<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FORT DEARBORN INCOME SECURITIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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:
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4) Date Filed:
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FORT DEARBORN INCOME SECURITIES, INC.
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To The Shareholders of
Fort Dearborn Income Securities, Inc.:
The Annual Meeting of Shareholders of Fort Dearborn Income Securities, Inc.
(the "Company") will be held on Monday, December 16, 1996, at 2:00 P.M., Chicago
time, at Brinson Partners, Inc., 209 South LaSalle Street, ninth floor, Chicago,
Illinois 60604, for the following purposes and for the transaction of such other
business as may properly come before the meeting:
(1) electing five directors; and
(2) voting to ratify or reject the selection of independent certified public
accountants made by the Board of Directors for the year ending September
30, 1997.
The subjects referred to above are discussed in detail in the Proxy
Statement attached to this notice. Each shareholder is invited to attend the
Annual Meeting of Shareholders in person. Shareholders of record at the close of
business on October 28, 1996, have the right to vote at the meeting. IF YOU
CANNOT BE PRESENT AT THE MEETING, WE URGE YOU TO FILL IN, SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN ORDER THAT THE MEETING CAN BE HELD AND A MAXIMUM
NUMBER OF SHARES MAY BE VOTED.
JOSEPH A. ANDERSON
SECRETARY
Chicago, Illinois
November 5, 1996
<PAGE>
FORT DEARBORN INCOME SECURITIES, INC.
209 S. LASALLE ST., ELEVENTH FLOOR
CHICAGO, ILLINOIS 60604-1295
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PROXY STATEMENT
INTRODUCTION
This statement, which is being mailed to shareholders on or about November
5, 1996, is furnished in connection with the solicitation of proxies by the
Board of Directors of Fort Dearborn Income Securities, Inc. (the "Company") for
use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held at
Brinson Partners, Inc., 209 South LaSalle Street, ninth floor, Chicago, Illinois
60604, on Monday, December 16, 1996, at 2:00 P.M., Chicago time. Proxies may be
solicited by mail, telephone and personal interview. The Company may also
request brokers, custodians, nominees and fiduciaries to forward proxy material
to the beneficial owners of stock of record. Any proxy given pursuant to such
solicitation and received in time for the Annual Meeting will be voted as
specified in such proxy. The enclosed proxy is revocable at any time. The proxy
may be revoked in writing, by giving a later-dated proxy, or orally at the
Annual Meeting. Signing and mailing the proxy will not affect your right to give
a later proxy or to attend the meeting and vote your shares in person. The cost
of soliciting proxies will be paid by the Company.
On October 28, 1996, the date for determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting, or any adjournments
thereof, there were issued and outstanding 8,800,065 shares of Capital Stock of
the Company, each entitled to one vote, constituting all of the Company's then-
outstanding securities. For purposes of determining the outcome of the vote on a
matter, an instruction to "abstain" from voting on a proposal will be treated as
shares present and entitled to vote and will have the same effect as a vote
against the proposal. "Broker non-votes" are not counted for the purpose of
determining the number of shares present on a voting matter and have no effect
on the outcome of the vote. Any adjournment of the meeting would require the
affirmative vote of a majority of those present in person or by proxy at the
session of the meeting to be adjourned. The proxy solicited hereby confers
authority to vote for any such adjournment; however, a proxy voted against or
abstained from voting on any proposal herein would not be voted in favor of an
adjournment to permit further solicitation of proxies.
1. ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting as the entire Board
of Directors to hold office until the next annual meeting or until their
successors shall have been elected and shall have qualified. If authority is
granted on the accompanying proxy to vote in the election of directors, it is
the intention of the persons named in the proxy to vote at the Annual Meeting
for the election of the nominees named below. If any of the nominees are
unavailable to serve as directors, an event which the Board of Directors does
not now expect, the persons named in the proxy will vote for such other persons
as they, in their discretion, may choose. The affirmative vote of the holders of
a majority of the shares represented at the Annual Meeting is required for the
election of a director. All of the nominees are presently directors of the
Company and all have consented to serve if elected.
1
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<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED
WHEN DIRECTLY OR
FIRST INDIRECTLY
NAMES AND AGES PRINCIPAL OCCUPATIONS BECAME SEPTEMBER 30,
OF NOMINEES AND OTHER DIRECTORSHIPS DIRECTOR 1996
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<S> <C> <C> <C>
Richard M. Burridge, 67............. Chairman, The Burridge Group since 1996 1972 4,982
(Investment Management); Director of Lincoln
National Income Fund, Lincoln National
Convertible Bond Fund, Cincinnati Financial
Corporation, St. Joseph Light and Power, and The
Blue Cross of Illinois; Vice Chairman, Alliance
Capital Management Corp. prior to March, 1986.
Richard S. Peterson, 66............. Formerly Chief Economist, Continental Bank 1995 1,000
(1969-1994); Currently Chairman, Board of
Directors, Illinois Council on Economic
Education; Past member, Economic Advisory
Council, American Bankers Association (1978-1981
and 1990-1993).
C. Roderick O'Neil, CFA, 65......... Chairman, O'Neil Associates (formerly Greenspan 1992 3,043
O'Neil Associates), an investment and financial
consulting firm; Director, Beckman Instruments,
Inc. (Since January, 1994) Director, AMBAC, Inc.
(Since 1991) and AMBAC Treasurers Trust (Since
1995); Trustee, Memorial Drive Trust (Since
1974); Member, Fiduciary Committee ASARCO (Since
1991).
Frank K. Reilly, CFA, 60............ Bernard J. Hank Professor of Business 1993 991
Administration, University of Notre Dame (since
1981); Director, The Brinson Funds (since June
1992); Director, Greenwood Trust Corp. (since
1993); Director, NIBCO (since 1993); Director,
Battery Park Fund (since 1996); Board of
Governors, Association for Investment Management
and Research (since 1993); Board of Trustees,
Institute of Chartered Financial Analysts (since
1993); Director, CFP Board of Standards (since
1993).
Edward M. Roob, 62.................. Senior Vice President, Daiwa Securities America, 1993 6,000
Inc. (1986-1993); Director, The Brinson Funds;
Director, The Brinson Relationship Funds;
Trustee, Brinson Trust Company; Member, Board of
Governors Chicago Stock Exchange, (1988-1991);
Member U.S. Treasury and Federal Agency Advisory
Committee, (1972-1985).
</TABLE>
The Board of Directors has an Audit Committee comprised of all of the
directors. The Board of Directors does not have a nominating or compensation
committee.
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During the fiscal year ended September 30, 1996, five meetings of the Board
of Directors and one meeting of the Audit Committee were held. All directors
attended 100% of the total number of such meetings.
Among other things, the Audit Committee makes recommendations concerning the
retention of the Company's independent auditors, their fees and duties,
including any non-audit related services performed by them; confers with such
auditors; reviews the Company's financial reporting activities; and confers with
and makes appropriate recommendations to personnel of the Company's investment
advisor who perform services of a financial nature for the Company.
The Company pays each of its directors (except Mr. Burridge) at the rate of
$9,000 annually to serve as directors and $750 for each Board of Directors
meeting attended. The Company pays Mr. Burridge at the rate of $13,000 annually
to serve as Chairman of the Board of Directors and $750 for each Board of
Directors meeting attended.
The following table sets forth as to each Director the compensation paid to
him in the fiscal year ended September 30, 1996 for service on the Board of the
Company and, in the case of Messrs. Reilly and Roob, on the boards of two other
investment companies for which the Advisor performed investment advisory
services.
COMPENSATION TABLE
<TABLE>
<CAPTION>
PENSION OR
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION ACCRUED AS PART OF BENEFITS UPON FROM COMPANY AND
NAME OF DIRECTOR FROM COMPANY COMPANY EXPENSES RETIREMENT FUND COMPLEX
- -------------------------------------------- -------------- ------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Richard M. Burridge......................... $ 16,750 0 0 $ 16,750
C. Roderick O'Neil.......................... $ 12,750 0 0 $ 12,750
Richard S. Peterson......................... $ 9,000 0 0 $ 9,000
Frank K. Reilly............................. $ 12,750 0 0 $ 39,750
Edward M. Roob.............................. $ 12,750 0 0 $ 39,750
</TABLE>
2. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as auditors of the
Company for the fiscal year ending September 30, 1997. To the best knowledge of
the Board of Directors, the firm of KPMG Peat Marwick LLP has no direct or
material indirect financial interest in the Company. Under the Investment
Company Act of 1940, such selection must be submitted to the shareholders for
ratification or rejection at the Annual Meeting. The Board of Directors
recommends that such selection be ratified by the shareholders of the Company.
The affirmative vote of the holders of a majority of the shares represented at
the Annual Meeting is required for ratification. Representatives of KPMG Peat
Marwick LLP will attend the Annual Meeting, have an opportunity to make a
statement and be available to respond to appropriate questions from
shareholders. KPMG Peat Marwick LLP has been the independent auditors for the
Company since its organization.
INVESTMENT ADVISOR
Brinson Partners, Inc. ("Advisor"), 209 South LaSalle St., Chicago, Illinois
60604-1295, is the investment advisor to the Company. The Advisor is a
wholly-owned subsidiary of Brinson Holdings, Inc., 209 South LaSalle St.,
Chicago, Illinois 60604-1295.
3
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OFFICERS
The Company does not pay direct compensation to officers for their services
to the Company. The Company's officers are as follows:
Gary P. Brinson (age 53), who has served as President of the Company
(since 1983), is President and Managing Partner of Brinson Partners, Inc.
(since 1989), and was President and Chief Executive Officer of First Chicago
Investment Advisors (1984-1989), and was a Senior Vice President of The
First National Bank of Chicago (1981-1989).
Dennis L. Hesse (age 53), who serves as Vice President and Portfolio
Manager of the Company (since 1985), is Managing Partner, Fixed Income
Group, Brinson Partners, Inc. (since 1989), and was Managing Director, Fixed
Income Division, First Chicago Investment Advisors (1985-1989), a Vice
President of the First National Bank of Chicago (1985-1989), and was
Director of Investments United Airlines, Inc. (1980-1985).
Joseph A. Anderson (age 34), who serves as Secretary-Treasurer of the
Company is a Partner of Brinson Partners, Inc. (since 1993), was the
Assistant Secretary and Assistant Treasurer of Fort Dearborn (1992-1995) and
is currently the Vice President of Brinson Trust Company (since February,
1995).
Gregory P. Smith (age 36), who serves as Assistant Portfolio Manager of
the Company (since 1988), is a Portfolio Manager, Fixed Income Group,
Brinson Partners, Inc. (since 1989), was a Portfolio Manager, Fixed Income
Division, First Chicago Investment Advisors (1987-1989), and was an
Assistant Vice President of The First National Bank of Chicago (1988-1989).
PRINCIPAL SHAREHOLDERS
Generally, under the Securities and Exchange Commission rules, a person is
deemed to be the beneficial owner of a security with respect to which such
person, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power (which includes power to vote, or direct
the voting of, such security) or investment power (which includes power to
dispose of, or direct the disposition of, such security). A Schedule 13G dated
February 13, 1996, was filed with the Securities and Exchange Commission on
behalf of Deep Discount Advisors, Inc. The aggregate shares of Capital Stock
reported as beneficially owned total 569,299 which represent approximately 6.4%
of the Company's outstanding shares.
On September 30, 1996, the directors and officers of the Company as a group
owned or were deemed to own beneficially, directly or indirectly, a total of
77,262 shares of Capital Stock of the Company (less than 1% of the outstanding
shares).
Swiss Bank Corporation (Basel, Switzerland) owns 100% of the common stock of
Brinson Holdings, Inc.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented for action at the Company's 1997
annual meeting of shareholders must be received at the Company's office in
Chicago, Illinois not less than 120 days in advance of that date in 1996 which
corresponds to the date of this Proxy Statement in order to be considered for
inclusion in the proxy materials for that meeting.
OTHER MATTERS
Shareholders are urged to review the Company's Annual Report which
accompanies this Proxy Statement.
4
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The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those mentioned in this Proxy Statement. If any other
business should come before the meeting, the persons named in the proxy will
vote thereon in accordance with their best judgment.
If you cannot attend the Annual Meeting, it is requested that you complete
and sign the enclosed proxy and return it in the envelope provided so that the
meeting may be held and action taken on the matters described herein with the
greatest possible number of shares participating.
JOSEPH A. ANDERSON
SECRETARY/TREASURER
5
<PAGE>
FORT DEARBORN INCOME SECURITIES, INC.
P PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 16, 1996
R
O The undersigned, having received Notice of Meeting and Proxy Statement
dated November 3, 1996, appoints M. Finley Maxson and Iver M. Nelson
X and each or any of them as proxies, with full power of substitution and
revocation, to represent the undersigned and to vote all shares
Y (including those owned beneficially by the undersigned through the
Automatic Dividend Investment Plan) which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of Fort Dearborn Income
Securities, Inc. to be held on December 16, 1996, 2:00 P.M., at Brinson
Partners, Inc., 209 South LaSalle St., Ninth Floor, Chicago, Illinois,
and any adjournments thereof:
Election of Directors, Nominees: COMMENTS: (change of address)
R. M. Burridge, C. R. O'Neil, R. S. Peterson
F. K. Reilly, E. M. Roob ------------------------------
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(If you have written in the
above space, please mark the
corresponding box on the reverse
side of this card.)
You are encouraged to specify your choices by marking the
appropriate boxes ON THE REVERSE SIDE. If you do not mark any
boxes, your proxy will be voted in accordance with the Board of
Directors' recommendations. The Proxies cannot vote your shares
unless you sign and return this card.
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SEE REVERSE SIDE
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<PAGE>
/X/ Please mark your 6210
votes as in this
example.
This proxy when properly executed will be voted in the manner
directed herein. If no direction is made, this proxy will be voted
FOR election of directors and FOR proposal 2.
The Board of Directors recommends a vote FOR
election of directors and FOR proposal 2 and proposal 3.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Ratification of KPMG / / / / / /
Directors. Peat Marwick LLP as
(see reverse) independent
accountants.
3. In their discretion, the proxies
are authorized to vote upon such
other matters as may properly come
before the Meeting or any adjournment
thereof.
For, except vote withheld from the
following nominee(s): Change of Address/ / /
Comments on Reverse Side.
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Please date and sign exactly as name
appears hereon. Joint owners should
each sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
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1995
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SIGNATURE(S) DATE
