UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
| Filed by the Registrant [X] | |
| Filed by a Party other than the Registrant [ ] | |
| Check the appropriate box: | |
| [ ] | Preliminary Proxy Statement |
| [ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| [X] | Definitive Proxy Statement |
| [ ] | Definitive Additional Materials |
| [ ] | Soliciting Material Pursuant to §240.14a-12 |
| FORT DEARBORN INCOME SECURITIES, INC. |
| (Name of Registrant as Specified In Its Charter) |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
| [X] | No fee required. | |
| [ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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| [ ] | Fee paid previously with preliminary materials. | |
| [ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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FORT DEARBORN INCOME SECURITIES, INC. |
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NOTICE OF |
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ANNUAL MEETING OF SHAREHOLDERS |
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DECEMBER 4, 2009 |
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TO THE SHAREHOLDERS:
The annual meeting of shareholders of Fort Dearborn Income Securities, Inc. (the “Fund”) will be held on Friday, December 4, 2009 at 1:00 p.m., Central Time, at One North Wacker Drive, 38th Floor, Chicago, Illinois 60606 for the following purposes:
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(1) |
To elect four (4) Directors to serve until the annual meeting of shareholders in 2010, or until their successors are elected and qualified or until they resign or are otherwise removed; and |
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To transact such other business as may properly come before the meeting or any adjournment thereof. |
You are entitled to vote at the meeting and any adjournments thereof if you owned Fund shares at the close of business on October 6, 2009. If you attend the meeting, you may vote your shares in person. To obtain directions to attend the meeting and vote in person, call the Fund’s toll-free number: 1-800-647 1568. If you do not expect to attend the meeting, please complete, date, sign and return the enclosed proxy card in the enclosed postage paid envelope.
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By order of the Board of Directors, |
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MARK F. KEMPER |
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Vice President and Secretary |
November 4,
2009
One North Wacker Drive
Chicago, Illinois 60606
Important Notice Regarding the Availability
of Proxy Materials for the
Shareholder Meeting to be held on December 4, 2009. The proxy statement is
available at
www.ubs.com/1/e/globalam/Americas/globalamus/globalamusii/closed_end_funds.html.
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YOUR VOTE IS IMPORTANT |
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Please indicate your voting instructions on the enclosed proxy card, date and sign it, and return it in the postage paid envelope provided. If you sign, date and return the proxy card but give no voting instructions, your shares will be voted “FOR” the nominees for director named in the attached proxy statement, and in the proxies’ discretion, either “FOR” or “AGAINST” any other business that may properly arise at the annual meeting, including adjournment. In order to avoid the additional expense to the Fund of further solicitation, we ask your cooperation in mailing your proxy card promptly. |
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general guidelines for signing proxy cards may be of assistance to you and avoid the time and expense to the Fund in validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to the name shown in the registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. For example:
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Registration |
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Valid Signature |
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Corporate Accounts |
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(1) ABC Corp. |
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ABC Corp. |
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John Doe, Treasurer |
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(2) ABC Corp |
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John Doe, Treasurer |
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(3) ABC Corp. c/o John Doe, Treasurer |
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John Doe |
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(4) ABC Corp. Profit Sharing Plan |
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John Doe, Trustee |
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Partnership Accounts |
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(1) The XYZ Partnership |
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Jane B. Smith, Partner |
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(2) Smith and Jones, Limited Partnership |
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Jane B. Smith, General Partner |
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Trust Accounts |
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(1) ABC Trust Account |
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Jane B. Doe, Trustee |
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(2) Jane B. Doe, Trustee u/t/d 12/18/78 |
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Jane B. Doe |
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Custodial or Estate Accounts |
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(1) John B. Smith, Cust. f/b/o |
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John B. Smith |
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(2) Estate of John B. Smith |
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John B. Smith, Jr., Executor |
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FORT DEARBORN INCOME SECURITIES, INC. |
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One North Wacker Drive |
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Chicago, Illinois 60606 |
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PROXY STATEMENT |
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Annual Meeting of Shareholders to be Held on December 4, 2009
This proxy statement is furnished to the shareholders of Fort Dearborn Income Securities, Inc. (the “Fund”) in connection with the Board of Directors’ solicitation of proxies to be used at the annual meeting of shareholders of the Fund to be held on December 4, 2009, at 1:00 p.m., Central Time, at the principal executive offices of the Fund at One North Wacker Drive, 38th Floor, Chicago, Illinois 60606, or any adjournment or adjournments thereof. This proxy statement and the related proxy card will first be mailed to shareholders on or about November 4, 2009.
A majority of the shares outstanding and entitled to vote on October 6, 2009 represented in person or by proxy, must be present to establish a quorum for the transaction of business at the meeting. Abstentions and broker non-votes will be counted as shares present for purposes of determining whether a quorum is present. Broker non-votes are shares held in street name for which the broker indicates that instructions have not been received from the beneficial owners or other persons entitled to vote and for which the broker does not have discretionary voting authority. It is expected that abstentions and broker non-votes will have no effect on Proposal 1. In the event that a quorum is not present at the annual meeting, shareholders present in person or the persons named as proxies may propose one or more adjournments of the annual meeting to permit further solicitation of proxies. Any such adjournment will require the affirmative vote of a majority of those shares represented at the annual meeting in person or by proxy. If the meeting is adjourned, notice need not be given of the adjourned meeting at which the adjournment is taken. At any adjourned meeting, the Fund may transact any business which might have been transacted at the original meeting.
The individuals named as proxies on the enclosed proxy card will vote in accordance with your direction as indicated thereon if your proxy card is received properly executed by you or by your duly appointed agent or attorney-in-fact. If you give no voting instructions, your shares will be voted FOR the four nominees for Director named herein, and, in the proxies’ discretion, either FOR or AGAINST any other business that may properly arise at the annual meeting, including questions of adjournment. You may revoke any proxy card by attending the annual meeting in person, giving another proxy or submitting a written notice of revocation to the Fund’s Secretary at UBS Global Asset Management (Americas), Inc., One North Wacker Drive, Chicago, Illinois 60606. Unless you are attending the annual meeting in person, to be effective, your revocation must be received by the Fund prior to the meeting and must indicate your name and account number. If you attend the annual meeting in person you may, if you wish, vote by ballot at the meeting, thereby canceling any proxy previously given. If your shares are held by your bank or broker, then in order to vote in person at the annual meeting, you will need to obtain a “Legal Proxy” from your bank or broker and present it to the Inspector of Election at the meeting.
As of the record date, October 6, 2009, the Fund had 8,775,665 shares of common stock outstanding. The solicitation of proxies, the cost of which will be borne by the Fund, will be made primarily by mail but also may include telephone and oral communications by regular employees of UBS Global Asset Management (Americas), Inc. (“UBS Global AM” or the “Advisor”), who will not receive any
compensation therefor from the Fund. Each full share of the Fund outstanding is entitled to one vote, and each fractional share of the Fund outstanding is entitled to a proportionate share of one vote.
UBS Global AM serves as the Fund’s investment advisor. UBS Global AM is an indirect wholly owned asset management subsidiary of UBS AG. UBS AG is an internationally diversified organization with headquarters in Zurich and Basel, Switzerland. UBS AG operates in many areas of the financial services industry. The principal business offices of UBS Global AM are located at One North Wacker Drive, Chicago, Illinois 60606.The principal offices of UBS AG are Bahnhofstrasse 45, Zurich, Switzerland and Aeschenvorstadt 1, 4051 Basel, Switzerland.
The Fund is sending to shareholders, in a separate mailing, the Fund’s annual report for the fiscal year ended September 30, 2009. You may obtain, without charge, additional copies of the Fund’s annual report and semi-annual report by: (1) written request to: UBS Global Asset Management (Americas), Inc., Attn: Mark F. Kemper, One North Wacker Drive, Chicago, Illinois 60606; or (2) calling the Fund’s toll-free number: 1-800-647 1568. The Fund’s annual and semi-annual report are also available, without charge, at www.ubs.com/1/e/globalam/Americas/globalamus/globalamusii/closed_end_funds.html.
PROPOSAL 1. ELECTION OF DIRECTORS
Proposal 1 relates to the election of Directors of the Fund. Management proposes the election of the four nominees named in the table on the following page. Each nominee has indicated his or her willingness to serve if elected. If elected, each nominee will hold office until the next annual meeting of shareholders or until his or her successor is elected and qualified, or until he or she resigns or is otherwise removed. Each of the nominees was last elected Director at the Fund’s December 2008 annual meeting of shareholders. As described more fully below, these nominees have significant experience managing investment vehicles. All of the Fund’s nominees have been Fund Directors for numerous years, and are also on the boards of other funds managed by UBS Global AM. They have had experience as senior officers and directors of major business corporations and other investment advisors.
Directors are elected by a plurality vote of shareholders. Unless you give contrary instructions on the enclosed proxy card, your shares will be voted FOR the election of all four 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 management may recommend.
Directors, including those who are not “interested persons” of the Fund as that term is defined by the Investment Company Act of 1940, as amended (“1940 Act”) (“Independent Directors”), shall be elected by the affirmative vote of the holders of a plurality of the shares of the Fund cast in person or by proxy and entitled to vote thereon, provided a quorum is present, so that the nominees with the largest number of votes are elected as Fund Directors. There is no cumulative voting for the election of Directors. Proxies cannot be voted for a greater number of persons than the number of nominees named. None of the Directors or nominees beneficially owned 1% or more of the Fund’s common stock and none of the executive officers beneficially owned any shares of the Fund’s common stock as of October 6, 2009. In addition, the Directors and executive officers, as a group, beneficially owned less than 1% of the outstanding common stock of the Fund as of October 6, 2009.
Listed in the table on the following page, for each nominee, is a brief description of the nominee’s experience as a Director of the Fund and as a director or trustee of other funds, as well as other recent professional experience.
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Name, Age, and Address |
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Position(s) |
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Length of |
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Principal |
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Other |
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Shares |
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INDEPENDENT DIRECTORS: |
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Adela Cepeda; 51 |
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Director |
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Since 2000 |
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Ms. Cepeda is founder and president of A.C. Advisory, Inc. (since 1995). |
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Ms. Cepeda is a director or trustee of four investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Ms. Cepeda is a director of the MGI Funds (7 portfolios) (since 2005), director of the Consulting Group Capital Markets Funds (11 portfolios) and director of Amalgamated Bank of Chicago. |
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1,000 |
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Frank K. Reilly; 73 |
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Chair- |
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Since 1992 |
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Mr. Reilly is a Professor of Finance at the University of Notre Dame (since 1982). |
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Mr. Reilly is a director or trustee of four investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Mr. Reilly is a director of Discover Bank, a subsidiary of Discover Financial Services. |
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8,555 |
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Edward M. Roob; 75 |
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Director |
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Since 1993 |
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Mr. Roob is retired (since 1993). |
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Mr. Roob is a director or trustee of four investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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None. |
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9,000 |
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J. Mikesell Thomas; 58 |
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Director |
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Since 2002 |
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Mr. Thomas is a principal with the investment firm, Castle Creek Capital (since July 2008), President and CEO of First Chicago Bancorp (since November 2008) and CEO of First Chicago Bank & Trust (since November 2008). He is the former President and CEO of Federal Home Loan Bank of Chicago (2004 to March 2008). Mr. Thomas was an independent financial advisor (2001 to 2004). |
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Mr. Thomas is a director or trustee of four investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Mr. Thomas is a director and chairman of the Audit Committee for Northshore University HealthSystem. |
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None |
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Each Independent Director receives, for his or her service to the UBS Family of Funds Complex and one unregistered investment company advised by the Advisor and overseen by the Board, an annual retainer of $160,000 paid quarterly for serving as a Board member. The chairperson of the Board also receives an annual retainer of $20,000 from the UBS Family of Funds Complex for his or her service to the Board. In addition, the chairs of the Audit Committee and the Nominating, Compensation and Governance Committee receive an annual retainer of $15,000 and $7,500, respectively, for their service to the Board. The UBS Family of Funds Complex also reimburses each Director and officer for out-of-pocket expenses in connection with travel and attendance at Board meetings. No officer, director or employee of UBS Global AM or any of its affiliates presently receives any compensation from the Fund for acting as a Board member or officer.
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Compensation Table†
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Name of Person, Position |
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Total |
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Adela Cepeda, Director |
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2,560 |
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N/A |
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120,000 |
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Frank K. Reilly, Director and Chairperson |
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2,881 |
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N/A |
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135,000 |
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Edward M. Roob, Director |
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2,560 |
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N/A |
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120,000 |
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J. Mikesell Thomas, Director |
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2,801 |
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N/A |
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131,250 |
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† |
Only Independent Directors are compensated by the Fund. |
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* |
Represents fees paid to each Director for service on the Board during the fiscal year ended September 30, 2009. |
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** |
Represents fees paid for services during the fiscal year ended September 30, 2009 to each Board member by four investment companies for which UBS Global AM or one of its affiliates served as investment advisor, sub-advisor or manager. The Fund does not have a bonus, pension, profit sharing or retirement plan. |
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Nominee Ownership of Fund Shares
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Independent Directors: |
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Adela Cepeda |
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$1–$10,000 |
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$1–$10,000 |
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Frank K. Reilly |
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over $100,000 |
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over $100,000 |
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Edward M. Roob |
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over $100,000 |
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over $100,000 |
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J. Mikesell Thomas |
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$0 |
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$0 |
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† |
Information regarding ownership of shares of the Fund is as of October 6, 2009; information regarding ownership of shares in all registered investment companies overseen by nominee for which UBS Global AM or an affiliate serves as investment advisor, sub-advisor or manager is as of September 30, 2009. |
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As of September 30, 2009, the Independent Directors and 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.
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ADDITIONAL INFORMATION
Information Concerning Independent
Registered Public Accounting Firm
The Fund’s financial statements for the fiscal year ended September 30, 2009 were audited by Ernst & Young LLP (“Ernst & Young”), independent registered public accounting firm. In addition, Ernst & Young prepares the Fund’s federal and state annual income tax returns and provides certain non-audit services. The Audit Committee has considered whether the provision of those non-audit services is compatible with maintaining Ernst & Young’s independence. In the past two fiscal years, the Audit Committee did not approve any services provided by Ernst & Young pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X. The Board of Directors of the Fund has selected Ernst & Young as the independent registered public accounting firm for the Fund for the fiscal year ending September 30, 2009. Ernst & Young has been the Fund’s independent registered public accounting firm since the fiscal year ended September 30, 2001. Ernst & Young has informed the Fund that it has no material direct or indirect financial interest in the Fund.
Representatives of Ernst & Young will be present at the meeting via telephone.
Audit Fees
For the fiscal years ended September 30, 2009 and September 30, 2008, the aggregate Ernst & Young audit fees for professional services rendered to the Fund were approximately $36,800 and $35,000, 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
In each of the fiscal years ended September 30, 2009 and September 30, 2008, 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 $2,500 and $2,500, respectively.
Fees included in the audit-related fees category are those associated with the reading and providing comments on the semi-annual statements.
There were no audit-related fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
Tax Fees
In each of the fiscal years ended September 30, 2009 and September 30, 2008, the aggregate tax fees billed by Ernst & Young for professional services rendered to the Fund were approximately $4,450 and $4,440, respectively.
Fees included in the tax fees category comprise all services performed by professional staff in the independent accountant’s tax division except those services related to the audits. This category comprises fees for tax return preparation, review of excise tax calculations and FIN 48 review.
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There were no tax fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 201 of Regulation S-X during the fiscal years indicated above.
All Other Fees
In each of the fiscal years ended September 30, 2009 and September 30, 2008, there were no fees billed by Ernst & Young for products and services, other than the services reported above, rendered to the Fund.
Fees included in the “all other fees” category would consist of services related to internal control reviews, strategy and other consulting, financial information systems design and implementation, consulting on other information systems, and other tax services unrelated to the Fund.
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.
Pre-Approval Policies and Procedures
The Audit Committee Charter contains the Audit Committee’s pre-approval policies and procedures. Reproduced below is an excerpt from the Audit Committee Charter regarding pre-approval policies and procedures:
To carry out its purposes, the Audit Committee shall have the following duties and powers:
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To pre-approve the engagement of, and to recommend to the Board the engagement, retention or termination of, the independent auditors to provide audit, review or attest services to the Fund, and, in connection therewith, to review and evaluate the capabilities and independence of the auditors, and receive the auditors’ specific representations as to their independence. In evaluating the auditor’s qualifications, performance and independence, the Committee must, among other things, obtain and review a report by the auditors, at least annually, describing the following items: (i) all relationships between the independent auditors and the Fund, as well as with the Fund’s investment advisor or any control affiliate of the investment advisor that provides ongoing services to the Fund; (ii) any material issues raised by the most recent internal quality control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (iii) the audit firm’s internal quality control procedures. |
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To pre-approve all non-audit services to be provided to the Fund by the independent auditors when, without such pre-approval, the auditors would not be independent of the Fund under applicable federal securities laws, rules or auditing standards. |
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To pre-approve all non-audit services to be provided by the Fund’s independent auditors to the Fund’s investment advisor or to any entity that controls, is controlled by or is under common control with the Fund’s investment advisor (“advisor affiliate”) and that provides ongoing services to the Fund, when, without such pre-approval by the Committee, the auditors would not be independent of the Fund under applicable federal securities laws, rules or auditing standards. |
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(d) |
To establish, if deemed necessary or appropriate as an alternative to Committee pre-approval of services to be provided by the independent auditors as required by paragraphs (b) and (c) above, policies and procedures to permit such services to be pre-approved by other means, such as by |
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action of a designated member or members of the Committee, subject to subsequent Committee review or oversight. |
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To consider whether the non-audit services provided by the Fund’s independent auditor to the Fund’s investment advisor or any advisor affiliate that provides on-going services to the Fund, which services were not pre-approved by the Committee, are compatible with maintaining the auditors’ independence. |
Aggregate Non-Audit Fees
For the fiscal years ended September 30, 2009 and September 30, 2008, the aggregate non-audit fees billed by Ernst & Young of $138,950 and $211,849, respectively, included non-audit services rendered on behalf of the Fund of $6,950 and $6,940, respectively, and non-audit services rendered on behalf of the Fund’s 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 $132,000 and $204,909, respectively.
The Audit Committee has considered whether the provision of non-audit services that were rendered to the Fund’s 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 is compatible with maintaining Ernst & Young’s independence.
Additional Information about the Board of Directors
The Board of Directors (the “Board”) of the Fund met six times during the fiscal year ended September 30, 2009. Each Director attended 75% or more of the Board meetings during the last fiscal year. In addition, no Directors attended less than 75% of the aggregate of the total number of meetings held by the Board and the total number of meetings held by all committees on which such Director served during the fiscal year ended September 30, 2009.
The Fund’s Directors are not required to attend the Fund’s annual meetings. All four of the Directors attended the annual meeting of shareholders in 2008.
The Fund’s Audit Committee is responsible for, among other things: (i) selecting, overseeing and setting the compensation of the Fund’s independent registered public accounting firm; (ii) overseeing the Fund’s accounting and financial reporting policies and practices, its internal controls and, as appropriate, the internal controls of certain service providers; (iii) overseeing the quality and objectivity of the Fund’s financial statements and the independent audits thereof; and (iv) acting as a liaison between the Fund’s independent registered public accounting firm and the full Board of Directors. A copy of the Audit Committee Charter is available on the Fund’s website at www.ubs.com/1/e/globalam/Americas/globalamus/globalamusii/closed_end_funds.html. In fulfilling its duties, the Audit Committee has: (a) reviewed and discussed the Fund’s audited financial statements with management; (b) discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61; (c) received certain written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 and discussed the independent auditors’ independence with them; and (d) based upon its review of the above, recommended to the Board that the Fund’s audited financial statements be included in the Fund’s annual
8
report to shareholders for the fiscal year ended September 30, 2008. It is anticipated the Audit Committee will conduct similar discussions and review for the fiscal year ended September 30, 2009. The Audit Committee currently consists of Ms. Cepeda and Messrs. Reilly, Roob and Thomas, none of whom have any relationship to the Fund that may interfere with the exercise of their independence from management or the Fund and each of whom is independent as defined under listing standards of the NYSE applicable to closed-end funds. Each member of the Fund’s Audit Committee is also a member of a similar committee established by the boards of certain other investment companies for which UBS Global AM or an affiliate serves as investment advisor, sub-advisor or manager. The Audit Committee met four times during the fiscal year ended September 30, 2009.
The Board has also established a Nominating, Compensation and Governance Committee that acts pursuant to a written charter (“Nominating, Compensation and Governance Committee Charter”). The Nominating, Compensation and Governance Committee is responsible for, among other things, selecting, evaluating and recommending to the Board candidates to be nominated as additional Independent Directors of the Board, periodically reviewing the composition of the Board, periodically reviewing Board governance procedures and recommending any appropriate changes thereto and periodically reviewing the compensation structure for Independent Directors. A copy of the Nominating, Compensation and Governance Committee Charter is attached as Appendix A. The Nominating, Compensation and Governance Committee currently consists of Ms. Cepeda and Messrs. Reilly, Roob and Thomas, 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, Compensation and Governance Committee met two times during the fiscal year ended September 30, 2009.
In nominating candidates, the Nominating, Compensation and Governance Committee believes that no specific qualifications or disqualifications are controlling or paramount, or that specific qualities or skills are necessary for each candidate to possess. In identifying and evaluating nominees for Director, the Nominating, Compensation and 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 applicable independence and experience requirements of the NYSE and is otherwise qualified under applicable laws and regulations to serve as a member of the Board; (ii) whether or not the person has any relationships that might impair his or her independence, such as any business, financial or family relationships with Fund management, the investment advisor of the Fund, other Fund service providers or their affiliates; (iii) whether or not the person is willing to serve, and willing and able to commit the time necessary for the performance of the duties of a Board member; (iv) the person’s judgment, skill, diversity and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; (v) the interplay of the candidate’s experience with the experience of other Board members; and (vi) the extent to which the candidate would be a desirable addition to the Board and any committees thereof.
While the Nominating, Compensation and Governance Committee is solely responsible for the selection and recommendation to the Board of Board candidates, the Nominating, Compensation and Governance Committee will consider nominees recommended by Qualifying Fund Shareholders if a vacancy occurs among those board members who are independent board members. A Qualifying Fund Shareholder is a shareholder that: (i) owns of record, or beneficially through a financial intermediary, 1/2 of 1% or more of the Fund’s outstanding shares and (ii) has been a shareholder of at least 1/2 of 1% of the Fund’s total outstanding shares for 12 months or more prior to submitting the recommendation to the Nominating, Compensation and Governance Committee. In order to recommend a nominee, a Qualifying Fund Shareholder should send a letter to the chairperson of the Nominating, Compensation and
9
Governance Committee, care of Mark Kemper, Secretary of the Fund, at UBS Global Asset Management (Americas), Inc., One North Wacker Drive, Chicago, Illinois 60606. The Qualifying Fund Shareholder’s letter should include: (i) the name and address of the Qualifying Fund Shareholder making the recommendation; (ii) the number of shares of the Fund which are owned of record and beneficially by such Qualifying Fund Shareholder and the length of time that such shares have been so owned by the Qualifying Fund Shareholder; (iii) a description of all arrangements and understandings between such Qualifying Fund Shareholder and any other person or persons (naming such person or persons) pursuant to which the recommendation is being made; (iv) the name and address of the nominee; and (v) the nominee’s resume or curriculum vitae.
The Qualifying Fund Shareholder’s letter 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 Nominating, Compensation and Governance 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.
Shareholders may send other communications to the Board by sending a letter to the chairperson of the Board of Directors, Mr. Frank K. Reilly, care of Mark Kemper, Secretary of the Fund, at UBS Global Asset Management (Americas), Inc., One North Wacker Drive, Chicago, Illinois 60606. The chairperson of the Board of Directors will relay shareholder communications to the other Board members.
10
EXECUTIVE OFFICERS
Officers of the Fund are appointed by the Directors and serve at the pleasure of the Board. None of the Fund’s officers currently receives any compensation from the Fund. The executive officers of the Fund are:
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Joseph J. Allessie*; 44 |
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Vice President and Assistant Secretary |
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Since 2005 |
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Mr. Allessie is an executive director (since 2007) (prior to which he was a director) and deputy general counsel (since 2005) at UBS Global Asset Management (US) Inc. and UBS Global AM (collectively, “UBS Global AM—Americas region”). Prior to joining UBS Global AM—Americas region, he was senior vice president and general counsel of Kenmar Advisory Corp. (from 2004 to 2005). Prior to that, Mr. Allessie was general counsel and secretary of GAM USA Inc., GAM Investments, GAM Services, GAM Funds, Inc. and the GAM Avalon Funds (from 1999 to 2004). Mr. Allessie is a vice president and assistant secretary of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Thomas Disbrow*; 43 |
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Vice President, Treasurer, and Principal Accounting Officer |
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Since 2000 (Vice President) and since 2006 (Treasurer and Principal Accounting Officer) |
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Mr. Disbrow is an executive director (since 2007) (prior to which he was a director) and head of US mutual fund treasury administration department (since 2006) of UBS Global AM—Americas region. Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Occupation(s) During Past 5 Years; |
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Michael J. Flook*; 44 |
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Vice President and Assistant Treasurer |
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Since 2006 |
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Mr. Flook is an associate director and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region (since 2006). Prior to joining UBS Global AM—Americas region, he was a senior manager with The Reserve (asset management firm) from May 2005 to May 2006. Prior to that he was a senior manager with PFPC Worldwide since October 2000. Mr. Flook is a vice president and assistant treasurer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serve as investment advisor, sub-advisor or manager. |
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Mark F. Kemper**; 51 |
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Vice President and Secretary |
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Since 1999 and 2004, respectively |
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Mr. Kemper is a managing director (since 2006) and general counsel (since 2004) of UBS Global AM—Americas region. He was deputy general counsel of UBS Global AM from July 2001 to July 2004. He has been secretary of UBS Global AM—Americas region since 1999 and assistant secretary of UBS Global Asset Management Trust Company since 1993. Mr. Kemper is secretary of UBS Global AM—Americas region (since 2004). Mr. Kemper is vice president and secretary of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Joanne M. Kilkeary*; 41 |
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Vice President Assistant Treasurer |
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Since 2006 |
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Ms. Kilkeary is a director (since March 2008) (prior to which she was an associate director) (since 2000) and a senior manager (since 2004) of the US mutual fund treasury administration department of UBS Global AM—Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Tammie Lee*; 38 |
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Vice President and Assistant Secretary |
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Since 2005 |
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Ms. Lee is a director and associate general counsel of UBS Global AM—Americas region (since 2005). Prior to joining UBS Global AM—Americas region, she was vice president and counsel at Deutsche Asset Management/Scudder Investments from 2003 to 2005. Prior to that she was assistant vice president and counsel at Deutsche Asset Management/Scudder Investments from 2000 to 2003. Ms. Lee is a vice president and assistant secretary of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Steven LeMire*; 40 |
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Vice President and Assistant Treasurer |
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Since 2007 |
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Mr. LeMire is a director and senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region (since October 2007). Prior to joining UBS Global AM—Americas region, he was an independent consultant with Third River Capital, LLC (formerly Two Rivers Capital, LLC) (from 2005 to 2007). Prior to that, he was vice president of operations and fund administration with Oberweis Asset Management, Inc. (from 1997 to 2005). Mr. LeMire is a vice president and assistant treasurer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Name, Address, and Age |
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Principal
Occupation(s) During Past 5 Years; |
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Joseph McGill*; 47 |
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Vice President and Chief Compliance Officer |
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Since 2004 |
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Mr. McGill is a managing director (since 2006) and chief compliance officer (since 2003) at UBS Global AM—Americas region. Prior to joining UBS Global AM—Americas region, he was assistant general counsel at J.P. Morgan Investment Management (from 1999 to 2003). Mr. McGill is a vice president and chief compliance officer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Nancy D. Osborn*; 43 |
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Vice President and Assistant Treasurer |
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Since 2007 |
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Mrs. Osborn is an associate director and a senior manager of the US mutual fund treasury administration department of UBS Global AM—Americas region (since 2006). Prior to joining UBS Global AM—Americas region, she was an Assistant Vice President with Brown Brothers Harriman since April 1996. Mrs. Osborn is a vice president and assistant treasurer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Eric Sanders*; 44 |
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Vice President and Assistant Secretary |
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Since 2005 |
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Mr. Sanders is a director and associate general counsel of UBS Global AM— Americas region (since 2005). From 1996 until June 2005, he held various positions at Fred Alger & Company, Incorporated, the most recent being assistant vice president and associate general counsel. Mr. Sanders is a vice president and assistant secretary of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Name, Address, and Age |
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Principal
Occupation(s) During Past 5 Years; |
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Andrew Shoup*; 53 |
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Vice President and Chief Operating Officer |
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Since 2006 |
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Mr. Shoup is a managing director and the Global Head of the Fund Treasury Administration department of UBS Global AM—Americas region (since July 2006). Mr. Shoup is also a director of UBS (IRL) Fund p.l.c. (since December 2008). Prior to joining UBS Global AM—Americas region, he was chief administrative officer for the Legg Mason Partner Funds (formerly Smith Barney, Salomon Brothers and CitiFunds mutual funds) from November 2003 to July 2006. Prior to that, he held various positions with Citigroup Asset Management and related Companies with their domestic and offshore mutual funds since 1993. Additionally, he has worked for another mutual fund complex as well as spending eleven years in public accounting. Mr. Shoup is a vice president and chief operating officer of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Kai R. Sotorp**; 50 |
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President |
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Since 2006 |
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Mr. Sotorp is Head—Americas for UBS Global Asset Management (since 2004); a member of the UBS Group Managing Board (since 2003) and a member of the UBS Global Asset Management Executive Committee (since 2001). Prior to his current role, Mr. Sotorp was head of UBS Global Asset Management—Asia Pacific (2002- 2004), covering Australia, Japan, Hong Kong, Singapore and Taiwan; head of UBS Global Asset Management (Japan) Ltd. (2001 to 2004); representative director and president of UBS Global Asset Management (Japan) Ltd. (2000 to 2004); and member of the board of Mitsubishi Corp.—UBS Realty Inc. (2000 to 2004). Mr. Sotorp is president of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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Name, Address, and Age |
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Occupation(s) During Past 5 Years; |
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Keith A. Weller*; 48 |
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Vice President and Assistant Secretary |
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Since 2004 |
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Mr. Weller is an executive director and senior associate general counsel of UBS Global AM—Americas region (since 2005) and has been an attorney with affiliated entities since 1995. Mr. Weller is a vice president and assistant secretary of 20 investment companies (consisting of 102 portfolios) for which UBS Global AM—Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager. |
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* |
This person’s business address is 1285 Avenue of the Americas, New York, NY 10019-6028. |
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** |
This person’s business address is One North Wacker Drive, Chicago, IL 60606. |
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16
OWNERSHIP OF SHARES
As of October 6, 2009, the following persons or entities were known by the Fund to be owners of more than 5% of the Fund’s common stock. Other than with respect to Doliver Capital Advisors, Inc., as set forth in their Schedule 13G/A filing, the Fund has no knowledge whether the record holdings reported below are also held beneficially.
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Name
and Address of |
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Amount
and Nature of |
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Percent of Fund |
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Raymond James & |
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1,261,680 shares of common |
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14.37% |
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Associates, Inc. |
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stock of the Fund |
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880 Carilion Parkway |
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P.O. Box 12749 |
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St. Petersburg, FL 33716 |
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Doliver Capital Advisors, Inc.* |
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1,596,200 shares of common |
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18.19% |
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6363 Woodway, Suite 963 |
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stock of the Fund |
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Houston, TX 77057 |
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Merrill Lynch |
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829,820 shares of common |
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9.46% |
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101 Hudson St. |
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stock of the Fund |
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8th Floor |
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Jersey City, NJ 07302 |
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Charles Schwab & Co., Inc. |
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675,664 shares of common |
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7.70% |
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Attn: Proxy Department |
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stock of the Fund |
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211 Main Street |
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San Francisco, CA 94105 |
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First Clearing, LLC |
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1,609,214 shares of common |
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18.34% |
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10700 Wheat First Drive |
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stock of the Fund |
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WS 1023 |
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Glen Allen, VA 23060 |
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* Based on Schedule 13G/A filed on February 13, 2009. According to a Form 13F-HR filed with the SEC on August 14, 2009 for the calendar year or quarter ended June 30, 2009, Doliver Capital Advisors, Inc. reported owning 1,308,962 shares of common stock of the Fund.
Other than as set forth above, as of October 6, 2009, Management of UBS Global AM did not know of any other person who owned of record or beneficially 5% or more of the common stock of the Fund.
17
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
The Fund anticipates mailing this proxy statement on or about November 4, 2009. In addition, the Fund anticipates that its next annual meeting of shareholders will be held on or around the same date next year. Any shareholder who wishes to submit proposals for inclusion in the Fund’s proxy statement and proxy card to be considered at the Fund’s 2010 annual meeting of shareholders should send such proposals to the Secretary of the Fund at UBS Global Asset Management (Americas), Inc., One North Wacker Drive, Chicago, Illinois 60606. In order for such proposals to be included in the Fund’s proxy statement and proxy card relating to the 2010 annual meeting of shareholders, shareholder proposals must be received by the Fund no later than July 7, 2010 and must satisfy other requirements of the federal securities laws. Submission of a proposal by a shareholder does not guarantee that the proposal will be included in the proxy statement. A shareholder who wishes to make a proposal at the Fund’s 2010 annual shareholders’ meeting without including the proposal in the Fund’s proxy statement and proxy card must notify the Fund of such proposal by directing such notice to the Secretary of the Fund at the address set forth above by no later than September 20, 2010. If a shareholder fails to give notice to the Fund by this date, then the persons named as proxies in the proxies solicited by the Board for the 2010 annual meeting of shareholders may exercise discretionary voting power with respect to any such proposal.
OTHER BUSINESS
Management knows of no business to be presented at the meeting other than the matters set forth in this proxy statement, but should any other matter requiring a vote of shareholders arise, the proxies will vote thereon according to their best judgment in the interest of the Fund.
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By order of the Board of Directors, |
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MARK F. KEMPER |
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Vice President and Secretary |
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November 4, 2009 |
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It is important that you execute and return your proxy promptly. |
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18
Appendix A
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NOMINATING, COMPENSATION AND GOVERNANCE COMMITTEE CHARTER |
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I. |
The Committee. |
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The Nominating, Compensation and Governance Committee (the “Committee”) is a committee of, and established by, the Board of Trustees/Directors (the “Board”) of each of the entities listed on Schedule A hereto (each a “Fund”). The Committee consists of such number of members as set by the Board from time to time and its members shall be selected by the Board. The Committee shall be comprised entirely of “independent members.” For purposes of this Charter, independent members shall mean members who are not interested persons of the Fund (“Disinterested Board members”) as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”). |
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II. |
Board Nominations and Functions. |
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1. |
The Committee shall make recommendations for nominations for Disinterested Board members on the Board to the incumbent Disinterested Board members and to the full Board. The Committee shall evaluate candidates’ qualifications for Board membership and the independence of such candidates from the Fund’s investment advisors and other principal service providers. Persons selected must be independent in terms of both the letter and the spirit of the 1940 Act. The Committee shall also consider the effect of any relationships beyond those delineated in the 1940 Act that might impair independence, e.g., business, financial or family relationships with investment advisors or service providers. |
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The Committee also shall evaluate candidates’ qualifications and make recommendations for “interested” members on the Board to the full Board. |
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3. |
The Committee may consider the factors listed in Schedule B to evaluate candidates for membership on the Board. The Committee also 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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4. |
The Committee shall periodically review Board governance procedures and shall recommend any appropriate changes to the full Board. |
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5. |
The Committee shall periodically review the composition of the Board to determine whether it may be appropriate to add individuals with backgrounds or skill sets that differ from those of the members currently on the Board. |
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6. |
The Committee shall periodically review Disinterested Board member compensation and shall recommend any appropriate changes to the Disinterested Board members as a group. |
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7. |
The Committee shall review recommendations from Qualifying Fund Shareholders (as defined in Schedule B) for nominations to fill vacancies on the Board if such recommendations are submitted in accordance with the procedures described in Schedule B. |
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III. |
Committee Nominations and Functions. |
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The Committee shall make recommendations to the full Board for nomination for membership on all committees of the Board and shall review committee assignments at least annually. |
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2. |
The Committee shall review as necessary the responsibilities of any committees of the Board, whether there is a continuing need for each committee, whether there is a need for additional |
A-1
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committees of the Board, and whether committees should be combined or reorganized. The Committee shall make recommendations for any such action to the full Board. |
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IV. |
Other Powers and Responsibilities. |
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The Committee shall meet as often as it deems appropriate. |
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The Committee shall have the resources and authority appropriate to discharge its responsibilities, including authority to retain special counsel and other experts or consultants at the expense of the Fund. |
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3. |
The Committee shall report its activities to the Board and make such recommendations as the Committee may deem necessary or appropriate. |
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4. |
A majority of the members of the Committee shall constitute a quorum for the transaction of business at any meeting of the Committee. The action of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the action of the Committee. The Committee may meet in person or by telephone, and a majority of the members of the Committee may act by written consent to the extent not inconsistent with the Fund’s bylaws. In the event of any inconsistency between this Charter and the Fund’s organizational documents, the provisions of the Fund’s organizational documents shall be given precedence. |
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5. |
The Committee shall review this Charter at least annually and recommend any changes to the full Board. |
A-2
Schedule A
The UBS Funds
UBS Relationship Funds
SMA Relationship Trust
Fort Dearborn Income Securities, Inc.
A-3
[This Page Intentionally Left Blank]
Schedule
B
NOMINATION AND APPOINTMENT POLICY
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1. |
The Committee believes that it is in the best interests of the Fund and its shareholders to obtain highly-qualified candidates to serve as members of the Board. |
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2. |
In nominating candidates, the Committee believes that no specific qualifications or disqualifications are controlling or paramount, or that specific qualities or skills are necessary for each candidate to possess. The Committee shall take into consideration such factors as it deems appropriate. These factors may include: |
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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 applicable to closed-end funds as they may be adopted and modified from time to time by the New York Stock Exchange and is otherwise qualified under applicable laws and regulations to serve as a member of the Board; |
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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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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 person’s judgment, skill, diversity and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; |
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the interplay of the candidate’s 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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While the Committee is solely responsible for the selection and recommendation to the Board of Board candidates, the Committee will consider nominees recommended by Qualifying Fund Shareholders if a vacancy occurs among those Board members who are Independent Board Members. A Qualifying Fund Shareholder is a shareholder that: (i) owns of record, or beneficially through a financial intermediary, 1/2 or 1% or more of the Fund’s outstanding shares and (ii) has been a shareholder of 1/2 of 1% of the Fund’s total outstanding shares for 12 months or more prior to submitting the recommendation to the Committee. Such recommendations shall be directed to the Secretary of the Fund at such address as is set forth in the Fund’s disclosure documents. The Qualifying Fund Shareholder’s letter should include: (i) the name and address of the Qualifying Fund Shareholder making the recommendation; (ii) the number of shares of each class and series of shares of the Fund which are owned of record and beneficially by such Qualifying Fund Shareholder and the length of time that such shares have been so owned by the Qualifying Fund Shareholder; (iii) a description of all arrangements and understandings between such Qualifying Fund Shareholder and any other person or persons (naming such person or persons) pursuant to which the recommendation is being made; (iv) the name and address of the nominee; and (v) the nominee’s resume or curriculum vitae. The Qualifying Fund Shareholder’s letter 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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FORT |
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Proxy Statement |
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FORT |
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Notice of |
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PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
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Proxy — FORT DEARBORN INCOME SECURITIES, INC. |
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ANNUAL MEETING OF SHAREHOLDERS – December 4, 2009 |
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The undersigned hereby appoints as proxies, Joseph J. Allessie and Tammie Lee, and each of them (with full power of substitution) to represent the undersigned and to vote for the undersigned all shares of common stock of the undersigned at the aforesaid meeting and any adjournment or postponement there of with all the power the undersigned would have if personally present. The shares represented by this proxy will be voted as instructed. If no instructions are received, this proxy shall be deemed to grant authority to vote “FOR” proposal 1. Additionally, the votes entitled to be cast by the undersigned will be cast in the discretion of the proxy holder on any other matter that may properly come before the meeting or any adjournment or postponement thereof. This proxy is solicited on behalf of the Board of Directors of Fort Dearborn Income Securities, Inc. |
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YOUR VOTE IS IMPORTANT. Please date and sign this proxy on the reverse side and return it in the enclosed. |
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE |
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FORT DEARBORN |
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Using a black ink pen, mark your votes with an X as shown in |
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Annual Meeting Proxy Card |
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PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
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A |
Election of Directors — The Board of Directors recommends a vote FOR the listed nominees. |
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1. Nominees: |
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Withhold |
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01 - Adela Cepeda |
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02 - Frank K. Reilly |
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03 - Edward M. Roob |
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04 - J. Mikesell Thomas |
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Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
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If shares are held by an individual, sign your name exactly as it appears on this card. If shares are held jointly, either party may sign, but the name of the party signing should conform exactly to the name shown on this proxy card. If shares are held by a corporation, partnership or other entity, the name and capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. Sign exactly as name appears hereon. |
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Date (mm/dd/yyyy) — Please print date below. |
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Signature 1 — Please keep signature within the box. |
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Signature 2 — Please keep signature within the box. |
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/ / |
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1 U P X 0 2 3 5 9 5 2 |
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01445A |
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