<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:
[_] CONFIDENTIAL, FOR USE OF THE
[_] Preliminary Proxy Statement 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
DUFF & PHELPS UTILITIES INCOME INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(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:
<PAGE>
LOGO DUFF & PHELPS
UTILITIES INCOME INC.
55 EAST MONROE STREET, CHICAGO, ILLINOIS 60603 (312) 368-5510
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 10, 1997
The annual meeting of shareholders of Duff & Phelps Utilities Income Inc.
will be held at The Downtown Association, 60 Pine Street, New York, New York,
on Thursday, April 10, 1997 at 9:00 a.m. to:
1. Elect two directors by the holders of the Fund's common stock and one
director by the holders of the Fund's preferred stock;
2. Ratify or reject the selection of Arthur Andersen LLP as independent
public accountants for the Fund; and
3. Transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on February 28, 1997 are
entitled to vote at the meeting.
For the Board of Directors,
/s/ T. Brooks Beittel
T. Brooks Beittel
Secretary
March 3, 1997
WE NEED YOUR PROXY VOTE IMMEDIATELY.
YOUR VOTE IS VITAL. THE MEETING OF SHAREHOLDERS WILL HAVE TO BE ADJOURNED
WITHOUT CONDUCTING ANY BUSINESS IF FEWER THAN A MAJORITY OF THE SHARES
ELIGIBLE TO VOTE ARE REPRESENTED. IN THAT EVENT, THE FUND WOULD CONTINUE TO
SOLICIT VOTES IN AN ATTEMPT TO OBTAIN A QUORUM. TO AVOID THE EXPENSE OF AND
THE POSSIBLE DELAY CREATED BY SUCH A SOLICITATION, PLEASE RETURN YOUR PROXY
CARD IMMEDIATELY. YOU AND ALL OTHER SHAREHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.
<PAGE>
PROXY STATEMENT
The board of directors of Duff & Phelps Utilities Income Inc. (the "Fund")
is soliciting proxies from the shareholders for use at the annual meeting of
shareholders to be held April 10, 1997 and at any adjournment of that meeting.
A proxy may be revoked at any time before it is voted, either by voting in
person at the meeting or by written notice to the Fund or delivery of a later-
dated proxy.
Shareholders of the Fund of record at the close of business on February 28,
1997 are entitled to notice of and to participate in the meeting. The Fund had
200,354,513 shares of common stock and 5,000 shares of remarketed preferred
stock outstanding on the record date. Each share of common stock outstanding
on the record date entitles the holder thereof to one vote for each director
being elected by the common stock (with no cumulative voting permitted) and to
one vote on each other matter. Each share of preferred stock outstanding on
the record date entitles the holder thereof to one vote for each director
being elected by the preferred stock (with no cumulative voting permitted) and
to one vote on each other matter submitted for a vote of holders of preferred
stock. A plurality of votes cast at the meeting by the common stock as to the
directors representing the common stock is necessary to elect such directors.
A plurality of votes cast at the meeting by the preferred stock as to the
director representing the preferred stock is necessary to elect such director.
On most other matters, the affirmative vote of a majority of either (a) all of
the shares outstanding and entitled to be voted thereon or (b) just the shares
voted at the meeting, with the common stock and the preferred stock voting
together as a single class, is necessary for approval. An affirmative vote by
either a majority or two-thirds of the remarketed preferred stock (voting
separately as one class) or by a series thereof is also necessary to approve
certain matters adversely affecting the remarketed preferred stock or the
series. Abstentions are counted for purposes of determining whether a quorum
is present at the meeting but not for purposes of determining the number of
votes cast with respect to any voting matter. However, abstentions have the
effect of a no vote if the vote required is a majority of all the shares
outstanding and entitled to be voted. Any broker non-votes on a particular
matter are treated as abstentions with respect to that matter.
This proxy statement is first being mailed on or about March 3, 1997. The
Fund will bear the cost of the annual meeting and this proxy solicitation.
1. ELECTION OF DIRECTORS
The board of directors of the Fund is responsible for the overall management
and operations of the Fund. Directors are divided into three classes and
elected to serve staggered three-year terms. At the meeting, holders of common
stock are entitled to elect two directors and holders of preferred stock are
entitled to elect one director, in each case to serve until the annual meeting
of shareholders in 2000 or until their successors are elected and qualified.
The persons named in the enclosed proxy intend to vote in favor of the
election of the persons named below (unless otherwise instructed).
Each of the nominees has consented to serve as a director of the Fund, if
elected. In case any of the nominees should become unavailable for election
for any unforeseen reason, the persons designated in the proxy will have the
right to vote for a substitute. The name, positions with the Fund, principal
occupations during the past five years, other business affiliations, age at
February 1, 1997 and address of each of the nominees and of each of the other
current directors are stated below. Messrs. Cole, Davidson, Bruce and Day have
been directors of the Fund since January 1989. Ms. Lampton has been a director
of the Fund since October 1994, and Mr. Sprinkel has been a director of the
Fund since April 1995. Each of the other current directors has been a director
of the Fund since the Fund commenced operations in January 1987.
<PAGE>
NOMINEES
FOR TERMS EXPIRING IN 2000:
HARRY J. BRUCE, director (3)
Private investor; Chairman, Roman Holdings, Inc.; former Chairman
and Chief Executive Officer, Illinois Central Railroad Co.;
director, General Binding Corporation; age 65; 88 Woodley Road,
Winnetka, Illinois 60093.
ROBERT J. DAY, director (4)(5)
Retired Chairman and Director, USG Corporation (manufacturer of
construction materials) since June 1990 (Chairman and Chief
Executive Officer prior thereto); former Chairman of the Board,
Federal Reserve Bank of Chicago; age 72; 125 South Franklin Street,
Chicago, Illinois 60606.
NANCY LAMPTON, director (5)(6)
Chairman and Chief Executive Officer, American Life and Accident
Insurance Company of Kentucky; director, BancOne Kentucky
Corporation and Baltimore Gas and Electric; age 54; 3 Riverfront
Plaza, Louisville, Kentucky 40202.
CONTINUING DIRECTORS
WITH TERMS EXPIRING IN 1998:
FRANKLIN A. COLE, director (2)(5)
Chairman, Croesus Corporation (private management and investment
company); former Chairman and Chief Executive Officer, Amerifin
Corporation (formerly named Walter E. Heller International
Corporation); director, American National Bank and Trust Company of
Chicago, Aon Corporation, CNA Income Shares, GATX Corporation and
People's Energy Corporation; age 70; 11 South LaSalle Street,
Chicago, Illinois 60602.
FRANCIS E. JEFFRIES, director (1)(2)(4)
Retired Chairman, Phoenix Duff & Phelps Corporation since December
1996 (Chairman, November 1995-December 1996); Chairman and Chief
Executive Officer, Duff & Phelps Corporation, June 1993-November
1995 (President and Chief Executive Officer, January 1992-June
1993); President and Chief Executive Officer, Duff & Phelps Illinois
Inc. since 1987 (President and Chief Operating Officer, 1984-1987)
and Chairman of the Board, Duff & Phelps Investment Management Co.
(1988-1993); director, Phoenix Duff & Phelps Corporation, The Empire
District Electric Company, Duff & Phelps Utilities Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.;
director/trustee, Phoenix Funds; age 66; 55 East Monroe Street,
Chicago, Illinois 60603.
BERYL W. SPRINKEL, director (3)(6)
Consulting economist since January 1989; Chairman of the Council of
Economic Advisers under President Reagan (1985-1989); member of
President Reagan's cabinet (1987-1989); Under Secretary of the
Treasury for Monetary Affairs (1981-1985); director, US Life Corp.;
age 73; 20140 St. Andrews Drive, Olympia Fields, Illinois 60461.
2
<PAGE>
WITH TERMS EXPIRING IN 1999:
WALLACE B. BEHNKE, director (3)
Consulting engineer since July 1989; prior thereto, Vice Chairman,
Commonwealth Edison Company (public utility); age 71; 323 Glen
Eagle, Kiawah Island, South Carolina 29455.
GORDON B. DAVIDSON, director (4)
Senior Counsel, Wyatt, Tarrant & Combs (law firm) since September
1995 (Chairman of the Executive Committee prior thereto); age 70;
Citizens Plaza, Louisville, Kentucky 40202.
CLAIRE V. HANSEN, director and Chairman (1)(2)(4)
Senior Advisor to the Board of Directors, Phoenix Duff & Phelps
Corporation since November 1995; Senior Advisor to the Board of
Directors, Duff & Phelps Corporation, 1988-November 1995 (Chairman
of the Board, 1987-1988; Chairman of the Board and Chief Executive
Officer prior thereto); Chairman of the Board, Duff Research Inc.
and Duff & Phelps Investment Management Co., 1985-1987; age 71;
Three First National Plaza, Suite 1400, Chicago, Illinois 60602.
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(1) "Interested person" of the Fund (as defined in the Investment Company Act
of 1940 (the "1940 Act")) as an officer of the Fund or as a current or
former officer or director of the Fund's investment adviser.
(2) Member of the executive committee of the board of directors, which has
authority, with certain exceptions, to exercise the powers of the board
between board meetings.
(3) Member of the audit committee of the board of directors, which makes
recommendations regarding the selection of the Fund's independent public
accountants and meets with representatives of the accountants to determine
the scope of and review the results of each audit.
(4) Member of the nominating committee of the board of directors, which
selects nominees for election as directors and officers. The nominating
committee does not consider nominees recommended by shareholders.
(5) Member of the contracts committee of the board of directors, which makes
recommendations regarding the Fund's contractual arrangements for
investment management and administrative services, including the terms and
conditions of such contracts.
(6) Elected by the holders of the Fund's preferred stock.
----------------
During 1996, the board of directors held six meetings, the audit committee
met three times, the nominating committee met twice and the contracts
committee met once. Each director attended at least 75% in the aggregate of
the meetings of the board and of the committees on which he or she served.
3
<PAGE>
The following table shows the compensation paid by the Fund to the Fund's
current directors during 1996:
COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM THE
NAME OF DIRECTOR FUND
---------------- ------------
<S> <C>
Wallace B. Behnke............................................ $27,500
Harry J. Bruce............................................... 25,000
Franklin A. Cole............................................. 25,500
Gordon B. Davidson........................................... 24,000
Robert J. Day................................................ 27,500
Claire V. Hansen............................................. 0
Francis E. Jeffries.......................................... 0
Nancy Lampton................................................ 23,000
Beryl W. Sprinkel............................................ 25,000
</TABLE>
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(1) During 1996, each director not affiliated with the Adviser received an
annual fee of $15,000 (and an additional $2,500 if the director served as
chairman of a committee of the board of directors) plus an attendance fee
of $1,000 for each meeting of the board of directors or of a committee of
the board of directors attended in person or by telephone. Directors and
officers affiliated with the Adviser receive no compensation from the Fund
for their services as such. In addition to the amounts shown in the table
above, all directors and officers who are not interested persons of the
Fund, the Adviser or the Administrator are reimbursed for the expenses
incurred by them in connection with their attendance at a meeting of the
board of directors or a committee of the board of directors. The Fund does
not have a pension or retirement plan applicable to directors or officers
of the Fund.
2. SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The board of directors has selected Arthur Andersen LLP as independent
public accountants for the Fund until the annual meeting of shareholders held
in 1998. Arthur Andersen LLP has served as independent public accountants for
the Fund since the Fund commenced operations. The selection is being submitted
for ratification or rejection by the shareholders as required by the 1940 Act.
A representative of Arthur Andersen LLP is expected to be present at the
meeting of shareholders and will be available to respond to appropriate
questions and have an opportunity to make a statement if the representative so
desires. Ratification or rejection of the selection of independent public
accountants will be determined by a majority of the votes cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE SELECTION
OF ARTHUR ANDERSEN LLP.
OTHER BUSINESS
Management is not aware of any other matters that will come before the
meeting. If any other business should come before the meeting, however, your
proxy, if signed and returned, will give discretionary authority to the
persons designated in it to vote according to their best judgment.
4
<PAGE>
OTHER INFORMATION
THE ADVISER AND PHOENIX DUFF & PHELPS. Duff & Phelps Investment Management
Co. is the Fund's investment adviser (the "Adviser") under an investment
advisory agreement (the "Advisory Agreement") dated November 1, 1995. The Fund
is also a party to a service agreement (the "Service Agreement") with the
Adviser and Phoenix Duff & Phelps Corporation ("Phoenix Duff & Phelps") dated
November 1, 1995. The Adviser is a wholly-owned subsidiary of Phoenix Duff &
Phelps, which is an indirect, majority-owned subsidiary of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life"). The address of the adviser is
55 East Monroe Street, Chicago, Illinois 60603.
The Adviser (together with its predecessor) has been in the investment
advisory business for more than 60 years and, excluding the Fund, currently
has more than $10 billion in client accounts under discretionary management.
The Adviser also provides non-discretionary investment advisory and portfolio
consulting services to corporate and public retirement funds and endowment
funds aggregating more than $29 billion.
On November 1, 1995, Duff & Phelps Corporation merged (the "Merger") with
Phoenix Securities Group, Inc., a Connecticut corporation ("Phoenix Securities
Group"), a wholly-owned subsidiary of PM Holdings, Inc., a Connecticut
corporation, a wholly-owned subsidiary of Phoenix Home Life, a New York mutual
life insurance company. Pursuant to the Merger, Phoenix Securities Group
merged with and into Duff & Phelps Corporation, with the result that Duff &
Phelps Corporation became an indirect, majority-owned subsidiary of Phoenix
Home Life. Upon completion of the Merger, Duff & Phelps Corporation was
renamed Phoenix Duff & Phelps Corporation. Consummation of the Merger
constituted an "assignment," as defined in the 1940 Act of the investment
advisory agreement in effect prior to the Merger. As required by the 1940 Act,
that investment advisory agreement provided for its automatic termination in
the event of an assignment. Consequently, in order for the Adviser to continue
providing investment advisory services to the Fund after the closing of the
Merger, a special meeting of the Fund's shareholders was held on September 12,
1995, at which meeting the Fund's shareholders approved the Advisory Agreement
which became effective upon completion of the Merger on November 1, 1995.
Under the terms of the Advisory Agreement, the Adviser furnishes continuing
investment supervision to the Fund and is responsible for the management of
the Fund's portfolio, subject to the overall control of the board of directors
of the Fund. Currently, the Adviser has nine professionals (i.e., research
analysts and portfolio managers), along with support staff, assigned to the
operation of the Fund. Seven of the nine professionals have the CFA (Chartered
Financial Analyst) designation and one is a CPA (Certified Public Accountant).
The Adviser furnishes, at its own expense, office space, equipment and
personnel to the Fund in connection with the performance of its investment
management responsibilities, and pays all other expenses incurred by it in
connection with managing the assets of the Fund not payable by the Fund's
administrator pursuant to the administration agreement. The Advisory Agreement
also includes the conditions under which the Fund may use "Duff & Phelps" in
its name. For its services the Adviser receives from the Fund a quarterly fee,
payable out of the Fund's assets, at an annual rate of 0.60 of 1% of the
average weekly net assets of the Fund up to $1.5 billion and 0.50 of 1% of
average weekly net assets in excess of $1.5 billion. The management fee paid
by the Fund to the Adviser for 1996 was $12,254,315.
5
<PAGE>
Except for the expenses borne by the Adviser and the Administrator (as
described below) pursuant to their respective agreements with the Fund, the
Fund pays all expenses incurred in its operations, including, among other
things, expenses for legal, accounting and auditing services, taxes, interest,
costs of printing and distributing shareholder reports, proxy materials,
prospectuses and stock certificates, charges of custodians, registrars,
transfer agents, dividend disbursing agents, dividend reinvestment plan agents
and remarketing agents, Securities and Exchange Commission fees, fees and
expenses of non-interested directors, insurance, brokerage costs, litigation
and other extraordinary or non-recurring expenses.
Under the terms of the Service Agreement, Phoenix Duff & Phelps makes
available to the Adviser the services of its employees and various facilities
to enable the Adviser to perform certain of its obligations to the Fund.
However, the obligation of performance under the Advisory Agreement is solely
that of the Adviser, for which Phoenix Duff & Phelps assumes no
responsibility, except as described in the preceding sentence. The Adviser
reimburses Phoenix Duff & Phelps for any costs, direct or indirect, that are
fairly attributable to the services performed and the facilities provided by
Phoenix Duff & Phelps under the Service Agreement. The Fund does not pay any
fees pursuant to the Service Agreement.
The Advisory Agreement and the Service Agreement both provide that the
Adviser and Phoenix Duff & Phelps shall not be liable to the Fund or its
shareholders for any loss suffered as a consequence of any act or omission of
the Adviser or Phoenix Duff & Phelps, as the case may be, in connection with
the respective agreements except by reason of its willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations under the respective agreements.
Unless earlier terminated as described below, the Advisory Agreement and the
Service Agreement both continue until November 1, 1997, and thereafter from
year to year, if approved annually (i) by a majority of the directors of the
Fund who are not interested persons of the Fund or the Adviser, in the case of
the Advisory Agreement, or Phoenix Duff & Phelps, in the case of the Service
Agreement, and (ii) by either the board of directors of the Fund or the
holders of a majority of the outstanding shares of the Fund as defined in the
1940 Act. A majority of the outstanding shares of the Fund as defined in the
1940 Act means the following vote of each of the common stock and the
preferred stock voting separately by class: (i) 67% of the shares of the class
represented at a meeting at which more than 50% of the outstanding shares of
the class are represented; or (ii) more than 50% of the outstanding shares of
the class. The Advisory Agreement may be terminated without penalty on 60
days' written notice by any party thereto or by a vote of the shareholders of
the Fund and would terminate automatically if it were assigned by any party.
If the Advisory Agreement were terminated, shareholder approval would be
required to enter into a new agreement. At a meeting held July 20, 1995, the
board of directors of the Fund, including all of the directors who are not
interested persons of the Fund or the Adviser in attendance at the meeting
voting separately as a class, unanimously voted to approve the Advisory
Agreement and to recommend its approval to the shareholders. As noted above,
the Fund's shareholders approved the Advisory Agreement at a special meeting
held September 12, 1995. The Service Agreement may be terminated without
penalty on 60 days' written notice by any party thereto and would terminate
automatically if it were assigned by any party unless a majority of the Fund's
board of directors, including a majority of the directors who are not
interested persons of the Fund or Phoenix Duff & Phelps, approves continuation
of the Service Agreement. The Service Agreement was approved by a majority of
the directors of the Fund who are not interested persons of the Fund or
Phoenix Duff & Phelps and by a majority of the board of directors of the Fund
at a meeting held on July 20, 1995.
6
<PAGE>
The directors of the Adviser are Clyde E. Bartter, Calvin J. Pedersen and
Wayne C. Stevens. The principal occupations of Mr. Pedersen are shown under
"Other Information--Officers of the Fund" below. Mr. Bartter is Senior
Executive Vice President and Mr. Stevens is President and Chief Executive
Officer of the Adviser. The business address of Mr. Bartter is 600 Ohio
Savings Plaza, Cleveland, Ohio 44114. The business address of Messrs. Pedersen
and Stevens is 55 East Monroe Street, Chicago, Illinois 60603.
THE ADMINISTRATOR. J.J.B. Hilliard, W.L. Lyons, Inc. serves as the Fund's
administrator (the "Administrator") under an administration agreement (the
"Administration Agreement") dated November 1, 1995. The Administrator
(together with its predecessors) has been engaged in the investment business
as a securities broker-dealer and investment adviser since 1854. It also
serves as administrator and investment adviser to Hilliard-Lyons Government
Fund, Inc., a money market mutual fund, and Hilliard Lyons Growth Fund, Inc.,
an open-end mutual fund, and is a wholly-owned subsidiary of Hilliard-Lyons,
Inc. Its principal address is Hilliard Lyons Center, Louisville, Kentucky
40202.
Under the terms of the Administration Agreement, the Administrator provides
all management and administrative services required in connection with the
operation of the Fund not required to be provided by the Adviser pursuant to
the Advisory Agreement, as well as the necessary office facilities, equipment
and personnel to perform such services. For its services, the Administrator
receives from the Fund a quarterly fee at annual rates of 0.25 of 1% of the
Fund's average weekly net assets up to $100 million, 0.20 of 1% of the Fund's
average weekly net assets from $100 million to $1.0 billion, 0.10 of 1% of
average weekly net assets from $1.0 billion to $1.5 billion and 0.06 of 1% of
average weekly net assets in excess of $1.5 billion. The total administrative
fee paid by the Fund to the Administrator for 1996 was $2,944,545.
The Administration Agreement provides that the Administrator shall not be
liable to the Fund or its shareholders for any loss suffered as a consequence
of any act or omission of the Administrator in connection with the agreement
except by reason of its willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard of its
obligations under the agreement.
Unless earlier terminated as described below, the Administration Agreement
continues until November 1, 1997, and thereafter from year to year, if
approved annually (i) by a majority of the directors of the Fund who are not
interested persons of the Fund or the Administrator and (ii) by either the
board of directors of the Fund or the holders of a majority of the outstanding
shares of the Fund as defined in the 1940 Act. The Administration Agreement
may be terminated without penalty on 60 days' written notice by any party
thereto or by a vote of the shareholders of the Fund. The Administration
Agreement was approved by a majority of the directors of the Fund who are not
interested persons of the Fund or the Administrator and by a majority of the
board of directors of the Fund at a meeting held on July 20, 1995.
OFFICERS OF THE FUND. As noted above under "Election of Directors," Mr.
Hansen is chairman of the Fund. The name, positions with the Fund, principal
occupation during the past five years, age at February 1, 1997 and address of
each other executive officer of the Fund is set forth below. The officers are
elected at the annual meeting of the board of directors.
CALVIN J. PEDERSEN, President and Chief Executive Officer, since April 1994
President, Phoenix Duff & Phelps Corporation since November 1995;
President, Duff & Phelps Corporation, 1993-November 1995 (Senior Vice
President, 1986-1988 and Executive Vice President, 1988-1993);
Executive Vice President and Director, Duff & Phelps Investment
Management Co. since
7
<PAGE>
1988 (Senior Vice President, 1986-1988); President and Chief Executive
Officer, Duff & Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc.; Director, Phoenix group of
funds; age 55; 55 East Monroe Street, Chicago, Illinois 60603.
RICHARD J. SPLETZER, Executive Vice President and Chief Investment Officer,
since January 1997 (Senior Vice President, Chief Investment Officer and
Assistant Secretary, January 1987-January 1997)
Executive Vice President, Duff & Phelps Investment Management Co. since
1993 (Senior Vice President, 1986-1993); Senior Vice President and Head
of Public Utility Research, Duff & Phelps Corporation, prior thereto;
age 59; 55 East Monroe Street, Chicago, Illinois 60603.
T. BROOKS BEITTEL, Secretary, Treasurer and Senior Vice President, since
January 1995
Senior Vice President, Duff & Phelps Investment Management Co. since
1993 (Vice President 1987-1993); age 46; 55 East Monroe Street,
Chicago, Illinois 60603.
NATHAN I. PARTAIN, Senior Vice President and Assistant Secretary, since
January 1997
Executive Vice President, Duff & Phelps Investment Management Co. since
January 1997; Director of Utility Research, Phoenix Duff & Phelps
Corporation, 1989-1996 (Director of Equity Research, 1993- 1996 and
Director of Fixed Income Research, 1993); director, Otter Tail Power
Company; age 40, 55 East Monroe Street, Chicago, Illinois 60603.
MICHAEL SCHATT, Vice President, since January 1997
Senior Vice President, Duff & Phelps Investment Management Co. since
January 1997; Managing Director, Phoenix Duff & Phelps Corporation,
1994-1996; Self-employed consultant, 1994; Director of Real Estate
Advisory Practice, Coopers & Lybrand, 1990-1994; age 49; 55 East Monroe
Street, Chicago, Illinois 60603.
JOSEPH C. CURRY, JR., Vice President, since April 1988
Senior Vice President, J.J.B. Hilliard, W.L. Lyons, Inc. since 1994
(Vice President 1982-1994); Vice President Hilliard Lyons Trust
Company; President and Director, Hilliard-Lyons Government Fund, Inc.;
Vice President, Treasurer and Secretary, Hilliard Lyons Growth Fund,
Inc.; age 52; Hilliard Lyons Center, Louisville, Kentucky 40202.
DIANNA P. WENGLER, Assistant Secretary, since April 1988
Vice President, J.J.B. Hilliard, W.L. Lyons, Inc. since 1990; Vice
President and Treasurer, Hilliard-Lyons Government Fund, Inc.; Vice
President, Hilliard Lyons Growth Fund, Inc.; age 36; Hilliard Lyons
Center, Louisville, Kentucky 40202.
PORTFOLIO TRANSACTIONS. The Adviser has discretion to select brokers and
dealers to execute portfolio transactions initiated by the Adviser and to
select the markets in which such transactions are to be executed. In executing
portfolio transactions and selecting brokers or dealers, the primary
responsibility of the Adviser is to seek the best combination of net price and
execution for the Fund. The Fund ordinarily purchases securities in
8
<PAGE>
the primary markets, and in assessing the best net price and execution
available to the Fund, the Adviser considers all factors it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis).
In selecting brokers or dealers to execute particular transactions and in
evaluating the best net price and execution available, the Adviser is
authorized to consider "brokerage and research services" (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934), statistical
quotations, specifically the quotations necessary to determine the Fund's net
asset value, and other information provided to the Fund and/or the Adviser (or
their affiliates). The Adviser is also authorized to cause the Fund to pay to
a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction. The Adviser must determine in good faith, however, that such
commission was reasonable in relation to the value of the brokerage and
research services provided, viewed in terms of that particular transaction or
in terms of all the accounts over which the Adviser exercises investment
discretion. It is possible that certain of the services received by the
Adviser attributable to a particular transaction will benefit one or more
other accounts for which investment discretion is exercised by the Adviser.
The Advisory Agreement requires the Adviser to provide fair and equitable
treatment to the Fund in the selection of portfolio investments and the
allocation of investment opportunities between the Fund and the Adviser's
other investment management clients, but does not obligate the Adviser to give
the Fund exclusive or preferential treatment. It is likely that from time to
time the Adviser may make similar investment decisions for the Fund and its
other clients. In some cases, the simultaneous purchase or sale of the same
security by the Fund and another client of the Adviser could have a
detrimental effect on the price or volume of the security to be purchased or
sold, as far as the Fund is concerned. In other cases, coordination with
transactions for other clients and the ability to participate in volume
transactions could benefit the Fund.
Although the Fund purchases securities for investment income or capital
appreciation, or both, and not for short-term trading profits, it may dispose
of securities without regard to the time they have been held when such action
appears advisable to the Adviser.
During 1996, the Fund paid brokerage commissions aggregating $7,057,947 in
connection with its portfolio transactions, not including the gross
underwriting spread on securities purchased in underwritten public offerings
or the spread in over-the-counter transactions with firms acting as principal.
The Administrator received $74,016 or approximately 1.0% of total brokerage
commissions in 1996 for effecting transactions involving 0.7% of the aggregate
dollar amount of transactions in which the Fund paid brokerage commissions.
Duff & Phelps Securities Co., a former wholly-owned subsidiary of Phoenix Duff
& Phelps, received $51,750 or approximately 0.7% of total brokerage
commissions in 1996 for effecting transactions involving 0.6% of the aggregate
dollar amount of transactions in which the Fund paid brokerage commissions.
9
<PAGE>
SHAREHOLDERS. The following table shows shares of common stock of the Fund
as to which each director, and all directors and officers of the Fund as a
group, had or shared power over voting or disposition at January 9, 1997. The
directors and officers of the Fund owned no shares of the Fund's remarketed
preferred stock. Shares are held with sole power over voting and disposition
except as noted. The shares of common stock held by each of the persons listed
below and by all directors and officers as a group represented less than 1% of
the outstanding common stock.
<TABLE>
<CAPTION>
SHARES
OF
COMMON
STOCK
-------
<S> <C>
Wallace B. Behnke................................................. 2,352
Harry J. Bruce.................................................... 21,095
Franklin A. Cole(2)............................................... 3,264
Gordon B. Davidson(1)............................................. 18,000
Robert J. Day..................................................... 14,600
Claire V. Hansen(1)............................................... 28,632
Francis E. Jeffries(1)............................................ 69,073
Nancy Lampton..................................................... 2,537
Beryl W. Sprinkel................................................. 300
Directors and officers as a group (14 persons)(1)(2).............. 264,178
</TABLE>
- --------
(1) Messrs. Davidson, Hansen and Jeffries disclaim beneficial ownership of
7,000, 5,010 and 4,982, respectively, of the shares listed. The directors
and officers disclaim beneficial ownership of 23,671, in the aggregate, of
the shares listed as owned by the directors and officers as a group.
(2) Mr. Cole had shared power to vote and/or dispose of the shares listed. The
directors and officers had shared power to vote and/or dispose of 10,140
of the shares listed as owned by the directors and officers as a group.
At January 15, 1997, no person was known by the Fund to own beneficially 5%
or more of the outstanding shares of the Fund (as determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934 requires the Fund's officers and
directors, and persons who own more than 10% of a registered class of the
Fund's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Officers, directors and greater than 10% shareholders are required
by Securities and Exchange Commission regulations to furnish the Fund with
copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Fund, or written representations that no
Forms 5 were required, the Fund believes that during 1996 all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with.
SOLICITATION OF PROXIES. Proxies will be solicited by mail. Proxies may be
solicited by Fund personnel personally or by telephone, telegraph or mail, but
such persons will not be specially compensated for such services. The Fund
will inquire of any record holder known to be a broker, dealer, bank or other
nominee as to whether other persons are the beneficial owners of shares held
of record by such persons. If so, the Fund will supply additional copies of
solicitation materials for forwarding to beneficial owners, and will make
10
<PAGE>
reimbursement for reasonable out-of-pocket costs. In addition, the Fund may
hire a proxy solicitor to assist the Fund in the solicitation of proxies at a
fee of approximately $15,000, plus out-of-pocket expenses.
SHAREHOLDER PROPOSALS. Any shareholder proposal to be considered for
inclusion in the Fund's proxy statement and form of proxy for the 1998 annual
meeting of shareholders should be received by the Secretary of the Fund no
later than November 3, 1997.
ANNUAL AND SEMI-ANNUAL REPORTS. The Fund will provide without charge to any
shareholder who so requests, a copy of the Fund's annual report for the year
ended December 31, 1996 and the Fund's semi-annual report for the six months
ended June 30, 1996. Requests for copies of such reports should be directed to
the Administrator at (800) 680-4367 (toll-free).
GENERAL. A list of shareholders entitled to be present and vote at the
annual meeting will be available at the offices of the Fund, 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 annual meeting will necessitate
adjournment and will give rise to additional expense.
ALL SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND MAIL PROXIES PROMPTLY IN
THE RETURN ENVELOPE PROVIDED.
March 3, 1997
11
<PAGE>
- --------------------------------------------------------------------------------
DUFF & PHELPS UTILITIES INCOME INC.
PROXY SOLICITED BY MANAGEMENT FROM COMMON SHAREHOLDERS
FOR MEETING TO BE HELD ON APRIL 10, 1997
Franklin A. Cole, Gordon B. Davidson and Beryl W. Sprinkel or any of them,
each with full power of substitution, are authorized to vote all shares of
common stock of Duff & Phelps Utilities Income Inc. owned by the undersigned at
the meeting of shareholders to be held April 10, 1997, and at any adjournment
of the meeting. They shall vote in accordance with the instructions set forth
below.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
FOLLOWING PROPOSALS.
1. Election of Directors: Harry J. Bruce and Robert J. Day.
FOR____ WITHHOLD____ WITHHOLD FOR____
To withhold authority to vote for either individual nominee, write that
nominee's name in the space after "WITHHOLD FOR".
2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants of the Fund.
FOR____ WITHHOLD____ ABSTAIN____
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED "FOR"
PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated , 1997 (please fill in, sign and date this proxy and mail
it in the envelope provided.)
-----------------------------------
-----------------------------------
(Signature(s) of Shareholder(s))
IMPORTANT: Please sign exactly as
your name or names appear on the
shareholder records of the Fund.
If you sign as agent or in any
other representative capacity,
please state the capacity in which
you sign. Where there is more than
one owner, each should sign.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DUFF & PHELPS UTILITIES INCOME INC.
PROXY SOLICITED BY MANAGEMENT FROM PREFERRED SHAREHOLDERS
FOR MEETING TO BE HELD ON APRIL 10, 1997
Franklin A. Cole, Gordon B. Davidson and Beryl W. Sprinkel or any of them,
each with full power of substitution, are authorized to vote all shares of
preferred stock of Duff & Phelps Utilities Income Inc. owned by the undersigned
at the meeting of shareholders to be held April 10, 1997, and at any
adjournment of the meeting. They shall vote in accordance with the instructions
set forth below.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
FOLLOWING PROPOSALS.
1. Election of Director: Nancy Lampton.
FOR____ WITHHOLD____
2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants of the Fund.
FOR____ WITHHOLD____ ABSTAIN____
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED "FOR"
PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated , 1997 (please fill in, sign and date this proxy and mail
it in the envelope provided.)
-----------------------------------
-----------------------------------
(Signature(s) of Shareholder(s))
IMPORTANT: Please sign exactly as
your name or names appear on the
shareholder records of the Fund.
If you sign as agent or in any
other representative capacity,
please state the capacity in which
you sign. Where there is more than
one owner, each should sign.
- --------------------------------------------------------------------------------
