
2001.

INFORMATION CONCERNING INDEPENDENT AUDITORS

The Fund's financial statements for the fiscal year ended September 30,
2002, were audited by Ernst & Young LLP ('Ernst & Young'), independent auditors.
In addition, Ernst & Young prepares the Fund's federal and state annual income
tax returns and provides certain non-audit services. The Audit and Contract
Review 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 auditors
for the Fund for the fiscal year ending September 30, 2003. Ernst & Young has
informed the Fund that it has no material direct or indirect financial interest
in the Fund.

Ernst & Young have been the Fund's independent auditors since July 25, 2001.
On July 25, 2001, the Board of Directors of the Fund, upon the recommendation of
the Board's Audit Committee, determined not to retain PricewaterhouseCoopers
('PwC') and approved a change of the Fund's independent auditors to Ernst &
Young. For the fiscal years ended September 30, 2000 and September 30, 1999,
PwC's audit reports contained no adverse opinion or disclaimer of opinion; nor
were their reports qualified or modified as to uncertainty, audit scope, or
accounting principles. Further, there were no disagreements between the Fund and
PwC on accounting principles or practices, financial statement disclosure or
audit scope or procedure, which if not resolved to the satisfaction of PwC would
have caused them to make reference to the disagreement in their report.

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 fees billed by Ernst & Young for professional services
rendered for the audit of the Fund's annual financial statements for the most
recent fiscal year and the review of the financial statements included in the
Fund's reports to shareholders are $21,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

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.

ALL OTHER FEES

There were $151,000 in fees billed by Ernst & Young for the most recent
fiscal year for other 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.

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:

LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD TIME NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ------------- ------ ----------------------------------

Thomas Disbrow*; 36 Vice President Since 2000 Mr. Disbrow is a director and a senior
and Assistant manager of the mutual fund finance
Treasurer department of UBS Global AM. Prior to
November 1999, he was a vice president of
Zweig/Glaser Advisers. Mr. Disbrow is a
vice president and assistant treasurer of
22 investment companies (consisting of 43
portfolios) for which UBS Global AM or one
of its affiliates serves as investment
advisor, sub-advisor or manager.

Amy R. Doberman*; 40 Vice President Since 2000 Ms. Doberman is a managing director and
and Secretary general counsel of UBS Global AM. From
December 1997 through July 2000, she was
general counsel of Aeltus Investment
Management, Inc. Prior to working at Aeltus,
Ms. Doberman was assistant chief counsel of
the SEC's Division of Investment Management.
Ms. Doberman is vice president and secretary
of UBS Supplementary Trust and a vice
president and secretary of 24 investment
companies (consisting of 81 portfolios) and
vice president and assistant secretary of
one investment company (consisting of 2
portfolios) for which UBS Global AM or one
of its affiliates serves as investment
advisor, sub-advisor or manager.

Elbridge T. Gerry III*; 45 Vice President Since 1996 Mr. Gerry is a managing director -- fixed
income of UBS Global AM. Mr. Gerry is a vice
president of 6 investment companies
(consisting of 11 portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

David M. Goldenberg*; 36 Vice President Since 2002 Mr. Goldenberg is an executive director and
and Assistant deputy general counsel of UBS Global AM.
Secretary From 2000 - 2002 he was director, legal
affairs at Lazard Asset Management. Mr.
Goldenberg was global director of compliance
for SSB Citi Asset Management Group from
1998 - 2000. He was associate general
counsel at Smith Barney Asset Management
from 1996 - 1998. Prior to working at Smith
Barney Asset Management, Mr. Goldenberg was
branch chief and senior counsel in the SEC's
Division of Investment Management.
Mr. Goldenberg is vice president and
assistant secretary of UBS Supplementary
Trust, vice president and assistant
secretary of 24 investment companies
(consisting of 81 portfolios) and a vice
president and secretary of one investment
company (consisting of 2 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Kevin J. Mahoney*; 37 Vice President Since 1999 Mr. Mahoney is a director and a senior
and Assistant manager of the mutual fund finance department
Treasurer of UBS Global AM. Prior to April 1999, he
was the manager of the mutual fund internal
control group of Salomon Smith Barney.
Mr. Mahoney is a vice president and assistant
treasurer of 22 investment companies
(consisting of 43 portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Paul H. Schubert*; 39 Vice President Since 1994 Mr. Schubert is an executive director and
and Treasurer head of the mutual fund finance department
of UBS Global AM. Mr. Schubert is treasurer
and principal accounting officer of
UBS Supplementary Trust and of two
investment companies (consisting of
38 portfolios) and a vice president and
treasurer of 22 investment companies
(consisting of 43 portfolios) and treasurer
and chief financial officer of one
investment company (consisting of
2 portfolios) for which UBS Global AM or
one of its affiliates serves as investment
advisor, sub-advisor or manager.

Brian M. Storms*; 48 President Since 2000 Mr. Storms is chief executive officer (since
July 2002), director and president of
UBS Global AM (since March 1999). He is also
chief executive officer (since July 2002), a
member of the board of directors and
president of UBS Global Asset Management
(Americas) Inc. ('UBS Global AM (Americas)')
and UBS Global Asset Management (New
York) Inc. ('UBS Global AM (New York)')
(since October 2001). Mr. Storms was chief
executive officer of UBS Global AM from
October 2000 to September 2001 and chief
operating officer (2001 - 2002). He was
chief operating officer of UBS Global AM
(Americas) and UBS Global AM (New York) from
September 2001 to July 2002. He was a
director or trustee of several investment
companies in the UBS Family of Funds
(1999 - 2001). He was president of
Prudential Investments (1996 - 1999). Prior
to joining Prudential Investments he was a
managing director at Fidelity Investments.
Mr. Storms is president and trustee of
UBS Supplementary Trust and of two
investment companies (consisting of 38
portfolios) and president of 22 investment
companies (consisting of 43 portfolios) and
trustee and chairman of one investment
company (consisting of 2 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Keith A. Weller*; 41 Vice President Since 1995 Mr. Weller is a director and senior
and Assistant associate general counsel of
Secretary UBS Global AM. Mr. Weller is a vice
president and assistant secretary of 22
investment companies (consisting of 43
portfolios) for which UBS Global AM 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.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Fund is not aware of any outstanding report required to be filed by any
board member or officer pursuant to Section 16(a) of the Securities Exchange Act
of 1934.

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit proposals to be considered at the
Fund's 2004 annual meeting of shareholders should send such proposals to the
Secretary of the Fund at 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 August 1, 2003 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,

AMY R. DOBERMAN
Secretary

November 29, 2002

----------------------------------------------------------------
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
----------------------------------------------------------------
14

EXHIBIT A

AUDIT AND CONTRACT REVIEW COMMITTEE CHARTER

ESTABLISHMENT AND PURPOSE

The Audit and Contract Review Committee (the 'Committee') of the Boards of
Trustees and Boards of Directors (each, a 'Board' and collectively, the
'Boards') of the funds for which UBS Global Asset Management (US) Inc.
('UBS Global AM') serves as investment adviser or investment manager (each, a
'Fund' and collectively, the 'Funds') is hereby established on this the 12th day
of September, 2001. The two primary purposes of the Committee are to oversee the
Funds' accounting and financial reporting policies, practices and internal
controls as required by the Investment Company Act of 1940, as amended (the
'Act') and, for those Funds organized as closed-end investment management
companies, the rules of the New York Stock Exchange, Inc. or other relevant
securities exchange, if any, on which shares of the Fund are listed, and to
review the performance by certain service providers of their contracts and
arrangements with the Funds as required by the Act.

In connection with the oversight of each Fund's accounting and financial
reporting policies, practices and internal controls, the Committee will endeavor
to assure the quality and objectivity of each Fund's independent audit and each
Fund's financial statements, act as a liaison between the Boards and each Fund's
independent auditors and periodically report to the Boards. In performing its
duties, the Committee shall have unrestricted access to the Boards' Trustees and
Directors, the independent auditors, Fund officers, and the senior management of
UBS Global AM.

With respect to its contract review function, the Committee will consider
the performance of the Funds' investment advisor or investment manager (as
appropriate) and administrator, sub-advisors, distributor and all other service
providers. The Committee will determine whether compensation paid by the Funds
pursuant to their contracts and arrangements is reasonable and appropriate in
light of the nature and quality of the services rendered. In performing its
duties, the Committee shall have unrestricted access to the Funds' Trustees and
Directors, the officers of the Funds and senior management of each service
provider.

COMPOSITION

The Committee shall be composed of all the independent Trustees/Directors of
the Funds. The Boards shall elect a chairperson, who shall preside over
Committee meetings (the 'Chairperson'). The Chairperson shall serve for an
initial interim term of one year and, thereafter, for successive terms of three
years.

Each member of the Committee must meet the independence and experience
requirements set forth in Appendix A.

MEETINGS

The Committee shall meet on a regular basis, but not less frequently than
annually. An agenda shall be established for each meeting. Special meetings
shall be called as circumstances require. The Chairperson may invite the Funds'
officers and other interested parties to participate in meetings. The Committee
may, in its discretion, meet in executive session outside the presence of the
Funds' officers and other parties.

A majority 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.

A-1

REPORTING

The Chairperson shall report to the Boards on the result of its
deliberations and make such recommendations as deemed appropriate.

DUTIES AND RESPONSIBILITIES

As a general rule, the Funds' independent auditors are ultimately
accountable to the applicable Board and the Committee, and the Committee and the
Boards have the ultimate authority and responsibility to select, evaluate and
where appropriate, replace the independent auditors of the Funds. In addition,
the Committee shall have the following specific duties and responsibilities for
each Fund:

AUDIT OVERSIGHT

Recommend to the Board the selection of an independent public accounting
firm.

Review the scope of the Fund's proposed audit each year, including the
extent of audit and non-audit services provided to the Fund by the
independent auditors, and the audit procedures to be utilized. At the
conclusion of each audit, the Committee will review the audit, including
any comments or recommendations, with the independent auditors.

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.

Discuss with the independent auditors any disclosed relationships or
services that may impact the objectivity and independence of the
independent auditors.

Recommend to the Board appropriate actions in response to the independent
auditors' report to satisfy itself of, and oversee, the independence of the
auditors.

Discuss with management the performance of the independent auditors,
management's recommendation with respect to the reasonableness of their
fees and the recommendation to the Board regarding the retention of the
independent auditors.

Review and discuss with the independent auditors and management the Fund's
annual report to shareholders and significant accounting policies
underlying the report and its presentation to the public.

Discuss with the Fund's independent auditors any matters required to be
discussed pursuant to Statement of Auditing Standards No. 61, as modified
or supplemented.

Discuss with the Fund's independent auditors, to the extent required by
Statement of Auditing Standards No. 71, any adjustments which were made to
previously reported financial information.

Review with the independent auditors the adequacy and effectiveness of
relevant internal controls and procedures and the quality of the staff
implementing these controls and procedures.

As necessary, review with the independent auditors and management any
'illegal acts,' as defined in Section 10A of the Securities Exchange Act of
1934 and required by that statute to be reported to the Committee, or other
significant issues that could have a material effect on the Fund's
financial statements.

Make recommendations to the Board, based on the Committee's review and
discussions with the Fund's independent auditors and management, with
respect to the Fund's financial statements as to

A-2

whether the financial statements should be included in the Fund's annual
report for the previous fiscal year.

With respect to each Fund, obtain from management a representation that the
Fund's principal executive officer and principal financial officer will
provide the certification relating to financial statements required to
accompany SEC filings on Form N-SAR (or on any superseding form adopted by
the SEC). If either the principal executive officer or the principal
financial officer cannot provide such a representation, the Committee will
obtain a full report as to the reasons therefor and based on that report,
take such actions as it deems necessary or appropriate.

Discuss with management any complaints regarding accounting, internal
accounting controls, or auditing matters affecting the Fund that are
brought to the attention of the Fund's principal executive officer,
principal financial officer or secretary and all significant deficiencies
in the design or operation of internal controls and any related incidence
of fraud, whether or not material.

CONTRACT REVIEW

Request such information as is deemed relevant by the Committee regarding
the performance of each of the contracts and arrangements required to be
reviewed and approved by the Board.

Review all information and data provided by the service providers in
connection with their performance of these contracts and arrangements.

Meet with such representatives of the service providers as the Committee
deems necessary.

Make recommendations to the Board concerning the initial approval and/or
continuation of each of the proposed contracts and arrangements and the
reasonableness and appropriateness of the proposed fees.

Consider such other matters as the Committee may deem appropriate in
carrying out the above responsibilities and any other matters that may be
assigned to it by the Board.

OTHER

Review with the Fund's investment manager and sub-advisors:

(a) such compliance matters as are appropriate to be brought to the
attention of the Committee; and

(b) any comments or criticisms from the staff of the Securities and
Exchange Commission or any other regulators as are appropriate to be
brought to the attention of the Committee.

LIMITS ON COMMITTEE LIABILITY

The Audit and Contract Review Committee is not responsible for either the
preparation of the financial statements or the auditing of the financial
statements. Management of the Funds has the responsibility for preparing the
financial statements and implementing internal controls and the independent
auditors have the responsibility for auditing the financial statements and
monitoring the effectiveness of the internal controls. The review of the
financial statements by the audit committee is not of the same quality as the
audit performed by the independent auditors. In carrying out its
responsibilities, the audit 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 Committee
members.

A-3

APPENDIX A

INDEPENDENCE REQUIREMENTS

In order to be deemed independent, each member of the Committee must be free
of any relationships that may interfere with the exercise of his or her
independent judgment. To ensure the independence of each Committee member, the
following restrictions shall apply to each Committee member:

A Director/Trustee who is an employee (including non-employee executive
officers) of a Fund or any of its affiliates may not serve on the Committee
until three years following the termination of his or her employment. In
the event the employment relationship is with a former parent or
predecessor of a Fund, the Director/Trustee could serve on the Committee
after three years following the termination of the relationship between the
Fund and the former parent or predecessor.

A Director/Trustee: (a) who is a partner, controlling shareholder, or
executive officer of an organization that has a business relationship with
a Fund, or (b) who has a direct business relationship with a Fund (e.g., a
consultant) may serve on the Committee only if the Board of
Directors/Trustees of that Fund determines in its business judgment that
the relationship does not interfere with the Director's/Trustee's exercise
of independent judgment. In making a determination regarding the
independence of a Director/Trustee pursuant to this paragraph, the Board of
Directors/Trustees of the Fund should consider, among other things, the
materiality of the relationship to the Fund, to the Director/Trustee, and,
if applicable, to the organization with which the Director/Trustee is
affiliated.

'Business relationship' can include commercial, industrial, banking,
consulting, legal, accounting and other relationships. A Director/Trustee
can have this relationship directly with the Fund, or the
Director/Trustee can be a partner, officer or employee of an organization
that has such a relationship. The Director/Trustee may serve on the
Committee without the above-referenced Board of Directors'/Trustees'
determination after three years following the termination of, as
applicable, either: (a) the relationship between the organization with
which the Director/Trustee is affiliated and the Fund, (b) the
relationship between the Director/Trustee and his or her partnership
status, shareholder interest or executive officer position, or (c) the
direct business relationship between the Director/Trustee and the Fund.

A Director/Trustee who is employed as an executive of another corporation
where a Fund's executives serve on that corporation's compensation
committee may not serve on the Committee.

A Director/Trustee who is an 'Immediate Family' member (as this term is
defined in Rule 303.02(A) of the NYSE Listed Company Manual) of an
individual who is an executive officer of a Fund or any of its affiliates
cannot serve on the Committee until three years following the termination
of such employment relationship.

EXCEPTIONS

One Independent Director/Trustee who does not meet the independence
requirements above, and is not a current employee or an immediate family member
of such an employee, may be appointed as a member of the Committee, if the
Boards of Directors/Trustees of the UBS Global AM Funds, under exceptional and
limited circumstances, determine that his or her membership on the Committee is
required by the best interests of the Funds and their shareholders, and the
Boards disclose, in the next annual proxy statement for each closed-end Fund
subsequent to the person's appointment, the nature of the relationship and the
reasons why the person was appointed to the Committee.

A-4

EXPERIENCE REQUIREMENTS

Each member of the Committee must be 'financially literate'. A member of the
Committee will be deemed to be 'financially literate' if he or she is able to
read and understand financial statements, including, but not limited to, the
Funds' balance sheets, income statements, and cash flow statements, or will
become able to do so within a reasonable time after becoming a member of the
Committee.

FINANCIAL EXPERTISE REQUIREMENTS

At least one member of the Committee must have past employment experience in
finance or accounting, requisite professional certification in accounting, or
any comparable experience or background which would result in the individual's
financial sophistication, including being or having been a chief executive
officer, chief financial officer or other senior officer with financial
oversight responsibilities.

A-5

---------------------------------
INVESTMENT
GRADE
MUNICIPAL
INCOME FUND INC.
---------------------------------

---------------------------------------
INVESTMENT
GRADE
MUNICIPAL
INCOME FUND INC.
---------------------------------------

-------------------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
JANUARY 16, 2003
AND
PROXY STATEMENT
-------------------------

PROXY
STATEMENT

Appendix 1
APS
PROXY

INVESTMENT GRADE MUNICIPAL INCOME FUND INC.

ANNUAL MEETING OF SHAREHOLDERS - JANUARY 16, 2003

The undersigned hereby apponts as proxies Keith A. Weller and Marissa
Duran-Cruz and each of them (with power of substitution) to vote for the
undersigned all shares of preferred stock of the undersigned at the aforesaid
meeting and any adjourment 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 43052, Providence, RI 02940-5105. 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

[X] PLEASE MARK VOTE AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"

1. To elect as directors:

NOMINEES: (01) Margo N. Alexander, (02) Richard Q. Armstrong, (03) David
J. Beaubien, (04) E. Garrett Bewkes, Jr., (05) Richard R. Burt,
(06) Meyer Feldberg, (07) George W. Gowen,
(08) William W. Hewitt, Jr., (09) Morton L. Janklow,
(10) Frederic V. Malek, (11) Carl W. Schafer and
(12) William D. White.

FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ] _______________________________________
For all nominees except as noted above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

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 conform exactly to the name shown on this proxy card.
If shares are held by a corporation, partnership or similar account, the name
and the 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:
(if held jointly)_________________Date:_______Signature:__________Date:________

Appendix 2
COMMON STOCK
PROXY

INVESTMENT GRADE MUNICIPAL INCOME FUND INC.

ANNUAL MEETING OF SHAREHOLDERS - JANUARY 16, 2003

The undersigned hereby apponts as proxies Keith A. Weller and Marissa
Duran-Cruz and each of them (with power of substitution) to vote for the
undersigned all shares of common stock of the undersigned at the aforesaid
meeting and any adjourment 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

SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE

[X] PLEASE MARK VOTE AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"

1. To elect as directors:

NOMINEES: (01) Richard Q. Armstrong, (02) David J. Beaubien,
(03) E. Garrett Bewkes, Jr., (04) Richard R. Burt,
(05) George W. Gowen, (06) William W. Hewitt, Jr.,
(07) Morton L. Janklow, (08) Frederic V. Malek,
(09) Carl W. Schafer and (10) William D. White.

FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES

[ ] _______________________________________
For all nominees except as noted above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

This proxy will not be voted unless it is dated and signed exactly as instructed
below.

Sign exactly as name appears hereon.

Signature:
(if held jointly)_________________Date:_______Signature:__________Date:________

STATEMENT OF DIFFERENCES
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The service mark symbol shall be expressed as.......................... 'sm'
The section symbol shall be expressed as............................... 'SS'
The dagger symbol shall be expressed as................................ 'D'