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. )

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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 Rule
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)

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INVESTMENT GRADE MUNICIPAL INCOME FUND INC.
----------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 20, 2005
----------------

TO THE SHAREHOLDERS:

The annual meeting of shareholders of Investment Grade Municipal Income Fund
Inc. (the 'Fund') will be held on January 20, 2005, at 10:00 a.m., Eastern time,
at 1285 Avenue of the Americas, 14th Floor, New York, New York 10019 for the
following purposes:

MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS:

(1) To elect five (5) directors to serve until the annual meeting of
shareholders in 2006, 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 2006, 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 19, 2004. 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
Secretary

November 29, 2004
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

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PROXY STATEMENT

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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 20, 2005

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 20, 2005, at 10:00 a.m., Eastern
time, at 1285 Avenue of the Americas, 14th Floor, New York, New York 10019, 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, 2004.

A majority of the shares outstanding on November 19, 2004, 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 seven 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 five 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 (US) 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 19, 2004, 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 (US) Inc. ('UBS Global AM') or
UBS Financial Services Inc., who will not receive any compensation therefore
from 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, 2004, 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 seven 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 Fund's January 2004 Annual Meeting of Shareholders.

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 five 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, Richard R. Burt, 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 seven nominees; and, if you are a holder of the common
stock, your shares of common stock will be voted FOR the five 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.

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 (18 persons) beneficially owned any
shares of the Fund's common stock or APS on November 5, 2004.

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
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE
---------------------- ---- ------ ------------------- -------------------

INTERESTED DIRECTOR:
Margo N. Alexander'D'; 57 Director Since Mrs. Alexander is Mrs. Alexander is a
c/o UBS Global Asset Management 1996 retired. She was an director or trustee of 16
51 West 52nd Street executive vice president investment companies
New York, NY 10019 of UBS Financial (consisting of 33
Services Inc. (from March portfolios) for which
1984 to December 2002). UBS Global AM or one of
She was chief executive its affiliates serves as
officer (from January investment advisor, sub-
1995 to October 2000), a advisor or manager.
director (from January
1995 to September 2001)
and chairman (from March
1999 to September 2001)
of UBS Global AM
(formerly known as
Mitchell Hutchins Asset
Management Inc.).

INDEPENDENT DIRECTORS:
Richard Q. Armstrong; 69 Director Since Mr. Armstrong is chairman Mr. Armstrong is a
c/o Willkie Farr & and Chairman 1995 and principal of R.Q.A. director or trustee of 16
Gallagher LLP of the Board Enterprises (management investment companies
787 Seventh Avenue of Directors consulting firm) (since (consisting of 33
New York, NY 10019-6099 April 1991 and principal portfolios) for which UBS
occupation since March Global AM or one of its
1995). affiliates serves as
investment advisor, sub-
advisor or manager.

David J. Beaubien; 70 Director Since Mr. Beaubien is retired Mr. Beaubien is a
84 Doane Road 2001 (since 2003). He was director or trustee of 16
Ware, MA 01082 chairman of Yankee investment companies
Environmental Systems, (consisting of 33
Inc., a manufacturer of portfolios) for which
meteorological measuring UBS Global AM or one of
systems (since 1991). its affiliates serves as
investment advisor, sub-
advisor or manager.

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

INTERESTED DIRECTOR:
Margo N. Alexander'D'; 57 None
c/o UBS Global Asset Management
51 West 52nd Street
New York, NY 10019

INDEPENDENT DIRECTORS:
Richard Q. Armstrong; 69 None
c/o Willkie Farr &
Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099

David J. Beaubien; 70 Mr. Beaubien is
84 Doane Road also a director of
Ware, MA 01082 IEC Electronics,
Inc., a
manufacturer of
electronic
assemblies.

Richard R. Burt; 57 Director Since Mr. Burt is chairman of Mr. Burt is a director or
1275 Pennsylvania Ave., N.W. 1995 Diligence LLC trustee of 16 investment
Washington, D.C. 20004 (international companies (consisting of
information and security 33 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). advisor or manager.

Meyer Feldberg; 62 Director Since Professor Feldberg is Professor Feldberg is a
Columbia Business School 1992 Dean Emeritus and Sanford director or trustee of 30
33 West 60th Street Bernstein Professor of investment companies
7th Floor Leadership and Ethics at (consisting of 47
New York, NY 10023-7905 Columbia Business School. portfolios) for which
Prior to July 2004, he UBS Global AM or one of
was Dean and Professor of its affiliates serves as
Management of the investment advisor,
Graduate School of sub-advisor or manager.
Business at Columbia
University (since 1989).

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

Richard R. Burt; 57 Mr. Burt is also a
1275 Pennsylvania Ave., N.W. director of
Washington, D.C. 20004 Hollinger
International Inc.
(publishing), HCL
Technologies, Ltd.
(software and
information
technologies), The
Central European
Fund, Inc., The
Germany Fund, Inc.,
IGT, Inc. (provides
technology to
gaming and wagering
industry) and
chairman of Weirton
Steel Corp. (makes
and finishes steel
products). He is
also a director or
trustee of funds in
the Scudder Mutual
Funds Family
(consisting of 47
portfolios).

Meyer Feldberg; 62 Professor Feldberg
Columbia Business School is also a director
33 West 60th Street of Primedia Inc.
7th Floor (publishing),
New York, NY 10023-7905 Federated
Department Stores,
Inc. (operator of
department stores),
Revlon, Inc.
(cosmetics), Select
Medical Inc.
(healthcare
services) and
SAPPI, Ltd.
(producer of
paper).

Carl W. Schafer; 68 Director Since Mr. Schafer is president Mr. Schafer is a director
66 Witherspoon Street #1100 1996 of the Atlantic or trustee of 16
Princeton, NJ 08542 Foundation (charitable investment companies
foundation) (since 1990). (consisting of 33
portfolios) for which
UBS Global AM or one of
its affiliates serves as
investment advisor, sub-
advisor or manager.

William D. White; 70 Director Since Mr. White is retired Mr. White is a director
P.O. Box 199 2001 (since 1994). or trustee of 16
Upper Black Eddy, PA 18972 investment companies
(consisting of 33
portfolios) for which
UBS Global AM or one of
its affiliates serves as
investment advisor, sub-
advisor or manager.

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

Carl W. Schafer; 68 Mr. Schafer is also
66 Witherspoon Street #1100 a director of Labor
Princeton, NJ 08542 Ready, Inc.
(temporary
employment),
Guardian Life
Insurance Company
Mutual Funds
(consisting of 25
portfolios), the
Harding, Loevner
Funds (consisting
of three
portfolios), E.I.I.
Realty Securities
Trust (consisting
of two portfolios)
and Frontier Oil
Corporation.

William D. White; 70 None
P.O. Box 199
Upper Black Eddy, PA 18972

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'D' Mrs. Alexander is an 'interested person' of the Fund as defined in the 1940
Act by virtue of her former positions with UBS Global AM and/or any of its
affiliates.

INFORMATION ABOUT NOMINEE BENEFICIAL OWNERSHIP OF FUND SHARES

AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
DOLLAR RANGE REGISTERED INVESTMENT COMPANIES OVERSEEN
OF EQUITY BY 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

INDEPENDENT DIRECTORS:*
Richard Q. Armstrong................... None Over $100,000
David J. Beaubien...................... None Over $100,000
Richard R. Burt........................ None None
Meyer Feldberg......................... None Over $100,000
Carl W. Schafer........................ None $50,001 - $100,000
William D. White....................... None $10,001 - $50,000

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'D' Information regarding ownership of shares of the Fund is as of November 5,
2004; 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, 2003.

* 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 the beginning of
2004.

As of December 31, 2003, 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 nine times during the fiscal year
ended September 30, 2004. 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 2004.

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
of the Fund's independent auditors. A copy of the charter is attached as
Exhibit A. In fulfilling its duties, the Audit 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 Fund's audited financial statements be
included in the Fund's annual report to shareholders for the fiscal year ended
September 30, 2004. The Audit Committee currently consists of Messrs. Armstrong,
Beaubien, Burt, Feldberg 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 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, 2004, and each member
attended 75% or more of those meetings.

The board has also established a Nominating and Corporate Governance
Committee (the 'Nominating Committee') that acts pursuant to a written charter
('the Nominating and Corporate Governance Committee Charter'). The Nominating
Committee is responsible for, among other things, evaluating and recommending to
the board candidates to be nominated as additional Independent Directors of the
board. A copy of the Nominating and Corporate Governance Committee Charter is
attached as Exhibit B. The Nominating Committee currently consists of Messrs.
Burt, Feldberg, Schafer and White, 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
Committee met three times during the fiscal year ended September 30, 2004.

In nominating candidates, the Nominating 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 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 applicable independence and experience requirements of
the NYSE 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.

The Nominating Committee will consider nominees recommended by shareholders
if a vacancy among the Independent Directors occurs. In order to recommend a
nominee, a shareholder should send a letter to the chairperson of the Nominating
Committee, Professor Meyer Feldberg, care of the Secretary of the Fund at UBS
Global Asset Management (US) 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 for the
board and to serve if elected by shareholders. The board does not have a
standing compensation committee.

Shareholders may send other communications to the board by sending a letter
to the chairperson of the Audit Committee, Mr. Richard Q. Armstrong, care of
Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019-6099.
The chairperson of the Audit Committee will relay shareholder communications to
the other board members.

Each Independent Director receives, in the aggregate from the UBS Global AM
funds, an annual retainer of $70,000 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. The
chairperson of the Audit Committee receives annually $25,000. Effective
October 1, 2004, the chairperson of the Nominating Committee receives annually
$15,000. Effective October 1, 2004, the Chairman of the board receives annually
$30,000. (If a board member simultaneously holds more than one position on the
board, he or she is paid only the higher of the two fees otherwise payable for
these positions.) 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 (i.e., expense divided by number of funds yields per fund allocation). No
officer, director or employee of UBS Global AM or any 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.

Each director who has attained the age of seventy-two (72) 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'D'

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

Richard Q. Armstrong, Director.............................. $2,201 $112,500
David J. Beaubien, Director................................. $1,895 $100,000
Richard R. Burt, Director................................... $1,862 $100,000
Meyer Feldberg, Director.................................... $2,020 $200,125
Carl W. Schafer, Director................................... $1,895 $100,000
William D. White, Director.................................. $1,895 $100,000

---------

'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 in the 1940
Act, do not receive compensation from the funds.

* Represents fees paid to each director during the fiscal year ended
September 30, 2004.

** Represents fees paid during the calendar year ended December 31, 2003 to
each board member by: (a) 22 investment companies in the case of Messrs.
Armstrong, Beaubien, Burt, Schafer and White; and (b) 36 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.

INFORMATION CONCERNING INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Fund's financial statements for the fiscal year ended September 30,
2004, 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, 2005. 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, 2004 and September 30, 2003 were approximately $36,750 and
$13,600, 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 $12,693 and $21,300, respectively, in each of the fiscal years
ended September 30, 2004 and September 30, 2003. This includes amounts related
to non-audit services prior to May 6, 2003 that would have been subject to
pre-approval if the Securities and Exchange Commission ('SEC') rules relating to
the pre-approval of non-audit services had been in effect at that time.

Fees included in the audit-related category are those associated with
(1) the reading of and provision of comments on the 2004 and 2003 semiannual
financial statements, (2) review of portions of the Fund's semiannual 2003
Form N-SAR filing, (3) review of the consolidated 2003 and 2002 profitability of
UBS Global AM to assist the board members in their annual
advisory/administration contract reviews, and (4) auction preferred shares
testing for the Fund's fiscal years ended 2004 and 2003.

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 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, 2004 and September 30,
2003 were approximately $11,400 and $8,100, respectively. This includes amounts
related to tax services prior to May 6, 2003 that would have

been subject to pre-approval if the SEC rules relating to the pre-approval of
non-audit services had been in effect at that time.

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 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, 2004 and September 30, 2003, there
were no fees billed by Ernst & Young for other services provided to the Fund.
Fees included in the 'all other fees' category consist of services related to
internal control reviews, strategy and other consulting, financial information
systems design and implementation, consulting on other information systems, and
tax services unrelated to the Fund.

With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, 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 services1 to be
provided to the Fund and (b) all permissible non-audit services to be
provided by the Fund's independent auditors to UBS Global [AM] and any
Covered Service Providers, if the engagement relates directly to the

---------
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.

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.

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, 2004 and September 30, 2003, the
aggregate fees billed by Ernst & Young of $3,661,972 and $3,178,679,
respectively, for non-audit services rendered on behalf of the Fund ('covered'),
its 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 adviser ('non-covered') that provides ongoing services to the registrant for
each of the last two fiscal years of the Fund is shown in the table below:

2004 2003
---- ----

Covered Services............................................ $ 24,093 $ 29,400
Non-Covered Services........................................ $3,637,879 $3,149,279

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.

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
---------------------- ------------- ------ ----------------------------------

W. Douglas Beck*; 37 Vice President Since 2003 Mr. Beck is an executive director and head
of product management of UBS Global AM
(since 2002). From March 1998 to November
2002, he held various positions at Merrill
Lynch, the most recent being first vice
president and co-manager of the Managed
Solutions Group. Mr. Beck is vice president
of 20 investment companies (consisting of 75
portfolios) for which UBS Global AM or one
of its affiliates serves as investment
advisor, sub-advisor or manager.

James Capezzuto*; 40 Vice President Since 2004 Mr. Capezzuto is director and associate
and Assistant general counsel at UBS Global AM (since
Secretary 2004). Prior to joining UBS Global AM he was
senior vice president, senior compliance
manager at Bank of America (from 2003-2004)
prior to that he was general counsel at
Steinberg Priest & Sloane and prior to that
he was director and senior counsel at
Deutsche Asset Management (from 1996 --
2002.) Mr. Capezzuto is a vice president and
assistant secretary of 20 investment
companies (consisting of 75 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Thomas Disbrow*; 38 Vice President Since 2000 Mr. Disbrow is a director and co-head of the
and Treasurer (Vice mutual fund finance department of
President); UBS Global AM. Prior to November 1999, he
since 2004 was a vice president of Zweig/Glaser
(Treasurer) Advisers. Mr. Disbrow is a vice president
and treasurer of 16 investment companies
(consisting of 33 portfolios) and vice
president and assistant treasurer of four
investment companies (consisting of 42
portfolios) for which UBS Global AM or one
of its affiliates serves as investment
advisor, sub-advisor or manager.

Elbridge T. Gerry III*; 47 Vice President Since 1996 Mr. Gerry is a managing director --
municipal fixed income of UBS Global AM. Mr.
Gerry is a vice president of six investment
companies (consisting of 10 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Mark F. Kemper**; 46 Vice President Since 2004 Mr. Kemper is general counsel of UBS Global
and Secretary Asset Management -- Americas region (since
July 2004). Mr. Kemper also is an executive
director of UBS Global Asset Management
(Americas) Inc. ('UBS Global AM (Americas'))
and was its deputy general counsel 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 (since
2004). Mr. Kemper is vice president and
secretary of 20 investment companies
(consisting of 75 portfolios) for which
UBS Global AM (Americas) or one of its
affiliates serves as investment advisor,
sub-advisor or manager.

Joanne M. Kilkeary*; 36 Vice President Since 2004 Ms. Kilkeary is an associate director and a
and Assistant senior manager of the mutual fund finance
Treasurer department of UBS Global AM. Ms. Kilkeary is
a vice president and assistant treasurer of
16 investment companies (consisting of 33
portfolios) for which UBS Global AM or one
of its affiliates serves as investment
advisor, sub-advisor or manager.

Joseph T. Malone*; 37 Vice President Since 2004 Mr. Malone is a director and co-head of the
and Assistant mutual fund finance department of UBS Global
Treasurer AM. From August 2000 through June 2001, he
was the controller at AEA Investors Inc.
From March 1998 to August 2000, Mr. Malone
was a manager within the investment management
services practice of PricewaterhouseCoopers LLC.
Mr. Malone is vice president and assistant
treasurer of 16 investment companies
(consisting of 33 portfolios) and vice
president, treasurer and principal
accounting officer of four investment
companies (consisting of 42 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Joseph McGill*; 42 Vice President Since 2004 Mr. McGill is an executive director and chief
and Chief compliance officer at UBS Global AM (since
Compliance 2003). Prior to joining UBS Global AM he
Officer was Assistant General Counsel, J. P. Morgan
Investment Management (from 1999-2003). Mr.
McGill is a vice president and chief
compliance officer of 20 investment
companies (consisting of 75 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Joseph A. Varnas*; 37 President Since 2003 Mr. Varnas is a managing director (since
March 2003), global head of information
technology and operations (since March 2004)
and head of product management -- Americas
(since November 2002) of UBS Global AM. He
was head of technology of UBS Global AM from
November 2002 to March 2004. From 2000 to
2001, he was manager of product development
in Investment Consulting Services at
UBS Financial Services Inc. Mr. Varnas was a
senior analyst in the Global Securities
Research and Economics Group at Merrill
Lynch from 1995 to 1999. Mr. Varnas is
president of 20 investment companies
(consisting of 75 portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

William Veronda*; 58 Vice President Since 2004 Mr. Veronda is an executive
director -- fixed income of UBS Global AM
(since 1995). Mr. Veronda is a vice
president of two investment companies
(consisting of two portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.

Keith A. Weller*; 43 Vice President Since 1995 Mr. Weller is a director and associate
and Assistant general counsel of UBS Global AM. Mr. Weller
Secretary is a vice president and assistant secretary
of 20 investment companies (consisting of 75
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.

** This person's business address is One North Wacker Drive, Chicago, Illinois
60606.

OTHER INFORMATION

BENEFICIAL OWNERSHIP OF SHARES

As of November 5, 2004, 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 2006 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, 2005, 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
Secretary

November 29, 2004

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

EXHIBIT A

AUDIT COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MAY 12, 2004

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 (US) 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

---------
(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.

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-1

auditors to UBS 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.

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.

A-2

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.

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.

A-3

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.

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

---------
(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

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 Dollar 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 (US) 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

A-9

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.

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)

A-10

EXHIBIT B

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
AMENDED AND RESTATED AS OF NOVEMBER 10, 2004

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 (US) 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:

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;

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

B-1

investment advisor and/or sub-advisors of the Fund, Fund service
providers or their affiliates;

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;

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,

the interplay of the candidate's experience with the experience of
other Board members; and

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

B-2

and prepare a summary of the performance of the Board and its committees,
to be discussed with the Board.

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 Dollar Fund Inc.
Investment Grade Municipal Income Fund Inc.
Insured Municipal Income Fund Inc.
Managed High Yield Plus Fund Inc.

B-4

[THIS PAGE INTENTIONALLY LEFT BLANK]

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

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

PROXY
STATEMENT

-------------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
JANUARY 20, 2005
AND
PROXY STATEMENT
-------------------

COMMON STOCK
PROXY

PROXY

INVESTMENT GRADE MUNICIPAL INCOME FUND INC.

ANNUAL MEETING OF SHAREHOLDERS - JANUARY 20, 2005

The undersigned hereby appoints as proxies Keith A. Weller and Cristina
Paradiso 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 adjournment 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 8586, Edison, NJ
08818-9452. 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 4996
vote as in
this example.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.

1. To elect as directors:

Nominees: (01) Richard Q. Armstrong, (02) David J. Beaubien,
(03) Richard R. Burt, (04) Carl W. Schafer and
(05) William D. White.

FOR [_] [_] WITHHOLD
ALL FROM ALL
NOMINEES NOMINEES

[_]
--------------------------------------
For all nominees except as noted above

Mark box at right if an address [_]
change or comment has been noted
on this card.

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 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:
--------- ------ --------- ------

PREFERRED STOCK
PROXY

PROXY

INVESTMENT GRADE MUNICIPAL INCOME FUND INC.

ANNUAL MEETING OF SHAREHOLDERS - JANUARY 20, 2005

The undersigned hereby appoints as proxies Keith A. Weller and Cristina
Paradiso 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 adjournment thereof with all the power the undersigned would
have if personally present. The shares represented by this proxy will be voted
as instructed.

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

[X] Please mark 4996
vote as in
this example.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.

1. To elect as directors:

Nominees: (01) Margo N. Alexander, (02) Richard Q. Armstrong,
(03) David J. Beaubien, (04) Richard R. Burt, (05) Meyer Feldberg,
(06) Carl W. Schafer and (07) William D. White.

FOR [_] [_] WITHHOLD
ALL FROM ALL
NOMINEES NOMINEES

[_]
--------------------------------------
For all nominees except as noted above

Mark box at right if an address [_]
change or comment has been noted
on this card.

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
------------------------

The dagger symbol shall be expressed as................................ 'D'