FORTIS SECURITIES INC, DEF 14A, 1995-11-07

FORTIS SECURITIES INC
DEF 14A, 1995-11-07

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<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)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[_] 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:

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(2) Aggregate number of securities to which transaction applies:

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(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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid: $125.00

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[X] 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:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:
<PAGE>

[LOGO FOR FORTIS]

November 7, 1995

Re: Fortis Securities, Inc. Annual Shareholders' Meeting

Dear Shareholder:

You are cordially invited to the annual meeting of the shareholders of Fortis
Securities, Inc. (the "Company") that will take place on December 7, 1995 at
Macalester College, Weyerhauser Building, 62 Macalester Street, St. Paul,
Minnesota. PLEASE NOTE THAT THE MEETING WILL BEGIN AT 11:00 A.M.

In reviewing the enclosed proxy materials you will discover that, in addition
to the annual items of electing the Company's Directors and selecting the
Company's independent accountants, you are being asked to approve a change in
how one portion of the Company's advisory fee is calculated. As set forth on
page 7 of the proxy statement, if the proposed fee structure had been in place
during the past two years, the total increase in advisory fees over that period
of time would have been 1.17% in 1994 and .01% in 1995. For all the reasons set
forth on pages 6 through 10 of the proxy statement, including the fact that the
Company's advisory fee has not been increased since the Company's inception in
1972 (a period of twenty-three years), your Board of Directors recommends that
you vote "FOR" this proposal.

Please review the enclosed materials and return your completed proxy as promptly
as possible.

Sincerely,

/s/ Dean C. Kopperud
- --------------------
Dean C. Kopperud
President

[FORTIS LETTERHEAD]
<PAGE>

LOGO

FORTIS SECURITIES, INC.
500 Bielenberg Drive, Woodbury, Minnesota 55125
Mailing Address: P.O. Box 64284, St. Paul, Minnesota 55164

NOTICE OF ANNUAL SHAREHOLDERS' MEETING

TO BE HELD ON DECEMBER 7, 1995

The annual meeting of the shareholders of Fortis Securities, Inc. (the
"Company") will be held at Macalester College, Weyerhauser Building, 62
Macalester Street, St. Paul, Minnesota, on Thursday, December 7, 1995, at
11:00 a.m. for the following purposes:

1. To elect a Board of Directors.

2. To ratify the selection by the Board of Directors of the Company of KPMG
Peat Marwick LLP as independent public accountants for the Company for
the fiscal year ending July 31, 1996.

3. To approve an amended Investment Advisory and Services Agreement, which
broadens the base for calculating a portion of the management fee from
"interest and dividend income" to "investment income."

4. To transact such other business as may properly come before the meeting.

Shareholders of record on October 25, 1995, are the only persons entitled to
notice of and to vote at the meeting.

Your attention is directed to the attached Proxy Statement. WHETHER OR NOT
YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, SIGN, DATE, AND MAIL
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO SAVE THE COMPANY ANY
FURTHER SOLICITATION EXPENSE. There is enclosed with the proxy an addressed
envelope for which no postage is required.

Michael J. Radmer
Secretary

Dated: November 7, 1995
<PAGE>

PROXY STATEMENT

FORTIS SECURITIES, INC.
500 BIELENBERG DRIVE, WOODBURY, MINNESOTA 55125
MAILING ADDRESS: P.O. BOX 64284, ST. PAUL, MINNESOTA 55164

ANNUAL MEETING OF SHAREHOLDERS--DECEMBER 7, 1995

The enclosed proxy is solicited by the Board of Directors of Fortis
Securities, Inc. (the "Company") in connection with the annual meeting of
shareholders of the Company to be held December 7, 1995, and at any
adjournment thereof. The cost of solicitation, including the cost of preparing
and mailing the Notice of Annual Shareholders' Meeting and this Proxy
Statement, will be paid by the Company, and such mailing will take place on
approximately November 7, 1995. Representatives of Fortis Advisers, Inc.
("Advisers"), the investment adviser and manager of the Company, without cost
to the Company, may solicit proxies for the management of the Company by means
of mail, telephone, or personal calls.

A proxy may be revoked before the meeting by giving written notice, in
person or by mail, of revocation to the Secretary of the Company or at the
meeting prior to voting in person. Unless revoked, properly executed proxies
in which choices are not specified by the shareholders will be voted for each
item for which no choice is specified, in accordance with the recommendation
of the Board of Directors. In instances where choices are specified by the
shareholders in the proxy, those proxies will be voted or the vote will be
withheld in accordance with the shareholder's choice. Should any other matters
come before the meeting, it is the intention of the persons named as proxies
in the enclosed Proxy to act upon them according to their best judgment.

If a shareholder abstains from voting as to any matter, then the shares held
by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter, but will be counted as a vote against such proposal. Under the
rules of the New York Stock Exchange, Proposals 1 and 2 are considered
discretionary, which means that brokers are authorized to vote on such
proposals on behalf of their customers with or without specific voting
instructions. However, Proposal 3 is considered a "nondiscretionary" proposal,
which means that such brokers are not authorized to vote on such proposals
without specific voting instructions as to such proposals. Therefore, "broker
nonvotes" on Proposal 3 will not be counted as present for purposes of
determining whether a quorum of shares is present at the meeting.

Only shareholders of record on October 25, 1995, may vote at the meeting or
any adjournment thereof. As of that date there were issued and outstanding
12,611,294 common shares, $.01 par value, the only class of securities of the
Company. Each shareholder is entitled to one vote for each share held. Voting
for the election of directors is not cumulative, which means that the holders
of a majority of the Company's outstanding shares have the power to elect the
entire Board of Directors. None of the matters to be presented at the meeting
will entitle any shareholder of the Company to appraisal rights.

If a quorum is not present at a meeting, or if a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies. In determining whether to
<PAGE>

adjourn the meeting, the following factors may be considered: the nature of
the proposals that are the subject of the meeting, the percentage of votes
actually cast, the percentage of negative votes actually cast, the nature of
any further solicitation, and the information to be provided to shareholders
with respect to the reasons for the solicitation. Any adjournment will require
the affirmative vote of a majority of those shares represented at the meeting
in person or by proxy.

ANNUAL REPORT OF THE COMPANY

The Annual Report of the Company containing financial statements of the
Company for the fiscal year ended July 31, 1995, was mailed to shareholders on
September 26, 1995. If you did not receive a copy of the Annual Report, or
would like to receive an additional copy, please call the Company at 1-800-
800-2638, extension 4579, and a copy will be sent to you, without charge, by
first class mail within three business days.

SHARE OWNERSHIP

The following table sets forth, as of October 11, 1995, shares of the
Company owned beneficially by, and certain other share ownership information
with respect to, directors of the Company and all officers and directors as a
group. As of October 11, 1995, all directors and officers as a group owned
less than 1% of the outstanding shares of the Company. No person or entity as
of October 11, 1995, to the knowledge of management, owned beneficially more
than 5% of the outstanding shares of the Company.

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF COMPANY OTHER FORTIS FUND
BENEFICIAL OWNER SHARES BENEFICIALLY OWNED SHARES OWNED*
----------------------------------------------------------------------------
<S> <C> <C>
Richard W. Cutting 0 1,346
Allen R. Freedman 0 127,481
Dr. Robert M. Gavin 0 7,085
Benjamin S. Jaffray 400 1,076
Jean L. King 100 7,597
Dean C. Kopperud 1,082 7,317
Edward M. Mahoney 5,000 108,798
Robb L. Prince 364 260,063
Leonard J. Santow 2,776 324,933
Joseph M. Wikler 0 106,073
All officers and
directors as a group 9,722
</TABLE>
- --------

* Indicates shares beneficially owned as of October 11, 1995, in Fortis
Advantage Portfolios, Inc.; Fortis Equity Portfolios, Inc.; Fortis
Fiduciary Fund, Inc.; Fortis Growth Fund, Inc.; Fortis Income Portfolios,
Inc.; Fortis Money Portfolios, Inc.; Fortis Series Fund, Inc.; Fortis Tax-
Free Portfolios, Inc.; Fortis Worldwide Portfolios, Inc.; and Special
Portfolios, Inc., all of which are investment companies affiliated with the
Company. Such funds are herein collectively referred to as the "Other
Fortis Funds."

2
<PAGE>

PROPOSAL ONE
ELECTION OF DIRECTORS

The Bylaws of the Company provide that the shareholders of the Company have
the power to fix the number of directors. The Company's management recommends
that the number of directors to be elected at the annual meeting be set at
ten. Unless otherwise instructed, the proxies will vote in favor of a
resolution to set the number of directors at ten.

It is intended that the enclosed proxy will be voted for the election of the
ten persons named below as directors unless such authority has been withheld
in the proxy. The term of office of persons elected will be until the next
annual meeting of the shareholders or until their successors are elected and
shall qualify. Pertinent information regarding the nominees is set forth
below.

<TABLE>
<CAPTION>
NAME, AGE, AND
PERIOD SERVED AS PRINCIPAL OCCUPATION AND FIRM DIRECTORSHIP OF OTHER
DIRECTOR OF THE COMPANY AT WHICH CARRIED ON REPORTING COMPANIES(1)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Richard W. Certified public accountant and Other Fortis Funds
Cutting financial consultant.
Age 64, Direc-
tor
since 1993 (2)
Allen R. Chairman and Chief Executive Other Fortis Funds; Systems and
Freedman* Officer of Fortis, Inc.; a Computer Technology Corporation
Age 55, Direc- Managing Director of Fortis
tor International, N.V.
since 1987
Dr. Robert M. President, Macalester College Other Fortis Funds
Gavin
Age 55, Direc-
tor
since 1986(3)
Benjamin S. Chairman of The Sheffield Other Fortis Funds
Jaffray Group, Ltd., a financial
Age 65, Direc- consulting group.
tor
since 1984(3)
Jean L. King President, Communi-King, a Other Fortis Funds
Age 51, Direc- communications consulting firm.
tor
since 1984(2)
Dean C. Chief Executive Officer and a Other Fortis Funds
Kopperud* director of Advisers; Chief
Age 43, Direc- Executive Officer, President,
tor and a director of Fortis
since January Investors, Inc., the
1995(3) underwriter of shares of open-
end mutual funds affiliated
with the Company, and Senior
Vice President of Fortis
Benefits Insurance Company and
Time Insurance Company
Edward M. Ma- Retired; prior to December Other Fortis Funds; Analysts
honey 1994, Chairman and Chief International Corporation
Age 65, Direc- Executive Officer and a
tor director of Advisers and Fortis
since 1979(3) Investors, Inc.
</TABLE>

3
<PAGE>

* Denotes directors who are interested persons, as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of the Company and
Advisers. Mr. Kopperud is an "interested person" of Advisers and the
Company primarily because he holds certain positions, including serving as
Chief Executive Officer and a director of Advisers. Mr. Freedman is an
"interested person" of Advisers and the Company primarily because he holds
certain positions, including serving as Chairman and Chief Executive
Officer of Fortis, Inc., the parent company of Advisers, and as a Managing
Director of Fortis International, N.V., the parent company of Fortis, Inc.

(1) "Reporting Companies" means companies with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934
or subject to the requirements of Section 15(d) of such act and any
company registered as an investment company under the 1940 Act.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Executive Committee of the Board of Directors.
(4)Member of the Investment Consulting Committee of the Board of Directors.

All of the above nominees, except Mr. Kopperud, were elected directors by
the shareholders at their last annual meeting and are currently serving as
directors of the Company. Mr. Kopperud was elected by the Board of Directors
to fill a newly created vacancy and has served as a director of the Company
since January 1, 1995.

The Company has an Audit Committee of the Board of Directors whose members
are selected annually by the full Board of Directors. None of the members of
the Audit Committee are "interested persons" as defined by the 1940 Act. The
Audit Committee met two times during the fiscal year ended July 31, 1995. The
Company does not have a standing compensation committee or a standing
nominating committee of the Board of Directors.

4
<PAGE>

The functions performed by the Audit Committee are to recommend annually to
the Board a firm of independent certified public accountants to audit the
books and records of the Company for the ensuing year; to monitor that firm's
performance; to review with the firm the scope and results of each audit and
determine the need, if any, to extend audit procedures; to confer with the
firm and representatives of the Company on matters concerning the Company's
financial statements and reports, including the appropriateness of its
accounting practices and of its financial controls and procedures; to evaluate
the independence of the firm; to review procedures to safeguard portfolio
securities; to review the purchase by the Company from the firm of nonaudit
services; to review all fees paid to the firm; and to facilitate
communications between the firm and the Company's officers and directors.

During the Company's fiscal year ended July 31, 1995, there were five
meetings of the full Board of Directors. No director, except Dr. Gavin,
attended fewer than 75% of the aggregate of the number of meetings of the
Board of Directors and the number of meetings held by all committees of the
Board on which such director served. Dr. Gavin attended four of the six
meetings of the Board of Directors and the committees of the Board on which he
served.

The following table sets forth the aggregate compensation received by each
director during the fiscal year ended July 31, 1995, as well as the total
compensation received by each director from the Company and all other open-end
investment companies managed by Advisers during the fiscal year ended July 31,
1995. Neither Mr. Freedman, who is an officer of the parent company of
Advisers, nor Mr. Kopperud, who is an officer of Advisers and Investors,
received any such compensation and they are not included in the table. No
executive officer of the Company received compensation from the Company during
the fiscal year ended July 31, 1995.

<TABLE>
<CAPTION>
AGGREGATE PENSION OR TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS ESTIMATED FROM FUND COMPLEX
FROM THE ACCRUED AS PART OF ANNUAL BENEFITS PAID TO
DIRECTOR COMPANY COMPANY EXPENSES UPON RETIREMENT DIRECTOR(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard W.
Cutting $1,900 0 0 $32,300
Dr. Robert
M. Gavin 2,400(2) 0 0 41,650(2)
Benjamin
S.
Jaffray 1,900 0 0 32,300
Jean L.
King 1,900 0 0 32,300
Edward M.
Mahoney 1,000 0 0 16,700
Robb L.
Prince 1,800 0 0 31,200
Leonard J.
Santow 1,835 0 0 31,600
Joseph M.
Wikler 1,900 0 0 32,300
</TABLE>
- --------

(1) Includes aggregate compensation paid by the Company and all 10 Other
Fortis Funds paid to the Director.

(2) Compensation paid to Dr. Gavin during the fiscal year ended July 31, 1995,
includes compensation for his attendance at certain meetings held during
the fiscal year ended July 31, 1994.

The vote of a majority of the shares represented at the meeting, provided at
least a quorum (more than 50% of the outstanding shares) is represented in
person or by proxy, is sufficient for the election of the above nominees to
the Board of Directors. Unless otherwise instructed, the proxies will vote for
the above ten nominees.

5
<PAGE>

All of the nominees listed above have consented to serve as directors if
elected. In the event any of the above nominees are not candidates for
election at the meeting, the proxies may vote for such other persons as
management may designate. Nothing currently indicates that such a situation
will arise.

PROPOSAL TWO
RATIFICATION OR REJECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS

The 1940 Act provides that every registered investment company shall be
audited at least once each year by independent public accountants selected by
a majority of the directors of the investment company who are not interested
persons of the investment company or of its investment adviser. The 1940 Act
provides that the selection be submitted for ratification or rejection by the
shareholders.

On September 21, 1995, upon the recommendation of the Company's Audit
Committee and the Company's Board of Directors, including a majority of the
directors who are not interested persons of Advisers or the Company, the
directors selected KPMG Peat Marwick LLP to be the Company's independent
public accountants for the fiscal year ending July 31, 1996. KPMG Peat Marwick
LLP has served as the independent public accountants of the Company since the
fiscal year ended July 31, 1989. KPMG Peat Marwick LLP also serves as
independent public accountants for the Other Fortis Funds.

Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting. Such representatives will be given the opportunity to make a
statement to the shareholders if they desire to do so and are expected to be
available to respond to any questions which may be raised at the meeting.

The affirmative vote of a majority of the shares represented at the meeting,
provided at least a quorum (more than 50% of the outstanding shares) is
represented in person or by proxy, is sufficient for the ratification of the
selection of the independent public accountants. Unless otherwise instructed,
the proxies will vote for the ratification of the selection of KPMG Peat
Marwick LLP as the Company's independent public accountants.

PROPOSAL THREE
APPROVAL OR DISAPPROVAL OF AN AMENDED
INVESTMENT ADVISORY AND SERVICES AGREEMENT

SUMMARY

Fortis Advisers, Inc. ("Advisers"), 500 Bielenberg Drive, Woodbury,
Minnesota, is currently acting as investment adviser to the Company pursuant
to an Investment Advisory and Services Agreement (the "Current Agreement")
dated December 12, 1990, between Advisers and the Company. The Board of
Directors, including a majority of the directors who are not parties to the
Advisory Agreement or interested persons of such parties, approved a
resolution at their meeting of December 8, 1994, approving the continuance of
the Current Agreement.

Advisers has proposed, and the Board of Directors has approved, resolutions
recommending the adoption by Company shareholders of an amended investment
advisory and services agreement (the

6
<PAGE>

"Proposed Agreement") which modifies the management fee arrangement. Under the
Current Agreement the Company pays Advisers a monthly fee at an annual rate of
0.45% of the average monthly net asset value of the Company for the first $100
million of Company assets and 0.4% of the average monthly net asset value for
assets over $100 million plus 2% of the net amount of interest and dividend
income after deducting interest on borrowed funds. This fee covers all
investment advice, material and other services furnished, all facilities and
equipment, and all expenses paid or reimbursed by Advisers under the Current
Agreement. The Proposed Agreement provides that the Company will pay Advisers
a monthly fee at the same annual rate of the Company's average monthly net
asset value as under the Current Agreement plus 2% of the Company's net amount
of investment income after deducting interest on borrowed funds. Investment
income includes interest income, dividend income, and other investment income
such as fees derived from securities lending and "dollar rolls."

The purpose of the proposed change in the fee arrangement is to compensate
Advisers for the management resources required to employ investment practices
and strategies that provide investment income to the Company in addition to
interest and dividend income. In recent years, investment companies have
derived an increasing proportion of their income from sources other than
interest and dividends as the industry has developed new investment strategies
and practices, including securities lending and dollar rolls. Many of these
investment strategies and practices did not exist at the time the current fee
arrangement with Advisers was adopted. Consequently, the management fee under
the Current Agreement does not take into account the investment income derived
from such strategies and practices.

The following table shows the management fee the Company paid to Advisers
for its fiscal years ended July 31, 1994, and July 31, 1995, including the
part of the management fee based on the net amount of interest and dividend
income, and what the fee would have been for each of those years if the fee
had been based on net investment income, assuming that the Proposed Agreement
had been in effect during those periods.

<TABLE>
<CAPTION>
IF PROPOSED AGREEMENT
UNDER CURRENT AGREEMENT HAD BEEN IN EFFECT(1)
------------------------ ------------------------
1994 1995 1994 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income(2)......... $11,726,033 $11,442,054 $11,726,033 $11,442,054
Dividend Income............ 3,142 0 3,142 0
----------- ----------- ----------- -----------
11,729,175 11,442,054 11,729,175 11,442,054
Other Investment Income(3). 0 0 449,823 5,371
----------- ----------- ----------- -----------
11,729,175 11,442,054 12,178,998 11,447,425
Income-based Fee Percent... 2.00% 2.00% 2.00% 2.00%
----------- ----------- ----------- -----------
Income-based Fee........... 234,584 228,841 243,580 228,949
=========== =========== =========== ===========
Net Asset Value-based Fee.. 533,573 501,621 533,573 501,621
----------- ----------- ----------- -----------
Total Management Fee....... $ 768,157 $ 730,462 $ 777,153 $ 730,570
=========== =========== =========== ===========
Increase in Total
Management Fee............ $ 8,996 $ 108
Increase over Current
Agreement................. 1.17% 0.01%
Total Expense Ratio........ .76% .78% .77% .78%
</TABLE>
- --------
(1)As adjusted assuming the Proposed Agreement had been in effect during those
years.
(2)Includes original issue discount amortization.
(3)Includes fee income such as dollar roll fees and securities lending fees,
by way of example.

7
<PAGE>

The following table shows the fees and expenses that were paid by the
Company under the Current Agreement during the fiscal year ended July 31,
1995, and the fees and expenses that would have been paid by the Company
during such year had the Proposed Agreement been in effect.

<TABLE>
<CAPTION>
CURRENT PROPOSED
AGREEMENT AGREEMENT
--------- ---------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)....................... N.A. N.A.
Dividend Reinvestment and Cash Purchase Plan Fees.... None None
ANNUAL EXPENSES
Management Fees...................................... .65% .65%
Other Expenses....................................... .13% .13%
Total Annual Expenses.............................. .78% .78%
</TABLE>

The following example illustrates your expenses on a Company investment
under both the Current Agreement and the Proposed Agreement, assuming the
annual expenses set forth in the preceding table. The example should not be
considered a representation of past or future expenses. Actual expenses may be
greater or less than those shown.

Example

You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:

<TABLE>
<CAPTION>
CURRENT PROPOSED
AGREEMENT AGREEMENT
--------- ---------
<S> <C> <C>
1 Year............................................... $ 8.00 $ 8.00
3 Years.............................................. $25.00 $25.00
5 Years.............................................. $43.00 $43.00
10 Years.............................................. $97.00 $97.00
</TABLE>

BASES FOR RECOMMENDATION OF THE PROPOSED AGREEMENT

Despite changes in portfolio management strategies and techniques,
inflationary factors, and increasing costs to Advisers of rendering investment
advisory and other shareholder services to the Company, no increases in the
fee structure under which Advisers manages the Company have occurred since the
Company's inception in 1972.

Since 1972, many events have occurred and are continuing that are
dramatically changing the investment company industry. As noted above, certain
portfolio strategies and practices, such as portfolio securities lending and
"dollar rolls," did not exist at the time the current management fee
arrangement was adopted. When the Company lends its portfolio securities
(principally to broker-dealers) the Company receives amounts equal to
dividends or interest on the securities loaned and earns income for having
made the loan. Similarly, the Company receives fee income when it engages in
"dollar rolls." When the Company enters into "dollar rolls," the Company sells
securities for delivery in the current month and simultaneously contracts with
the same counterparty to purchase similar (same type, coupon, and maturity)
but not identical securities on a specified future date. The Company gives up
the right to receive principal and interest paid on the securities sold;
however, the Company would benefit to the extent of any difference between the
price received for the securities sold and the

8
<PAGE>

lower forward price for the future purchase plus any fee income received.
Securities lending, dollar rolls, and other portfolio management techniques
and strategies require management expertise, effort, and other resources.
Changing the management fee arrangement to take investment income into account
would compensate Advisers for the resources it employs to produce such income
for the Company.

CURRENT AGREEMENT

The Current Agreement was last approved by the shareholders of the Company
at the annual shareholders' meeting held November 8, 1990. The Current
Agreement was presented to shareholders at that time because the ownership of
Advisers was restructured, and under the 1940 Act, this constituted an
assignment of the former investment advisory and services agreement, thereby
terminating the agreement. The Current Agreement contains the same material
terms and conditions, including the fee paid by the Company, as the Company's
former investment agreement with Advisers.

The Current Agreement continues for two years from the date of execution and
from year to year thereafter so long as such continuance is specifically
approved at least annually by (1) the Board of Directors of the Company or (2)
the vote of a majority of the outstanding voting securities of the Company;
provided, however, that in either event the continuance must also be approved
by a vote of the majority of the directors of the Company who are not
"interested persons," as that term is defined in the 1940 Act, of Advisers or
of the Company, cast in person at a meeting called for the purpose of voting
on such approval. The Current Agreement automatically terminates upon its
assignment (as defined in the 1940 Act) and is terminable at any time without
penalty by the Board of Directors of the Company or by the vote of the holders
of a majority of the outstanding voting securities of the Company on 60 days'
notice to Advisers and by Advisers on 60 days' notice to the Company. For
purposes of these provisions, a majority of the outstanding shares of the
Company means the lesser of (i) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares are represented or (ii) more
than 50% of the outstanding shares.

The Current Agreement provides that Advisers will furnish the Company with
an investment program complying with the investment objectives, policies, and
restrictions of the Company and, in carrying out such a program, will be
responsible for the investment and reinvestment of the Company's assets.
Advisers will perform and bear the cost of research, statistical analysis, and
continuous complete supervision of the Company's investment portfolio.
Advisers will also furnish to the Company office space and all ordinary and
necessary office facilities, equipment, and personnel for managing the affairs
of the Company. Advisers will bear the cost of fees, salaries, or other
remuneration of directors and officers of the Company who also serve as
directors, officers, or employees of Advisers or any of its affiliated
companies. In addition, Advisers will act as co-transfer agent and bear the
cost of stock transfer and registrar fees and dividend disbursement and
reinvestment expenses. The Company will pay certain other costs and expenses
of its operations, including fees of the directors who are not "affiliated
persons" (as defined in the 1940 Act) of Advisers, custodian expenses, legal
fees, expenses of independent accountants, costs of acquiring and disposing of
portfolio securities, interest, taxes, and stock exchange listing expenses.

9
<PAGE>

If expenses (including the management fee but excluding interest, taxes,
brokerage fees and, where permitted, extraordinary expenses) borne by the
Company in any fiscal year exceed the following expense limitations, Advisers
will reimburse the Company for any excess. These expense limitations are 1.5%
of average net assets up to $30,000,000 and 1% of average net assets over
$30,000,000. As of September 30, 1995, the Company had net assets of
approximately $115,555,037. For the fiscal year ended July 31, 1995, Advisers
did not reimburse the Company for any expenses.

PROPOSED AGREEMENT

At the Board of Directors meeting held September 21, 1995, in response to
proposals by Advisers, the Board of Directors approved resolutions
recommending the adoption by Company shareholders of the Proposed Agreement,
which modifies the management fee arrangement. Under the Proposed Agreement,
the Company would pay Advisers the same fee on average net assets; however,
instead of paying Advisers 2% of the net amount of interest and dividend
income the Company would pay Advisers 2% of the net amount of investment
income. As noted above, the Company's investment income includes interest
income, dividend income, and other income such as fees the Company receives
for lending its portfolio securities and engaging in "dollar roll"
transactions.

As noted in the table above, for the fiscal years ended July 31, 1994, and
July 31, 1995, the Company would have paid $8,996 and $108, respectively, in
additional management fees to Advisers if the fee structure under the Proposed
Agreement had been in effect during those years. Of course, the amount of the
management fee will vary from year to year because the amount of investment
income varies from year to year. A table containing certain information
concerning Other Fortis Funds having an investment objective substantially
similar to that of the Company and which describes the rate of compensation
such funds pay Advisers is located in Appendix A to this Proxy Statement.

The approval of the Proposed Agreement requires the affirmative vote of the
holders of a "majority" of the Company's outstanding shares, as described
above under "Current Agreement." Unless otherwise instructed, the proxies will
vote in favor of the adoption of the Proposed Agreement.

The Proposed Agreement would become effective January 1, 1996, if approved
by shareholders. If the shareholders do not approve the Proposed Agreement,
the Current Agreement may continue in effect or Advisers may propose
alternative amendments at a subsequent shareholders' meeting.

THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS APPROVE THE
PROPOSED AGREEMENT WITH ADVISERS.

OTHER MATTERS

Management does not intend to present any business to the meeting not
mentioned in this Proxy Statement and currently knows of no other business to
be presented. If any other matters are brought before the meeting, the persons
named as proxies will vote on such matters in accordance with their judgment
of the best interests of the Company.

10
<PAGE>

SUPPLEMENTAL INFORMATION WITH RESPECT TO THE COMPANY

Certain information about the executive officers of the Company is set forth
below. Unless otherwise indicated, all positions have been held more than five
years.

<TABLE>
<CAPTION>
POSITION WITH ADVISERS
AND BUSINESS EXPERIENCE
OFFICER'S NAME AND ADDRESS AGE POSITION WITH THE COMPANY DURING THE PAST FIVE YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dean C. Kopperud 43 President since 1995 Chief Executive Officer and
500 Bielenberg Drive director of Advisers; Chief
Woodbury, Minnesota Executive Officer, President, and
a director of Investors; prior to
January 1995, President of
Advisers and Investors; prior to
April 1994, Senior Vice President
of Advisers, Investors, Fortis
Benefits Insurance Company, and
Time Insurance Company.
Robert W. Beltz, Jr. 46 Vice President since Vice President--Annuity and
500 Bielenberg Drive 1993 Mutual Fund Operations of
Woodbury, Minnesota Advisers and Investors.
James S. Byrd 44 Vice President since Vice President of Advisers and
5500 Wayzata Boulevard 1991 Investors; prior to March 1991,
Golden Valley, Minnesota Senior Vice President, Templeton
Investment Counsel, Inc., Fort
Lauderdale, Florida.
Nicholas L. M. dePeyster 29 Vice President since Vice President of Advisers (since
One Chase Manhattan Plaza September 1995 August 1995) and Vice President,
New York, New York Equities, Fortis Asset
Management; prior to July 1991,
Research Associate, Smith Barney,
Inc., New York, New York.
Charles J. Dudley 36 Vice President since Vice President of Advisers and
One Chase Manhattan Plaza September 1995 Fortis Asset Management; prior to
New York, New York August 1995, Senior Vice
President and Portfolio Manager,
Sun America Asset Management, New
York, New York.
Thomas D. Gualdoni 47 Vice President since Vice President of Advisers,
500 Bielenberg Drive 1984 Investors, and Fortis Benefits
Woodbury, Minnesota Insurance Company.
Maroun M. Hayek 47 Vice President since Vice President of Advisers (since
One Chase Manhattan Plaza September 1995 August 1995) and Vice President,
New York, New York Fixed Income, Fortis Asset
Management.
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH ADVISERS
AND BUSINESS EXPERIENCE
OFFICER'S NAME AND ADDRESS AGE POSITION WITH THE COMPANY DURING THE PAST FIVE YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Howard G. Hudson 58 Vice President since Executive Vice President of
One Chase Manhattan Plaza September 1995 Advisers (since August 1995) and
New York, New York Senior Vice President, Fixed
Income, Fortis Asset Management;
prior to February 1991, Senior
Vice President, Fairfield
Research, New Canaan,
Connecticut.
Robert C. Lindberg 42 Vice President since Vice President of Advisers and
One Chase Manhattan Plaza 1993 Investors; prior to July 1993,
New York, New York Vice President, Portfolio
Manager, and Chief Securities
Trader, COMERICA, Inc., Detroit,
Michigan. COMERICA, Inc. is a
bank.
Larry A. Medin 45 Vice President since Senior Vice President--Sales of
500 Bielenberg Drive September 1995 Advisers and Investors; from
Woodbury, Minnesota August 1992 to November 1994,
Senior Vice President, Western
Divisional Officer of Colonial
Investment Services, Inc.,
Boston, Massachusetts; from June
1991 to August 1992, Regional
Vice President, Western
Divisional Officer of Alliance
Capital Management, New York, New
York; prior to June 1991, Senior
Vice President, National Sales
Director, Met Life State Street
Investment Services, Inc.
Kevin J. Michels 44 Vice President since Vice President of Advisers (since
One Chase Manhattan Plaza September 1995 August 1995) and Vice President,
New York, New York Administration, Fortis Asset
Management.
Jon H. Nicholson 45 Vice President since Vice President--Marketing and
500 Bielenberg Drive 1994 Product Development of Fortis
Woodbury, Minnesota Benefits Insurance Company
John W. Norton 54 Vice President since Senior Vice President, Secretary,
500 Bielenberg Drive 1978 and General Counsel of Advisers.
Woodbury, Minnesota
Fred Obser 57 Vice President since Senior Vice President of Advisers
One Chase Manhattan Plaza September 1995 (since August 1995) and Senior
New York, New York Vice President, Equities, Fortis
Asset Management.
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH ADVISERS
AND BUSINESS EXPERIENCE
OFFICER'S NAME AND ADDRESS AGE POSITION WITH THE COMPANY DURING THE PAST FIVE YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dennis M. Ott 49 Vice President since Senior Vice President of Advisers
5500 Wayzata Boulevard 1985 and Investors.
Golden Valley, Minnesota
Stephen M. Poling 64 Vice President since Executive Vice President and
5500 Wayzata Boulevard 1983 director of Advisers and
Golden Valley, Minnesota Investors.
Stephen M. Rickert 52 Vice President since Vice President of Advisers (since
One Chase Manhattan Plaza September 1995 August 1995) and Corporate Bond
New York, New York Analyst, Fortis Asset Management;
from August 1993 to April 1994,
Corporate Bond Analyst, Dillon,
Read & Co. Inc., New York, New
York; prior to June 1992, Vice
President, Western Asset
Management, Pasadena, California.
Richard P. Roche 43 Vice President since Vice President of Advisers and
500 Bielenberg Drive September 1995 Investors; prior to August 1995,
Woodbury, Minnesota President of Prospecting By
Seminars, Inc., Guttenberg, New
Jersey.
Anthony J. Rotondi 50 Vice President since Senior Vice President of
500 Bielenberg Drive September 1995 Advisers; from January 1993 to
Woodbury, Minnesota August 1995, Senior Vice
President, Operations, Fortis
Benefits Insurance Company; prior
to January 1993, Senior Vice
President, Information
Technology, Fortis, Inc.
Keith R. Thomson 58 Vice President since Vice President of Advisers and
5500 Wayzata Boulevard 1993 Investors.
Golden Valley, Minnesota
Christopher J. Woods 35 Vice President since Vice President of Advisers (since
One Chase Manhattan Plaza September 1995 August 1995) and Vice President,
New York, New York Fixed Income, Fortis Asset
Management; prior to November
1992, Head of Fixed Income, The
Police and Firemen's Disability
and Pension Fund of Ohio,
Columbus, Ohio.
Gary N. Yalen 53 Vice President since President and Chief Investment
One Chase Manhattan Plaza September 1995 Officer of Advisers (since August
New York, New York 1995) and Fortis Asset
Management, a division of Fortis,
Inc., and Senior Vice President,
Fortis, Inc.
</TABLE>

13
<PAGE>

No officer or director of the Company owns any securities of Advisers. No
officer or director of the Company owns any securities of or has any other
material direct or indirect interest in Advisers or any person controlling,
controlled by or under common control with Advisers. None of the executive
officers or directors has family relationships with other executive officers
or directors.

Based on Company records and other information, the Company believes that
all SEC filing requirements applicable to its directors, officers, Advisers
and companies affiliated with the Advisers, pursuant to Section 16(a) of the
Securities Exchange Act of 1934, with respect to the Company's fiscal year
ending July 31, 1995, were satisfied.

SUPPLEMENTAL INFORMATION WITH RESPECT TO ADVISERS

Fortis, Inc. owns 100% of the outstanding voting securities of Advisers. Mr.
Kopperud is the Chief Executive Officer of Advisers. Messrs. Kopperud, Yalen,
and Poling are the directors of Advisers.

Fortis Inc., located in New York, New York, is a wholly owned subsidiary of
Fortis International, N.V. ("Fortis International"), which in turn is a wholly
owned subsidiary of Sycamore Insurance Holdings, N.V., which in turn is a
wholly owned subsidiary of AMEV/VSB 1990 N.V. ("AMEV/VSB 1990").

AMEV/VSB 1990 is a corporation organized under the laws of The Netherlands
and is owned 50% by Fortis AMEV and 50% by Fortis AG. AMEV/VSB 1990 owns a
group of companies active in insurance, banking and financial services and
real estate development in The Netherlands, the United States, Western Europe,
Australia and New Zealand.

Fortis AMEV is a diversified financial services company headquartered in
Utrecht, The Netherlands, where its insurance operations began in 1847. Fortis
AG is a diversified financial services company headquartered in Brussels,
Belgium, where its insurance operations began in 1824. Fortis AMEV and Fortis
AG own a group of companies (of which AMEV/VSB 1990 is one) active in
insurance, banking and financial services and real estate development in The
Netherlands, Belgium, the United States, Western Europe and the Pacific Rim.

The address of Fortis International, Sycamore Insurance Holdings, N.V.,
AMEV/VSB 1990, and Fortis AMEV is Archimedeslaan 10, 3584 BA Utrecht, The
Netherlands. The address of Fortis AG is Boulevard Emile Jacqanin 53, 1000
Brussels, Belgium.

PROPOSALS OF COMPANY SHAREHOLDERS

Proposals of Company shareholders intended to be presented at the 1996
annual shareholders' meeting must be received at the Company's offices by July
10, 1996, in order to be considered for inclusion in the Company's proxy
statement and form of proxy for the 1996 annual meeting.

Dated: November 7, 1995 Michael J. Radmer, Secretary

14
<PAGE>

APPENDIX A

The table below sets forth certain information as of September 30, 1995,
concerning Other Fortis Funds having an investment objective similar to that
of the Company and describes the rate of compensation such funds pay Advisers.

<TABLE>
<CAPTION>
NAME OF INVESTMENT NET ASSET VALUE ANNUAL FEE (BASED ON
COMPANY AND/OR PORTFOLIO AS OF SEPTEMBER 30, 1995 AVERAGE NET ASSETS)
------------------------ ------------------------ --------------------
<S> <C> <C>
Fortis Advantage Portfolios, Inc.
Government Total Return Portfolio $ 63,636,204 .80% for the first $50 million
.75% for the next $450 million
.70% for assets over $500 million
High Yield Portfolio 140,975,019 .8% for the first $50 million
.7% for assets over $50 million
Fortis U.S. Government Securities Series 480,725,202 .8% for the first $50 million
of Fortis Income Portfolios, Inc. .7% for assets over $50 million
Fortis Series Fund, Inc.*
Diversified Income Series 104,086,533 .5% for the first $50 million
.45% for assets over $50 million
U.S. Government Securities Series 175,388,729 .5% for the first $50 million
.45% for assets over $50 million
</TABLE>
- --------

*The fee Advisers receives from Fortis Series Fund, Inc. reflects the fact
that such fund, unlike the other Fortis Funds listed above, does not offer
its shares directly to the public. Therefore, the costs borne by Advisers
of acting as transfer agent, registrar, and dividend agent are
significantly lower than those for the other Fortis Funds.

A-1
<PAGE>

NOTICE OF
ANNUAL
SHAREHOLDERS'
MEETING
TO BE HELD
DECEMBER 7, 1995

AND PROXY STATEMENT

FORTIS SECURITIES, INC.
<PAGE>

Receipt of Notice of Annual Shareholders' Meeting and Proxy Statement is
acknowledged by your execution of this proxy. Mark, sign, date, and return this
proxy in the addressed envelope--no postage required. Please mail promptly to
save the Company further solicitation expenses.

FORTIS SECURITIES, INC.

PROXY SERVICES
POST OFFICE BOX 9148
FARMINGDALE, NY 11735-9855

FORTIS SECURITIES, INC.

PROXY FOR ANNUAL SHAREHOLDERS' MEETING
TO BE HELD ON DECEMBER 7, 1995

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints Michael J. Radmer, Scott R. Plummer, and Robert W.
Beltz, Jr. and each of them with power to act without the other and with all the
right of substitution in each, the proxies of the undersigned to vote all shares
of Fortis Securities, Inc. (the "Company") held by the undersigned on October
25, 1995, at the Annual Shareholders' Meeting of the Company, to be held at
Macalester College, Weyerhauser Building, 62 Macalester Street, St. Paul,
Minnesota, on Thursday, December 7, 1995 at 11:00 a.m. and any adjournment
thereof, with all powers the undersigned would possess if present in person. All
previous proxies given with respect to the meeting are revoked.

THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS BELOW. IT IS
UNDERSTOOD THAT IF NO CHOICE IS SPECIFIED BELOW, THIS PROXY WILL BE VOTED "FOR"
ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE
BEST INTERESTS OF THE COMPANY.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
- --------------------------------------------------------------------------------
FORTIS SECURITIES, INC.

FORTIS KEEP THIS PORTION FOR YOUR RECORDS,
- -------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.

[_] [_] [_]
FOR AGAINST ABSTAIN
[_] [_] [_]
FOR AGAINST ABSTAIN
[_] [_] [_]

1. TO ELECT DIRECTORS, THE NOMINEES ARE: 01) R.W. CUTTING, 02) A.R. FREEDMAN,
03) DR. R.M. GAVIN, 04) B.S. JAFFRAY, 05) J.L. KING, 06) D.C. KOPPERUD,
07) E.M. MAHONEY, 08) R.L. PRINCE, 09) L.J. SANTOW, 10) J.M. WIKLER
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE THAT
NOMINEE(S) NUMBER ON THE LINE PROVIDED BELOW

---------------------------------------------------------------------------

2. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY:

3. PROPOSAL TO APPROVE AN AMENDED INVESTMENT ADVISORY AND SERVICES AGREEMENT,
WHICH BROADENS THE BASE FOR CALCULATING A PORTION OF THE MANAGEMENT FEE
FROM "INTEREST AND DIVIDEND INCOME" TO "INVESTMENT INCOME":

4. TO VOTE WITH DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.

___________________________________________
(Please sign name(s) exactly as registered)

___________________________________________ -----------------
(If there are co-owners, both should sign) Date