UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to§240.14a-12 |
Western Asset Investment Grade Income Fund Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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WESTERN ASSET INVESTMENT GRADE INCOME FUND INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 8, 2020
To the Stockholders of
Western Asset Investment Grade Income Fund Inc.
The Annual Meeting of Stockholders of Western Asset Investment Grade Income Fund Inc. (the “Fund”) will be held at 620 Eighth Avenue (at 41st Street), 49th Floor, New York, New York, on Friday, May 8, 2020, at 10:00 a.m., Eastern Time, to consider and act upon the following matters:
(1) | Election of a Board of Directors; and |
(2) | Such other matters as may properly come before the meeting and any adjournment(s) or postponement(s) thereof. |
Due to recommendations from public officials or public health and travel concerns arising from the coronavirus known asCOVID-19, it is possible that the Fund will change the date, time, location, or means of conducting the Annual Meeting. Any such change will be announced via press release, which will be posted on the Fund’s website at www.lmcef.com prior to the Annual Meeting. An announcement of the change also would be filed with the Securities and Exchange Commission via its EDGAR system without the Fund delivering additional proxy materials to stockholders or amending its proxy statement. Although no decision has been made, the Fund may impose additional procedures or limitations on attending the Annual Meeting. The Fund may enable attendance at or participation in the Annual Meeting by means of remote communication (for example, a “virtual” or “hybrid” stockholder meeting).
The Board of Directors has fixed the close of business on March 25, 2020 as the record date for the determination of stockholders entitled to receive notice of and to vote at the Annual Meeting and any adjournment(s) or postponement(s) thereof.
By Order of the Board of Directors
Robert I. Frenkel,
Secretary
April 3, 2020
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE URGED TO DATE, FILL IN, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
WESTERN ASSET INVESTMENT GRADE INCOME FUND INC.
620 Eighth Avenue, 49th Floor, New York, New York 10018
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 8, 2020:
The proxy statement is available at
https://www.proxy-direct.com/lmf-31221
The accompanying proxy is solicited by the Board of Directors of Western Asset Investment Grade Income Fund Inc., (the “Fund”) for use at the annual meeting of stockholders of the Fund to be held on May 8, 2020 at 10:00 a.m., Eastern Time, at 620 Eighth Avenue (at 41st Street), 49th Floor, New York, New York, (the “Annual Meeting”), and at any adjournment(s) or postponement(s) thereof. At the Annual Meeting, stockholders of the Fund will be asked to consider the election of eleven Directors (the “Nominees”) to the Board of Directors of the Fund. The Nominees serve on Boards of Trustees/Directors of substantially all of the mutual funds within the Legg Mason fund complex that are advised by Western Asset Management Company, LLC (“Western Asset” or the “Investment Adviser”). This Proxy Statement and the form of proxy were first mailed to stockholders on or about April 3, 2020. Please note that only one annual or semi-annual report or Proxy Statement may be delivered to two or more stockholders of the Fund who share an address, unless the Fund has received instructions to the contrary. To request a separate copy of an annual or semi-annual report or the Proxy Statement, or for instructions as to how to request a separate copy of these documents or as to how to request a single copy if multiple copies of these documents are received, stockholders should contact the Fund at 620 Eighth Avenue, 49th Floor, New York, New York 10018 or by calling toll free at888-777-0102.
The Board of Directors has fixed the close of business on March 25, 2020 as the record date (“Record Date”) for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment(s) or postponement(s) thereof. As of the Record Date, there were 9,503,287 shares of the Fund’s common stock (the “Common Stock”) outstanding and entitled to one vote per share (and a fractional vote with respect to fractional shares) with respect to each matter to be voted on at the Annual Meeting. The outstanding shares of Common Stock constitute the only outstanding voting securities of the Fund entitled to be voted at the Annual Meeting.
A majority (greater than 50%) of the outstanding shares of Common Stock as of the Record Date must be represented in person or by proxy to constitute a quorum for the Annual Meeting. Directors will be elected by a plurality of the votes of the shares of the Fund’s Common Stock present in person or represented by proxy and entitled to vote on the election of Directors. In all matters other than the election of Directors, and except where a different vote is required by any provision of law or the Fund’s Certificate of Incorporation or Bylaws, the affirmative vote of the majority of shares of the Fund’s Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter will be the act of the stockholders. Each stockholder has the right to revoke his or her proxy at any time before it is voted. A proxy may be revoked by filing with the Secretary of the Fund a written revocation or a properly executed proxy bearing a later date or by voting in person at the Annual Meeting. Any stockholder may attend the Annual Meeting, whether or not he or she has previously given a proxy.
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The solicitation of proxies for the Annual Meeting will be made primarily by mail. However, additional solicitation may take place in writing or by telephone or personal interview by officers of the Fund (or their designees), who will not receive compensation from the Fund for such services. In addition, you may receive a telephone call from our proxy solicitor, Computershare Inc. (operating through its Computershare Fund Services division), a Delaware corporation (“CFS”), which has been retained to assist stockholders in the voting process. For these services, the Fund will pay CFS a fee that is expected to be approximately $29,000. However, the exact cost will depend on the amount and types of services rendered.
The Fund will reimburse brokers and other nominees, in accordance with New York Stock Exchange approved reimbursement rates, for their expenses in forwarding solicitation material to the beneficial owners of shares of the Fund. All expenses incurred in connection with the solicitation of proxies, including the services of CFS, will be borne by the Fund.
Abstentions and “brokernon-votes” (i.e., proxies signed and returned by brokers with respect to shares held by brokers or nominees as to which one or more votes is not indicated because (i) instructions have not been received from the beneficial owners or the persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter) will be counted as shares present for purposes of determining whether a quorum is present, but will not be counted as having been voted on the matter in question. Assuming that a quorum would otherwise be present, abstentions and brokernon-votes will accordingly have no effect for the purpose of determining whether a Director has been elected.
Jane E. Trust, Jeanne M. Kelly, Robert I. Frenkel, Thomas C. Mandia, Tara E. Gormel, Angela N. Velez and Marc A. De Oliveira, the persons named as proxies on the proxy card accompanying this Proxy Statement, were selected by the Board of Directors to serve in such capacity or substituted by the persons selected by the Board of Directors. Messrs. Frenkel, Mandia and De Oliveira and Mses. Trust, Kelly, Gormel and Velez are officers of the Fund. Each executed and returned proxy will be voted in accordance with the directions indicated thereon or, if no direction is indicated, such proxy will be voted for the election as Directors of the Fund the Board of Directors’ Nominees listed in this proxy statement. Discretionary authority is provided in the proxy as to any matters not specifically referred to therein. The Board of Directors is not aware of any other matters which are likely to be brought before the Annual Meeting. However, if any such matters properly come before the Annual Meeting, the persons named in the proxy are fully authorized to vote thereon in accordance with their judgment and discretion.
HOW TO SUBMIT A PROXY
Important Notice Regarding the Availability of Proxy Materials for the Meeting to be Held on May 8, 2020
The proxy statement and related materials are available at
https://www.proxy-direct.com/lmf-31221
Stockholders of record may submit a proxy in respect of their Shares by using any of the following methods:
By Telephone. Submit a proxy by calling the toll-free telephone number printed on the proxy card. The proxy card should be in hand when making the call.Easy-to-follow voice prompts allow the stockholder of record to authenticate his or her identity by entering the validation numbers printed on the enclosed proxy card, provide voting instructions for the Shares, and confirm that the instructions have been properly recorded.
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Please see the instructions on the enclosed card for telephone touch-tone proxy submission. Stockholders will have an opportunity to review their voting instructions and to make any necessary changes before submitting their voting instructions and terminating their telephone call.
By Internet. Submit a proxy via the Internet by accessing the web address printed on the proxy card. The proxy card should be in hand when accessing the web page.Easy-to-follow on screen instructions allow the stockholder of record to authenticate his or her identity by entering validation numbers printed on the enclosed proxy card, provide voting instructions for the Shares, and confirm that the instructions have been properly recorded.
Please see the instructions on the enclosed proxy card for Internet proxy submission. Stockholders will have the opportunity to review their voting instructions and to make any necessary changes before submitting their voting instructions.
By Mail. Stockholders of record may complete, sign, and date the proxy card and return it in the prepaid envelope provided.
PROPOSAL
ELECTION OF DIRECTORS
Eleven Directors are to be elected at the Annual Meeting to serve until their successors have been duly elected and qualified, subject to prior death, resignation, retirement, disqualification or removal from office and applicable law. Information about each Nominee is set forth in the table below. All of the Nominees are presently Directors of the Fund.
The Fund’s Bylaws provide that the Board of Directors will consist of such number of Directors as may be fixed from time to time by a majority of the Directors, which number is currently eleven.
It is the intention of the persons designated as proxies in the proxy card, unless otherwise directed therein, to vote at the Annual Meeting for the election of the Nominees named below as Directors of the Fund. Each of the Nominees has agreed to serve if elected at the Annual Meeting. If any Nominee is unable or unavailable to serve, the persons named in the proxies will vote the proxies for such other person as the Board of Directors may recommend for the position of Director.
Required Vote. The Directors of the Fund will be elected by a plurality vote of the shares of the Fund’s Common Stock present in person or represented by proxy and entitled to vote on the election of Directors. The Directors unanimously recommend that stockholders vote to elect each of the Nominees listed below to the Board of Directors.
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Information Regarding the Nominees and Directors. Information about the Nominees and Directors is set forth below. Ms. Trust is the President and Chief Executive Officer of the Fund. No other Nominee serves as an officer of the Fund. The address of each Nominee is c/o the Fund at its principal business address (100 International Drive, Baltimore, Maryland 21202).
Name and Year of Birth | Position(s) | Term of | Principal Occupations | Number of Portfolios in Fund Complex Overseen by Nominee** | Other Directorships | Common Stock of the Fund Beneficially Owned on December 31, 2019 | ||||||
INDEPENDENT NOMINEES AND DIRECTORS | ||||||||||||
Robert Abeles, Jr. Born 1945 | Director(1) | Served since 2013 | Senior Vice PresidentEmeritus (since 2016) and formerly, Senior Vice President, Finance and Chief Financial Officer (2009 to 2016) at University of Southern California. | 55 | Board Member, Great Public Schools Now (since 2018); Board Member, Excellent Education Development (since 2012). | None | ||||||
Jane F. Dasher Born 1949 | Director(1) | Served since 1999 | Chief Financial Officer, Long Light Capital, LLC, formerly known as Korsant Partners, LLC (a family investment company) (since 1997). | 55 | Director, Visual Kinematics, Inc. (since 2018). | None | ||||||
Anita L. DeFrantz Born 1952 | Director(1)(2) | Served since 1998 | President of Tubman Truth Corp. (since 2015); PresidentEmeritus (since 2015) and formerly, President (1987 to 2015) and Director (1990 to 2015) of LA84 (formerly Amateur Athletic Foundation of Los Angeles); Member (since 1986), Member of Executive Board (since 2013) and Vice President (since 2017) of the International Olympic Committee. | 55 | None | 1,000 |
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Name and Year of Birth | Position(s) | Term of | Principal Occupations | Number of Portfolios in Fund Complex Overseen by Nominee** | Other Directorships | Common Stock of the Fund Beneficially Owned on December 31, 2019 | ||||||
INDEPENDENT NOMINEES AND DIRECTORS (continued) | ||||||||||||
Susan B. Kerley Born 1951 | Director(1)(2) | Served since 1992 | Investment Consulting Partner, Strategic Management Advisors, LLC (investment consulting) (since 1990). | 55 | Director and Trustee (since 1990) and Chairman (since 2017 and 2005 to 2012) of various series of MainStay Family of Funds (66 funds); formerly, Investment Company Institute (ICI) Board of Governors (2006 to 2014); ICI Executive Committee (2011 to 2014); Chairman of the Independent Directors Council (2012 to 2014). | None | ||||||
Michael Larson(3) Born 1959 | Director(1)(2) | Served since 2004 | Chief Investment Officer for William H. Gates III (since 1994) | 57 | Republic Services, Inc. (since 2009); Fomento Economico Mexicano, SAB (since 2011); EcoLab Inc. (since 2012). Formerly, Autonation, Inc. (2010 to 2018); | None | ||||||
Avedick B. Poladian Born 1951 | Director(1)(2) | Served since 2007 | Director and Advisor (since 2017) and former Executive Vice President and Chief Operating Officer (2002 to 2016) of Lowe Enterprises, Inc. (privately held real estate and hospitality firm); formerly, Partner, Arthur Andersen, LLP (1974 to 2002). | 55 | Occidental Petroleum Corporation (since 2008); California Resources Corporation (since 2014) and Public Storage (since 2010). | None |
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Name and Year of Birth | Position(s) | Term of | Principal Occupations | Number of Portfolios in Fund Complex Overseen by Nominee** | Other Directorships | Common Stock of the Fund Beneficially Owned on December 31, 2019 | ||||||
INDEPENDENT NOMINEES AND DIRECTORS (continued) | ||||||||||||
William E. B. Siart Born 1946 | Director and Chairman(1)(2) | Served since 1997 | Chairman of Great Public Schools Now (since 2015); Chairman of Excellent Education Development (since 2000); formerly, Trustee of The Getty Trust (2005 to 2017); Chairman of Walt Disney Concert Hall, Inc. (1998 to 2006). | 55 | Member of Board of United States Golf Association, Executive Committee Member (since 2018). | None | ||||||
Jaynie Miller Studenmund Born 1954 | Director(1)(2) | Served since 2004 | Corporate Board Member and Advisor (since 2004); retired as Chief Operating Officer of Overture Services, Inc. (publicly traded internet company that created search engine marketing) (2001 to 2004); Executive vice president for consumer and business banking for three national financial institutions (1984 to 1997). | 55 | Director of Pacific Premier Bancorp Inc. and Pacific Premier Bank (since 2019); Director of EXL (operations management and analytics company) (since 2018); Director of CoreLogic, Inc. (information, analytics and business services company) (since 2012); formerly, Director of Pinnacle Entertainment, Inc. (gaming and hospitality company) (2012 to 2018); Director of LifeLock, Inc. (identity theft protection company) (2015 to 2017); Director of Orbitz Worldwide, Inc. (online travel company) (2007 to 2014). | None |
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Name and Year of Birth | Position(s) | Term of | Principal Occupations | Number of Portfolios in Fund Complex Overseen by Nominee** | Other Directorships | Common Stock of the Fund Beneficially Owned on December 31, 2019 | ||||||
INDEPENDENT NOMINEES AND DIRECTORS (continued) | ||||||||||||
Peter J. Taylor Born 1958 | Director(1)(2) | Served since 2019 | President to ECMC Foundation (nonprofit organization) (since 2014); formerly, Executive Vice President and Chief Financial Officer for University of California system (2009 to 2014); Managing Director, Barclays Capital (investment bank) (2008 to 2009); Managing Director, Lehman Brothers (investment bank) (1993 to 2008). | 55 | Member of Board of Trustees of California State University system; Director of Pacific Mutual Holding Company(4), Kaiser Family Foundation, Ralph M. Parson Foundation, and Edison International. | None | ||||||
INTERESTED NOMINEE AND DIRECTOR | ||||||||||||
Ronald L. Olson Born 1941 | Director(2)(5) | Served since 2005 | Partner, Munger, Tolles & Olson LLP (law partnership) (since 1968). | 55 | Berkshire Hathaway, Inc.; formerly, Graham Holdings Company (formerly, The Washington Post Company) (2003 to 2017). | 1,000 |
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Name and Year of Birth | Position(s) | Term of | Principal Occupations | Number of Portfolios in Fund Complex Overseen by Nominee** | Other Directorships | Common Stock of the Fund Beneficially Owned on December 31, 2019 | ||||||
INTERESTED NOMINEE, DIRECTOR AND OFFICER | ||||||||||||
Jane E. Trust Born 1962 | Director, President and Chief Executive Officer(2)(6) | Served since 2015 | Senior Managing Director of Legg Mason & Co., LLC (“Legg Mason & Co.”) (since 2018); Managing Director of Legg Mason & Co. (2016 to 2018); Officer and/or Trustee/ Director of 145 funds associated with Legg Mason Partners Fund Advisor, LLC (“LMPFA”) or its affiliates (since 2015); President and Chief Executive Officer of LMPFA (since 2015); formerly, Senior Vice President of LMPFA (2015); Director of ClearBridge, LLC (formerly, Legg Mason Capital Management, LLC) (2007 to 2014); Managing Director of Legg Mason Investment Counsel & Trust Co. (2000 to 2007). | 142(7) | None | None |
(1) | Member of the Audit Committee, the Executive and Contract Committee, the Governance and Nominating Committee and the Investment and Performance Committee of the Board of Directors. |
(2) | Member of the Investment and Performance Committee. |
(3) | Mr. Larson also serves as a Trustee of Western Asset Inflation-Linked Income Fund (“WIA”) and Western Asset Inflation-Linked Income & Opportunities Fund (“WIW”) (each aclosed-end investment company) and, effective March 6, 2020, Mr. Larson serves as a Board member of the Fund, Western Asset Premier Bond Fund (“WEA”), Western Asset Funds, Inc., Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust (each anopen-end investment company), which, together with WIA and WIW, are considered part of the same Fund Complex as the Fund (all together, the “Western Asset Funds”). Mr. Larson is the chief investment officer for William H. Gates III and in that capacity oversees all of thenon-Microsoft investments of Mr. Gates and all of the investments of the Bill and Melinda Gates Foundation Trust. Since 1997, Western Asset, the Fund’s investment adviser, has provided discretionary investment advice with respect to one or more separate investment portfolios for Mr. Gates and the Bill and Melinda Gates Foundation Trust. Since the beginning of the last two completed fiscal years of the Fund, at no time did the value of those investment portfolios exceed 0.5% of Western Asset’s total assets under management. No changes to these arrangements are currently contemplated. |
(4) | Western Asset, the Fund’s investment adviser, and its affiliates provide investment advisory services with respect to registered investment companies sponsored by an affiliate of Pacific Mutual Holding Company (“Pacific Holdings”). Affiliates of Pacific Holdings receive compensation from LMPFA or its affiliates for shareholder or distribution services provided with respect to registered investment companies for which Western Asset or its affiliates serve as investment adviser. |
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(5) | Mr. Olson is considered to be an “interested person” (as defined above) of the Fund because his law firm has provided legal services to the Investment Adviser. |
(6) | Ms. Trust is an “interested person” (as defined in section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Fund because of her position with subsidiaries of, and ownership of shares of common stock of, Legg Mason, Inc., the parent company of the Investment Adviser. |
(7) | Ms. Trust is a Director/Trustee for 142 funds associated with Legg Mason & Co., LLC or its affiliates. Legg Mason & Co. is an affiliate of the Investment Adviser. |
* | Indicates the earliest year in which the Trustee or Nominee became a Board member for a Fund in the Fund complex. Each of the Directors of the Fund holds office until his or her successor shall have been duly elected and shall qualify, subject to prior death, resignation, retirement, disqualification or removal from office and applicable law. |
** | If elected, each Nominee would oversee 57 funds in the Legg Mason Funds complex (other than Ms. Trust, who would oversee 144 funds as Trustee/Director). Each current Director also serves as a Board member of WEA(closed-end investment company) and the portfolios of Western Asset Funds, Inc., Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust (each anopen-end investment company), which are considered part of the same Fund Complex as the Fund. Mr. Larson also serves as a Trustee of WIA and WIW (each aclosed-end investment company), which are considered part of the same Fund Complex as the Fund. The Investment Adviser serves as an investment adviser to WEA, WIA, WIW and one or more series of Western Asset Funds, Inc., Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust. The Fund’s subadviser, Western Asset Management Company Limited (the “Subadviser”), serves as subadviser to one or more of the Western Asset Funds or one or more series thereto. |
Additional Information Concerning the Board of Directors. The Board believes that each Nominee’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Nominees lead to the conclusion that the Board possesses the requisite skills and attributes. The Board believes that the Nominees’ ability to review, critically evaluate, question and discuss information provided to them, to interact effectively with the Investment Adviser, the Subadviser, other service providers, counsel and independent auditors, and to exercise effective business judgment in the performance of their duties serves to support this conclusion. The Board also has considered the following experience, qualifications, attributes and/or skills, among others, of its members in reaching its conclusion: his or her character and integrity; such person’s length of service as a board member of the Fund; such person’s willingness to serve and willingness and ability to commit the time necessary to perform the duties of a Director; as to each Nominee other than Mr. Olson and Ms. Trust, his or her status as not being an “interested person” (as defined in the 1940 Act) of the Fund (such Directors or Nominees who are not interested persons of the Fund being referred to as the “Independent Directors”). In addition, the following specific experience, qualifications, attributes and/or skills apply as to each Nominee: Mr. Abeles, business, accounting and finance expertise and experience as a chief financial officer, board member and/or executive officer of various businesses and other organizations; Ms. Dasher, experience as a chief financial officer of a private investment company; Ms. DeFrantz, business expertise and experience as a president, board member and/or executive officer of various businesses andnon-profit and other organizations; Ms. Kerley, investment consulting experience and background and mutual fund board experience; Mr. Larson, portfolio management expertise and experience as a board member of various businesses and other organizations; Mr. Poladian, business, finance and accounting expertise and experience as a board member of various businesses and/or as a partner of a multi-national accounting firm; Mr. Siart, business and finance expertise and experience as a president, chairperson, chief executive officer and/or board member of various businesses andnon-profit and other organizations; Ms. Studenmund, business and finance expertise and experience as a president, board member and/or chief operating officer of various businesses; Mr. Taylor, business and finance expertise and experience as a chief financial officer, president and/or board member of various businesses andnon-profit organizations; Mr. Olson, business and legal expertise and experience as a partner of a law firm and/or board member of various businesses andnon-profit and other organizations; and Ms. Trust, investment management and risk oversight experience as an executive and portfolio manager and leadership roles within Legg Mason and affiliated entities.
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References to the qualifications, attributes and skills of the Directors and Nominees are pursuant to requirements of the Securities and Exchange Commission, do not constitute holding out of the Board or any Nominee as having any special expertise or experience, and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.
The Board is responsible for overseeing the management and operations of the Fund. Mr. Siart serves as Chairman of the Board. Mr. Siart is an Independent Director. Independent Directors constitute more than 70% of the Board. As described further below, the Board has four standing committees: the Audit Committee, the Executive and Contracts Committee (referred to as the Contracts Committee), the Governance and Nominating Committee (referred to as the Governance Committee), and the Investment and Performance Committee (referred to as the Performance Committee). Each of the Audit, Governance, Contracts and Performance Committees is chaired by an Independent Director and each (other than the Performance Committee) is composed entirely of Independent Directors. Where deemed appropriate, the Board constitutes ad hoc committees.
The Board has determined that its leadership structure is appropriate given the business and nature of the Fund. In connection with its determination, the Board considered that the Chairman of the Board is an Independent Director. The Chairman of the Board can play an important role in setting the agenda of the Board and also serves as a key point person for dealings between management and the other Independent Directors. The Independent Directors believe that the Chairman’s independence facilitates meaningful dialogue between fund management and the Independent Directors. The Board also considered that the chairperson of each Board committee is an Independent Director, which yields similar benefits with respect to the functions and activities of the various Board committees (e.g., each committee’s chairperson works with the Investment Adviser and other service providers to set agendas for the meetings of the applicable Board committees). As noted above, through the committees the Independent Directors consider and address important matters involving the Fund, including those presenting conflicts or potential conflicts of interest for management. The Independent Directors also regularly meet outside the presence of management and are advised by independent legal counsel. The Board has determined that its committees help ensure that the Fund has effective and independent governance and oversight. The Board also believes that its leadership structure, in which the Chair of the Board is not affiliated with Legg Mason, is appropriate. The Board also believes that its leadership structure facilitates the orderly and efficient flow of information to the Independent Directors from management, including the Investment Adviser and Subadviser. The Board reviews its structure on an annual basis.
As an integral part of its responsibility for oversight of the Fund in the interests of stockholders, the Board oversees risk management of the Fund’s investment programs and business affairs. The function of the Board with respect to risk management is one of oversight and not active involvement in, or coordination of,day-to-day risk management activities for the Fund. The Board has emphasized to the Fund’s Investment Adviser and Subadviser the importance of maintaining vigorous risk management. The Board exercises oversight of the risk management process primarily through the Performance Committee, Audit Committee, Contracts Committee, and through oversight by the Board itself.
The Fund faces a number of risks, such as investment risk, counterparty risk, valuation risk, reputational risk, risk of operational failure or lack of business continuity, and legal, compliance and regulatory risk. Risk management seeks to identify and address risks, i.e., events or circumstances that could have material adverse effects on the business, operations, stockholder services, investment performance or reputation of the Fund.
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Under the overall supervision of the Board or the applicable Committee, the Fund, the Investment Adviser, the Subadviser, and the affiliates of the Investment Adviser and the Subadviser, and other service providers to the Fund employ a variety of processes, procedures and controls to identify various of those possible events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur. Different processes, procedures and controls are employed with respect to different types of risks. Various personnel, including the Fund’s and the Investment Adviser’s Chief Compliance Officer and the Investment Adviser’s chief risk officer, as well as various personnel of other service providers such as the Fund’s independent accountants, report to the Audit Committee, Contracts Committee and Performance Committee and/or to the Board with respect to various aspects of risk management, as well as events and circumstances that have arisen and responses thereto. These reports and other similar reports received by the Directors as to risk management matters are typically summaries of the relevant information. The Board recognizes that not all risks that may affect the Fund can be identified, that it may not be practical or cost-effective to eliminate or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the Fund’s goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness.
Audit Committee. The Board of Directors has established an Audit Committee composed solely of Independent Directors, consisting of Messrs. Abeles, Larson, Poladian, Siart and Taylor and Mses. Dasher, DeFrantz, Kerley and Studenmund. Each member of the Audit Committee is “independent,” as independence for audit committee members is defined in the currently applicable listing standards of the New York Stock Exchange, on which the Common Stock of the Fund is listed and traded. The Audit Committee provides oversight with respect to the accounting and financial reporting policies and procedures of the Fund and, among other things, considers the selection of the independent registered public accounting firm for the Fund and the scope of the audit and approves services proposed to be performed by the independent registered public accounting firm on behalf of the Fund and, under certain circumstances, the Investment Adviser, Subadviser and certain affiliates. The Audit Committee operates under a written charter adopted and approved by the Board, a copy of which is available on the Fund’s website at www.lmcef.com and click on the name of the Fund.
The Audit Committee of the Fund has submitted the following report:
The Audit Committee has reviewed and discussed with management of the Fund the audited financial statements for the last fiscal year. The Audit Committee has discussed with the Fund’s independent registered public accounting firm the matters required to be discussed by Statements on Auditing Standards No. 1301 (“SAS No. 1301”). SAS No. 1301 requires the independent registered public accounting firm to communicate to the Audit Committee matters including, if applicable: (1) methods used to account for significant unusual transactions; (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus; (3) the process used by management in formulating critical accounting estimates and the basis for the independent registered public accounting firm’s conclusions regarding the reasonableness of those estimates; and (4) disagreements with management over the application of accounting principles and certain other matters. The Audit Committee has received the written disclosures and the letter from the Fund’s independent registered public accounting firm required by Public Company Accounting Oversight Board Rule 3526 (requiring the independent registered public accounting firm to make written disclosures to and discuss with the Audit Committee various matters relating to its independence), and has discussed with such independent registered public accounting firm its independence.
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Based on the foregoing review and discussions, the Audit Committee* recommended to the Directors the inclusion of the audited financial statements for the last fiscal year in the Fund’s annual report to stockholders.
Robert Abeles, Jr. (Chairman)
Jane F. Dasher
Anita L. DeFrantz
Susan B. Kerley
Avedick B. Poladian
William E. B. Siart
Jaynie Miller Studenmund
Peter J. Taylor
*Michael Larson was not a member of the Audit Committee at the time the Audit Committee submitted its report to the Board of Directors.
Governance and Nominating Committee. The Board of Directors has established a Governance Committee composed solely of Independent Directors, consisting of Mses. Dasher, DeFrantz, Kerley and Studenmund and Messrs. Abeles, Larson, Poladian, Siart and Taylor. The Governance Committee meets to select nominees for election as Directors of the Fund, to review and make recommendations to the Board with respect to Director compensation, and consider other matters of Board policy. The Governance Committee operates under a written charter adopted and approved by the Board, a copy of which is available on the Fund’s website at www.lmcef.com and click on the name of the Fund.
The Governance Committee requires that Director candidates have a college degree or equivalent business experience, but has not otherwise established specific, minimum qualifications that must be met by an individual to be considered by the Committee for nomination as a Director. The Governance Committee may take into account a wide variety of factors in considering Director candidates, including, but not limited to: (i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities to the Board of Directors, (ii) relevant industry and related experience, (iii) educational background, (iv) financial expertise, (v) an assessment of the candidate’s ability, judgment and expertise and (vi) overall diversity of the Board’s composition.
Although the Governance Committee does not have a formal policy with regard to the consideration of diversity in identifying Director nominees, as a matter of practice the Governance Committee typically considers the overall diversity of the Board’s composition when identifying nominees. Specifically, the Governance Committee considers the diversity of skill sets desired among the Board members in light of the Fund’s characteristics and circumstances and how those skill sets might complement each other. The Governance Committee also takes into account the personal background of current and prospective Directors in considering the composition of the Board. In addition, as part of its annual self-evaluation, the Directors have an opportunity to consider the diversity of the Board, both in terms of skill sets and personal background, and any observations made by the Board during the self-evaluation inform the Governance Committee in its decision making process.
The Governance Committee may consider candidates for Director recommended by the Fund’s current Directors, officers, Investment Adviser or Subadviser, stockholders or any other source deemed to be appropriate by the Governance Committee. Candidates properly submitted by stockholders (as described below) will be considered and evaluated on the same basis as candidates recommended by other sources.
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The policy of the Governance Committee is to consider nominees recommended by stockholders to serve as Director, provided that any such recommendation is submitted in writing to the Fund, to the attention of the Secretary, at the address of the principal executive offices of the Fund, not less than one hundred and twenty calendar days nor more than one hundred and thirty-five calendar days prior to the date of the meeting at which the nominee would be elected and that such stockholder recommendation contains the information about such nominee required by the Fund’s procedures for stockholders to submit nominee candidates, which are a part of the Governance Committee’s Charter. The Governance Committee has full discretion to reject nominees recommended by stockholders, and there is no assurance that any such person so recommended and considered by the Governance Committee will be nominated for election to the Fund’s Board of Directors.
Executive and Contracts Committee. The Board of Directors has established a Contracts Committee consisting of Messrs. Abeles, Larson, Poladian, Siart and Taylor and Mses. Dasher, DeFrantz, Kerley and Studenmund. The Contracts Committee may meet from time to time between Board meetings in order to consider appropriate matters and to review the various contractual arrangements between the Fund and its affiliated persons.
Investment and Performance Committee. The Board of Directors has established a Performance Committee consisting of Messrs. Abeles, Larson, Poladian, Olson, Siart and Taylor and Mses. Dasher, DeFrantz, Kerley, Studenmund and Trust. The Performance Committee is charged with, among other things, reviewing investment performance.
Meetings. During 2019, the Board of Directors held five meetings, the Audit Committee held six meetings, the Governance Committee held three meetings, and the Contracts Committee held two meetings. The Performance Committee is a newly formed committee of the Board as of January 1, 2020 and therefore did not meet during the fiscal year ended December 31, 2019. Each Director, except for Mr. Larson and Mses. Dasher and Kerley, who each became, respectively, a Director effective March 6, 2020, January 10, 2020 and January 10, 2020, attended at least 75% of the aggregate number of meetings of the Board of Directors and the committees of the Board of Directors on which he or she served.
Stockholder Communications. The Board of Directors has adopted a process for stockholders to send communications to the Board of Directors. Stockholders may mail written communications to the attention of the Board of Directors, care of the Fund’s Secretary, at the principal executive offices of the Fund. The written communication must include the stockholder’s name, be signed by the stockholder, refer to the Fund, and include the class and number of shares held by the stockholder as of a recent date. The Secretary is responsible for determining, in consultation with other officers of the Fund, counsel, and other advisers as appropriate, which stockholder communications will be relayed to the Board.
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Director Holdings. The following table states the dollar range of equity securities beneficially owned as of March 1, 2020 by each Nominee in the Fund and, on an aggregate basis, in any registered investment companies overseen or to be overseen by the Nominee in the same “family of investment companies.” As of March 1, 2020, all Directors and officers of the Fund as a group beneficially owned less than 1% of the outstanding shares of the Fund on such date.
Name of Nominee | Dollar Range of Equity Securities in the Fund | Aggregate Dollar Range of Equity Securities in all Funds Overseen or to be Overseen by Nominee in Family of Investment Companies(1) | ||
INDEPENDENT NOMINEES | ||||
Robert Abeles, Jr. | None | None | ||
Jane F. Dasher | None | Over $100,000 | ||
Anita L. DeFrantz | $10,001-$50,000 | $10,001-$50,000 | ||
Susan B. Kerley | None | Over $100,000 | ||
Michael Larson | None | Over $100,000 | ||
Avedick B. Poladian | None | Over $100,000 | ||
William E. B. Siart | None | None | ||
Jaynie Miller Studenmund | None | Over $100,000 | ||
Peter J. Taylor | None | $10,001-$50,000 | ||
INTERESTED NOMINEES | ||||
Jane E. Trust | None | Over $100,000 | ||
Ronald L. Olson | $10,001-$50,000 | $10,001-$50,000 |
(1) | The term “Family of Investment Companies” means any two or more registered investment companies that share the same investment adviser or hold themselves out as related companies for purposes of investment or investor services. “Family of investment companies” for these purposes includes all of the Western Asset Funds. |
Director Compensation. For serving as a Director of the Fund, each Independent Director receives an annual retainer plus fees for attending each regularly scheduled meeting and special Board meeting he or she attends in person or by telephone. The Independent Directors are also reimbursed for allout-of-pocket expenses relating to attendance at such meetings. Those Independent Directors who serve in leadership positions of the Board or Board committees, as well as each committee member, receive additional compensation. All such fees paid to the Directors are aggregate fees for serving on the combined Board of Directors/Trustees of the Fund, Western Asset Premier Bond Fund and the portfolios of Western Asset Funds, Inc., Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust, and such fees are allocated according to each such investment company’s average annual net assets. The Board reviews the level of Director compensation periodically and Director compensation may change from time to time. Mr. Olson, an “interested person” (as defined in the 1940 Act) of the Fund, receives from the Investment Adviser an annual retainer plus fees for attending each regularly scheduled meeting and special Board meeting he attends in person or by telephone.
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For the fiscal year ended December 31, 2019, the Directors received the compensation set forth in the following table for serving as Directors of the Fund and as Directors or Trustees of other funds in the same “Fund Complex.”
Name of Nominee | Aggregate Compensation from the Fund ($) | Pension or Retirement Benefits Accrued as Part of Fund’s Expenses ($) | Estimated Annual Benefits Upon Retirement ($) | Total Compensation from the Fund and its Fund Complex Paid to Directors ($) | ||||
INDEPENDENT NOMINEE AND DIRECTORS | ||||||||
Robert Abeles, Jr. | 3,090 | 0 | 0 | 242,000(1) | ||||
Jane F. Dasher(2) | 0 | 0 | 0 | 296,000(3) | ||||
Anita L. DeFrantz | 3,005 | 0 | 0 | 217,000(1) | ||||
Susan B. Kerley(2) | 0 | 0 | 0 | 316,000(3) | ||||
Michael Larson(4) | 0 | 0 | 0 | 90,000(5) | ||||
Avedick B. Poladian | 3,005 | 0 | 0 | 217,000(1) | ||||
William E. B. Siart | 3,141 | 0 | 0 | 257,000(1) | ||||
Jaynie Miller Studenmund | 3,005 | 0 | 0 | 217,000(1) | ||||
Peter J. Taylor(6) | 7,299 | 0 | 0 | 108,165(1)(7) | ||||
INTERESTED NOMINEES AND DIRECTORS | ||||||||
Jane E. Trust | 0 | 0 | 0 | 0(8) | ||||
Ronald L. Olson | 0 | 0 | 0 | 0(8) |
(1) | Includes amounts received in 2019 from the Fund, WEA and the portfolios of Western Asset Funds, Inc., which are considered part of the same Fund Complex as the Fund. |
(2) | Mses. Dasher and Kerley each became a Director of the Fund and WEA effective January 10, 2020. |
(3) | Includes amounts received in 2019 from Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust, which are considered part of the same Fund Complex as the Fund. |
(4) | Mr. Larson became a Director of the Fund and WEA effective March 6, 2020. |
(5) | Includes amounts received in 2019 from WIA and WIW, which are considered part of the same Fund Complex as the Fund. |
(6) | Mr. Taylor became a Director of the Fund and WEA effective March 1, 2019. |
(7) | Includes amounts received in 2019 from the Fund, WEA and the portfolios of Western Asset Funds, Inc., which are considered part of the same Fund Complex as the Fund. From March 1, 2019 to December 31, 2019, Mr. Taylor was retained to provide services to the Independent Board members of Western Asset Funds, Inc. with respect to their oversight of Western Asset Funds, Inc. His compensation for these services, paid by Western Asset Funds, Inc., was set at an annual rate of $110,000. |
(8) | Mr. Olson and Ms. Trust are not compensated by the Fund for their services as Trustees because of their relationships with Western Asset and Western Asset’s parent company, respectively. |
During 2019, the Fund paid no remuneration to its officers, all of whom were also officers or employees of the Investment Adviser or one of its affiliates.
INFORMATION CONCERNING THE INVESTMENT
ADVISER AND SUBADVISER AND THE FUND’S OFFICERS
The Investment Adviser and the Subadviser are subsidiaries of Legg Mason, Inc., a holding company which, through its subsidiaries, is engaged in providing investment advisory services to individuals and institutions. Franklin Resources, Inc. (“Franklin Resources”) and Legg Mason, Inc. (“Legg Mason”) announced that they have entered into a definitive agreement for Franklin Resources to acquire Legg Mason, which, subject to approvals and the satisfaction of the other conditions, is expected to be consummated later this year.
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The address of Legg Mason is 100 International Drive, Baltimore, Maryland 21202. The Investment Adviser’s address is 385 East Colorado Boulevard, Pasadena, California 91101. The Subadviser’s address is 10 Exchange Square, London, England EC2A2EN. An affiliate of the Investment Adviser, Legg Mason Partners Fund Advisor, LLC, 620 Eighth Avenue, New York, NY 10018, provides administrative services to the Fund.
Information regarding the executive officers of the Fund and their ownership of Common Stock is set forth below, except that information regarding Ms. Trust, a Director and the President of the Fund, is provided in the table above with the Nominees and Directors. Unless otherwise noted, the address of each officer is c/o the Fund at the address listed above.
Name and Year of | Position(s) Held with | Term of Office and | Principal Occupations During the Past 5 Years | Common Stock of the Fund Beneficially Owned on March 1, 2020 | ||||
Christopher Berarducci Born 1974
620 Eighth Avenue 49th Floor New York, NY 10018 | Principal Financial Officer and Treasurer | Served since 2019(2) | Treasurer (since 2010) and Principal Financial Officer (since 2019)of certain mutual funds associated with Legg Mason & Co. or its affiliates; Director of Legg Mason & Co. (since 2015); formerly, Vice President of Legg Mason & Co. (2011 to 2015); Assistant Controller of certain funds associated with Legg Mason& Co. or its affiliates (prior to 2010). | None | ||||
Ted P. Becker Born 1951
620 Eighth Avenue 49th Floor New York, NY 10018 | Chief Compliance Officer | Served since 2007(3) | Director of Global Compliance at Legg Mason, Inc. (since 2006); Chief Compliance Officer of LMPFA (since 2006); Managing Director of Compliance of Legg Mason & Co. (since 2005); Chief Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2006). | None | ||||
Robert I. Frenkel Born 1954
100 First Stamford Place 6th Floor Stamford, CT 06902 | Secretary and Chief Legal Officer | Served since 2007 | Vice President and Deputy General Counsel of Legg Mason, Inc. (since 2006); Managing Director and General Counsel of U.S. Mutual Funds for Legg Mason & Co. (since 2006) and Legg Mason & Co. predecessors (since 1994); Secretary and Chief Legal Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006). | None | ||||
Jenna Bailey Born 1978
100 First Stamford Place 5th Floor Stamford, CT 06902 | Identity Theft Prevention Officer | Served since 2015 | Identity Theft Prevention Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2015); Compliance Officer of Legg Mason & Co. (since 2013); Assistant Vice President of Legg Mason & Co. (since 2011); formerly, Associate Compliance Officer of Legg Mason & Co. (2011 to 2013). | None |
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Name and Year of | Position(s) Held with | Term of Office and | Principal Occupations During the Past 5 Years | Common Stock of the Fund Beneficially Owned on March 1, 2020 | ||||
Jeanne M. Kelly Born 1951
620 Eighth Avenue 49th Floor New York, NY 10018 | Senior Vice President | Served since 2007 | Senior Vice President of certain funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); Managing Director of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); formerly, Senior Vice President of LMFAM (2013 to 2015). | None | ||||
Thomas C. Mandia Born 1962
100 First Stamford Place 6th Floor Stamford, CT 06902 | Assistant Secretary | Served since 2007 | Managing Director and Deputy General Counsel of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); Secretary of LMPFA (since 2006); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006); Secretary of LM Asset Services, LLC (“LMAS”) (since 2002) and Legg Mason Fund Asset Management, Inc. (“LMFAM”) (since 2013) (formerly registered investment advisers). | None |
(1) | Indicates the earliest year in which the officer became an officer for a Fund in the Fund Complex. Each officer holds office until his or her respective successor is chosen and qualified, or in each case until he or she sooner dies, resigns, is removed with or without cause or becomes disqualified. |
(2) | Effective September 23, 2019, Mr. Berarducci became Treasurer and Principal Financial Officer of the Fund. |
(3) | Effective July 17, 2019, Mr. Becker became Chief Compliance Officer of the Fund. |
STOCKHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
Proposals that stockholders wish to present to the 2021 Annual Meeting and to have included in the Fund’s proxy materials relating to such meeting pursuant to Rule14a-8 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), must be delivered to the Secretary of the Fund on or before December 4, 2020 (i.e., at least 120 days before April 3, 2021).
Stockholders who wish to make a proposal at the 2021 Annual Meeting — other than one that will be included in the Fund’s proxy materials — should notify the Fund on or before February 17, 2021 (i.e., 45 days prior to April 3, 2021).
The proper submission of a stockholder proposal does not guarantee that it will be included in the Fund’s proxy materials or presented at a stockholder meeting. Stockholder proposals are subject to the requirements of applicable law and the Fund’s Certificate of Incorporation and Bylaws.
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SHARE OWNERSHIP INFORMATION
As of the Record Date, Cede & Co., as nominee for participants in The Depository Trust Company, held of record 9,113,890 shares of Common Stock (representing approximately 95.90% of the Fund’s Common Stock). Cede & Co.’s address is 55 Water Street, 25th Floor, New York, New York 10041-0001. As of the Record Date, the persons shown in the table below owned, to the knowledge of the Fund, beneficially more than five percent of the outstanding shares of Common Stock.
Stockholder Name and Address | Share Holdings | Percentage Owned | ||
First Trust Portfolios L.P., First Trust Advisors L.P. and The Charger Corporation 120 East Liberty Drive, Suite 400, Wheaton, IL 60187(2) | 1,828,906(1) | 19.25% |
(1) | Shares are held with shared dispositive power and without voting power. Shares are voted by the director of such unit investment trusts so as to insure that the shares are voted as closely as possible in the same manner and in the same general proportion as are the shares held by owners other than such unit investment trusts. See footnote 2 below. |
(2) | Based on information obtained from a Schedule 13G/A filed with the Securities and Exchange Commission on February 12, 2020 and the number of shares outstanding as of the Record Date. First Trust Portfolios L.P. is the sponsor of several unit investment trusts which hold shares of Common Stock of the Fund. No individual unit investment trust sponsored by First Trust Portfolios L.P. holds more than 3% of the Fund’s Common Stock. First Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P. and acts as portfolio supervisor of the unit investment trusts which hold shares of Common Stock of the Fund. The Charger Corporation is the general partner of both First Trust Portfolios L.P. and First Trust Advisors L.P. |
DELINQUENT SECTION 16(A) REPORTS
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require the Fund’s officers and Directors, the Investment Adviser, the Subadviser, certain affiliates of the Investment Adviser or Subadviser, and persons who beneficially own more than ten percent of a registered class of the Fund’s equity securities, among others, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange. These persons are required by SEC regulation to furnish the Fund with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, the Fund believes that, during 2019, all such filing requirements were met with respect to the Fund.
ANNUAL REPORT TO STOCKHOLDERS
The Fund’s Annual Report to Stockholders for the fiscal year ended December 31, 2019 contains financial and other information pertaining to the Fund. The Fund will furnish without charge to each person whose proxy is being solicited, upon request of such person, a copy of the Annual Report to Stockholders. Requests for copies of the Annual Report to Stockholders should be directed to Western Asset Investment Grade Income Fund Inc., 620 Eighth Avenue, 49th Floor, New York, New York 10018 or you may call888-777-0102.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Fund for the fiscal year ending December 31, 2020, and the Board of Directors, including a majority of the Independent Directors, has unanimously ratified such selection. PricewaterhouseCoopers LLP’s service is subject to termination by a majority of the outstanding shares of Common Stock of the Fund. Representatives of PricewaterhouseCoopers LLP are not currently expected to attend the meeting.
The following table presents fees billed in each of the last two fiscal years for services rendered to the Fund by PricewaterhouseCoopers LLP:
Fiscal year ended | Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees | ||||||||||||||||||||
December 31, 2018 | $ | 75,710 | $ | 0 | $ | 0 | $3,000 | |||||||||||||||||
December 31, 2019 | $ | 41,112 | $ | 0 | $ | 0 | $0 |
“Audit Fees” represents fees billed for each of the last two fiscal years for professional services rendered for the audit of the Fund’s annual financial statements for those fiscal years or services that are normally provided by the accountant in connection with statutory or regulatory filings or engagements for those fiscal years.
“Audit-Related Fees” represents fees billed for each of the last two fiscal years for assurance and related services reasonably related to the performance of the audit of the Fund’s annual financial statements for those years, including interim audit security pricing.
“Tax Fees” represents fees billed for each of the last two fiscal years for professional services related to tax compliance, tax advice and tax planning, including preparation of federal and state income tax returns and preparation of excise tax returns.
“All Other Fees” represents fees, if any, billed for other products and services rendered by PricewaterhouseCoopers LLP to the Fund for the last two fiscal years.
For the fiscal years ended December 31, 2018 and December 31, 2019, PricewaterhouseCoopers LLP billed aggregatenon-audit fees in the amounts of $678,000 and $938,841, respectively, to the Fund, the Investment Adviser and any entity controlling, controlled by or under common control with the Investment Adviser that provides ongoing services to the Fund.
Pre-Approval Policies of the Audit Committee. As noted above, the Audit Committee is governed by the Audit Committee Charter, which includes preapproval policies and procedures. Specifically, the Audit Committee Charter provides:
To carry out its purposes and responsibilities, the Audit Committee shall have the duty and power to:
(h) | pre-approve, to the extent contemplated by applicable regulations, audit andnon-audit services rendered to the Fund by the auditors andnon-audit services rendered to the Managers and certain of their affiliates by the auditors, and review the fees charged by the auditors for such services; provided, however, that the Audit Committee may implement policies and procedures pursuant to which services arepre-approved other than by the full Audit Committee, subject to the requirement that the full Audit Committee be notified at its next meeting of each such service. The Audit Committee has delegated to its Chairperson the authority, on behalf of the Audit Committee, topre-approve audit andnon-audit services rendered to the Fund andnon-audit services rendered to the Managers and their affiliates by the auditors; provided that any suchpre-approval is reported to the Audit Committee not later than its next meeting. |
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PricewaterhouseCoopers LLP did not bill any fees fornon-audit services performed for the Investment Adviser, and any entity controlling, controlled by or under common control with the Investment Adviser that provides ongoing services to the Fund, that requiredpre-approval by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X during the Fund’s fiscal years ended December 31, 2018 or December 31, 2019. No “Audit-Related Fees,” “Tax Fees” and “Other Fees” set forth in the table above were waived pursuant to paragraph (c)(7)(i)(C) of Rule2-01 of RegulationS-X.
The Audit Committee has considered whether the provision of thenon-audit services rendered by PricewaterhouseCoopers LLP to the Investment Adviser and any Service Affiliate that were not required to be preapproved by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X is compatible with maintaining the independence of PricewaterhouseCoopers LLP.
ADJOURNMENT
In the absence of a quorum at the Annual Meeting with respect to one or more proposals, or (even if a quorum is so present) if sufficient votes in favor of a proposal set forth in the Notice of Annual Meeting are not received by the time scheduled for the Annual Meeting, the persons named as proxies may propose one or more adjournments of the Annual Meeting after the date set for the original Annual Meeting, with no other notice than announcement at the Annual Meeting, to permit further solicitation of proxies with respect to such proposal. In addition, if, in the judgment of the persons named as proxies, it is advisable to defer action on a proposal, the persons named as proxies may propose one or more adjournments of the Annual Meeting with respect to such proposal for a reasonable time. Any adjournment(s) with respect to a proposal will require a majority in voting interest of the stockholders present in person or represented by proxy and entitled to vote at the Annual Meeting or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, the Annual Meeting, may adjourn such meeting from time to time. It is the intention of the persons designated in the enclosed proxy to vote in accordance with their best judgment on any adjournment(s) put to a stockholder vote with respect to one or more proposals. The costs of any additional solicitation and of any adjourned session will be borne by the Fund. Any proposals for which sufficient favorable votes have been received by the time of the Annual Meeting may be acted upon and, if so, such action will be final regardless of whether the Annual Meeting is adjourned to permit additional solicitation with respect to any other proposal. At any such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.
Due to recommendations from public officials or public health and travel concerns arising from the coronavirus known asCOVID-19, it is possible that the Fund will change the date, time, location, or means of conducting the Annual Meeting. Any such change will be announced via press release, which will be posted on the Fund’s website at www.lmcef.com prior to the Annual Meeting. An announcement of the change also would be filed with the Securities and Exchange Commission via its EDGAR system without the Fund delivering additional proxy materials to stockholders or amending its proxy statement. Although no decision has been made, the Fund may impose additional procedures or limitations on attending the Annual Meeting. The Fund may enable attendance at or participation in the Annual Meeting by means of remote communication (for example, a “virtual” or “hybrid” stockholder meeting).
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OTHER BUSINESS
The Fund is not aware of any other matters to be presented for action at the Annual Meeting. However, if any such other matters are properly presented, it is the intention of the persons designated in the enclosed proxy to vote in accordance with their best judgment.
By Order of the Board of Directors
Robert I. Frenkel, Secretary
April 3, 2020
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EVERY STOCKHOLDER’S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
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| VOTE ON THE INTERNET | |||
Log on to: | ||||
www.proxy-direct.com | ||||
or scan the QR code | ||||
Follow theon-screen instructions | ||||
available 24 hours | ||||
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VOTE BY PHONE Call1-800-337-3503 Follow the recorded instructions available 24 hours | |||
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VOTE BY MAIL Vote, sign and date this Proxy Card and return in the postage-paid envelope | |||
VOTE IN PERSON Attend Stockholder Meeting 620 Eighth Avenue, 49th Floor New York, New York* on May 8, 2020 | ||||
Please detach at perforation before mailing.
PROXY | WESTERN ASSET INVESTMENT GRADE INCOME FUND INC. | |||
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS | ||||
TO BE HELD ON MAY 8, 2020 |
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.The undersigned hereby appoints Marc De Oliveira, Robert I. Frenkel, Tara E. Gormel, Jeanne M. Kelly, Thomas C. Mandia, Jane Trust and Angela Velez, and each of them, attorneys and proxies for the undersigned, with full power of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Western Asset Investment Grade Income Fund Inc. (the “Fund”) which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Fund to be held at 620 Eighth Avenue, 49th Floor, New York, New York (unless changed as described in the Fund’s Notice of Annual Meeting) on May 8, 2020 at 10:00 a.m., New York Time and at any adjournments or postponements thereof (the “Meeting”). The undersigned hereby acknowledges receipt of the Notice of Meeting and accompanying proxy statement and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. The undersigned hereby revokes any proxy previously given.
This proxy, if properly executed, will be voted in the manner directed by the undersigned. If no direction is made, this proxy will be voted “FOR” the election of the nominees as director.
VOTE VIA THE INTERNET: www.proxy-direct.com VOTE VIA THE TELEPHONE: 1-800-337-3503
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CHANGE OF ADDRESS | ||||
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* | Unless changed as described in the Fund’s Notice of Annual Meeting. |
PAI_31221_040120
PLEASE MARK, SIGN, DATE ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
EVERY STOCKHOLDER’S VOTE IS IMPORTANT
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to Be Held on May 8, 2020.
The Notice of Meeting, Proxy Statement and Proxy Card are available at:
https://www.proxy-direct.com/lmf-31221
Please detach at perforation before mailing.
If no specific instructions are provided, this proxy will be voted “FOR” the proposal and in the discretion of the proxies upon such other business as may properly come before the Meeting.
TO VOTE MARK BLOCKS BELOW IN BLUE OR BLACK INK AS SHOWN IN THIS EXAMPLE: ☒ |
A | Proposal The Board of Directors recommends a vote “FOR” for the following proposal: | |||||||||||||||||||||
1. | Election of Directors: | FOR ALL | WITHHOLD ALL | FOR ALL EXCEPT | ||||||||||||||||||
01. | Robert Abeles, Jr. | 02. | Jane F. Dasher | 03. | Anita L. DeFrantz | ☐ | ☐ | ☐ | ||||||||||||||
04. | Susan B. Kerley | 05. | Michael Larson | 06. | Avedick B. Poladian | |||||||||||||||||
07. | William E. B. Siart | 08. | Jaynie Miller Studenmund | 09. | Peter J. Taylor | |||||||||||||||||
10. | Ronald Olson | 11. | Jane E. Trust | |||||||||||||||||||
INSTRUCTIONS: To withhold authority to vote for any individual director nominee(s), mark the “FOR ALL EXCEPT” box and write the name of the nominee(s) for which you would like to withhold authority on the following line. | ||||||||||||||||||||||
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2. | To transact such other business as may properly come before the Meeting and any adjournment(s) or postponement(s) thereof.
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B | Authorized Signatures — This section must be completed for your vote to be counted.— Sign and Date Below |
Note: | Please sign exactly as your name(s) appear(s) on this Proxy Card, and date it. When shares are held jointly, each holder should sign. When signing as attorney, executor, administrator, trustee, guardian, officer of corporation or other entity or in another representative capacity, please give the full title of such representation under the signature. |
Date (mm/dd/yyyy) — Please print date below | Signature 1 — Please keep signature within the box | Signature 2 — Please keep signature within the box | ||||||
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XXXXXXXXXXXXXX | PAI 31221 | M | XXXXXXXX |