SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Co-Registrants [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
DTF TAX-FREE INCOME INC.
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
(Names of Co-Registrants as Specified In Their Charters)
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.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
DTF TAX-FREE INCOME INC.
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
55 East Monroe Street
Chicago, Illinois 60603
Telephone (800) 338-8214
NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 18, 2005
To the Shareholders of:
DTF Tax-Free Income Inc.
Duff & Phelps Utility and Corporate Bond Trust Inc.
NOTICE IS HEREBY GIVEN to the holders of shares of common stock, par value
$0.01 per share ("Common Shares"), of each of DTF Tax-Free Income Inc. ("DTF")
and Duff & Phelps Utility and Corporate Bond Trust Inc. ("DUC") (DTF and DUC
sometimes being referred to herein individually as a "Fund") and to the holders
of shares of preferred stock of DTF, liquidation preference $50,000 per share,
designated Remarketed Preferred Stock ("DTF RPS"), that the Annual Meetings of
the Shareholders of DTF and DUC (the "Meeting") will be held jointly at the
University Club, 76 East Monroe Street, Chicago, Illinois, on May 18, 2005 at
8:30 a.m., for the following purposes:
1. To elect directors of each Fund in the following manner:
(a)with respect to DTF, to elect three directors by holders of
Common Shares of DTF and holders of DTF RPS, voting together as a
single class, to serve until the Annual Meeting in 2008 or until
a successor is duly elected and qualified; and
(b)with respect to DUC, to elect three directors, each to be elected
by holders of Common Shares of DUC, to serve until the Annual
Meeting in 2008 or until successors are duly elected and
qualified.
2. To transact such other business as may properly come before the
Meeting.
Holders of record of Common Shares of DTF and DUC and DTF RPS at the close
of business on April 4, 2005, are entitled to notice of and to vote at the
Meeting and any adjournment thereof.
By order of the Boards of Directors
of DTF and DUC
ALAN M. MEDER, Assistant Secretary
April 15, 2005
JOINT PROXY STATEMENT
DTF TAX-FREE INCOME INC.
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
55 East Monroe Street
Chicago, Illinois 60603
Telephone (800) 338-8214
JOINT ANNUAL MEETING OF SHAREHOLDERS
May 18, 2005
INTRODUCTION
This Joint Proxy Statement is furnished in connection with the solicitation
by the Boards of Directors of DTF Tax-Free Income Inc. ("DTF") and Duff &
Phelps Utility and Corporate Bond Trust Inc. ("DUC") of proxies to be voted at
the Joint Annual Meeting of Shareholders of DTF and DUC, and at any and all
adjournments thereof (the "Meeting"), to be held at the University Club, 76
East Monroe Street, Chicago, Illinois, on May 18, 2005 at 8:30 a.m. The
approximate mailing date of this Joint Proxy Statement and accompanying forms
of proxy is April 15, 2005. DTF and DUC sometimes are referred to herein
individually as a "Fund" and collectively as the "Funds". DTF and DUC are each
a part of a fund complex (referred to herein as the "Fund Complex") comprised
of 71 funds, including 3 other closed-end funds and 66 open-end mutual funds.
The Board of Directors of DTF has fixed the close of business on April 4,
2005 as the record date (the "Record Date") for the determination of holders of
shares of common stock, par value $0.01 per share, of DTF ("DTF Common Shares")
and holders of shares of preferred stock, liquidation preference $50,000 per
share, designated Remarketed Preferred Stock, of DTF ("DTF RPS") entitled to
vote at the Meeting. The Board of Directors of DUC has fixed the close of
business on April 4, 2005 as the Record Date for the determination of holders
of shares of common stock, par value $0.01 per share, of DUC ("DUC Common
Shares" and, collectively with the DTF Common Shares and the DTF RPS, the
"Shares") entitled to vote at the Meeting. Holders of Shares on the Record Date
(the "Shareholders") will be entitled to one vote for each Share held, with no
Shares having cumulative voting rights. As of the Record Date, there were
8,507,456 issued and outstanding DTF Common Shares, 1,300 issued and
outstanding shares of DTF RPS and 26,882,561 issued and outstanding DUC Common
Shares.
As of the Record Date, to the knowledge of the management of each respective
Fund, no person beneficially owned more than 5% of the DTF Common Shares, the
DTF RPS or the DUC Common Shares.
The Meeting is scheduled as a joint meeting of the respective Shareholders
of the Funds because the Shareholders of each Fund are expected to consider and
vote on similar matters. The Boards of Directors have determined that the use
of a joint proxy statement for the Meeting is in the best interest of the
Shareholders of each Fund. In the event that any Shareholder of a Fund present
at the Meeting objects to the holding of a joint meeting and moves for an
adjournment of such Fund's meeting to a time immediately after the Meeting, so
that such Fund's meeting may be held separately, the persons named as proxies
will vote in favor of such adjournment. Shareholders of each Fund will vote
separately on each of the proposals relating to their respective Fund, and an
unfavorable vote on a proposal by the Shareholders of one Fund will not affect
the implementation by the other Fund of such proposal if the Shareholders of
such other Fund approve the proposal.
Summary of Voting on Proposals
Affected Classes of Shares of Such Fund
Proposal Fund Entitled to Vote
-------- -------- ------------------------------
1(a) DTF DTF Common Shares and DTF RPS
1(b) DUC DUC Common Shares
Each proposal requires the affirmative vote of a plurality of the Shares of
a Fund entitled to vote thereon present at the Meeting in person or by proxy
and voting to elect the respective nominees as Directors.
On the matters coming before the Meeting as to which a choice has been
specified by the Shareholders by means of the ballot on the proxy, the
respective Shares will be voted accordingly. Shares not voted with respect to a
proposal due to an abstention or broker non-vote will be deemed votes not cast
with respect to such proposal, but such Shares will be deemed present for
quorum purposes. Management of each Fund recommends that you cast your vote FOR
the nominees for Directors of each Fund listed in this Joint Proxy Statement.
If a proxy is executed and returned and no choice is specified thereon, the
Shares will be voted FOR the nominees for Directors of each Fund listed in this
Joint Proxy Statement. Shareholders who execute proxies may revoke them at any
time before they are voted by filing with the respective Fund a written notice
of revocation, by delivering a duly executed proxy bearing a later date or by
attending the Meeting and voting in person.
The Boards of Directors of the Funds know of no business other than that
mentioned in Proposal 1 in the Notice of Meeting which will be presented for
consideration at the Meeting. If any other matters are properly presented, it
is the intention of the persons named on the enclosed proxy to vote proxies in
accordance with their best judgment. In the event a quorum is present at the
Meeting but sufficient votes to approve any of the proposals are not received,
the persons named as proxies may propose one or more adjournments of such
Meeting to permit further solicitation of proxies, provided they determine such
an adjournment and additional solicitation is reasonable and in the interest of
Shareholders based on a consideration of all relevant factors, including the
nature of the relevant proposal, the percentage of votes then cast, the
percentage of negative votes then cast, the nature of the proposed solicitation
activities and the nature of the reasons for such further solicitation.
Duff & Phelps Investment Management Co. (the "Adviser") is the investment
adviser for each of the Funds. The Adviser has acted as investment adviser for
each Fund since it commenced investment operations. The Adviser is a
wholly-owned subsidiary of Phoenix Investment Partners, Ltd. ("PXP"). The
address of the Adviser is 55 East Monroe Street, Chicago, Illinois 60603. The
address of PXP is 56 Prospect Street, Hartford, Connecticut 06115. PXP is the
investment management subsidiary of The Phoenix Companies, Inc. ("PNX"). PNX is
a leading provider of wealth management products and services to individuals
and businesses. Its principal offices are located at One American Row,
Hartford, Connecticut 06115.
The Annual Reports to Shareholders of each Fund, which include financial
statements of each Fund as of its 2004 fiscal year end, have previously been
mailed to Shareholders. Each Fund will furnish, without charge, a copy of such
reports to Shareholders who request them by contacting the administrator of the
respective Fund as set forth on page 15 of this Joint Proxy Statement.
2
PROPOSAL 1: ELECTION OF DIRECTORS
General Information
At the Meeting, Shareholders of each Fund will vote for the election of
nominees to serve as Directors of their respective Fund. As of the date of this
Joint Proxy Statement, the Board of Directors of each of DTF and DUC currently
is comprised of the same ten Directors: Messrs. Conway, Crawford,
Dalzell-Payne, Georgeson, Jeffries, McLoughlin, Morris and Pavia, and Mesdms.
Moran and McNamara. Mr. Crawford and Mr. Georgeson are scheduled to retire, and
Mr. Pavia has informed the Boards of his intention to retire, from the Board of
Directors of each of DTF and DUC effective following the election of the
Director nominees named herein at the Meeting. Following the Meeting and the
effectiveness of the retirements of Messrs. Crawford, Georgeson and Pavia, the
Board of Directors of DTF will appoint Mr. Vitale and Ms. Lampton as Class III
Directors of DTF to fill the vacancies resulting from Mr. Crawford's and Mr.
Pavia's retirement and the Board of Directors of DUC will appoint Mr. Vitale as
a Class I Director of DUC to fill the vacancy resulting from Mr. Georgeson's
retirement. Following the Meeting and assuming the election and appointment of
the respective DTF and DUC nominees the Board of Directors of each of DTF and
DUC will be reduced to nine Directors. All Directors and nominees are scheduled
to serve for a staggered term of one, two or three years, which will expire at
the annual meeting of each Fund as set forth on pages 10 and 11 of this Joint
Proxy Statement or until a successor is duly elected and qualified.
Directors
The table below sets forth the names, ages, principal occupations and other
information with respect to each of the Directors as of the date of the Proxy
Statement, as well as information regarding Mr. Vitale and Ms. Lampton, who are
anticipated to fill vacancies resulting from scheduled retirements. The Funds
do not believe that any current Directors are "interested persons" of the
Funds, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations thereunder by reason of
a current affiliation with the Adviser or otherwise. Mr. McLoughlin provides
periodic, limited consulting services to the Adviser but is not a full-time
employee. However, the Funds may consider the deliberations and actions of the
Directors other than Mr. McLoughlin for purposes of certain matters requiring
the approval of a majority of Directors who are not "interested persons" under
the 1940 Act.
Number of
Portfolios
in Fund
Positions Term of Office Complex Other
Held with and Length of Principal Occupation(s) Overseen Directorships
Name, Address and Age Funds Time Served During Past 5 Years by Director Held by Director
--------------------- --------- -------------- ----------------------------------------- ----------- --------------------
E. Virgil Conway Director DUC and DTF: Chairman, Rittenhouse Advisors, LLC 35 Director of Urstadt
Rittenhouse Advisors, LLC Director since (consulting firm) since 2001. Chairman Biddle Property
101 Park Avenue 1995 and Board Member of the Metropolitan Corp. (1989-
New York, NY 10178 Transportation Authority (1992-2001). present), Trustee/
Age: 74 Chairman and Trustee of the Harlem Director of Trism,
Youth Development Foundation (1987- Inc. (1994-2001),
2002). Chairman and Director of New Consolidated Edison
York Housing Partnership Development Company of New
Corp. (1981-2003). Director/Trustee, Pace York, Inc. (1970-
University (1978-present), Centennial 2002), Union
Insurance Company (1974-2002), Josiah Pacific Corp.
Macy, Jr., Foundation (1973-present), (1978-2002),
Realty Foundation of New York (1972- Blackrock Fund for
present). Freddie Mac
Securities (Advisory
Director) (1990-
2000), Accuhealth,
Inc. (1994-2002),
Atlantic Mutual
Insurance Company
(1986-2002).
3
Number of
Portfolios
in Fund Other
Positions Term of Office Complex Directorships
Held with and Length of Principal Occupation(s) Overseen Held by
Name, Address and Age Funds Time Served During Past 5 Years by Director Director
--------------------- ------------- -------------- ------------------------------------------ ----------- ---------------
William W. Crawford* Director DUC and DTF: Currently retired. Former President and 2 None
4765 Whispering Pine Way Director since Chief Operating Officer of Hilliard,
Naples, FL 34103 1995 Lyons, Inc., a registered broker-dealer.
Age: 76
Harry Dalzell-Payne Director DUC and DTF: Currently retired. Formerly a Major 35 None
The Flat Director since General of the British Army.
Elmore Court 1996
Elmore, GLOS GL2 3NT, UK
Age: 75
William N. Georgeson* Director DTF: Director Currently retired. Former Vice President 2 None
575 Glenwood Road since 1991 and of Nuveen Advisory Corp., an investment
Lake Forest, IL 60045 DUC: Director adviser. Director, Concordia University
Age: 77 since 1993 Foundation (charity) (1994-2003).
Francis E. Jeffries Chairman of DTF: Director Chairman of the Boards of Directors of the 28 Director,
8477 Bay Colony Drive the Boards of since 1991 and Funds. Until February 27, 2004, President DNP Select
#902 Directors DUC: Director of the Funds. Until May 13, 1997, Income Fund
Naples, FL 34108 since 1993 Chairman of the Board of Directors of Inc. (closed-
Age: 74 Phoenix Investment Partners, Ltd. end fund) and
("PXP"). Prior to July 1995, Chief The Empire
Executive Officer of the predecessor of District
PXP and Chairman of the Board of Duff & Electric
Phelps Investment Management Co. Company.
(through
2004).
Nancy Lampton ** Chairman and Chief Executive Officer, 1 Director,
3 Riverfront Plaza Hardscuffle Inc. (insurance holding Constellation
471 West Main Street company) since January 2000; Chairman Energy
Louisville, Kentucky 40202 and Chief Executive Officer, American Group, Inc.
Age 63 Life and Accident Insurance Company of (public utility
Kentucky since 1971; holding
company) and
DNP Select
Income Fund
Inc. (closed-
end fund).
Advisory
Board
Member,
Thorium
Power, Inc.
(designer of
non-
proliferative
fuel for
nuclear
energy needs)
--------
*Scheduled to retire following the Meeting.
**To be appointed as Director of DTF following the Meeting and effective upon
the retirement of Mr. Pavia; Nominee for election as a Class III Director of
DUC at the meeting.
4
Number of
Portfolios
in Fund Other
Positions Term of Office Complex Directorships
Held with and Length of Principal Occupation(s) Overseen Held by
Name, Address and Age Funds Time Served During Past 5 Years by Director Director
--------------------- --------- -------------- ------------------------------------------- ----------- -------------
Philip R. McLoughlin Director DUC and DTF: Consultant to Phoenix Investment 76 Director, The
56 Prospect Street Director since Partners, Ltd. (2002-present). Director and Phoenix
Hartford, CT 06115 1996 Chief Executive Officer (1995-2002) and Companies,
Age: 58 Chairman (1997-2002), PXP. Executive Inc. (2001-
Vice President and Chief Investment 2002); PXRE
Officer, The Phoenix Companies, Inc. Group (1985-
(2001-2002). Director (1994-2002) and present) and
Executive Vice President, Investments World Trust
(1988-2002), Phoenix Life Mutual Fund (1991-
Insurance Company. Director, Phoenix present).
Distribution Holding Company and
Phoenix Investment Management
Company (2001-2002). Director,
Aberdeen Asset Management plc (1986-
2002). Director (1983-2002) and
Chairman (1995-2002) Phoenix
Investment Counsel, Inc. Director (1984-
2002), Chairman (1990-2002) and
President (1990-2000), Phoenix Equity
Planning Corporation. Chairman and Chief
Executive Officer, Phoenix/Zweig
Advisers (1999-2002). Director and
Executive Vice President, Phoenix Life
and Annuity Company (1996-2002).
Director and Executive Vice President,
PHL Variable Insurance Company (1995-
2002). Director, Phoenix National Trust
Company (1996-2002). Director, W.S.
Griffith Securities Inc. (1992-2002).
Director and Vice President, PM Holdings,
Inc. (1985-2002).
Geraldine M. McNamara Director DUC and DTF: Managing Director (1982-present) of U.S. 35 None
U.S. Trust Company of Director since Trust Company of New York (private
New York 2003 bank).
11 West 54th Street
New York, NY 10019
Age: 53
Eileen A. Moran Director DUC and DTF: President and Chief Executive Officer, 2 None
PSEG Resources, Inc. Director since PSEG Resources Inc. (1990-present)
80 Park Plaza T-22 1996 (investment company).
Newark, NJ 07102
Age: 50
5
Number of
Portfolios
in Fund Other
Positions Term of Office Complex Directorships
Held with and Length of Principal Occupation(s) Overseen Held by
Name, Address and Age Funds Time Served During Past 5 Years by Director Director
--------------------- --------- -------------- ------------------------------------------- ----------- --------------
Everett L. Morris Director DTF: Director Currently retired. Vice President of W.H. 35 Director,
164 Laird Road since 1991 and Reaves and Company (since 1993). Prior Reaves Utility
Colts Neck, NJ 07722 DUC: Director to March 1993, Director of Public Service Income Fund
Age: 76 since 1993 Enterprise Group Incorporated and
President and Chief Operating Officer of
Enterprise Diversified Holdings
Incorporated. Prior to January 1992,
Senior Executive Vice President and Chief
Financial Officer of Public Service
Electric and Gas Company. Prior to 1991,
Director of First Fidelity Bank, N.A., N.J.
Richard A. Pavia+ Director DTF: Director Currently retired. Vice Chairman Cook 2 None
7145 North Ionia Avenue since 1991 and County Illinois President's Advisory
Chicago, IL 60646 DUC: Director Council-Forest Preserve District (since
Age: 73 since 1993 1997). Special Consultant, K&D Facilities
Resource Corp. (1995-2003).
David J. Vitale++ Chief Administrative Officer, Chicago 1 Director, ISO
125 South Clark Street Public Schools since April 2003; Private New England
16th Floor investor November 2002-April 2003; Inc. (not for
Chicago, Illinois 60603 President and Chief Executive Officer, profit
Age 59 Board of Trade of the City of Chicago, independent
Inc., March 2001-November 2002; Retired system
executive 1999-2001; Vice Chairman and operator of
Director, Bank One Corporation, 1998- New
1999; Vice Chairman and Director, First England's
Chicago NBD Corporation, and President, electricity
The First National Bank of Chicago, 1995- supply); DNP
1998; Vice Chairman, First Chicago Select Income
Corporation and The First National Bank Fund Inc.
of Chicago, 1993-1998 (Director, 1992- (closed-end
1998; Executive Vice President, 1986- fund); Ariel
1993); Capital
Management,
Inc., and Ark
Investment
Management
and Wheels,
Inc.
--------
+Intends to retire following the Meeting.
++To be appointed as Director of DTF and DUC following the Meeting and
effective upon the retirements of Mr. Crawford and Mr. Georgeson,
respectively.
6
Non-Director Officers of the Funds
The table below sets forth certain information concerning the principal
executive officers of the Funds. The officers serve until their respective
successors are chosen and qualified. The Funds' officers receive no
compensation from the Funds but are also officers of the Adviser or an
affiliate of the Adviser and receive compensation in such capacities.
Name, Address Position(s) Held with Funds and Principal Occupation(s)
and Age Length of Time Served During Past 5 Years
------------- --------------------------------------- -----------------------------------------------------------
Nathan I. Partain DUC and DTF: President and Chief Executive Vice President, Duff & Phelps Investment
55 East Monroe Street Executive Officer since 2004 Management Co. (1997-present). President and Chief
Chicago, IL 60603 Executive Officer (2001-present), Executive Vice
Age: 48 President, Chief Investment Officer and Assistant Secretary
(1998-2001), DNP Select Income Fund Inc. Director of
Otter Tail Corporation (1993-present).
Timothy M. Heaney DTF: Chief Investment Officer since Managing Director, Fixed Income (1997-present), Director,
56 Prospect Street 2004; Vice President since 1997; and Fixed Income Research (1996-1997) and Investment
Hartford, CT 06115-0480 Portfolio Manager (1997-2004) Analyst (1995-1996) of Phoenix Investment Counsel, Inc.
Age: 40
Daniel J. Petrisko DUC: Chief Investment Officer since Senior Vice President (1997-present) and Vice President
55 E. Monroe Street 2004; Vice President (2000-present) and (1995-1997) of Duff & Phelps Investment Management Co.
Chicago, IL 60603 Portfolio Manager (2002-2004)
Age: 44
Alan M. Meder DUC and DTF: Senior Vice President of Duff & Phelps Investment
55 E. Monroe Street Treasurer and Assistant Secretary Management Co. (1994-present).
Chicago, IL 60603 since 2000
Age: 45
Joyce Riegel DUC and DTF: Chief Compliance Officer of DNP Select Income Fund Inc.
55 E. Monroe Street Chief Compliance Officer since 2003 (2004-present), Senior Vice President and Chief
Chicago, IL 60603 Compliance Officer (2004-present) and Vice President and
Age: 50 Compliance Officer of Duff & Phelps Investment
Management Co. (2002-2004), Vice President and Chief
Compliance Officer, Stein Roe Investment Counsel LLC
(2001-2002), Vice President and Compliance Officer, Stein
Roe Farnham Incorporated (1996-2000).
7
Equity Securities Owned by Directors and Officers
Based on information provided to the Funds, including information provided
by the Funds' service providers, the current and anticipated Directors of the
Funds, as of the Record Date, beneficially owned equity securities of the Funds
in the dollar ranges set forth in the tables below.
Independent Directors
Aggregate Dollar Range
of Equity Securities
Dollar Range of Equity Securities Owned in All Funds
Owned in Funds Overseen by
--------------------------------- Director in Family of
Name DTF DUC Investment Companies/1/
---- ---------------- ---------------- ----------------------
E. Virgil Conway..... None None None
William W. Crawford.. $10,001-$50,000 $10,001-$50,000 $10,001-$50,000
Harry Dalzell-Payne.. None None None
William N. Georgeson. $10,001-$50,000 Over $100,000 Over $100,000
Francis E. Jeffries.. Over $100,000 Over $100,000 Over $100,000
Nancy Lampton........ None None None
Philip R. McLoughlin. $1-$10,000 $1-$10,000 $1-$10,000
Geraldine M. McNamara $10,001-$50,000 $10,001-$50,000 $10,001-$50,000
Eileen A. Moran...... $10,001-$50,000 $50,001-$100,000 Over $100,000
Everett L. Morris.... Over $100,000 Over $100,000 Over $100,000
Richard A. Pavia..... $50,001-$100,000 Over $100,000 Over $100,000
David J. Vitale...... None None None
--------
/1/ The Family of Investment Companies is comprised of DTF and DUC.
Based on information provided to the Funds, including information provided
by the Funds' service providers and in relevant filings with the Securities and
Exchange Commission (the "SEC"), the current and anticipated Directors of the
Funds as of the Record Date, beneficially owned the number of equity securities
of each Fund set forth in the table below.
Number of Equity
Securities
Owned in Funds/2/
----------------
Name DTF/3/ DUC/3/
---- ------ ------
E. Virgil Conway..... None None
William W. Crawford.. 1,000 1,000
Harry Dalzell-Payne.. None None
William N. Georgeson. 2,000 14,705
Francis E. Jeffries.. 56,776/1/ 36,498/1/
Nancy Lampton........ None None
Philip R. McLoughlin. 250 250
Geraldine M. McNamara 708 1,391
Eileen A. Moran...... 1,984 5,895
Everett L. Morris.... 72,326 9,000
Richard A. Pavia..... 5,940 7,280
David J. Vitale...... None None
--------
/1/ Of the listed shares, Mr. Jeffries disclaims beneficial ownership of 8,000
DTF Common Shares and 2,498 DUC Common Shares.
/2/ All shares owned are Common Shares.
/3/ The percentage of shares of each Fund beneficially owned by each Director
does not exceed 1% of the class so owned.
8
Based on information provided to the Funds, including information provided
by the Funds' service providers, the Directors and officers of each Fund as a
group, as of the Record Date, owned less than 1% of the outstanding DUC Common
Shares, owned no outstanding shares of DTF RPS and owned 1.6% of the
outstanding DTF Common Shares.
None of the Directors or officers of the Funds made any purchases or sales
of securities of PNX or any of its subsidiaries, including the Adviser,
exceeding 1% of the outstanding common stock of such company during each Fund's
fiscal year ended in 2004.
As of the Record Date, none of the Directors of the Funds who are not
interested persons of the Funds (within the meaning of Section 2(a)(19) of the
1940 Act) nor any "immediate family member" (within the meaning of Item 22 of
Schedule 14A of the federal proxy rules) of any Director who is not an
interested person of the Funds, owns either beneficially or of record the
securities of the Adviser or PNX.
Board and Committee Meetings
Each Board of Directors held four meetings during its respective 2004 fiscal
year. Each Director attended at least 75% of the meetings of the Board of
Directors held during the period for which he or she was a Director.
Each Fund has an audit committee (the "audit committee") and a nominating
and governance committee ("the governance committee"). DUC's audit committee
met five times and DTF's audit committee met three times during each Fund's
respective 2004 fiscal year. Each Fund's nominating committee met three times
during its 2004 fiscal year. Each such Director attended at least 75% of the
meetings of the audit committee and governance committee held during the period
for which he or she was a Director.
Audit Committee. The audit committee is responsible for supervision of the
Funds' independent auditors, the annual review of the Funds' investment
advisory agreements and any other matters requiring the approval of the
Directors who are not "interested persons" of the Funds pursuant to the 1940
Act. The Boards of Directors of the Funds have adopted a formal written charter
for the audit committee which sets forth the audit committee's
responsibilities. In accordance with proxy rules promulgated by the Securities
and Exchange Commission (the "SEC"), a fund's audit committee charter is
required to be filed at least once every three years as an exhibit to a fund's
proxy statement. The revised and restated Joint Audit Committee Charter for the
Funds is filed as Appendix A to this Joint Proxy Statement. The audit
committees of the Funds have reviewed and discussed the financial statements of
the Funds with management as well as with Ernst & Young LLP ("E&Y"), the
independent auditors of the Funds, and discussed with E&Y the matters required
to be discussed under the Statement of Auditing Standards No. 61. The audit
committees have received the written disclosures and the letter from E&Y
required under Independence Standard Board No. 1 and have discussed with the
independent auditors their independence. Based on this review, the audit
committees recommended to the Boards of Directors of the Funds that the audited
financial statements of the Funds be included in each Fund's annual report to
shareholders for each Fund's most recent fiscal year for filing with the SEC.
The audit committee and the governance committee of each Fund consists of
Messrs. Conway, Crawford, Dalzell-Payne, Georgeson, Morris and Pavia and
Mesdms. McNamara and Moran, each of whom is not an "interested person" of the
Funds as defined in the 1940 Act and are independent, as independence is
defined by the listing standards of the New York Stock Exchange applicable to
audit committee members that are applicable to the Funds.
9
The Funds' audit committees each have adopted a Pre-Approval Policy, which
is attached hereto as Annex A to the Joint Audit Committee Charter which
appears in Appendix A hereto.
Governance Committee. The governance committee is responsible primarily for
nominating Directors and for monitoring corporate governance matters. Each of
the Funds has considered the adoption of the following policy with respect to
shareholder recommendations of Director candidates:
The governance committee will consider Director candidates recommended by
shareholders. In considering candidates submitted by shareholders, the
governance committee will take into consideration the needs of the Board of
Directors, the qualifications of the candidate and the interests of
shareholders. The governance committee may also take into consideration the
number of shares held by the recommending shareholder and the length of time
that such shares have been held. To have a candidate considered by the
governance committee, a shareholder must submit the recommendation in writing
and must include the following information:
. The name of the shareholder and evidence of the person's ownership of
shares of the applicable Fund, including the number of shares owned and
the length of time of ownership;
. The name of the candidate, the candidate's resume or a listing of his or
her qualifications to be a Director of the Fund and the person's consent
to be named as a Director if selected by the governance committee and
nominated by the Board(s) of Directors; and
. If requested by the governance committee, a completed and signed Director
questionnaire.
The shareholder recommendation and information described above must be sent
to the Funds' Corporate Secretary c/o Duff & Phelps Investment Management Co.,
55 East Monroe Street, Suite 3600, Chicago, Illinois 60603 and must be received
by the Corporate Secretary not less than 120 days prior to the anniversary date
of the Fund's most recent annual meeting of shareholders or, if the meeting has
moved by more than 30 days, a reasonable amount of time before the meeting.
The governance committee believes that the minimum qualifications for
serving as a director of the Fund(s) are that a nominee demonstrate, by
significant accomplishment in his or her field, an ability to make a meaningful
contribution to the Board of Directors' oversight of the business and affairs
of the Fund(s) and have an impeccable record and reputation for honest and
ethical conduct in both his or her professional and personal activities. In
addition, the governance committee examines a candidate's specific experiences
and skills, time availability in light of other commitments, potential
conflicts of interest and independence from management and the Fund(s). The
governance committee also seeks to have the Board(s) of Directors represent a
diversity of backgrounds and experience.
The Funds' governance committees have adopted a Joint Governance and
Nominating Committee Charter. The Fund intends to make available a current copy
of the Joint Governance and Nominating Committee Charter, which is attached as
Annex B hereto, through the Fund's website at www.phoenixinvestments.com.
Compensation of Directors
Each Director who is an "affiliated person" of the Adviser (within the
meaning of Section 2(a)(3) of the 1940 Act) by reason of being a full-time
employee of the Adviser or an affiliate receives no compensation from
10
the Funds for acting as Director. Each of the other Directors is paid the
following amounts for his or her service as a Director: (i) an annual fee of
$24,000 (representing a combined retainer for directorships held by such person
for each of the Funds), which amount is allocated among the Funds, with $16,000
of such annual fee being allocated to DUC and $8,000 of such annual fee being
allocated to DTF; (ii) an additional $4,000 to any Director who serves as a
chairman of a committee of the Board of Directors; (iii) an attendance fee of
$1,500 per regular meeting; (iv) an attendance fee of $1,500 per committee
meeting; and (v) all out-of-pocket expenses of such members incurred in
connection with each of the foregoing meetings. Mr. Jeffries receives an
additional $7,500 annual fee for each Fund for serving as Chairman of the Board
of Directors. The following table summarizes the compensation paid to Directors
of each Fund for its respective fiscal year ended in 2004:
Independent Directors
Aggregate
Compensation Total
from Each Fund Pension or Compensation
for which Director Retirement Estimated from the
Serves on Board/2/ Benefits Annual Funds and
------------------ Accrued as Part of Benefits Upon Fund
Name/1/ DTF/3/ DUC/4/ Fund Expenses Retirement Complex/5/
------- ------- ------- ------------------ ------------- ------------
E. Virgil Conway..... $23,000 $34,000 None None $183,751
William W. Crawford.. $23,000 $34,000 None None $ 61,000
Harry Dalzell-Payne.. $23,000 $34,000 None None $167,125
William N. Georgeson. $23,000 $38,000 None None $ 65,000
Francis E. Jeffries.. $21,500 $29,500 None None $155,750
Nancy Lampton........ None None None None $ 47,227
Philip R. McLoughlin. None None None None $ 4,000
Geraldine M. McNamara $20,500 $34,000 None None $161,375
Eileen A. Moran...... $23,000 $34,000 None None $ 60,750
Everett L. Morris.... $31,000 $38,000 None None $178,751
Richard A. Pavia..... $21,500 $34,000 None None $ 61,375
David J. Vitale...... None None None None $ 46,977
--------
1 Neither Ms. Lampton nor Mr. Vitale was a Director of the Funds during the
last fiscal year of each of the Funds and neither received any compensation
directly from the Funds.
2 The amounts shown are for each Fund's fiscal year ended in 2004.
3 DTF has adopted a deferred compensation plan for its Directors who are not
"affiliated persons" of the Adviser or an affiliate of the Adviser. Pursuant
to DTF's deferred compensation plan, for the fiscal year ended in 2004, the
following Directors deferred their compensation in the amounts of: Mr.
Georgeson, $3,000; Mr. Jeffries, $21,500; Ms. McNamara, $9,250 and Ms. Moran,
$1,500. Amounts deferred by a Director of DTF will be retained by DTF and
will earn a rate of return determined by reference to the return on DTF
Common Shares.
4 DUC has adopted a deferred compensation plan for its Directors who are not
"affiliated persons" of the Adviser or an affiliate of the Adviser. Pursuant
to DUC's deferred compensation plan, for the fiscal year ended in 2004, the
following Directors deferred their compensation in the amounts of: Mr.
Jeffries, $29,500; Ms. McNamara, $17,000; and Mr. Morris, $28,500. Amounts
deferred by a Director of DUC will be retained by DUC and will earn a rate of
return determined by reference to the return on DUC Common Shares.
5 The amounts shown reflect the total aggregate compensation received by each
Director from the Fund Complex for the calendar year ended December 31, 2004.
11
Nominees for DTF Directors
At the Meeting, Francis E. Jeffries, Geraldine M. McNamara and Eileen A.
Moran are to be considered for election to serve as Class I Directors until the
Annual Meeting of Shareholders in 2008 or until successors have been duly
elected and qualified. Holders of DTF Common Shares and holders of DTF RPS,
voting as a single class, will vote with respect to each of the nominees for
Director, and an affirmative vote of a plurality of DTF Common Shares and DTF
RPS, voting as a single class, present at the Meeting in person or by proxy, is
required to elect each such nominee. It is the intention of the persons named
on the enclosed proxy to vote the shares represented by them for the election
of the respective nominees unless the proxy is marked otherwise.
The Articles of Incorporation and By-Laws of DTF provide that the Board of
Directors shall consist of not less than three nor more than ten directors
divided into three classes, the classes to be as nearly equal in number as
possible. Generally, the Directors of only one class are elected at each annual
meeting, so that the regular term of only one class of Directors will expire
annually and any particular Director stands for election only once in each
three-year period. Assuming each of the DTF nominees is elected at the Meeting
and giving effect to the appointments of Mr. Vitale to fill the vacancy
resulting from Mr. Crawford's retirement and of Ms. Lampton to fill the vacancy
resulting from Mr. Pavia's retirement, the terms of each class of the Board of
Directors will expire at the annual meetings of DTF in the years indicated in
the table below:
Class I Directors
Francis E. Jeffries - 2008
Geraldine M. McNamara - 2008
Eileen A. Moran - 2008
Class II Directors
E. Virgil Conway - 2006
Everett L. Morris - 2006
Harry Dalzell-Payne - 2006
Class III Directors
Nancy Lampton - 2007
David J. Vitale - 2007
Philip R. McLoughlin - 2007
Pursuant to the 1940 Act, as long as any shares of DTF RPS are outstanding,
the holders of shares of DTF RPS, voting as a separate class, will elect two of
the Directors of DTF. Everett L. Morris and Nancy Lampton have been designated
to be elected by the holders of DTF RPS. In the event a vacancy occurs on the
Board of Directors by reason of death, resignation or a reason other than
removal by the appropriate class of stockholders, the remaining Directors, or
remaining Director, elected by the class or classes of shares that elected the
vacant Director's position shall fill the vacancy for the entire unexpired term.
Nominees for DUC Directors
At the Meeting, Philip R. McLoughlin, Geraldine M. McNamara and Nancy
Lampton are to be considered for election to serve as Class III Directors until
the Annual Meeting of Shareholders in 2008 or until successors have been duly
elected and qualified. The holders of DUC Common Shares will vote with respect
to each of the nominees for Director. An affirmative vote of a plurality of DUC
Common Shares, present at the Meeting in person or by proxy, is required to
elect each nominee. It is the intention of the persons named on the enclosed
proxy to vote the shares represented by them for the election of the respective
nominees unless the proxy is marked otherwise.
The Articles of Incorporation and By-Laws of DUC provide that the Board of
Directors shall consist of not less than three nor more than ten directors
divided into three classes, the classes to be as nearly equal in number
12
as possible. Generally, the Directors of only one class are elected at each
annual meeting, so that the regular term of only one class of Directors will
expire annually and any particular Director stands for election only once in
each three-year period, although Mr. Morris was elected by the DUC Common
Shareholders to serve a two-year term before his scheduled retirement in 2006.
Assuming each of the DUC nominees is elected at the Meeting and giving effect
to the appointment of Mr. Vitale to fill the vacancy resulting from Mr.
Georgeson's retirement, the terms of each class of the Board of Directors will
expire at the annual meetings of DUC in the years indicated in the table below:
Class I Directors
David J. Vitale - 2006
Francis E. Jeffries - 2006
Eileen A. Moran - 2006
Class II Directors
E. Virgil Conway - 2007
Everett L. Morris - 2006
Harry Dalzell-Payne - 2007
Class III Directors
Philip R. McLoughlin - 2008
Geraldine M. McNamara - 2008
Nancy Lampton - 2008
Shareholder Approval
With respect to DTF, holders of DTF Common Shares and holders of shares of
DTF RPS, voting together as a single class, are entitled to vote on each
nominee for DTF. With respect to DUC, holders of DUC Common Shares are entitled
to vote on each nominee for DUC. The affirmative vote of a plurality of the
Shares cast in person or by proxy is required to elect the respective nominees.
THE BOARDS OF DIRECTORS RECOMMEND A VOTE "FOR" EACH OF THE NOMINEES.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
E&Y has been selected as the independent registered public accounting firm
by the audit committee of each Fund and ratified by a majority of each Fund's
Board of Directors, including a majority of the independent Directors by vote
cast in person, to audit the accounts of each Fund for and during each Fund's
fiscal year ending in 2005. None of the Funds knows of any direct or indirect
financial interest of E&Y in the Funds.
Representatives of E&Y do not plan on attending the Meeting, but can be
available by phone. E&Y will have the opportunity to make a statement if they
desire to do so and can be available to respond to appropriate questions.
Audit Fees
The aggregate fees billed to each Fund by E&Y for professional services
rendered for the audit of each Fund's annual financial statements for the most
recent fiscal year were in the following amounts:
DTF $37,250
DUC $39,250
13
The aggregate fees billed to each Fund by E&Y for professional services
rendered for the audit of each Fund's annual financial statements for the
fiscal year preceding the most recent fiscal year were in the following amounts:
DTF $34,500
DUC $36,500
Audit-Related Fees
The aggregate fees billed in the most recent fiscal year to each Fund by E&Y
for assurance and related services reasonably related to the performance of the
audit of each Fund's annual financial statements were as listed below. The
nature of these services was periodic review of the Fund's commercial paper
rating agency compliance tests. The fees for each Fund were in the following
amounts:
DTF $2,600
DUC $2,600
The aggregate fees billed in the fiscal year preceding the most recent
fiscal year to each Fund by E&Y for assurance and related services reasonably
related to the performance of the audit of each Fund's annual financial
statements were in the amounts listed below. The nature of these services was
periodic review of the Fund's commercial paper rating agency compliance tests.
The fees for each Fund were in the following amounts:
DTF $7,425
DUC $7,425
Tax Fees
The aggregate fees billed in the most recent fiscal year to each Fund by E&Y
for professional services rendered for tax compliance, tax advice, and tax
planning were as listed below. The nature of these services was completion of
the federal tax return. The fees for each Fund were in the following amounts:
DTF $3,750
DUC $3,750
The aggregate fees billed in the fiscal year preceding the most recent
fiscal year to each Fund by E&Y for tax compliance, tax advice, and tax
planning were as listed below. The nature of these services was completion of
the federal tax return. The fees for each Fund were in the following amounts:
DTF $3,500
DUC $3,500
All Other Fees
There were no fees billed in the most recent fiscal year or in the fiscal
year immediately preceding the most recent fiscal year for services other than
those described above to either Fund.
Aggregate Non-Audit Fees
The aggregate non-audit fees billed in the most recent fiscal year by E&Y
for services rendered to the Funds were in the following amounts:
DTF $6,350
DUC $6,350
14
The aggregate non-audit fees billed in the fiscal year preceding the most
recent fiscal year by E&Y for services rendered to the Funds were in the
following amounts:
DTF $10,925
DUC $10,925
In addition, the aggregate non-audit fees billed by E&Y for services
rendered to the Adviser, or any entity controlling, controlled by, or under
common control with the Adviser that provides ongoing services to the Funds
were $0 for the most recent fiscal year of the Funds and $0 for the fiscal year
preceding the most recent one of the Funds. All such fees for services rendered
by E&Y to the Funds for audit and non-audit services and to the Adviser or any
entity controlling, controlled by or under common control with the Adviser that
provides ongoing services to the Funds, which are related to the operations of
the Funds, were pre-approved by the audit committee of each Fund. The audit
committee of each Fund has considered whether the provision of non-audit
services that were rendered to the Adviser or any entity controlling,
controlled by or under common control with the Adviser that provides ongoing
services that were not pre-approved is compatible with maintaining E&Y's
independence.
PROXY SOLICITATION EXPENSES
The expense of preparing, printing and mailing the enclosed form of proxy,
accompanying Notice of Meeting and this Joint Proxy Statement and all other
costs in connection with the solicitation of proxies will be borne by the
Funds, which will also reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
Shares of the Funds. The Funds employ Georgeson Shareholder Communications Inc.
pursuant to a standard proxy solicitor contract to solicit proxies on behalf of
the Funds, the cost of which will be borne proportionately by each Fund. Such
amount is estimated to be approximately $3,500 per Fund, plus out of pocket
expenses.
In order to obtain the necessary quorum at the Meeting, additional
solicitation may be made by mail, telephone, telegraph or personal interview by
representatives of the Funds, the Adviser and its affiliates or by dealers or
their representatives. It is anticipated that the cost of such supplementary
solicitations, if any, will be nominal.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Annual Reports to Shareholders of each Fund, which include financial
statements of each Fund as of its 2004 fiscal year end, have previously been
mailed to Shareholders. Shareholders of DTF can obtain, without charge, a copy
of DTF's Annual Report by calling EquiServe Trust Company, N.A., DTF's transfer
agent, at (800) 451-6788 or by writing to Prudential Investments, LLC, DTF's
administrator, at Gateway Center Three, 100 Mulberry Street, 9th Floor, Newark,
New Jersey 07102. Shareholders of DUC can obtain, without charge, a copy of
DUC's Annual Report, by calling Princeton Administrators, L.P., DUC's
administrator, at (800) 543-6217 or by writing to Princeton Administrators,
L.P., P.O. Box 9095, Princeton, NJ 08543-9095. None of the Directors or
officers of the Funds has a material interest in such administrators.
15
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
The Boards of Directors of the Funds have considered the following
procedures in order to facilitate communications between the Boards of
Directors and the shareholders of the Funds and other interested parties.
Receipt of Communications
Shareholders and other interested parties may contact the Board of Directors
of the Funds or any member of the Board of Directors of the Funds by mail. To
communicate with the Board of Directors or any member of the Board of
Directors, correspondence should be addressed to the "Board of Directors" or
the individual Board members with whom you wish to communicate by either name
or title. All such correspondence should be sent c/o the applicable Fund or
Funds at 55 East Monroe Street, Suite 3600, Chicago, Illinois 60603.
Forwarding the Communications
All communications received will be opened by the office of the legal
counsel of Duff & Phelps Investment Management Co. for the sole purpose of
determining whether the contents represent a message to one or more of the
Directors. The office of the legal counsel will forward promptly to the
addressee any contents that relate to the Fund(s) and that are not in the
nature of advertising, promotions of a product or service, or patently
offensive material. In the case of communications to the Board of Directors or
any committee or group of members of the Boards of Directors, the legal
counsel's office will make sufficient copies of the contents to send to each
Director who is a member of the group or committee to which the envelope is
addressed.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
It is the policy of the Funds that their Directors, particularly those
subject to election at that meeting, are encouraged to attend annual meetings
of shareholders. The 2004 Joint Annual Meeting of Shareholders was attended by
all of the members of the Boards of Directors of the Funds who were Directors
at the time of such meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the Securities Exchange
Act of 1934, as amended, require each of the Funds' Directors and officers, the
Adviser, affiliated persons of the Adviser and persons who own more than 10% of
a registered class of a Fund's equity securities to file forms with the SEC and
the New York Stock Exchange, if applicable, reporting their affiliation with
the respective Fund and reports of ownership and changes in ownership of Shares
of the respective Fund's equity securities. These persons and entities are
required by SEC rules and regulations to furnish the Funds with copies of all
such forms they file. Based on a review of these forms furnished to the Funds,
the Funds believe that during the last fiscal year of each Fund, each Fund's
Directors and officers, the Adviser and affiliated persons of the Adviser
complied with all applicable filing requirements.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2006 Joint Annual
Meeting of Shareholders pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), must be received by
16
the appropriate Fund at the Fund's principal executive offices by December 16,
2005. In order for Shareholder proposals made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c)
under the Exchange Act, such proposals must be received by the Fund at the
Fund's executive offices by February 29, 2006.
GENERAL
Management of the Funds does not intend to present and does not have reason
to believe that others will present any other items of business at the Meeting.
However, if other matters are properly presented to the Meeting for a vote, the
proxies will be voted upon such matters in accordance with the judgment of the
persons acting under the proxies.
A list of Shareholders entitled to be present and vote at the Meeting will
be available at the offices of the Funds, 55 East Monroe Street, Chicago,
Illinois 60603, for inspection by any Shareholder during regular business hours
for ten days prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting will necessitate
adjournment and will give rise to additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
ALAN M. MEDER
Assistant Secretary
April 15, 2005
17
Appendix A
REVISED AND RESTATED (2003)
JOINT AUDIT COMMITTEE CHARTER OF
DTF TAX-FREE INCOME INC.
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
AS ADOPTED AS OF NOVEMBER 2003/1/
-----------------
I. PURPOSE OF THE AUDIT COMMITTEE
The purpose of the Audit Committee (the "Audit Committee") of the Board of
Directors (the "Board") of each of DTF Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (each a "Fund")/2/ is to provide
assistance to the Board in fulfilling its legal and fiduciary obligations with
respect to matters involving the accounting, auditing, financial reporting and
internal control functions of the Fund, including, without limitation:
(a) assisting the Board's oversight of:
(i) the integrity of the Fund's financial statements,
(ii) the Fund's compliance with legal and regulatory requirements,
(iii) the Fund's internal audit function and its independent
auditor's qualifications and independence, and
(iv) the performance of the Fund's internal audit function (whether
such function is performed by the Fund's independent auditor (the
"Independent Auditor") or by:
(1) the Fund's officers and/or
(2) service providers to the Fund, including Duff & Phelps
Investment Management Co., the Fund's investment adviser (the
"Adviser"), and third party administrators and their representatives
(collectively, an "Administrator"), and
(b) preparing the report required to be prepared by the Audit Committee
pursuant to the rules of the Securities and Exchange Commission (the "SEC")
for inclusion in the Fund's annual proxy statement.
--------
/[1]/This Joint Audit Committee Charter, adopted on the date mentioned above,
supercedes and replaces all prior versions that may have been adopted from
time to time.
/[2]/This Joint Audit Committee Charter has been adopted by the Audit Committee
and approved by the Board of Directors of each Fund. Solely for the sake of
clarity and simplicity, this Joint Audit Committee Charter has been drafted
as if there is a single Fund, a single Audit Committee and a single Board.
The terms "Audit Committee," "Independent Directors" and "Board" mean the
Audit Committee, Independent Directors and the Board of each Fund,
respectively, unless the context otherwise requires. The Audit Committee
and the Board of each Fund, however, shall act separately and in the best
interests of its respective Fund.
A-1
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of three or more trustees/directors
as determined from time to time by resolution of the Fund's Board. Each member
of the Audit Committee shall be qualified to serve on the Audit Committee
pursuant to the requirements of the Sarbanes-Oxley Act of 2002 (the "SOX Act")
and the rules and regulations promulgated by the SEC pursuant to the SOX Act
and by the New York Stock Exchange (the "NYSE"), as applicable. If a Fund's
common shares are not listed for trading on a securities exchange, the members
of that Fund's Audit Committee shall be "independent" as defined by the NYSE
listing standards.
No member of the Board may serve as a member of the Audit Committee if the
member serves on the audit committee of more than two other public companies,
unless the Board determines that such simultaneous service would not impair the
ability of the member to effectively serve on the Audit Committee. Any such
determination must be disclosed in the Fund's annual proxy statement. For
purposes of the foregoing limitation, "public companies" shall not include any
Fund or any investment fund for which any of the Adviser, Phoenix Investment
Partners, Ltd. (the parent of the Adviser), The Phoenix Companies, Inc. or
other affiliates thereof (collectively, "Phoenix") provides investment
management services, or any other investment fund within the "Fund Complex"
under applicable SEC rules.
Each member of the Audit Committee shall be "independent" as defined by the
rules promulgated by the SEC pursuant to the SOX Act and the NYSE listing
standards (or the listing standards of such other securities exchange on which
the respective Fund's common shares are listed for trading)./3/
According to Rule 10A-3 under the Securities Exchange Act of 1934 (a part of
the rules and regulations promulgated by the SEC pursuant to the SOX Act), a
member is independent if he/she, other than in his or her capacity as a member
of the Audit Committee, the Board or any other board committee:
(a) does not accept directly or indirectly any consulting, advisory or
other compensatory fee from the Fund (or any subsidiary thereof), other than
receipt of fixed amounts of compensation under a retirement plan (including
deferred compensation) from the Fund for prior service, so long as such
compensation is not contingent in any way on continued service; and
(b) is not an "interested person" of the Fund (an "Independent Director")
as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act").
The chairperson of the Audit Committee shall be designated by the members of
the Audit Committee, by a majority vote. Each member of the Audit Committee
must be "financially literate" as such qualification is interpreted by the
Board in its business judgment, or must become financially literate within a
reasonable period of time after his or her appointment to the Audit Committee.
In addition, at least one member of the Audit Committee must have "accounting
or related financial management expertise" as the Board interprets such
qualification in its business judgment.
--------
/[3]/Under Section 303A of the NYSE Listed Company Manual, the NYSE Corporate
Governance Rules set forth therein (including the "independence" standards
for directors and audit committee members, are not applicable to
NYSE-listed closed-end funds that are in compliance with Rule 10A-3 of the
1934 Act, except as otherwise provided in this Audit Committee Charter.
A-2
Further, either (a) at least one member of the Audit Committee must be
determined by the Board in its business judgment to be an "audit committee
financial expert" (as such term is defined in the rules and regulations
promulgated by the SEC pursuant to the SOX Act), or (b) if no member of the
Audit Committee is an "audit committee financial expert," such fact must be
disclosed in the Fund's annual report filed with the SEC.
Under the SOX Act, an "audit committee financial expert" must possess the
following attributes: (1) an understanding of generally accepted accounting
principles and financial statements; (2) the ability to assess the general
application of such principles in connection with the accounting for estimates,
accruals and reserves; (3) 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 Fund's
financial statements, or experience actively supervising one or more persons
engaged in such activities; (4) an understanding of internal control over
financial reporting; and (5) an understanding of audit committee functions.
The SOX Act further requires that the attributes of an "audit committee
financial expert" shall have been acquired through: (1) 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; (2) experience actively
supervising a principal financial officer, principal accounting officer
controller, public accountant, auditor or person performing similar functions;
(3) experience overseeing or assessing the performance of companies or public
accountants with respect to the preparation, auditing or evaluation of
financial statements; or (4) other relevant experience.
The Audit Committee shall recommend to the Board whether one or more of its
members should be deemed to be an "audit committee financial expert" or, if
not, why not, and the Board shall make the final determinations in this regard.
No person who is determined to be and designated as an "audit committee
financial expert" shall have any greater responsibility or have any different
fiduciary duties than any other member of the Audit Committee or of the Board.
Any vacancy on the Audit Committee shall be filled by the affirmative vote
of a majority of the remaining members of the Audit Committee at the next
meeting of the Audit Committee following the occurrence of the vacancy. No
member of the Audit Committee shall be removed except by the affirmative vote
of a majority of the members of the Audit Committee.
III. MEETINGS OF THE AUDIT COMMITTEE
The Audit Committee shall meet on a regular basis and special meetings shall
be called as circumstances require. The Audit Committee, in its discretion, may
ask members of management or others to attend its meetings (or portions
thereof) and to provide pertinent information as necessary. The Audit Committee
will meet separately on a periodic basis with (a) the chief financial officer
of the Fund, (b) management of the Adviser, Phoenix or an Administrator, as the
case may be, responsible for the Fund's internal audit function and for
assisting with the preparation of the Fund's financial statements and (c) the
Independent Auditor, in each case to discuss any matters that the Audit
Committee or any of the above persons or firms believe should be discussed
privately.
A majority of the members of the Audit Committee present in person or by
means of a conference telephone or other communication equipment by means of
which all persons participating in the meeting can communicate
A-3
with each other shall constitute a quorum, provided that, once annually, at the
meeting for selecting the Independent Auditor, a majority of the members of the
Audit Committee present in person shall constitute a quorum. The Audit
Committee may also take action by the written consent of a majority of its
members, except to the extent an in-person meeting is required by the preceding
sentence.
For the sake of increased efficiency and for the dissemination of knowledge
among the Funds, each Audit Committee may meet jointly with any other Audit
Committee of other of the Funds.
The Audit Committee shall cause to be maintained minutes of all meetings and
records relating to those meetings and provide copies of such minutes to the
Board and the Fund.
IV. AUTHORITY
The Audit Committee shall have the authority to carry out its duties and
responsibilities as set forth in this Joint Audit Committee Charter, to
institute investigations of suspected improprieties and to retain independent
counsel or seek assistance from experts.
V. DUTIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE
In carrying out its duties and responsibilities, the Audit Committee's
policies and procedures will remain flexible, so that it may be in a position
to best react or respond to changing circumstances or conditions. The following
are the duties and responsibilities of the Audit Committee:
(a)Oversight of the Auditor's Engagement/Independence
(i) Appoint (subject to ratification by a majority of the Independent
Directors), the Independent Auditor to audit the books and accounts of the
Fund and its subsidiaries, if any, for each fiscal year;
(ii) Review and, in its sole discretion, approve in advance the
Independent Auditor's annual engagement letter, including the proposed fees
contained therein;
(iii) Pre-approve any of the following services (collectively, the
"Covered Services"):
(A) all engagements for audit and non-audit services to be provided
by the Independent Auditor to the Fund and
(B) all engagements for non-audit services to be provided by the
Independent Auditor to the Adviser or any other Phoenix entity that
provides ongoing services to the Fund (collectively, the "Covered
Entities"), but only if the non-audit services provided to such
Covered Entities would have a direct impact on the operations and
financial reporting of the Fund; provided that pre-approval by the
Audit Committee of Covered Services may be effected pursuant to the
procedures described below;
(iv) Obtain at least annually from the Independent Auditor and review
a report describing:
(A) the Independent Auditor's internal quality-control procedures;
and
(B) any material issues raised by the most recent internal
quality-control review, or peer review, of the Independent Auditor,
or by any inquiry or investigation by any governmental or
A-4
professional authority, within the preceding five years, respecting
one or more independent audits carried out by the Independent
Auditor, and any steps taken to deal with any such issues;
(v) Obtain quarterly "notice reports" for the Fund (and, if the
quarterly communication is not within 90 days prior to the filing of an
audit report with the SEC for the Fund, provide an update with any
changes to the previously reported information) from the Independent
Auditor and review a report notifying the Audit Committee of all
non-audit services that were not pre-approved by the Fund's Audit
Committee provided to: (A) the Adviser or any entity controlling or
controlled by the Adviser, or to any registered or unregistered
investment company advised by the Adviser or any such controlling or
controlled entity or (B) to any entity under common control with the
Adviser if the entity (1) is an investment advisor, or (2) is engaged in
the business of providing administrative, custodian, underwriting, or
transfer agency services to any investment company or investment
advisor. Such disclosure shall include the fees associated with any
services described in this paragraph;
(vi) Review at least annually the qualifications, performance and
independence of the Independent Auditor, including the performance of
the lead partner of the Independent Auditor, and, in its discretion,
make decisions regarding the replacement or termination of the
Independent Auditor when circumstances warrant; provided that if the
Audit Committee proposes to terminate the Independent Auditor's annual
engagement letter before its termination date, such termination is
subject to the right of the Fund's shareholders to terminate the
employment of the Independent Auditor pursuant to Section 32(a)(3) of
the 1940 Act;
(vii) Oversee the independence of the Independent Auditor by, among
other things:
(A) actively engaging in a dialogue with the Independent Auditor
with respect to any disclosed relationships or services that may
impact the objectivity and independence of the Independent Auditor,
and taking appropriate action to satisfy itself of the auditor's
independence;
(B) monitoring compliance by the Independent Auditor with the
audit partner rotation requirements contained in the SOX Act and the
rules and regulations promulgated by the SEC thereunder;
(C) monitoring compliance by the Fund with the employee conflict
of interest requirements contained in the SOX Act and the rules and
regulations promulgated by the SEC thereunder; and
(D) considering whether there should be a regular rotation of the
Independent Auditor;
(viii) Instruct the Independent Auditor that it is ultimately
accountable to the Audit Committee, and that the Audit Committee is
responsible for the appointment (subject to ratification by the
Independent Directors), retention, compensation, evaluation and
termination of the Independent Auditor, provided that if the Audit
Committee proposes to terminate the Independent Auditor's annual
engagement letter before its termination date, such termination is
subject to the right of the Fund's shareholders to terminate the
employment of the Independent Auditor pursuant to Section 32(a)(3) of
the 1940 Act; and
(ix) Establish clear hiring policies with respect to the Related
Entities (defined below) hiring employees or former employees of the
Independent Auditor.
(b) Oversight of the Audit
(i) Review the annual audit plan of the Independent Auditor,
including the scope of audit activities and all critical accounting
policies and practices to be used, monitor such plan's progress and
results
A-5
periodically during the year and review the results of the year-end
audit of the Fund, including any comments or recommendations of the
Independent Auditor;
(ii) Obtain at least annually for the Fund from the Independent
Auditor and review a report describing:
(A) all critical accounting policies and practices used;
(B) all alternative treatments within United States Generally
Accepted Accounting Principles for policies and practices related to
material items that have been discussed with management of the Fund,
including (1) ramifications of the use of such alternative
disclosures and treatments, and (2) the treatment preferred by the
Independent Auditor; and
(C) other material written communications between the Independent
Auditor and management of the Fund, such as any management letter or
schedule of unadjusted differences;
(iii) Review with the chief financial officer of the Fund and with
management representatives of the Adviser, other Phoenix entities and/or
the Administrator, in each case responsible for the Fund's internal
audit function and for assisting with the preparation of the Fund's
financial statements (collectively, "Management") and the Independent
Auditor, the following:
(A) the Fund's annual audited financial statements and interim
financial statements, and any major issues related thereto;
(B) critical accounting policies and such other accounting
policies of the Fund as are deemed appropriate for review by the
Audit Committee prior to any interim or year-end filings with the SEC
or other regulatory body, including any financial reporting issues
which could have a material impact on the Fund's financial
statements; and
(C) the effect of regulatory, accounting and financial reporting
initiatives on the financial statements of the Fund;
(iv) Review on a regular basis with the Independent Auditor any
problems or difficulties encountered by the Independent Auditor in the
course of any audit work, including Management's response with respect
thereto, any restrictions on the scope of the Independent Auditor's
activities or on access to requested information, and any significant
disagreements with Management. In connection therewith, the Audit
Committee will review with the Independent Auditor the following:
(A) any accounting adjustments that were noted or proposed by the
Independent Auditor but were rejected by Management (as immaterial or
otherwise);
(B) any communications between the audit team and the Independent
Auditor's national office respecting auditing or accounting issues
presented by the engagement; and
(C) any "management" or "internal control" letter issued, or
proposed to be issued, by the Independent Auditor to the Fund;
(v) Attempt to resolve all disagreements between the Independent
Auditor and Management regarding financial reporting; and
(vi) Review information obtained from the Independent Auditor
pursuant to Section 10A of the Securities Exchange Act of 1934.
A-6
(c) Oversight of Internal Audit Function and Controls and Procedures
(i) Review periodically a report from the Fund's chief executive
officer, chief financial officer and Independent Auditor, at least
annually, regarding the following:
(A) all significant deficiencies in the design or operation of
internal controls of the Fund, the Adviser, the Administrator or any
Phoenix entity that is identified in writing to the Audit Committee
as being responsible for the financial reporting or operations of the
Fund (collectively, the "Related Entities"), or, to the knowledge of
such persons, other service providers, which could adversely affect
the Fund's ability to record, process, summarize, and report
financial data, including any material weaknesses in internal
controls identified by the Independent Auditor;
(B) any fraud, whether or not material, that involves Management
or other employees of the Fund, the Related Entities, or, to the
knowledge of such persons, other service providers to the Fund who
have a significant role in the Fund's internal controls;
(C) any significant changes in internal controls or in other
factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and
material weaknesses related to the Fund, the Related Entities, or, to
the knowledge of such persons, other service providers to the Fund;
and
(ii) Discuss periodically with the appropriate officers of the Fund
and, to the extent appropriate, the Independent Auditor, the Fund's
policies with respect to risk assessment and risk management.
(d) Compliance
(i) Establish and maintain free and open means of communication
between and among the Board, the Audit Committee, the Independent
Auditor, any Related Entities and management of those other service
providers of the Fund identified in writing to and deemed appropriate by
the Audit Committee, including providing such parties with appropriate
opportunities to meet separately and privately with the Audit Committee
on a periodic basis as the Audit Committee may deem necessary or
appropriate;
(ii) Establish procedures for (A) the receipt, retention and
treatment of complaints received by the Fund regarding accounting,
internal accounting controls or auditing matters, and (B) the
confidential, anonymous submission by employees of the Related Entities
or other service providers responsible for such services of concerns
regarding questionable accounting or auditing matters; and
(iii) Secure independent expert advice to the extent the Audit
Committee determines it to be appropriate, including retaining, with or
without approval of the Board, independent counsel, accountants,
consultants or others, to assist the Audit Committee in fulfilling its
duties and responsibilities, the cost of such independent expert
advisors to be borne by the Fund.
(e) Miscellaneous
(i) Prepare an annual performance evaluation of the Audit Committee,
which evaluation must compare the performance of the Audit Committee
with the requirements of this Joint Audit Committee Charter, and set
forth the goals and objectives of the Audit Committee for the upcoming
year. The evaluation will include a review and assessment of the
adequacy of this Audit Committee Joint Charter. The performance
evaluation by the Audit Committee shall be conducted in such manner as
the Audit Committee deems appropriate;
(ii) Report regularly to the Board on its activities, as appropriate;
and
A-7
(iii) Perform such additional activities, and consider such other
matters, within the scope of its duties and responsibilities, as the
Audit Committee, the Governance Committee or the Board deems necessary
or appropriate.
VI. PRE-APPROVAL PROCEDURES
The Audit Committee shall prepare written pre-approval procedures pursuant
to which it may pre-approve Covered Services. The Audit Committee, in its
discretion, may elect to delegate to one or more of its members authority to
pre-approve Covered Services between regularly scheduled meetings of the Audit
Committee. The Audit Committee shall review and approve its pre-approval
procedures at least annually. The pre-approval procedures in effect from
time-to-time shall be attached to this Joint Audit Committee Charter as Annex A.
VII. REPORTING
The Audit Committee shall report its activities to the Board on a regular
basis, so that the Board is kept informed of its activities on a current basis.
In connection therewith, the Audit Committee will review with the Board any
issues that arise with respect to the quality or integrity of the Fund's
financial statements, the Fund's compliance with legal or regulatory
requirements, the performance and independence of the Independent Auditors, or
the performance of the Fund's internal audit function. In particular, the Audit
Committee will also report its conclusions with respect to the matters set
forth above in Sections V(a) (vi) and (vii), Sections V(b)(iv) and (v), Section
(c)(i)(A) and (B), Section V(e)(i) to the Board. Reports to the Board may take
the form of an oral report by the chairperson of the Audit Committee or any
other member of the Audit Committee designed by the Audit Committee to make
this report.
The Audit Committee shall prepare the report required by the rules of the
SEC to be included in the Fund's annual proxy statement and determine to its
satisfaction that the Audit Committee has: (a) reviewed and discussed the
audited financial statements with management of the Fund; (b ) discussed with
the Independent Auditor the matters required to be discussed by the Statements
on Auditing Standards No. 61; (c) received the written disclosures and the
letter from the Independent Auditor required by ISB Standard No. 1 and have
discussed with the Independent Auditor the auditor's independence; and (d) made
a recommendation to the Board as to whether the financial statements be
included in the Fund's annual report for the past fiscal year, as filed with
the SEC.
VIII. RESOURCES
The Board shall ensure that the Audit Committee has adequate resources, as
determined by the Audit Committee, with which to discharge its
responsibilities, including for the payment of (a) compensation (i) to any firm
of independent auditors engaged for the purpose of preparing or issuing an
audit report or performing other audit, review or attest services for the Fund,
and (ii) to any advisors employed by the Audit Committee, including independent
counsel, consultants or other advisors, as the Audit Committee determines
necessary to carry out its duties, and (b) ordinary administrative expenses of
the Audit Committee that are necessary or appropriate in carrying out its
duties.
A-8
IX. LIMITS ON ROLE OF AUDIT COMMITTEE
While the Audit Committee has the duties and responsibilities set forth in
this Joint Audit Committee Charter, the Audit Committee is not responsible for:
. planning or conducting the audit or for determining whether the Fund's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles;
. determining whether the Form N-CSR filed by the Fund with the SEC contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by the report;
. determining whether the Fund's financial statements and other financial
information included in the Form N-CSR fairly present in all material
respects the financial condition, results of operations, changes in net
assets and cash flows of the Fund as of, and for, the periods presented in
the Form N-CSR; or
. establishing, designing or maintaining disclosure controls and procedures
for the Fund.
In fulfilling its responsibilities hereunder, it is recognized that members
of the Audit Committee are not full-time employees of the Fund, the Adviser,
the Administrator, Phoenix or any Related Party. The Audit Committee and its
members do not have a duty or responsibility 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 Audit Committee shall be
entitled to rely on (a) the integrity of those persons and organizations within
and outside the Fund, the Adviser, the Administrator, Phoenix or any Related
Party from which it receives information, (b) the accuracy of the financial and
other information provided to the Audit Committee absent actual knowledge to
the contrary (which shall be promptly reported to the Board) and (c) statements
made by management or third parties as to any information technology, internal
audit and other non-audit services provided by the Independent Auditor to the
Fund.
A-9
Annex A
JOINT AUDIT COMMITTEE PRE-APPROVAL POLICY
OF
DTF TAX-FREE INCOME INC.
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
AS ADOPTED BY THE AUDIT COMMITTEE
AS OF NOVEMBER 2003/[1]/
Statement of Principles
The Audit Committee of the Board of Directors of each of DTF Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc. (each a "Fund"
and, collectively, the "Funds,")/[2]/ is required to pre-approve all Covered
Services (as defined in the Joint Audit Committee Charter) in order to assure
that the provision of the Covered Services does not impair the auditors'
independence. Unless a type of service to be provided by the Independent
Auditor (as defined in the Joint Audit Committee Charter) is pre-approved in
accordance with the terms of this Joint Audit Committee Pre-Approval Policy
(the "Policy"), it will require specific pre-approval by the Audit Committee or
by any member of the Audit Committee to which pre-approval authority has been
delegated.
The appendices to this Policy describe the Audit, Audit-Related, Tax and All
Other services that are Covered Services and that have been pre-approved under
this Policy. The term of any such pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee specifically provides for a different
period. At its regular 1/st/ Quarter meeting of each calendar year, the Audit
Committee will review and re-approve this Policy and the appendices attached
hereto, together with any changes deemed necessary or desirable by the Audit
Committee. The Audit Committee may, from time to time, modify the nature of the
services pre-approved, the aggregate level of fees pre-approved or both.
Delegation
In the intervals between the scheduled meetings of the Audit Committee, the
Audit Committee delegates pre-approval authority under this Policy to the
Chairman of the Audit Committee (the "Chairman"). The Chairman shall report any
pre-approval decisions under this Policy to the Audit Committee at its next
scheduled meeting. At each scheduled meeting, the Audit Committee will review
with the Independent Auditor the Covered Services pre-approved by the Chairman
pursuant to delegated authority, if any, and the fees related thereto. Based on
these reviews, the Audit Committee can modify, at its discretion, the
pre-approval originally granted by the Chairman pursuant to delegated
authority. This modification can be to the nature of services pre-approved, the
aggregate level of fees approved, or both. The Audit Committee expects
pre-approval of Covered Services by
--------
/[1]/This Joint Audit Committee Pre-Approval Policy, adopted on the date
mentioned above, supercedes and replaces all prior versions that may have
been adopted from time to time.
/[2]/This Joint Audit Committee Pre-Approval Policy has been adopted by the
Audit Committee of each Fund. Solely for the sake of clarity and
simplicity, this Joint Audit Committee Pre-Approval Policy has been
drafted as if there is a single Fund, a single Audit Committee and a
single Board. The terms "Audit Committee" and "Board" mean the Audit
Committee and Board of each Fund, respectively, unless the context
otherwise requires. The Audit Committee and the Board of each Fund,
however, shall act separately and in the best interests of its respective
Fund.
A-10
the Chairman pursuant to this delegated authority to be the exception rather
than the rule and may modify or withdraw this delegated authority at any time
the Audit Committee determines that it is appropriate to do so.
Pre-Approved Fee Levels
Fee levels for all Covered Services to be provided by the Independent
Auditor and pre-approved under this Policy will be established annually by the
Audit Committee and set forth in the appendices hereto. Any proposed Covered
Services exceeding these fee levels will require specific pre-approval by the
Audit Committee (or the Chairman pursuant to delegated authority).
Audit Services
The terms and fees of the annual Audit services engagement for the Fund are
subject to the specific pre-approval of the Audit Committee. The Audit
Committee will approve, if necessary, any changes in terms, conditions and fees
resulting from changes in audit scope, Fund structure or other matters.
In addition to the annual Audit services engagement specifically approved by
the Audit Committee, any other Audit services for the Fund not listed in
Appendix A must be specifically pre-approved by the Audit Committee (or the
Chairman pursuant to delegated authority).
Audit-Related Services
Audit-Related services are assurance and related services that are not
required for the audit, but are reasonably related to the performance of the
audit or review of the financial statements of the Fund and, to the extent they
are Covered Services, the other Covered Entities (as defined in the Joint Audit
Committee Charter) or that are traditionally performed by the Independent
Auditor. Audit-Related services that are Covered Services and are not listed in
Appendix B must be specifically pre-approved by the Audit Committee (or the
Chairman pursuant to delegated authority).
Tax Services
The Audit Committee believes that the Independent Auditor can provide Tax
services to the Covered Entities such as tax compliance, tax planning and tax
advice without impairing the auditor's independence. However, the Audit
Committee will not permit the retention of the Independent Auditor in
connection with a transaction initially recommended by the Independent Auditor,
the sole business purpose of which may be tax avoidance and the tax treatment
of which may not be supported in the Internal Revenue Code and related
regulations. Tax services that are Covered Services and are not listed in
Appendix C must be specifically pre-approved by the Audit Committee (or the
Chairman pursuant to delegated authority).
All Other Services
All Other services that are Covered Services and are not listed in Appendix
D must be specifically pre-approved by the Audit Committee (or the Chairman
pursuant to delegated authority).
Procedures
Requests or applications to provide Covered Services that require approval
by the Audit Committee (or the Chairman pursuant to delegated authority) will
be submitted to the Audit Committee or the Chairman, as the case may be, by
both the Independent Auditor and the Chief Financial Officer of the respective
Covered Entity, and must include a joint statement as to whether, in their
view, (a) the request or application is consistent with the SEC's rules on
auditor independence and (b) the requested service is or is not a non-audit
service prohibited by the SEC. A request or application submitted to the
Chairman between scheduled meetings of the Audit Committee should include a
discussion as to why approval is being sought prior to the next regularly
scheduled meeting of the Audit Committee.
A-11
Appendix A
Pre-Approved Audit Services for the Funds
Range of
Service Fees
------- --------
Statutory audits or financial audits for subsidiaries, if any; services associated with SEC registration
statements, periodic reports and other documents filed with the SEC or other documents issued in
connection with securities offerings (e.g., comfort letters, consents), and assistance in responding to
SEC comment letters; attestation reports required by Section 404 of the Sarbanes-Oxley Act of
2002; Form N-SAR internal control letters and SAS 100 reviews..........................................
A-12
Appendix B
Pre-Approved Audit-Related Services
A. For the Funds
Range of
Service Fees
------- --------
Attest services not required by statute or regulation (including the provision of certificates to the rating
agencies regarding the asset coverage of any preferred shares or commercial paper issued by a
Fund......................................................................................................
B. For the other Covered Entities
Range of
Service Fees
------- --------
Consultations with the chief financial officer, chief compliance officer and other appropriate
representatives of management of the Adviser and its affiliates as to the accounting or disclosure
treatment of transactions or events and/or the actual or potential impact of final or proposed rules,
standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (other
than consultations that, under SEC rules, would be deemed to be "audit" services rather than "audit-
related" services)...................................................................................
Attest services not required by statute or regulation..................................................
A-13
Appendix C
Pre-Approved Tax Services
Range of
Service Fees
------- --------
U.S. federal, state, local and other tax planning, advice, compliance and return preparation
Misc. tax planning and advice (e.g. tax treatment for individual security holdings).........
Pre-Approved Tax Services
Range of
Service Fees
------- --------
A-14
Appendix D
Pre-Approved All Other Services
Range of
Service Fees
------- --------
None..
Pre-Approved All Other Services
Range of
Service Fees
------- --------
A-15
Appendix B
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
DTF TAX-FREE INCOME INC.
(THE "FUNDS")
GOVERNANCE AND NOMINATING
COMMITTEE CHARTER
Purpose
The purposes of the Committee are: (1) to identify individuals qualified to
become Board members and to recommend that the Board select particular Director
nominees; (2) to develop and recommend to the Board a set of governance
principles applicable to the Fund; (3) to oversee annually the evaluation of
the Board, this Committee and management of other committees of the Fund; and
(4) to assist the Board in fulfilling its oversight responsibilities with
respect to matters relating to the interests of the shareholders of the Fund.
Committee Composition
The Committee shall be composed of three (3) or more members of the Board of
Directors of the Fund, each of whom shall be an Independent Director and not an
interested person (as such term is defined by section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act")). One member of the
Committee shall serve as Chairperson. The Board shall select the members of the
Committee. Other Directors of the Fund, while not serving as members of the
Committee, nonetheless may have a role in the nominating process by identifying
and recommending potential candidates to the Committee for its consideration,
and by otherwise assisting the Committee in the discharge of its
responsibilities.
Board Nominations/Independence
1. The Committee shall recommend to the Board Director nominees for election
at the next meeting of the Fund's shareholders, as required. Additionally, in
the event of any vacancies on or additions to the Board, the Committee shall
evaluate the qualifications of candidates and make nominations for membership
on the Board, as the case may be. The Committee may also recommend that a
vacancy in the membership of the Board not be filled based on the then current
Board's size, composition and structure. In carrying out its responsibilities
under this paragraph, the Committee shall have sole authority to retain and
terminate any search firm to be used to identify Director candidates, including
sole authority to approve the search firm's fees and other retention terms.
2. Persons nominated as Independent Directors may not be "interested
persons" of the Fund as that term is defined in the 1940 Act or such other
interpretations and rules and regulations adopted in connection therewith. The
Committee shall also review the composition of the Board to ensure that at
least a sufficient percentage of the Directors are not interested persons,
consistent with the requirements of the 1940 Act and the rules and regulations
thereunder and of the New York Stock Exchange. With respect to such
consideration of nominees and existing Directors, the Committee shall carefully
evaluate their independence from any investment adviser, principal underwriter
or other principal service provider to the Fund (and any affiliate thereof).
The Committee shall also take into consideration any affiliations disclosed in
the then current registration statement or other public filing for the Fund or
otherwise disclosed to the Committee and any person who the Committee considers
to be unlikely to exercise an appropriate degree of independence as a result
of: (a) a material business or
B-1
professional relationship with the Fund, its investment advisers or principal
underwriter (or any of their affiliated persons); or (b) a close familial
relationship with any natural person who is an investment adviser or principal
underwriter (or any of their affiliated persons) may be considered by the
Committee to be an interested person. The Committee shall also consider the
effect of any relationships beyond those delineated in the 1940 Act that might
impair the independence of any existing or prospective Independent Director. It
shall consult with counsel to the Fund concerning the requirements of the 1940
Act applicable to the selection and qualification of Independent Directors.
3. In assessing the qualifications of an existing or potential candidate for
Independent Director membership on the Board, the Committee shall consider such
other factors, as it may deem relevant.
Committee Nominations
1. The Committee shall make recommendations to the Board concerning the
responsibilities or establishment of Board committees.
2. The Committee shall review and make recommendations from time to time to
the Board regarding the nature and duties of Board committees, including: (i)
committee member qualifications (including, without limitation, "financial
expert" status); (ii) committee member appointment and removal; (iii) committee
structure and operations (including authority to delegate to subcommittees);
and (iv) committee reporting to the Board. In the event of any vacancies on or
additions to any committee, the Committee shall evaluate the qualifications of
candidates and make recommendations on membership on any committee to the Board.
Fund Governance
1. The Committee shall recommend to the Board for its approval a set of
governance guidelines and shall review such guidelines from time to time as it
deems necessary or appropriate and recommend any proposed changes to the Board
for approval. Such procedures shall consider, among other things, whether the
Board is properly constituted, if matters entrusted to the Board have been
properly considered, and any other matters that the Board should properly
consider.
2. The Committee shall coordinate an annual self-assessment by the Board of
its effectiveness at least annually. The self-assessment may include, e.g.,
consideration of the Board's committee structure; the appropriateness of
rotating the composition of each Committee; and whether each Board member is
capable of providing sufficient oversight to the number of funds they monitor.
The Committee shall promptly report its findings and conclusions to the Board.
Other Powers and Responsibilities
1. The Committee shall meet as necessary in connection with any vacancy on
or addition to the Board (or Committee) and otherwise from time to time as it
deems appropriate, but no less frequently than annually, to perform its
responsibilities.
2. The Committee shall have the resources and authority appropriate to
discharge its responsibilities.
3. The Committee shall annually review the sufficiency of the retainer and
fees paid to each member of the Board and to the members of the several
Committees. If the Committee finds the retainer or fees to be insufficient,
they will make a recommendation to the Board.
B-2
4. The Committee shall recommend to the Board any revisions or modifications
to this Charter that the Committee deems necessary or appropriate to the
effective exercise of its responsibilities.
5. The Committee shall prepare and maintain minutes of the resolutions
adopted at all of its meetings and provide copies thereof to the Board within a
reasonable period of time following each meeting.
(Approved August 18, 2004)
B-3
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE.
================================================================================
DTF TAX-FREE INCOME INC.
================================================================================
COMMON STOCK
1. Authority to vote for the election as Directors, the nominees listed below:
Class I Nominees: (01) Francis E. Jeffries (02) Geraldine M. McNamara
(03) Eileen A. Moran
FOR EACH NOMINEE WITHHELD FROM EACH NOMINEE
[_] [_]
[_] ___________________
For each nominee except as noted here
2. Upon any and all other business which may come before the Annual Meeting or
any adjournment thereof.
The undersigned hereby acknowledges receipt of the accompanying Notice of Joint
Annual Meeting and Joint Proxy Statement for the Annual Meeting to be held on
May 18, 2005.
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [_]
Please be sure to sign and date this Proxy.
Signature: ____________ Date: ________ Signature: ____________ Date: ________
COMMON DTF TAX-FREE INCOME INC. COMMON
Annual Meeting of Stockholders - May 18, 2005
Proxy Solicited on Behalf of the Board of Directors
The undersigned holder of shares of Common Stock of DTF TAX-FREE INCOME INC.
(the "Fund"), a Maryland corporation, hereby appoints Joyce Riegel and Alan M.
Meder, and each of them, with full power of substitution and revocation, as
proxies, to represent the undersigned at the Annual Meeting of Stockholders to
be held at the University Club, 76 East Monroe Street, Chicago, Illinois, on May
18, 2005 at 8:30 a.m., and at any and all adjournments thereof, and thereat to
vote all shares of Common Stock of the Fund which the undersigned would be
entitled to vote, with all powers the undersigned would possess if personally
present, in accordance with the following instructions.
If more than one of the proxies, or their substitutes, are present at the Annual
Meeting or any adjournment thereof, they jointly (or, if only one is present and
voting, then that one) shall have authority and may exercise all powers granted
hereby. This Proxy, when properly executed, will be voted in accordance with the
instructions marked herein by the undersigned. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED HEREIN AND IN THE
DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Please sign this proxy exactly as your name(s) appear(s) on the books of the
Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
--------------------------------------------------------------------------------
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE.
================================================================================
DTF TAX-FREE INCOME INC.
================================================================================
REMARKETED PREFERRED STOCK
1. Authority to vote for the election as Directors, the nominees listed below:
Class I Nominees: (01) Francis E. Jeffries (02) Geraldine M. McNamara
(03) Eileen A. Moran
FOR EACH NOMINEE WITHHELD FROM EACH NOMINEE
[_] [_]
[_] __________________
For each nominee except as noted here
2. Upon any and all other business which may come before the Annual Meeting or
any adjournment thereof.
The undersigned hereby acknowledges receipt of the accompanying Notice of Joint
Annual Meeting and Joint Proxy Statement for the Annual Meeting to be held on
May 18, 2005.
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [_]
Please be sure to sign and date this Proxy.
Signature: ____________ Date: _______ Signature: _____________ Date: _______
PREFERRED DTF TAX-FREE INCOME INC. PREFERRED
Annual Meeting of Stockholders - May 18, 2005
Proxy Solicited on Behalf of the Board of Directors
The undersigned holder of shares of Remarketed Preferred Stock ("RPS") of DTF
TAX-FREE INCOME INC. (the "Fund"), a Maryland corporation, hereby appoints Joyce
Riegel and Alan M. Meder, and each of them, with full power of substitution and
revocation, as proxies, to represent the undersigned at the Annual Meeting of
Stockholders to be held at the University Club, 76 East Monroe Street, Chicago,
Illinois, on May 18, 2005 at 8:30 a.m., and at any and all adjournments thereof,
and thereat to vote all shares of RPS of the Fund which the undersigned would be
entitled to vote, with all powers the undersigned would possess if personally
present, in accordance with the following instructions.
If more than one of the proxies, or their substitutes, are present at the Annual
Meeting or any adjournment thereof, they jointly (or, if only one is present and
voting, then that one) shall have authority and may exercise all powers granted
hereby. This Proxy, when properly executed, will be voted in accordance with the
instructions marked herein by the undersigned. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED HEREIN AND IN THE
DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Please sign this proxy exactly as your name(s) appear(s) on the books of the
Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
--------------------------------------------------------------------------------
Please Vote, Date, and [X]
Sign and Return Promptly Votes must be indicated
in Enclosed Envelope. (x) in Black or Blue ink.
1. Authority to vote for the election as Class III Directors, the nominees
listed below:
FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS [_]
listed below [_] for all nominees listed below [_]
Class III Nominees: Philip R. McLoughlin, Geraldine M. McNamara and Nancy
Lampton
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the space
provided below.)
*Exceptions
----------------------------------------------------------------
2. Upon any and all other business which may come before the Annual Meeting or
any adjournment thereof.
The undersigned hereby acknowledges receipt of the accompanying Notice of
Joint Annual Meeting and Joint Proxy Statement for the Annual Meeting to be
held on May 18, 2005.
To change your address, please mark this box. [_]
To include any comments, please mark this box. [_]
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
+----------------------------------------+
| SCAN LINE |
+----------------------------------------+
---------------- ------------------------ -------------------------
Date Share Owner sign here Co-Owner sign here
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
ANNUAL MEETING OF STOCKHOLDERS - MAY 18, 2005
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of DUFF & PHELPS UTILITY AND
CORPORATE BOND TRUST INC. (the "Fund"), a Maryland corporation, hereby appoints
Joyce Riegel and Alan M. Meder and each of them, with full power of substitution
and revocation, as proxies to represent the undersigned at the annual meeting of
stockholders to be held at the University Club, 76 East Monroe Street, Chicago,
Illinois, on May 18, 2005 at 8:30 a.m. (the "Annual Meeting") and at any and all
adjournments thereof, and thereat to vote all shares of Common Stock of the Fund
which the undersigned would be entitled to vote, with all powers the undersigned
would possess if personally present, in accordance with the following
instructions.
If more than one of the proxies, or their substitute, are present at
the Annual Meeting or any adjournment thereof, they jointly (or, if only
one is present and voting, then that one) shall have authority and may
exercise all powers granted hereby. This Proxy, when properly executed,
will be voted in accordance with the instructions marked herein by the
undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH
OF THE PROPOSALS DESCRIBED HEREIN AND, IN THE DISCRETION OF THE PROXIES,
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
(Continued and to be signed and dated on reverse side)
DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
P.O. BOX 11326
NEW YORK, N.Y. 10203-0326
--------------------------------------------------------------------------------