UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Insured Municipal Income Fund Inc.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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INSURED MUNICIPAL INCOME FUND INC.
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NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
JULY 20, 2006
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TO THE SHAREHOLDERS:
The annual meeting of shareholders of Insured Municipal Income Fund Inc.
(the "Fund") will be held on July 20, 2006 at 10:00 a.m., Eastern time, on the
16th Floor of the CBS Building located at 51 West 52nd Street, New York, New
York 10019-6114 for the following purposes:
MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS:
(1) To elect five (5) directors to serve until the annual meeting of
shareholders in 2007, 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 2007 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 May 19, 2006. If you attend the
meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
By order of the board of directors,
MARK F. KEMPER
Vice President and Secretary
May 30, 2006
51 West 52nd Street
New York, New York 10019-6114
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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 "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.
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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
INSURED 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 JULY 20, 2006
This proxy statement is furnished to the shareholders of Insured Municipal
Income Fund Inc. (the "Fund") in connection with the board of directors'
solicitation of proxies to be used at the annual meeting of the shareholders of
the Fund to be held on July 20, 2006, at 10:00 a.m., Eastern time, on the 16th
Floor of the CBS Building located at 51 West 52nd Street, New York, New York
10019-6114, or any adjournment or adjournments thereof. This proxy statement and
the related proxy card will first be mailed to shareholders on or about May 30,
2006.
A majority of the shares outstanding on May 19, 2006, represented in person
or by proxy, must be present for the transaction of business at the meeting. In
the event that a quorum is not present at the annual meeting (including a quorum
of the Fund's auction preferred shares ("APS") with respect to the election of
the two directors to be elected solely by the APS), or if such 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 (Americas) Inc., at 51 West 52nd Street, New York, New
York 10019-6114. To be effective, your revocation must be received by the Fund
prior to the meeting and must indicate your name and account number. In
addition, if you attend the annual meeting in person you may, if you wish, vote
by ballot at the meeting, thereby cancelling any proxy previously given.
As of the record date, May 19, 2006, the Fund had outstanding 20,628,363
shares of common stock and 4,200 shares of the APS, representing Series A,
Series B, Series C, Series D, Series E and Series F 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 and oral communications by regular employees
of UBS Global Asset Management (Americas) Inc. ("UBS Global AM") or UBS
Financial Services Inc., who will not receive any compensation therefor 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
and Basel, Switzerland. UBS AG operates in many areas of the financial services
industry. Principal business offices of UBS Global AM are located at 51 West
52nd Street, New York, New York 10019-6114 and at One North Wacker Drive,
Chicago, Illinois 60606. The principal business address of UBS AG is
Bahnhofstrasse 45, Zurich, Switzerland.
The Fund's annual report containing financial statements for the fiscal year
ended March 31, 2006 is being mailed to shareholders concurrently with this
proxy statement.
PROPOSALS 1. AND 3. ELECTION OF DIRECTORS
Proposals 1 and 3 relate to the election of directors of the Fund.
Management proposes the election of the 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.
Holders of the outstanding shares of the APS, voting as a separate class,
are entitled to elect two of the Fund's directors. Meyer Feldberg and Richard R.
Burt 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 the
outstanding common stock and APS, voting together as a single class. Richard Q.
Armstrong, David J. Beaubien, Alan S. Bernikow, Bernard B. Garil and Heather R.
Higgins have been nominated as the directors that are to be elected by all
common stock and APS holders. Each of the nominees was last elected director at
a Special Meeting of Shareholders held on February 3, 2006. 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 by 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
2
of persons than the number of nominees named. None of the current directors and
executive officers (19 persons) beneficially owned any shares of the Fund's
common stock or APS on April 30, 2006.
Listed in the table below, for each nominee, is a brief description of the
nominee's experience as a director of the Fund and as a director or trustee of
other funds, as well as other recent professional experience.
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
NAME, ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
------- ---- ------ ------------------- ------------------- ---------------
INTERESTED DIRECTOR:
Meyer Feldberg;(+) 64 Director Since 1993 Professor Feldberg is Professor Feldberg is a Professor Feldberg
Morgan Stanley Dean Emeritus and director or trustee of is also a director
1585 Broadway Sanford Bernstein 29 investment companies of Primedia Inc.
33rd Floor Professor of Leadership (consisting of 48 (publishing), Federated
New York, NY 10036 and Ethics at Columbia portfolios) for which Department Stores, Inc.
Business School, UBS Global AM or one of (operator of department
although on a two year its affiliates serves as stores), Revlon, Inc.
leave of absence. He is investment advisor, (cosmetics), and SAPPI,
also a senior advisor to sub-advisor or manager. Ltd. (producer of
Morgan Stanley paper).
(financial services)
(since March 2005).
Prior to July 2004, he
was Dean and Professor
of Management of the
Graduate School of
Business at Columbia
University (since 1989).
3
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
NAME, ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
------- ---- ------ ------------------- ------------------- ---------------
INDEPENDENT DIRECTORS:
Richard Q. Armstrong; 70 Director Since 1995 Mr. Armstrong is Mr. Armstrong is a None
70 c/o Willkie Farr & and (Director) chairman and principal director or trustee of
Gallagher LLP Chairman Since 2004 of R.Q.A. Enterprises 16 investment companies
787 Seventh Avenue of the (Chairman (management consulting (consisting of 35
New York, NY 10019-6099 Board of of the firm) (since April 1991 portfolios) for which
Directors Board of and principal occupation UBS Global AM or one of
Directors) since March 1995). its affiliates serves as
investment advisor,
sub-advisor or manager.
David J. Beaubien; 71 Director Since 2001 Mr. Beaubien is retired Mr. Beaubien is a Mr. Beaubien is also a
84 Doane Road (since 2003). He was director or trustee of director of IEC
Ware, MA 01082 chairman of Yankee 16 investment Electronics, Inc., a
Environmental companies (consisting manufacturer of
Systems, Inc., a of 35 portfolios) for electronic assemblies.
manufacturer of which UBS Global AM
meteorological or one of its affiliates
measuring systems serves as investment
(since 1991). advisor, sub-advisor or
manager.
Alan S. Bernikow; 65 Director Since 2006 Mr. Bernikow is a Mr. Bernikow is a Mr. Bernikow is also a
c/o Deloitte & Touche consultant on director or trustee of director of Revlon,
1633 Broadway non-management matters 16 investment companies Inc. (cosmetics) (and
New York, NY 10019 for the firm of (consisting of 35 serves as the chair of
Deloitte & Touche portfolios) for which its audit committee), a
(international UBS Global AM or one of director of Mack-Cali
accounting and its affiliates serves Realty Corporation
consulting firm) (since as investment advisor, (real estate investment
June 2003). Previously, sub-advisor or manager. trust) (and serves as
he was Deputy Chief the chair of its audit
Executive Officer at committee) and a
Deloitte & Touche. director of the Casual
Male Retail Group,
Inc. (menswear).
Richard R. Burt; 59 Director Since 1995 Mr. Burt is chairman Mr. Burt is a director Mr. Burt is also a
1275 Pennsylvania of Diligence Inc. or trustee of 16 director of The
Ave., N.W. Washington, (information and risk investment companies Central European
D.C. 20004 management firm) (consisting of 35 Fund, Inc., The
and IEP Advisors portfolios) for which Germany Fund, Inc.,
(international UBS Global AM or The New Germany
investments and one of its affiliates Fund, Inc., IGT, Inc.
consulting firm). serves as investment (provides technology
advisor, sub-advisor or to gaming and wagering
manager. industry) and The
Protective Group, Inc.
(produces armor
products).
4
TERM OF
OFFICE* AND
POSITION(S) LENGTH OF NUMBER OF PORTFOLIOS
NAME, ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) IN FUND COMPLEX OTHER DIRECTORSHIPS
AND AGE FUND SERVED DURING PAST 5 YEARS OVERSEEN BY NOMINEE HELD BY NOMINEE
------- ---- ------ ------------------- ------------------- ---------------
Bernard B. Garil; 65 Director Since 2006 Mr. Garil is retired Mr. Garil is a director Mr. Garil is also a
6754 Casa Grande Way (since 2001). He was a or trustee of 16 director of OFI
Delray Beach, FL 33446 Managing Director at investment companies Trust Company
PIMCO Advisory (consisting of 35 (commercial trust
Services (from 1999 to portfolios) for which company) and a
2001) where he served UBS Global AM or trustee for the
as President of one of its affiliates Brooklyn College
closed-end funds and serves as investment Foundation, Inc.
Vice-President of the advisor, sub-advisor or (charitable
variable insurance manager. foundation).
product funds advised
by OpCap Advisors
(until 2001).
Heather R. Higgins; 46 Director Since 2006 Ms. Higgins is the Ms. Higgins is a None
255 E. 49th St. President and Director director or trustee of
Suite 23D of The Randolph 16 investment companies
New York, NY 10017 Foundation (charitable (consisting of 35
foundation) (since portfolios) for which
1991). Ms. Higgins also UBS Global AM or one of
serves on the boards of its affiliates serves
several non-profit as investment advisor,
charitable groups, sub-advisor or manager.
including the
Independent Women's
Forum (chairman), the
Philanthropy
Roundtable (vice
chairman) and the
Hoover Institution
(executive committee).
-------------------
* Each director holds office until the next annual meeting of shareholders
or until his or her successor is elected and qualified, or until he or she
resigns or is otherwise removed. Each director who has attained the age of
seventy-two (72) years will be subject to retirement on the last day of
the month in which he or she attains such age.
(+) Professor Feldberg is deemed an "interested person" of the Fund as
defined in the 1940 Act because he is a senior advisor to Morgan Stanley,
a financial services firm with which the Fund may conduct transactions.
5
INFORMATION ABOUT NOMINEE OWNERSHIP OF FUND SHARES
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES
DOLLAR RANGE OVERSEEN BY NOMINEE FOR WHICH
OF EQUITY UBS GLOBAL AM OR AN AFFILIATE
SECURITIES SERVES AS INVESTMENT ADVISOR,
NOMINEE IN FUND(+) SUB-ADVISOR OR MANAGER(+)
------- ------- -------------------------
INTERESTED DIRECTOR:
Meyer Feldberg ................................... None Over $100,000
INDEPENDENT DIRECTORS*:
Richard Q. Armstrong ............................. None Over $100,000
David J. Beaubien ................................ None Over $100,000
Alan S. Bernikow ................................. None None
Richard R. Burt .................................. None Over $100,000
Bernard B. Garil ................................. None Over $100,000
Heather R. Higgins ............................... None None
-------------------
(+) Information regarding ownership of shares of the Fund is as of April 30,
2006; information regarding ownership of shares in all registered
investment companies overseen by nominee for which UBS Global AM or an
affiliate serves as investment advisor, sub-advisor or manager is as of
December 31, 2005.
* To the extent they have not already done so, the Independent Directors
have each agreed to invest the equivalent of a minimum of one year's
board member's fees, in the aggregate, in the funds in the UBS Fund
complex. Such investments may be spread across a number of funds, and
they may not necessarily be made in any one particular fund overseen. The
investment may be made over a period not to exceed three years from the
beginning of 2004 or the date of election to the Board, whichever is
later.
As of December 31, 2005, the Independent Directors or their immediate family
members did not own any securities issued by UBS Global AM or any company
controlling, controlled by or under common control with UBS Global AM.
The board of directors of the Fund met six times during the fiscal year
ended March 31, 2006. Each director attended 75% or more of the board meetings
during the last fiscal year. The Fund's directors are not required to attend the
Fund's annual meetings, and no directors attended the annual meeting of
shareholders in 2005 or the special meeting of shareholders in February 2006.
The board has established an Audit Committee that acts pursuant to a written
charter ("Audit Committee Charter") and is responsible for, among other things:
(i) overseeing the scope of the Fund's audit, (ii) overseeing the Fund's
accounting and financial reporting policies, practices and internal controls;
and (iii) approving, and recommending to the board for ratification, the
selection, appointment, retention or termination of the Fund's registered public
accounting firm, as well as determining the compensation thereof. A copy of the
charter is attached as Exhibit A. In furtherance of its duties, the Audit
Committee also is responsible for, among other things: receiving reports from
the Fund's independent registered public accounting firm regarding their
independence and discussing any disclosed relationships or services that may
diminish the objectivity and independence of the registered public accounting
firm; inquiring of UBS Global AM and the Fund's independent registered public
accounting firm as to the Fund's qualification under Subchapter M of the
Internal Revenue Code and the amounts distributed and reported to shareholders;
and reviewing with the independent registered public accounting firm any
problems or difficulties the independent registered public accounting firm may
have encountered during the conduct of the audit. Although the Audit Committee
has the responsibilities described above, it is not responsible for planning or
conducting the Fund's audit or determining whether the Fund's financial
statements are complete and accurate and
6
are in accordance with US generally accepted accounting principles. Absent
actual knowledge to the contrary, Audit Committee members are entitled to rely
on the accuracy of the information they receive from persons within and outside
the Fund. The Audit Committee currently consists of Messrs. Armstrong,
Beaubien, Bernikow, Burt and Garil, and Ms. Higgins, none of whom have any
relationship to the Fund that may interfere with the exercise of their
independence from management or the Fund, and who are independent as defined
under listing standards of the New York Stock Exchange 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 March
31, 2006. Each Audit Committee member attended 75% or more of the Audit
Committee meetings during the last fiscal year.
The board has also established a Nominating and Corporate Governance
Committee that acts pursuant to a written charter ("Nominating and Corporate
Governance Committee Charter"). The Nominating and Corporate Governance
Committee is responsible for, among other things: selecting, evaluating and
recommending to the board candidates to be nominated as additional Independent
Directors of the board; making recommendations to the Board with respect to
compensation of board and committee members; performing an annual evaluation of
the board and its committees; reporting on such evaluation to the board; and
performing such other corporate governance functions as the board may authorize.
A copy of the Nominating and Corporate Governance Committee Charter is attached
as Exhibit B. The Nominating and Corporate Governance Committee currently
consists of Messrs. Burt, Beaubien and Garil, and Ms. Higgins, none of whom is
an "interested person" for purposes of the 1940 Act, and all of whom are
independent as defined under listing standards of the New York Stock Exchange
applicable to closed-end funds. The Nominating and Corporate Governance
Committee met three times during the fiscal year ended March 31, 2006. In
nominating candidates, the Nominating and Corporate Governance Committee
believes that no specific qualifications or disqualifications are controlling or
paramount, or that specific qualities or skills are necessary for each candidate
to possess.
In identifying and evaluating nominees for director, the Nominating and
Corporate Governance Committee takes into consideration such factors as it deems
appropriate. These factors may include: (i) whether or not the person is an
"interested person" as defined in the 1940 Act, meets the independence and
experience requirements of the NYSE cited above 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 and Corporate Governance Committee will consider nominees
recommended by shareholders if a vacancy occurs. In order to recommend a
nominee, a shareholder should send a letter to the chairperson of the Nominating
and Corporate Governance Committee, Mr. Richard R. Burt, care of the Secretary
of the Fund at UBS Global Asset Management (Americas) Inc., 51 West 52nd Street,
New York, New York 10019-6114 and indicate on the envelope "Nominating and
Corporate Governance Committee." The shareholder's letter should state the
nominee's name and should include the nominee's resume or curriculum vitae, and
must be accompanied by a written consent of the individual to stand for
7
election if nominated by the board and to serve if elected by shareholders. The
board does not have a standing compensation committee.
Each Independent Director receives, in the aggregate from the UBS Global AM
funds, an annual retainer of $95,000 and a $13,000 fee for each regular board
meeting (and each in-person special joint board meeting) actually attended.
Independent Directors who participate in previously scheduled in-person meetings
by telephone to accommodate other business obligations are paid $2,000 for such
meetings. Independent Directors who participate in previously scheduled
in-person meetings by telephone because of illness or other unavoidable
circumstances are paid the full meeting fee. Each Independent Director will
receive $2,000 for each special in-person meeting (not held as a joint meeting)
of the Fund's board actually attended where the Fund's board must meet
separately from the regularly scheduled joint board meetings. Independent
Directors who participate in scheduled telephonic meetings of the board(s) of
one or more funds are paid $1,000 for each such meeting actually attended. The
board's Chairman receives annually an additional $50,000; the chairperson of the
Audit Committee receives annually an additional $35,000; and the chairperson of
the Nominating and Corporate Governance Committee receives annually an
additional $25,000; provided that, if a board member simultaneously holds more
than one such position, he or she is paid only the higher of the fees otherwise
payable for these positions. Independent Directors who are also members of the
Audit Committee and/or Nominating and Corporate Governance Committee are paid
$2,000 for each meeting of such Committee actually attended, provided that such
meeting is not held in conjunction with a regularly scheduled board meeting. The
foregoing fees will be allocated among all of the UBS Global AM funds (or each
relevant fund in the case of a special meeting) as follows: (i) one-half of the
expense will be allocated pro rata based on the funds' relative net assets at
the end of the calendar quarter preceding the date of payment and (ii) one-half
of the expense will be allocated according to the number of such funds. No
officer, director or employee of UBS Global AM or one of its affiliates
presently receives any compensation from the Fund for acting as a board member
or officer. All board members are reimbursed for expenses incurred in attending
meetings. Professor Feldberg, an interested person of the Fund, is compensated
by management.
8
The table below includes certain information relating to the compensation of
the Fund's Independent Directors.
COMPENSATION TABLE(+)
TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE FUND
FROM AND THE
NAME OF PERSON, POSITION THE FUND* FUND COMPLEX**
------------------------ --------- --------------
Richard Q. Armstrong, Director ......................................... $3,626 $164,514
David J. Beaubien, Director ............................................ $2,967 $135,000
Alan S. Bernikow, Director(+++) ........................................ 0 0
Richard R. Burt, Director .............................................. $3,215 $142,500
Meyer Feldberg, Director(++)............................................ $ 746 $172,983
Bernard B. Garil, Director(+++) ........................................ 0 0
Heather R. Higgins, Director(+++) ...................................... 0 0
-------------------
(+) 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 UBS Global AM funds.
(++) Until March 1, 2005, Professor Feldberg was an Independent Director and
was compensated as such by the funds for which UBS Global AM or an
affiliate served as investment advisor, sub-advisor or manager. Effective
March 1, 2005, Professor Feldberg is an "interested person" of the Fund
by virtue of his position as senior advisor with Morgan Stanley. As such,
Professor Feldberg is no longer compensated by the funds for which UBS
Global AM serves as investment advisor, sub-advisor or manager. The
compensation amounts listed in the Compensation Table for Professor
Feldberg represent only those amounts paid by the funds.
(+++) Messrs. Bernikow and Garil and Ms. Higgins were elected to the Board in
February 2006 and were not compensated in 2005 as Directors.
* Represents fees paid to each director during the fiscal year ended March
31, 2006.
** Represents fees paid during the calendar year ended December 31, 2005 to
each board member by: (a) 16 investment companies in the case of Messrs.
Armstrong, Beaubien and Burt; and (b) 29 investment companies in the case
of Professor Feldberg for which UBS Global AM or one of its affiliates
served as investment advisor, sub-advisor or manager. No fund within the
UBS fund complex has a bonus, pension, profit sharing or retirement plan.
9
INFORMATION CONCERNING INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Fund's financial statements for the fiscal year ended March 31, 2006,
were audited by Ernst & Young LLP ("Ernst & Young"), independent registered
public accouting 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 auditors
for the Fund for the fiscal year ending March 31, 2007. Ernst & Young has been
the Fund's independent registered public accounting firm since its inception in
June 1993. 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 fiscal years ended March 31, 2006 and March 31,
2005 were approximately $38,500 and $37,300, respectively.
Fees included in the audit fees category are those associated with the
annual audits of financial statements and services that are normally provided in
connection with statutory and regulatory filings.
AUDIT-RELATED FEES.
The aggregate audit-related fees billed by Ernst & Young for services
rendered to the Fund that are reasonably related to the performance of the
audits of the financial statements, but not reported as audit fees, were
approximately $8,712 and $12,500, respectively, in each of the fiscal years
ended March 31, 2006 and March 31, 2005.
Fees included in the audit-related category are those associated with (1)
the reading and providing of comments on the 2005 and 2004 semiannual financial
statements, (2) review of the consolidated 2004 and 2003 report on the
profitability of the UBS Funds to UBS Global Asset Management (US) Inc. and its
affiliates to assist the board members in their annual advisory/administration
contract reviews and (3) auction preferred shares testing for the Fund's fiscal
years ended 2006 and 2005.
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no
audit-related fees that were approved by the Audit Committee pursuant to the de
minimis exception for the fiscal years ended March 31, 2006 and March 31, 2005
on behalf of (i) the Fund's service providers that relate directly to the
operations and financial reporting of the Fund, or (ii) the Fund itself. There
were no audit-related fees required to be approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated
above.
TAX FEES.
The aggregate tax fees billed by Ernst & Young for services rendered to the
Fund for each of the fiscal years ended March 31, 2006 and March 31, 2005 were
approximately $12,075 and $8,600, respectively.
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.
10
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no tax
fees that were approved by the Audit Committee pursuant to the de minimis
exception for the fiscal years ended March 31, 2006 and March 31, 2005 on behalf
of (i) the Fund's service providers that relate directly to the operations and
financial reporting of the Fund, or (ii) the Fund itself. There were no tax fees
required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X during the fiscal years indicated above.
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.
For the fiscal years ended March 31, 2006 and March 31, 2005, there were no
fees billed by Ernst & Young for other services provided to the Fund. Fees
included in the all other fees category would consist of services related to
internal control reviews, strategy and other consulting, financial information
systems design and implementation, consulting on other information systems, and
other tax services unrelated to the Fund.
With respect to Rule 2-01(c)(7)(i)(C) of Regulation S-X, there were no fees
within this category that were approved by the Audit Committee pursuant to the
de minimis exception for the fiscal years ended March 31, 2006 and March 31,
2005 on behalf of (i) the Fund's service providers that relate directly to the
operations and financial reporting of the Fund, or (ii) the Fund itself. There
were no "all other fees" required to be approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated
above.
The Audit Committee Charter contains the audit committee's pre-approval
policies and procedures. Reproduced below is an excerpt from the Audit
Committee Charter regarding pre-approval policies and procedures:
The Audit Committee shall:
2. Pre-approve (a) all audit and permissible non-audit services(1) to
be provided to the Fund and (b) all permissible non-audit services to
be provided by the Fund's independent auditors to UBS Global [Asset
Management (Americas) Inc. ("UBS Global")] and any
-------------------
(1) The Committee will not approve non-audit services that the Committee
believes may taint the independence of the auditors. Currently, permissible
non-audit services include any professional services (including tax
services) that are not prohibited services as described below, provided to
the Fund by the independent auditors, other than those provided to the Fund
in connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements of
the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services; (viii)
legal services and expert services unrelated to the audit; and (ix) any
other service the Public Company Accounting Oversight Board determines, by
regulation, is impermissible.
11
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).
For the fiscal year ended March 31, 2006, the aggregate fees billed by Ernst
& Young of $82,287 included non-audit services rendered on behalf of the Fund of
$20,787, and non-audit services rendered on behalf of the Fund's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser)
and any entity controlling, controlled by, or under common control with the
investment adviser of $61,500. For the fiscal year ended March 31, 2005, the
aggregate fees billed by Ernst & Young of $96,100 included non-audit services
rendered on behalf of the Fund of $21,100 and non-audit services rendered on
behalf of the Fund's investment adviser (not including any sub-adviser whose
role is primarily portfolio management and is subcontracted with or overseen by
another investment adviser) and any entity controlling, controlled by, or under
common control with the investment adviser of $75,000.
The Audit Committee was not required to consider whether the provision of
non-audit services that were rendered to the Fund's investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser
that provides ongoing services to the Fund that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining Ernst & Young's independence.
-------------------
Pre-approval by the Committee of any permissible non-audit services is
not required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, UBS Global 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.
12
EXECUTIVE OFFICERS
Officers of the Fund are appointed by the Directors and serve at the
pleasure of the board. None of the Fund's officers currently receives any
compensation from the Fund. The executive officers of the Fund are:
PRINCIPAL OCCUPATION(S)
DURING PAST 5 YEARS;
NUMBER OF PORTFOLIOS IN
POSITION(S) HELD LENGTH OF FUND COMPLEX FOR WHICH
NAME, ADDRESS AND AGE WITH FUND TIME SERVED PERSON SERVES AS OFFICER
--------------------- --------- ----------- ------------------------
Joseph Allessie*; 40 Vice President Since 2005 Mr. Allessie is a director and deputy general
and Assistant counsel at UBS Global Asset Management (US) Inc.
Secretary and UBS Global AM (collectively, "UBS Global
AM--Americas region") (since 2005). Prior to
joining UBS Global AM--Americas region, he was
senior vice president and general counsel of
Kenmar Advisory Corp. (from 2004 to 2005).
Prior to that Mr. Allessie was general counsel
and secretary of GAM USA Inc., GAM Investments,
GAM Services, GAM Funds, Inc. and the GAM
Avalon Funds (from 1999 to 2004). Mr. Allessie
is a vice president and assistant secretary of
20 investment companies (consisting of 90
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
W. Douglas Beck*; 39 President Since 2005 Mr. Beck is an executive director and head
of product development and management for UBS
Global AM--Americas region (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
president of 20 investment companies
(consisting of 90 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager, and was vice president
of such investment companies from 2003 to 2005.
13
PRINCIPAL OCCUPATION(S)
DURING PAST 5 YEARS;
NUMBER OF PORTFOLIOS IN
POSITION(S) HELD LENGTH OF FUND COMPLEX FOR WHICH
NAME, ADDRESS AND AGE WITH FUND TIME SERVED PERSON SERVES AS OFFICER
--------------------- --------- ----------- ------------------------
Thomas Disbrow*; 40 Vice President Since 2000 Mr. Disbrow is a director (since 2001), head
and Treasurer (Vice of retail mutual fund operations and co-head
President); of the mutual fund finance department
since 2004 (since 2004) of UBS Global AM--Americas region.
(Treasurer) Mr. Disbrow is a vice president and treasurer
of 16 investment companies (consisting of 35
portfolios) and vice president and assistant
treasurer of four investment companies
(consisting of 55 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager.
Elbridge T. Gerry III*; Vice President Since 1996 Mr. Gerry is a managing director--municipal
49 fixed income of UBS Global AM--Americas
region (since 2001). Mr. Gerry is a vice
president of six investment companies
(consisting of 10 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager.
Mark F. Kemper**; 48 Vice President Since 2004 Mr. Kemper is general counsel of UBS Global
and Secretary AM--Americas region (since 2004). Mr. Kemper
also is a managing director of UBS Global
AM--Americas region (since 2006). He was deputy
general counsel of UBS Global Asset Management
(Americas) Inc. ("UBS Global AM (Americas)")
from July 2001 to July 2004. He has been
secretary of UBS Global AM (Americas) since
1999 and assistant secretary of UBS Global
Asset Management Trust Company since 1993.
Mr. Kemper is secretary of UBS Global AM--
Americas region (since 2004). Mr. Kemper is
vice president and secretary of 20 investment
companies (consisting of 90 portfolios) for
which UBS Global AM--Americas region or one
of its affiliates serves as investment
advisor, sub-advisor or manager.
14
PRINCIPAL OCCUPATION(S)
DURING PAST 5 YEARS;
NUMBER OF PORTFOLIOS IN
POSITION(S) HELD LENGTH OF FUND COMPLEX FOR WHICH
NAME, ADDRESS AND AGE WITH FUND TIME SERVED PERSON SERVES AS OFFICER
--------------------- --------- ----------- ------------------------
Joanne M. Kilkeary*; 38 Vice President Since 2004 Ms. Kilkeary is an associate director (since
and Assistant 2000) and a senior manager (since 2004) of
Treasurer the mutual fund finance department of UBS
Global AM--Americas region. Ms. Kilkeary
is a vice president and assistant treasurer of
16 investment companies (consisting of 35
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Tammie Lee*; 35 Vice President Since 2005 Ms. Lee is a director and associate general
and Assistant counsel of UBS Global AM--Americas
Secretary region (since 2005). Prior to joining
UBS Global AM--Americas region, she was vice
president and counsel at Deutsche Asset
Management/Scudder
Investments from April 2003 to October
2005. Prior to that she was assistant vice
president and counsel at Deutsche Asset
Management/Scudder Investments from
July 2000 to March 2003. Prior to joining
Deutsche Asset Management/Scudder
Investments, she was assistant counsel at First
Investors Corporation from August 1996 to
June 2000. Ms. Lee is a vice president and
assistant secretary of 20 investment
companies (consisting of 90 portfolios) for
which UBS Global AM--Americas region
or one of its affiliates serves as investment
advisor, sub-advisor or manager.
Joseph T. Malone*; 38 Vice President Since 2004 Mr. Malone is a director (since 2001) and
and Assistant (Vice co-head of the mutual fund finance
Treasurer President); department (since 2004) of UBS Global
since 2001 AM--Americas region. From August 2000 through
(Assistant June 2001, he was the controller at AEA
Treasurer) Investors Inc. Mr. Malone is vice president
and assistant treasurer of 16 investment
companies (consisting of 35 portfolios) and
vice president, treasurer and principal
accounting officer of four investment
companies (consisting of 55 portfolios) for
which UBS Global AM--Americas region or one
of its affiliates serves as investment
advisor, sub-advisor or manager.
15
PRINCIPAL OCCUPATION(S)
DURING PAST 5 YEARS;
NUMBER OF PORTFOLIOS IN
POSITION(S) HELD LENGTH OF FUND COMPLEX FOR WHICH
NAME, ADDRESS AND AGE WITH FUND TIME SERVED PERSON SERVES AS OFFICER
--------------------- --------- ----------- ------------------------
Joseph McGill*; 44 Vice President Since 2004 Mr. McGill is a managing director (since 2006)
and Chief and chief compliance officer (since 2003) at
Compliance UBS Global AM--Americas region. Prior to
Officer joining UBS Global AM--Americas region, he was
assistant general counsel at J.P. Morgan
Investment Management (from 1999 to 2003).
Mr. McGill is a vice president and chief
compliance officer of 20 investment companies
(consisting of 90 portfolios) for which UBS
Global AM--Americas region or one of its
affiliates serves as investment advisor,
sub-advisor or manager.
Kevin McIntyre*; 39 Vice President Since 2005 Mr. McIntyre is a director (since 2003 and
portfolio manager (since 2005) of UBS Global
AM--Americas region. He is also Head of
Municipal Trading since 2002. Prior to that
he was a trader and assistant portfolio
manager with UBS Global AM--Americas region.
Mr. McIntyre is a vice president of two
investment companies (consisting of two
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Eric Sanders*; 40 Vice President Since 2005 Mr. Sanders is a director and associate
and Assistant general counsel of UBS Global AM--Americas
Secretary region (since 2005). From 1996 until June
2005, he held various positions at Fred
Alger & Company, Incorporated, the most
recent being assistant vice president and
associate general counsel. Mr. Sanders is a
vice president and assistant secretary of
20 investment companies (consisting of 90
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
16
PRINCIPAL OCCUPATION(S)
DURING PAST 5 YEARS;
NUMBER OF PORTFOLIOS IN
POSITION(S) HELD LENGTH OF FUND COMPLEX FOR WHICH
NAME, ADDRESS AND AGE WITH FUND TIME SERVED PERSON SERVES AS OFFICER
--------------------- --------- ----------- ------------------------
Keith A. Weller*; 44 Vice President Since 1995 Mr. Weller is an executive director and senior
and Assistant associate general counsel of UBS Global
Secretary AM--Americas region (Since 2005). Mr. Weller
is a vice president and assistant secretary
of 20 investment companies (consisting of 90
portfolios) for which UBS Global AM--Americas
region or one of its affiliates serves as
investment advisor, sub-advisor or manager.
-------------------
* This person's business address is 51 West 52nd Street, New York, New York
10019-6114.
** This person's business address is One North Wacker Drive, Chicago,
Illinois 60606.
17
OTHER INFORMATION
BENEFICIAL OWNERSHIP OF SHARES
Management does not know of any person who owns beneficially 5% or more of
the common stock 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 2007 annual meeting of shareholders should send such proposals to the
Secretary of the Fund at UBS Global Asset Management (Americas) Inc., 51 West
52nd Street, New York, New York 10019-6114. In order to be considered at that
meeting, shareholder proposals must be received by the Fund no later than
January 27, 2007 and must satisfy other requirements of the federal securities
laws.
OTHER BUSINESS
Management knows of no business to be presented to the meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Fund.
By order of the board of directors,
MARK F. KEMPER
Vice President and Secretary
May 30, 2006
--------------------------------------------------------------------------------
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
--------------------------------------------------------------------------------
18
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EXHIBIT A
AUDIT COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MAY 12, 2004
(REVISED AS OF FEBRUARY 3, 2006)
ESTABLISHMENT AND PURPOSE
This document serves as the Charter for the Audit Committee (the
"Committee") of the Board of each fund (the "Fund") advised by UBS Global Asset
Management (Americas) Inc. ("UBS Global") listed on Appendix A hereto (each such
Charter being a separate Charter). The primary purposes of the Committee are to
assist Board oversight of (1) the integrity of the Fund's financial statements,
(2) the Fund's compliance with legal and regulatory requirements, (3) the
independent auditors' qualifications and independence and (4) the performance of
the Fund's independent auditors.
In performing its Board oversight assistance function, the Committee will,
among other things (a) oversee the scope of the Fund's audit, the quality and
objectivity of the Fund's financial statements, the Fund's accounting and
financial reporting policies and practices and its internal controls and, as
appropriate, the internal controls of certain service providers; (b) approve,
and recommend to the Board, for ratification, the selection, appointment,
retention or termination of the Fund's independent auditors, as well as
determining the compensation thereof; and (c) pre-approve all audit and
non-audit services provided to the Fund and certain other persons by such
independent auditors.
DUTIES AND RESPONSIBILITIES
AUDIT OVERSIGHT
The Fund's independent auditors are accountable to the Committee.
The Committee shall:
1. Approve, and recommend to the Board for the Board's ratification, the
selection, appointment, retention or termination of the Fund's
independent auditors, or of any other public accounting firm engaged for
the purpose of performing other audit, review or attest services for the
Fund.
2. Pre-approve (a) all audit and permissible non-audit services(1) to be
provided to the Fund and (b) all permissible non-audit services to be
provided by the Fund's independent auditors to UBS
-------------------
(1) The Committee will not approve non-audit services that the Committee
believes may taint the independence of the auditors. Currently, permissible
non-audit services include any professional services (including tax
services) that are not prohibited services as described below, provided to
the Fund by the independent auditors, other than those provided to the Fund
in connection with an audit or a review of the financial statements of the
Fund. Permissible non-audit services may not include: (i) bookkeeping or
other services related to the accounting records or financial statements of
the Fund; (ii) financial information systems design and implementation;
(iii) appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v) internal audit
outsourcing services; (vi) management functions or human resources; (vii)
broker or dealer, investment adviser or investment banking services; (viii)
legal services and expert services unrelated to the audit; and (ix) any
other service the Public Company Accounting Oversight Board determines, by
regulation, is impermissible.
A-1
Global and any Covered Service Providers, if the engagement relates
directly to the operations and financial reporting of the Fund. In
carrying out this responsibility, the Committee shall seek periodically
from UBS Global and from the independent auditors a list of such audit
and permissible non-audit services that can be expected to be rendered
to the Fund, UBS Global or any Covered Service Providers by the Fund's
independent auditors, and an estimate of the fees sought to be paid in
connection with such services. The Committee may delegate its
responsibility to pre-approve any such audit and permissible non-audit
services to a subcommittee consisting of the Chairperson of the
Committee and two other members of the Committee as the Chairperson,
from time to time, may determine and appoint, and such sub-committee
shall report to the Committee, at its next regularly scheduled meeting
after the sub-committee's meeting, its decision(s). From year to year,
the Committee shall report to the Board whether this system of
pre-approval has been effective and efficient or whether this Charter
should be amended to allow for pre-approval pursuant to such policies
and procedures as the Committee shall approve, including the delegation
of some or all of the Committee's pre-approval responsibilities to other
persons (other than UBS Global or the Fund's officers).
3. Discuss with the independent auditors any disclosed relationships or
services that may diminish the objectivity and independence of the
independent auditors; receive periodic reports from the independent
auditors regarding the independent auditors' independence (including
receiving the independent auditors' specific representations as to
independence consistent with current statements of the Independence
Standards Board); and discuss such reports with the independent
auditors, and, if so determined by the Committee, recommend that the
Board take appropriate action to ensure the independence of the
independent auditors.
4. Review, in consultation with the independent auditors, the scope of the
Fund's proposed audit each year, including the audit procedures to be
utilized, and certain other matters in connection with the Fund's
financial statements.
5. Inquire of UBS Global and the independent auditors as to the Fund's
qualification under Subchapter M of the Internal Revenue Code and
amounts distributed and reported to shareholders for Federal tax
purposes.
6. [Closed-end Funds only] Review and discuss the Fund's audited annual
financial statements and unaudited semiannual reports with UBS Global
and, in the case of the audited financials, the independent auditors,
including the Fund's disclosure of management's discussion of Fund
performance.
-------------------
Pre-approval by the Committee of any permissible non-audit services is not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, UBS Global and any service
providers controlling, controlled by or under common control with UBS
Global that provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount of revenues
paid to the independent auditors (during the fiscal year in which the
permissible non-audit services are provided) by (a) the Fund, (b) its
investment adviser and (c) any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services
to the Fund during the fiscal year in which the services are provided that
would have to be approved by the Committee; (ii) the permissible non-audit
services were not recognized by the Fund at the time of the engagement to
be non-audit services; and (iii) such services are promptly brought to the
attention of the Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
A-2
7. Review with the independent auditors any problems or difficulties the
auditors may have encountered during the conduct of the audit, relating
to the conduct of the audit, including any matters required to be
discussed pursuant to Statement of Auditing Standards No. 61, or any
subsequent Statement, and management's response.
8. Ensure that the independent auditors submit on a periodic basis to the
Committee a formal written statement delineating all relationships of
the auditors consistent with Independence Standards Board Standard No.
1, or any subsequent Statement.
9. Review, in consultation, as appropriate, with the independent auditors
and Fund service providers, matters relating to internal controls and
disclosure controls and procedures at the Fund and at the Fund's service
providers.
10. Request, receive and/or review from the independent auditors such other
materials as deemed necessary or advisable by the Committee in the
exercise of its duties under this charter; such materials may include,
without limitation, any other material written communications bearing on
the Fund's financial statements, or internal or disclosure controls,
between the independent auditors and the Fund, UBS Global, the Fund's
sub-adviser(s), if any, or other Fund service providers, such as any
management letter or schedule of unadjusted differences, and any comment
or "deficiency" letter received from a regulatory or selfregulatory
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.
A-3
17. [Closed-end Funds only] Review hiring policies of UBS Global and the
Fund, if any, for employees and former employees of the Fund's
independent auditors.
18. [Closed-end Funds only] Prepare an annual performance evaluation of the
Committee for the Board's review.
19. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
In performing its duties, the Committee shall be provided by UBS Global, the
Fund's sub-advisor(s), if any, or the Fund, as applicable, with such
information, data and services as the Committee shall request to discharge its
duties and responsibilities, shall consult as it deems appropriate with the
members of the Board, officers and employees of the Fund, UBS Global, the Fund's
sub-advisor(s), if any, the Fund's counsel and the Fund's other service
providers and, as it determines necessary to carry out its duties and at the
Fund's expense, may engage outside advisors and consultants. In carrying out its
functions, the Committee shall meet separately, periodically, with management
and with the Fund's independent auditors. The Fund shall provide appropriate
funding for the Committee to carry out its duties and responsibilities.
COMPOSITION
The Committee shall have a minimum of three members and shall be composed of
a number of Board members, each of whom has been determined not to be an
"interested person," as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("1940 Act"), of the Fund (the
"Independent Board Members"), as the Board shall determine from time to time.
Each member of the Committee must also meet the independence and experience
requirements as set forth in Sections 303A.07(a) and 303.01(b)(2)(a) of the New
York Stock Exchange's Listed Company Manual, in each case as applicable to
closed-end Funds. The Committee shall elect a chairperson, who shall preside
over Committee meetings (the "Chairperson"). The Chairperson shall serve for a
term of three years, which term may be renewed from time to time.(2)
In addition, the Board shall use its best efforts to ensure that at least
one member of the Committee is an "audit committee financial expert," as
determined under the rules of the Securities and Exchange Commission. Appendix B
sets forth the audit committee financial expert requirements as of the date of
this amended and restated Charter. In the event that the Committee does not have
at least one such audit committee financial expert, the nominating committee of
the Board shall endeavor to identify and recommend to the Board a candidate that
meets such requirements or, in the event the Board does not, at such time, have
a nominating committee, the Board shall designate the Independent Board Members
as a committee to identify and recommend to the Board a candidate that meets
such requirements.
For those Funds listed on the NYSE, no member of the Committee may serve on
the audit committees of more than three public companies, including all Funds
managed by UBS Global (deemed for these purposes to be a single public company),
unless the Board determines that such simultaneous service would not impair the
ability of such member to serve on the Committee effectively.
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
-------------------
(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
established for each meeting. Additional meetings shall be called as
circumstances require. The Committee may request any officer or employee of the
Fund, the Fund's counsel, UBS Global, the Fund's sub-adviser(s), if any, the
Fund's independent auditors or other interested persons to attend a meeting of
the Committee or to meet with any members of, or consultants to, the Committee.
The Committee will meet with the Fund's independent auditors at least once a
year outside the presence of the Fund's officers and other parties. The
Committee may, in its discretion, also meet outside the presence of the Fund's
officers and other parties at other times. Meetings of the Committee may be
held in person, by telephone or by other appropriate means.
One-third of the Committee's members shall constitute a quorum. At any
meeting of the Committee, the decision of a majority of the members present and
voting shall be determinative as to any matter submitted to a vote.
REPORTING
The Chairperson shall report to the Board on the result of its deliberations
and make such recommendations as deemed appropriate.
LIMITS ON ROLE OF COMMITTEE
While the Committee has the duties and responsibilities set forth in this
Charter, the Committee is not responsible for planning or conducting the Fund's
audit or for determining whether the Fund's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. In fulfilling their responsibilities hereunder, it is recognized
that the members of the Committee are not full-time employees of the Fund, it is
not the duty or the responsibility of the Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards, and each member of the Committee shall be
entitled to rely on (a) the integrity of those persons within and outside the
Fund from which it receives information; (b) the accuracy of the financial and
other information provided to the Committee absent actual knowledge to the
contrary (which shall be promptly reported to the Board); and (c) statements
made by the officers and employees of the Fund, UBS Global or other third
parties as to any information technology, internal audit and other non-audit
services provided by the independent auditors to the Fund. The review of the
Fund's financial statements by the Committee is not of the same quality as the
audit performed by the independent auditors.
In carrying out its responsibilities, the Committee's policies and
procedures shall be adapted, as appropriate, in order to best react to a
changing environment.
AMENDMENTS
This Charter may be amended by a vote of a majority of the Board members.
A-5
APPENDIX A
UBS Managed Municipal Trust
UBS Series Trust
UBS Investment Trust
UBS Index Trust
UBS Municipal Money Market Series
UBS Money Series
UBS PACE Select Advisors Trust
UBS Cashfund Inc.
UBS RMA Money Fund Inc.
UBS RMA Tax-Free Fund Inc.
UBS Master Series, Inc.
Strategic Global Income Fund, Inc.*
Global High Income 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 (Americas) Inc. ("UBS Global AM") listed
on Appendix A to the Fund's Audit Committee Charter ("Charter").
These policies shall constitute an amendment to, and a part of, the Charter
and shall be designated as Appendix C to the Charter. These policies constitute
the procedures to be established pursuant to Item 10 of "Duties and
Responsibilities--Audit Oversight" in the Charter; however, the Board has
decided to extend the benefit of these policies to all Funds, not just those
exchange-listed Funds that are required to establish such procedures pursuant to
Section 301 of the Sarbanes-Oxley Act and Rule 303A of the New York Stock
Exchange Inc. Listed Company Manual.
These policies establish (1) procedures for the receipt, retention and
treatment of complaints received by the Fund (including Fund officers) regarding
accounting, internal accounting controls or auditing matters or other matters
relating to the operations of the Fund, (2) procedures for the confidential,
anonymous submission of concerns regarding questionable accounting or auditing
matters by employees of the investment adviser (and subadvisor, 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 concerns are reasonably
believed to relate to accounting, internal accounting controls or auditing
matters or other matters relating to the operations of the Fund.
A-8
The Committee directs UBS Global AM to communicate these policies to its
primary contact(s) at each other Service Provider. Each Service Provider,
including UBS Global AM, shall be directed to make these methods by which
complaints or concerns can be communicated known to its employees who are
primarily involved in accounting, internal accounting controls or auditing
matters or other matters relating to the operations of the Fund that could
reasonably be expected to impact the Fund. If any Service Provider refuses such
request, UBS Global AM shall notify the Committee of the Service Provider's
reasons for non-cooperation, and the Committee shall recommend to the Board such
actions as it believes appropriate.
NON RETALIATION
The Fund prohibits any form of retaliation being taken against any board
member or officer, and shall request that each Service Provider not take any
form of retaliation against its employees, as a result of such person lawfully
engaging in any of the following "Covered Activities":
1. reporting concerns or complaints regarding accounting, internal
accounting controls or auditing matters or other matters relating to the
operations of the Fund; or
2. assisting in an internal or external investigation conducted by the Fund
or a Service Provider regarding such concerns or complaints; or
3. filing, testifying, participating or otherwise assisting in a criminal or
regulatory proceeding relating to the Fund or a Service Provider.
To the extent possible, the Board shall seek assurances from Service
Providers that they shall not discharge, demote, suspend, threaten, harass, or
in any other manner discriminate against an employee in the terms and conditions
of his or her employment because such employee has made a report of a concern or
complaint or engaged in any other Covered Activities under these policies. In
addition, the Board shall seek assurances from Service Providers that they shall
not knowingly, with the intent to retaliate, take any action harmful to any
employee, including interference with the lawful employment or livelihood of any
person, for providing to a law enforcement officer any truthful information
relating to the commission or possible commission of any crime.
CONFIDENTIALITY
Reasonable efforts will be made to keep a reporting person's identity
confidential. In certain circumstances, however, it may be possible that in the
course of the investigation, facts must be disclosed that would require the
identity of the reporting person to be disclosed. Accordingly, in such
circumstances, it is not possible to give a blanket guarantee of
confidentiality. However, the Committee shall take all reasonable steps (and ask
its Service Providers to make reasonable efforts) to attempt to safeguard the
submission of information on a confidential basis.
A Fund Person or Service Provider employee may submit information
anonymously to the Committee through a letter addressed directly to the Chairman
of the Committee (or in the event of a potential conflict involving such person,
to any other member of the Committee at the Chairman's (or other Committee
member's) address as specified in the Fund's Annual Report to Shareholders. The
Committee recognizes that certain Service Providers have established their own
procedures for the confidential, anonymous receipt of concerns or complaints and
requests that Service Providers promptly report to the Committee any concerns or
complaints relating to the matters discussed herein.
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
A-9
regarding potential legal/regulatory violations and questionable accounting or
auditing matters or other matters relating to the operations of a Fund or other
ethical dilemmas. The hotline is available for leaving a voicemail message
24-hours a day, seven days a week. In order to protect confidentiality, only the
UBS Global AM General Counsel and Chief Compliance Officer will be authorized to
retrieve messages. Please utilize the hotline and the mailbox only for this
stated purpose. The ethics hotline number is 866-237 1851. Written submissions
should be addressed to: UBS Global Asset Management (US) Inc., Attn: ETHICS, 51
West 52nd Street, New York, NY 10019-6114.
BREACH OF THIS POLICY
Retaliatory conduct which amounts to a breach of this policy could result in
criminal or regulatory sanctions or civil liability or have an adverse effect on
the Fund's or a Service Provider's reputation. As a result, a breach of this
policy may constitute gross misconduct and may result in disciplinary action up
to and including dismissal from service as a board member or officer, or with
respect to a Service Provider, the Board's decision to terminate any Fund
contracts or other relationships with the Service Provider.
RETENTION AND TREATMENT OF INFORMATION REGARDING CONCERNS AND COMPLAINTS
The Committee minutes shall reflect the receipt, retention and treatment of
information received pursuant to this policy. The Committee shall have the power
to obtain the resources it deems necessary and appropriate to investigate any
information regarding such concerns or complaints, including obtaining the
assistance of special counsel, auditors or other advisors or consultants to
assist it in carrying out its responsibilities.
(May 2004, as revised February 2006)
A-10
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EXHIBIT B
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
AMENDED AND RESTATED AS OF NOVEMBER 10, 2004
(REVISED AS OF FEBRUARY 3, 2006)
ESTABLISHMENT AND PURPOSE
This document serves as the Charter for the Nominating and Corporate
Governance Committee (the "Committee") of the Board of each fund (the "Fund")
advised by UBS Global Asset Management (Americas) Inc. ("UBS Global") listed on
Appendix A hereto (each such Charter being a separate Charter). The primary
purposes of the Committee are to (a) identify individuals qualified to serve as
members of the Board of Directors/Trustees (the "Board") of each Fund; (b) make
recommendations to the Board on the composition of the Board; (c) recommend
committee assignments and responsibilities to the Board; (d) make
recommendations to the Board regarding corporate governance matters and
responsibilities; and (e) periodically assess the functioning of the Board and
its committees (including the Committee).
COMPOSITION
1. The Committee shall consist of three or more Board members who are not
"interested persons" of the Fund, as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended ("1940
Act"), of the Fund (the "Independent Board Members"). Each member of
the Committee must also meet the independence and experience requirements
applicable to closed-end funds as they may be adopted and modified from
time to time by the New York Stock Exchange (the "NYSE"). Each Committee
member shall serve until a successor to such member is duly elected or
qualified or until such member's resignation or removal from the Board or
the Committee.
2. The Committee shall elect a chairperson (the "Chairperson") of the
Committee, who shall preside over Committee meetings.
3. The compensation of the Chairperson and the Committee members shall be as
determined by the Board.
NOMINATION AND APPOINTMENT POLICY
1. The Committee believes that it is in the best interests of the Fund and
its shareholders to obtain highly-qualified candidates to serve as
members of the Board.
2. In nominating candidates, the Committee believes that no specific
qualifications or disqualifications are controlling or paramount, or that
specific qualities or skills are necessary for each candidate to possess.
The Committee shall take into consideration such factors as it deems
appropriate. These factors may include:
o whether or not the person is an "interested person" as defined in the
1940 Act, meets the independence and experience requirements of the
NYSE cited above and is otherwise qualified under applicable laws and
regulations to serve as a member of the Board;
o whether or not the person has any relationships that might impair his
or her independence, such as any business, financial or family
relationships with Fund management, the investment advisor and/or
sub-advisors of the Fund, Fund service providers or their affiliates;
B-1
o whether or not the person is willing to serve, and willing and able to
commit the time necessary for the performance of the duties of a Board
member;
o the person's judgment, skill, diversity and experience with investment
companies and other organizations of comparable purpose, complexity
and size and subject to similar legal restrictions and oversight,
o the interplay of the candidate's experience with the experience of
other Board members; and
o the extent to which the candidate would be a desirable addition to the
Board and any committees thereof.
3. While the Committee is solely responsible for the selection and
recommendation to the Board of Board candidates, the Committee will
consider nominees recommended by Fund shareholders if a vacancy occurs
among those Board members who are Independent Board Members. Such
recommendations shall be directed to the Secretary of the Fund at such
address as is set forth in the Fund's disclosure documents. The
shareholder's letter should state the nominee's name and should include
the nominee's resume or curriculum vitae, and must be accompanied by a
written consent of the individual to stand for election if nominated for
the Board and to serve if elected by shareholders. The Committee may also
seek such additional information about the nominee as it considers
appropriate, including information relating to such nominee that is
required to be disclosed in solicitations or proxies for the election of
Board members.
4. The Committee may from time to time establish specific requirements
and/or additional factors to be considered for Board candidates as it
deems necessary or appropriate.
DUTIES AND RESPONSIBILITIES
1. The Committee shall identify individuals believed to be qualified to
become Board members and recommend to the Board the nominees to either
(i) be elected by the Board or (ii) stand for election as Board members
at the annual or special meeting of shareholders, as applicable.
2. The Committee shall be responsible for reviewing with the Board the
requisite skills and criteria for new Board members as well as the
composition of the Board as a whole.
3. The Committee shall review, as it deems necessary, and make
recommendations with regard to the tenure of the Board members,
including, as it deems necessary, any term limits and mandatory
retirement age.
4. The Committee shall review, as it deems necessary, and make
recommendations to the Board with regard to the compensation of Board
and committee chairpersons.
5. The Committee shall have the authority to retain and terminate any
search firm to be used to identify Board nominees, subject to the Board's
sole authority to approve the search firm's fees and other retention
terms.
6. The Committee shall be responsible for overseeing an annual evaluation of
the Board and its committees to determine whether the Board and its
committees are functioning effectively. The Committee shall determine
the nature of the evaluation, supervise the conduct of the evaluation
and prepare a summary of the performance of the Board and its committees,
to be discussed with the Board.
B-2
7. The Committee shall have any other duties or responsibilities expressly
delegated to the Committee by the Board from time to time relating to (a)
the nomination of the Board or any committee members, (b) corporate
governance matters and (c) Board and committee evaluation matters.
SUBCOMMITTEES
1. The Committee shall have the authority to delegate all or a portion of
its duties and responsibilities to a subcommittee of the Committee.
MEETINGS
1. The Committee shall meet at such times as it deems necessary or
appropriate to carry out its duties. Meetings of the Committee may be
held in person, by telephone or by other appropriate means. The
Committee may also take action by unanimous written consent.
2. One-half of the Committee's members shall constitute a quorum, if at
least two members are present. At any meeting of the Committee, the
decision of a majority of the members present and voting shall be
determinative as to any matter submitted to a vote.
3. The Committee shall keep written minutes of its meetings, which minutes
shall be maintained within the books and records of the Fund, and the
Committee shall report to the Board on its meetings.
4. The Committee shall, from time to time as it deems appropriate, review
and reassess the adequacy of this Charter and recommend any proposed
changes to the Board for approval.
5. The Committee shall have the resources and authority to make reasonable
expenditures, including expenditures to retain any experts and counsel
related to the aforementioned duties and tasks that will be reimbursed by
the Fund.
REPORTING
1. The Chairperson shall report to the Board on the result of the
Committee's deliberations and make such recommendations as deemed
appropriate.
AMENDMENTS
1. This Charter may be amended by a vote of a majority of the Board members.
B-3
SCHEDULE A
UBS Managed Municipal Trust
UBS Series Trust
UBS Investment Trust
UBS Index Trust
UBS Municipal Money Market Series
UBS Money Series
UBS PACE Select Advisors Trust
UBS Cashfund Inc.
UBS RMA Money Fund Inc.
UBS RMA Tax-Free Fund Inc.
UBS Master Series, Inc.
Strategic Global Income Fund, Inc.
Global High Income Dollar Fund Inc.
Investment Grade Municipal Income Fund Inc.
Insured Municipal Income Fund Inc.
Managed High Yield Plus Fund Inc.
B-4
----------------------
INSURED
MUNICIPAL
INCOME FUND INC.
======================
----------------------------
PROXY INSURED
MUNICIPAL
STATEMENT INCOME FUND INC.
============================
-------------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
JULY 20, 2006
AND
PROXY STATEMENT
===================
+
INSURED MUNICIPAL INCOME FUND INC.
000000000.000 ext
000000000.000 ext
000004 000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 LEAST ADDRESS LINE 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6
C 1234567890 J N T
[ ] Mark this box with an X if you have made
changes to your name or address details above.
================================================================================
ANNUAL MEETING PROXY CARD
================================================================================
The Board of Directors recommends a vote "FOR" the listed nominees.
[A] ELECTION OF DIRECTORS
1. To elect as directors
NOMINEES:
FOR WITHHOLD
01 - Richard Q. Armstrong [ ] [ ]
02 - David J. Beaubien [ ] [ ]
03 - Alan S. Bernikow [ ] [ ]
04 - Bernard B. Garil [ ] [ ]
05 - Heather R. Higgins [ ] [ ]
[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
This proxy will not be voted unless it is dated and signed exactly as
instructed below:
If shares are held by an individual, sign your name exactly as it appears on
this card. If shares are held jointly, either party may sign, but the name of
the party signing should 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 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
-------------------------------------------------- -------------------------------------------------- --------------------------
[ ][ ]/[ ][ ]/[ ][ ][ ][ ]
-------------------------------------------------- -------------------------------------------------- --------------------------
[ ] 0093201 1UPX COY +
================================================================================
COMMON PROXY - INSURED MUNICIPAL INCOME FUND INC.
================================================================================
ANNUAL MEETING OF SHAREHOLDERS - JULY 20, 2006
The undersigned hereby appoints as proxies Keith A. Weller and Cristina
Paradiso 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 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 INSURED 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
+
INSURED MUNICIPAL INCOME FUND INC.
000000000.000 ext
000000000.000 ext
000004 000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 LEAST ADDRESS LINE 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4
ADD 5
ADD 6
C 1234567890 J N T
[ ] Mark this box with an X if you have made
changes to your name or address details above.
================================================================================
ANNUAL MEETING PROXY CARD
================================================================================
The Board of Directors recommends a vote "FOR" the listed nominees.
[A] ELECTION OF DIRECTORS
1. To elect as directors
NOMINEES:
FOR WITHHOLD
01 - Richard Q. Armstrong [ ] [ ]
02 - David J. Beaubien [ ] [ ]
03 - Alan S. Bernikow [ ] [ ]
04 - Richard R. Burt [ ] [ ]
05 - Meyer Feldberg [ ] [ ]
06 - Bernard B. Garil [ ] [ ]
07 - Heather R. Higgins [ ] [ ]
[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR
YOUR INSTRUCTIONS TO BE EXECUTED.
This proxy will not be voted unless it is dated and signed exactly as
instructed below:
If shares are held by an individual, sign your name exactly as it appears on
this card. If shares are held jointly, either party may sign, but the name of
the party signing should 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 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
-------------------------------------------------- -------------------------------------------------- --------------------------
[ ][ ]/[ ][ ]/[ ][ ][ ][ ]
-------------------------------------------------- -------------------------------------------------- --------------------------
[ ] 0093202 1UPX COY +
================================================================================
APS PROXY - INSURED MUNICIPAL INCOME FUND INC.
================================================================================
ANNUAL MEETING OF SHAREHOLDERS - JULY 20, 2006
The undersigned hereby appoints as proxies Keith A. Weller and Cristina
Paradiso 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 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 INSURED
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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE