Proposal 1. Election of
Directors
The board proposes the election of
Richard Q. Armstrong, Alan S. Bernikow and Barry M. Mandinach to serve as Class
I directors for a three year term expiring in 2016 and until their successors
are duly elected and qualify, or until they resign or are otherwise removed.
Each nominee has indicated his willingness to serve if elected. Each of Messrs.
Armstrong, Bernikow, and Mandinach was last elected director at an Annual
Meeting of Shareholders held on September 16, 2010. If you properly execute and
return the enclosed proxy card, unless you give contrary instructions on the
proxy card, then your shares will be voted FOR the election of the three
nominees. 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
the board may recommend.
Directors, including any who are not
interested persons of the Fund as that term is defined in the Investment
Company Act of 1940, as amended (1940 Act) (Independent Directors), shall be
elected by a plurality of votes cast, 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 (24 persons)
beneficially owned any shares of the Funds common stock on July 1,
2013.
Listed in the table below is a brief
description of the experience of each nominee and each other director, both as a
director or trustee of other funds, as well as other recent professional
experience.
2
Nominees:
Name, age, and address
|
|
Position(s)
held
with
Fund
|
|
Term of
office* and
length
of
time served
|
|
Principal occupation(s)
during
past 5 years
|
|
Number of portfolios
in Fund
complex
overseen by nominee
|
|
Other directorships
held by
nominee
|
Independent directors:
|
|
|
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|
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Richard Q.
Armstrong; 78
c/o Keith A. Weller,
Assistant Fund Secretary,
UBS
Global Asset
Management (Americas)
Inc.,
1285 Avenue of
the
Americas,
12th Floor,
New York, NY 10019
|
|
Class
I
Director
and
Chairman
of the
Board
of
Directors
|
|
Since
1998
(Director);
Since 2004
(Chairman
of the Board
of
Directors);
Current
term expires
2013
|
|
Mr. Armstrong is chairman and
principal of R.Q.A. Enterprises (management consulting firm) (since 1991 and principal occupation since March 1995). Mr. Armstrong was
president or chairman of a number of packaged goods companies (responsible
for such brands as Canada Dry, Dr. Pepper, Adirondack Beverages and Moët
Hennessy) (from 1982 to 1995).
|
|
Mr. Armstrong is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Alan S.
Bernikow; 72
207 Benedict Ave.
Staten Island, NY 10314
|
|
Class
I
Director
|
|
Since
2006;
Current
term expires
2013
|
|
Mr. Bernikow is retired. He was
a consultant on non-management matters for the firm of Deloitte &
Touche (international accounting and consulting firm) (from 2003 until
2007). Previously, he was Deputy Chief Executive Officer at Deloitte &
Touche.
|
|
Mr. Bernikow is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
Mr. Bernikow is also a director
of Revlon, Inc. (cosmetics) (and serves as the chair of its audit
committee and as the chair of its compensation committee), a director of
Mack-Cali Realty Corporation (real estate investment trust) (and serves as
the chair of its audit committee) and a director of the Casual Male Retail
Group, Inc. (menswear) (and serves as a member of its audit committee and
as a member of its nominating and corporate governance committee). He is
also a director of Premier American Bank,
N.A.
|
3
Name, age, and address
|
|
Position(s)
held
with
Fund
|
|
Term of
office* and
length
of
time served
|
|
Principal occupation(s)
during
past 5 years
|
|
Number of portfolios
in Fund
complex
overseen by nominee
|
|
Other directorships
held by
director
|
Interested director:
|
|
|
|
|
|
|
|
|
Barry M.
Mandinach; 57
UBS Global Asset
Management (US) Inc.
1285 Avenue
of the
Americas
New York, NY 10019
|
|
Class
I
Director
|
|
Since
2010;
Current
term expires
2013
|
|
Mr. Mandinach is a managing
director of UBS Global Asset Management (US) Inc. and UBS Global AM
(collectively, UBS Global AMAmericas region). He has been with UBS
Global AMAmericas region or its predecessors since 2001. He is the Head
of Institutional & Wholesale Business (US) (since 2009) as well as
Chief Marketing Officer (US) (since 2006).
|
|
Mr. Mandinach is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
Other
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interested
director:
|
|
|
|
|
|
|
|
|
|
|
Meyer
Feldberg; 71
Morgan Stanley
1585 Broadway
36th Floor
New
York, NY 10036
|
|
Class
II
Director
|
|
Since
1998;
Term expires
2014
|
|
Professor Feldberg is Dean
Emeritus and Professor of Leadership and Ethics at Columbia Business
School, although on an extended leave of absence. He is also a senior
advisor to Morgan Stanley (financial services) (since March 2005).
Professor Feldberg also serves as President of New York City Global
Partners (an organization located in the Office of the Mayor of the City
of New York that promotes interaction with other cities around the world)
(since May 2007). Prior to July 2004, he was Dean and Professor of
Management of the Graduate School of Business at Columbia University
(since 1989).
|
|
Professor Feldberg is a
director or trustee of 22 investment companies (consisting of 57
portfolios) for which UBS Global AM or one of its affiliates serves as
investment advisor or manager.
|
|
Professor Feldberg is also a
director of Macys, Inc. (operator of department stores), Revlon, Inc.
(cosmetics), SAPPI, Ltd. (producer of paper) and the New York City
Ballet.
|
4
Name, age, and address
|
|
Position(s)
held
with
Fund
|
|
Term of
office* and
length
of
time served
|
|
Principal occupation(s)
during
past 5 years
|
|
Number of portfolios
in Fund
complex
overseen by nominee
|
|
Other directorships
held by
director
|
Independent directors:
|
|
|
|
|
|
|
|
|
Richard R.
Burt; 66
McLarty Associates
900 17th Street N.W.
Washington, D.C.
20006
|
|
Class
II
Director
|
|
Since
1998;
Term expires
2014
|
|
Mr. Burt is a managing director
of McLarty Associates (a consulting firm) (since April 2007). He was
chairman of IEP Advisors (international investments consulting firm) until 2009. Prior to April 2007, he was chairman of Diligence Inc.
(international information and risk management firm).
|
|
Mr. Burt is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
Mr. Burt is also a director of
The Central Europe & Russia Fund, Inc., The European Equity Fund, Inc.
and The New Germany Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Bernard H.
Garil; 73
6754 Casa Grande Way
Delray Beach, FL 33446
|
|
Class
III
Director
|
|
Since
2006;
Term expires
2015
|
|
Mr. Garil is retired (since
2001). He was a managing director at PIMCO Advisory Services (from 1999 to
2001) where he served as president of closed-end funds and vice-president
of the variable insurance product funds advised by OpCap Advisors (until
2001).
|
|
Mr. Garil is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
Mr. Garil is also a director of
OFI Global Trust Company (commercial trust company), the Leukemia &
Lymphoma Society (voluntary health organization) and a trustee for the
Brooklyn College Foundation, Inc. (charitable
foundation).
|
|
|
|
|
|
|
|
|
|
|
|
Heather R.
Higgins; 53
255 E. 49th St., Suite 23D
New York, NY
10017
|
|
Class
III
Director
|
|
Since
2006;
Term expires
2015
|
|
Ms. Higgins is the president
and director of The Randolph Foundation (charitable foundation) (since
1991). Ms. Higgins also serves (or has served) on the boards of several
non-profit charitable groups, including the Independent Womens Forum
(chairman) and the Philanthropy Roundtable (vice chairman). She also
serves on the board of the Hoover Institution (from 2001-2007 and since
2009).
|
|
Ms. Higgins is a director or
trustee of 13 investment companies (consisting of 45 portfolios) for which
UBS Global AM serves as investment advisor or manager.
|
|
None
|
5
____________________
*
|
Following the
expiration of his or her term, each director holds office until his or her
successor is elected and qualifies, or until he or she resigns or is
otherwise removed.
|
|
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|
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.
|
|
|
|
Mr. Mandinach is
deemed an interested person of the Fund as defined in the 1940 Act
because of his employment by UBS Global AMAmericas
region.
|
Information about nominee/other
director beneficial ownership of fund shares
Nominee/other director
|
|
|
Dollar range
of
equity
securities
in Fund
|
|
Aggregate dollar range of
equity securities in all
registered investment companies overseen by
nominee/
other director for which UBS Global AM or an
affiliate
serves as investment advisor or
manager
|
Interested nominee/
|
|
|
|
|
other director:
|
|
|
|
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Meyer
Feldberg
|
|
None
|
|
Over $100,000
|
Barry M. Mandinach
|
|
None
|
|
Over
$100,000
|
Independent nominees/
|
|
|
|
|
other directors:
|
|
|
|
|
Richard Q. Armstrong
|
|
None
|
|
Over
$100,000
|
Alan S.
Bernikow
|
|
None
|
|
Over $100,000
|
Richard R. Burt
|
|
None
|
|
Over
$100,000
|
Bernard H.
Garil
|
|
None
|
|
Over $100,000
|
Heather R. Higgins
|
|
None
|
|
Over
$100,000
|
____________________
|
Information
regarding ownership of shares in all registered investment companies
overseen by nominee/other director for which UBS Global AM serves as
investment advisor or manager is as of December 31, 2012.
|
|
|
It is the boards policy that each member
invest more than $100,000, in the aggregate, in the UBS Global AM funds he or
she oversees. Such investments by a board member may be dispersed across a
number of funds, and may not necessarily be made in any one particular
fund.
6
Additional information about the
board
Leadership structure and
qualifications of board of directors
The board is responsible for oversight of the Fund. The board is
currently composed of seven directors, five of whom are Independent Directors.
One of the remaining two directors is independent of UBS Global AM but an
interested person of the Fund within the meaning of the 1940 Act because he is
employed by a registered broker-dealer that may execute transactions with the
Fund from time to time. The other director is an interested person of the Fund
within the meaning of the 1940 Act because of his employment with UBS Global
AMAmericas region. The board members have selected an Independent Director to
act as chairman of the board. The chairman of the boards role is to preside at
all meetings of the board and generally to act as a liaison with service
providers, officers, attorneys and other directors between meetings. The
chairman may also perform such other functions as may be delegated by the board
from time to time. The board has established an Audit Committee and a Nominating
and Corporate Governance Committee, both comprised only of non-interested
directors, to assist the board in the oversight and direction of the business
and affairs of the Fund, and from time to time may establish ad hoc committees,
informal working groups or designate one or more members to review and address
the policies and practices of the Fund or to liaise with the Funds Chief
Compliance Officer or service providers, including staff of UBS Global AM, with
respect to certain specified matters. The board meets in-person at regularly
scheduled meetings five times throughout the year. In addition, the directors
may meet in-person or by telephone at special meetings or on an informal basis
at other times. Each committee meets as appropriate to conduct the oversight
functions delegated to the committee by the board and reports its findings to
the board. The board and Audit Committee conduct annual assessments of their
oversight function and structure. The Independent Directors have also engaged
independent legal counsel to assist them in performing their oversight
responsibilities. The directors have determined that the boards leadership and
committee structure is appropriate because it allows the board to exercise
informed and independent judgment over the matters under its purview and to
allocate areas of responsibility among committees of Independent Directors and
the full board in a manner that enhances the full boards oversight.
The Fund has engaged UBS Global AM to
manage the Fund on a day-to-day basis. The board is responsible for overseeing
UBS Global AM and other service providers in the operations of the Fund in
accordance with the 1940 Act, applicable state and other laws, and the Funds
charter. The board reviews, on an ongoing basis, the Funds performance,
operations and investment strategies and techniques. The board also conducts
reviews of UBS Global AM and its role in running the operations of the
Fund.
The board has concluded that, based
on each nominees and other directors experience, qualifications, attributes or
skills on an individual basis and in combination with those of the other
nominees and other directors, each nominee and other director should serve as a
director. In determining that a particular nominee or other director is
qualified to serve as a director, the board has considered a variety of
criteria, none of which, in isolation, was controlling. The board believes that,
collectively, the nominees and other directors have balanced and diverse
experience, skills, attributes and qualifications, which allow the board to
operate effectively in governing the Fund and protecting the interests of
shareholders. Among the attributes common to all nominees and other directors
are their ability to review critically, evaluate, question and discuss
information provided to them, to interact effectively with other board members,
UBS Global AM, other service providers, counsel and the independent registered
public accounting firm, and
7
to exercise effective business
judgment in the performance of their duties as directors. In addition, where
applicable, the board has taken into account the actual service and commitment
of the directors during their tenure in concluding that each should continue to
serve. A nominees/directors ability to perform his or her duties effectively
may have been attained through a nominees/directors educational background or
professional training; business, consulting, public service or academic
positions; experience from service as a director of the Fund, other funds in the
fund complex, other investment funds, public companies, or non-profit entities
or other organizations; and/or other life experiences. Set forth below is a
brief discussion of the specific experience, qualifications, attributes or
skills of each nominee or other director that led the board to conclude that he
or she should serve as a director.
Mr. Armstrong and Amb. Burt have each
served as a director of the Fund and as directors/trustees of other funds in the
fund complex for well more than a decade, including as members and/or chairs of
various board committees. Mr. Armstrong has served as chairman of the board
since 2004. Most recently, Mr. Armstrong has been chairman and principal of a
management consulting firm. From 1982 through 1995, Mr. Armstrong had been
president or chairman of several international consumer packaged goods
companies, including (1) chairman of the board, chief executive officer and
co-owner of Adirondack Beverages (producer and distributor of soft drinks and
sparkling/still waters); (2) partner of the New England Consulting Group
(management consulting firm); and (3) managing director of LVMH U.S. Corporation
(US subsidiary of the French luxury goods conglomerate, Louis Vuitton Moët
Hennessey Corporation) and chairman of its wine and spirits subsidiary,
Schieffelin & Somerset Company (responsible for such brands as Canada Dry
and Dr. Pepper, among many others). He also served as president of Cluett
Peabody & Company (textile/apparel, including such well-known brands as
Arrow shirts and Gold Toe socks). Amb. Burt has many years of experience in
advising companies regarding international investment and risk management. Amb.
Burt also currently serves, or has served, on the boards of directors of several
funds outside of the UBS Global AM fund complex and has served as a director on
other corporate boards. Amb. Burt was the chief negotiator in the Strategic Arms
Reduction Talks with the former Soviet Union (1989-1991) and the US Ambassador
to the Federal Republic of Germany (1985-1989). He had also been a partner of
McKinsey & Company (management consulting firm). Mr. Mandinach has extensive
experience in the mutual fund industry and a broad understanding of the needs of
investors. Throughout his career, Mr. Mandinach has been involved with the
marketing of mutual funds and in building relationships with service
intermediaries. Mr. Mandinach is currently the Head of UBS Global AMAmericas
regions Institutional & Wholesale Business (US) as well as its Chief
Marketing Officer (US). Mr. Mandinach has previously held positions at Drexel
Burnham Lambert and at the Zweig funds. Prof. Feldberg has served as a director
of the Fund and other mutual funds in the fund complex for over two decades.
Prof. Feldberg has held several prestigious positions at Columbia Business
School and the Graduate School of Business at Columbia University, including
Dean and Professor of Management. He is also a senior advisor to Morgan Stanley
and serves on the boards of several public companies. Mr. Bernikow, Mr. Garil
and Ms. Higgins were elected as directors of the Fund and the other funds in the
fund complex during 2005-2006.
Mr. Bernikow,
Mr. Garil and Ms. Higgins also serve as members and/or chairs of various board
committees. Mr. Bernikow has extensive accounting and finance experience (being
a certified public accountant and having served for many years as the Deputy
Chief Executive Officer of Deloitte & Touche LLP, one of the four largest
independent registered public accounting firms in the US) and currently serves,
or has served, on the boards and committees of various public companies and a
national bank. Mr. Garil has four decades of experience in the fund management
business and for much of that time he served as an executive of a fund adviser
and as a member of fund boards. He began his career at the US Securities and
8
Exchange Commission. Ms. Higgins has
experience as a portfolio manager for a major US trust bank and has held senior
executive positions and/or directorships at several major charitable
organizations.
Additional details about each nominee
and other directors professional experience is included above in the table
under Proposal 1. That table contains information regarding other directorships
currently held by board members. In addition, during the five years ended July
1, 2013, the following director was a member of the boards of the following
companies: Amb. Burtdirector of IGT, Inc. (provides technology to gaming and
wagering industry); and director of The Protective Group, Inc. (produces armor
products).
Risk oversight
The Fund is subject to a number of risks, including
investment, compliance, operational and valuation risks, among others. Risk
oversight forms part of the boards general oversight of the Funds investment
program and operations and is addressed as part of various regular board and
committee activities. Day-to-day risk management with respect to the Fund is the
responsibility of UBS Global AM or other service providers (depending on the
nature of the risk), subject to supervision by UBS Global AM. Each of UBS Global
AM and other service providers have their own independent interest in risk
management and their policies and methods of risk management may differ from the
Funds and each others in the setting of priorities, the resources available or
the effectiveness of relevant controls. As a result, the board recognizes that
it is not possible to identify all of the risks that may affect the Fund or to
develop processes and controls to eliminate or mitigate their occurrence or
effects, and that some are simply beyond any control of the Fund or UBS Global
AM, its affiliates or other service providers. As part of its regular oversight
of the Fund, the board, directly or through a committee, reviews reports from,
among others, management, the Funds Chief Compliance Officer, its independent
registered public accounting firm, counsel, and internal auditors for UBS Global
AM or its affiliates, as appropriate, regarding risks faced by the Fund and UBS
Global AMs risk oversight programs. The board has appointed a Chief Compliance
Officer, who oversees the implementation and testing of the Funds compliance
program and reports to the board regarding compliance matters for the Fund and
its service providers; the board has designated one of its members to liase with
the Chief Compliance Officer between board meetings to assure that significant
compliance issues identified by the Chief Compliance Officer will be brought to
the attention of the full board in a timely and appropriate manner. The board
may, at any time and in its discretion, change the manner in which it conducts
risk oversight.
Board and shareholder
meetings
The board of directors of
the Fund met six times during the fiscal year ended May 31, 2013. Each director
attended 75% or more of the board meetings during the last fiscal year. The
Funds directors are not required to attend the Funds annual meetings, and no
directors attended the annual meeting of shareholders in 2012.
Committees
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 Funds audit; (ii)
overseeing the Funds 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 Funds
independent registered public accounting firm, as well as determining the
9
compensation thereof. The Audit
Committee 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 Funds independent registered public accounting firm regarding its
independence and discussing any disclosed relationships or services that may
diminish the objectivity and independence of the independent registered public
accounting firm; inquiring of UBS Global AM and the Funds independent
registered public accounting firm as to the Funds 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 set forth in its Audit Committee Charter and described above,
it is not responsible for planning or conducting the Funds audit or determining
whether the Funds financial statements are complete and accurate and are in
accordance with US generally accepted accounting principles. In fulfilling their
responsibilities under the Funds Audit Committee Charter, it is recognized that
(i) the members of the Audit Committee are not full-time employees of the Fund;
(ii) it is not the duty or the responsibility of the Audit Committee or its
members to conduct field work or any other types of auditing and accounting
reviews or procedures or to set auditor independence standards; and (iii) each
member of the Audit Committee shall be entitled to rely on: (a) the integrity of
those persons within or outside of the Fund from whom he or she 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 AM or other third parties as to any information technology,
internal audit and other non-audit services provided by the independent
registered public accounting firm to the Fund. The review of the Funds
financial statements by the Funds Audit Committee is not of the same quality as
the audit performed by the independent registered public accounting
firm.
None of the members of the Audit Committee has any relationship to the Fund that may
interfere with the exercise of his or her independence from management or the Fund, and each is independent as defined
under the listing standards of the New York Stock Exchange (NYSE) applicable to closed-end funds. Each
member of the Funds Audit Committee is also a member of a similar committee established by the boards of certain other
investment companies for which UBS Global AM serves as investment advisor or manager. The Audit Committee met seven times
during the fiscal year ended May 31, 2013, and all the members of the Audit Committee attended 75% or more of those meetings
except for Richard R. Burt, who attended five out of seven of those meetings.
The Funds Audit Committee has: (a)
reviewed and discussed the Funds audited financial statements with management;
(b) discussed with the independent registered public accounting firm the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
as adopted by the Public Company Accounting Oversight Board (PCAOB) in Rule
3200T; (c) received written disclosures and the letter from the independent
registered public accounting firm required by Independence Standards Board
Standard No. 1, as adopted by the PCAOB in Rule 3600T, and has discussed with
the independent registered public accounting firm its independence; and (d)
based upon its review of the above, recommended to the board that the Funds
audited financial statements be included in the Funds annual report to
shareholders for the fiscal year ended May 31, 2013. The members of the Audit
Committee are Richard Q. Armstrong, Alan S. Bernikow, Richard R. Burt, Bernard
H. Garil and Heather R. Higgins. In addition to serving on the Audit Committee,
Mr. Bernikow currently serves as a member of the audit committees of at least
three other public companies not affiliated with the UBS Global AM funds he
oversees. The board has determined that
10
Mr. Bernikows simultaneous service
on the audit committees of these other public companies does not impair his
ability to effectively serve on the Audit Committee.
The board has also established a
Nominating and Corporate Governance Committee that acts pursuant to a written
charter (Nominating and Corporate Governance Committee Charter). The
Nominating and Corporate Governance Committee is responsible for, among other
things, identifying, 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; overseeing an annual evaluation of the board and its
committees; reporting on such evaluation to the board; and performing such other
governance functions as the board may from time to time delegate to the
Nominating and Corporate Governance Committee. A copy of the Nominating and
Corporate Governance Committee Charter is not available on UBS Global AMs Web
site, but a copy of the Nominating and Corporate Governance Committee Charter is
attached as Exhibit B. The Nominating and Corporate Governance Committee
currently consists of Messrs. Burt and Garil and Ms. Higgins, none of whom is an
interested person for purposes of the 1940 Act, and all of whom are
independent as defined under listing standards of the NYSE applicable to
closed-end funds. The Nominating and Corporate Governance Committee met four
times during the fiscal year ended May 31, 2013, and each member attended those
meetings.
In nominating candidates, the
Nominating and Corporate Governance Committee believes that no specific
qualifications or disqualifications are controlling or paramount, and does not
believe that specific qualities or skills are necessary for each candidate to
possess. In identifying and evaluating nominees for director, the Nominating and
Corporate Governance Committee takes into consideration such factors as it deems
appropriate. These factors may include: (i) whether or not the person is an
interested person as defined in the 1940 Act, meets the independence and
experience requirements of the NYSE applicable to closed-end funds and is
otherwise qualified under applicable laws and regulations to serve as a member
of the board; (ii) whether or not the person has any relationships that might
impair his or her independence, such as any business, financial or family
relationships with Fund management, the investment advisor and/or sub-advisors
of the Fund, Fund service providers or their affiliates; (iii) whether or not
the person is willing to serve, and willing and able to commit the time
necessary for the performance of the duties of a board member; (iv) the persons
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 candidates
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 Burt, care of the Secretary of the Fund at UBS Global Asset
Management (Americas) Inc., UBS Tower, One North Wacker Drive, Chicago, IL 60606
and indicate on the envelope Nominating and Corporate Governance Committee.
The shareholders letter should state the nominees name and should include the
nominees
resumé
or
curriculum
vitae
, and must be accompanied by a
written consent of the individual to stand for election if nominated by the
board and to serve if elected by shareholders. In addition, the shareholders
11
letter must satisfy the requirements
of the Funds Bylaws as in effect from time to time, including disclosure
requirements to be satisfied by proponents of matters to be submitted to a vote
of shareholders. A copy of the related requirements of the Funds Bylaws as in
effect as of the date of this proxy statement is attached as Exhibit
C.
The board does not have a standing
compensation committee. Shareholders can send other communications to the board
care of its Chairman at the following address: Mr. Richard Q. Armstrongc/o
Keith A. Weller, Assistant Fund Secretary, UBS Global Asset Management
(Americas) Inc., 1285 Avenue of the Americas, 12th Floor, New York, NY
10019.
Information about independent
director ownership of securities issued by UBS Global AM or any company
controlling, controlled by or under common control with UBS Global
AM
As of December 31, 2012, 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.
Compensation
Each Independent Director receives, in the aggregate from
the UBS Global AM funds of which he or she is a director, an annual retainer of
$110,000 and an $18,000 fee for each regular joint board meeting of the boards
of those funds (and each in-person special joint board meeting of the boards of
those funds) actually attended. Independent Directors who participate in
previously scheduled joint in-person meetings of the boards of the UBS Global AM
funds by telephone to accommodate other business obligations are paid $2,000 for
such meetings. Independent Directors who participate in previously scheduled
in-person joint meetings of the boards of the UBS Global AM funds by telephone
because of illness or other unavoidable circumstances are paid the full meeting
fee. Each Independent Director receives from the relevant fund $2,000 for each
special in-person meeting (not held as a joint meeting) of the board of that
fund actually attended where a funds board must meet separately from the
regularly scheduled joint board meetings. Independent Directors who participate
in scheduled telephonic meetings of the board(s) of one or more UBS Global AM
funds are paid $1,000 for each such meeting actually attended.
The chairman of the boards receives
annually an additional $50,000; the chairperson of the Audit Committee receives
annually an additional $35,000; the chairperson of the Nominating and Corporate
Governance Committee receives annually an additional $25,000. In addition, a
board member who undertakes a special assignment to provide special assistance
in coordinating the boards oversight of compliance or contract reconsideration
matters (currently Heather R. Higgins and Bernard H. Garil, respectively)
receives annually an additional $20,000. However, provided that, if a board
member simultaneously holds more than one such position or assignment, he or she
is paid only the higher of the fees otherwise payable for these positions or
assignments. Independent Directors who are also members of the Audit Committee
and/or Nominating and Corporate Governance Committee are paid in the aggregate
from the UBS Global AM funds he or she oversees, annual retainers of $10,000 and
$5,000, respectively, in connection with his or her membership on the Audit
Committee and/or Nominating and Corporate Governance Committee. The foregoing
fees are allocated among all such funds (or each relevant fund in the case of a
special meeting) as follows: (i) one-half of the expense is 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 is
allocated according to the number of such funds. No officer, director or
employee of
12
UBS Global AM or one of its
affiliates presently receives any compensation from the funds for acting as a
board member or officer. All board members are reimbursed for expenses incurred
in attending meetings.
The table below includes certain
information relating to the compensation of the Funds nominees/other
directors.
Compensation table
Name of person,
position
|
|
Aggregate
compensation
from
the
Fund*
|
|
Total
compensation
from the
Fund
and the Fund
Complex**
|
Richard Q. Armstrong, director
|
$
|
3,311
|
|
$
|
263,000
|
|
Alan
S. Bernikow, director
|
|
3,120
|
|
|
249,000
|
|
Richard R. Burt, director
|
|
2,831
|
|
|
243,000
|
|
Meyer
Feldberg, director
|
|
None
|
|
|
233,577
|
|
Bernard H. Garil, director
|
|
2,993
|
|
|
239,000
|
|
Heather R. Higgins, director
|
|
2,993
|
|
|
239,000
|
|
Barry M. Mandinach, director
|
|
None
|
|
|
None
|
|
____________________
|
|
Except as
discussed elsewhere herein, only Independent Directors were compensated by
the funds for
which UBS Global AM
serves as investment advisor or manager.
|
|
|
|
|
|
Professor Feldberg is an
interested person of the Fund by virtue of his position as senior
advisor with Morgan Stanley, and not by reason of affiliation with UBS
Global AM. He is compensated (i) by funds for which the management,
investment advisory and/or administration contract between the fund and
UBS Global AM provides that the fund may bear a portion of the
compensation to a director who is not an interested person of the fund by
reason of affiliation with UBS Global AM or any of UBS Global AMs
affiliates, and (ii) otherwise by UBS Global AM. Accordingly, the
compensation amounts listed above for Professor Feldberg represent only
(1) those amounts paid by other funds within the fund complex for which
UBS Global AM does not serve as investment advisor or manager, and (2)
funds within the fund complex that have management, investment advisory
and/or administration contracts providing that the fund may bear a portion
of his compensation. Professor Feldberg is compensated by UBS Global AM
with respect to his service on the Funds board.
|
|
|
|
|
|
Mr. Mandinach is an interested
person of the Fund as defined in the 1940 Act. He is not compensated by
the Fund or other funds in the fund complex for his services as a board
member.
|
|
|
|
*
|
|
Represents fees paid to each
director during the fiscal year ended May 31, 2013.
|
|
|
|
**
|
|
Represents fees paid during the
calendar year ended December 31, 2012 to each board member by: (a) 13
investment companies in the case of Messrs. Armstrong, Bernikow, Burt and
Garil and Ms. Higgins; and (b) 22 investment companies in the case of
Professor Feldberg for which UBS Global AM or one of its affiliates served
as investment advisor
or manager. No fund within the UBS
fund complex has a bonus, pension, profit sharing or retirement plan.
|
13
Information concerning independent
registered public accounting firm
The Funds financial statements for
the fiscal year ended May 31, 2013
were audited by Ernst & Young LLP
(Ernst & Young), independent registered public accounting firm. In
addition, Ernst & Young prepares the Funds 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 & Youngs independence. The Audit Committee of the Fund
has selected Ernst & Young as the Funds independent registered public
accounting firm, and such selection also has been approved by the Funds board
for the fiscal year ending May 31, 2014. Ernst & Young has been the Funds
independent registered public accounting firm since its inception in June 1998.
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 response.
Audit fees
The aggregate audit fees billed by Ernst & Young for
professional services rendered to the Fund for the audit of each of the last two
fiscal years ended May 31, 2013 and May 31, 2012 were approximately $68,200 and
$62,600, respectively.
Fees included in the audit fees
category are those associated with the annual audits of financial statements and
services that are normally provided in connection with statutory and regulatory
filings.
Audit-related
fees
The aggregate audit-related fees
billed by Ernst & Young for services rendered to the Fund that are
reasonably related to the performance of the audits of the financial statements,
but not reported as audit fees, were approximately $7,088 and $3,600,
respectively, in each of the fiscal years ended May 31, 2013 and May 31,
2012.
Fees included in the audit-related
fees category are those associated with (1) the reading and providing of
comments on the 2012 and 2011 semiannual financial statements and (2) review of
the consolidated 2011 and 2010 reports on the profitability of the UBS funds to
UBS Global AM and its affiliates to assist the board members in their annual
advisory/administration contract reviews.
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
May 31, 2013 and May 31, 2012 on behalf of (i) the Funds 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.
14
Tax fees
The aggregate tax fees billed by Ernst & Young for
services rendered to the Fund for each of the fiscal years ended May 31, 2013
and May 31, 2012 were approximately $17,978 and $17,550,
respectively.
Fees included in the tax fees
category comprise all services performed by professional staff in the
independent accountants tax division except those services related to the
audits. This category comprises fees for review of tax compliance, tax return
preparation and excise tax calculations.
With respect to Rule 2-01(c)(7)(i)(C)
of Regulation S-X, there were no tax fees that were approved by the Audit
Committee pursuant to the de minimis exception for the fiscal years ended May
31, 2013 and May 31, 2012 on behalf of (i) the Funds service providers that
relate directly to the operations and financial reporting of the Fund, or (ii)
the Fund itself. There were no tax fees required to be approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years
indicated above.
All other fees
For the fiscal years ended May 31, 2013 and May 31, 2012,
there were no fees billed by Ernst & Young for other products and services
provided to the Fund other than the services reported above. Fees included in
the all other fees category would consist of services related to internal
control reviews, strategy and other consulting, financial information systems
design and implementation, consulting on other information systems, and other
tax services unrelated to the Fund.
There were no fees billed by Ernst
& Young for the most recent fiscal year for professional services rendered
for financial information systems design and implementation services provided to
the Fund, UBS Global AM and entities that control, are controlled by or are
under common control with UBS Global AM that provide services to the Fund.
With respect to Rule 2-01(c)(7)(i)(C)
of Regulation S-X, there were no fees within this category that were required to
be approved by the Audit Committee pursuant to the de minimis exception for the
fiscal years ended May 31, 2013 and May 31, 2012 on behalf of (i) the Funds
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 Committees pre-approval policies and procedures. Reproduced below is
an excerpt from the Audit Committee Charter regarding pre-approval policies and
procedures:
The Audit Committee shall:
Pre-approve (a) all audit and permissible non-audit services
1
to be provided to the Fund and (b) all permissible non-audit services to be
provided by the Funds independent auditors to UBS Global [Asset Management
(Americas) Inc. (UBS Global [AM])] and any Covered Service
Providers,
____________________
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
(footnote continued on next
page)
|
15
if the
engagement relates directly to the operations and financial reporting of the
Fund. In carrying out this responsibility, the Committee shall seek periodically
from UBS Global [AM] and from the independent auditors a list of such audit and
permissible non-audit services that can be expected to be rendered to the Fund,
UBS Global [AM] or any Covered Service Providers by the Funds 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-committees 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 Committees pre-approval
responsibilities to other persons (other than UBS Global [AM] or the Funds
officers).
Aggregate non-audit
fees
For the fiscal years ended May
31, 2013 and May 31, 2012, the aggregate non-audit fees billed by Ernst &
Young of $259,888 and $290,500, respectively, included non-audit services
rendered on behalf of the Fund of $25,066 and $21,150, respectively, and
non-audit services rendered on behalf of the Funds investment advisor (not
including any sub-advisor whose role is primarily portfolio management and is
subcontracted with or overseen by another investment advisor) and any entity
controlling, controlled by, or under common control with the investment advisor
that provides ongoing services to the Fund of $234,822 and
$269,350
respectively.
____________________
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
advisor 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 advisor and (c) any entity controlling, controlled
by, or under common control with the investment advisor 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.
16
The Audit Committee was not required
to consider whether the provision of non-audit services that were rendered to
the Funds investment advisor (not including any sub-advisor whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment advisor), and any entity controlling, controlled by, or under common
control with the investment advisor 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 was compatible with maintaining Ernst & Youngs
independence.
Executive officers
Officers of the Fund are appointed by
the directors and serve at the pleasure of the board. None of the Funds
officers currently receives any compensation from the Fund. The executive
officers of the Fund are:
Name, address, and age
|
|
Position(s) held
with the Fund
|
|
Term of office
and length of
time
served
|
|
Principal occupation(s) during past 5
years;
number of portfolios in Fund complex
for which person serves
as officer
|
Joseph Allessie*;
47
|
|
Vice President
and
Assistant
Secretary
|
|
Since 2005
|
|
Mr. Allessie is an executive director (since 2007) (prior to which he was a
director) and deputy general counsel (since 2005) at UBS Global AMAmericas region. Mr. Allessie is a vice
president and assistant secretary of 17 investment companies (consisting of 80 portfolios) for which UBS Global AM
serves as investment advisor or manager.
|
|
|
|
|
|
|
|
Rose Ann Bubloski*;
45
|
|
Vice President
and
Assistant
Treasurer
|
|
Since 2011
|
|
Ms. Bubloski is a director
(since March 2012) (prior to which she was an associate director) and
senior manager of the US mutual fund treasury administration department of
UBS Global AMAmericas region. She was vice president
at Cohen & Steers Capital Management, Inc. (investment manager) (from
2007 to 2008). She is vice president and assistant treasurer of 17
investment companies (consisting of 80 portfolios) for which UBS Global AM
serves as investment advisor or
manager.
|
17
Name, address, and
age
|
|
Position(s) held
with the
Fund
|
|
Term of office
and length
of
time served
|
|
Principal occupation(s) during past
5 years;
number of portfolios in Fund complex
for which person
serves as officer
|
Mark E. Carver*;
49
|
|
President
|
|
Since 2010
|
|
Mr. Carver is a managing
director and Head of Product Development and ManagementAmericas for UBS
Global AMAmericas region (since 2008). In this role, he oversees product
development and management for both wholesale and institutional
businesses. He is a member of the Americas Management Committee (since
2008) and the Regional Operating Committee (since 2008). Prior to 2008,
Mr. Carver held a number of product-related or sales responsibilities with
respect to funds, advisory programs and separately managed accounts. Mr.
Carver joined a predecessor of an affiliated firm in 1985 and has been
with UBS Global AMAmericas region (or its affiliates) since 1996. Mr.
Carver is president of 17 investment companies (consisting of 80
portfolios) for which UBS Global AM serves as investment advisor or
manager.
|
|
|
|
|
|
|
|
Thomas Disbrow*;
47
|
|
Vice President
and
Treasurer
|
|
Since 2000
(Vice
President);
Since 2004
(Treasurer)
|
|
Mr. Disbrow is a managing
director (since 2011) (prior to which he was an executive director) (since
2007) and head of North American Fund Treasury department (since 2011) of
UBS Global AMAmericas region. Mr. Disbrow is a vice president and
treasurer and/or principal accounting officer of 17 investment companies
(consisting of 80 portfolios) for which UBS Global AMAmericas region
serves as investment advisor or
manager.
|
18
Name, address, and
age
|
|
Position(s) held
with the
Fund
|
|
Term of office
and length
of
time served
|
|
Principal occupation(s) during past
5 years;
number of portfolios in Fund complex
for which person
serves as officer
|
Craig
Ellinger**; 43
|
|
Vice President
|
|
Since 2010
|
|
Mr. Ellinger is a managing
director and the Head of US Investment Grade and Global High Yield Fixed
Income at UBS Global AMAmericas region (since 2012); previously, he was
the global head of credit research and global head of high yield at UBS
Global AMAmericas region (since 2008). In this role, he oversees US
investment grade and global high yield portfolio management. Mr. Ellinger
is vice president of two investment companies (consisting of two
portfolios) for which UBS Global AM serves as investment advisor or
manager.
|
|
|
|
|
|
|
|
Michael J.
Flook*; 48
|
|
Vice President
and Assistant
Treasurer
|
|
Since 2006
|
|
Mr. Flook is a director (since
2010) (prior to which he was an associate director) (since 2006) and a
senior manager of the US mutual fund treasury administration department of
UBS Global AMAmericas region (since 2006). Mr. Flook is a vice president
and assistant treasurer of 17 investment companies (consisting of 80
portfolios) for which UBS Global AMAmericas region serves as investment
advisor or manager.
|
|
|
|
|
|
|
|
Christopher S.
Ha*; 32
|
|
Vice President
and
Assistant
Secretary
|
|
Since
September
2012
|
|
Mr. Ha is a director and
associate general counsel (since September 2012) at UBS Global AMAmericas
region. Prior to joining UBS Global AMAmericas region, Mr. Ha was of
counsel at Buhler, Duggal & Henry LLP (law firm) (from March 2012 to
July 2012) and an associate attorney at Dechert LLP (law firm) (from 2007
to 2009). Mr. Ha is a vice president and assistant secretary of 17
investment companies (consisting of 80 portfolios) for which UBS Global
AMAmericas region serves as investment advisor or
manager.
|
19
Name, address, and
age
|
|
Position(s) held
with the
Fund
|
|
Term of office
and length
of
time served
|
|
Principal occupation(s) during past
5 years;
number of portfolios in Fund complex
for which person
serves as officer
|
Matthew Iannucci**;
41
|
|
Vice President
|
|
Since 2009
|
|
Mr. Iannucci is an executive
director (since 2010) (prior to which he was a director) (since 2002) and
portfolio manager (since 2009) of UBS Global AMAmericas region. Prior to
that he was a credit analyst for UBS Global AMAmericas region. Mr.
Iannucci is a vice president of one investment company (consisting of one
portfolio) for which UBS Global AMAmericas region serves as investment
advisor or manager.
|
|
|
|
|
|
|
|
Mark F. Kemper**;
55
|
|
Vice President
and
Secretary
|
|
Since 2004
|
|
Mr. Kemper is a managing director (since 2006) and head of the legal
department of UBS Global AMAmericas region (since 2004), secretary of UBS Global AM (since 2004) and assistant
secretary of UBS Global Asset Management Trust Company (since 1993) and secretary of UBS AM Holdings (USA) Inc.
(since 2001). Mr. Kemper is vice president and secretary of 17 investment companies (consisting of 80 portfolios) for
which UBS Global AMAmericas region serves as investment advisor or manager.
|
|
|
|
|
|
|
|
Joanne M.
Kilkeary*; 45
|
|
Vice President
and
Assistant
Treasurer
|
|
Since 2004
|
|
Ms. Kilkeary is an executive
director (since March 2013) (prior to which she was a director) (since
2008) and a senior manager (since 2004) of the US mutual fund treasury
administration department of UBS Global AMAmericas region. Ms. Kilkeary
is a vice president and assistant treasurer of 17 investment companies
(consisting of 80 portfolios) for which UBS Global AMAmericas region or
one of its affiliates serves as investment advisor or
manager.
|
|
|
|
|
|
|
|
Tammie Lee*;
42
|
|
Vice President
and
Assistant
Secretary
|
|
Since 2005
|
|
Ms. Lee is an executive
director (since 2010) (prior to which she was a director) (since 2005) and
associate general counsel of UBS Global AMAmericas region (since 2005).
Ms. Lee is a vice president and assistant secretary of 17 investment
companies (consisting of 80 portfolios) for which UBS Global AMAmericas
region serves as investment advisor or
manager.
|
20
Name, address, and
age
|
|
Position(s) held
with the
Fund
|
|
Term of office
and length
of
time served
|
|
Principal occupation(s) during past
5 years;
number of portfolios in Fund complex
for which person
serves as officer
|
Joseph McGill*;
51
|
|
Vice President
and
Chief
Compliance
Officer
|
|
Since 2004
|
|
Mr. McGill is a managing
director (since 2006) and chief compliance officer (since 2003) of UBS
Global AMAmericas region. Mr. McGill is a vice president and chief
compliance officer of 17 investment companies (consisting of 80
portfolios) for which UBS Global AMAmericas region serves as investment
advisor or manager.
|
|
|
|
|
|
|
|
Nancy D.
Osborn*; 47
|
|
Vice President
and
Assistant
Treasurer
|
|
Since 2007
|
|
Mrs. Osborn is a director
(since 2010) (prior to which she was an associate director) and a senior
manager of the US mutual fund treasury administration department of UBS
Global AMAmericas region (since 2006). Mrs. Osborn is a vice president
and assistant treasurer of 17 investment companies (consisting of 80
portfolios) for which UBS Global AMAmericas region serves as investment
advisor or manager.
|
|
|
|
|
|
|
|
Eric Sanders*;
47
|
|
Vice President
and
Assistant
Secretary
|
|
Since 2005
|
|
Mr. Sanders is a director and
associate general counsel of UBS Global AMAmericas region (since 2005).
Mr. Sanders is a vice president and assistant secretary of 17 investment
companies (consisting of 80 portfolios) for which UBS Global AMAmericas
region serves as investment advisor or manager.
|
|
|
|
|
|
|
|
Andrew Shoup*;
56
|
|
Vice President
and
Chief
Operating
Officer
|
|
Since 2006
|
|
Mr. Shoup is a managing
director and the global head of the fund treasury administration
department of UBS Global AMAmericas region (since 2006). Mr. Shoup is
also a director of UBS (IRL) Fund p.l.c. (since 2008). Mr. Shoup is a vice
president and chief operating officer of 17 investment companies
(consisting of 80 portfolios) for which UBS Global AMAmericas region
serves as investment advisor or
manager.
|
21
Name, address, and
age
|
|
Position(s) held
with the
Fund
|
|
Term of office
and length
of
time served
|
|
Principal occupation(s) during past
5 years;
number of portfolios in Fund complex
for which person
serves as officer
|
Keith A.
Weller*; 51
|
|
Vice President
and
Assistant
Secretary
|
|
Since 1998
|
|
Mr. Weller is an executive
director and senior associate general counsel of UBS Global AMAmericas
region (since 2005) and has been an attorney with affiliated entities
since 1995. Mr. Weller is a vice president and assistant secretary of 17
investment companies (consisting of 80 portfolios) for which UBS Global
AMAmericas region serves as investment advisor or
manager.
|
|
|
|
|
|
|
|
Mandy Yu*;
29
|
|
Vice President
|
|
Since
February
2013
|
|
Ms. Yu is an authorized officer
(since 2012) and tax compliance manager (since March 2013) of the US
mutual fund treasury administration department of UBS Global AMAmericas
region. She was a Fund Treasury Manager (from 2012 to March 2013) and a
Mutual Fund Administrator (from 2007 to 2012) for UBS Global AMAmericas
region. Ms. Yu is a vice president of 17 investment companies (consisting
of 80 portfolios) for which UBS Global AMAmericas region serves as
investment advisor or
manager.
|
____________________
|
|
Officers of the Fund are appointed by the directors and serve at
the pleasure of the board.
|
|
|
|
*
|
|
This
persons
business address is 1285 Avenue of the Americas, New
York, New York 10019-6028.
|
|
|
|
**
|
|
This
persons
business address is One North Wacker Drive, Chicago,
Illinois 60606.
|
22
Other
information
Beneficial
ownership of shares
The following information is based
upon a review of public filings. As of July 15, 2013, management knew of the
following person who owned beneficially 5% or more of the common stock of the
Fund:
Title of class
|
|
|
Name and address of
beneficial
owner
|
|
|
Amount and nature of
beneficial
ownership
|
|
Percent of class
|
Common Stock
|
|
First Trust Portfolios L.P.;
|
|
14,782,923*
|
|
23.79%**
|
|
|
First Trust Advisors L.P.;
|
|
|
|
|
|
|
The Charger Corporation
|
|
|
|
|
|
|
120 East Liberty Dr., Suite 400
|
|
|
|
|
|
|
Wheaton, Illinois 60187
|
|
|
|
|
____________________
*
|
|
First Trust Portfolios
L.P. is the sponsor of several unit investment trusts which hold shares of
common stock of the Fund. No individual unit investment trust sponsored by
First Trust Portfolios L.P. holds more than 3% of the Funds common stock.
First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P.
and acts as portfolio supervisor of the unit investment trusts which hold
shares of common stock of the Fund. The Charger Corporation is the general
partner of both First Trust Portfolios L.P. and First Trust Advisors
L.P.
|
|
**
|
|
First Trust Portfolios
L.P. made the filing upon which this information is based for a reporting
event occurring on December 31, 2012. Percent of class is based on the
number of shares outstanding as of July 15,
2013.
|
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 for inclusion in the Funds proxy materials for a subsequent
shareholders meeting should send such proposals to the Secretary of the Fund at
UBS Global Asset Management (Americas) Inc., UBS Tower, One North Wacker Drive,
Chicago, IL 60606. In order to be considered for inclusion in the Funds proxy
materials for the 2014 annual meeting of shareholders, shareholder proposals
must be received by the Fund no later than March 31, 2014.
Any shareholder who wishes to submit
proposals to be considered at a subsequent shareholders meeting and not to be
included in the Funds proxy materials should send such proposals to the
Secretary of the Fund at UBS Global Asset Management (Americas) Inc., UBS Tower,
One North Wacker Drive, Chicago, IL 60606. In order to be considered at the
Funds 2014 annual meeting of shareholders, shareholder proposals must be
received by the Fund no earlier than March 1, 2014 and no later than March 31,
2014.
23
Shareholder proposals that are
submitted in a timely manner either for inclusion in the Funds proxy materials,
or otherwise for presentation at the Funds 2014 annual meeting of shareholders,
will not necessarily be included in the Funds proxy materials or be able to be
presented at the 2014 annual meeting of shareholders. Inclusion or presentation
of such proposals, as applicable, is subject to limitations under the federal
securities laws and informational requirements of the Funds current Bylaws
(attached as Exhibit C), as in effect from time to time.
Currency of
information
Shareholders should note that
information and data provided in this proxy statement is current only as of the
dates indicated.
Important
notice regarding the availability of proxy materials for the annual meeting of
shareholders to be held on September 20, 2013
This proxy statement, along with the
Funds annual report for the reporting period ended May 31, 2013, are available
free of charge on the Funds website at
http://www.ubs.com/us/en/asset_management/individual_investors/closed_end_funds.html.
Other
business
Management knows of no business to be
presented at the meeting other than the matters set forth in this proxy
statement, but should any other matter requiring a vote of shareholders arise,
the proxies will vote thereon in their discretion.
By order of the board of
directors,
Mark F. Kemper
Vice President and Secretary
July 29, 2013
It is important that you
execute and return your proxy promptly.
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24
This page intentionally left
blank.
Exhibit
A
Audit
committee charter amended and restated as of May 12, 2004
(with revisions
through July 2013)
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 Funds financial statements, (2) the Funds compliance with
legal and regulatory requirements, (3) the independent auditors qualifications
and independence and (4) the performance of the Funds independent
auditors.
In performing its Board oversight
assistance function, the Committee will, among other things (a) oversee the
scope of the Funds audit, the quality and objectivity of the Funds financial
statements, the Funds 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 Funds 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 Funds independent
auditors are accountable to the Committee.
The Committee shall:
1.
|
|
Approve, and recommend to the
Board for the Boards ratification, the selection, appointment, retention
or termination of the Funds independent auditors, or of any other public
accounting firm engaged for the purpose of performing other audit, review
or attest services for the Fund.
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2.
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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
Funds independent auditors to UBS Global
and
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____________________
1
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|
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 advisor 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
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|
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 Funds 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-committees 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 Committees
pre-approval responsibilities to other persons (other than UBS Global or
the Funds officers).
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3.
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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.
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4.
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Review, in consultation with
the independent auditors, the scope of the Funds proposed audit each
year, including the audit procedures to be utilized, and certain other
matters in connection with the Funds financial statements.
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5.
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Inquire of UBS Global and
the independent auditors as to the Funds qualification under Subchapter M
of the Internal Revenue Code and amounts distributed and reported to
shareholders for Federal tax purposes.
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6.
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[Closed-end Funds only]
Review and discuss the Funds audited annual financial statements and
unaudited semiannual reports with UBS Global and, in the case of the
audited financials, the independent auditors, including the Funds
disclosure of managements discussion of Fund performance.
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____________________
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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 advisor and (c) any entity
controlling, controlled by, or under common control with the investment
advisor 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.
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|
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 managements
response.
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8.
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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.
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9.
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|
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 Funds service providers.
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10.
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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 Funds financial
statements, or internal or disclosure controls, between the independent
auditors and the Fund, UBS Global, the Funds sub-advisor(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 Funds sub-advisor(s), if any, that relates to services
rendered to the Fund.
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11.
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|
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
Funds investment advisor (including sub-advisors, 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.
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12.
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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.
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13.
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[Closed-end Funds only]
Consider and, if appropriate, recommend the publication of the Funds
annual audited financial statements in the Funds 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
Funds officers and UBS Global; and prepare the audit committee report
required to be included in the Funds proxy statement for its annual
meeting of shareholders.
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14.
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[Closed-end Funds only] At
least annually, obtain and review a report by the Funds 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.
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A-3
15.
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[Closed-end Funds only] Discuss in general the
Funds periodic earnings releases, as well as any financial information
and earnings guidance provided to analysts and rating
agencies.
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16.
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[Closed-end Funds only] Discuss policies with
respect to risk assessment and risk management.
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17.
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|
[Closed-end Funds only] Review hiring policies of
UBS Global and the Fund, if any, for employees and former employees of the
Funds independent auditors.
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18.
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[Closed-end Funds only] Prepare an annual
performance evaluation of the Committee for the Boards
review.
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19.
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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 Funds 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 Funds sub-advisor(s), if any, the Funds
counsel and the Funds other service providers and, as it determines necessary
to carry out its duties and at the Funds expense, may engage outside advisors
and consultants. In carrying out its functions, the Committee shall meet
separately, periodically, with management and with the Funds 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 Exchanges 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.
____________________
2
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|
In the case of a
newly-organized UBS fund, the Chairpersons 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
For those Funds listed on the NYSE,
no member of the Committee may serve on the audit committees of more than three
public companies, including all Funds managed by UBS Global (deemed for these
purposes to be a single public company), unless the Board determines that such
simultaneous service would not impair the ability of such member to serve on the
Committee effectively.
Meetings
The Committee shall meet on a regular basis, but not less
frequently than twice a year. Special meetings may also be held upon reasonable
notice to the members of the Committee. An agenda shall be established for each
meeting. Additional meetings shall be called as circumstances require. The
Committee may request any officer or employee of the Fund, the Funds counsel,
UBS Global, the Funds sub-advisor(s), if any, the Funds 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 Funds independent auditors at least once a year outside the presence of the
Funds officers and other parties. The Committee may, in its discretion, also
meet outside the presence of the Funds 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 Committees 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 Funds audit or for determining
whether the Funds 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 Funds 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 Committees 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
Investment Trust
UBS Money Series
UBS
PACE Select Advisors Trust
UBS Cashfund Inc.
UBS RMA Money Fund Inc.
UBS RMA Tax-Free Fund Inc.
Master Trust
*Strategic Global Income Fund, Inc.
*Global High 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
registrants 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 Funds 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 11 of Duties and ResponsibilitiesAudit 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 advisor (and sub-advisor, if applicable), administrator (and
sub-administrator, if applicable), principal underwriter (if any), or any other
provider of accounting related services for the Fund (each a Service Provider)
and (3) protections for such persons bringing complaints or concerns to the
attention of the Boards 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 BNY
Mellon Investment Servicing (US), Inc.), contact UBS Global AM via the
whistleblower hotline referenced below (unless such person believes that using
such 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).
A-8
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.
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 Providers 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 persons 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-9
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 Chairmans (or other Committee members) address as specified in the
Funds 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.
Whistleblower hotline &
web-site
Where circumstances preclude
the use of conventional channels (oral or written report to line manager, Head
of Compliance, Regional General Counsel or Human Resources), UBS Global AM has
established a whistleblower hotline and a dedicated whistleblower intranet site
to facilitate the confidential, anonymous submission of concerns regarding
potential legal/regulatory violations and questionable accounting or auditing
matters or other matters relating to the operations of a Fund or other ethical
dilemmas. The whistleblower intranet site can only be accessed through the
internal network available to UBS Global AM employees. The whistleblower hotline
can be reached either internally or externally; external calls to the
whistleblower hotline can be made toll-free. The dedicated web-site consists of
a whistleblower form with instructions for submission. 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 Regional Responsible Counsel will be
authorized to take steps to investigate the matter. Please utilize the hotline
and the mailbox only for this stated purpose. The whistleblower hotline number
is toll-free 1-888-968-4827 (when prompted for your user ID and pin code, press
1# to proceed directly to the hotline). Written submissions should be addressed
to: UBS Global Asset Management (Americas) Inc., Attn: Chief Compliance Officer,
1285 Avenue of the Americas, New York, NY 10019-6028.
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 Funds or a
Service Providers 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 Boards 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, with revisions through
July 2013)
A-10
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blank.
Exhibit B
Nominating and corporate governance
committee charter
(with revisions effective May 2010)
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. 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
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1.
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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 members resignation or removal from
the Board or the Committee.
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2.
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The Committee shall elect a chairperson (the
Chairperson) of the Committee, who shall preside over Committee
meetings.
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3.
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The compensation of the Chairperson and the
Committee members shall be as determined by the
Board.
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Nomination and appointment
policy
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1.
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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.
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2.
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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:
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whether or not the person is an
interested person as defined in the 1940 Act, meets the
independence and experience requirements of the
NYSE cited above and is otherwise qualified
under applicable laws and regulations to serve as a member of the
Board;
-
whether or not the person has any
relationships that might impair his or her independence, such
as any business, financial or family
relationships with Fund management, the investment advisor
and/or sub-advisors of the Fund, Fund service
providers or their affiliates;
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B-1
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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;
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the persons 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,
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the interplay of the candidates
experience with the experience of other Board members; and
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the extent to which the candidate would
be a desirable addition to the Board and any
committees thereof.
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3.
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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 Funds
disclosure documents. The shareholders letter should state the nominees
name and should include the nominees 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.
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4.
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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.
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Duties and
responsibilities
1.
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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.
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2.
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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.
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3.
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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.
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4.
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The Committee shall review,
as it deems necessary, and make recommendations to the Board with regard
to the compensation of Board and committee chairpersons.
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5.
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The Committee shall have the
authority to retain and terminate any search firm to be used to identify
Board nominees, subject to the Boards sole authority to approve the
search firms fees and other retention terms.
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B-2
6.
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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. As part of the Committees
annual evaluation of the Board, the Chairperson of the Committee shall
survey each Board member regarding the Board members assessment of the
competency and performance of the other members of the Board and the
Chairperson of the Board shall survey each Board member, other than the
Chairperson of the Committee, regarding the Board members assessment of
the competency and performance of the member of the Board serving as
Chairperson of the Committee.
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7.
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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.
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Subcommittees
1.
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The Committee shall have the
authority to delegate all or a portion of its duties and responsibilities
to a subcommittee of the Committee.
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Meetings
1.
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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.
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2.
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One-half of the Committees
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.
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3.
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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.
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4.
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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.
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5.
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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.
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Reporting
1.
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The Chairperson shall report
to the Board on the result of the Committees deliberations and make such
recommendations as deemed appropriate.
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Amendments
1.
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This Charter may be amended
by a vote of a majority of the Board members.
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B-3
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.
Master
Trust
Strategic Global Income Fund, Inc.
Global High Income Fund
Inc.
Investment Grade Municipal Income
Fund Inc.
Managed High Yield Plus Fund Inc.
B-4
Exhibit C
Article II, Section 11 of the Funds
Bylaws amended and restated as of May 2010
Section 11. Advance Notice of
Stockholder Nominees for Director and other Stockholder Proposals