Edgar Filing: FORT DEARBORN INCOME SECURITIES INC

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 Rule 14a-11(c) or Rule 14a-12

Fort Dearborn Income Securities, Inc.
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(Name of Registrant as Specified in Its Charter)

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(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:

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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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[ ] Fee paid previously with preliminary materials.

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[ ] 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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(4) Date Filed:

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FORT DEARBORN INCOME SECURITIES, INC.

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NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS

DECEMBER 15, 2003

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TO THE SHAREHOLDERS:

The annual meeting of shareholders of Fort Dearborn Income Securities, Inc.
(the "Fund") will be held on December 15, 2003 at 3:00 p.m., Central time, at
One North Wacker Drive, Chicago, Illinois 60606 for the following purposes:

(1) To elect four (4) directors to serve until the annual meeting of
shareholders in 2004, or until their successors are elected and
qualified or until they resign or are otherwise removed; and

(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.

You are entitled to vote at the meeting and any adjournments thereof if you
owned Fund shares at the close of business on October 24, 2003. If you attend
the meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED POSTAGE PAID ENVELOPE.

By order of the board of directors,

David M. Goldenberg
Secretary

November 17, 2003
One North Wacker Drive
Chicago, Illinois 60606

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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN IT, AND RETURN IT IN THE POSTAGE PAID ENVELOPE PROVIDED. If you sign,
date and return the proxy card but give no voting instructions, your shares
will be voted "FOR" the nominees for director named in the attached proxy
statement and, in the proxies' discretion, either "FOR" or "AGAINST" any other
business that may properly arise at the annual meeting. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY.
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INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general guidelines for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund in validating your
vote if you fail to sign your proxy card properly.

1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.

2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy card.

3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:

REGISTRATION VALID SIGNATURE
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Corporate Accounts
(1) ABC Corp. .................................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp. .................................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer ............ John Doe
(4) ABC Corp. Profit Sharing Plan ................ John Doe, Trustee

Partnership Accounts
(1) The XYZ Partnership .......................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership ......... Jane B. Smith, General Partner

Trust Accounts
(1) ABC Trust Account ............................ Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/18/78 .......... Jane B. Doe

Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o
John B. Smith, Jr. UGMA/UTMA ................. John B. Smith
(2) Estate of John B. Smith ...................... John B. Smith, Jr., Executor

FORT DEARBORN INCOME SECURITIES, INC.
ONE NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606

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PROXY STATEMENT

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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON DECEMBER 15, 2003

This proxy statement is furnished to the shareholders of Fort Dearborn
Income Securities, Inc. (the "Fund") in connection with the board of directors'
solicitation of proxies to be used at the annual meeting of shareholders of the
Fund to be held on December 15, 2003, at 3:00 p.m., Central time, at One North
Wacker Drive, Chicago, Illinois 60606, or any adjournment or adjournments
thereof. This proxy statement and the related proxy card will first be mailed to
shareholders on or about November 17, 2003.

A majority of the shares outstanding on October 24, 2003, represented in
person or by proxy, must be present for the transaction of business at the
meeting. In the event that a quorum is not present at the annual meeting, or if
a quorum is present at the annual meeting but sufficient votes to approve any of
the proposals are not received, the persons named as proxies may propose one or
more adjournments of the annual meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
those shares represented at the annual meeting in person or by proxy. The
persons named as proxies will vote those proxies which they are entitled to vote
FOR any such proposal in favor of such an adjournment and will vote those
proxies marked WITHHOLD on any such proposal against such adjournment. A
shareholder vote may be taken on one or more of the proposals in this proxy
statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.

Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
but will have no effect on Proposal 1, for which the required vote is a
plurality of the votes cast on the matter.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you give no voting instructions, your shares will be voted
FOR the four nominees for director named herein and, in the proxies' discretion,
either FOR or AGAINST any other business that may properly arise at the annual
meeting. You may revoke any proxy card by giving another proxy or by submitting
a written notice of revocation to the Fund's Secretary at 51 West 52nd Street,
New York, New York 10019-6114. To be effective, your revocation must be received
by the Fund prior to the meeting and must indicate your name and account number.
In addition, if you attend the annual meeting in person you may, if you wish,
vote by ballot at the meeting, thereby cancelling any proxy previously given.

As of the record date, October 24, 2003, the Fund had 8,775,665 shares of
common stock outstanding. The solicitation of proxies, the cost of which will be
borne by the Fund, will be made primarily by mail but also may include telephone
and oral communications by regular employees of UBS Global Asset Management
(Americas) Inc. ("UBS Global AM"), who will not receive any compensation
therefor from

the Fund. Management does not know of any person who owns beneficially 5% or
more of the shares of the Fund. Each full share of the Fund outstanding is
entitled to one vote, and each fractional share of the Fund outstanding is
entitled to a proportionate share of one vote.

UBS Global AM serves as the Fund's investment advisor. UBS Global AM is an
indirect wholly owned asset management subsidiary of UBS AG. UBS AG is an
internationally diversified organization with headquarters in Zurich,
Switzerland. UBS AG operates in many areas of the financial services industry.
The principal business offices of UBS Global AM are located at One North Wacker
Drive, Chicago, Illinois 60606. The principal business address of UBS AG is
Bahnhofstrasse 45, Zurich, Switzerland.

The Fund's annual report containing financial statements for the fiscal
year ended September 30, 2003, is being mailed to shareholders concurrently with
this proxy statement.

PROPOSAL 1. ELECTION OF DIRECTORS

Proposal 1 relates to the election of directors of the Fund. Pursuant to
the Retirement Policy of directors, C. Roderick O'Neil, who is chairman of the
Board of Directors is not standing for re-election and will retire at the annual
meeting. Management proposes the election of the four nominees named in the
table below. Each nominee has indicated his or her willingness to serve if
elected. If elected, each nominee will hold office until the next annual meeting
of shareholders or until his or her successor is elected and qualified, or until
he or she resigns or is otherwise removed. Each of the nominees was last elected
director at the Fund's December 2002 Annual Meeting of Shareholders. Unless you
give contrary instructions on the enclosed proxy card, your shares will be voted
FOR the election of all four nominees. If any of the nominees should withdraw or
otherwise become unavailable for election, your shares will be voted FOR such
other nominee or nominees as management may recommend.

Directors, including those who are not "interested persons" of the Fund as
that term is defined by the Investment Company Act of 1940, as amended ("1940
Act") ("Independent Directors), shall be elected by the affirmative vote of the
holders of a plurality of the shares of the Fund cast in person or by proxy and
entitled to vote thereon, provided a quorum is present. Proxies cannot be voted
for a greater number of persons than the number of nominees named. None of the
executive officers (7 persons) beneficially owned any shares of the Fund's
common stock on October 24, 2003.

Listed in the table below, for each nominee, is a brief description of the
nominee's experience as a director of the Fund and as a director or trustee of
other funds, as well as other recent professional experience.

POSITION(S) LENGTH OF PRINCIPAL
NAME, ADDRESS AND HELD WITH TIME OCCUPATION(S)
AGE FUND SERVED DURING PAST 5 YEARS
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INDEPENDENT DIRECTORS:
Adela Cepeda; 45 Director Since Ms. Cepeda is founder
A.C. Advisory, Inc. 2000 and president of A.C.
Three First National Advisory, Inc. (since
Plaza, 1995).
Suite 1515
Chicago, Illinois
60602

NUMBER OF SHARES
PORTFOLIOS IN BENEFICIALLY
FUND OTHER OWNED DIRECTLY
NAME, ADDRESS AND COMPLEX OVERSEEN DIRECTORSHIPS OR INDIRECTLY
AGE BY NOMINEE HELD BY NOMINEE OCTOBER 24, 2003
---------------------- -------------------------- -------------------- -----------------

INDEPENDENT DIRECTORS:

Adela Cepeda; 45 Ms. Cepeda is a director Ms. Cepeda is a 1,000
A.C. Advisory, Inc. of one investment director of Lincoln
Three First National company (consisting of National Income
Plaza, one portfolio) for which Fund, Inc. and
Suite 1515 UBS Global AM serves Lincoln National
Chicago, Illinois as investment advisor Convertible
60602 Securities Fund.

POSITION(S) LENGTH OF PRINCIPAL
NAME, ADDRESS AND HELD WITH TIME OCCUPATION(S)
AGE FUND SERVED DURING PAST 5 YEARS
--------------------- ------------- ----------- ------------------------

Frank K. Reilly; 67 Director Since Mr. Reilly is a
College of Business 1993 Professor at the
Administration University of Notre
University of Notre Dame since 1982. Mr.
Dame Reilly was a Director
Notre Dame, IN of Battery Park Funds
46556-0399 Inc. (1995-2001).

Edward M. Roob; 69 Director Since Mr. Roob is retired
841 Woodbine Lane 1993 (since 1993). Mr. Roob
Northbrook, IL was a Committee
60002 Member of the
Chicago Stock
Exchange from
1993-1999.

J. Mikesell Thomas, Director Since Mr. Thomas is an
51 2002 independent financial
c/o UBS Global advisor (since 2001).
Asset Management He was a managing
(Americas) Inc. director of Lazard
One N. Wacker Freres & Co. (1995 to
Drive 2001).
Chicago, Illinois
60606

NUMBER OF SHARES
PORTFOLIOS IN BENEFICIALLY
FUND OTHER OWNED DIRECTLY
NAME, ADDRESS AND COMPLEX OVERSEEN DIRECTORSHIPS OR INDIRECTLY
AGE BY NOMINEE HELD BY NOMINEE OCTOBER 24, 2003
--------------------- ---------------------------- ---------------------- -----------------

Frank K. Reilly; 67 Mr. Reilly is a director Mr. Reilly is a 5,706
College of Business or trustee of five Director of Discover
Administration investment companies Bank; Morgan
University of Notre (consisting of 44 Stanley Trust, FSB;
Dame portfolios), for which and NIBCO, Inc.
Notre Dame, IN UBS Global AM or one
46556-0399 of its affiliates serves as
investment advisor,
sub-advisor or manager.

Edward M. Roob; 69 Mr. Roob is a director Mr. Roob is a 8,000
841 Woodbine Lane or trustee of five Trustee of the CCM
Northbrook, IL investment companies Fund Complex (9
60002 (consisting of 44 portfolios).
portfolios), for which
UBS Global AM or one
of its affiliates serves as
investment advisor,
sub-advisor or manager.

J. Mikesell Thomas, Mr. Thomas is a director Mr. Thomas is a None
51 of one investment director and
c/o UBS Global company (consisting of chairman of the
Asset Management one portfolio) for which Finance Committee
(Americas) Inc. UBS Global AM serves for Evanston
One N. Wacker as investment advisor Northwestern
Drive Healthcare. He is
Chicago, Illinois also a vice president
60606 of the Board of
Trustees for
Mid-Day Club and
leadership of Greater
Chicago Association.

INFORMATION ABOUT NOMINEE OWNERSHIP OF FUND SHARES

DOLLAR RANGE AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
OF EQUITY REGISTERED INVESTMENT COMPANIES OVERSEEN BY NOMINEE
SECURITIES FOR WHICN UBS GLOBAL AM OR AN AFFILIATE SERVES AS
NOMINEE IN FUND+ INVESTMENT ADVISOR, SUB-ADVISOR OR MANAGER+
---------------------------- --------------------- ----------------------------------------------------

INDEPENDENT DIRECTORS:
Adela Cepeda ............... $10,001 -- $50,000 $10,001 -- $50,000
Frank K. Reilly ............ $50,001 -- $100,000 Over $100,000
Edward M. Roob ............. Over $100,000 Over $100,000
J. Mikesell Thomas ......... None None

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+ Information regarding ownership of shares of the Fund is as of October
24, 2003; information regarding ownership of shares in all registered
investment companies overseen by nominee for which UBS Global AM or an
affiliate serves as investment advisor, sub-advisor or manager is as of
December 31, 2002.

As of December 31, 2002, the Independent Directors did not own any
securities issued by UBS Global AM or any company controlling, controlled by or
under common control with UBS Global AM.

The board of directors of the Fund met six times during the fiscal year
ended September 30, 2003. Each director attended 75% or more of the board
meetings during the last fiscal year. The board has

established an Audit Committee that acts pursuant to a written charter and is
responsible for, among other things: (i) overseeing the scope of the Fund's
audit; (ii) overseeing the Fund's accounting and financial reporting policies,
practices and internal controls; (iii) to oversee the quality and objectivity
of the Fund's financial statements and the independent audit(s) thereof; and
(iv) to act as a liaison between the Fund's independent auditors and the full
Board. A copy of the charter is attached as Exhibit A. In fulfilling its
duties, the Audit Committee has: (a) reviewed and discussed the Fund's audited
financial statements with management; (b) discussed with the independent
auditors the matters required to be discussed by Statement on Auditing
Standards No. 61; (c) received certain written disclosures and the letter from
the independent auditors required by Independence Standards Board Standard No.
1 and discussed the independent auditors' independence with them; and (d) based
upon its review of the above, recommended to the board that the Fund's audited
financial statements be included in the Fund's annual report to shareholders
for the fiscal year ended September 30, 2003. The Audit Committee currently
consists of Ms. Cepeda, Messrs. O'Neil, Thomas, Reilly and Roob, none of whom
have any relationship to the Fund that may interfere with the exercise of their
independence from management or the Fund and each of whom is independent as
defined under listing standards of the New York Stock Exchange. Messrs. Reilly
and Roob are also members of a similar committee established by the boards of
certain other investment companies for which UBS Global AM or an affiliate
serves as investment advisor, sub-advisor or manager. The Audit Committee met
three times during the fiscal year ended September 30, 2003, and each member
attended those meetings.

Each Independent Director (except the Chairman) receives, in the aggregate
from the fund, an annual retainer of $9,000. Each Independent Director
(including the chairman) receives $750 for each regular board meeting actually
attended. The Chairman receives an annual retainer of $13,000. No officer,
director or employee of UBS Global AM or one of its affiliates presently
receives any compensation from the Fund for acting as a board member or
officer.

COMPENSATION TABLE+

TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE FUND
NAME OF FROM AND THE
PERSON, POSITION THE FUND* FUND COMPLEX**
---------------------------- -------------- ---------------

Adela Cepeda ............... $13,500 $13,500
C. Roderick O'Neil ......... $17,500 $17,500
Frank K. Reilly ............ $13,500 $75,600
Edward M. Roob ............. $13,500 $75,600
J. Mikesell Thomas ......... $13,500 $13,500

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+ Only Independent Directors are compensated by the funds for which UBS
Global AM or an affiliate serves as investment advisor, sub-advisor or
manager.

* Represents fees paid to each director during the fiscal year ended
September 30, 2003.

** Represents fees paid during the calendar year ended December 31, 2002 to
each board member by: (a) one investment company in the case of Ms.
Cepeda and Mr. Thomas; and (b) 5 investment companies in the case of
Messrs. Reilly and Roob for which UBS Global AM or one of its affiliates
served as investment advisor, sub-advisor or manager. No fund within the
UBS fund complex has a bonus, pension, profit sharing or retirement plan.

INFORMATION CONCERNING INDEPENDENT AUDITORS

The Fund's financial statements for the fiscal year ended September 30,
2003, were audited by Ernst & Young LLP ("Ernst & Young"), independent
auditors. In addition, Ernst & Young prepares the Fund's federal and state
annual income tax returns and provides certain non-audit services. The Audit
and Contract Review Committee has considered whether the provision of those
non-audit services is compatible with maintaining Ernst & Young's independence.
The board of directors of the Fund has selected Ernst & Young as the
independent auditors for the Fund for the fiscal year ending September 30,
2004. Ernst & Young has been the Fund's independent auditors since fiscal year
ended September 30, 2001. Ernst & Young has informed the Fund that it has no
material direct or indirect financial interest in the Fund.

Representatives of Ernst & Young are not expected to be present at the
meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.

AUDIT FEES

The aggregate fees billed by Ernst & Young for professional services
rendered for the audit of the Fund's annual financial statements for the most
recent fiscal year and the review of the financial statements included in the
Fund's reports to shareholders were approximately $28,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

There were no fees billed by Ernst & Young for the most recent fiscal year
for professional services rendered for financial information systems design and
implementation services provided to the Fund, UBS Global AM and entities that
control, are controlled by or are under common control with UBS Global AM that
provide services to the Fund.

ALL OTHER FEES

There were approximately $36,000 in fees billed by Ernst & Young for the
most recent fiscal year for other services provided to the Fund, UBS Global AM
and entities that control, are controlled by or are under common control with
UBS Global AM that provide services to the Fund.

EXECUTIVE OFFICERS

Officers of the Fund are appointed by the directors and serve at the
pleasure of the board. None of the Fund's officers currently receives any
compensation from the Fund. The executive officers of the Fund are:

PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
-------------------------- ------------------ ------------- ---------------------------------------------

Joseph A. Anderson**; 41 Assistant Since 1992 Mr. Anderson is an executive director of
Treasurer UBS Global AM. (since 1991) and is
currently the vice president of UBS
Global Asset Management Trust Company
(since 1995). Mr. Anderson is assistant
treasurer of one investment company
(consisting of one portfolio) for which
UBS Global AM serves as investment
advisor.

Amy R. Doberman*; 41 Vice President Since 2003 Ms. Doberman is a managing director and
and Assistant general counsel of UBS Global Asset
Secretary Management (US) Inc. From December
1997 through July 2000, she was general
counsel of Aeltus Investment
Management, Inc. Ms. Doberman is vice
president and assistant secretary of five
investment companies (consisting of
44 portfolios) and vice president and
secretary of 17 investment companies
(consisting of 37 portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor
or manager.

Craig G. Ellinger**; 33 Vice President Since 2001 Mr. Ellinger is a portfolio manager in the
Fixed Income Group at UBS Global AM
(since 2000) He previously served in a
similar position at PPM America, Inc.
(1997 to 2000). Mr. Ellinger is vice
president of one investment company
(consisting of one portfolio) for which
UBS Global AM serves as investment
advisor.

David M. Goldenberg*; 37 Vice President Since 2003 Mr. Goldenberg is an executive director
and Secretary and deputy general counsel of UBS
Global Asset Management (US) Inc. From
2000 to 2002 he was director, legal affairs
at Lazard Asset Management. Mr.
Goldenberg served in various capacities,
including most recently as global director
of Compliance, at SSB Citi Asset
Management Group from 1996 to 2000.
Mr. Goldenberg is a vice president and
secretary of five investment companies
(consisting of 44 portfolios) and a vice
president and assistant secretary of
17 investment companies (consisting of
37 portfolios) for which UBS Global AM
or one of its affiliates serves as investment
advisor, sub-advisor or manager.

Rita Rubin*; 33 Assistant Since 2003 Ms. Rubin is a director and associate
Secretary general counsel of UBS Global Asset
Management (US) Inc. Prior to 2001, she
was an attorney with the law firm of
Kirkpatrick & Lockhart LLP. Ms. Rubin is
an assistant secretary of four investment
companies (consisting of 42 portfolios) for
which UBS Global AM or one of its
affiliates serves as investment advisor,
sub-advisor or manager.

Paul H. Schubert*; 40 Vice President Since 2003 Mr. Schubert is an executive director and
and Treasurer head of the mutual fund finance
department of UBS Global Asset
Management (US) Inc. Mr. Schubert is
treasurer and principal accounting officer
of three investment companies (consisting
of 41 portfolios), a vice president and
treasurer of 18 investment companies
(consisting of 38 portfolios), and treasurer
and chief financial officer of one
investment company (consisting of two
portfolios) for which UBS Global AM or
one of its affiliates serves as investment
advisor, sub-advisor or manager.

PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS;
POSITION(S) HELD LENGTH OF NUMBER OF PORTFOLIOS IN FUND COMPLEX
NAME, ADDRESS, AND AGE WITH THE FUND TIME SERVED FOR WHICH PERSON SERVES AS OFFICER
------------------------ ------------------ ------------- ---------------------------------------------

Joseph A. Varnas*; 35 President Since 2003 Mr. Varnas is a managing director (since
March 2003), chief technology officer
(since March 2001) and head of product,
technology and operations of UBS Global
Asset Management (US) Inc. (since
November 2002). From 2000 to 2001, he
was manager of product development in
Investment Consulting Services at UBS
Financial Services Inc. Mr. Varnas was a
senior analyst in the Global Securities
Research and Economics Group at Merrill
Lynch from 1995 to 1999. Mr. Varnas is
president of 21 investment companies
(consisting of 79 portfolios) for which
UBS Global AM or one of its affiliates
serves as investment advisor, sub-advisor
or manager.

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* This person's business address is 51 West 52nd Street, New York, New York
10019-6114

** This person's business address is One North Wacker Drive, Chicago,
Illinois 60606.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

An initial report under Section 16(a) of the Securities Exchange Act of
1934 was not timely filed for Ms. Doberman, Messrs. Goldenberg and Schubert.
These delayed reports did not involve any transactions in the Fund's common
stock but rather related to their election as officers. Two Statements of
Change in Beneficial Ownership of Securities were not timely filed for Mr.
Reilly, these delayed reports involved purchases in the Fund's common stock. A
Statement of Change in Beneficial Ownership of Securities was not timely filed
for Mr. O'Neil, this delayed report involved a sale of the Fund's common stock.

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit proposals to be considered at the
Fund's 2004 annual meeting of shareholders should send such proposals to the
Secretary of the Fund at 51 West 52nd Street, New York, New York 10019-6114. In
order to be considered at that meeting, shareholder proposals must be received
by the Fund no later than July 15, 2004 and must satisfy other requirements of
the federal securities laws.

OTHER BUSINESS

Management knows of no business to be presented at the meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Fund.

By order of the board of directors,

David M. Goldenberg
Secretary

November 17, 2003

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IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
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EXHIBIT A

FORT DEARBORN INCOME SECURITIES, INC.

AUDIT COMMITTEE CHARTER

This Audit Committee Charter (the "Charter") is adopted by the Board of
Directors (the "Board") of Fort Dearborn Income Securities, Inc. (the "Fund").

1. The Audit Committee of the Board (the "Committee") shall be composed
entirely of independent directors of the Fund.

2. The purposes of the Committee are:

(a) to select, oversee and set the compensation of the Fund's
independent auditors;

(b) to oversee the Fund's accounting and financial reporting policies
and practices, its internal controls and, as appropriate, the
internal controls of certain service providers;

(d) to act as a liaison between the Fund's independent auditors and
the full Board.

The function of the Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and
internal control, and the auditors' responsibility to plan and carry
out a proper audit.

3. To carry out its purposes, the Committee shall have the following
duties and powers:

(a) to pre-approve and to recommend to the Board the selection,
retention or termination of the independent auditors to provide
audit, review or attest services to the Fund, and, in connection
therewith, to evaluate the independence of the auditors, and, in
connection therewith, to receive the auditors' specific
representations as to their independence;

(b) to pre-approve all non-audit services to be provided to the Fund
by the independent auditors when, without such pre-approval, the
auditors would not be independent of the Fund under applicable
federal securities laws, rules or auditing standards;

(c) to approve all non-audit services to be provided by the Fund's
independent auditors to the Fund's investment adviser or to any
entity that controls, is controlled by or is under common control
with the Fund's investment adviser and that provides ongoing
services to the Fund, when, without such pre-approval by the
Committee, the auditors would not be independent of the Fund
under applicable federal securities laws, rules or auditing
standards;

(d) to establish, if deemed necessary or appropriate as an
alternative to Committee pre-approval of services to be provided
by the independent auditors as required by paragraphs (b) and (c)
above, policies and procedures to permit such services to be
pre-approved by other means, such as by action of a designated
member or members of the Committee, subject to subsequent
Committee review or oversight;

(e) to meet with the Fund's independent auditors, including private
meetings, as necessary: (i) to review the arrangements for and
scope of the Fund's annual audit and any special audits; (ii) to
discuss any matters of concern relating to the Fund's financial
statements, including any

A-1

adjustments to such statements recommended by the auditors, or
other results of said audit(s); (iii) to receive and consider the
auditors' comments with respect to the Fund's financial policies,
procedures and internal accounting controls and management's
responses thereto; and (iv) to review the form of opinion the
auditors propose to render to the Board and shareholders;

(f) to consider and, if appropriate, recommend the publication of the
Fund's annual audited financial statements in the Fund's annual
report in advance of printing and publication of the annual
report, based on its review and discussions of such annual report
with the independent auditors, the Fund's officers and UBS Global
Asset Management;

(g) to receive and consider reports from the Fund's independent
auditors regarding: (i) all critical accounting policies and
practices of the Fund to be used; (ii) all alternative accounting
treatments for policies and practices related to material items
that have been discussed with management, including the potential
ramifications of use of those treatments and the treatment
preferred by the auditors; (iii) any material written
communications between the auditors and management; and (iv) all
non-audit services provided to any entity in the Fund's
investment company complex that were not pre-approved by the
Committee or pursuant to pre-approval policies and procedures
established by the Committee and associated fees;

(h) to consider the effect upon the Fund of any changes in accounting
principles or practices proposed by management or the auditors;

(i) to review and approve the fees charged by the auditors for audit
and non-audit services;

(j) to consult with the Board in connection with the Board's
determination whether one or more members of the Committee
qualify as an "audit committee financial expert;"

(k) to receive reports from Fund management of any significant
deficiencies in the design or operation of the Fund's internal
controls that could adversely affect the Fund's ability to
record, process, summarize and report financial data, any
material weaknesses in the Fund's internal controls and any
fraud, whether or not material, that involves management or other
employees of the Fund who have a significant role in the Fund's
internal controls, and to evaluate any corrective actions taken
by management or that should be taken by management or the Board;

(l) to investigate improprieties or suspected improprieties in Fund
operations; and

(m) to report its activities to the full Board on a regular basis and
to make such recommendations with respect to the above and other
matters as the Committee may deem necessary or appropriate.

4. The Committee shall meet at least once annually with the auditors
(outside the presence of Fund management) and is empowered to hold
special meetings, as circumstances require. The Committee may meet in
person or by telephone, and a majority of Committee members then in
office shall constitute a meeting quorum. The Committee may act by a
vote of a majority of those members present at a meeting and
constituting a quorum, or by written consent of a majority of Committee
members.

5. The Committee shall, from time to time and as it deems appropriate,
meet with the Treasurer of the Fund and with internal auditors, if any,
for the investment adviser.

6. The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain
special counsel and other experts or consultants at the expense of the
Fund.

A-2

7. The Committee shall establish procedures for (i) receipt, retention and
treatment of complaints received by the Fund or the Fund's investment
adviser regarding accounting, internal accounting controls, or
accounting matters, and (ii) the confidential anonymous submission by
employees of the Fund or the Fund's investment adviser of concerns
regarding questionable accounting or auditing matters.

8. The Committee shall review this Charter at least annually and recommend
any changes to the full Board.

Adopted as of August 19, 2003.

A-3

-----------------
FORT DEARBORN
INCOME
SECURITIES, INC.
-----------------

PROXY STATEMENT

-----------------
FORT DEARBORN
INCOME
SECURITIES, INC.
-----------------

-----------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
DECEMBER 15, 2003
AND
PROXY STATEMENT
-----------------

FOLD AND DETACH HERE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

PROXY

FORT DEARBORN INCOME SECURITIES, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 15, 2003

The undersigned, having received the Notice of Annual Meeting and Proxy
Statement dated November 17, 2003, appoints David M. Goldenberg and Rita Rubin
and each or any of them as proxies, with full power of substitution and
revocation, to represent the undersigned and to vote all shares (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 15,
2003, 3:00 P.M., at UBS Global Asset Management, One N. Wacker Drive, 38th
floor, Chicago, Illinois, and any adjournments thereof.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE 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 THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.

(Continued and to be dated and signed on reverse side.)

FORT DEARBORN INCOME SECURITIES, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8966
EDISON, NJ 08818-8966

FOLD AND DETACH HERE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

[X] PLEASE MARK 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.

--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS.
--------------------------------------------------------------------------------

1. Election of Directors, Nominees: A. Cepeda, F.K. Reilly, E.M. Roob,
J.M. Thomas

FOR WITHHELD
[ ] ______________________________ [ ] [ ]
FOR, except vote withheld from
the following nominee(s):

2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the Meeting or any adjournment thereof.

If you plan to attend the Annual meeting,
please check this box. [ ]

Mark box at right if an address change or
comment has been noted on the reverse [ ]
side of this card.
--------------------------------------------------------------------------------

Signature _________________________ Date: ____________________2003

(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.