Edgar Filing: DUFF & PHELPS UTILITIES INCOME INC

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
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RULE 14A-6(E)(2))

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[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

DUFF & PHELPS UTILITIES INCOME INC.
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(Name of Registrant as Specified In Its Charter)

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[LOGO]
DUFF & PHELPS

UTILITIES INCOME INC.

55 EAST MONROE STREET, CHICAGO, ILLINOIS 60603 (312) 368-5510

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS APRIL 23, 2002

The annual meeting of shareholders of Duff & Phelps Utilities Income Inc.
will be held at the Registry Resort, 475 Seagate Drive, Naples, Florida, on
Tuesday, April 23, 2002 at 9:00 a.m. to:

1. Elect five directors by the holders of the Fund's common 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 March 1, 2002 are
entitled to vote at the meeting.

Forthe Board of Directors,

/s/ T. Brooks Beittel
T.Brooks Beittel
Secretary

March 1, 2002

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.

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 23, 2002 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 March 1, 2002
are entitled to notice of and to participate in the meeting. The Fund had
213,977,924 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 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 1, 2002. 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 are
elected to serve staggered three-year terms. At the meeting on April 23, 2002,
holders of common stock are entitled to elect three directors for a term ending
in 2005, one director for a term ending in 2004 and one director for a term
ending in 2003, in each case to serve until the annual meeting of shareholders
in that year or until his or her successor is 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.

Set forth below are the names and certain biographical information about the
director nominees, the continuing directors and the officers of the Fund.
Except as indicated in the table, directors are elected by the

holders of the Fund's common stock. The officers are elected at the annual
meeting of the board of directors of the Fund

Name, Position with the Fund,
Address Length of Time Served Principal Occupation During Past 5 Years
and Age and Term of Office and Other Affiliations
------- ----------------------- ----------------------------------------

Nominee--Interested Director

Claire V. Hansen (1)(2)(4). Chairman and Director Senior Advisor to the Board of Directors, Phoenix
55 East Monroe Street since January 1987 Investment Partners, Ltd. since November 1995;
Chicago, Illinois 60603 Nominee for a term President and Chief Executive Officer, Duff &
Age 76 expiring in 2005 Phelps Utilities Income Inc. January 2000-
February 2001; 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
Nominees--Independent Directors

Wallace B. Behnke (3)...... Director since January Consulting engineer since July 1989; prior thereto,
323 Glen Eagle 1987 Vice Chairman, Commonwealth Edison Company
Kiawah Island Nominee for a term (public utility)
South Carolina 29455 expiring in 2003
Age 76

Gordon B. Davidson (4)..... Director since January Of Counsel, Wyatt, Tarrant & Combs (law firm)
PNC Plaza 1989 since September 1995 (Chairman of the Executive
Louisville, Kentucky Nominee for a term Committee prior thereto); retired Director,
40202 expiring in 2004 BellSouth Corp.; former Chairman of the Board
Age 75 and Director, Trans Financial Advisers, Inc.

Connie K. Duckworth........ Nominee for a term Partner, Eight Wings Enterprises (investor in
77 Stone Gate Lane expiring in 2005 early-stage businesses) since December 2001;
Lake Forest, Illinois 60045 Advisory Director, Goldman, Sachs & Company,
Age 47 December 2000-December 2001 (Managing
Director, December 1996-December 2000, Partner
1990-1996, Chief Operating Officer of Firmwide
Diversity Committee 1990-1995); Chair, The
Committee of 200 (organization of women
business leaders)

Carl F. Pollard............ Nominee for a term Owner, Hermitage Farm L.L.C. (Thoroughbred
10500 W. U.S. Hwy 42 expiring in 2005 breeding) since January 1995; Chairman,
Goshen, Kentucky 40026 Columbia Healthcare Corporation 1993-1994;
Age 63 Chairman and Chief Executive Officer, Galen
Health Care, Inc. March-August 1993; President
and Chief Operating Officer, Humana Inc. 1991-

1993 (previously Senior Executive Vice President,
Executive Vice President and Chief Financial
Officer); Chairman and Director, Churchill Downs
Incorporated; Director, National City Bank,
Kentucky (Executive Committee), Breeders' Cup
Limited, Kentucky Derby Museum Corporation;
Trustee, Thoroughbred Owners and Breeders
Association
Continuing Directors--Independent Directors

Harry J. Bruce (3)....... Director since January Private investor; former Chairman and Chief
1630 Sheridan Road 1989 Executive Officer, Illinois Central Railroad Co.
Wilmette, Illinois 60091 Current term expires 2003
Age 70

Franklin A. Cole (2)(5).. Director since January Chairman, Croesus Corporation (private
54 West Hubbard Street 1989 management and investment company); former
Chicago, Illinois 60610 Current term expires 2004 Chairman and Chief Executive Officer, Amerifin
Age 75 Corporation (formerly named Walter E. Heller
International Corporation); Director, Aon
Corporation

Robert J. Genetski (5)(6) Director since April 2001 President, Robert Genetski & Associates, Inc.
195 North Harbor Drive Current term expires 2004 (economic and financial consulting firm) since
Chicago, Illinois 60601 1991; Senior Managing Director, Chicago Capital,
Age 59 Inc. (financial services firm) 1995-2001; former
Senior Vice President and Chief Economist,
Harris Trust & Savings Bank; author of several
books; regular contributor to the Nikkei Financial
Daily

Francis E. Jeffries...... Director since January Retired Chairman, Phoenix Investment Partners,
(1)(2)(4)(7) 1987 Ltd. since May 1997 (Chairman, November 1995-
8477 Bay Colony Drive Current term expires 2004 May 1997); Chairman and Chief Executive
Naples, Florida 34108 Officer, Duff & Phelps Corporation, June 1993-
Age 71 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, The Empire District Electric
Company

Nancy Lampton (4)(5)(6)... Director since October Chairman and Chief Executive Officer,
3 Riverfront Plaza 1994 Hardscuffle Inc. (insurance holding company) and
Louisville, Kentucky 40202 Current term expires 2003 Chairman and Chief Executive Officer, American
Age 59 Life and Accident Insurance Company of
Kentucky; Director, Constellation Energy Group,
Inc.

David J. Vitale (3)(5).... Director since April 2000 President and Chief Executive Officer, Board of
141 West Jackson Boulevard Current term expires 2003 Trade of the City of Chicago, Inc. since March
Chicago, Illinois 60604 2001; Retired bank executive 1999-2001; Vice
Age 55 Chairman and Director, Bank One Corporation,
1998-1999; Vice Chairman and Director, First
Chicago NBD Corporation, and President, The
First National Bank of Chicago, 1995-1998; Vice
Chairman, First Chicago Corporation and The
First National Bank of Chicago, 1993-1998
(Director, 1992-1998; Executive Vice President,
1986-1993); Director, Ariel Capital Management,
Inc., Ark Investment Management, Wheels Inc.
Officers of the Fund (other than the Chairman, for whom see above)

Nathan I. Partain......... President and Chief Executive Vice President, Duff & Phelps
55 East Monroe Street Executive Officer, since Investment Management Co. since January 1997;
Chicago, Illinois 60603 February 2001 (Executive Director of Utility Research, Phoenix Investment
Age 45 Vice President, Chief Partners, Ltd., 1989-1996 (Director of Equity
Investment Officer and Research, 1993-1996 and Director of Fixed
Assistant Secretary, April Income Research, 1993); Director, Otter Tail
1998-February 2001; Corporation
Senior Vice President,
Chief Investment Officer
and Assistant Secretary,
January-April 1998;
Senior Vice President and
Assistant Secretary,
January 1997-January
1998)

T. Brooks Beittel......... Secretary, Treasurer and Senior Vice President, Duff & Phelps Investment
55 East Monroe Street Senior Vice President, Management Co. since 1993 (Vice President
Chicago, Illinois 60603 since January 1995 1987-1993)
Age 51

Michael Schatt............ Senior Vice President Senior Vice President, Duff & Phelps Investment
55 East Monroe Street since April 1998 (Vice Management Co. since January 1997; Managing
Chicago, Illinois 60603 President, January 1997- Director, Phoenix Investment Partners, Ltd.,
Age 54 April 1998) 1994-1996

Joseph C. Curry, Jr....... Vice President since April Senior Vice President, J.J.B. Hilliard, W.L. Lyons,
Hilliard Lyons Center 1988 Inc. since 1994 (Vice President 1982-1994); Vice
Louisville, Kentucky 40202 President Hilliard Lyons Trust Company;
Age 57 President, Hilliard-Lyons Government Fund, Inc.;
Vice President, Treasurer and Secretary, Hilliard
Lyons Growth Fund, Inc.; Treasurer, Senbanc
Fund

Dianna P. Wengler......... Assistant Secretary since Vice President, J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center April 1988 since 1990; Vice President, Hilliard-Lyons
Louisville, Kentucky 40202 Government Fund, Inc.; Assistant Secretary,
Age 41 Hilliard Lyons Growth Fund, Inc.

--------
(1)Mr. Hansen is deemed to be an "interested person" of the Fund (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")) because of
his positions with the Fund and with Phoenix Investment Partners, Ltd.
("Phoenix Investment Partners"), parent company of Duff & Phelps Investment
Management Co., the Fund's investment adviser (the "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.
(7)Mr. Jeffries oversees 34 portfolios in the Fund Complex to which the Fund
belongs. Mr. Jeffries was formerly a shareholder and member of senior
management of Duff & Phelps Corporation, predecessor to Phoenix Investment
Partners. Under the terms of his employment contract, Phoenix Investment
Partners continued to pay through 2001 the annual premium on life insurance
policies owned by Mr. Jeffries. The amount of such premiums in 2000 and 2001
was $62,682 and $22,989, respectively. In 2000, Mr. Jeffries received
$283,554 for the repurchase of his common shares in Phoenix Investment
Partners and $228,850 for the purchase of outstanding unexercised options,
which transactions were effected at the then market value for such shares
and options.

During 2001, the board of directors held six meetings, the audit committee
met twice, the nominating committee met four times and the contracts committee
met twice. 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.

The following table provides certain information relating to the equity
securities beneficially owned by each director or director nominee as of
February 11, 2002, (i) in the Fund and (ii) on an aggregate basis, in any

registered investment companies overseen or to be overseen by the director or
nominee within the same family of investment companies as the Fund.

Aggregate Dollar Range
of Equity Securities in
All Funds Overseen or
to be Overseen by
Director or Nominee in
Name of Dollar Range of Equity Securities Family of Investment
Director or Nominee in the Fund Companies
------------------- --------------------------------- -----------------------

Interested Director
Claire V. Hansen over $100,000 over $100,000

Independent Directors (and Nominees)
Wallace B. Behnke $10,001-$50,000 $10,001-$50,000
Harry J. Bruce over $100,000 over $100,000
Franklin A. Cole $10,001-$50,000 $10,001-$50,000
Gordon B. Davidson over $100,000 over $100,000
Connie K. Duckworth none none
Robert J. Genetski $10,001-$50,000 $10,001-$50,000
Francis E. Jeffries over $100,000 over $100,000
Nancy Lampton over $100,000 over $100,000
Carl F. Pollard none none
David J. Vitale $10,001-$50,000 $10,001-$50,000

As of February 11, 2001, none of the foregoing directors or director
nominees, or their immediate family members, owned any securities of the
Adviser or any person (other than a registered investment company) directly or
indirectly controlling, controlled by or under common control with the Adviser.

The following table shows the compensation paid by the Fund to the Fund's
directors during 2001:

COMPENSATION TABLE(1)(2)

Aggregate
Compensation
from the
Name of Director Fund
---------------- ------------

Interested Director
Claire V. Hansen..... $ 0
Independent Directors
Wallace B. Behnke.... $39,429
Harry J. Bruce....... 33,500
Franklin A. Cole..... 44,500

Gordon B. Davidson.... 40,500
Francis E. Jeffries(2) 34,500
Nancy Lampton......... 37,500
David J. Vitale....... 42,571

--------
(1)Each director not affiliated with the Adviser receives an annual fee of
$22,500 (and an additional $3,000 if the director served as chairman of a
committee of the board of directors) plus an attendance fee of $1,500

for each meeting of the board of directors and $1,000 for each meeting 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 (as defined below) 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)During 2001, Mr. Jeffries received aggregate compensation of $135,000 for
service as a director of the Fund and as a director or trustee of 33 other
investment companies in the same fund complex as the Fund. No other director
received compensation for service as a director of any other investment
company in the same fund complex as the Fund.

The board of directors, including all of the independent directors,
unanimously recommends a vote "FOR" the election of the five nominees for
director named above.

2. SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

The board of directors has selected Arthur Andersen LLP ("Andersen") as
independent public accountants for the Fund until the annual meeting of
shareholders in 2003. The Board's selection was based on the recommendation of
the Fund's audit committee and is being submitted for ratification or rejection
by the shareholders. Andersen has served as independent public accountants for
the Fund since the Fund commenced operations. Before making its recommendation
that Andersen be selected as independent public accountants for the Fund for
the current year, the audit committee carefully considered Andersen's
qualifications for the position. This included a comprehensive review of the
quality of the work Andersen has performed for the Fund to date, the
qualifications of those individuals who will lead and serve on Andersen's
engagement team providing services to the Fund and the quality control
procedures that Andersen has established to govern its operations.

A representative of Andersen 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.

Audit Fees. Andersen billed aggregate fees of $48,700 for professional
services rendered for (i) the audit of the Fund's 2001 financial statements and
(ii) the review of the financial statements included in the Fund's semi-annual
report for the six months ended June 30, 2001.

Financial Information Systems Design and Implementation Fees. No fees were
billed by Andersen for professional services rendered during 2001 in connection
with financial information systems design and implementation.

All Other Fees. The aggregate of all other fees billed by Andersen for
professional services rendered during 2001 was $30,900. Those services included
quarterly reporting required by the rating agencies that rate the Fund's
preferred stock and commercial paper, review of 1940 Act filings, preparation
of income tax returns and other tax consultation services.

All audit and non-audit services provided by Andersen are approved by the
Fund's audit committee, which considers whether the provision of non-audit
services is compatible with maintaining Andersen's independence.

The board of directors unanimously 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.

OTHER INFORMATION

The Adviser and Phoenix Investment Partners. Duff & Phelps Investment
Management Co. serves as the Fund's investment adviser under an investment
advisory agreement (the "Advisory Agreement") dated May 1, 1998. The Adviser is
a wholly-owned subsidiary of Phoenix Investment Partners, which is an indirect,
wholly-owned subsidiary of The Phoenix Companies, Inc. Prior to May 11, 1998,
Phoenix Investment Partners was known as Phoenix Duff & Phelps Corporation. 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 $4.3 billion in client accounts under discretionary management.

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 ten professionals (i.e., research analysts
and portfolio managers), along with support staff, assigned to the operation of
the Fund. Eight of the ten 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 management 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. For purposes of
calculating the management fee, the Fund's net assets are defined as the sum of
(i) the aggregate net asset value of the Fund's common stock, (ii) the
aggregate liquidation preference of the Fund's preferred stock and (iii) the
aggregate proceeds of commercial paper issued by the Fund. The management fee
paid by the Fund to the Adviser for 2001 was $15,284,267.

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.

The Fund is also a party to a service agreement dated May 1, 1998 (the
"Service Agreement") with the Adviser and Phoenix Investment Partners. Under
the terms of the Service Agreement, Phoenix Investment Partners 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 Investment Partners assumes no responsibility,
except as described in the preceding sentence. The Adviser reimburses Phoenix
Investment Partners for any costs, direct or indirect, that are fairly
attributable to the services performed and the facilities provided by Phoenix
Investment Partners 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 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
Investment Partners, 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 Advisory Agreement.

At the annual meeting held on April 29, 1998, the Fund's shareholders
approved the Advisory Agreement for a two-year term beginning on May 1, 1998
and ending on April 30, 2000. At a meeting held on October 17, 1997, the Board
of Directors of the Fund, including all of the directors who were not
interested persons of the Fund or Phoenix Investment Partners in attendance at
the meeting voting separately as a class, approved the Service Agreement for a
two-year term beginning on May 1, 1998 and ending on April 30, 2000, contingent
on the above-referenced approval of the Advisory Agreement by the shareholders
of the Fund. Unless earlier terminated as described below, the Advisory
Agreement and the Service Agreement may be continued 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 Investment Partners, 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 the common stock and the preferred stock voting
together as a single class: (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. At meetings held on January 26, 2000,
February 23, 2001 and February 22, 2002, the Board of Directors of the Fund,
including all of the directors of the Fund who were not interested persons of
the Fund or the Adviser, in the case of the Advisory Agreement, or Phoenix
Investment Partners, in the case of the Service Agreement, in attendance at the
meeting voting separately as a class, voted to continue the Advisory Agreement
and the Service Agreement for an additional one-year term. Accordingly, the
term of these agreements currently extends to April 30, 2003.

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. 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 Investment Partners, approves
continuation of the Service Agreement.

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 May 1, 1998. 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 as investment adviser to Senbanc Fund, an open-end mutual
fund. The Administrator is a wholly-owned subsidiary of The PNC Financial
Services Group, 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 in excess of $1.0 billion. For purposes of
calculating the administrative fee, the Fund's net assets are defined as the
sum of (i) the aggregate net asset value of the Fund's common stock, (ii) the
aggregate liquidation preference of the Fund's preferred stock and (iii) the
aggregate proceeds of commercial paper issued by the Fund. The total
administrative fee paid by the Fund to the Administrator for 2001 was
$3,806,813.

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.

At a meeting held on October 17, 1997, the board of directors of the Fund,
including all of the directors who were not interested persons of the Fund or
the Administrator in attendance at the meeting voting separately as a class,
approved the Administration Agreement for a two-year term beginning on May 1,
1998 and ending on April 30, 2000, contingent on approval of the Advisory
Agreement by the shareholders of the Fund (which approval was granted at the
annual meeting held on April 29, 1998). Unless earlier terminated as described
below, the Administration Agreement may be continued 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. At meetings held on January 26,
2000, February 23, 2001 and February 22, 2002, the Board of Directors of the
Fund, including all of the directors of the Fund who were not interested
persons of the Fund or the Administrator in attendance at the meeting voting
separately as a class, voted to continue the Administration Agreement for an
additional one-year term. Accordingly, the term of this agreement currently
extends to April 30, 2003.

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 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 (the "1934
Act")), 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. The Adviser does not engage brokers whose
commissions it believes to be unreasonable in relation to services provided. 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 2001, the Fund paid brokerage commissions aggregating $9,015,619 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.

Shareholders. The following table shows shares of common stock of the Fund
as to which each director, each nominee for director, and all directors and
officers of the Fund as a group, had or shared power over voting or disposition
at December 31, 2001. 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.

Shares of
common stock
------------

Wallace B. Behnke (1)................................ 2,793
Harry J. Bruce....................................... 21,095
Franklin A. Cole (1)................................. 3,264
Gordon B. Davidson (2)............................... 22,000
Connie K. Duckworth.................................. 0
Robert J. Genetski................................... 3,000
Claire V. Hansen (2)................................. 28,810
Francis E. Jeffries (2).............................. 75,097
Nancy Lampton (1)(2)................................. 56,631
Carl F. Pollard...................................... 0
David J. Vitale...................................... 1,000
Directors and officers as a group (14 persons) (1)(2) 229,862

--------
(1)Messrs. Behnke and Cole and Ms. Lampton had shared power to vote and/or
dispose of 2,793, 3,264 and 50,500, respectively, of the shares listed. The
directors and officers had shared power to vote and/or dispose of 61,849, in
the aggregate, of the shares listed as owned by the directors and officers
as a group.
(2)Messrs. Davidson, Hansen and Jeffries and Ms. Lampton disclaim beneficial
ownership of 7,000, 10,020, 8,553 and 51,200, respectively, of the shares
listed. The directors and officers disclaim beneficial ownership of 82,065,
in the aggregate, of the shares listed as owned by the directors and
officers as a group.

At March 1, 2001, 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 1934 Act).

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the 1934 Act 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 a review of the copies of Section 16(a) forms furnished
to the Fund, or written representations that no Forms 5 were required, the Fund
believes that during 2001 all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners were complied
with.

Report of the Audit Committee. The audit committee is composed of three
directors and acts under a written charter adopted by the board of directors on
April 25, 2000. A copy of the charter was attached as Appendix A to the Fund's
proxy statement dated March 1, 2001. Each of the members of the audit committee
is independent as defined in the listing standards of the New York Stock
Exchange. In connection with the audit of the Fund's 2001 audited financial
statements, the audit committee: (1) reviewed and discussed the Fund's 2001
audited financial statements with management, (2) discussed with the
independent public accountants the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees, as

amended, (3) received and reviewed the written disclosures and the letter from
the independent public accountants required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees, as amended, and
(4) discussed with the independent public accountants their independence from
the Fund and its management. Based on the foregoing reviews and discussions,
the audit committee recommended to the board of directors that the financial
statements referred to above be included in the Fund's Annual Report to
Shareholders for filing with the Securities and Exchange Commission.

The Audit Committee

David J. Vitale, Chairman
Wallace B. Behnke
Harry J. Bruce

Future Name Change. On February 22, 2002, the board of directors of the Fund
voted to change the name of the Fund, effective on April 23, 2002, following
the annual meeting of shareholders. Under the laws of Maryland, where the Fund
is incorporated, the name change will not require a shareholder vote. The name
change is being made in response to a new rule that the Securities and Exchange
Commission ("SEC") has recently adopted. Under the new SEC rule, a fund whose
name suggests investment in a certain industry is required to adopt a policy to
invest at least 80% of the value of its assets in that particular industry.
While your Fund currently has over 80% of its assets invested in companies in
the public utilities industry, historically the Fund's investment policy has
only required 65% of the Fund's assets to be invested in the utilities
industry. Your Board of Directors believes that it would not be in the best
interests of the Fund to increase that minimum level from 65% to 80% at the
present time. Instead, the Board has decided to change the name of the Fund to
"DNP Select Income Fund Inc." This new name will enable the Fund to maintain
its existing investment allocation policy and thereby preserve its current
flexibility to pursue its primary objectives of current income and long-term
growth of income, through investments made both inside and outside of the
utilities industry.

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
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 $20,000, 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 2003 annual
meeting of shareholders should be received by the Secretary of the Fund no
later than November 1, 2002. Under the circumstances described in, and upon
compliance with, Rule 14a-4(c) under the 1934 Act, the Fund may solicit proxies
in connection with the 2003 annual meeting which confer discretionary authority
to vote on any shareholder proposals of which the Secretary of the Fund does
not receive notice by January 15, 2003.

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, 2001 and the Fund's semi-annual report for the six months
ended June 30, 2001. Requests for copies of such reports should be directed to
the Administrator at (888) 878-7845 (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 1, 2002

DUFF & PHELPS UTILITIES INCOME INC.

PROXY SOLICITED BY MANAGEMENT FROM COMMON SHAREHOLDERS
FOR MEETING TO BE HELD ON APRIL 23, 2002

Robert J. Genetski, Nancy Lampton and David J. Vitale 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 23, 2002, and at any adjournment of the
meeting. They shall vote in accordance with the instructions set forth on the
reverse side hereof.

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.)

DUFF & PHELPS UTILITIES INCOME INC.
P.O. BOX 11435
NEW YORK, NY 10203-0435

Please Vote, Date, and
Sign and Return Promptly Votes must be indicated
---- in the Enclosed Envelope ---- (x) in Black or Blue ink

Your Board of Directors unanimously recommends a vote "FOR" each of the
following proposals.

1. Election of Directors:

FOR ALL WITHHOLD *EXCEPTIONS
--- FOR ALL --- ---

Nominees: Wallace B. Behnke, Gordon B. Davidson, Connie K. Duckworth,
Claire V. Hansen and Carl F. Pollard

(INSTRUCTIONS: To withhold authority to vote for any nominee, mark the
"Exceptions" box and write the name of that nominee in the space provided
below.)

*Exceptions
---------------------------------------------------------------------

2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants of the Fund.

FOR AGAINST ABSTAIN
--- --- ---

To change your address, please mark this box.
---

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.

Date:
------------------------------------------------------

------------------------------------------------------------
Share Owner sign here

------------------------------------------------------------
Co-Owner sign here

DUFF & PHELPS UTILITIES INCOME INC.

PROXY SOLICITED BY MANAGEMENT FROM PREFERRED SHAREHOLDERS
FOR MEETING TO BE HELD ON APRIL 23, 2002

Robert J. Genetski, Nancy Lampton and David J. Vitale 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 23, 2002, 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" the following
proposal.

1.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"
proposal 1 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 , 2002 (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.