<PAGE>
Filed Pursuant to Rule 497(b)
Registration File No.: 333-73171
MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(800) 869-NEWS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 1999
TO THE SHAREHOLDERS OF MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND:
Notice is hereby given of a Special Meeting of the Shareholders of Morgan
Stanley Dean Witter Mid-Cap Growth Fund ("MSDW Mid-Cap") to be held in
Conference Room A, Forty-Fourth Floor, Two World Trade Center, New York, New
York 10048, at 11:00 a.m., New York time, on June 8, 1999, and any adjournments
thereof (the "Meeting"), for the following purposes:
1. To consider and vote upon an Agreement and Plan of Reorganization, dated
February 25, 1999 (the "Reorganization Agreement"), between MSDW Mid-Cap
and TCW/DW Mid-Cap Equity Trust ("TCW/DW Mid-Cap"), pursuant to which
substantially all of the assets of MSDW Mid-Cap would be combined with
those of TCW/DW Mid-Cap and shareholders of MSDW Mid-Cap would become
shareholders of TCW/DW Mid-Cap receiving shares of TCW/DW Mid-Cap with a
value equal to the value of their holdings in MSDW Mid-Cap (the
"Reorganization"). The proposed Reorganization, even if approved by
shareholders of MSDW Mid-Cap, is contingent upon implementation of
proposals pursuant to which (1) Morgan Stanley Dean Witter Advisors Inc.
would become the investment manager for TCW/DW Mid-Cap; (2) TCW Funds
Management, Inc. would become sub-advisor for TCW/DW Mid-Cap; and (3)
TCW/DW Mid-Cap would become a member of the Morgan Stanley Dean Witter
family of funds (collectively, the "TCW/DW Mid-Cap Conversion
Transaction"). Implementation of the TCW/DW Mid-Cap Conversion Transaction
is subject to approval by shareholders of TCW/DW Mid-Cap. Subsequent to the
TCW/DW Mid-Cap Conversion Transaction, TCW/DW Mid-Cap will change its name
to "Morgan Stanley Dean Witter Mid-Cap Equity Trust."
2. To act upon such other matters as may properly come before the Meeting.
The Reorganization is more fully described in the accompanying Proxy
Statement and Prospectus and a copy of the Reorganization Agreement is attached
as Exhibit A thereto. Shareholders of record at the close of business on March
26, 1999 are entitled to notice of, and to vote at, the Meeting. Please read
the Proxy Statement and Prospectus carefully before telling us, through your
proxy or in person, how you wish your shares to be voted. THE BOARD OF TRUSTEES
OF MSDW MID-CAP RECOMMENDS YOU VOTE IN FAVOR OF THE REORGANIZATION. WE URGE YOU
TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY. Alternatively, if you are
eligible to vote telephonically by touchtone telephone or electronically on the
Internet (as discussed in the enclosed Proxy Statement and Prospectus), you may
do so in lieu of attending the Meeting in person.
By Order of the Board of Trustees,
BARRY FINK,
Secretary
April 12, 1999
- --------------------------------------------------------------------------------
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM BE REPRESENTED AT THE MEETING. THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. CERTAIN
SHAREHOLDERS WILL BE ABLE TO VOTE TELEPHONICALLY BY TOUCHTONE TELEPHONE OR
ELECTRONICALLY ON THE INTERNET BY FOLLOWING INSTRUCTIONS CONTAINED ON THEIR
PROXY CARDS OR ON THE ENCLOSED VOTING INSTRUCTION CARD.
- --------------------------------------------------------------------------------
<PAGE>
TCW/DW MID-CAP EQUITY TRUST
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(800) 869-NEWS
ACQUISITION OF THE ASSETS OF
MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND
BY AND IN EXCHANGE FOR SHARES OF
TCW/DW MID-CAP EQUITY TRUST
This Proxy Statement and Prospectus is being furnished to shareholders of
Morgan Stanley Dean Witter Mid-Cap Growth Fund ("MSDW Mid-Cap") in connection
with an Agreement and Plan of Reorganization, dated February 25, 1999 (the
"Reorganization Agreement"), pursuant to which substantially all of the assets
of MSDW Mid-Cap will be combined with those of TCW/DW Mid-Cap Equity Trust
("TCW/DW Mid-Cap") in exchange for shares of TCW/DW Mid-Cap (the
"Reorganization"). As a result of this transaction, shareholders of MSDW
Mid-Cap will become shareholders of TCW/DW Mid-Cap and will receive shares of
TCW/DW Mid-Cap with a value equal to the value of their holdings in MSDW
Mid-Cap. The Reorganization, even if approved by shareholders of MSDW Mid-Cap,
is contingent upon implementation of proposals pursuant to which (1) Morgan
Stanley Dean Witter Advisors Inc. ("MSDW Advisors" or the "Investment Manager")
would become the investment manager for TCW/DW Mid-Cap; (2) TCW Funds
Management, Inc. ("TCW") would become sub-advisor for TCW/DW Mid-Cap; and (3)
TCW/DW Mid-Cap would become a member of the Morgan Stanley Dean Witter family
of funds (collectively, the "TCW/DW Mid-Cap Conversion Transaction").
Implementation of the TCW/DW Mid-Cap Conversion Transaction is subject to
approval by shareholders of TCW/DW Mid-Cap. Subsequent to the TCW/DW Mid-Cap
Conversion Transaction, TCW/DW Mid-Cap will change its name to "Morgan Stanley
Dean Witter Mid-Cap Equity Trust."
The terms and conditions of the proposed Reorganization are more fully
described in this Proxy Statement and Prospectus and in the Reorganization
Agreement between MSDW Mid-Cap and TCW/DW Mid-Cap, attached hereto as Exhibit
A. The address of MSDW Mid-Cap is that of TCW/DW Mid-Cap set forth above. This
Proxy Statement also constitutes a Prospectus of TCW/DW Mid-Cap, which is dated
April 12, 1999, filed by TCW/DW Mid-Cap with the Securities and Exchange
Commission (the "Commission") as part of its Registration Statement on Form
N-14 (the "Registration Statement").
TCW/DW Mid-Cap is an open-end diversified management investment company
whose investment objective is long-term capital appreciation. The fund seeks to
achieve its investment objective by investing primarily in equity securities
issued by medium-sized companies whose market capitalizations, at the time of
acquisition, are within the capitalization range of the companies comprising
the Standard & Poor's Mid-Cap 400 Index (approximately between $192 million and
$11.7 billion as of February 26, 1999) and that, in the opinion of TCW, exhibit
superior earnings growth prospects and attractive stock market valuations.
This Proxy Statement and Prospectus sets forth concisely information about
TCW/DW Mid-Cap that shareholders of MSDW Mid-Cap should know before voting on
the Reorganization Agreement. A copy of the Prospectus of TCW/DW Mid-Cap dated
March 29, 1999, is attached as Exhibit B and incorporated herein by reference.
Also enclosed and incorporated herein by reference is TCW/DW Mid-Cap's Annual
Report for the fiscal year ended November 30, 1998. A Statement of Additional
Information relating to the Reorganization, described in this Proxy Statement
and Prospectus (the "Additional Statement"), dated April 12, 1999, has been
filed with the Commission and is also incorporated herein by reference. Also
incorporated herein by reference are MSDW Mid-Cap's Prospectus, dated July 29,
1998, and Annual Report for its fiscal year ended May 31, 1998 and the
succeeding unaudited Semi-Annual Report for the six months ended November 30,
1998. Such documents are available without charge by calling (800) 869-NEWS
(TOLL FREE).
Investors are advised to read and retain this Proxy Statement and Prospectus
for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THIS PROXY STATEMENT AND PROSPECTUS IS DATED APRIL 12, 1999.
<PAGE>
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION ............................................................. 1
General ................................................................ 1
Record Date; Share Information ......................................... 2
Proxies ................................................................ 2
Expenses of Solicitation ............................................... 3
Vote Required .......................................................... 3
SYNOPSIS ................................................................. 4
The Reorganization ..................................................... 4
Fee Table .............................................................. 4
Tax Consequences of the Reorganization ................................. 8
Comparison of MSDW Mid-Cap and TCW/DW Mid-Cap .......................... 8
PRINCIPAL RISK FACTORS ................................................... 11
THE REORGANIZATION ....................................................... 12
The Proposal ........................................................... 12
The Board's Consideration .............................................. 12
The Reorganization Agreement ........................................... 13
Tax Aspects of the Reorganization ...................................... 15
Description of Shares .................................................. 16
Capitalization Table (unaudited) ....................................... 17
Appraisal Rights ....................................................... 17
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS ........... 17
Investment Objectives and Policies ..................................... 17
Investment Restrictions ................................................ 19
ADDITIONAL INFORMATION ABOUT MSDW MID-CAP AND TCW/DW MID-CAP .............
General ................................................................ 20
Financial Information .................................................. 20
Management ............................................................. 20
Description of Securities and Shareholder Inquiries .................... 20
Dividends, Distributions and Taxes ..................................... 20
Purchases, Repurchases and Redemptions ................................. 20
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE .............................. 20
FINANCIAL STATEMENTS AND EXPERTS ......................................... 21
LEGAL MATTERS ............................................................ 21
AVAILABLE INFORMATION .................................................... 21
OTHER BUSINESS ........................................................... 22
Exhibit A - Agreement and Plan of Reorganization, dated
February 25, 1999, by and between MSDW Mid-Cap and TCW/DW Mid-Cap ...... A-1
Exhibit B - Prospectus of TCW/DW Mid-Cap dated March 29, 1999 ............ B-1
</TABLE>
<PAGE>
MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(800) 869-NEWS
--------------------
PROXY STATEMENT AND PROSPECTUS
--------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 1999
INTRODUCTION
GENERAL
This Proxy Statement and Prospectus is being furnished to the shareholders
of Morgan Stanley Dean Witter Mid-Cap Growth Fund ("MSDW Mid-Cap"), an open-end
diversified management investment company, in connection with the solicitation
by the Board of Trustees of MSDW Mid-Cap (the "Board") of proxies to be used at
the Special Meeting of Shareholders of MSDW Mid-Cap to be held in Conference
Room A, Forty-Fourth Floor, Two World Trade Center, New York, New York 10048 at
11:00 A.M., New York time, on June 8, 1999, and any adjournments thereof (the
"Meeting"). It is expected that the mailing of this Proxy Statement and
Prospectus will be made on or about April 12, 1999.
At the Meeting, MSDW Mid-Cap shareholders ("Shareholders") will consider
and vote upon an Agreement and Plan of Reorganization, dated February 25, 1999
(the "Reorganization Agreement"), between MSDW Mid-Cap and TCW/DW Mid-Cap
Equity Trust ("TCW/DW Mid-Cap") pursuant to which substantially all of the
assets of MSDW Mid-Cap will be combined with those of TCW/DW Mid-Cap in
exchange for shares of TCW/DW Mid-Cap. As a result of this transaction,
Shareholders will become shareholders of TCW/DW Mid-Cap and will receive shares
of TCW/DW Mid-Cap equal to the value of their holdings in MSDW Mid-Cap on the
date of such transaction (the "Reorganization"). Pursuant to the
Reorganization, each Shareholder will receive the class of shares of TCW/DW
Mid-Cap that corresponds to the class of shares of MSDW Mid-Cap currently held
by that Shareholder. Accordingly, as a result of the Reorganization, each Class
A, Class B, Class C and Class D Shareholder of MSDW Mid-Cap will receive Class
A, Class B, Class C and Class D shares of TCW/DW Mid-Cap, respectively. The
shares to be issued by TCW/DW Mid-Cap pursuant to the Reorganization (the
"TCW/DW Mid-Cap Shares") will be issued at net asset value without an initial
sales charge. Further information relating to TCW/DW Mid-Cap is set forth
herein and in TCW/DW Mid-Cap's current Prospectus, dated March 29, 1999
("TCW/DW Mid-Cap's Prospectus"), attached to this Proxy Statement and
Prospectus and incorporated herein by reference. The Reorganization, even if
approved by shareholders of MSDW Mid-Cap, is contingent upon implementation of
proposals pursuant to which (1) Morgan Stanley Dean Witter Advisors Inc. ("MSDW
Advisors" or the "Investment Manager") would become the investment manager for
TCW/DW Mid-Cap; (2) TCW Funds Management, Inc. ("TCW") would become sub-advisor
for TCW/DW Mid-Cap; and (3) TCW/DW Mid-Cap would become a member of the Morgan
Stanley Dean Witter family of funds (collectively, the "TCW/DW Mid-Cap
Conversion Transaction"). Implementation of the TCW/DW Mid-Cap Conversion
Transaction is subject to approval by shareholders of TCW/DW Mid-Cap. Upon
effectiveness of the TCW/DW Mid-Cap Conversion Transaction, TCW/DW Mid-Cap will
change its name to "Morgan Stanley Dean Witter Mid-Cap Equity Trust."
<PAGE>
The information concerning MSDW Mid-Cap contained herein has been supplied
by MSDW Mid-Cap and the information concerning TCW/DW Mid-Cap contained herein
has been supplied by TCW/DW Mid-Cap.
RECORD DATE; SHARE INFORMATION
The Board has fixed the close of business on March 26, 1999 as the record
date (the "Record Date") for the determination of the Shareholders entitled to
notice of, and to vote at, the Meeting. As of the Record Date, there were
36,897,606 shares of MSDW Mid-Cap issued and outstanding. Shareholders on the
Record Date are entitled to one vote per share on each matter submitted to a
vote at the Meeting. A majority of the outstanding shares entitled to vote,
represented in person or by proxy, will constitute a quorum at the Meeting.
The following persons were known to own of record or beneficially 5% or
more of the outstanding shares of a Class of MSDW Mid-Cap as of the Record
Date: Class A -- Morgan Stanley Dean Witter Trust FSB (MSDW Trust), TTEE, Art
Soune Inc. 401(k) Plan, P.O. Box 957, Jersey City, NJ 07303-0957 (10.929%),
Beatus Pension Trust, U/A Dtd 3/1/71 BL Beatus MD, TTEE, 55 Humphreys Center,
Suite 300, Memphis, TN 38120-2367 (7.647%) and MSDW Trust, TTEE, Del Campo
Baking Company Inc., Salary Reduction, Profit Sharing Plan, P.O. Box 957,
Jersey City, NJ 07303-0957 (5.298%); and Class D -- Hare & Co., c/o The Bank of
New York, P.O. Box 11203, New York, NY 10286-1203 (82.042%). As of the Record
Date, the trustees and officers of MSDW Mid-Cap, as a group, owned less than 1%
of the outstanding shares of MSDW Mid-Cap.
The following persons were known to own of record or beneficially 5% or
more of the outstanding shares of a Class of TCW/DW Mid-Cap as of the Record
Date: Class A -- Reed A. Larson & Joyce A. Larson, JTWROS, N7766 Highway 26,
Watertown, WI 53094-9440 (9.5%) and Blush & Co., P.O. Box 976, New York, NY
10268-0976 (7.1%); Class C -- Adam J. Gilburne, 5104 Greystone Way, Birmingham,
AL 35242-7200 (6.0%); and Class D -- Morgan Stanley Dean Witter Advisors Inc.,
Attn: Maurice Bendrihem, Two World Trade Center, New York, NY 10048-0203
(42.2%) and Resources Trust Company, TTEE, U/A IRA 04/08/97 FBO Freeman A.
Machado, P.O. Box 5900, Denver, CO 80217-5900 (57.7%). As of the Record Date,
the trustees and officers of TCW/DW Mid-Cap, as a group, owned less than 1% of
the outstanding shares of TCW/DW Mid-Cap.
PROXIES
The enclosed form of proxy, if properly executed and returned, will be
voted in accordance with the choice specified thereon. The proxy will be voted
in favor of the Reorganization Agreement unless a choice is indicated to vote
against or to abstain from voting on the Reorganization Agreement. The Board
knows of no business, other than that set forth in the Notice of Special
Meeting of Shareholders, to be presented for consideration at the Meeting.
However, the proxy confers discretionary authority upon the persons named
therein to vote as they determine on other business, not currently
contemplated, which may come before the Meeting. Abstentions and, if
applicable, broker "non-votes" will not count as votes in favor of the
Reorganization Agreement, and broker "non-votes" will not be deemed to be
present at the meeting for purposes of determining whether the Reorganization
Agreement has been approved. 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. If a Shareholder executes
and returns a proxy but fails to indicate how the votes should be cast, the
proxy will be voted in favor of the Reorganization Agreement. The proxy may be
revoked at any time prior to the voting thereof by any of the following: (i)
written notice of revocation to the Secretary of MSDW Mid-Cap at Two World
Trade Center, New York, New York 10048; (ii) attending the Meeting and voting
in person; or (iii) signing and returning (whether by mail or, as discussed
below, by touchtone telephone or the Internet) a new proxy (if returned and
received in time to be voted). Attendance at the Meeting will not in and of
itself revoke a proxy.
2
<PAGE>
In the event that the necessary quorum to transact business or the vote
required to approve or reject the Reorganization Agreement is not obtained at
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies. Any such adjournment
will require the affirmative vote of the holders of a majority of shares of
MSDW Mid-Cap present in person or by proxy at the Meeting. The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of the Reorganization Agreement and will vote against
any such adjournment those proxies required to be voted against the
Reorganization Agreement.
EXPENSES OF SOLICITATION
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement and Prospectus, will be borne by MSDW Mid-Cap
which expenses are expected to approximate $220,000. MSDW Mid-Cap and TCW/DW
Mid-Cap will bear all of their respective other expenses associated with the
Reorganization. In addition to the solicitation of proxies by mail, proxies may
be solicited by officers of MSDW Mid-Cap, and officers and regular employees of
MSDW Advisors and Morgan Stanley Dean Witter Trust FSB ("MSDW Trust"), an
affiliate of MSDW Advisors, personally or by mail, telephone, telegraph or
otherwise, without compensation therefor. Brokerage houses, banks and other
fiduciaries may be requested to forward soliciting material to the beneficial
owners of shares and to obtain authorization for the execution of proxies.
Shareholders whose shares are registered with MSDW Trust will be able to
vote their shares by touchtone telephone or by Internet by following the
instructions on the proxy card or on the Voting Information Card accompanying
this Proxy Statement and Prospectus. To vote by touchtone telephone,
Shareholders can call the toll-free number 1-800-690-6903. To vote by Internet,
Shareholders can access the websites www.msdwt.com or www.proxyvote.com.
Telephonic and Internet voting with MSDW Trust presently are not available to
Shareholders whose shares are held in street name.
In certain instances, MSDW Trust may call Shareholders to ask if they
would be willing to have their votes recorded by telephone. This telephone
voting procedure is designed to authenticate Shareholders' identities, to allow
Shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been recorded
properly. No recommendation will be made as to how a Shareholder should vote on
the Reorganization Agreement other than to refer to the recommendation of the
Board. MSDW Mid-Cap has been advised by counsel that these procedures are
consistent with the requirements of applicable law. Shareholders voting by
telephone in this manner will be asked for their social security number or
other identifying information and will be given an opportunity to authorize
proxies to vote their shares in accordance with their instructions. To ensure
that the Shareholders' instructions have been recorded correctly, they will
receive a confirmation of their instructions in the mail. A special toll-free
number will be available in case the information contained in the confirmation
is incorrect. Although a Shareholder's vote may be taken by telephone, each
Shareholder will receive a copy of this Proxy Statement and Prospectus and may
vote by mail using the enclosed proxy card or by touchtone telephone or the
Internet as set forth above. The last proxy vote received in time to be voted,
whether by proxy card, touchtone telephone or Internet will be the vote that is
counted and will revoke all previous votes by the shareholder.
VOTE REQUIRED
Approval of the Reorganization Agreement by the Shareholders requires the
affirmative vote of a majority (i.e., more than 50%) of the shares of MSDW
Mid-Cap represented in person or by proxy and entitled to vote at the Meeting,
provided a quorum is present at the Meeting. If the Reorganization Agreement is
not approved by Shareholders, MSDW Mid-Cap will continue in existence and the
Board will consider alternative actions.
3
<PAGE>
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus. This synopsis
is only a summary and is qualified in its entirety by the more detailed
information contained or incorporated by reference in this Proxy Statement and
Prospectus and the Reorganization Agreement. Shareholders should carefully
review this Proxy Statement and Prospectus and the Reorganization Agreement in
their entirety and, in particular, TCW/DW Mid-Cap's Prospectus, which is
attached to this Proxy Statement and Prospectus and incorporated herein by
reference.
THE REORGANIZATION
The Reorganization Agreement provides for the transfer of substantially
all the assets of MSDW Mid-Cap, subject to stated liabilities, to TCW/DW
Mid-Cap in exchange for the TCW/DW Mid-Cap Shares. The aggregate net asset
value of the TCW/DW Mid-Cap Shares issued in the exchange will equal the
aggregate value of the net assets of MSDW Mid-Cap received by TCW/DW Mid-Cap.
On or after the closing date scheduled for the Reorganization (the "Closing
Date"), MSDW Mid-Cap will distribute the TCW/DW Mid-Cap Shares received by MSDW
Mid-Cap to Shareholders as of the Valuation Date (as defined below under "The
Reorganization Agreement") in complete liquidation of MSDW Mid-Cap and MSDW
Mid-Cap will thereafter be dissolved and deregistered under the Investment
Company Act of 1940, as amended (the "1940 Act"). As a result of the
Reorganization, each Shareholder will receive that number of full and
fractional TCW/DW Mid-Cap Shares equal in value to such Shareholder's pro rata
interest in the net assets of MSDW Mid-Cap transferred to TCW/DW Mid-Cap.
Pursuant to the Reorganization, each Shareholder will receive the class of
shares of TCW/DW Mid-Cap that corresponds to the class of shares of MSDW
Mid-Cap currently held by that Shareholder. Accordingly, as a result of the
Reorganization, each Class A, Class B, Class C and Class D Shareholder of MSDW
Mid-Cap will become holders of Class A, Class B, Class C and Class D shares of
TCW/DW Mid-Cap, respectively. Shareholders holding their shares of MSDW Mid-Cap
in certificate form will be asked to surrender their certificates in connection
with the Reorganization. Shareholders who do not surrender their certificates
prior to the Closing Date will still receive their shares of TCW/DW Mid-Cap
(showing its new name Morgan Stanley Dean Witter Mid-Cap Equity Trust);
however, such Shareholders will not be able to redeem, transfer or exchange the
TCW/DW Mid-Cap Shares received until the old certificates have been
surrendered. The Board has determined that the interests of Shareholders will
not be diluted as a result of the Reorganization.
FOR THE REASONS SET FORTH BELOW UNDER "THE REORGANIZATION -- THE BOARD'S
CONSIDERATION," THE BOARD, INCLUDING THE TRUSTEES WHO ARE NOT "INTERESTED
PERSONS" OF MSDW MID-CAP ("INDEPENDENT TRUSTEES"), AS THAT TERM IS DEFINED IN
THE 1940 ACT, HAS CONCLUDED THAT THE REORGANIZATION IS IN THE BEST INTERESTS OF
MSDW MID-CAP AND ITS SHAREHOLDERS AND RECOMMENDS APPROVAL OF THE REORGANIZATION
AGREEMENT.
FEE TABLE
MSDW Mid-Cap and TCW/DW Mid-Cap each pay expenses for management of their
assets, distribution of their shares and other services, and those expenses are
reflected in the net asset value per share of each fund. The following table
illustrates expenses and fees that each class of shares of MSDW Mid-Cap
incurred during the twelve month period ended November 30, 1998. With respect
to TCW/DW Mid-Cap, the table sets forth expenses and fees based on the fund's
November 30, 1998 fiscal year end. The table also sets forth pro forma fees for
the surviving combined fund (TCW/DW Mid-Cap) reflecting what the fee schedule
would have been on November 30, 1998, if the Reorganization had been
consummated twelve (12) months prior to that date.
4
<PAGE>
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
MSDW TCW/DW PRO FORMA
MID-CAP MID-CAP COMBINED
------- ------- --------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFERING PRICE)
Class A ..................................... 5.25%(1) 5.25%(1) 5.25%(1)
Class B ..................................... none none none
Class C ..................................... none none none
Class D ..................................... none none none
MAXIMUM SALES CHARGE IMPOSED ON REINVESTED
DIVIDENDS
Class A ..................................... none none none
Class B ..................................... none none none
Class C ..................................... none none none
Class D ..................................... none none none
MAXIMUM CONTINGENT DEFERRED SALES CHARGE (AS
A PERCENTAGE OF THE LESSER OF ORIGINAL
PURCHASE PRICE OR REDEMPTION PROCEEDS)
Class A ..................................... none(2) none(2) none(2)
Class B ..................................... 5.00%(3) 5.00%(3) 5.00%(3)
Class C ..................................... 1.00%(4) 1.00%(4) 1.00%(4)
Class D ..................................... none none none
REDEMPTION FEES
Class A ..................................... none none none
Class B ..................................... none none none
Class C ..................................... none none none
Class D ..................................... none none none
EXCHANGE FEE
Class A ..................................... none none none
Class B ..................................... none none none
Class C ..................................... none none none
Class D ..................................... none none none
</TABLE>
Annual Fund Operating Expenses As a Percentage of Average Net Assets
<TABLE>
<CAPTION>
MSDW TCW/DW PRO FORMA
MID-CAP MID-CAP COMBINED
------- ------- --------
<S> <C> <C> <C>
MANAGEMENT AND ADVISORY FEE(5)
Class A ..................................... 0.75% 1.00% 0.74%
Class B ..................................... 0.75% 1.00% 0.74%
Class C ..................................... 0.75% 1.00% 0.74%
Class D ..................................... 0.75% 1.00% 0.74%
12B-1 FEES(6)(7)
Class A ..................................... 0.25% 0.25% 0.25%
Class B ..................................... 1.00% 0.90% 1.00%
Class C ..................................... 1.00% 1.00% 1.00%
Class D ..................................... none none none
OTHER EXPENSES
Class A ..................................... 0.20% 0.30% 0.20%
Class B ..................................... 0.20% 0.30% 0.20%
Class C ..................................... 0.20% 0.30% 0.20%
Class D ..................................... 0.20% 0.30% 0.20%
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
MSDW TCW/DW PRO FORMA
MID-CAP MID-CAP COMBINED
------- ------- --------
<S> <C> <C> <C>
TOTAL FUND OPERATING EXPENSES (5)
Class A ..................................... 1.20% 1.55% 1.19%
Class B ..................................... 1.95% 2.20% 1.94%
Class C ..................................... 1.95% 2.30% 1.94%
Class D ..................................... 0.95% 1.30% 0.94%
</TABLE>
- ----------
(1) Reduced for purchases of $25,000 and over (see "Purchase of Fund Shares
-- Initial Sales Charge Alternative -- Class A Shares" in MSDW Mid-Cap's
Prospectus and "Share Class Arrangements" in TCW/DW Mid-Cap's
Prospectus).
(2) Investments that are not subject to any sales charge at the time of
purchase are subject to a Contingent Deferred Sales Charge ("CDSC") of
1.00% that will be imposed on redemptions made within one year after
purchase, except for certain specific circumstances (see "Purchases,
Exchanges and Redemptions" below, "Purchase of Fund Shares -- Initial
Sales Charge Alternative -- Class A Shares" in MSDW Mid-Cap's Prospectus
and "Share Class Arrangements" in TCW/DW Mid-Cap's Prospectus).
(3) The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter.
(4) Only applicable to redemptions made within one year after purchase (see
"Purchases, Exchanges and Redemptions" below, "Purchase of Fund Shares --
Level Load Alternative -- Class C Shares" in MSDW Mid-Cap's Prospectus
and "Share Class Arrangements" in TCW/DW Mid-Cap's Prospectus).
(5) The Pro Forma Combined rate reflects the anticipated lower advisory fee
of TCW/DW Mid-Cap obtained by the effect of (i) a lower advisory fee
payable to MSDW Advisors as a result of the TCW/DW Mid-Cap Conversion
Transaction and (ii) having additional assets at a lower breakpoint in
the advisory fee upon the combination of the two funds based upon MSDW
Mid-Cap's average net assets for the fiscal year ended May 31, 1998 and
TCW/DW Mid-Cap's average net assets for the fiscal year ended November
30, 1998.
(6) The 12b-1 fee is accrued daily and payable monthly. With respect to each
fund, the entire 12b-1 fee payable by Class A and a portion of the 12b-1
fee payable by each of Class B and Class C equal to 0.25% of the average
daily net assets of the class are currently characterized as a service
fee within the meaning of National Association of Securities Dealers,
Inc. ("NASD") guidelines and are payments made for personal service
and/or maintenance of shareholder accounts. The remainder of the 12b-1
fee, if any, is an asset-based sales charge, and is a distribution fee
paid to Morgan Stanley Dean Witter Distributors Inc. (the "Distributor")
to compensate it for the services provided and the expenses borne by the
Distributor and others in the distribution of each fund's shares (see
"Description of Shares" below, "Purchase of Fund Shares -- Plan of
Distribution" in MSDW Mid-Cap's Prospectus and "Share Class Arrangements"
in TCW/DW Mid-Cap's Prospectus).
(7) Upon conversion of Class B shares to Class A shares, such shares will be
subject to the lower 12b-1 fee applicable to Class A shares. No sales
charge is imposed at the time of conversion of Class B shares to Class A
shares. Class C shares do not have a conversion feature and, therefore,
are subject to an ongoing 1.00% distribution fee (see "Description of
Shares" below, "Purchase of Fund Shares -- Alternative Purchase
Arrangements" in MSDW Mid-Cap's Prospectus and "Share Class Arrangements"
in TCW/DW Mid-Cap's Prospectus).
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<PAGE>
HYPOTHETICAL EXAMPLE
To attempt to show the effect of these expenses on an investment over
time, the hypotheticals shown below have been created. Assuming that an
investor makes a $10,000 investment in either MSDW Mid-Cap or TCW/DW Mid-Cap or
the new combined fund, that the annual return is 5% and that the operating
expenses for each fund are the ones shown in the chart above, if the investment
was redeemed at the end of each period shown below, the investor would incur
the following expenses by the end of each period shown:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
MSDW Mid-Cap
Class A ......... $641 $886 $ 1,150 $1,903
Class B ......... $698 $912 $ 1,252 $2,275
Class C ......... $298 $612 $ 1,052 $2,275
Class D ......... $ 97 $303 $ 525 $1,166
TCW/DW Mid-Cap
Class A ......... $674 $989 $ 1,325 $2,274
Class B ......... $723 $988 $ 1,380 $2,534
Class C ......... $333 $718 $ 1,230 $2,636
Class D ......... $132 $412 $ 713 $1,568
Pro Forma Combined
Class A ......... $640 $883 $ 1,145 $1,892
Class B ......... $697 $909 $ 1,247 $2,264
Class C ......... $297 $609 $ 1,047 $2,264
Class D ......... $ 96 $300 $ 520 $1,155
</TABLE>
If such investment was not redeemed, the investor would incur the
following expenses:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
MSDW Mid-Cap
Class A ......... $ 641 $ 886 $1,150 $ 1,903
Class B ......... $ 198 $ 612 $1,052 $ 2,275
Class C ......... $ 198 $ 612 $1,052 $ 2,275
Class D ......... $ 97 $ 303 $ 525 $ 1,166
TCW/DW Mid-Cap
Class A ......... $ 674 $ 989 $1,325 $ 2,274
Class B ......... $ 223 $ 688 $1,180 $ 2,534
Class C ......... $ 233 $ 718 $1,230 $ 2,636
Class D ......... $ 132 $ 412 $ 713 $ 1,568
Pro Forma Combined
Class A ......... $,640 $ 883 $1,145 $ 1,892
Class B ......... $ 197 $ 609 $1,047 $ 2,264
Class C ......... $ 197 $ 609 $1,047 $ 2,264
Class D ......... $ 96 $ 300 $ 520 $ 1,155
</TABLE>
THE ABOVE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL OPERATING EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. LONG-TERM SHAREHOLDERS OF CLASS B AND CLASS C SHARES OF
MSDW MID-CAP AND TCW/DW MID-CAP MAY PAY MORE IN SALES CHARGES, INCLUDING
DISTRIBUTION FEES, THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END SALES
CHARGES PERMITTED BY THE NASD.
The purpose of the foregoing fee table is to assist the investor or
shareholder in understanding the various costs and expenses that an investor or
shareholder in a fund will bear directly or indirectly. For a more complete
description of these costs and expenses, see "Comparison of MSDW Mid-Cap and
TCW/DW Mid-Cap -- Investment Management and Distribution Plan Fees, Other
Significant Fees, and Purchases, Exchanges and Redemptions" below.
7
<PAGE>
TAX CONSEQUENCES OF THE REORGANIZATION
As a condition to the Reorganization, MSDW Mid-Cap will receive an opinion
of Gordon Altman Butowsky Weitzen Shalov & Wein to the effect that the
Reorganization will constitute a tax-free reorganization for Federal income tax
purposes, and that no gain or loss will be recognized by MSDW Mid-Cap or the
shareholders of MSDW Mid-Cap for Federal income tax purposes as a result of the
transactions included in the Reorganization. For further information about the
tax consequences of the Reorganization, see "The Reorganization -- Tax Aspects
of the Reorganization" below.
COMPARISON OF MSDW MID-CAP AND TCW/DW MID-CAP
INVESTMENT OBJECTIVES AND POLICIES. MSDW Mid-Cap and TCW/DW Mid-Cap are
funds which have similar investment objectives and policies. The investment
objective of MSDW Mid-Cap is long-term capital growth. The investment objective
of TCW/DW Mid-Cap is long-term capital appreciation.
MSDW Mid-Cap seeks to achieve its investment objective by investing, under
normal circumstances, at least 65% of its total assets in a diversified
portfolio of domestic and foreign equity securities of "mid-cap" companies
which are companies whose market capitalization falls within the range of $250
million to $5 billion. In selecting stocks for MSDW Mid-Cap within this mid-cap
universe, MSDW Advisors uses an industry approach that seeks to diversify the
assets of MSDW Mid-Cap in approximately 18 to 35 industries. TCW/DW Mid-Cap
seeks to achieve its investment objective by investing, under normal
circumstances, at least 65% of its total assets in equity securities issued by
medium-sized companies whose market capitalizations, at the time of
acquisition, are within the capitalization range of the companies comprising
the Standard & Poor's Mid-Cap 400 Index (the "S&P 400 Index") (approximately
between $192 million and $11.7 billion as of February 26, 1999) and that, in
the opinion of TCW, exhibit superior earnings growth prospects and attractive
stock market valuations. In investing TCW/DW Mid-Cap's assets, TCW uses its
proprietary research in pursuing a "bottom-up" investment philosophy, which
emphasizes individual company selection.
MSDW Mid-Cap may invest up to 35% of its total assets in (i) U.S.
Government securities, investment grade corporate debt securities and money
market instruments, or (ii) equity securities of companies with market
capitalizations which fall outside of the range of $250 million to $5 billion
at the time of purchase, as long as such investments are consistent with MSDW
Mid-Cap's investment objective. MSDW Mid-Cap may also invest up to 35% of its
total assets in the equity securities of non-U.S. companies, including American
Depository Receipts, rights, warrants, and the direct purchase of foreign
securities. Additionally, MSDW Mid-Cap may acquire, through purchase or
distribution by the issuer of a security held in its portfolio, fixed income
securities that are convertible into common stock of the issuer, including
lower rated convertible securities. Up to 35% of TCW/DW Mid-Cap's total assets
may be invested in equity securities whose market capitalization at the time of
acquisition is not within the capitalization range of companies comprising the
S&P 400 Index, as well as in investment grade fixed-income securities
consisting of securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, corporate debt securities and money market
instruments. TCW/DW Mid-Cap may also invest up to 5% of its assets in certain
high yield, high risk convertible or other fixed-income securities (commonly
known as "junk bonds"). Additionally, TCW/DW Mid-Cap may invest up to 25% of
its total assets in equity securities of foreign issuers in the form of direct
investments or depository receipts or similar investments. The processes by
which each fund selects common stocks and other investments differ and are more
fully described under "Comparison of Investment Objectives, Policies and
Restrictions" below.
The principal differences between the funds' investment policies, as well
as certain similarities, are more fully described under "Comparison of
Investment Objectives, Policies and Restrictions" below.
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<PAGE>
The investment policies of both MSDW Mid-Cap and TCW/DW Mid-Cap are not
fundamental and may be changed by their respective Boards of Trustees.
INVESTMENT MANAGEMENT AND DISTRIBUTION PLAN FEES. MSDW Mid-Cap obtains
investment management services from MSDW Advisors for which it pays MSDW
Advisors monthly compensation calculated daily by applying the following annual
rates to MSDW Mid-Cap's net assets: 0.75% of the portion of daily net assets
not exceeding $500 million; and 0.725% of the portion of daily net assets
exceeding $500 million. TCW/DW Mid-Cap currently obtains investment management
services from Morgan Stanley Dean Witter Services Company Inc. ("MSDW
Services"), a wholly-owned subsidiary of MSDW Advisors, and investment advisory
services from TCW. As compensation for such services, TCW/DW Mid-Cap pays (i)
MSDW Services a fee at an annual rate of 0.60% of the fund's average daily net
assets and (ii) TCW a fee at an annual rate of 0.40% of the fund's average
daily net assets. Both fees are paid monthly and calculated daily. Following
the TCW/DW Mid-Cap Conversion Transaction upon which the Reorganization is
contingent, TCW/DW Mid-Cap will obtain investment management services from MSDW
Advisors and sub-advisory services from TCW, and will pay only an investment
management fee to MSDW Advisors calculated daily by applying the same annual
rate(s) as those listed above for MSDW Mid-Cap's investment management fee.
MSDW Advisors would, in turn, pay TCW a sub-advisory fee equal to 40% of the
investment management fee paid by TCW/DW Mid-Cap. Thus, the rate at which
investment management fees will be payable by TCW/DW Mid-Cap after the
Reorganization will be equal to the investment management fees currently paid
by MSDW Mid-Cap.
Both MSDW Mid-Cap and TCW/DW Mid-Cap have adopted identical distribution
plans ("Plans") pursuant to Rule 12b-1 under the 1940 Act. In the case of Class
A and Class C shares, each fund's Plan provides that the fund will reimburse
the Distributor and others for the expenses of certain activities and services
incurred by them in connection with the distribution of the Class A and Class C
shares of each fund. Reimbursement for these expenses is made in monthly
payments by each fund to the Distributor which will in no event exceed amounts
equal to payments at the annual rates of 0.25% and 1.0% of the average daily
net assets of Class A and Class C shares, respectively. In the case of Class B
shares, each fund's Plan provides that the fund will pay the Distributor a fee,
which is accrued daily and paid monthly, at the annual rate of 1.0% of the
lesser of: (a) the average daily aggregate gross sales of each fund's Class B
shares since the inception of each fund (not including reinvestments of
dividends or capital gains distributions), less the average daily aggregate net
asset value of each fund's Class B shares redeemed since each fund's inception
upon which a contingent deferred sales charge ("CDSC") has been imposed or
waived, or (b) the average daily net assets of Class B. The fee is paid for the
services provided and the expenses borne by the Distributor and others in
connection with the distribution of each fund's Class B shares. There are no
12b-1 fees applicable to both funds' Class D shares. For further information
relating to the 12b-1 fees applicable to each class of TCW/DW Mid-Cap's shares,
see the section entitled "Share Class Arrangements" in TCW/DW Mid-Cap's
Prospectus, attached hereto. The Distributor also receives the proceeds of any
CDSC paid by the funds' shareholders at the time of redemption. The CDSC
schedules applicable to each of MSDW Mid-Cap and TCW/DW Mid-Cap are set forth
below under "Purchases, Exchanges and Redemptions."
OTHER SIGNIFICANT FEES. Both MSDW Mid-Cap and TCW/DW Mid-Cap pay
additional fees in connection with their operations, including legal, auditing,
transfer agent, trustees fees and custodial fees. See "Synopsis -- Fee Table"
above for the percentage of average net assets represented by such "Other
Expenses."
PURCHASES, EXCHANGES AND REDEMPTIONS. Class A shares of each fund are sold
at net asset value plus an initial sales charge of up to 5.25%. The initial
sales charge is reduced for certain purchases. Investments of $1 million or
more (and investment by certain other limited categories of investors) are not
subject to any sales charges at the time of purchase, but are subject to a CDSC
of 1.0% on redemptions made within one year after purchase (except for certain
specific circumstances fully described in each fund's Prospectus).
9
<PAGE>
Class B shares of each fund are offered at net asset value with no initial
sales charge, but are subject to the same CDSC schedule set forth below (Class
B shares of each fund purchased by certain qualified employer sponsored benefit
plans are subject to a reduced CDSC schedule):
<TABLE>
<CAPTION>
CLASS B SHARES OF MSDW MID-CAP AND
YEAR SINCE PURCHASE PAYMENT MADE TCW/DW MID-CAP
- -------------------------------- --------------
<S> <C>
First ............................ 5.0%
Second ........................... 4.0%
Third ............................ 3.0%
Fourth ........................... 2.0%
Fifth ............................ 2.0%
Sixth ............................ 1.0%
Seventh and thereafter ........... none
</TABLE>
Class C shares of each fund are sold at net asset value with no initial
sales charge, but are subject to a CDSC of 1.0% on redemptions made within one
year after purchase. The CSDC may be waived for certain redemptions (which are
fully described in each fund's Prospectus).
Class D shares of each fund are available only to limited categories of
investors and are sold at net asset value with no initial sales charge or CDSC.
The CDSC is paid to the Distributor. Shares of MSDW Mid-Cap and TCW/DW
Mid-Cap are distributed by the Distributor and offered by Dean Witter Reynolds
Inc. and other dealers who have entered into selected dealer agreements with
the Distributor. For further information relating to the CDSC schedules
applicable to each of the classes of shares of MSDW Mid-Cap and TCW/DW Mid-Cap,
see the section entitled "Purchase of Fund Shares" in MSDW Mid-Cap's Prospectus
and the section entitled "Share Class Arrangements" in TCW/DW Mid-Cap's
Prospectus.
Shares of each class of MSDW Mid-Cap may be exchanged for shares of the
same class of any other Morgan Stanley Dean Witter Fund that offers its shares
in more than one class, without the imposition of an exchange fee.
Additionally, shares of each class of MSDW Mid-Cap may be exchanged for shares
of Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust, Morgan Stanley
Dean Witter Limited Term Municipal Trust, Morgan Stanley Dean Witter Short-Term
Bond Fund and the five Morgan Stanley Dean Witter Funds that are money market
funds (the foregoing eight funds are collectively referred to as the "MSDW
Mid-Cap Exchange Funds"), without the imposition of an exchange fee. Class A
shares of MSDW Mid-Cap may also be exchanged for shares of Morgan Stanley Dean
Witter Multi-State Municipal Series Trust and Morgan Stanley Dean Witter Hawaii
Municipal Trust. Upon consummation of the Reorganization, the foregoing
exchange privileges will still be applicable to shareholders of the combined
fund.
Shares of each class of TCW/DW Mid-Cap may currently be exchanged for
shares of the same class of any other TCW/DW Fund advised by TCW and managed by
MSDW Services that offers its shares in more than one class, without the
imposition of an exchange fee. TCW/DW Mid-Cap shares may also be exchanged for
shares of TCW/DW North American Government Income Trust or for any of the five
Morgan Stanley Dean Witter Funds that are money market funds (the foregoing six
funds are collectively referred to as the "TCW/DW Mid-Cap Exchange Funds"),
without the imposition of an exchange fee.
With respect to both funds, no CDSC is imposed at the time of any
exchange, although any applicable CDSC will be imposed upon ultimate
redemption. During the period of time a TCW/DW Mid-Cap and MSDW Mid-Cap
shareholder remains in a TCW/DW Mid-Cap Exchange Fund or a MSDW Mid-Cap
Exchange Fund,
10
<PAGE>
respectively, the holding period (for purposes of determining the CDSC rate) is
frozen. Following the TCW/DW Mid-Cap Conversion Transaction which must precede
the Reorganization, shareholders of TCW/DW Mid-Cap will be able to exchange
their shares for shares of Morgan Stanley Dean Witter Funds. THEREFORE, THERE
WILL BE NO CHANGE IN THE EXCHANGE PRIVILEGES FOR SHAREHOLDERS OF MSDW MID-CAP
AS A RESULT OF THE REORGANIZATION. Both MSDW Mid-Cap and TCW/DW Mid-Cap provide
telephone exchange privileges to their shareholders. For greater details
relating to exchange privileges applicable to TCW/DW Mid-Cap following the
Reorganization, see the section entitled "Shareholder Services" in MSDW
Mid-Cap's Prospectus.
Shareholders of MSDW Mid-Cap and TCW/DW Mid-Cap may redeem their shares
for cash at any time at the net asset value per share next determined; however,
such redemption proceeds may be reduced by the amount of any applicable CDSC.
Both MSDW Mid-Cap and TCW/DW Mid-Cap offer a reinstatement privilege whereby a
shareholder who has not previously exercised such privilege whose shares have
been redeemed or repurchased may, within thirty-five days after the date of
redemption or repurchase, reinstate any portion or all of the proceeds thereof
in shares of the same class from which such shares were redeemed or repurchased
and receive a pro rata credit for any CDSC paid in connection with such
redemption or repurchase. MSDW Mid-Cap and TCW/DW Mid-Cap may redeem
involuntarily, at net asset value, most accounts valued at less than $100 or,
in the case of an account opened through EasyInvest(SM), if after twelve months
the shareholder has invested less than $1,000 in the account. For more
information about EasyInvest(SM), see "Shareholder Services" in MSDW Mid-Cap's
Prospectus and "Shareholder Information -- How To Buy Shares" in TCW/DW
Mid-Cap's Prospectus.
DIVIDENDS. Each fund declares dividends separately for each of its
classes. Both MSDW Mid-Cap and TCW/DW Mid-Cap distribute substantially all of
their net investment income and net realized short-term and long-term capital
gains, if any, at least once each year. Each fund, however, may determine
either to distribute or to retain all or part of any net long-term capital
gains in any year for reinvestment. With respect to each fund, dividends and
capital gains distributions are automatically reinvested in additional shares
of the same class of shares of the fund at net asset value unless the
shareholder elects to receive cash.
PRINCIPAL RISK FACTORS
The net asset value of TCW/DW Mid-Cap and MSDW Mid-Cap will fluctuate with
changes in the market value of their respective portfolio securities. The
market value of the funds' portfolio securities will increase or decrease due
to a variety of economic, market and political factors, including movements in
interest rates, which cannot be predicted. Both funds invest in medium-sized
companies which may involve greater risk of volatility of a fund's net asset
value than is customarily associated with investing in larger, established
companies. Often medium-sized companies and the industries in which they are
focused are still evolving and while this may offer better growth potential
than larger, established companies, it also may make them more sensitive to
changing market conditions.
Both funds may invest a portion (up to 25% for TCW/DW Mid-Cap and up to
35% for MSDW Mid-Cap) of their total assets in foreign securities and, as such,
are subject to additional risks such as adverse political and economic
developments abroad, including the possibility of expropriations or
confiscatory taxation, limitations on the use or transfer of fund assets and
any effects of foreign social, economic or political instability. Foreign
companies are not subject to the regulatory requirements of U.S. companies and,
as such, there may be less publicly available information about such companies.
Moreover, foreign companies are not subject to uniform accounting, auditing and
financial reporting standards and requirements comparable to those applicable
to U.S. companies. Additionally, securities of foreign issuers may be less
liquid than comparable securities of U.S. issuers and, as such, their price
changes may be more volatile. Furthermore, foreign exchanges and broker-dealers
are generally subject to less government and exchange scrutiny and regulation
than their
11
<PAGE>
American counterparts and brokerage commissions, dealer concessions and other
transaction costs may be higher in foreign markets than in the U.S.
Fluctuations in the relative rates of exchange between the currencies of
different countries will affect the value of a fund's investments. Changes in
foreign currency exchange rates relative to the U.S. dollar will affect the
U.S. dollar value of a fund's assets denominated in that currency and thereby
impact upon the fund's total return on such assets.
Although TCW/DW Mid-Cap does not currently hold such securities, it may
invest up to 5% of its assets in certain high yield, high risk convertible and
other fixed income securities (commonly known as "junk bonds"), which
securities are subject to certain special risks. Although MSDW Mid-Cap does not
currently hold such securities, it also may invest in lower rated convertible
securities.
MSDW Mid-Cap and TCW/DW Mid-Cap may enter into foreign currency exchange
contracts when purchasing foreign securities in order to facilitate settlement
and to limit the effect of changes in the relationship between the U.S. dollar
and the foreign currency during the period between trade date and settlement
date. Although it does not currently do so, MSDW Mid-Cap may enter into options
and futures transactions and both funds may enter into repurchase agreements,
may purchase securities on a when issued and delayed delivery basis, or on a
when, as and if issued basis, may lend their portfolio securities, may purchase
zero coupon securities and may invest in real estate investment trusts, all of
which involve certain special risks. Both MSDW Mid-Cap and TCW/DW Mid-Cap may
invest in or acquire convertible securities which are fixed-income securities
convertible into common stock. To the extent that a convertible security's
investment value is greater than its conversion value, its price will be
primarily a reflection of such investment value and its price will be likely to
increase when interest rates fall and decrease when interest rates rise, as
with a fixed-income security (the credit standing of the issuer and other
factors may also have an effect on the convertible security's value). If the
conversion value exceeds the investment value, the price of the convertible
security will rise above its investment value and, in addition, the convertible
security will sell at some premium over its conversion value. (This premium
represents the price investors are willing to pay for the privilege of
purchasing a fixed-income security with a possibility of capital appreciation
due to the conversion privilege.) At such times the price of the convertible
security will tend to fluctuate directly with the price of the underlying
equity security.
The foregoing discussion is a summary of the principal risk factors. For a
more complete discussion of the risks of each fund, see "Investment Objective
and Policies -- Portfolio Characteristics" in the Prospectus of MSDW Mid-Cap
and "Principal Risks" and "Additional Risk Information" in TCW/DW Mid-Cap's
Prospectus attached hereto and incorporated herein by reference.
THE REORGANIZATION
THE PROPOSAL
The Board of Trustees of MSDW Mid-Cap, including the Independent Trustees,
having reviewed the financial position of MSDW Mid-Cap and the prospects for
achieving economies of scale through the Reorganization and having determined
that the Reorganization is in the best interests of MSDW Mid-Cap and its
Shareholders and that the interests of Shareholders will not be diluted as a
result thereof, recommends approval of the Reorganization by Shareholders of
MSDW Mid-Cap.
THE BOARD'S CONSIDERATION
At a meeting held on February 25, 1999, the Board, including all of the
Independent Trustees, unanimously approved the Reorganization Agreement and
determined to recommend that Shareholders approve the
12
<PAGE>
Reorganization Agreement. In reaching this decision, the Board made an
extensive inquiry into a number of factors, particularly the investment
performance of TCW/DW Mid-Cap and the capabilities of TCW to provide
sub-advisory services as well as comparative expenses currently incurred in the
operations of MSDW Mid-Cap, TCW/DW Mid-Cap and the anticipated expenses of
TCW/DW Mid-Cap following the TCW/DW Mid-Cap Conversion Transaction (upon which
the Reorganization is contingent) and the Reorganization. The Board also
considered other factors, including, but not limited to: the general
compatibility of the investment objectives, policies, restrictions and
portfolios of MSDW Mid-Cap and TCW/DW Mid-Cap; the terms and conditions of the
Reorganization which would affect the price of shares to be issued in the
Reorganization; the tax-free nature of the Reorganization; and any direct or
indirect costs in connection with the Reorganization.
In recommending the Reorganization to Shareholders, the Board of MSDW
Mid-Cap considered that the Reorganization would have the following benefits to
Shareholders:
1. Once the Reorganization is consummated, the expenses which would be
borne by shareholders of each class of the "combined fund" should be lower on a
percentage basis than the expenses per share of each corresponding class of
MSDW Mid-Cap. Furthermore, to the extent that the Reorganization would result
in Shareholders becoming shareholders of a combined larger fund, further
economies of scale could be achieved since various fixed expenses (e.g.,
auditing and legal) can be spread over a larger number of shares.
2. Shareholders would have a continued participation in a diversified
portfolio of primarily mid-cap stocks through investment in TCW/DW Mid-Cap.
3. The Reorganization is intended to qualify as a tax-free reorganization
for Federal income tax purposes, pursuant to which no gain or loss will be
recognized by MSDW Mid-Cap or its Shareholders for Federal income tax purposes.
4. The Board also took into consideration that absent the Reorganization,
TCW/DW Mid-Cap will continue to compete for investor funds directly with MSDW
Mid-Cap. The Reorganization should allow for more concentrated selling efforts
to the benefit of both MSDW Mid-Cap and TCW/DW Mid-Cap shareholders and avoid
the inefficiencies associated with the operation and distribution of two
similar funds through the same sales organization.
The Board of Trustees of TCW/DW Mid-Cap, including a majority of the
Independent Trustees of TCW/DW Mid-Cap, also have determined that the
Reorganization is in the best interests of TCW/DW Mid-Cap and its shareholders
and that the interests of existing shareholders of TCW/DW Mid-Cap will not be
diluted as a result thereof. The transaction will enable TCW/DW Mid-Cap to
acquire investment securities which are consistent with TCW/DW Mid-Cap's
investment objective, without the brokerage costs attendant to the purchase of
such securities in the market. Also, the addition of assets to TCW/DW Mid-Cap's
portfolio is expected to result in a further reduction in the investment
management fee resulting from the addition of more assets at a lower breakpoint
rate in the management fee schedule. Furthermore, like the shareholders of MSDW
Mid-Cap, the shareholders of TCW/DW Mid-Cap may also realize an intangible
benefit in having the Morgan Stanley Dean Witter sales organization concentrate
its selling efforts on one rather than two similar funds, which may result in
further economies of scale. Finally, the Board considered that even if the
benefits enumerated above are not realized, the costs to the fund are
sufficiently minor to warrant taking the opportunity to realize those benefits.
THE REORGANIZATION AGREEMENT
The terms and conditions under which the Reorganization would be
consummated, as summarized below, are set forth in the Reorganization
Agreement. This summary is qualified in its entirety by reference to the
Reorganization Agreement, a copy of which is attached as Exhibit A to this
Proxy Statement and Prospectus.
13
<PAGE>
The Reorganization Agreement provides that (i) MSDW Mid-Cap will transfer
all of its assets, including portfolio securities, cash (other than cash
amounts retained by MSDW Mid-Cap as a "Cash Reserve" in the amount sufficient
to discharge its liabilities not discharged prior to the Valuation Date (as
defined below) and for expenses of the dissolution), cash equivalents and
receivables to TCW/DW Mid-Cap on the Closing Date in exchange for the
assumption by TCW/DW Mid-Cap of stated liabilities of MSDW Mid-Cap, including
all expenses, costs, charges and reserves, as reflected on an unaudited
statement of assets and liabilities of MSDW Mid-Cap prepared by the Treasurer
of MSDW Mid-Cap as of the Valuation Date (as defined below) in accordance with
generally accepted accounting principles consistently applied from the prior
audited period, and the delivery of the TCW/DW Mid-Cap Shares; (ii) such TCW/DW
Mid-Cap Shares would be distributed to Shareholders of MSDW Mid-Cap on the
Closing Date or as soon as practicable thereafter; (iii) MSDW Mid-Cap would be
dissolved; and (iv) the outstanding shares of MSDW Mid-Cap would be canceled.
The number of TCW/DW Mid-Cap Shares to be delivered to MSDW Mid-Cap will
be determined by dividing the aggregate net asset value of each class of shares
of MSDW Mid-Cap acquired by TCW/DW Mid-Cap by the net asset value per share of
the corresponding class of shares of TCW/DW Mid-Cap; these values will be
calculated as of the close of business of the New York Stock Exchange on the
third business day following the receipt of the requisite approval by
Shareholders of the Reorganization Agreement or at such other time as MSDW
Mid-Cap and TCW/DW Mid-Cap may agree (the "Valuation Date"). As an
illustration, assume that on the Valuation Date, Class B shares of MSDW Mid-Cap
had an aggregate net asset value (not including any Cash Reserve of MSDW
Mid-Cap) of $100,000. If the net asset value per Class B share of TCW/DW
Mid-Cap were $10 per share at the close of business on the Valuation Date, the
number of Class B shares of TCW/DW Mid-Cap to be issued would be 10,000
($100,000 (divided by) $10). These 10,000 Class B shares of TCW/DW Mid-Cap
would be distributed to the former Class B shareholders of MSDW Mid-Cap. This
example is given for illustration purposes only and does not bear any
relationship to the dollar amounts or shares expected to be involved in the
Reorganization.
On the Closing Date or as soon as practicable thereafter, MSDW Mid-Cap
will distribute pro rata to its Shareholders of record as of the close of
business on the Valuation Date, the TCW/DW Mid-Cap Shares it receives. Each
Shareholder of MSDW Mid-Cap will receive the class of shares of TCW/DW Mid-Cap
that corresponds to the class of shares of MSDW Mid-Cap currently held by that
Shareholder. Accordingly, the TCW/DW Mid-Cap Shares will be distributed as
follows: each of the Class A, Class B, Class C and Class D shares of TCW/DW
Mid-Cap will be distributed to holders of Class A, Class B, Class C and Class D
shares of MSDW Mid-Cap, respectively. TCW/DW Mid-Cap will cause its transfer
agent to credit and confirm an appropriate number of TCW/DW Mid-Cap Shares to
each Shareholder. Certificates for TCW/DW Mid-Cap Shares will be issued only
upon written request of a Shareholder and only for whole shares, with
fractional shares credited to the name of the Shareholder on the books of
TCW/DW Mid-Cap. Shareholders who wish to receive certificates representing
their TCW/DW Mid-Cap Shares must, after receipt of their confirmations, make a
written request to TCW/DW Mid-Cap's transfer agent, Morgan Stanley Dean Witter
Trust FSB, Harborside Financial Center, Plaza Two, Jersey City, New Jersey
07311. Shareholders of MSDW Mid-Cap holding their shares in certificate form
will be asked to surrender such certificates in connection with the
Reorganization. Shareholders who do not surrender their certificates prior to
the Closing Date will still receive their shares of TCW/DW Mid-Cap; however,
such Shareholders will not be able to redeem, transfer or exchange the TCW/DW
Mid-Cap Shares (showing its new name Morgan Stanley Dean Witter Mid-Cap Equity
Trust) received until the old certificates have been surrendered.
The Closing Date will be the next business day following the Valuation
Date. The consummation of the Reorganization is contingent upon the approval of
the Reorganization by the Shareholders of MSDW Mid-Cap and the receipt of the
other opinions and certificates set forth in Sections 6, 7 and 8 of the
Reorganization
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<PAGE>
Agreement and the occurrence of the events described in those Sections, certain
of which may be waived by MSDW Mid-Cap or TCW/DW Mid-Cap. The Reorganization
Agreement may be amended in any mutually agreeable manner. All expenses of this
solicitation, including the cost of preparing and mailing this Proxy Statement
and Prospectus, will be borne by MSDW Mid-Cap, which expenses are expected to
approximate $222,000. MSDW Mid-Cap and TCW/DW Mid-Cap will bear all of their
respective other expenses associated with the Reorganization.
The Reorganization Agreement may be terminated and the Reorganization
abandoned at any time, before or after approval by Shareholders by mutual
consent of MSDW Mid-Cap and TCW/DW Mid-Cap. In addition, either party may
terminate the Reorganization Agreement upon the occurrence of a material breach
of the Reorganization Agreement by the other party or if, by September 30,
1999, any condition set forth in the Reorganization Agreement has not been
fulfilled or waived by the party entitled to its benefits.
Under the Reorganization Agreement, within one year after the Closing
Date, MSDW Mid-Cap shall: either pay or make provision for all of its
liabilities and distribute any remaining amount of the Cash Reserve (after
paying or making provision for such liabilities and the estimated cost of
making the distribution) to former shareholders of MSDW Mid-Cap that received
TCW/DW Mid-Cap Shares. MSDW Mid-Cap shall be dissolved and deregistered as an
investment company promptly following the distribution of shares of TCW/DW
Mid-Cap to Shareholders of record of MSDW Mid-Cap.
The effect of the Reorganization is that Shareholders who vote their
shares in favor of the Reorganization Agreement are electing to sell their
shares of MSDW Mid-Cap (at net asset value on the Valuation Date calculated
after subtracting any Cash Reserve) and reinvest the proceeds in TCW/DW Mid-Cap
Shares at net asset value and without recognition of taxable gain or loss for
Federal income tax purposes. See "Tax Aspects of the Reorganization" below. As
noted in "Tax Aspects of the Reorganization" below, if MSDW Mid-Cap recognizes
net gain from the sale of securities prior to the Closing Date, such gain, to
the extent not offset by capital loss carryforwards, will be distributed to
Shareholders prior to the Closing Date and will be taxable to Shareholders as
capital gain.
Shareholders will continue to be able to redeem their shares of MSDW
Mid-Cap at net asset value next determined after receipt of the redemption
request (subject to any applicable CDSC) until the close of business on the
business day next preceding the Closing Date. Redemption requests received by
MSDW Mid-Cap thereafter will be treated as requests for redemption of shares of
TCW/DW Mid-Cap.
TAX ASPECTS OF THE REORGANIZATION
At least one but not more than 20 business days prior to the Valuation
Date, MSDW Mid-Cap will declare and pay a dividend or dividends which, together
with all previous such dividends, will have the effect of distributing to
Shareholders all of MSDW Mid-Cap's investment company taxable income for all
periods since the inception of MSDW Mid-Cap through and including the Valuation
Date (computed without regard to any dividends paid deduction), and all of MSDW
Mid-Cap's net capital gain, if any, realized in such periods (after reduction
for any capital loss carryforward).
The Reorganization is intended to qualify for Federal income tax purposes
as a tax-free reorganization under Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). MSDW Mid-Cap and TCW/DW Mid-Cap have
represented that, to their best knowledge, there is no plan or intention by
Shareholders to redeem, sell, exchange or otherwise dispose of a number of
TCW/DW Mid-Cap Shares received in the transaction that would reduce
Shareholders' ownership of TCW/DW Mid-Cap Shares to a number of shares having a
value, as of the Closing Date, of less than 50% of the value of all of the
formerly outstanding MSDW Mid-Cap shares as of the same date. MSDW Mid-Cap and
TCW/DW Mid-Cap have each further represented that, as of the Closing Date, MSDW
Mid-Cap and TCW/DW Mid-Cap will qualify as regulated investment companies. In
addition, TCW/DW Mid-Cap has represented that it has no plan or intention to
sell or otherwise dispose of more than 50% of the assets of MSDW Mid-Cap
acquired in the Reorganization, except for dispositions made in the ordinary
course of business.
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<PAGE>
As a condition to the Reorganization, MSDW Mid-Cap and TCW/DW Mid-Cap will
receive an opinion of Gordon Altman Butowsky Weitzen Shalov & Wein that, based
on certain assumptions, facts, the terms of the Reorganization Agreement and
additional representations set forth in the Reorganization Agreement or
provided by MSDW Mid-Cap and TCW/DW Mid-Cap:
1. The transfer of substantially all of MSDW Mid-Cap's assets in exchange
for the TCW/DW Mid-Cap Shares and the assumption by TCW/DW Mid-Cap of certain
stated liabilities of MSDW Mid-Cap followed by the distribution by MSDW Mid-Cap
of the TCW/DW Mid-Cap Shares to Shareholders in exchange for their MSDW Mid-Cap
shares will constitute a "reorganization" within the meaning of Section
368(a)(1)(C) of the Code, and MSDW Mid-Cap and TCW/DW Mid-Cap will each be a
"party to a reorganization" within the meaning of Section 368(b) of the Code;
2. No gain or loss will be recognized by TCW/DW Mid-Cap upon the receipt
of the assets of MSDW Mid-Cap solely in exchange for the TCW/DW Mid-Cap Shares
and the assumption by TCW/DW Mid-Cap of the stated liabilities of MSDW Mid-Cap;
3. No gain or loss will be recognized by MSDW Mid-Cap upon the transfer of
the assets of MSDW Mid-Cap to TCW/DW Mid-Cap in exchange for the TCW/DW Mid-Cap
Shares and the assumption by TCW/DW Mid-Cap of the stated liabilities or upon
the distribution of TCW/DW Mid-Cap Shares to Shareholders in exchange for their
MSDW Mid-Cap shares;
4. No gain or loss will be recognized by Shareholders upon the exchange of
the shares of MSDW Mid-Cap for the TCW/DW Mid-Cap Shares;
5. The aggregate tax basis for the TCW/DW Mid-Cap Shares received by each
of the Shareholders pursuant to the Reorganization will be the same as the
aggregate tax basis of the shares in MSDW Mid-Cap held by each such Shareholder
immediately prior to the Reorganization;
6. The holding period of the TCW/DW Mid-Cap Shares to be received by each
Shareholder will include the period during which the shares in MSDW Mid-Cap
surrendered in exchange therefor were held (provided such shares in MSDW
Mid-Cap were held as capital assets on the date of the Reorganization);
7. The tax basis of the assets of MSDW Mid-Cap acquired by TCW/DW Mid-Cap
will be the same as the tax basis of such assets to MSDW Mid-Cap immediately
prior to the Reorganization; and
8. The holding period of the assets of MSDW Mid-Cap in the hands of TCW/DW
Mid-Cap will include the period during which those assets were held by MSDW
Mid-Cap.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EFFECT, IF
ANY, OF THE PROPOSED TRANSACTION IN LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES.
BECAUSE THE FOREGOING DISCUSSION ONLY RELATES TO THE FEDERAL INCOME TAX
CONSEQUENCES OF THE PROPOSED TRANSACTION, SHAREHOLDERS SHOULD ALSO CONSULT
THEIR TAX ADVISORS AS TO STATE AND LOCAL TAX CONSEQUENCES, IF ANY, OF THE
PROPOSED TRANSACTION.
DESCRIPTION OF SHARES
TCW/DW Mid-Cap shares to be issued pursuant to the Reorganization
Agreement will, when issued, be fully paid and non-assessable by TCW/DW Mid-Cap
and transferable without restrictions and will have no preemptive rights. Class
B shares of TCW/DW Mid-Cap, like Class B shares of MSDW Mid-Cap, have a
conversion feature pursuant to which approximately ten (10) years after the
date of the original purchase of such shares, the shares will convert
automatically to Class A shares, based on the relative net asset values of the
two classes. For greater details regarding the conversion feature, including
the method by which the 10 year period is calculated and the treatment of
reinvested dividends, see "Purchase of Fund Shares" in MSDW Mid-Cap's
Prospectus and "Share Class Arrangements" in TCW/DW Mid-Cap's Prospectus.
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CAPITALIZATION TABLE (UNAUDITED)
The following table sets forth the capitalization of TCW/DW Mid-Cap and
MSDW Mid-Cap as of January 31, 1999 and on a pro forma combined basis as if the
Reorganization had occurred on that date:
<TABLE>
<CAPTION>
NET ASSET
SHARES VALUE
CLASS A NET ASSETS OUTSTANDING PER SHARE
- ----------------------------------- --------------- ------------- ----------
<S> <C> <C> <C>
MSDW Mid-Cap ...................... $ 3,691,926 237,855 $ 15.52
TCW/DW Mid-Cap .................... $ 1,819,820 82,745 $ 21.99
Combined Fund (pro forma) ......... $ 5,511,746 250,636 $ 21.99
CLASS B
- ------------------------------------
MSDW Mid-Cap ...................... $593,724,555 38,788,794 $ 15.31
TCW/DW Mid-Cap .................... $292,052,348 13,410,653 $ 21.78
Combined Fund (pro forma) ......... $885,776,903 40,670,734 $ 21.78
CLASS C
- ------------------------------------
MSDW Mid-Cap ...................... $ 7,271,751 475,001 $ 15.31
TCW/DW Mid-Cap .................... $ 1,726,233 79,367 $ 21.75
Combined Fund (pro forma) ......... $ 8,997,984 413,700 $ 21.75
CLASS D
- ------------------------------------
MSDW Mid-Cap ...................... $ 2,673,104 171,936 $ 15.55
TCW/DW Mid-Cap .................... $ 20,378 923 $ 22.08
Combined Fund (pro forma) ......... $ 2,693,482 121,987 $ 22.08
</TABLE>
APPRAISAL RIGHTS
Shareholders will have no appraisal rights in connection with the
Reorganization.
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES AND POLICIES
MSDW Mid-Cap and TCW/DW Mid-Cap each are funds which have similar,
although not identical, investment objectives and policies. The investment
objective of MSDW Mid-Cap is long-term capital growth. The investment objective
of TCW/DW Mid-Cap is long-term capital appreciation. Both funds seek to achieve
their objectives by investing principally in a diversified portfolio of common
stocks of medium-sized companies in accordance with their respective investment
strategies set forth below.
TCW/DW Mid-Cap seeks to achieve its investment objective by investing,
under normal circumstances, at least 65% of its total assets in common stocks
and other equity securities issued by medium-sized companies whose market
capitalizations, at the time of acquisition, are within the capitalization
range of the companies comprising the S&P Mid-Cap 400 Index (approximately
between $192 million and $11.7 billion as of February 26, 1999) and that, in
the opinion of TCW, exhibit superior earnings growth prospects and attractive
stock market valuations. The equity securities in which TCW/DW Mid-Cap may
invest include common stocks and convertible securities such as investment
grade convertible bonds, notes, debentures, preferred stocks or other
securities convertible into common stock.
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TCW pursues a "bottom-up" investment philosophy in investing TCW/DW
Mid-Cap's assets. The "bottom-up" investment process is characterized by TCW's
proprietary research process which is used in the selection of investments.
Quantitative and qualitative standards also will be used to screen the more
than 1,000 medium-sized companies within the applicable capitalization range to
provide TCW with a list of potential investment securities. TCW then subjects
the list of securities to fundamental analysis using a variety of criteria. Up
to 35% of the fund's total assets may be invested in equity securities whose
market capitalization at the time of acquisition is not within the stated
capitalization range, as well as in investment grade fixed-income securities
consisting of securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, corporate debt securities and money market
instruments. Up to 25% of the fund's total assets may be invested in equity
securities of foreign issuers in the form of direct investments or depository
receipts or other similar securities convertible into securities of foreign
issuers.
In addition, although it does not currently do so, TCW/DW Mid-Cap may
invest up to 5% of its assets in certain high yield, high risk convertible and
other fixed-income securities (commonly known as "junk bonds"). Moreover, any
amount of TCW/DW Mid-Cap's total assets may be invested in money market
instruments or cash to maintain, temporarily, a "defensive" position when TCW
believes it is advisable to do so.
MSDW Mid-Cap seeks to achieve its investment objective by investing, under
normal circumstances, at least 65% of its total assets in a diversified
portfolio of domestic and foreign equity securities of "mid-cap" companies. For
purposes of MSDW Mid-Cap, a mid-cap company is a company whose market
capitalization falls within the range of $250 million to $5 billion. The fund
may invest up to 35% of its total assets in (i) U.S. Government Securities,
investment grade corporate debt securities and money market instruments, or
(ii) equity securities of companies with market capitalizations which fall
outside of the range of $250 million to $5 billion at the time of purchase, as
long as such investments are consistent with the fund's investment objective.
The fund may invest up to 35% of its total assets in the equity securities of
non-U.S. companies, including American or other Depository Receipts, rights,
warrants, and the direct purchase of foreign securities. Equity securities in
which the fund may invest include common stocks and securities convertible into
common stocks.
MSDW Mid-Cap utilizes an investment process that places primary emphasis
on seeking to identify industries, rather than individual companies, as
prospects for capital appreciation and whereby MSDW Advisors seeks to invest
the assets of the fund in industries it considers to be attractive at the time
of purchase and to sell those it considers overvalued. MSDW Advisors invests
principally in those mid-cap companies that in the opinion of MSDW Advisors
have above-average relative growth potential.
MSDW Mid-Cap may engage in options and futures transactions. The fund may
purchase and sell (write) options on debt and equity securities which are
listed on Exchanges or which are OTC options and may only write covered options
in an amount up to, but not exceeding in the aggregate, 25% of the value of its
total assets. The fund also may purchase listed and OTC call and put options in
amounts equaling up to 10% of its total assets and may invest up to 5% of its
total assets in stock index options. MSDW Mid-Cap may purchase call and put
options to close out covered call or written put positions, as applicable, or
to protect the value of the relevant security. MSDW Mid-Cap may purchase and
sell interest rate and stock index futures contracts that are traded on U.S.
commodity exchanges on such underlying securities as U.S. Treasury securities,
GNMA Certificates, and indexes such as the S&P 500 Index, the New York Stock
Exchange Composite Index and the Moody's Investment-Grade Corporate Bond Index.
Both funds may invest their assets in foreign securities, including
securities of foreign issuers denominated in foreign currencies in the form of
direct investments or in the form of American Depository Receipts, European
Depository Receipts or other similar securities convertible into securities of
foreign issuers; TCW/DW Mid-Cap may invest up to 25% of its total assets in
foreign securities while MSDW Mid-Cap may invest up to 35% of its total assets
in foreign securities.
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<PAGE>
Both TCW/DW Mid-Cap and MSDW Mid-Cap may (i) purchase securities on a
when-issued or delayed delivery basis, (ii) purchase securities on a "when, as
and if issued" basis, (iii) enter into repurchase agreements subject to certain
procedures designed to minimize risks associated with such agreements, (iv)
purchase rights and warrants, (v) invest in zero coupon securities, (vi) invest
in real estate investment trusts, (vii) lend their portfolio securities, and
(viii) invest (up to 15% of TCW/DW Mid-Cap's net assets and up to 5% of MSDW
Mid-Cap's total assets) in securities which are subject to restrictions on
resale because they have not been registered under the Securities Act of 1933,
as amended, or which are not otherwise readily marketable (both funds do not
include Rule 144A securities in this limitation).
The investment policies of both MSDW Mid-Cap and TCW/DW Mid-Cap are not
fundamental and may be changed by their respective Boards. The foregoing
discussion is a summary of the principal differences and similarities between
the investment policies of the funds. For a more complete discussion of each
fund's policies, see the sections entitled "Investment Objective and Policies"
and "Investment Practices and Policies" in MSDW Mid-Cap's Prospectus and
Statement of Additional Information, respectively; and the sections entitled
"Principal Investment Strategies" and "Additional Investment Strategy
Information" in TCW/DW Mid-Cap's Prospectus and "Description of the Fund and
its Investments and Risks" in TCW/DW Mid-Cap's Statement of Additional
Information.
INVESTMENT RESTRICTIONS
The investment restrictions adopted by MSDW Mid-Cap and TCW/DW Mid-Cap as
fundamental policies are substantially similar and are summarized under the
caption "Investment Restrictions" in MSDW Mid-Cap's Prospectus and Statement of
Additional Information and under the caption "Description of the Fund and its
Investments and Risks -- Fund Policies/Investment Restrictions" in TCW/DW
Mid-Cap's Statement of Additional Information. A fundamental investment
restriction cannot be changed without the vote of the majority of the
outstanding voting securities of a fund, as defined in the 1940 Act. The
material differences are as follows: (a) MSDW Mid-Cap has fundamental
restrictions that it may not invest more than 5% of the value of its total
assets in the securities of any one issuer (other than obligations issued, or
guaranteed by, the United States Government, its agencies or instrumentalities)
and that it may not purchase more than 10% of all outstanding voting securities
of any one issuer; TCW/DW Mid-Cap applies the same restrictions but only with
respect to 75% of its assets; (b) both funds are prohibited from issuing senior
securities as defined in the 1940 Act except insofar as a fund may be deemed to
have issued a senior security by reason of: (i) entering into any repurchase
agreement; (ii) borrowing money in accordance with the fund's applicable
restriction; or (iii) lending portfolio securities; TCW/DW Mid-Cap carves out
an additional exception for purchasing securities on a when-issued or delayed
delivery basis; (c) both funds are prohibited from purchasing commodities or
commodities contracts but MSDW Mid-Cap may purchase or sell futures contracts
and related options; (d) TCW/DW Mid-Cap may not purchase warrants if, as a
result, the fund would then have either more than 5% of its net assets invested
in warrants or more than 2% of its net assets invested in warrants not listed
on the New York or American Stock Exchange; MSDW Mid-Cap has no such
restriction; and (e) TCW/DW Mid-Cap is prohibited from investing in options or
futures contracts; MSDW/DW Mid-Cap has no such restriction.
In addition, MSDW Mid-Cap has a fundamental restriction that it may not
invest in securities of any issuer if, to the knowledge of the fund, any
officer or trustee of the fund or of the fund's Investment Manager owns more
than 1/2 of 1% of the outstanding securities of such issuer, and such officers
and trustees who own more than 1/2 of 1% own in the aggregate more than 5% of
the outstanding securities of such issuer; TCW/DW Mid-Cap has no such
limitation.
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<PAGE>
ADDITIONAL INFORMATION ABOUT MSDW MID-CAP
AND TCW/DW MID-CAP
GENERAL
For a discussion of the organization and operation of MSDW Mid-Cap, see
"The Fund and its Management," "Investment Objective and Policies," "Investment
Restrictions" and "Prospectus Summary" in, and the cover page of, the fund's
Prospectus. For a discussion of the organization and operation of TCW/DW
Mid-Cap, see "Fund Management," "Investment Objective," "Principal Investment
Strategies" and "Additional Investment Strategy Information" in the fund's
Prospectus.
FINANCIAL INFORMATION
For certain financial information about TCW/DW Mid-Cap and MSDW Mid-Cap,
see "Financial Highlights" in their respective Prospectuses and "Past
Performance" in TCW/DW Mid-Cap's Prospectus and "Performance Information" in
MSDW Mid-Cap's Prospectus.
MANAGEMENT
For information about the respective Board of Trustees, MSDW Advisors,
TCW, and the Distributor of TCW/DW Mid-Cap and MSDW Mid-Cap, see "Fund
Management" in TCW/DW Mid-Cap's Prospectus and "Management of the Fund" in
TCW/DW Mid-Cap's Statement of Additional Information and "The Fund and its
Management" and "Investment Objective and Policies" in, and on the back cover
of, MSDW Mid-Cap's Prospectus.
DESCRIPTION OF SECURITIES AND SHAREHOLDER INQUIRIES
For a description of the nature and most significant attributes of shares
of TCW/DW Mid-Cap and MSDW Mid-Cap, and information regarding shareholder
inquiries, see the back cover of TCW/DW Mid-Cap's Prospectus and "Capital Stock
and Other Securities" in TCW/DW Mid-Cap's Statement of Additional Information
and "Additional Information" in MSDW Mid-Cap's Prospectus.
DIVIDENDS, DISTRIBUTIONS AND TAXES
For a discussion of TCW/DW Mid-Cap's and MSDW Mid-Cap's policies with
respect to dividends, distributions and taxes, see "Distributions" and "Tax
Consequences" in TCW/DW Mid-Cap's Prospectus and "Dividends, Distributions and
Taxes" in MSDW Mid-Cap's Prospectus as well as the discussion herein under
"Synopsis -- Purchases, Exchanges and Redemptions."
PURCHASES, REPURCHASES AND REDEMPTIONS
For a discussion of how TCW/DW Mid-Cap's and MSDW Mid-Cap's shares may be
purchased, repurchased and redeemed, see "How to Buy Shares," "How to Exchange
Shares" and "How to Sell Shares" in TCW/DW Mid-Cap's Prospectus and "Purchase
of Fund Shares," "Shareholder Services" and "Redemptions and Repurchases" in
MSDW Mid-Cap's Prospectus.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For a discussion of TCW/DW Mid-Cap's performance, see management's letter
to shareholders in its Annual Report for its fiscal year ended November 30,
1998 accompanying this Proxy Statement and Prospectus. For a discussion of the
performance of MSDW Mid-Cap, see its Annual Report for its fiscal year ended
May 31, 1998 and its unaudited Semi-Annual Report for the six months ended
November 30, 1998.
20
<PAGE>
FINANCIAL STATEMENTS AND EXPERTS
The financial statements of TCW/DW Mid-Cap, for the year ended November
30, 1998, and MSDW Mid-Cap, for the year ended May 31, 1998 that are
incorporated by reference in the Statement of Additional Information relating
to the Registration Statement on Form N-14 of which this Proxy Statement and
Prospectus forms a part, have been audited by PricewaterhouseCoopers LLP,
independent accountants. The financial statements have been incorporated by
reference in reliance upon such reports given upon the authority of
PricewaterhouseCoopers LLP as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of TCW/DW Mid-Cap
will be passed upon by Gordon Altman Butowsky Weitzen Shalov & Wein, New York,
New York. Such firm will rely on Lane Altman & Owens, Boston, Massachusetts, as
to matters of Massachusetts law.
AVAILABLE INFORMATION
Additional information about MSDW Mid-Cap and TCW/DW Mid-Cap is available,
as applicable, in the following documents which are incorporated herein by
reference: (i) TCW/DW Mid-Cap's Prospectus dated March 29, 1999, attached to
this Proxy Statement and Prospectus, which Prospectus forms a part of
Post-Effective Amendment No. 6 to TCW/DW Mid-Cap's Registration Statement on
Form N-1A (File Nos. 33-63685; 811-7377); (ii) TCW/DW Mid-Cap's Annual Report
for its fiscal year ended November 30, 1998, accompanying this Proxy Statement
and Prospectus; (iii) MSDW Mid-Cap's Prospectus dated July 29, 1998, which
Prospectus forms a part of Post-Effective Amendment No. 5 to MSDW Mid-Cap's
Registration Statement on Form N-1A (File Nos. 33-53955; 811-7179); and (iv)
MSDW Mid-Cap's Annual Report for its fiscal year ended May 31, 1998 and its
unaudited Semi-Annual Report for its six months ended November 30, 1998. The
foregoing documents may be obtained without charge by calling (800) 869-NEWS
(toll-free).
TCW/DW Mid-Cap and MSDW Mid-Cap are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith, file reports and other information with the Commission.
Proxy material, reports and other information about TCW/DW Mid-Cap and MSDW
Mid-Cap which are of public record can be inspected and copied at public
reference facilities maintained by the Commission at Room 1204, Judiciary
Plaza, 450 Fifth Street, NW, Washington, D.C. 20549 and certain of its regional
offices, and copies of such materials can be obtained at prescribed rates from
the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549.
21
<PAGE>
OTHER BUSINESS
Management of MSDW Mid-Cap knows of no business other than the matters
specified above which will be presented at the Meeting. Since matters not known
at the time of the solicitation may come before the Meeting, the proxy as
solicited confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or adjournments
thereof, and it is the intention of the persons named as attorneys-in-fact in
the proxy to vote this proxy in accordance with their judgment on such matters.
By Order of the Board of Trustees
Barry Fink,
Secretary
April 12, 1999
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this
25th day of February, 1999, by and between TCW/DW MID-CAP EQUITY TRUST, a
Massachusetts business trust ("TCW/DW Mid-Cap") and MORGAN STANLEY DEAN WITTER
MID-CAP GROWTH FUND, a Massachusetts business trust ("MSDW Mid-Cap").
This Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of Treas. Reg. 1.368-2(g), for a
reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization ("Reorganization") will consist of the
transfer to TCW/DW Mid-Cap of substantially all of the assets of MSDW Mid-Cap
in exchange for the assumption by TCW/DW Mid-Cap of all stated liabilities of
MSDW Mid-Cap and the issuance by TCW/DW Mid-Cap of shares of beneficial
interest, par value $0.01 per share (the "TCW/DW Mid-Cap Shares"), to be
distributed, after the Closing Date hereinafter referred to, to the
shareholders of MSDW Mid-Cap in liquidation of MSDW Mid-Cap as provided herein,
all upon the terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. THE REORGANIZATION AND LIQUIDATION OF MSDW MID-CAP
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, MSDW Mid-Cap agrees to
assign, deliver and otherwise transfer the MSDW Mid-Cap Assets (as defined in
paragraph 1.2) to TCW/DW Mid-Cap and TCW/DW Mid-Cap agrees in exchange therefor
to assume all of MSDW Mid-Cap's stated liabilities on the Closing Date as set
forth in paragraph 1.3(a) and to deliver to MSDW Mid-Cap the number of TCW/DW
Mid-Cap Shares, including fractional TCW/DW Mid-Cap Shares, determined in the
manner set forth in paragraph 2.3. Such transactions shall take place at the
closing provided for in paragraph 3.1 ("Closing").
1.2 (a) The "MSDW Mid-Cap Assets" shall consist of all property, including
without limitation, all cash (other than the "Cash Reserve" (as defined in
paragraph 1.3(b)), cash equivalents, securities and dividend and interest
receivables owned by MSDW Mid-Cap, and any deferred or prepaid expenses shown
as an asset on MSDW Mid-Cap's books on the Valuation Date.
(b) On or prior to the Valuation Date, MSDW Mid-Cap will provide TCW/DW
Mid-Cap with a list of all of MSDW Mid-Cap's assets to be assigned, delivered
and otherwise transferred to TCW/DW Mid-Cap and of the stated liabilities to be
assumed by TCW/DW Mid-Cap pursuant to this Agreement. MSDW Mid-Cap reserves the
right to sell any of the securities on such list but will not, without the
prior approval of TCW/DW Mid-Cap, acquire any additional securities other than
securities of the type in which TCW/DW Mid-Cap is permitted to invest and in
amounts agreed to in writing by TCW/DW Mid-Cap. TCW/DW Mid-Cap will, within a
reasonable time prior to the Valuation Date, furnish MSDW Mid-Cap with a
statement of TCW/DW Mid-Cap's investment objectives, policies and restrictions
and a list of the securities, if any, on the list referred to in the first
sentence of this paragraph that do not conform to TCW/DW Mid-Cap's investment
objective, policies and restrictions. In the event that MSDW Mid-Cap holds any
investments that TCW/DW Mid-Cap is not permitted to hold, MSDW Mid-Cap will
dispose of such securities on or prior to the Valuation Date. In addition, if
it is determined that the portfolios of MSDW Mid-Cap and TCW/DW Mid-Cap, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon TCW/DW Mid-Cap with respect to such investments, MSDW Mid-Cap if
requested by TCW/DW Mid-Cap will, on or prior to the
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Valuation Date, dispose of and/or reinvest a sufficient amount of such
investments as may be necessary to avoid violating such limitations as of the
Closing Date (as defined in paragraph 3.1).
1.3 (a) MSDW Mid-Cap will endeavor to discharge all of its liabilities and
obligations on or prior to the Valuation Date. TCW/DW Mid-Cap will assume all
stated liabilities, which includes, without limitation, all expenses, costs,
charges and reserves reflected on an unaudited Statement of Assets and
Liabilities of MSDW Mid-Cap prepared by the Treasurer of MSDW Mid-Cap as of the
Valuation Date in accordance with generally accepted accounting principles
consistently applied from the prior audited period.
(b) On the Valuation Date, MSDW Mid-Cap may establish a cash reserve,
which shall not exceed 5% of MSDW Mid-Cap's net assets as of the close of
business on the Valuation Date ("Cash Reserve") to be retained by MSDW Mid-Cap
and used for the payment of its liabilities not discharged prior to the
Valuation Date and for the expenses of dissolution.
1.4 In order for MSDW Mid-Cap to comply with Section 852(a)(1) of the Code
and to avoid having any investment company taxable income or net capital gain
(as defined in Sections 852(b)(2) and 1222(11) of the Code, respectively) in
the short taxable year ending with its dissolution, MSDW Mid-Cap will on or
before the Valuation Date (a) declare a dividend in an amount large enough so
that it will have declared dividends of all of its investment company taxable
income and net capital gain, if any, for such taxable year (determined without
regard to any deduction for dividends paid) and (b) distribute such dividend.
1.5 On the Closing Date or as soon as practicable thereafter, MSDW Mid-Cap
will distribute TCW/DW Mid-Cap Shares received by MSDW Mid-Cap pursuant to
paragraph 1.1 pro rata to its shareholders of record determined as of the close
of business on the Valuation Date ("MSDW Mid-Cap Shareholders"). Each MSDW
Mid-Cap Shareholder will receive the class of shares of TCW/DW Mid-Cap that
corresponds to the class of shares of MSDW Mid-Cap currently held by that MSDW
Mid-Cap Shareholder. Accordingly, the TCW/DW Mid-Cap Shares will be distributed
as follows: each of the Class A, Class B, Class C and Class D shares of TCW/DW
Mid-Cap will be distributed to holders of Class A, Class B, Class C and Class D
shares of MSDW Mid-Cap, respectively. Such distribution will be accomplished by
an instruction, signed by MSDW Mid-Cap's Secretary, to transfer TCW/DW Mid-Cap
Shares then credited to MSDW Mid-Cap's account on the books of TCW/DW Mid-Cap
to open accounts on the books of TCW/DW Mid-Cap in the names of the MSDW
Mid-Cap Shareholders and representing the respective pro rata number of TCW/DW
Mid-Cap Shares due such MSDW Mid-Cap Shareholders. All issued and outstanding
shares of MSDW Mid-Cap simultaneously will be canceled on MSDW Mid-Cap's books;
however, share certificates representing interests in MSDW Mid-Cap will
represent a number of TCW/DW Mid-Cap Shares after the Closing Date as
determined in accordance with paragraph 2.3. TCW/DW Mid-Cap will issue
certificates representing TCW/DW Mid-Cap Shares in connection with such
exchange only upon the written request of a MSDW Mid-Cap Shareholder.
1.6 Ownership of TCW/DW Mid-Cap Shares will be shown on the books of
TCW/DW Mid-Cap's transfer agent. TCW/DW Mid-Cap Shares will be issued in the
manner described in TCW/DW Mid-Cap's current Prospectus and Statement of
Additional Information.
1.7 Any transfer taxes payable upon issuance of TCW/DW Mid-Cap Shares in a
name other than the registered holder of TCW/DW Mid-Cap Shares on MSDW
Mid-Cap's books as of the close of business on the Valuation Date shall, as a
condition of such issuance and transfer, be paid by the person to whom TCW/DW
Mid-Cap Shares are to be issued and transferred.
1.8 Any reporting responsibility of MSDW Mid-Cap is and shall remain the
responsibility of MSDW Mid-Cap up to and including the date on which MSDW
Mid-Cap is dissolved and deregistered pursuant to paragraph 1.9.
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1.9 Within one year after the Closing Date, MSDW Mid-Cap shall pay or make
provision for the payment of all its liabilities and taxes, and distribute to
the shareholders of MSDW Mid-Cap as of the close of business on the Valuation
Date any remaining amount of the Cash Reserve (as reduced by the estimated cost
of distributing it to shareholders). MSDW Mid-Cap shall be dissolved as a
Massachusetts business trust and deregistered as an investment company under
the Investment Company Act of 1940, as amended ("1940 Act"), promptly following
the making of all distributions pursuant to paragraph 1.5.
1.10 Copies of all books and records maintained on behalf of MSDW Mid-Cap
in connection with its obligations under the 1940 Act, the Code, state blue sky
laws or otherwise in connection with this Agreement will promptly after the
Closing be delivered to officers of TCW/DW Mid-Cap or their designee and TCW/DW
Mid-Cap or its designee shall comply with applicable record retention
requirements to which MSDW Mid-Cap is subject under the 1940 Act.
2. VALUATION
2.1 The value of the MSDW Mid-Cap Assets shall be the value of such assets
computed as of 4:00 p.m. on the New York Stock Exchange on the third business
day following the receipt of the requisite approval by shareholders of MSDW
Mid-Cap of this Agreement or at such time on such earlier or later date after
such approval as may be mutually agreed upon in writing (such time and date
being hereinafter called the "Valuation Date"), using the valuation procedures
set forth in TCW/DW Mid-Cap's then current Prospectus and Statement of
Additional Information.
2.2 The net asset value of TCW/DW Mid-Cap Share shall be the net asset
value per share computed on the Valuation Date, using the valuation procedures
set forth in TCW/DW Mid-Cap's then current Prospectus and Statement of
Additional Information.
2.3 The number of TCW/DW Mid-Cap Shares (including fractional shares, if
any) to be issued hereunder shall be determined, with respect to each class, by
dividing the aggregate net asset value of each class of MSDW Mid-Cap shares
(determined in accordance with paragraph 2.1) by the net asset value per share
of the corresponding class of shares of TCW/DW Mid-Cap (determined in
accordance with paragraph 2.2). For purposes of this paragraph, the aggregate
net asset value of each class of shares of MSDW Mid-Cap shall not include the
amount of the Cash Reserve.
2.4 All computations of value shall be made by Morgan Stanley Dean Witter
Services Company Inc. ("MSDW Services") in accordance with its regular practice
in pricing TCW/DW Mid-Cap. TCW/DW Mid-Cap shall cause MSDW Services to deliver
a copy of its valuation report at the Closing.
3. CLOSING AND CLOSING DATE
3.1 The Closing shall take place on the next business day following the
Valuation Date (the "Closing Date"). The Closing shall be held as of 9:00 a.m.
Eastern time, or at such other time as the parties may agree. The Closing shall
be held in a location mutually agreeable to the parties hereto. All acts taking
place at the Closing shall be deemed to take place simultaneously as of 9:00
a.m. Eastern time on the Closing Date unless otherwise provided.
3.2 Portfolio securities held by MSDW Mid-Cap and represented by a
certificate or other written instrument shall be presented by it or on its
behalf to The Bank of New York (the "Custodian"), as custodian for TCW/DW
Mid-Cap, for examination no later than five business days preceding the
Valuation Date. Such portfolio securities (together with any cash or other
assets) shall be delivered by MSDW Mid-Cap to the Custodian for the account of
TCW/DW Mid-Cap on or before the Closing Date in conformity with applicable
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custody provisions under the 1940 Act and duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof in accordance
with the custom of brokers. The portfolio securities shall be accompanied by
all necessary Federal and state stock transfer stamps or a check for the
appropriate purchase price of such stamps. Portfolio securities and instruments
deposited with a securities depository (as defined in Rule 17f-4 under the 1940
Act) shall be delivered on or before the Closing Date by book-entry in
accordance with customary practices of such depository and the Custodian. The
cash delivered shall be in the form of a Federal Funds wire, payable to the
order of "The Bank of New York, Custodian for Morgan Stanley Dean Witter
Mid-Cap Equity Trust."
3.3 In the event that on the Valuation Date, (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be restricted or
(b) trading or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of both TCW/DW Mid-Cap and MSDW Mid-Cap,
accurate appraisal of the value of the net assets of TCW/DW Mid-Cap or the MSDW
Mid-Cap Assets is impracticable, the Valuation Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
without restriction or disruption and reporting shall have been restored.
3.4 If requested, MSDW Mid-Cap shall deliver to TCW/DW Mid-Cap or its
designee (a) at the Closing, a list, certified by its Secretary, of the names,
addresses and taxpayer identification numbers of the MSDW Mid-Cap Shareholders
and the number and percentage ownership of outstanding MSDW Mid-Cap shares
owned by each such MSDW Mid-Cap Shareholder, all as of the Valuation Date, and
(b) as soon as practicable after the Closing, all original documentation
(including Internal Revenue Service forms, certificates, certifications and
correspondence) relating to the MSDW Mid-Cap Shareholders' taxpayer
identification numbers and their liability for or exemption from back-up
withholding. TCW/DW Mid-Cap shall issue and deliver to such Secretary a
confirmation evidencing delivery of TCW/DW Mid-Cap Shares to be credited on the
Closing Date to MSDW Mid-Cap or provide evidence satisfactory to MSDW Mid-Cap
that such TCW/DW Mid-Cap Shares have been credited to MSDW Mid-Cap's account on
the books of TCW/DW Mid-Cap. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. COVENANTS OF TCW/DW MID-CAP AND MSDW MID-CAP
4.1 Except as otherwise expressly provided herein with respect to MSDW
Mid-Cap, TCW/DW Mid-Cap and MSDW Mid-Cap each will operate its business in the
ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and other distributions.
4.2 TCW/DW Mid-Cap will prepare and file with the Securities and Exchange
Commission ("Commission") a registration statement on Form N-14 under the
Securities Act of 1933, as amended ("1933 Act"), relating to TCW/DW Mid-Cap
Shares ("Registration Statement"). MSDW Mid-Cap will provide TCW/DW Mid-Cap
with the Proxy Materials as described in paragraph 4.3 below, for inclusion in
the Registration Statement. MSDW Mid-Cap will further provide TCW/DW Mid-Cap
with such other information and documents relating to MSDW Mid-Cap as are
reasonably necessary for the preparation of the Registration Statement.
4.3 MSDW Mid-Cap will call a meeting of its shareholders to consider and
act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated herein. MSDW Mid-Cap will prepare the
notice of meeting, form of proxy and proxy statement (collectively, "Proxy
Materials") to be used in connection with such meeting; provided that TCW/DW
Mid-Cap will furnish MSDW Mid-Cap with its currently effective prospectus for
inclusion in the Proxy Materials and with such other information relating to
TCW/DW Mid-Cap as is reasonably necessary for the preparation of the Proxy
Materials.
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4.4 MSDW Mid-Cap will assist TCW/DW Mid-Cap in obtaining such information
as TCW/DW Mid-Cap reasonably requests concerning the beneficial ownership of
MSDW Mid-Cap shares.
4.5 Subject to the provisions of this Agreement, TCW/DW Mid-Cap and MSDW
Mid-Cap will each take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
4.6 MSDW Mid-Cap shall furnish or cause to be furnished to TCW/DW Mid-Cap
within 30 days after the Closing Date a statement of MSDW Mid-Cap's assets and
liabilities as of the Closing Date, which statement shall be certified by MSDW
Mid-Cap's Treasurer and shall be in accordance with generally accepted
accounting principles consistently applied. As promptly as practicable, but in
any case within 60 days after the Closing Date, MSDW Mid-Cap shall furnish
TCW/DW Mid-Cap, in such form as is reasonably satisfactory to TCW/DW Mid-Cap, a
statement certified by MSDW Mid-Cap's Treasurer of MSDW Mid-Cap's earnings and
profits for Federal income tax purposes that will be carried over to TCW/DW
Mid-Cap pursuant to Section 381 of the Code.
4.7 As soon after the Closing Date as is reasonably practicable, MSDW
Mid-Cap (a) shall prepare and file all Federal and other tax returns and
reports of MSDW Mid-Cap required by law to be filed with respect to all periods
ending on or before the Closing Date but not theretofore filed and (b) shall
pay all Federal and other taxes shown as due thereon and/or all Federal and
other taxes that were unpaid as of the Closing Date, including without
limitation, all taxes for which the provision for payment was made as of the
Closing Date (as represented in paragraph 5.2(k)).
4.8 TCW/DW Mid-Cap agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act and the 1940 Act and to
make such filings required by the state Blue Sky and securities laws as it may
deem appropriate in order to continue its operations after the Closing Date.
5. REPRESENTATIONS AND WARRANTIES
5.1 TCW/DW Mid-Cap represents and warrants to MSDW Mid-Cap as follows:
(a) TCW/DW Mid-Cap is a validly existing Massachusetts business trust
with full power to carry on its business as presently conducted;
(b) TCW/DW Mid-Cap is a duly registered, open-end, management
investment company, and its registration with the Commission as an
investment company under the 1940 Act and the registration of its shares
under the 1933 Act are in full force and effect;
(c) All of the issued and outstanding shares of TCW/DW Mid-Cap have
been offered and sold in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities
laws. Shares of TCW/DW Mid-Cap are registered in all jurisdictions in which
they are required to be registered under state securities laws and other
laws, and said registrations, including any periodic reports or
supplemental filings, are complete and current, all fees required to be
paid have been paid, and TCW/DW Mid-Cap is not subject to any stop order
and is fully qualified to sell its shares in each state in which its shares
have been registered;
(d) The current Prospectus and Statement of Additional Information of
TCW/DW Mid-Cap conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the regulations
thereunder and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;
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(e) TCW/DW Mid-Cap is not in, and the execution, delivery and
performance of this Agreement will not result in a, material violation of
any provision of TCW/DW Mid-Cap's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to
which TCW/DW Mid-Cap is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its
knowledge, threatened against TCW/DW Mid-Cap or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business; and TCW/DW
Mid-Cap knows of no facts that might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects, or is reasonably likely to materially and
adversely effect, its business or its ability to consummate the
transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights for the year
ended November 30, 1998, of TCW/DW Mid-Cap certified by
PricewaterhouseCoopers LLP (copies of which have been furnished to MSDW
Mid-Cap), fairly present, in all material respects, TCW/DW Mid-Cap's
financial condition as of such date in accordance with generally accepted
accounting principles, and its results of such operations, changes in its
net assets and financial highlights for such period, and as of such date
there were no known liabilities of TCW/DW Mid-Cap (contingent or otherwise)
not disclosed therein that would be required in accordance with generally
accepted accounting principles to be disclosed therein;
(h) All issued and outstanding TCW/DW Mid-Cap Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and nonassessable with no personal liability attaching to the ownership
thereof, except as set forth under "Capital Stock and Other Securities" in
TCW/DW Mid-Cap's current Statement of Additional Information incorporated
by reference in the Registration Statement. TCW/DW Mid-Cap does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of its shares;
(i) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of TCW/DW Mid-Cap, and
this Agreement constitutes a valid and binding obligation of TCW/DW Mid-Cap
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors rights and to general equity principles. No other
consents, authorizations or approvals are necessary in connection with
TCW/DW Mid-Cap's performance of this Agreement;
(j) TCW/DW Mid-Cap Shares to be issued and delivered to MSDW Mid-Cap,
for the account of the MSDW Mid-Cap Shareholders, pursuant to the terms of
this Agreement will at the Closing Date have been duly authorized and, when
so issued and delivered, will be duly and validly issued TCW/DW Mid-Cap
Shares, and will be fully paid and non-assessable with no personal
liability attaching to the ownership thereof, except as set forth under the
caption "Additional Information" in TCW/DW Mid-Cap's current Prospectus
incorporated by reference in the Registration Statement;
(k) All material Federal and other tax returns and reports of TCW/DW
Mid-Cap required by law to be filed on or before the Closing Date have been
filed and are correct, and all Federal and other taxes shown as due or
required to be shown as due on said returns and reports have been paid or
provision has been made for the payment thereof, and to the best of TCW/DW
Mid-Cap's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return;
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(l) For each taxable year since its inception, TCW/DW Mid-Cap has met
the requirements of Subchapter M of the Code for qualification and
treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement
will adversely affect, and no other events are reasonably likely to occur
which will adversely affect the ability of TCW/DW Mid-Cap to continue to
meet the requirements of Subchapter M of the Code;
(m) Since November 30, 1998 there has been no change by TCW/DW Mid-Cap
in accounting methods, principles, or practices, including those required
by generally accepted accounting principles;
(n) The information furnished or to be furnished by TCW/DW Mid-Cap for
use in registration statements, proxy materials and other documents which
may be necessary in connection with the transactions contemplated hereby
shall be accurate and complete in all material respects and shall comply in
all material respects with Federal securities and other laws and
regulations applicable thereto; and
(o) The Proxy Materials to be included in the Registration Statement
(only insofar as they relate to TCW/DW Mid-Cap) will, on the effective date
of the Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
materially misleading.
5.2 MSDW Mid-Cap represents and warrants to TCW/DW Mid-Cap as follows:
(a) MSDW Mid-Cap is a validly existing Massachusetts business trust
with full power to carry on its business as presently conducted;
(b) MSDW Mid-Cap is a duly registered, open-end, management investment
company, and its registration with the Commission as an investment company
under the 1940 Act and the registration of its shares under the 1933 Act
are in full force and effect;
(c) All of the issued and outstanding shares of beneficial interest of
MSDW Mid-Cap have been offered and sold in compliance in all material
respects with applicable requirements of the 1933 Act and state securities
laws. Shares of MSDW Mid-Cap are registered in all jurisdictions in which
they are required to be registered and said registrations, including any
periodic reports or supplemental filings, are complete and current, all
fees required to be paid have been paid, and MSDW Mid-Cap is not subject to
any stop order and is fully qualified to sell its shares in each state in
which its shares have been registered;
(d) The current Prospectus and Statement of Additional Information of
MSDW Mid-Cap conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the regulations
thereunder and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;
(e) MSDW Mid-Cap is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of any provision of
MSDW Mid-Cap's Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which MSDW
Mid-Cap is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to its
knowledge, threatened against MSDW Mid-Cap or any of its properties or
assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business; and MSDW
Mid-Cap knows of no facts that might form the basis
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for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects, or is reasonably
likely to materially and adversely effect, its business or its ability to
consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets and Financial Highlights of MSDW Mid-Cap
for the year ended May 31, 1998, certified by PricewaterhouseCoopers LLP
(copies of which have been or will be furnished to TCW/DW Mid-Cap) fairly
present, in all material respects, MSDW Mid-Cap's financial condition as of
such date, and its results of operations, changes in its net assets and
financial highlights for such period in accordance with generally accepted
accounting principles, and as of such date there were no known liabilities
of MSDW Mid-Cap (contingent or otherwise) not disclosed therein that would
be required in accordance with generally accepted accounting principles to
be disclosed therein;
(h) MSDW Mid-Cap has no material contracts or other commitments (other
than this Agreement) that will be terminated with liability to it prior to
the Closing Date;
(i) All issued and outstanding shares of MSDW Mid-Cap are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and nonassessable with no personal liability attaching to the ownership
thereof, except as set forth under the caption "Additional Information" in
MSDW Mid-Cap's current Prospectus incorporated by reference in the
Registration Statement. MSDW Mid-Cap does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of its shares,
nor is there outstanding any security convertible to any of its shares. All
such shares will, at the time of Closing, be held by the persons and in the
amounts set forth in the list of shareholders submitted to TCW/DW Mid-Cap
pursuant to paragraph 3.4;
(j) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on
the part of MSDW Mid-Cap, and subject to the approval of MSDW Mid-Cap's
shareholders, this Agreement constitutes a valid and binding obligation of
MSDW Mid-Cap, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors rights and to general equity
principles. No other consents, authorizations or approvals are necessary in
connection with MSDW Mid-Cap's performance of this Agreement;
(k) All material Federal and other tax returns and reports of MSDW
Mid-Cap required by law to be filed on or before the Closing Date shall
have been filed and are correct and all Federal and other taxes shown as
due or required to be shown as due on said returns and reports have been
paid or provision has been made for the payment thereof, and to the best of
MSDW Mid-Cap's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return;
(l) For each taxable year since its inception, MSDW Mid-Cap has met all
the requirements of Subchapter M of the Code for qualification and
treatment as a "regulated investment company" and neither the execution or
delivery of nor the performance of its obligations under this Agreement
will adversely affect, and no other events are reasonably likely to occur
which will adversely affect the ability of MSDW Mid-Cap to continue to meet
the requirements of Subchapter M of the Code;
(m) At the Closing Date, MSDW Mid-Cap will have good and valid title to
the MSDW Mid-Cap Assets, subject to no liens (other than the obligation, if
any, to pay the purchase price of portfolio securities purchased by MSDW
Mid-Cap which have not settled prior to the Closing Date), security
interests or other encumbrances, and full right, power and authority to
assign, deliver and otherwise transfer such
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assets hereunder, and upon delivery and payment for such assets, TCW/DW
Mid-Cap will acquire good and marketable title thereto, subject to no
restrictions on the full transfer thereof, including any restrictions as
might arise under the 1933 Act;
(n) On the effective date of the Registration Statement, at the time of
the meeting of MSDW Mid-Cap's shareholders and on the Closing Date, the
Proxy Materials (exclusive of the currently effective TCW/DW Mid-Cap
Prospectus contained therein) will (i) comply in all material respects with
the provisions of the 1933 Act, the Securities Exchange Act of 1934, as
amended ("1934 Act") and the 1940 Act and the regulations thereunder and
(ii) not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Any other information furnished by MSDW
Mid-Cap for use in the Registration Statement or in any other manner that
may be necessary in connection with the transactions contemplated hereby
shall be accurate and complete and shall comply in all material respects
with applicable Federal securities and other laws and regulations
thereunder;
(o) MSDW Mid-Cap will, on or prior to the Valuation Date, declare one
or more dividends or other distributions to shareholders that, together
with all previous dividends and other distributions to shareholders, shall
have the effect of distributing to the shareholders all of its investment
company taxable income and net capital gain, if any, through the Valuation
Date (computed without regard to any deduction for dividends paid);
(p) MSDW Mid-Cap has maintained or has caused to be maintained on its
behalf all books and accounts as required of a registered investment
company in compliance with the requirements of Section 31 of the 1940 Act
and the Rules thereunder; and
(q) MSDW Mid-Cap is not acquiring TCW/DW Mid-Cap Shares to be issued
hereunder for the purpose of making any distribution thereof other than in
accordance with the terms of this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF MSDW MID-CAP
The obligations of MSDW Mid-Cap to consummate the transactions provided
for herein shall be subject, at its election, to the performance by TCW/DW
Mid-Cap of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of TCW/DW Mid-Cap contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date;
6.2 TCW/DW Mid-Cap shall have delivered to MSDW Mid-Cap a certificate of
its President and Treasurer, in a form reasonably satisfactory to MSDW Mid-Cap
and dated as of the Closing Date, to the effect that the representations and
warranties of TCW/DW Mid-Cap made in this Agreement are true and correct at and
as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as MSDW Mid-Cap
shall reasonably request;
6.3 MSDW Mid-Cap shall have received a favorable opinion from Gordon
Altman Butowsky Weitzen Shalov & Wein, counsel to TCW/DW Mid-Cap, dated as of
the Closing Date, to the effect that:
(a) TCW/DW Mid-Cap is a validly existing Massachusetts business trust,
and has the power to own all of its properties and assets and to carry on
its business as presently conducted (Massachusetts counsel may be relied
upon in delivering such opinion); (b) TCW/DW Mid-Cap is a duly registered,
open-end, management investment company, and its registration with the
Commission as an investment company
A-9
<PAGE>
under the 1940 Act is in full force and effect; (c) this Agreement has
been duly authorized, executed and delivered by TCW/DW Mid-Cap and,
assuming that the Registration Statement complies with the 1933 Act, the
1934 Act and the 1940 Act and regulations thereunder and assuming due
authorization, execution and delivery of this Agreement by MSDW Mid-Cap, is
a valid and binding obligation of TCW/DW Mid-Cap enforceable against TCW/DW
Mid-Cap in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors rights and to general equity principles; (d)
TCW/DW Mid-Cap Shares to be issued to MSDW Mid-Cap Shareholders as provided
by this Agreement are duly authorized and upon such delivery will be
validly issued, fully paid and non-assessable (except as set forth under
the caption "Capital Stock and Other Securities" in TCW/DW Mid-Cap's
Statement of Additional Information), and no shareholder of TCW/DW Mid-Cap
has any preemptive rights to subscription or purchase in respect thereof
(Massachusetts counsel may be relied upon in delivering such opinion); (e)
the execution and delivery of this Agreement did not, and the consummation
of the transactions contemplated hereby will not, violate TCW/DW Mid-Cap's
Declaration of Trust or By-Laws; and (f) to the knowledge of such counsel,
no consent, approval, authorization or order of any court or governmental
authority of the United States or any state is required for the
consummation by TCW/DW Mid-Cap of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act and such as may be required under state securities laws; and
6.4 As of the Closing Date, there shall have been no material change in
the investment objective, policies and restrictions nor any increase in the
investment management fees or annual fees pursuant to TCW/DW Mid-Cap's 12b-1
plan of distribution from those described in TCW/DW Mid-Cap's Prospectus dated
March 29, 1999 and Statement of Additional Information dated March 29, 1999.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF TCW/DW MID-CAP
The obligations of TCW/DW Mid-Cap to complete the transactions provided
for herein shall be subject, at its election, to the performance by MSDW
Mid-Cap of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of MSDW Mid-Cap contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date;
7.2 MSDW Mid-Cap shall have delivered to TCW/DW Mid-Cap at the Closing a
certificate of its President and its Treasurer, in form and substance
satisfactory to TCW/DW Mid-Cap and dated as of the Closing Date, to the effect
that the representations and warranties of MSDW Mid-Cap made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to such
other matters as TCW/DW Mid-Cap shall reasonably request;
7.3 MSDW Mid-Cap shall have delivered to TCW/DW Mid-Cap a statement of the
MSDW Mid-Cap Assets and its liabilities, together with a list of MSDW Mid-Cap's
portfolio securities and other assets showing the respective adjusted bases and
holding periods thereof for income tax purposes, as of the Closing Date,
certified by the Treasurer of MSDW Mid-Cap;
7.4 MSDW Mid-Cap shall have delivered to TCW/DW Mid-Cap within three
business days after the Closing a letter from PricewaterhouseCoopers LLP dated
as of the Closing Date stating that (a) such firm has performed a limited
review of the Federal and state income tax returns of MSDW Mid-Cap for each of
the last three taxable years and, based on such limited review, nothing came to
their attention that caused them to
A-10
<PAGE>
believe that such returns did not properly reflect, in all material respects,
the Federal and state income tax liabilities of MSDW Mid-Cap for the periods
covered thereby, (b) for the period from May 31, 1998 to and including the
Closing Date, such firm has performed a limited review (based on unaudited
financial data) to ascertain the amount of applicable Federal, state and local
taxes and has determined that same either have been paid or reserves have been
established for payment of such taxes, and, based on such limited review,
nothing came to their attention that caused them to believe that the taxes paid
or reserves set aside for payment of such taxes were not adequate in all
material respects for the satisfaction of all Federal, state and local tax
liabilities for the period from May 31, 1998 to and including the Closing Date
and (c) based on such limited reviews, nothing came to their attention that
caused them to believe that MSDW Mid-Cap would not qualify as a regulated
investment company for Federal income tax purposes for any such year or period;
7.5 TCW/DW Mid-Cap shall have received at the Closing a favorable opinion
from Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to MSDW Mid-Cap,
dated as of the Closing Date to the effect that:
(a) MSDW Mid-Cap is a validly existing Massachusetts business trust and
has the power to own all of its properties and assets and to carry on its
business as presently conducted (Massachusetts counsel may be relied upon
in delivering such opinion); (b) MSDW Mid-Cap is a duly registered,
open-end, management investment company under the 1940 Act, and its
registration with the Commission as an investment company under the 1940
Act is in full force and effect; (c) this Agreement has been duly
authorized, executed and delivered by MSDW Mid-Cap and, assuming that the
Registration Statement complies with the 1933 Act, the 1934 Act and the
1940 Act and the regulations thereunder and assuming due authorization,
execution and delivery of this Agreement by TCW/DW Mid-Cap, is a valid and
binding obligation of MSDW Mid-Cap enforceable against MSDW Mid-Cap in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors rights and to general equity principles; (d) the
execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated hereby will not, violate MSDW Mid-Cap's
Declaration of Trust or By-Laws; and (e) to the knowledge of such counsel,
no consent, approval, authorization or order of any court or governmental
authority of the United States or any state is required for the
consummation by MSDW Mid-Cap of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act and such as may be required under state securities laws; and
7.6 On the Closing Date, the MSDW Mid-Cap Assets shall include no assets
that TCW/DW Mid-Cap, by reason of limitations of the fund's Declaration of
Trust or otherwise, may not properly acquire.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF TCW/DW MID-CAP
AND MSDW MID-CAP
The obligations of MSDW Mid-Cap and TCW/DW Mid-Cap hereunder are each
subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
MSDW Mid-Cap in accordance with the provisions of MSDW Mid-Cap's Declaration of
Trust, and certified copies of the resolutions evidencing such approval shall
have been delivered to TCW/DW Mid-Cap;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein;
A-11
<PAGE>
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such Federal and state
authorities) deemed necessary by TCW/DW Mid-Cap or MSDW Mid-Cap to permit
consummation, in all material respects, of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent,
order or permit would not involve risk of a material adverse effect on the
assets or properties of TCW/DW Mid-Cap or MSDW Mid-Cap;
8.4 The Registration Statement shall have become effective under the 1933
Act, no stop orders suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act;
8.5 MSDW Mid-Cap shall have declared and paid a dividend or dividends
and/or other distribution or distributions that, together with all previous
such dividends or distributions, shall have the effect of distributing to the
MSDW Mid-Cap Shareholders all of MSDW Mid-Cap's investment company taxable
income (computed without regard to any deduction for dividends paid) and all of
its net capital gain (after reduction for any capital loss carry-forward and
computed without regard to any deduction for dividends paid) for all taxable
years ending on or before the Closing Date; and
8.6 The parties shall have received a favorable opinion of the law firm of
Gordon Altman Butowsky Weitzen Shalov & Wein (based on such representations as
such law firm shall reasonably request), addressed to TCW/DW Mid-Cap and MSDW
Mid-Cap, which opinion may be relied upon by the shareholders of MSDW Mid-Cap,
substantially to the effect that, for Federal income tax purposes:
(a) The transfer of substantially all of MSDW Mid-Cap's assets in
exchange for TCW/DW Mid-Cap Shares and the assumption by TCW/DW Mid-Cap of
certain stated liabilities of MSDW Mid-Cap followed by the distribution by
MSDW Mid-Cap of TCW/DW Mid-Cap Shares to the MSDW Mid-Cap Shareholders in
exchange for their MSDW Mid-Cap shares will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) of the Code, and MSDW Mid-Cap
and TCW/DW Mid-Cap will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by TCW/DW Mid-Cap upon the
receipt of the assets of MSDW Mid-Cap solely in exchange for TCW/DW Mid-Cap
Shares and the assumption by TCW/DW Mid-Cap of the stated liabilities of
MSDW Mid-Cap;
(c) No gain or loss will be recognized by MSDW Mid-Cap upon the
transfer of the assets of MSDW Mid-Cap to TCW/DW Mid-Cap in exchange for
TCW/DW Mid-Cap Shares and the assumption by TCW/DW Mid-Cap of the stated
liabilities or upon the distribution of TCW/DW Mid-Cap Shares to the MSDW
Mid-Cap Shareholders in exchange for their MSDW Mid-Cap shares;
(d) No gain or loss will be recognized by the MSDW Mid-Cap Shareholders
upon the exchange of the MSDW Mid-Cap shares for TCW/DW Mid-Cap Shares;
(e) The aggregate tax basis for TCW/DW Mid-Cap Shares received by each
MSDW Mid-Cap Shareholder pursuant to the reorganization will be the same as
the aggregate tax basis of the MSDW Mid-Cap Shares held by each such MSDW
Mid-Cap Shareholder immediately prior to the Reorganization;
(f) The holding period of TCW/DW Mid-Cap Shares to be received by each
MSDW Mid-Cap Shareholder will include the period during which the MSDW
Mid-Cap Shares surrendered in exchange therefor were held (provided such
MSDW Mid-Cap Shares were held as capital assets on the date of the
Reorganization);
A-12
<PAGE>
(g) The tax basis of the assets of MSDW Mid-Cap acquired by TCW/DW
Mid-Cap will be the same as the tax basis of such assets to MSDW Mid-Cap
immediately prior to the Reorganization; and
(h) The holding period of the assets of MSDW Mid-Cap in the hands of
TCW/DW Mid-Cap will include the period during which those assets were held
by MSDW Mid-Cap.
Notwithstanding anything herein to the contrary, neither TCW/DW Mid-Cap
nor MSDW Mid-Cap may waive the conditions set forth in this paragraph 8.6.
9. FEES AND EXPENSES
9.1 (a) TCW/DW Mid-Cap shall bear its expenses incurred in connection with
the entering into, and carrying out of, the provisions of this Agreement,
including legal, accounting, Commission registration fees and Blue Sky
expenses. MSDW Mid-Cap shall bear its expenses incurred in connection with the
entering into and carrying out of the provisions of this Agreement, including
legal and accounting fees, printing, filing and proxy solicitation expenses and
portfolio transfer taxes (if any) incurred in connection with the consummation
of the transactions contemplated herein.
(b) In the event the transactions contemplated herein are not consummated
by reason of MSDW Mid-Cap being either unwilling or unable to go forward (other
than by reason of the nonfulfillment or failure of any condition to MSDW
Mid-Cap's obligations specified in this Agreement), MSDW Mid-Cap's only
obligation hereunder shall be to reimburse TCW/DW Mid-Cap for all reasonable
out-of-pocket fees and expenses incurred by TCW/DW Mid-Cap in connection with
those transactions.
(c) In the event the transactions contemplated herein are not consummated
by reason of TCW/DW Mid-Cap being either unwilling or unable to go forward
(other than by reason of the nonfulfillment or failure of any condition to
TCW/DW Mid-Cap's obligations specified in this Agreement), TCW/DW Mid-Cap's
only obligation hereunder shall be to reimburse MSDW Mid-Cap for all reasonable
out-of-pocket fees and expenses incurred by MSDW Mid-Cap in connection with
those transactions.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
herein, except that the representations, warranties and covenants of MSDW
Mid-Cap hereunder shall not survive the dissolution and complete liquidation of
MSDW Mid-Cap in accordance with Section 1.9.
11. TERMINATION
11.1 This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing:
(a) by the mutual written consent of MSDW Mid-Cap and TCW/DW Mid-Cap;
(b) by either TCW/DW Mid-Cap or MSDW Mid-Cap by notice to the other,
without liability to the terminating party on account of such termination
(providing the terminating party is not otherwise in material default or
breach of this Agreement) if the Closing shall not have occurred on or
before September 30, 1999; or
(c) by either TCW/DW Mid-Cap or MSDW Mid-Cap, in writing without
liability to the terminating party on account of such termination (provided
the terminating party is not otherwise in material default
A-13
<PAGE>
or breach of this Agreement), if (i) the other party shall fail to
perform in any material respect its agreements contained herein required to
be performed on or prior to the Closing Date, (ii) the other party
materially breaches any of its representations, warranties or covenants
contained herein, (iii) the MSDW Mid-Cap shareholders fail to approve this
Agreement at any meeting called for such purpose at which a quorum was
present, or (iv) any other condition herein expressed to be precedent to
the obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
11.2 (a) Termination of this Agreement pursuant to paragraphs 11.1 (a) or
(b) shall terminate all obligations of the parties hereunder and there shall be
no liability for damages on the part of TCW/DW Mid-Cap or MSDW Mid-Cap, or the
trustees or officers of TCW/DW Mid-Cap or MSDW Mid-Cap, to any other party or
its trustees or officers.
(b) Termination of this Agreement pursuant to paragraph 11.1 (c) shall
terminate all obligations of the parties hereunder and there shall be no
liability for damages on the part of TCW/DW Mid-Cap or MSDW Mid-Cap, or the
trustees or officers of TCW/DW Mid-Cap or MSDW Mid-Cap, except that any
party in breach of this Agreement shall, upon demand, reimburse the
non-breaching party for all reasonable out-of-pocket fees and expenses
incurred in connection with the transactions contemplated by this
Agreement, including legal, accounting and filing fees.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties.
13. MISCELLANEOUS
13.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
13.5 The obligations and liabilities of TCW/DW Mid-Cap hereunder are
solely those of TCW/DW Mid-Cap. It is expressly agreed that no shareholder,
nominee, trustee, officer, agent, or employee of TCW/DW Mid-Cap shall be
personally liable hereunder. The execution and delivery of this Agreement have
been authorized by the trustees of TCW/DW Mid-Cap and signed by authorized
officers of TCW/DW Mid-Cap acting as such, and neither such authorization by
such trustees nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on any
of them personally.
13.6 The obligations and liabilities of MSDW Mid-Cap hereunder are solely
those of MSDW Mid-Cap. It is expressly agreed that no shareholder, nominee,
trustee, officer, agent, or employee of MSDW Mid-Cap
A-14
<PAGE>
shall be personally liable hereunder. The execution and delivery of this
Agreement have been authorized by the trustees of MSDW Mid-Cap and signed by
authorized officers of MSDW Mid-Cap acting as such, and neither such
authorization by such trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by a duly authorized officer.
MORGAN STANLEY DEAN WITTER MID-CAP
GROWTH FUND
By: /s/ CHARLES A. FIUMEFREDDO
--------------------------------------------
Name: Charles A. Fiumefreddo
Title: President
TCW/DW MID-CAP EQUITY TRUST
By: /s/ BARRY FINK
--------------------------------------------
Name: Barry Fink
Title: Vice President
A-15
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B
TCW/DW
MID-CAP EQUITY TRUST
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS LONG-TERM CAPITAL APPRECIATION
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
CONTENTS
The Fund Investment Objective ........................... 1
Principal Investment Strategies ................ 1
Principal Risks ................................ 1
Past Performance ............................... 3
Fees and Expenses .............................. 4
Additional Investment Strategy Information ..... 5
Additional Risk Information .................... 6
Fund Management ................................ 7
Shareholder Information Pricing Fund Shares ............................ 9
How to Buy Shares .............................. 9
How to Exchange Shares ......................... 11
How to Sell Shares ............................. 13
Distributions .................................. 15
Tax Consequences ............................... 15
Share Class Arrangements ....................... 17
Financial Highlights ................................................ 24
This Prospectus contains important information about
the Fund. Please read it carefully and keep it for
future reference.
FUND CATEGORY
[X] GROWTH
[ ] Growth and Income
[ ] Income
[ ] Money Market
<PAGE>
THE FUND
[GRAPHIC OMITTED]
INVESTMENT OBJECTIVE
- --------------------
TCW/DW Mid-Cap Equity Trust is a mutual fund that seeks long-term capital
appreciation. There is no guarantee that the Fund will achieve this objective.
[GRAPHIC OMITTED]
PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------
The Fund will normally invest at least 65% of its assets in a portfolio of
common stocks and other equity securities of medium-sized companies with market
capitalizations, at the time of purchase, within the capitalization range of the
companies comprising the Standard & Poor's Mid-Cap 400 Index, which
capitalization range is approximately between $192 million and $11.7 billion as
of February 26, 1999. The Fund's "Adviser," TCW Funds Management, Inc., invests
in companies that it believes exhibit superior earnings growth prospects and
attractive stock market valuations. The Adviser uses its proprietary research in
pursuing a "bottom-up" investment philosophy, which emphasizes individual
company selection. Quantitative and qualitative standards also will be used to
screen more than one thousand companies to provide a list of potential
investment securities. The Adviser then subjects the list of securities to a
fundamental analysis using a variety of criteria.
(sidebar)
CAPITAL APPRECIATION
An investment objective having the goal of selecting securities with the
potential to rise in value rather than pay out income.
(end sidebar)
Common stock is a share ownership or equity interest in a corporation. It may or
may not pay dividends, as some companies reinvest all of their profits back into
their businesses, while others pay out some of their profits to shareholders as
dividends.
In pursuing the Fund's investment objective, the Adviser has considerable leeway
in deciding which investments it buys, holds or sells on a day-to-day basis --
and which trading strategies it uses. For example, the Adviser in its discretion
may determine to use some permitted trading strategies while not using others.
In addition to U.S. common stocks, the Fund may make other investments. For more
information about the Fund's investments, see the "Additional Investment
Strategy Information" section.
[GRAPHIC OMITTED]
PRINCIPAL RISKS
- ---------------
The Fund's share price will fluctuate with changes in the market value of the
Fund's portfolio securities. When you sell Fund shares, they may be worth less
than what you paid for them and, accordingly, you can lose money investing in
this Fund.
A principal risk of investing in the Fund is associated with its common stock
investments of medium-sized companies. In general, stock values fluctuate in
response to activities specific to the company as well as general market,
economic and political conditions. Stock prices can fluctuate widely in response
to these factors.
1
<PAGE>
Investing in securities of medium-sized companies may involve greater risk than
is customarily associated with investing in more established companies. Often,
medium-sized companies and the industries in which they are focused are still
evolving, and they are more sensitive to changing market conditions than larger
companies in more established industries. Their securities may be more volatile
and have returns that vary, sometimes significantly, from the overall stock
market.
Shares of the Fund are not bank deposits and are not guaranteed or insured by
any bank, governmental entity, or the FDIC.
2
<PAGE>
[GRAPHIC OMITTED]
PAST PERFORMANCE
- ----------------
The bar chart and table below provide some indication of the Fund's performance
history. The Fund's past performance does not indicate how the Fund will perform
in the future.
ANNUAL TOTAL RETURNS -- CALENDAR YEARS
[bar chart]
1997 1998
---- ----
10.97% 62.71%
The bar chart reflects the performance of Class B shares; the performance of the
other Classes will differ because the Classes have different ongoing fees. The
performance information in the bar chart does not reflect the deduction of sales
charges; if these amounts were reflected, returns would be less than shown.
(sidebar)
ANNUAL TOTAL RETURNS
This chart shows how the performance of the Fund's Class B shares has varied
from year to year for the past two calendar years.
(end sidebar)
During the periods shown in the bar chart, the highest
return for a calendar quarter was 49.24% (quarter
ended December 31, 1998) and the lowest return for a
calendar quarter was -21.17% (quarter ended March 31,
1997).
(sidebar)
AVERAGE ANNUAL TOTAL RETURNS
This table compares the Fund's average annual returns with those of a broad
measure of market performance over time. The Fund's returns include the maximum
applicable sales charge for each Class and assume you sold your shares at the
end of each period.
(end sidebar)
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED THE 1998 CALENDAR YEAR)
- --------------------------------------------------------------------------------
LIFE OF FUND
PAST 1 YEAR (SINCE 2/27/96)
- --------------------------------------------------------------------------------
Class A 55.11% --
- --------------------------------------------------------------------------------
Class B(1) 57.71% 24.07%
- --------------------------------------------------------------------------------
Class C 61.53% --
- --------------------------------------------------------------------------------
Class D 64.16% --
- --------------------------------------------------------------------------------
S&P 400(2) 19.11% 22.76%
- --------------------------------------------------------------------------------
Lipper Mid-Cap Funds Index(3) 13.92% 15.07%
- --------------------------------------------------------------------------------
1 Prior to July 28, 1997, the Fund only issued Class B shares.
2 The Standard & Poor's (Registered Trademark) Mid-Cap 400 Index, a widely
recognized, unmanaged index of common stock prices. The performance of the
Index does not include expenses or fees, and should not be considered an
investment.
3 The Lipper Mid-Cap Funds Index is an equally-weighted performance index of
mid-cap funds. The Index is unmanaged and should not be considered an
investment.
3
<PAGE>
[GRAPHIC OMITTED]
FEES AND EXPENSES
- -----------------
The Fund offers four Classes of shares: Classes A, B, C and D. Each Class has a
different combination of fees, expenses and other features. The table below
briefly describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. The Fund does not charge account or exchange fees. See the
"Share Class Arrangements" section for further fee and expense information.
(sidebar)
SHAREHOLDER FEES
These fees are paid directly from your investment.
(end sidebar)
(sidebar)
ANNUAL FUND OPERATING EXPENSES
These expenses are deducted from the Fund's assets and are based on expenses
paid for the fiscal year ended November 30, 1998.
(end sidebar)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
---------------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) 5.25%(1) None None None
- ---------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a
percentage based on the lesser of the offering
price or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
- ---------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- ---------------------------------------------------------------------------------------------------------
Management and Advisory fee 1.00% 1.00% 1.00% 1.00%
- ---------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.25% 0.90% 1.00% None
- ---------------------------------------------------------------------------------------------------------
Other expenses 0.30% 0.30% 0.30% 0.30%
- ---------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.55% 2.20% 2.30% 1.30%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the time of purchase
are subject to a contingent deferred sales charge ("CDSC") of 1.00% that
will be imposed on sales made within one year after purchase, except for
certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.
4 Only applicable to sales made within one year after purchase.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your investment has a
5% return each year, and the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, the tables below show your costs at
the end of each period based on these assumptions depending upon whether or not
you sell your shares at the end of each period.
4
<PAGE>
<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
- ---------------------------------------------- -----------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A $674 $989 $1325 $2274 $674 $989 $1325 $2274
- ---------------------------------------------- -----------------------------------
CLASS B $725 $994 $1390 $2554 $225 $694 $1190 $2554
- ---------------------------------------------- -----------------------------------
CLASS C $333 $718 $1230 $2636 $233 $718 $1230 $2636
- ---------------------------------------------- -----------------------------------
CLASS D $132 $412 $713 $1568 $132 $412 $713 $1568
- ---------------------------------------------- -----------------------------------
</TABLE>
[GRAPHIC OMITTED]
ADDITIONAL INVESTMENT STRATEGY INFORMATION
- ------------------------------------------
The Fund seeks long-term capital appreciation. There is no guarantee that the
Fund will achieve this objective.
This section provides additional information concerning the Fund's principal
strategies.
Common Stocks. As discussed in the "Principal Investment Strategies" section,
the Fund will normally invest at least 65% of its assets in a portfolio of
common stocks of medium-sized companies.
Other Investments. The Fund also may invest up to 35% of its assets in equity
securities of small or large companies and investment grade fixed-income
securities. It also may invest up to 25% of its assets in foreign equity
securities (including depository receipts).
Defensive Investing. The Fund may take temporary "defensive" positions in
attempting to respond to adverse market conditions. The Fund may invest any
amount of its assets in cash or money market instruments in a defensive posture
when the Adviser believes it is advisable to do so. Although taking a defensive
posture is designed to protect the Fund from an anticipated market downturn, it
could have the effect of reducing the benefit from any upswing in the market or
otherwise affect the Fund's ability to meet its investment objective.
Portfolio Turnover. The Fund may engage in active and frequent trading of
portfolio securities to achieve its principal investment strategies. The
portfolio turnover rate is not expected to exceed 150% annually under normal
circumstances. A high turnover rate will increase Fund brokerage costs and may
affect the Fund's performance. It also may increase the Fund's capital gains,
which are passed along to Fund shareholders as distributions. This, in turn, may
increase your tax liability as a Fund shareholder. See the sections on
"Distributions" and "Tax Consequences."
The percentage limitations relating to the composition of the Fund's portfolio
referenced in "Principal Investment Strategies" apply at the time the Fund
acquires an investment. Subsequent percentage changes that result from market
fluctuations or
5
<PAGE>
changes in assets will not require the Fund to sell any portfolio security. The
Fund may change its principal investment strategies without shareholder
approval; however, you would be notified of any changes.
[GRAPHIC OMITTED]
ADDITIONAL RISK INFORMATION
- ---------------------------
As discussed in the "Principal Risks" section, a principal risk of investing in
the Fund is associated with its common stock investments, including the risks
associated with investments in securities of medium-sized companies. This
section provides additional information regarding the principal risks of
investing in the Fund.
Small Companies. As with the Fund's investments in medium-sized companies, its
investments in the securities of small companies may involve greater risk than
is customarily associated with investing in more established companies. Small
companies in particular often have limited product lines, financial resources
and less experienced management. As a consequence, their securities may be more
volatile and have returns that vary, sometimes significantly, from the overall
stock market.
Fixed-Income Securities. Principal risks of investing in the Fund are associated
with its fixed-income investments. All fixed-income securities, such as
corporate debt, are subject to two types of risk: credit risk and interest rate
risk. Credit risk refers to the possibility that the issuer of a security will
be unable to make interest payments and/or repay the principal on its debt.
Interest rate risk refers to fluctuations in the value of a fixed-income
security resulting from changes in the general level of interest rates. When the
general level of interest rates goes up, the price of most fixed-income
securities goes down. When the general level of interest rates goes down, the
price of most fixed-income securities goes up.
Foreign Securities. The Fund's investments in foreign securities (including
depository receipts) involve risks that are in addition to the risks associated
with domestic securities. One additional risk is currency risk. While the price
of Fund shares is quoted in U.S. dollars, the Fund generally converts U.S.
dollars to a foreign market's local currency to purchase a security in that
market. If the value of that local currency falls relative to the U.S. dollar,
the U.S. dollar value of the foreign security will decrease. This is true even
if the foreign security's local price remains unchanged.
Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation, exchange
control regulation, limitations on the use or transfer of Fund assets and any
effects of foreign social, economic or political instability. Foreign companies,
in general, are not subject to the regulatory requirements of U.S. companies
and, as such, there may be less publicly available information about these
companies. Moreover, foreign accounting, auditing and financial reporting
standards generally are different from those applicable to U.S.
6
<PAGE>
companies. Finally, in the event of a default of any foreign debt obligations,
it may be more difficult for the Fund to obtain or enforce a judgment against
the issuers of the securities.
Securities of foreign issuers may be less liquid than comparable securities of
U.S. issuers and, as such, their price changes may be more volatile.
Furthermore, foreign exchanges and broker-dealers are generally subject to less
government and exchange scrutiny and regulation than their U.S. counterparts.
Many European countries have adopted or are in the process of adopting a single
European currency, referred to as the "euro." The consequences of the euro
conversion for foreign exchange rates, interest rates and the value of European
securities the Fund may purchase are presently unclear. The consequences may
adversely affect the value and/or increase the volatility of securities held by
the Fund.
Year 2000. The Fund could be adversely affected if the computer systems
necessary for the efficient operation of Morgan Stanley Dean Witter Services
Company Inc. (the "Manager"), the Adviser and the Fund's other service
providers, as well as the markets and individual and governmental issuers in
which the Fund invests do not properly process and calculate date-related
information from and after January 1, 2000. While year 2000-related computer
problems could have a negative effect on the Fund, the Manager, Adviser and
affiliates are working hard to avoid any problems and to obtain assurances from
their service providers that they are taking similar steps.
[GRAPHIC OMITTED]
FUND MANAGEMENT
- ---------------
The Fund has retained the Manager -- Morgan Stanley Dean Witter Services Company
Inc. -- to provide administrative services and manage its business affairs
(other than providing investment advice). The Fund has contracted with the
Adviser -- TCW Funds Management, Inc. -- to invest the Fund's assets, including
the placing of orders for the purchase and sale of portfolio securities. The
Manager is a wholly-owned subsidiary of Morgan Stanley Dean Witter Advisors
Inc., which is in turn a wholly-owned subsidiary of Morgan Stanley Dean Witter &
Co., a preeminent global financial services firm that maintains leading market
positions in each of its three primary businesses: securities, asset management
and credit services. The Manager's main business office is located at Two World
Trade Center, New York, NY 10048.
(sidebar)
MORGAN STANLEY DEAN WITTER ADVISORS INC.
The Manager is a wholly owned subsidiary of Morgan Stanley Dean Witter Advisors
Inc., which is widely recognized as a leader in the mutual fund industry.
Together, the Manager and Morgan Stanley Dean Witter Advisors Inc. have more
than $126.2 billion in assets under management or administration as of
February 28, 1999.
(end sidebar)
7
<PAGE>
The Adviser, together with its affiliated companies, manages more than $55
billion primarily for institutional investors. The Adviser is a wholly-owned
subsidiary of The TCW Group, Inc. Its main business address is 865 South
Figueroa Street, Suite 1800, Los Angeles, California 90017.
Douglas S. Foreman, Group Managing Director of the Adviser, is the primary
portfolio manager of the Fund. He is assisted by Christopher J. Ainley, Managing
Director of the Adviser. Mr. Foreman and Mr. Ainley have been portfolio managers
with affiliated companies of The TCW Group since 1994.
The Fund pays the Manager and Adviser a monthly management or advisory fee as
full compensation for the services and facilities furnished to the Fund, and for
Fund expenses assumed by the Manager and Adviser. The fee is based on the Fund's
average daily net assets. For the fiscal year ended November 30, 1998 the Fund
accrued aggregate total compensation to the Manager and the Adviser of 1.00% of
the Fund's average daily net assets (0.60% to the Manager and 0.40% to the
Adviser).
In connection with the contemplated consolidation of the TCW/DW Funds with the
Morgan Stanley Dean Witter Funds, the Fund's Board of Trustees has approved
changes to the Fund's management/advisory relationships. Specifically, the Board
has approved the appointment of Morgan Stanley Dean Witter Advisors Inc. as the
new investment manager to replace the Adviser. The Board also has approved the
retention of the Adviser as sub-advisor to the Fund. The result of the new
arrangements would be that Morgan Stanley Dean Witter Advisors Inc. would have
overall responsibility for management of the Fund, including supervisory
responsibility over the Fund's investment programs, while the Adviser would
retain responsibility for investing the Fund's assets. The Manager would
continue to have responsibility for administrative services. Under the new
arrangements, the investment management fee rate that would be paid by the Fund
would be equal to the aggregate management/advisory fee rate currently paid by
the Fund. The Adviser would receive a sub-advisory fee paid by Morgan Stanley
Dean Witter Advisors Inc. equal to 0.40% of Morgan Stanley Dean Witter Advisors
Inc.'s fee. In order for the new arrangements to be implemented, they must be
approved by the Fund's shareholders, who will be asked to approve the changes at
a June 8, 1999 shareholders' meeting. Once shareholder approval is obtained, the
new arrangements would be effective as soon as practicable thereafter.
8
<PAGE>
SHAREHOLDER INFORMATION
[GRAPHIC OMITTED]
PRICING FUND SHARES
- -------------------
The price of Fund shares (excluding sales charges), called "net asset value," is
based on the value of the Fund's portfolio securities. The net asset value of
each Class, however, will differ because the Classes have different ongoing
distribution fees.
The net asset value per share of the Fund is determined once daily at 4:00 p.m.
Eastern time, on each day that the New York Stock Exchange is open (or, on days
when the New York Stock Exchange closes prior to 4:00 p.m., at such earlier
time). Shares will not be priced on days that the New York Stock Exchange is
closed.
The value of the Fund's portfolio securities is based on the securities' market
price when available. When a market price is not readily available, including
circumstances under which the Adviser determines that a security's market price
is not accurate, a portfolio security is valued at its fair value, as determined
under procedures established by the Fund's Board of Trustees. In these cases,
the Fund's net asset value will reflect certain portfolio securities' fair value
rather than their market price.
An exception to the Fund's general policy of using market prices concerns its
short-term debt portfolio securities. Debt securities with remaining maturities
of sixty days or less at the time of purchase are valued at amortized cost.
However, if the cost does not reflect the securities' market value, these
securities will be valued at their fair value.
[GRAPHIC OMITTED]
HOW TO BUY SHARES
- -----------------
You may open a new account to buy Fund shares or buy additional Fund shares for
an existing account by contacting your Morgan Stanley Dean Witter Financial
Advisor or other authorized financial representative. Your Financial Advisor
will assist you, step-by-step, with the procedures to invest in the Fund. You
may also purchase shares directly by calling the Fund's transfer agent and
requesting an application.
(sidebar)
CONTACTING A FINANCIAL ADVISOR
If you are new to the TCW/DW Funds family and would like to contact a Financial
Advisor, call (800) THE-DEAN for the telephone number of the Morgan Stanley
Dean Witter office nearest you. You may also access our office locator on our
Internet site at: www.deanwitter.com/funds
(end sidebar)
Because every investor has different immediate financial needs and long-term
investment goals, the Fund offers investors four Classes of shares: Classes A,
B, C and D. Class D shares are only offered to a limited group of investors.
Each Class of shares offers a distinct structure of sales charges, distribution
and service fees, and other features that are designed to address a variety of
needs. Your Financial Advisor or other authorized financial representative can
help you decide which Class may be most appropriate for you. When purchasing
Fund shares, you must specify which Class of shares you wish to purchase.
9
<PAGE>
When you buy Fund shares, the shares are purchased at the next share price
calculated (less any applicable front-end sales charge for Class A shares) after
we receive your investment order in proper form. We reserve the right to reject
any order for the purchase of Fund shares.
(sidebar)
EASYINVEST(SM)
A purchase plan that allows you to transfer money automatically from your
checking or savings account or from a Money Market Fund on a semi-monthly,
monthly or quarterly basis. Contact your Morgan Stanley Dean Witter Financial
Advisor for further information about this service.
(end sidebar)
MINIMUM INVESTMENT AMOUNTS
- --------------------------------------------------------------------------------
MINIMUM INVESTMENT
---------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
- --------------------------------------------------------------------------------
Regular Accounts: $1,000 $100
- --------------------------------------------------------------------------------
Individual Retirement Accounts: Regular IRAs $1,000 $100
Education IRAs $500 $100
- --------------------------------------------------------------------------------
EasyInvest(SM)
(Automatically from your checking or
savings account or Money Market Fund) $100* $100*
- --------------------------------------------------------------------------------
* Provided your schedule of investments totals $1,000 in twelve months.
There is no minimum investment amount if you purchase Fund shares through: (1)
the Morgan Stanley Dean Witter Advisors' mutual fund asset allocation plan, or
(2) a program, approved by the Fund's distributor, in which you pay an
asset-based fee for advisory, administrative and/or brokerage services, or (3)
employer-sponsored employee benefit plan accounts.
Investment Options for Certain Institutional and Other Investors/Class D Shares.
To be eligible to purchase Class D shares, you must qualify under one of the
investor categories specified in the "Share Class Arrangements" section of this
Prospectus.
Three Day Settlement. Fund shares are sold through the Fund's distributor,
Morgan Stanley Dean Witter Distributors Inc., on a normal three business day
basis; that is, your payment for Fund shares is due on the third business day
(settlement day) after you place a purchase order.
Subsequent Investments Sent Directly to the Fund. In addition to buying
additional Fund shares for an existing account by contacting your Morgan Stanley
Dean Witter Financial Advisor, you may send a check directly to the Fund. To buy
additional shares in this manner:
o Write a "letter of instruction" to the Fund specifying the name(s) on the
account, the account number, the social security or tax identification
number, the Class of shares you wish to purchase and the investment amount
(which would include any applicable front-end sales charge). The letter must
be signed by the account owner(s).
o Make out a check for the total amount payable to: TCW/DW Mid-Cap Equity
Trust.
o Mail the letter and check to Morgan Stanley Dean Witter Trust FSB at P.O.
Box 1040, Jersey City, NJ 07303.
10
<PAGE>
[GRAPHIC OMITTED]
HOW TO EXCHANGE SHARES
- ----------------------
Permissible Fund Exchanges. You may exchange shares of any Class of the Fund for
the same Class of any other continuously offered TCW/DW Multi-Class Fund advised
by the Adviser and managed by the Manager, without the imposition of an exchange
fee. You may also exchange Fund shares, without the imposition of an exchange
fee, for shares of TCW/DW North American Government Income Trust, and five Money
Market Funds for which Morgan Stanley Dean Witter Advisors serves as Investment
Manager.
Exchanges may be made after shares of the Fund acquired by purchase have been
held for thirty days. There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. The current Prospectus for each
Fund describes its investment objective, policies and investment minimums and
should be read before investment.
Exchange Procedures. You can process an exchange by contacting your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative. Otherwise, you must forward an exchange privilege authorization
form to the Fund's transfer agent -- Morgan Stanley Dean Witter Trust FSB -- and
then write the transfer agent or call (800) 869-NEWS to place an exchange order.
You can obtain an exchange privilege authorization form by contacting your
Financial Advisor or other authorized financial representative or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be processed
until we have received all applicable share certificates.
An exchange to any Fund (except a Money Market Fund) is made on the basis of the
next calculated net asset values of the Funds involved after the exchange
instructions are accepted. When exchanging into a Money Market Fund, the Fund's
shares are sold at their next calculated net asset value and the Money Market
Fund's shares are purchased at their net asset value on the following business
day.
The Fund may terminate or revise the exchange privilege upon required notice.
Certain services normally available to shareholders of Money Market Funds,
including the check writing privilege, are not available for Money Market Fund
shares you acquire in an exchange.
Telephone Exchanges. For your protection when calling Morgan Stanley Dean Witter
Trust FSB, we will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. These procedures may
include requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number. Telephone
instructions also may be recorded.
Telephone instructions will be accepted if received by the Fund's transfer agent
between 9:00 a.m. and 4:00 p.m. Eastern time, on any day the New York Stock
Exchange is open for business. During periods of drastic economic or market
changes, it is
11
<PAGE>
possible that the telephone exchange procedures may be difficult to implement,
although this has not been the case with the Fund in the past.
Tax Considerations of Exchanges. If you exchange shares of the Fund for shares
of another Fund there are important tax considerations. For tax purposes, the
exchange out of the Fund is considered a sale of Fund shares -- and the exchange
into the other Fund is considered a purchase. As a result, you may realize a
capital gain or loss.
You should review the "Tax Consequences" section and consult your own tax
professional about the tax consequences of an exchange.
Frequent Exchanges. A pattern of frequent exchanges may result in the Fund
limiting or prohibiting, at its discretion, additional purchases and/or
exchanges. The Fund will notify you in advance of limiting your exchange
privileges.
CDSC Calculations on Exchanges. See the "Share Class Arrangements" section of
this Prospectus for a further discussion of how applicable contingent deferred
sales charges (CDSCs) are calculated for shares of one Fund that are exchanged
for shares of another.
For further information regarding exchange privileges, you should contact your
Morgan Stanley Dean Witter Financial Advisor or call (800) 869-NEWS.
12
<PAGE>
[GRAPHIC OMITTED]
HOW TO SELL SHARES
- ------------------
You can sell some or all of your Fund shares at any time. If you sell Class A,
Class B or Class C shares, your net sale proceeds are reduced by the amount of
any applicable CDSC. Your shares will be sold at the next price calculated after
we receive your order in proper form.
OPTIONS PROCEDURES
- --------------------------------------------------------------------------------
Contact Your To sell your shares, simply call your Morgan Stanley Dean
Financial Advisor Witter Financial Advisor or other authorized financial
representative.
[GRAPHIC OMITTED] -------------------------------------------------------------
Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
- --------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
o your account number;
[GRAPHIC OMITTED] o the dollar amount or the number of shares you wish to
sell;
o the Class of shares you wish to sell; and
o the signature of each owner as it appears on the account.
------------------------------------------------------------
If you are requesting payment to anyone other than the
registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can generally obtain a signature guarantee
from a securities broker-dealer, bank or credit union; a
notary public cannot provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, New Jersey 07303. If you hold
share certificates, you must return the certificates, along
with the letter and any required additional documentation.
------------------------------------------------------------
A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
instructions.
- --------------------------------------------------------------------------------
Systematic If your investment in all of the TCW/DW Family of Funds has
Withdrawal Plan a total market value of at least $10,000, you may elect to
withdraw amounts of $25 or more, or in any whole percentage
of a Fund's balance (provided the amount is at least $25),
[GRAPHIC OMITTED] on a monthly, quarterly, semi-annual basis, from any Fund
with a balance of at least $1,000. Each time you add a Fund
to the plan, you must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this Prospectus.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call (800)
869-NEWS. You may terminate or suspend your plan at any
time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
- --------------------------------------------------------------------------------
(sidebar)
SYSTEMATIC WITHDRAWAL PLAN
This plan allows you to withdraw money automatically from your Fund account at
regular intervals. The service is available to shareholders whose investments in
all TCW/DW Funds total at least $10,000. Contact your Morgan Stanley Dean Witter
Financial Advisor for more details.
(end sidebar)
13
<PAGE>
Payment for Sold Shares. After we receive your instruction to sell in proper
form, a check will be mailed to you within seven days, although we will attempt
to make payment within one business day. Payment may also be sent to your
brokerage account.
Payment may be postponed or the right to sell your shares suspended, however,
under unusual circumstances. If you request to sell shares that were recently
purchased by check, payment of the sale proceeds may be delayed for the minimum
time needed to verify that the check has been honored (not more than fifteen
days from the time we receive the check).
Tax Considerations. Normally, your sale of Fund shares is subject to federal and
state income tax. You should review the "Tax Consequences" section of this
Prospectus and consult your own tax professional about the tax consequences of a
sale.
Reinstatement Privilege. If you sell Fund shares and have not previously
exercised the reinstatement privilege, you may, within 35 days after the date of
sale, invest any portion of the proceeds in the same Class of Fund shares at
their net asset value and receive a pro rata credit for any CDSC paid in
connection with the sale.
Involuntary Sales. The Fund reserves the right, on sixty days' notice, to sell
the shares of any shareholder (other than shares held in an IRA or 403(b)
Custodial Account) whose shares, due to sales by the shareholder, have a value
below $100, or in the case of an account opened through EasyInvest(SM), if after
12 months the shareholder has invested less than $1,000 in the account.
However, before the Fund sells your shares in this manner, we will notify you
and allow you sixty days to make an additional investment in an amount that will
increase the value of your account to at least the required amount before the
sale is processed. No CDSC will be imposed on any involuntary sale.
Margin Accounts. Certain restrictions may apply to Fund shares pledged in margin
accounts with Dean Witter Reynolds or another authorized broker-dealer of Fund
shares. If you hold Fund shares in this manner, please contact your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative for more details.
14
<PAGE>
[GRAPHIC OMITTED]
DISTRIBUTIONS
- -------------
(sidebar)
TARGETED DIVIDENDS(SM)
You may select to have your Fund distributions automatically invested in other
Classes of Fund shares or Classes of another TCW/DW Fund that you own. Contact
your Morgan Stanley Dean Witter Financial Advisor for further information about
this service.
(end sidebar)
The Fund passes substantially all of its earnings from income and capital gains
along to its investors as "distributions." The Fund earns income from stocks and
interest from fixed-income investments. These amounts are passed along to Fund
shareholders as "income dividend distributions." The Fund realizes capital gains
whenever it sells securities for a higher price than it paid for them. These
amounts are passed along as "capital gain distributions."
The Fund declares income dividends separately for each Class. Distributions paid
on Class A and Class D shares will be higher than for Class B and Class C
because distribution fees that Class B and Class C pay are higher. Normally,
income dividends are distributed to shareholders annually. Any capital gains are
distributed in December; if a second capital gain distribution is necessary, it
is paid in the following year. The Fund, however, may retain and reinvest any
long-term capital gains. The Fund may at times make payments from sources other
than income or capital gains that represent a return of a portion of your
investment.
Distributions are reinvested automatically in additional shares of the same
Class and automatically credited to your account, unless you request in writing
that all distributions be paid in cash. If you elect the cash option, the Fund
will mail a check to you no later than seven business days after the
distribution is declared. No interest will accrue on uncashed checks. If you
wish to change how your distributions are paid, your request should be received
by the Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at least
five business days prior to the record date of the distributions.
[GRAPHIC OMITTED]
TAX CONSEQUENCES
- ----------------
As with any investment, you should consider how your Fund investment will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in the Fund.
Unless your investment in the Fund is through a tax-deferred retirement account,
such as a 401(k) plan or IRA, you need to be aware of the possible tax
consequences when:
o The Fund makes distributions; and
o You sell Fund shares, including an exchange to another Fund.
Taxes on Distributions. Your distributions are normally subject to federal and
state income tax when they are paid, whether you take them in cash or reinvest
them in Fund shares. A distribution also may be subject to local income tax. Any
income dividend distributions and any short-term capital gain distributions are
taxable to you as
15
<PAGE>
ordinary income. Any long-term capital gain distributions are taxable as
long-term capital gains, no matter how long you have owned shares in the Fund.
Every January, you will be sent a statement (IRS Form 1099-DIV) showing the
taxable distributions paid to you in the previous year. The statement provides
full information on your dividends and capital gains for tax purposes.
Taxes on Sales. Your sale of Fund shares normally is subject to federal and
state income tax and may result in a taxable gain or loss to you. A sale also
may be subject to local income tax. Your exchange of Fund shares for shares of
another Fund is treated for tax purposes like a sale of your original shares and
a purchase of your new shares. Thus, the exchange may, like a sale, result in a
taxable gain or loss to you and will give you a new tax basis for your new
shares.
When you open your Fund account, you should provide your social security or tax
identification number on your investment application. By providing this
information, you will avoid being subject to a federal backup withholding tax of
31% on taxable distributions and redemption proceeds. Any withheld amount would
be sent to the IRS as an advance tax payment.
16
<PAGE>
[GRAPHIC OMITTED]
SHARE CLASS ARRANGEMENTS
- ------------------------
The Fund offers several Classes of shares having different distribution
arrangements designed to provide you with different purchase options according
to your investment needs. Your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative can help you decide which Class may be
appropriate for you.
The general public is offered three Classes: Class A shares, Class B shares and
Class C shares, which differ principally in terms of sales charges and ongoing
expenses. A fourth Class, Class D shares, is offered only to a limited category
of investors. Shares that you acquire through reinvested distributions will not
be subject to any front-end sales charge or CDSC -- contingent deferred sales
charge. Sales personnel may receive different compensation for selling each
Class of shares. The sales charges applicable to each Class provide for the
distribution financing of shares of that Class.
The chart below compares the sales charge and annual 12b-1 fee applicable to
each Class:
CLASS SALES CHARGE ANNUAL 12B-1 FEE
- --------------------------------------------------------------------------------
A Maximum 5.25% initial sales charge reduced for
purchase of $25,000 or more; shares sold without an
initial sales charge are generally subject to a 1.0%
CDSC during the first year 0.25%
- --------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing
to 0% after six years 1.0%
- --------------------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
- --------------------------------------------------------------------------------
D None None
- --------------------------------------------------------------------------------
CLASS A SHARES Class A shares are sold at net asset value plus an initial
sales charge of up to 5.25%. The initial sales charge is reduced for purchases
of $25,000 or more according to the schedule below. Investments of $1 million or
more are not subject to an initial sales charge, but are generally subject to a
contingent deferred sales charge, or CDSC, of 1.0% on sales made within one year
after the last day of the month of purchase. The CDSC will be assessed in the
same manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a distribution (12b-1) fee of up to 0.25% of the
average daily net assets of the Class.
17
<PAGE>
The offering price of Class A shares includes a sales charge (expressed as a
percentage of the offering price) on a single transaction as shown in the
following table:
(sidebar)
FRONT-END SALES CHARGE OR FSC
An initial sales charge you pay when purchasing Class A shares that is based on
a percentage of the offering price. The percentage declines based upon the
dollar value of Class A shares you purchase. We offer three ways to reduce your
Class A sales charges -- the Combined Purchase Privilege, Right of Accumulation
and Letter of Intent.
(end sidebar)
FRONT-END SALES CHARGE
---------------------------------------------
PERCENTAGE OF APPROXIMATE PERCENTAGE
AMOUNT OF SINGLE TRANSACTION PUBLIC OFFERING PRICE OF AMOUNT INVESTED
- --------------------------------------------------------------------------------
Less than $25,000 5.25% 5.54%
- --------------------------------------------------------------------------------
$25,000 but less than $50,000 4.75% 4.99%
- --------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
- --------------------------------------------------------------------------------
$100,000 but less than $250,000 3.00% 3.09%
- --------------------------------------------------------------------------------
$250,000 but less than $1 million 2.00% 2.04%
- --------------------------------------------------------------------------------
$1 million and over 0 0
- --------------------------------------------------------------------------------
The reduced sales charge schedule is applicable to purchases of Class A shares
in a single transaction by:
o A single account (including an individual, trust or fiduciary account).
o Family member accounts (limited to husband, wife and children under the age
of 21).
o Pension, profit sharing or other employee benefit plans of companies and
their affiliates.
o Tax-exempt organizations.
o Groups organized for a purpose other than to buy mutual fund shares.
Combined Purchase Privilege. You also will have the benefit of reduced sales
charges by combining purchases of Class A shares of the Fund in a single
transaction with purchases of Class A shares of other TCW/DW Multi-Class Funds.
Right of Accumulation. You also may benefit from a reduction of sales charges if
the cumulative net asset value of Class A shares of the Fund purchased in a
single transaction, together with shares of other TCW/DW Funds you currently own
which were previously purchased at a price including a front-end sales charge
(including shares acquired through reinvestment of distributions), amounts to
$25,000 or more. Also, if you have a cumulative net asset value of all your
Class A and Class D shares equal to at least $5 million (or $25 million for
certain employee benefit plans), you are eligible to purchase Class D shares of
any TCW/DW Fund subject to the Fund's minimum initial investment requirement.
You must notify your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative (or Morgan Stanley Dean Witter Trust FSB if
you purchase directly through the Fund), at the time a purchase order is placed,
that the purchase qualifies for the reduced charge under the Right of
Accumulation. Similar notification must be made in writing when an order is
placed by mail. The reduced sales charge will
18
<PAGE>
not be granted if: (i) notification is not furnished at the time of the order;
or (ii) a review of the records of Dean Witter Reynolds or other authorized
dealer of Fund shares or the Fund's transfer agent does not confirm your
represented holdings.
Letter of Intent. The schedule of reduced sales charges for larger purchases
also will be available to you if you enter into a written "letter of intent." A
letter of intent provides for the purchase of Class A shares of the Fund or
other TCW/DW Multi-Class Funds. The initial purchase under a letter of intent
must be at least 5% of the stated investment goal. To determine the applicable
sales charge reduction, you may also include: (1) the cost of shares of other
TCW/DW Multi-Class Funds which were previously purchased at a price including a
front-end sales charge during the 90-day period prior to the distributor
receiving the letter of intent, and (2) the cost of shares of other Funds you
currently own acquired in exchange for shares of Funds purchased during that
period at a price including a front-end sales charge. You can obtain a letter of
intent by contacting your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative, or by calling (800) 869-NEWS. If you do not
achieve the stated investment goal within the thirteen-month period, you are
required to pay the difference between the sales charges otherwise applicable
and sales charges actually paid.
Other Front-End Sales Charge Waivers. In addition to investments of $1 million
or more, your purchase of Class A shares is not subject to a front-end sales
charge (or a CDSC upon sale) if your account qualifies under one of the
following categories:
o A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.
o Persons participating in a fee-based investment program (subject to all of
its terms and conditions, including mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor pursuant to which they
pay an asset-based fee for investment advisory, administrative and/or
brokerage services.
o Employer-sponsored employee benefit plans, whether or not qualified under
the Internal Revenue Code, for which Morgan Stanley Dean Witter Trust FSB
serves as trustee or Dean Witter Reynolds' Retirement Plan Services serves
as recordkeeper under a written Recordkeeping Services Agreement ("MSDW
Eligible Plans") which have at least 200 eligible employees.
o A MSDW Eligible Plan whose Class B shares have converted to Class A shares,
regardless of the plan's asset size or number of eligible employees.
o A client of a Morgan Stanley Dean Witter Financial Advisor who joined us
from another investment firm within six months prior to the date of purchase
of Fund shares, and you used the proceeds from the sale of shares of a
proprietary mutual fund of that Financial Advisor's previous firm that
imposed either a front-end or deferred sales charge to purchase Class A
shares, provided that: (1) you sold the shares not more than 60 days prior
to the purchase of Fund shares, and (2) the sale proceeds were maintained in
the interim in cash or a money market fund.
19
<PAGE>
CLASS B SHARES Class B shares are offered at net asset value with no initial
sales charge but are subject to a contingent deferred sales charge, or CDSC, as
set forth in the table below. For the purpose of calculating the CDSC, shares
are deemed to have been purchased on the last day of the month during which they
were purchased.
(sidebar)
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A fee you pay when you sell shares of certain TCW/DW Funds purchased without an
initial sales charge. This fee declines the longer you hold your shares as set
forth in the table.
(end sidebar)
CDSC AS A PERCENTAGE
YEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED
- --------------------------------------------------------------------------------
First 5.0%
- --------------------------------------------------------------------------------
Second 4.0%
- --------------------------------------------------------------------------------
Third 3.0%
- --------------------------------------------------------------------------------
Fourth 2.0%
- --------------------------------------------------------------------------------
Fifth 2.0%
- --------------------------------------------------------------------------------
Sixth 1.0%
- --------------------------------------------------------------------------------
Seventh and thereafter None
- --------------------------------------------------------------------------------
Each time you place an order to sell or exchange shares, shares with no CDSC
will be sold or exchanged first, then shares with the lowest CDSC will be sold
or exchanged next. For any shares subject to a CDSC, the CDSC will be assessed
on an amount equal to the lesser of the current market value or the cost of the
shares being sold.
CDSC Waivers. A CDSC, if otherwise applicable, will be waived in the case of:
o Sales of shares held at the time you die or become disabled (within the
definition in Section 72(m)(7) of the Internal Revenue Code which relates to
the ability to engage in gainful employment), if the shares are: (i)
registered either in your name (not a trust) or in the names of you and your
spouse as joint tenants with right of survivorship; or (ii) held in a
qualified corporate or self-employed retirement plan, IRA or 403(b)
Custodial Account, provided in either case that the sale is requested within
one year of your death or initial determination of disability.
o Sales in connection with the following retirement plan "distributions": (i)
lump-sum or other distributions from a qualified corporate or self-employed
retirement plan following retirement (or, in the case of a "key employee" of
a "top heavy" plan, following attainment of age 591/2); (ii) distributions
from an IRA or 403(b) Custodial Account following attainment of age 591/2;
or (iii) a tax-free return of an excess IRA contribution (a "distribution"
does not include a direct transfer of IRA, 403(b) Custodial Account or
retirement plan assets to a successor custodian or trustee).
o Sales of shares held for you as a participant in a MSDW Eligible Plan.
o Sales of shares in connection with the Systematic Withdrawal Plan of up to
12% annually of the value of each Fund from which plan sales are made. The
percentage is determined on the date you establish the Systematic Withdrawal
Plan and based on the next calculated share price. You may have this CDSC
waiver applied in amounts up to 1% per month, 3% per quarter, 6%
semi-annually or 12% annually. Shares with no CDSC will be sold first,
followed by those with the lowest CDSC. As such, the waiver benefit will be
reduced by the amount of your shares that are not subject to a CDSC. If
20
<PAGE>
you suspend your participation in the plan, you may later resume plan
payments without requiring a new determination of the account value for the
12% CDSC waiver.
All waivers will be granted only following the Distributor receiving
confirmation of your entitlement. If you believe you are eligible for a CDSC
waiver, please contact your Financial Advisor or call (800) 869-NEWS.
Distribution Fee. Class B shares are subject to an annual 12b-1 fee of 1.0% of
the lesser of: (a) the average daily aggregate gross purchases by all
shareholders of the Fund's Class B shares since the inception of the Fund (not
including reinvestments of dividends or capital gains distributions), less the
average daily aggregate net asset value of the Fund's Class B shares sold by all
shareholders since the Fund's inception upon which a CDSC has been imposed or
waived, or (b) the average daily net assets of Class B.
Conversion Feature. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales charge. The
ten year period runs from the last day of the month in which the shares were
purchased, or in the case of Class B shares acquired through an exchange, from
the last day of the month in which the original Class B shares were purchased;
the shares will convert to Class A shares based on their relative net asset
values in the month following the ten year period. At the same time, an equal
proportion of Class B shares acquired through automatically reinvested
distributions will convert to Class A shares on the same basis. (Class B shares
held before May 1, 1997, however, will convert to Class A shares in May 2007.)
In the case of Class B shares held in a MSDW Eligible Plan, the plan is treated
as a single investor and all Class B shares will convert to Class A shares on
the conversion date of the Class B shares of a TCW/DW Fund purchased by that
plan.
Currently, the Class B share conversion is not a taxable event; the conversion
feature may be cancelled if it is deemed a taxable event in the future by the
Internal Revenue Service.
If you exchange your Class B shares for shares of one of the five Money Market
Funds for which Morgan Stanley Dean Witter Advisors serves as Investment
Manager, TCW/DW Multi-Class Fund or TCW/DW North American Government Income
Trust, the holding period for conversion is frozen as of the last day of the
month of the exchange and resumes on the last day of the month you exchange back
into Class B shares.
Exchanging Shares Subject to a CDSC. There are special considerations when you
exchange Fund shares that are subject to a CDSC. When determining the length of
time you held the shares and the corresponding CDSC rate, any period (starting
at the end of the month) during which you held shares of a fund that does not
charge a CDSC will not be counted. Thus, in effect the "holding period" for
purposes of calculating the CDSC is frozen upon exchanging into a fund that does
not charge a CDSC.
21
<PAGE>
For example, if you held Class B shares of the Fund in a regular account for one
year, exchanged to Class B of another TCW/DW Multi-Class Fund for another year,
then sold your shares, a CDSC rate of 4% would be imposed on the shares based on
a two year holding period -- one year for each Fund. However, if you had
exchanged the shares of the Fund for a Money Market Fund (which does not charge
a CDSC) instead of the TCW/DW Multi-Class Fund, then sold your shares, a CDSC
rate of 5% would be imposed on the shares based on a one year holding period.
The one year in the Money Market Fund would not be counted. Nevertheless, if
shares subject to a CDSC are exchanged for a Fund that does not charge a CDSC,
you will receive a credit when you sell the shares equal to the distribution
(12b-1) fees, if any, you paid on those shares while in that Fund up to the
amount of any applicable CDSC.
In addition, shares that are exchanged into or from a TCW/DW Multi-Class Fund
subject to a higher CDSC rate will be subject to the higher rate, even if the
shares are re-exchanged into a Fund with a lower CDSC rate.
CLASS C SHARES Class C shares are sold at net asset value with no initial
sales charge but are subject to a CDSC of 1.0% on sales made within one year
after the last day of the month of purchase. The CDSC will be assessed in the
same manner and with the same CDSC waivers as with Class B shares.
Distribution Fee. Class C shares are subject to an annual distribution (12b-1)
fee of up to 1.0% of the average daily net assets of that Class. The Class C
shares' distribution fee may cause that Class to have higher expenses and pay
lower dividends than Class A or Class D shares. Unlike Class B shares, Class C
shares have no conversion feature and, accordingly, an investor that purchases
Class C shares may be subject to distribution (12b-1) fees applicable to Class C
shares for an indefinite period.
CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any distribution (12b-1) fee. Class D shares are
offered only to investors meeting an initial investment minimum of $5 million
($25 million for MSDW Eligible Plans) and the following investor categories:
o Investors participating in Morgan Stanley Dean Witter Advisors' mutual fund
asset allocation program (subject to all of its terms and conditions,
including mandatory sale or transfer restrictions on termination) pursuant
to which they pay an asset-based fee.
o Persons participating in a fee-based investment program (subject to all of
its terms and conditions, including mandatory sale or transfer restrictions
on termination) approved by the Fund's distributor pursuant to which they
pay an asset-based fee for investment advisory, administrative and/or
brokerage services.
o Certain unit investment trusts sponsored by Dean Witter Reynolds.
o Certain other open-end investment companies whose shares are distributed by
the Fund's distributor.
22
<PAGE>
Meeting Class D Eligibility Minimums. To meet the $5 million ($25 million for
MSDW Eligible Plans) initial investment to qualify to purchase Class D shares
you may combine: (1) purchases in a single transaction of Class D shares of the
Fund and other TCW/DW Multi-Class Funds and/or (2) previous purchases of Class A
shares of TCW/DW Multi-Class Funds, TCW/DW North American Government Income
Trust and five Money Market Funds advised by Morgan Stanley Dean Witter Advisors
you currently own.
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a cash
payment representing an income dividend or capital gain and you reinvest that
amount in the applicable Class of shares by returning the check within 30 days
of the payment date, the purchased shares would not be subject to an initial
sales charge or CDSC.
PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment Company Act of
1940 with respect to the distribution of Class A, Class B and Class C shares.
The Plan allows the Fund to pay distribution fees for the sale and distribution
of these shares. It also allows the Fund to pay for services to shareholders of
Class A, Class B and Class C shares. Because these fees are paid out of the
Fund's assets on an ongoing basis, over time these fees will increase the cost
of your investment in these Classes and may cost you more than paying other
types of sales charges.
23
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate an investor would have earned or lost
on an investment in the Fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose report,
along with the Fund's financial statements, is included in the annual report,
which is available upon request.
<TABLE>
<CAPTION>
CLASS B
- ----------------------------------------------------------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR FEBRUARY 27, 1996*
ENDED ENDED THROUGH
NOVEMBER 30, 1998++ NOVEMBER 30, 1997**++ NOVEMBER 30, 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.85 $10.92 $10.00
- ----------------------------------------------------------------------------------------------------------
Income (loss) from Investment operations
Net investment income (0.26) (0.22) (0.13)
Net realized and unrealized gain 4.87 0.15 1.05
-------- -------- --------
Total income (loss) from investment
operations 4.61 (0.07) 0.92
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.46 $10.85 $10.92
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN+ 42.49% (0.64)% 9.20%(1)
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Expenses 2.20%(3) 2.29% 2.28%(2)
- ----------------------------------------------------------------------------------------------------------
Net investment loss (2.05)%(3) (2.16)% (1.79)%(2)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $212,043 $174,412 $205,274
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 52% 49% 25%(1)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
** Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
24
<PAGE>
<TABLE>
<CAPTION>
CLASS A++
- ---------------------------------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ---------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
- ---------------------------------------------------------------------------------
Net asset value, beginning of period $10.88 $10.85
- ---------------------------------------------------------------------------------
Income from Investment operations
Net investment loss (0.18) (0.06)
Net realized and unrealized gain 4.90 0.09
-------- --------
Total income from investment operations 4.72 0.03
- ---------------------------------------------------------------------------------
Net asset value, end of period $15.60 $10.88
- ---------------------------------------------------------------------------------
TOTAL RETURN+ 43.38% 0.28%(1)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------------------
Expenses 1.55%(3) 1.55%(2)
- ---------------------------------------------------------------------------------
Net investment loss (1.40)%(3) (1.46)%(2)
- ---------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------
Net assets, end of period, in thousands $1,107 $58
- ---------------------------------------------------------------------------------
Portfolio turnover rate 52% 49%
- ---------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
25
<PAGE>
<TABLE>
<CAPTION>
CLASS C++
- ---------------------------------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ---------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
- ---------------------------------------------------------------------------------
Net asset value, beginning of period $10.85 $10.85
- ---------------------------------------------------------------------------------
Income from Investment operations
Net investment loss (0.28) (0.08)
Net realized and unrealized gain 4.88 0.08
-------- --------
Total income from investment operations 4.60 --
- ---------------------------------------------------------------------------------
Net asset value, end of period $15.45 $10.85
- ---------------------------------------------------------------------------------
TOTAL RETURN+ 42.27% 0.09%(1)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------------------
Expenses 2.30%(3) 2.32%(2)
- ---------------------------------------------------------------------------------
Net investment loss (2.15)%(3) (2.22)%(2)
- ---------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------
Net assets, end of period, in thousands $712 $83
- ---------------------------------------------------------------------------------
Portfolio turnover rate 52% 49%
- ---------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
26
<PAGE>
<TABLE>
<CAPTION>
CLASS D++
- ---------------------------------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
NOVEMBER 30, 1998 NOVEMBER 30, 1997
- ---------------------------------------------------------------------------------
<S> <C> <C>
SELECTED PER SHARE DATA
- ---------------------------------------------------------------------------------
Net asset value, beginning of period $10.89 $10.85
- ---------------------------------------------------------------------------------
Income from Investment operations
Net investment loss (0.15) (0.05)
Net realized and unrealized gain 4.92 0.09
-------- --------
Total income from investment operations 4.77 0.04
- ---------------------------------------------------------------------------------
Net asset value, end of period $15.66 $10.89
- ---------------------------------------------------------------------------------
TOTAL RETURN+ 43.80% 0.37%(1)
- ---------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------------------
Expenses 1.30%(3) 1.30%(2)
- ---------------------------------------------------------------------------------
Net investment loss (1.15)%(3) (1.19)%(2)
- ---------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------
Net assets, end of period, in thousands $15 $10
- ---------------------------------------------------------------------------------
Portfolio turnover rate 52% 49%
- ---------------------------------------------------------------------------------
</TABLE>
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.
27
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS - MARCH 29, 1999
- --------------------------------------------------------------------------------
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its last fiscal year.
The Fund's Statement of Additional Information also provides additional
information about the Fund. The Statement of Additional Information is
incorporated herein by reference (legally is part of this Prospectus). For a
free copy of any of these documents to request other information about the
Fund, or to make shareholder inquiries, please call:
(800) 869-NEWS
You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:
WWW.DEANWITTER.COM/FUNDS
Information about the Fund (including the Statement of Additional Information)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (800) SEC-0330. Reports and
other information about the Fund are available on the SEC's Internet site
(www.sec.gov) and copies of this information may be obtained, upon payment of a
duplicating fee, by writing the Public Reference Section of the SEC,
Washington, DC 20549-6009.
TICKER SYMBOLS:
Class A: TMDAX Class C: TMDCX
------------------ ------------------
Class B: TMDBX Class D: TMDDX
------------------ ------------------
(INVESTMENT COMPANY ACT FILE NO. 811-7377)
TCW/DW
MID-CAP EQUITY TRUST
[GRAPHIC OMITTED]
A MUTUAL FUND THAT SEEKS
LONG-TERM CAPITAL APPRECIATION
<PAGE>
MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 1999
The undersigned shareholder of Morgan Stanley Dean Witter Mid-Cap Growth
Fund does hereby appoint Barry Fink, Ronald E. Robison and Robert S. Giambrone
and each of them, as attorneys-in-fact and proxies of the undersigned, each
with the full power of substitution, to attend the Special Meeting of
Shareholders of Morgan Stanley Dean Witter Mid-Cap Growth Fund to be held on
June 8, 1999, in Conference Room A, Forty-Fourth Floor, Two World Trade Center,
New York, New York at 11:00 A.M., New York time, and at all adjournments
thereof and to vote the shares held in the name of the undersigned on the
record date for said meeting for the Proposal specified on the reverse side
hereof. Said attorneys-in-fact shall vote in accordance with their best
judgment as to any other matter.
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE PROPOSAL SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY
THE BOARD OF TRUSTEES.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
- --------------------------------------------------------------------------------
PLEASE MARK VOTES
IN THE EXAMPLE USING [X]
BLACK OR BLUE INK
AS TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD
YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE PHONE OR BY INTERNET
(SEE ENCLOSED VOTING INFORMATION CARD FOR FURTHER INSTRUCTIONS)
TO VOTE A PROXY BY PHONE, call Toll-Free: 1-800-690-6903
TO VOTE A PROXY BY INTERNET, visit our Website(s): WWW.MSDWT.COM or
WWW.PROXYVOTE.COM
FOR AGAINST ABSTAIN
The Proposal: [ ] [ ] [ ]
Approval of the Agreement and Plan of Reorganization, dated as of February 25,
1999, pursuant to which substantially all of the assets of Morgan Stanley Dean
Witter Mid-Cap Growth Fund would be combined with those of TCW/DW Mid-Cap Equity
Trust and shareholders of Morgan Stanley Dean Witter Mid-Cap Growth Fund would
become shareholders of TCW/DW Mid-Cap Equity Trust receiving shares in TCW/DW
Mid-Cap Equity Trust with a value equal to their holdings in Morgan Stanley Dean
Witter Mid-Cap Growth Fund.
Please make sure to sign and date this
Proxy using black or blue ink.
Date
-------------------------------------
-----------------------------------------
-----------------------------------------
Shareholder sign in the box above
-----------------------------------------
-----------------------------------------
Co-Owner (if any) sign in the box above
- --------------------------------------------------------------------------------
| | PLEASE FOLD AND DETACH AT PERFORATION ALONG DOTTED LINES | |
MORGAN STANLEY DEAN WITTER MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
IMPORTANT
USE ONE OF THESE THREE EASY WAYS TO VOTE YOUR PROXY
1. BY MAIL. PLEASE DATE, SIGN AND RETURN THE ABOVE PROXY CARD IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
2. BY INTERNET. HAVE YOUR PROXY CARD AT HAND. GO TO THE "VOTE YOUR PROXY HERE"
LINK ON THE WEBSITE WWW.MSDWT.COM OR WWW.PROXYVOTE.COM. ENTER YOUR 12 DIGIT
CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-690-6903 ON A
TOUCH-TONE PHONE. ENTER YOUR 12-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
- --------------------------------------------------------------------------------
