SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule
14a-12
Insured Municipal Income Fund Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 17, 2003
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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 17, 2003 at 10:00 a.m., Eastern time, at 51
West 52nd Street, 16th Floor, New York, New York 10019-6114 for the following
purposes:
MATTERS TO BE VOTED UPON BY ALL SHAREHOLDERS:
(1) To elect seven (7) directors to serve until the annual meeting
of shareholders in 2004, 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 2004, 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 16, 2003. If you attend the
meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
By order of the board of directors,
AMY R. DOBERMAN
SECRETARY
May 30, 2003
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 17, 2003
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 17, 2003, at 10:00 a.m., Eastern time, at 51 West
52nd Street, 16th Floor, 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, 2003.
A majority of the shares outstanding on May 16, 2003, represented in person
or by proxy, must be present for the transaction of business at the meeting. In
the event that a quorum is not present at the annual meeting (including a quorum
of the Fund's auction preferred shares ("APS") with respect to the election of
the two directors to be elected by the APS), or if 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 nine 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 seven 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 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 16, 2003, the Fund had outstanding 20,628,363
shares of common stock and 3,000 shares of the APS, representing Series A,
Series B, Series C and Series D 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 (US) Inc. ("UBS Global AM") or UBS PaineWebber Inc. ("UBS
PaineWebber(sm)*"), 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, Switzerland. UBS AG operates in many areas of the financial services
industry. The principal business offices of UBS Global AM are located at 51 West
52nd Street, New York, New York 10019-6114. The principal business address of
UBS AG is Bahnhofstrasse 45, Zurich, Switzerland.
The Fund's annual report containing financial statements for the fiscal
year ended March 31, 2003 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 nine 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. Margo N. Alexander and Meyer
Feldberg have been nominated as the directors that are to be elected solely by
holders of the APS. The other seven 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, Richard R. Burt, Frederic V. Malek, Carl W.
Schafer, Brian M. Storms and William D. White have been nominated as the
directors that are to be elected by all common stock and APS holders. Each of
the nominees except for Mr. Storms was last elected director at the Fund's July
2002 Annual Meeting of Shareholders. Mr. Storms was appointed a director by the
current board effective June 30, 2003, and is being nominated for election by
shareholders at the July 2003 Annual Meeting. Mr. Storms had previously served
as a director of the Fund from 1999 to 2001. 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 nine nominees; and, if you are
a holder of the common stock, your shares of common stock will be voted FOR the
seven 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 of persons than the number of nominees named. None of the
current directors and executive officers (21 persons) beneficially owned any
shares of the Fund's common stock or APS on April 30, 2003.
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* UBS PaineWebber is a service mark of UBS AG.
2
Listed in the table below, for each nominee, is a brief description of the
nominees experience as a director of the Fund and as a director or trustee of
other funds, as well as other recent professional experience.
POSITION(S) LENGTH NUMBER OF PORTFOLIOS IN OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE HELD BY NOMINEE
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INTERESTED DIRECTORS:
Margo N. Alexander*+; 56 Director Since Mrs. Alexander is retired. Mrs. Alexander is a director None
1995 She was an executive vice or trustee of 19 investment
president of UBS PaineWebber companies (consisting of 40
(March 1984 to December portfolios) for which UBS
2002). She was chief Global AM or one of its
executive officer of UBS affiliates serves as
Global AM from January investment advisor, sub-advisor
1995 to October 2000, a or manager.
director (from January 1995
to September 2001) and
chairman (from March
1999 to September 2001).
Brian M. Storms*+; 48 Director and (Term Mr. Storms is chief executive Mr. Storms is president and None
Chairman of commences officer (since July 2002), trustee of UBS Supplementary
the Board of June 30, director and president of UBS Trust and of four investment
Directors 2003) Global AM (since March companies (consisting of 43
(effective 1999). He is also chief portfolios) and trustee and
June 30, 2003) executive officer (since July chairman of one investment
2002), a member of the board company (consisting of two
of directors and president of portfolios) for which UBS
UBS Global Asset Management Global AM or one of its affiliates
(Americas) Inc. ("UBS serves as investment advisor,
Global AM (Americas)") sub-advisor or manager.
and UBS Global Asset Mr. Storms was president of 19
Management (New York) Inc. investment companies (consisting
("UBS Global AM (New of 40 portfolios) for which UBS
York)")(since October 2001). Global AM or one of its affiliates
Mr. Storms was chief executive serves as investment adviser,
officer of UBS Global AM subadviser or manager until
from October 2000 to May 8, 2003; he has been
September 2001 and chief appointed a director or trustee
operating officer of UBS of those investment companies
Global AM (Americas) effective June 30, 2003.
and UBS Global AM
(New York) from
September 2001 to July 2002.
He was a director or trustee
of several investment
companies in the UBS Family
of Funds (1999 to 2001). He
was president of Prudential
Investments (1996 to 1999).
Prior to joining Prudential
Investments he was a
managing director at Fidelity
Investments.
3
POSITION(S) LENGTH NUMBER OF PORTFOLIOS IN OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE HELD BY NOMINEE
---------------------- ---------- ------- ----------------------- ------------------------ ---------------
INDEPENDENT DIRECTORS:
Richard Q. Armstrong; 67 Director Since Mr. Armstrong is chairman Mr. Armstrong is a director Mr. Armstrong is
R.Q.A. Enterprises 1995 and principal of R.Q.A. or trustee of 19 investment also a director of
One Old Church Road Enterprises (management companies (consisting of A1Fresh Beverages
Unit #6 consulting firm) (since 40 portfolios) for which Canada, Inc. (a
Greenwich, CT 06830 April 1991 and principal UBS Global AM or one Canadian Beverage
occupation since March of its affiliates serves as subsidiary of
1995). Mr. Armstrong was investment advisor, sub- A1Fresh Foods Inc.)
chairman of the board, chief advisor or manager. (since October
executive officer and 2000).
co-owner of Adirondack
Beverages (producer and
distributor of soft drinks and
sparkling/still waters) (from
October 1993 to March 1995).
He was a partner of The New
England Consulting Group
(management consulting firm)
(from December 1992 to
September 1993). He was
managing director of LVMH
U.S. Corporation (U.S.
subsidiary of the French
luxury goods conglomerate,
Louis Vuitton Moet Hennessey
Corporation) (from 1987 to
1991) and chairman of its
wine and spirits subsidiary,
Schieffelin & Somerset
Company (from 1987 to 1991).
David J. Beaubien; 68 Director Since Mr. Beaubien is chairman Mr. Beaubien is a director Mr. Beaubien is also
101 Industrial Road 2001 of Yankee Environmental or trustee of 19 investment a director of IEC
Turners Falls, MA 01376 Systems, Inc., a companies (consisting of Electronics, Inc., a
manufacturer of 40 portfolios) for which manufacturer of
meteorological measuring UBS Global AM or one electronic assemblies
systems. Prior to January of its affiliates serves as
1991, he was senior vice investment advisor, sub-
president of EG&G, Inc., a advisor or manager.
company which makes and
provides a variety of
scientific and technically
oriented products and
services. From 1985 to
January 1995, Mr. Beaubien
served as a director or trustee
on the boards of the Kidder,
Peabody & Co. Incorporated
mutual funds.
4
POSITION(S) LENGTH NUMBER OF PORTFOLIOS IN OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE HELD BY NOMINEE
---------------------- ---------- ------- ----------------------- ------------------------ ---------------
Richard R. Burt; 56 Director Since Mr. Burt is chairman of Mr. Burt is a director or Mr. Burt is also a
Pennsylvania Ave., N.W. 1995 Diligence LLC trustee of 19 investment director of Hollinger
Washington, D.C. 20004 (international information companies (consisting of International Inc.
and security firm) and IEP 40 portfolios) for which (publishing), HCL
Advisors (international UBS Global AM or one Technologies, Ltd.,
investments and consulting of its affiliates serves as The Central European
firm). He was the chief investment advisor, sub- Fund, Inc. and The
negotiator in the Strategic advisor or manager. Germany Fund, Inc.,
Arms Reduction Talks with IGT, Inc. (provides
the former Soviet Union technology to gaming
(from 1989 to 1991) and the and wagering
U.S. Ambassador to the industry) and
Federal Republic of Germany chairman of Weirton
(from 1985 to 1989). From Steel Corp. (makes
1991 to 1994, he served as a and finishes steel
partner of McKinsey & products). He is also
Company (management a director or trustee
consulting firm). of funds in the
Scudder Mutual
Funds Family
(consisting of 47
portfolios).
Meyer Feldberg; 61 Director Since Mr. Feldberg is Dean and Dean Feldberg is a director Dean Feldberg is
Columbia University 1993 Professor of Management or trustee of 33 investment also a director of
Uris Hall of the Graduate School of companies (consisting of Primedia Inc.
York, New York 10027 Business, Columbia 54 portfolios) for which (publishing),
University. Prior to 1989, UBS Global AM or one Federated
he was president of the of its affiliates serves as Department Stores,
Illinois Institute of investment advisor, sub- Inc. (operator of
Technology. advisor or manager. department stores),
Revlon, Inc.
(cosmetics), Select
Medical Inc.
(healthcare services)
and SAPPI, Ltd.
(producer of paper).
5
POSITION(S) LENGTH NUMBER OF PORTFOLIOS IN OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE HELD BY NOMINEE
---------------------- ---------- ------- ----------------------- ------------------------ ---------------
Frederic V. Malek; 66 Director Since Mr. Malek is chairman of Mr. Malek is a director or Mr. Malek is also a
1455 Pennsylvania Avenue, 1996 Thayer Capital Partners trustee of 19 investment director of Aegis
N.W. Suite 350 merchant bank) and companies (consisting of Communications,
Washington, D.C. 20004 chairman of Thayer Hotel 40 portfolios) for which Inc. (tele-services),
Investors III, Thayer Hotel UBS Global AM or one American
Investors II and Lodging of its affiliates serves as Management
Opportunities Fund (hotel investment advisor, sub- Systems, Inc.
investment partnerships). advisor or manager. (management
From January 1992 to consulting and
November 1992, he was computer related
campaign manager of Bush- services), Automatic
Quayle 92. From 1990 to Data Processing, Inc.
1992, he was vice chairman (computing services),
and, from 1989 to 1990, he CB Richard Ellis,
was president of Northwest Inc. (real estate
Airlines Inc. and NWA Inc. services), Federal
(holding company of National Mortgage
Northwest Airlines Inc.). Association, FPL
Prior to 1989, he was Group, Inc. (electric
employed by the Marriott services), Manor
Corporation (hotels, Care, Inc. (health
restaurants, airline catering care), and Northwest
and contract feeding), Airlines Inc.
where he most recently was
an executive vice president
and president of Marriott
Hotels and Resorts.
Carl W. Schafer; 67 Director Since Mr. Schafer is president of Mr. Schafer is a director or Mr. Schafer is also a
66 Witherspoon Street 1996 the Atlantic Foundation trustee of 19 investment director of Labor
#1100 (charitable foundation). companies (consisting of Ready, Inc.
Princeton, NJ 08542 Prior to January 1993, he 40 portfolios) for which (temporary
was chairman of the UBS Global AM or one employment),
Investment Advisory of its affiliates serves as Roadway Corp.
Committee of the Howard investment advisor, sub- (trucking), Guardian
Hughes Medical Institute. advisor or manager. Life Insurance
Company Mutual
Funds (consisting of
19 portfolios), the
Harding, Loevner
Funds (consisting of
four portfolios),
E.I.I. Realty
Securities Trust
(investment company)
and Frontier Oil
Corporation.
6
POSITION(S) LENGTH NUMBER OF PORTFOLIOS IN OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE FUND SERVED DURING PAST 5 YEARS BY NOMINEE HELD BY NOMINEE
---------------------- ---------- ------- ----------------------- ------------------------ ---------------
William D. White; 69 Director Since Mr. White is retired. From Mr. White is a director or None
P.O. Box 199 2001 February 1989 through trustee of 19 investment
Upper Black Eddy, PA 18972 March 1994, he was companies (consisting of
president of the National 40 portfolios) for which
League of Professional UBS Global AM or one
Baseball Clubs. Prior to of its affiliates serves as
1989, he was a television investment advisor, sub-
sportscaster for WPIX-TV, advisor or manager.
New York. Mr. White
served on the Board of
Directors of Centel from
1989 to 1993 and until
recently on the board of
directors of Jefferson
Banks Incorporated,
Philadelphia, PA.
* This persons business address is 51 West 52nd Street, New York, New York
10019-6114.
+ Mrs. Alexander and Mr. Storms are interested persons of the Fund as defined
in the 1940 Act by virtue of their positions with UBS Global AM and/or any
of its affiliates.
INFORMATION ABOUT NOMINEE OWNERSHIP OF FUND SHARES
DOLLAR RANGE AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
OF EQUITY REGISTERED INVESTMENT COMPANIES OVERSEEN BY NOMINEE
SECURITIES FOR WHICH UBS GLOBAL AM OR AN AFFILIATE SERVES AS
NOMINEE IN FUND+ INVESTMENT ADVISOR, SUB-ADVISOR OR MANAGER+
------- ------------ ---------------------------------------------------
INTERESTED DIRECTORS:
Margo N. Alexander ............................... None Over $100,000
Brian M. Storms .................................. None $1-$10,000
INDEPENDENT DIRECTORS:
Richard Q. Armstrong ............................. None Over $100,000
David J. Beaubien ................................ None Over $100,000
Richard R. Burt .................................. None $10,001-$50,000
Meyer Feldberg ................................... None Over $100,000
Frederic V. Malek ................................ None $50,001-$100,000
Carl W. Schafer .................................. None Over $100,000
William D. White ................................. None $10,001-$50,000
+ Information regarding ownership of shares of the Fund is as of April 30,
2003; 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, 2002.
7
As of December 31, 2002, the Independent Directors did not own any
securities issued by UBS Global AM or any company controlling, controlled by or
under common control with UBS Global AM.
The board of directors of the Fund met five times during the fiscal year
ended March 31, 2003. Each director attended 75% or more of the board meetings
during the last fiscal year. The board has established an Audit and Contract
Review Committee that acts pursuant to a written charter and is responsible for:
(i) overseeing the Fund's accounting and financial reporting policies, practices
and internal controls; and (ii) reviewing the performance by certain of the
Fund's service providers of their contracts and arrangements with the Fund. A
copy of the charter is attached as Exhibit A. In fulfilling its duties, the
Audit and Contract Review Committee has: (a) reviewed and discussed the Fund's
audited financial statements with management; (b) discussed with the independent
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61; (c) received certain written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1 and
discussed the independent auditors' independence with them; and (d) based upon
its review of the above, recommended to the board that the Fund's audited
financial statements be included in the Fund's annual report to shareholders for
the fiscal year ended March 31, 2003. The Audit and Contract Review Committee
currently consists of Messrs. Armstrong, Beaubien, Burt, Feldberg, Gowen,
Hewitt, Janklow, Malek, Schafer and White, none of whom have any relationship to
the Fund that may interfere with the exercise of their independence from
management or the Fund and who are independent as defined under listing
standards of the New York Stock Exchange. Messrs. Gowen, Hewitt and Janklow will
be retiring from the Fund's board and the Audit and Contract Review Committee
effective June 30, 2003; therefore, additional information regarding them is not
provided in this proxy statement. Each member of the Fund's Audit and Contract
Review Committee is also a member of a similar committee established by the
boards of certain other investment companies for which UBS Global AM or an
affiliate serves as investment advisor, sub-advisor or manager. The Audit and
Contract Review Committee met twice during the fiscal year ended March 31, 2003
and each member attended those meetings.
The board has also established a Nominating Committee that acts pursuant to
a written charter. The Nominating Committee is responsible for, among other
things: selecting, evaluating and recommending to the board candidates to be
nominated as additional Independent Directors of the Board; and reviewing the
composition of the board and the compensation arrangements for each of the
directors. The Nominating Committee currently consists of Messrs. Gowen,
Janklow, Schafer and White; however, Messrs. Gowen and Janklow will be retiring
from the Fund's board and the Nominating Committee effective June 30, 2003. The
Nominating Committee did not meet during the fiscal year ended March 31, 2003.
The Nominating Committee will consider nominees recommended by shareholders if a
vacancy occurs. In order to recommend a nominee, a shareholder should send a
letter to the chairperson of the Nominating Committee (effective June 30, 2003)
Mr. Carl W. Schafer, care of the Secretary of the Fund at 51 West 52nd Street,
New York, New York 10019-6114 and indicate on the envelope "Nominating
Committee." The shareholder's letter should state the nominee's name and should
include the nominee's RESUME or CURRICULUM VITAE. The board does not have a
standing compensation committee.
Each Independent Director receives, in the aggregate from the UBS Global AM
funds, an annual retainer of $50,000, and a $10,000 fee for each regular board
meeting (and each in-person special board meeting) actually attended. Each such
board member is also entitled to a $2,000 fee for each special telephone meeting
attended. The chairperson of the Audit and Contract Review Committee receives
annually $12,500. The chairperson of the Nominating Committee receives annually
$5,000. The foregoing fees will be allocated among all such funds (or each
relevant fund in the case of a special meeting) PRO RATA based on the funds'
relative net assets at the end of the calendar quarter preceding the date of
payment. No officer, director or employee of UBS Global AM or one of its
affiliates presently receives any compensation from the Fund for acting as a
board member or officer.
8
Each director who has attained the age of seventy-two (72) years will be
subject to retirement on the later of (a) the last day of the month in which he
or she attains such age or (b) June 30, 2003. The table below includes certain
information relating to the compensation of the Fund's directors who are not
retiring and who are standing for reelection.
COMPENSATION TABLE+
TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE FUND
NAME OF FROM AND THE
PERSON, POSITION THE FUND* FUND COMPLEX**
---------------- --------- --------------
Richard Q. Armstrong, Director ................. $600 $111,125
David J. Beaubien, Director .................... 554 108,000
Richard R. Burt, Director ...................... 554 108,000
Meyer Feldberg, Director ....................... 532 210,250
Frederic V. Malek, Director .................... 571 108,000
Carl W. Schafer, Director ...................... 581 108,000
William D. White, Director ..................... 554 108,000
----------
+ Only Independent Directors are compensated by the funds for which UBS
Global AM or an affiliate serves as investment advisor, sub-advisor or
manager; directors who are "interested persons," as defined by the 1940
Act, do not receive compensation from the funds.
* Represents fees paid to each director during the fiscal year ended March
31, 2003.
** Represents fees paid during the calendar year ended December 31, 2002 to
each board member by: (a) 22 investment companies in the case of Messrs.
Armstrong, Beaubien, Burt, Malek, Schafer and White; and (b) 36 investment
companies in the case of Mr. 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 AUDITORS
The Fund's financial statements for the fiscal year ended March 31, 2003,
were audited by Ernst & Young LLP ("Ernst & Young"), independent auditors. In
addition, Ernst & Young prepares the Fund's federal and state annual income tax
returns and provides certain non-audit services. The Audit and Contract Review
Committee has considered whether the provision of those non-audit services is
compatible with maintaining Ernst & Young's independence. The board of directors
of the Fund has selected Ernst & Young as the independent auditors for the Fund
for the fiscal year ending March 31, 2004. Ernst & Young has been the Fund's
independent auditors 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 fees billed by Ernst & Young for professional services
rendered for the audit of the Fund's annual financial statements for the most
recent fiscal year and the review of the financial statements included in the
Fund's reports to shareholders were approximately $29,700.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES.
There were no fees billed by Ernst & Young for the most recent fiscal year
for professional services rendered for financial information systems design and
implementation services provided to the Fund, UBS Global AM and entities that
control, are controlled by or are under common control with UBS Global AM that
provide services to the Fund.
ALL OTHER FEES.
There were approximately $123,500 in fees billed by Ernst & Young for the
most recent fiscal year for other services provided to the Fund, UBS Global AM
and entities that control, are controlled by or are under common control with
UBS Global AM that provide services to the Fund.
10
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;
POSITION(S) HELD LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ---------------- ----------- ----------------------------------------
W. Douglas Beck*; 36 Vice President Since 2003 Mr. Beck is an executive director and head of
and head of mutual fund product management of
UBS Global AM (since 2002). From March 1998 to
November 2002, he held various positions at
Merrill Lynch, the most recent being first vice
president and co-manager of the managed
solutions group. Prior to March 1998, Mr. Beck
was a portfolio manager and managing director
at Raymond James & Associates. Mr. Beck is vice
president of UBS Supplementary Trust and 22
investment companies (consisting of 81
portfolios) for which UBS Global AM or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
Thomas Disbrow*; 37 Vice President Since 2000 Mr. Disbrow is a director and a senior
and Assistant manager of the mutual fund finance
Treasurer department of UBS Global AM. Prior to
November 1999, he was a vice president of
Zweig/Glaser Advisers. Mr. Disbrow is a vice
president and assistant treasurer of 19
investment companies (consisting of 40
portfolios) and assistant treasurer of one
investment company (consisting of two
portfolios) for which UBS Global AM or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
Amy R. Doberman*; 41 Vice President Since 2000 Ms. Doberman is a managing director and
and Secretary general counsel of UBS Global AM. From
December 1997 through July 2000, she was
general counsel of Aeltus Investment
Management, Inc. Prior to working at Aeltus,
Ms. Doberman was assistant chief counsel of the
SEC's Division of Investment Management. Ms.
Doberman is vice president and assistant
secretary of UBS Supplementary Trust and five
investment companies (consisting of 44
portfolios) and vice president and secretary of
19 investment companies (consisting of 40
portfolios) for which UBS Global AM or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
11
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ---------------- ----------- ----------------------------------------
Elbridge T. Gerry III*; 46 Vice President Since 1996 Mr. Gerry is a managing director--fixed income of UBS
Global AM. Mr. Gerry is a vice president of six
investment companies (consisting of 11
portfolios) for which UBS Global AM or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
David M. Goldenberg*; 36 Vice President Since 2002 Mr. Goldenberg is an executive director and
and Assistant deputy general counsel of UBS Global AM.
Secretary From 2000 to 2002 he was director, legal
affairs at Lazard Asset Management. Mr.
Goldenberg was global director of compliance
for SSB Citi Asset Management Group from 1998
to 2000. He was associate general counsel at
Smith Barney Asset Management from 1996 to
1998. Prior to working at Smith Barney Asset
Management, Mr. Goldenberg was a branch chief
and senior counsel in the SEC's Division of
Investment Management. Mr. Goldenberg is a vice
president and secretary UBS Supplementary Trust
and of five investment companies (consisting of
44 portfolios) and a vice president and
assistant secretary of 19 investment companies
(consisting of 40 portfolios) for which UBS
Global AM or one of its affiliates serves as
investment advisor, sub-advisor or manager.
Kevin J. Mahoney*; 37 Vice President Since 1999 Mr. Mahoney is a director and a senior
and Assistant manager of the mutual fund finance
Treasurer department of UBS Global AM. Prior to April 1999,
he was the manager of the mutual fund internal
control group of Salomon Smith Barney. Mr.
Mahoney is a vice president and assistant
treasurer of 19 investment companies
(consisting of 40 portfolios) for which UBS
Global AM or one of its affiliates serves as
investment advisor, sub-advisor or manager.
12
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
---------------------- ---------------- ----------- ----------------------------------------
Paul H. Schubert*; 40 Vice President Since 1994 Mr. Schubert is an executive director and
and Treasurer head of the mutual fund finance department of
UBS Global AM. Mr. Schubert is treasurer and
principal accounting officer of UBS
Supplementary Trust and of three investment
companies (consisting of 41 portfolios), a vice
president and treasurer of 20 investment
companies (consisting of 41 portfolios), and
treasurer and chief financial officer of one
investment company (consisting of two
portfolios) for which UBS Global AM or one of
its affiliates serves as investment advisor,
sub-advisor or manager.
Joseph A. Varnas*; 35 President Since 2003 Mr. Varnas is a managing director (since
March 2003), chief technology officer (since
March 2001) and head of product, technology and
operations of UBS Global AM (since November
2002). From 2000 to 2001, he was manager of
product development at UBS PaineWebber
Investment Management Services. Mr. Varnas was
a senior analyst in the Global Securities
Research & Economics Group at Merrill Lynch
from 1995 to 1999. Mr. Varnas is president of
UBS Supplementary Trust and 23 investment
companies (consisting of 81 portfolios) for
which UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor or
manager.
Keith A. Weller*; 41 Vice President Since 1995 Mr. Weller is a director and senior associate
and Assistant general counsel of UBS Global AM.
Secretary Mr. Weller is a vice president and assistant
secretary of 19 investment companies
(consisting of 40 portfolios) for which UBS
Global AM or one of its affiliates serves as
investment advisor, sub-advisor or manager.
-------------
* This person's business address is 51 West 52nd Street, New York, New York
10019-6114.
13
OTHER INFORMATION
BENEFICIAL OWNERSHIP OF SHARES
Based on a Schedule 13G submitted to the Fund and filed with the Securities
and Exchange Commission, the following shareholder owned more than 5% of the
Fund's common stock as of the date indicated:
NUMBER AND PERCENTAGE OF COMMON STOCK
BENEFICIALLY OWNED AS OF
NAME AND ADDRESS* FEBRUARY 14, 2003
----------------- -------------------------------
Wachovia Corporation ............................................ 1,465,902 7.11%
----------
* The shareholder may be contacted c/o UBS Global Asset Management (US) Inc.,
51 West 52nd Street, New York, NY 10019-6114.
Management does not know of any other 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 by any
board member, officer, beneficial owner or any other person.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit proposals to be considered at the
Fund's 2004 annual meeting of shareholders should send such proposals to the
Secretary of the Fund at 51 West 52nd Street, New York, New York 10019-6114. In
order to be considered at that meeting, shareholder proposals must be received
by the Fund no later than January 30, 2004 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,
AMY R. DOBERMAN
SECRETARY
May 30, 2003
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
14
EXHIBIT A
AUDIT AND CONTRACT REVIEW COMMITTEE CHARTER
AMENDED AND RESTATED AS OF MAY 8, 2003
ESTABLISHMENT AND PURPOSE
This document serves as the Charter for the Audit and Contract Review
Committee (the "Committee") of the Board of each fund (the "Fund") advised by
UBS Global Asset Management (US) Inc. ("UBS Global") listed on Appendix A hereto
(each such Charter being a separate Charter). The primary purposes of the
Committee are to (a) 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; (c) pre-approve all audit and non-audit
services provided to the Fund and certain other persons by such independent
auditors; and (d) review the performance by certain service providers and
approve their contracts and arrangements with the Fund.
With respect to its contract review function, the Committee will consider
the performance of UBS Global, the Fund's adviser, administrator and
distributor(1); the Fund's sub-advisors, if any; and, as deemed necessary or
appropriate by the Committee, any other service providers. The Committee will
determine whether compensation paid by the Fund pursuant to its contracts and
arrangements is reasonable and appropriate in light of the nature and quality of
the services rendered.
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.
-----------
1 Open-end Funds only.
A-1
2. Pre-approve (a) all audit and permissible non-audit services2 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 and any
Covered Service Providers, if the engagement relates directly to the
operations and financial reporting of the Fund. In carrying out this
responsibility, the Committee shall seek periodically from UBS Global
and from the independent auditors a list of such audit and permissible
non-audit services that can be expected to be rendered to the Fund, UBS
Global or any Covered Service Providers by the Fund's independent
auditors, and an estimate of the fees sought to be paid in connection
with such services. The Committee may delegate its responsibility to
pre-approve any such audit and permissible non-audit services to a
sub-committee consisting of the Chairperson of the Committee and two
other members of the Committee as the Chairperson, from time to time,
may determine and appoint, and such sub-committee shall report to the
Committee, at its next regularly scheduled meeting after the
sub-committee's meeting, its decision(s). From year to year, the
Committee shall report to the Board whether this system of pre-approval
has been effective and efficient or whether this Charter should be
amended to allow for pre-approval pursuant to such policies and
procedures as the Committee shall approve, including the delegation of
some or all of the Committee's pre-approval responsibilities to other
persons (other than UBS Global or the Fund's officers).
3. Discuss with the independent auditors any disclosed relationships or
services that may diminish the objectivity and independence of the
independent auditors; receive periodic reports from the independent
auditors regarding the independent auditors' independence (including
receiving the independent auditors' specific representations as to
independence consistent with current statements of the Independence
Standards Board); and discuss such reports with the independent
auditors, and, if so determined by the Committee, recommend that the
Board take appropriate action to ensure the independence of the
independent auditors.
---------------
2 The Committee will not approve non-audit services that the Committee believes
may taint the independence of the auditors. Currently, permissible non-audit
services include any professional services (including tax services) that are
not prohibited services as described below, provided to the Fund by the
independent auditors, other than those provided to the Fund in connection
with an audit or a review of the financial statements of the Fund.
Permissible non-audit services may NOT include: (i) bookkeeping or other
services related to the accounting records or financial statements of the
Fund; (ii) financial information systems design and implementation; (iii)
appraisal or valuation services, fairness opinions or contribution-in-kind
reports; (iv) actuarial services; (v) internal audit outsourcing services;
(vi) management functions or human resources; (vii) broker or dealer,
investment adviser or investment banking services; (viii) legal services and
expert services unrelated to the audit; and (ix) any other service the Public
Company Accounting Oversight Board determines, by regulation, is
impermissible.
Pre-approval by the Committee of any permissible non-audit services is not
required so long as: (i) the aggregate amount of all such permissible
non-audit services provided to the Fund, UBS Global and any service providers
controlling, controlled by or under common control with UBS Global that
provide ongoing services to the Fund ("Covered Service Providers")
constitutes not more than 5% of the total amount of revenues paid to the
independent auditors (during the fiscal year in which the permissible
non-audit services are provided) by (a) the Fund, (b) its investment adviser
and (c) any entity controlling, controlled by, or under common control with
the investment adviser that provides ongoing services to the Fund during the
fiscal year in which the services are provided that would have to be approved
by the Committee; (ii) the permissible non-audit services were not recognized
by the Fund at the time of the engagement to be non-audit services; and (iii)
such services are promptly brought to the attention of the Committee and
approved by the Committee (or its delegate(s)) prior to the completion of the
audit.
A-2
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. 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.
7. 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.
8. 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.
9. Request, receive and/or review from the independent auditors such other
materials as deemed necessary or advisable by the Committee in the
exercise of its duties under this charter; such materials may include,
without limitation, any other material written communications bearing
on the Fund's financial statements, or internal or disclosure controls,
between the independent auditors and the Fund, UBS Global, the Fund's
sub-adviser(s), if any, or other Fund service providers, such as any
management letter or schedule of unadjusted differences, and any
comment or "deficiency" letter received from a regulatory or
self-regulatory organization addressed to the Fund, UBS Global or the
Fund's sub-adviser(s), if any, that relates to services rendered to the
Fund.
10. [Closed-end Funds only] 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 for the confidential, anonymous submission by Fund officers
or employees or Fund service providers of concerns regarding
questionable accounting or auditing matters related to the Fund.
11. 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.
12. [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.
13. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
CONTRACT REVIEW
1. Request such information as is deemed relevant by the Committee
regarding the performance of each of the contracts and arrangements
required to be reviewed and approved by the Board.
2. Review all information and data provided by the service providers in
connection with their performance of these contracts and arrangements.
A-3
3. Meet with such representatives of the service providers as the
Committee deems necessary.
4. Make recommendations to the Board concerning the initial approval
and/or continuation of each of the proposed contracts and arrangements
and the reasonableness and appropriateness of the proposed fees.
5. Consider such other matters as the Committee may deem appropriate in
carrying out the above responsibilities and any other matters that may
be assigned to it by the Board.
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. The Fund shall
provide appropriate funding for the Committee to carry out its duties and
responsibilities.
COMPOSITION
The Committee shall be composed of each Board member who 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"). Each member of the Committee must also
meet the independence and experience requirements as set forth in Section
303.01(b)(2)(a) of the New York Stock Exchange's Listed Company Manual. 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.(3)
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.
MEETINGS
The Committee shall meet on a regular basis, but not less frequently than
twice a year. Special meetings may also be held upon reasonable notice to the
members of the Committee. An agenda shall be established for each meeting.
Additional meetings shall be called as circumstances require. The Committee may
request any officer or employee of the Fund, the Fund's counsel, UBS Global, the
Fund's sub-adviser(s), if any, the Fund's independent auditors or other
interested persons to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee. The Committee will meet with the
Fund's independent auditors at least once a year outside the presence of the
Fund's officers and other parties. The Committee may, in its discretion, also
meet outside the presence of the Fund's officers and other parties at other
times. Meetings of the Committee may be held in person, by telephone or by other
appropriate means.
One-third of the Committee's members shall constitute a quorum. At any
meeting of the Committee, the decision of a majority of the members present and
voting shall be determinative as to any matter submitted to a vote.
----------
3 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
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 Investments Trust
UBS PaineWebber Managed Municipal Trust
UBS Series Trust
Liquid Institutional Reserves
UBS Investment Trust
UBS Index Trust
UBS PaineWebber Municipal Money Market Series
UBS Money Series
UBS Securities Trust
UBS PACE Select Advisors Trust
UBS PaineWebber Cashfund, Inc.
UBS PaineWebber RMA Money Fund, Inc.
UBS PaineWebber RMA Tax-Free Fund, Inc.
UBS Master Series, Inc.
UBS Financial Services Fund 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 paragraphs 10 and 12
and any other 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.
B-1
-----------------
INSURED
MUNICIPAL
INCOME FUND INC.
================
PROXY
STATEMENT
----------------
INSURED
MUNICIPAL
INCOME FUND INC.
================
-----------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
JULY 17, 2003
AND
PROXY STATEMENT
=================
Appendix: Forms of Proxy Cards
DETACH HERE
ZINM12
COMMON STOCK
PROXY
INSURED MUNICIPAL INCOME FUND INC.
ANNUAL MEETING OF SHAREHOLDERS - JULY 17, 2003
The undersigned hereby appoints as proxies Keith A. Weller and Marissa
Duran-Cruz and each of them (with power of substitution) to vote for the
undersigned all shares of common stock of the undersigned at the aforesaid
meeting and any 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.
SEE REVERSE SEE REVERSE
SIDE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
INSURED MUNICIPAL INCOME FUND INC.
PROXY SERVICES
C/O PFPC INC.
P.O. BOX 8586
EDISON, NJ 08818-9452
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL ZINM11
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
1. To elect as directors:
NOMINEES: (01) Richard Q. Armstrong, (02) David J. Beaubien,
(03) Richard R. Burt, (04) Frederic V. Malek, (05) Carl W. Schafer,
(06) Brian M. Storms and (07) William D. White.
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] -----------------------------------------------------------
For all nominees except as written above.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
This proxy will not be voted unless it is dated and signed exactly as instructed
below:
If shares are held by an individual, sign your name exactly as it appears on
this card. If shares are held jointly, either party may sign, but the name of
the party signing should conform exactly to the name shown of this proxy card.
If shares are held by a corporation, partnership or similar account, the name
and the capacity of the individual signing the proxy card should be indicated
unless it is reflected in the form of registration. For example, "ABC Corp.,
John Doe, Treasurer."
Sign exactly as name appears hereon.
Signature:
(if held jointly) Date: Signature: Date:
------------------------------------ ------------ -------------------------------- ----------
APS
PROXY
INSURED MUNICIPAL INCOME FUND INC.
ANNUAL MEETING OF SHAREHOLDERS - JULY 17, 2003
The undersigned hereby appoints as proxies Keith A. Weller and Marissa
Duran-Cruz and each of them (with power of substitution) to vote for the
undersigned all shares of preferred stock of the undersigned at the aforesaid
meeting and any 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.
SEE REVERSE SEE REVERSE
SIDE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
1. To elect as directors:
NOMINEES: (01) Margo N. Alexander, (02) Richard Q. Armstrong,
(03) David J. Beaubien, (04) Richard R. Burt, (05) Mayer Feldberg,
(06) Frederic V. Malek, (07) Carl W. Schafer, (08) Brian M. Storms
and (09) William D. White.
FOR WITHHOLD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] -----------------------------------------------------------
For all nominees except as written above.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
This proxy will not be voted unless it is dated and signed exactly as instructed
below:
If shares are held by an individual, sign your name exactly as it appears on
this card. If shares are held jointly, either party may sign, but the name of
the party signing should conform exactly to the name shown on this proxy card.
If shares are held by a corporation, partnership or similar account, the name
and the capacity of the individual signing the proxy card should be indicated
unless it is reflected in the form of registration. For example, "ABC Corp.,
John Doe, Treasurer."
Sign exactly as name appears hereon.
Signature:
(if held jointly) Date: Signature: Date:
------------------------------------ ------------ -------------------------------- ----------