<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
P.O. BOX 2798
BOSTON, MA 02208-2798
March 27, 1997
Dear Shareholder:
The enclosed proxy statement relates to a special meeting of the
shareholders of Morgan Stanley Universal Funds, Inc. (the "Company"). On
February 4, 1997, Morgan Stanley Group Inc., the parent corporation of the
Company's investment advisers, entered into an Agreement and Plan of Merger with
Dean Witter, Discover & Co. Pursuant to the merger agreement, each of your
Company's investment advisers, Morgan Stanley Asset Management Inc. ("MSAM") and
Miller Anderson & Sherrerd, LLP ("MAS") will become a subsidiary of the merged
company, which will be named Morgan Stanley, Dean Witter, Discover & Co. MSAM
and MAS will continue to provide the Company with investment advisory and
management services following the merger. The primary purpose of the special
meeting is to permit the Company's shareholders to consider new investment
advisory agreements to take effect following the merger. The new investment
advisory agreements between the Company and its investment advisers will be
identical to the Company's applicable current investment advisory agreements,
except for the dates of execution, effectiveness and initial terms.
The attached proxy statement seeks shareholder approval on this item.
Although we encourage you to read carefully the full proxy statement, we have
created a brief question-and-answer section for your convenience.
Your vote is important and your participation
in the governance of your Company does make a difference.
The proposal has been unanimously approved by the Board of Directors of the
Company, who recommend that you vote "FOR" the proposal. Your immediate response
will eliminate the need for additional solicitations. We look forward to your
participation, and we thank you for your continued confidence in Morgan Stanley
Universal Funds, Inc.
PLEASE SIGN AND RETURN YOUR PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
Sincerely,
Warren J. Olsen
President
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
P.O. BOX 2798
BOSTON, MA 02208-2798
INFORMATION ABOUT YOUR PROXY STATEMENT
Q. Why am I receiving this proxy statement?
A. The direct parent company of Morgan Stanley Asset Management Inc. ("MSAM")
and the indirect parent of Miller Anderson & Sherrerd, LLP ("MAS"), your
investment advisers, is merging with another company and, as a result, your
consent is being sought on:
. approval of a new investment advisory agreement with MSAM; and/or
. approval of a new investment advisory agreement with MAS.
Please refer to the proxy statement for a detailed explanation of the
proposed items.
Q. How will this affect my account?
A. You can expect the same management expertise and Shareholder service you
are currently receiving. The new investment advisory agreements between
your Company and its investment advisers will be identical to the Company's
current investment advisory agreements, except for the dates of execution,
effectiveness and initial terms.
Q. Why do I need to vote?
A. Your vote is needed to ensure that the proposal can be acted upon. Your
immediate response on the enclosed proxy card will help save on the costs
of any further solicitations for a Shareholder vote. We encourage all
Shareholders to participate in the governance of their Company.
Q. How does the Board of Directors suggest that I vote?
A. After careful consideration, the Board of Directors of your Company
unanimously recommends that you vote "FOR" each item proposed on the
enclosed proxy card(s).
Q. Who is paying for expenses related to the Shareholder meeting?
A. The Company's investment advisers or their affiliates will pay for all
costs of solicitation. The Company will not pay for the expenses relating
to the approval.
2
<PAGE>
Q. Where do I mail my proxy card(s)?
A. You may use the enclosed postage-paid envelope or mail your proxy card(s)
to:
Morgan Stanley Universal Funds, Inc.
P.O. Box 2798
Boston, MA 02208-2798
Q. Who do I call if I have questions?
A. We will be happy to answer your questions about the proxy solicitation.
Please call us at [Telephone Number] between [7:00 a.m. and 7:00 p.m.]
[Eastern time], Monday through Friday.
3
<PAGE>
Morgan Stanley Universal Funds, Inc.
P.O. Box 2798
Boston, Massachusetts 02208-2798
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS
May 1, 1997
A Special Meeting of Shareholders (the "Meeting") of Morgan Stanley
Universal Funds, Inc. (the "Company"), will be held at the offices of Morgan
Stanley Asset Management Inc. on May 1, 1997, at _:__ _.m. (New York time), in
Conference Room __, at 1221 Avenue of the Americas, __th Floor, New York, NY
10020, for the following purposes:
1. To approve or disapprove a new investment advisory agreement with
Morgan Stanley Asset Management Inc.;
2. To approve or disapprove a new investment advisory agreement with
Miller Anderson & Sherrerd, LLP; and
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
Only Shareholders of investment portfolios (the "Portfolios") advised by
Morgan Stanley Asset Management Inc. are entitled to vote on Proposal 1 (with
each appropriate Portfolio voting separately). Likewise, only Shareholders of
the Portfolios advised by Miller Anderson & Sherrerd, LLP are entitled to vote
on Proposal 2 (with each appropriate Portfolio voting separately). The enclosed
proxy card(s) will enable you to vote with respect to the Portfolio(s) in which
you are a shareholder. (You will receive a separate solicitation for each
account you have with the Company and a separate proxy card for each Portfolio
in which such accounts have an investment.)
Shareholders of record at the close of business on March 21, 1997 are
entitled to notice of and to vote at this Meeting or any adjournment thereof.
By Order of the Board of Directors
Valerie Y. Lewis, Secretary
March 27, 1997
4
<PAGE>
PROXY STATEMENT
MORGAN STANLEY UNIVERSAL FUNDS, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 1, 1997
This proxy statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Morgan Stanley Universal Funds, Inc.
(the "Company") of proxies to be voted at a Special Meeting of Shareholders and
all adjournments thereof (the "Meeting"), to be held at the offices of Morgan
Stanley Asset Management, Inc., Conference Room __, __th Floor, 1221 Avenue of
the Americas, New York, NY 10020 on Thursday, May 1, 1997 at _:__ _.m. (New York
time). The approximate mailing date of this proxy statement and accompanying
form of proxy is March 27, 1997.
The primary purpose of the Meeting is to permit the Company's shareholders
to consider New Advisory Agreements (defined below) to take effect following the
consummation of the transactions contemplated by an Agreement and Plan of
Merger, dated as of February 4, 1997 (the "Merger Agreement"), between Dean
Witter, Discover & Co. ("Dean Witter Discover") and Morgan Stanley Group Inc.
("MS Group"), the direct parent of Morgan Stanley Asset Management Inc. ("MSAM"
or an "Adviser") and the indirect parent of Miller Anderson & Sherrerd, LLP
("MAS" or an "Adviser"), the Company's investment advisers. Pursuant to the
Merger Agreement, MSAM will become a direct subsidiary and MAS will become an
indirect subsidiary of the merged company, which will be called Morgan Stanley,
Dean Witter, Discover & Co. The Company's New Advisory Agreements are identical
to the Company's Current Advisory Agreements (defined below), except for the
dates of execution, effectiveness and initial terms.
5
<PAGE>
The Company will furnish, without charge, a copy of its most recent
Annual Report to Shareholders of the Company on request. As of December 31,
1996, the Company was comprised of one active, non-diversified portfolio, the
Emerging Markets Equity Portfolio. Requests should be directed to the Company at
[address] or by calling (800) [number].
The record date for determining shareholders entitled to vote at the
meeting is March 21, 1997. Shareholders of each portfolio ("Portfolio") of the
Company will be entitled to one vote per share with respect to approval or
disapproval of the New Advisory Agreements (defined below). MSAM acts as an
investment adviser for the Company with respect to the U.S. Real Estate, Growth,
Emerging Markets Equity, Global Equity, International Magnum and Asian Equity
Portfolios (together, the "MSAM Advised Portfolios"). Shareholders of each of
the MSAM Advised Portfolios will vote separately on a New Advisory Agreement
(defined below) with MSAM. MAS acts as an investment adviser for the Company
with respect to the [High Yield,] Fixed Income, Value and Mid Cap Value
Portfolios (together, the "MAS Advised Portfolios"). Shareholders of each of the
MAS Advised Portfolios will vote separately on a New Advisory Agreement (defined
below) with MAS.
At the close of business on March 21, 1997, there were issued and
outstanding the following number of shares of each Portfolio.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Portfolio Outstanding Shares
--------- ------------------
- --------------------------------------------------------------------------------
<S> <C>
Fixed Income Portfolio
- --------------------------------------------------------------------------------
High Yield Portfolio
- --------------------------------------------------------------------------------
Growth Portfolio
- --------------------------------------------------------------------------------
Value Portfolio
- --------------------------------------------------------------------------------
Mid Cap Value Portfolio
- --------------------------------------------------------------------------------
U.S. Real Estate Portfolio
- --------------------------------------------------------------------------------
Global Equity Portfolio
- --------------------------------------------------------------------------------
International Magnum Portfolio
- --------------------------------------------------------------------------------
Emerging Markets Equity Portfolio
- --------------------------------------------------------------------------------
Asian Equity Portfolio
- --------------------------------------------------------------------------------
</TABLE>
Shares of each Portfolio are offered only to insurance companies for the
purpose of funding their variable annuity contracts and variable life insurance
policies and to certain tax-qualified investors. The Portfolios are new and
therefore a majority of the shares of each Portfolio are currently owned by MSAM
in connection with MS-Group and/or MSAM providing initial capital to the
Portfolios. Information about owners of five percent or more of the outstanding
shares of each Portfolio is set forth in the following table.
6
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Title of Class of Shares Name of Beneficial Amount and Nature of Percent of
Owner Beneficial Ownership Outstanding
Shares
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed Income Portfolio
- -----------------------------------------------------------------------------------------------
High Yield Portfolio
- -----------------------------------------------------------------------------------------------
Growth Portfolio
- -----------------------------------------------------------------------------------------------
Value Portfolio
- -----------------------------------------------------------------------------------------------
Mid Cap Value Portfolio
- -----------------------------------------------------------------------------------------------
U.S. Real Estate Portfolio
- -----------------------------------------------------------------------------------------------
Global Equity Portfolio
- -----------------------------------------------------------------------------------------------
International Magnum Portfolio
- -----------------------------------------------------------------------------------------------
Emerging Markets Equity Portfolio
- -----------------------------------------------------------------------------------------------
Asian Equity Portfolio
- -----------------------------------------------------------------------------------------------
</TABLE>
[Note: Each insurance company should be treated as beneficial owner of the
shares it holds in its separate account.]
Under current interpretation and administration of the Investment Company
Act of 1940, as amended (the "1940 Act"), and regulations thereunder, insurance
companies holding shares of the Portfolios in separate accounts which are
registered under the 1940 Act are required to vote the shares in accordance with
instructions from their variable annuity contract owners and variable life
insurance policy owners. Instructions are obtained by the insurance companies
sending this proxy statement to their contract owners and policy owners and
soliciting the instructions. Shares held in registered separate accounts for
which contract owners and policy owners do not give instructions are voted for
and against the proposal in the same proportions as the shares voted pursuant to
instructions. In addition, shares of each Portfolio owned by MS-Group and/or
MSAM in connection with providing initial capital will be voted in the same
proportion as shares held in insurance company separate accounts are voted.
Voting
With respect to each Portfolio, a "vote of majority of the outstanding
voting securities" is required, which is defined under the 1940 Act as the
lesser of (i) 67% or more of the voting shares of the Portfolio entitled to vote
thereon present in person or by proxy at the Meeting, if the holders of more
than 50% of the outstanding voting shares of the Portfolio entitled to vote
7
<PAGE>
thereon are present in person or represented by proxy, or (ii) more than 50% of
the outstanding voting of the Portfolio entitled to vote thereon.
Shareholders of each MSAM Advised Portfolio are entitled to vote with
respect to Proposal Number 1 and Shareholders of each MAS Advised Portfolio are
entitled to vote with respect to Proposal Number 2. Proposal Number 1 will be
approved with respect to an MSAM Advised Portfolio if approved by the
Shareholders of that MSAM Advised Portfolio, regardless of whether the other
Shareholders of any other Portfolios approve the proposal. Likewise, Proposal
Number 2 will be approved with respect to an MAS Advised Portfolio if approved
by the shareholders of that MAS Advised Portfolio, regardless of whether the
other shareholders of any other Portfolios approve the proposal.
The Board recommends that you cast your vote.
. FOR approval of the New Advisory Agreement with MSAM; and/or
---
. FOR approval of the New Advisory Agreement with MAS.
---
All properly executed proxies received prior to the Meeting will be voted
at the Meeting in accordance with the instructions marked thereon. Proxies
received prior to the Meeting on which no vote is indicated will be voted "for"
the proposal as to which it is entitled to vote. Abstentions will not be counted
for or against the proposal, but will be counted as votes present for purposes
---- --
of determining whether a quorum is present. Abstentions will be counted as votes
present for purposes of determining a "majority of the outstanding voting
securities" present at the Meeting and will therefore have the effect of
counting against any Proposal to which they relate. A majority of the
outstanding Shares entitled to vote on a proposal must be present in person or
by proxy to have a quorum to conduct business at the Meeting.
Shareholders who execute proxies may revoke them at any time before they
are voted by filing with the Company a written notice of revocation, by
delivering a duly executed proxy bearing a later date or by attending the
Meeting and voting in person.
THE PROPOSAL: APPROVAL OF NEW ADVISORY AGREEMENTS
The Advisers
- ------------
Morgan Stanley Asset Management Inc. (MSAM)
MSAM currently is a wholly-owned subsidiary of MS Group and provides a
broad range of portfolio management services to customers in the United States
and abroad. At [date], MSAM together with its affiliated asset management
companies (other than MAS) managed investments totaling approximately $__
billion. The address of MSAM is 1221 Avenue of the Americas, New York, NY 10020.
8
<PAGE>
Set forth below is the name, address and principal occupation of the
principal executive officer and each director of MSAM:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name and Address Principal Occupation
- ---------------- --------------------
- --------------------------------------------------------------------------------
<S> <C>
Barton M. Biggs Chairman and Managing Director, MSAM; Managing
1221 Avenue of Americas Director of Morgan Stanley & Co. Incorporated;
New York, New York 10020 Chairman of Morgan Stanley Asset Management
Limited
- --------------------------------------------------------------------------------
James M. Allwin President, Director and Managing Director,
1221 Avenue of Americas MSAM; Managing Director of Morgan Stanley &
New York, New York 10020 Co. Incorporated; President of Morgan Stanley
Realty Inc.
- --------------------------------------------------------------------------------
Peter A. Nadosky Vice Chairman, Director and Managing Director,
1221 Avenue of Americas MSAM; Managing Director of Morgan Stanley &
New York, New York 10020 Co. Incorporated; Director of Morgan Stanley
Asset Management Limited
- --------------------------------------------------------------------------------
Gordon S. Gray Director and Managing Director, MSAM; Managing
1221 Avenue of Americas Director of Morgan Stanley & Co. Incorporated
New York, New York 10020
- --------------------------------------------------------------------------------
Dennis G. Sherva Director and Managing Director, MSAM; Managing
1221 Avenue of Americas Director of Morgan Stanley & Co. Incorporated
New York, New York 10020
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Miller Anderson & Sherrerd, LLP (MAS)
MAS, a Pennsylvania limited liability partnership founded in 1969, has its
principal offices at One Tower Bridge, West Conshohocken, Pennsylvania 19428.
MAS provides investment services to employee benefit plans, endowment funds,
foundations and other institutional investors and has served as investment
adviser to several open-end investment companies since 1984. At [date], MAS
managed investments totaling approximately $___ billion.
Listed below are the names, address and principal occupations of each of
the principal executive officers of MAS.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name and Address Principal Occupation
- ---------------- --------------------
- --------------------------------------------------------------------------------
<S> <C>
Thomas L. Bennett Principal executive officer and Portfolio
One Tower Bridge Manager; Managing Director, Morgan Stanley
West Conshohocken, PA 19428 & Co. Incorporated
- --------------------------------------------------------------------------------
Gary G. Schlarbaum Principal executive officer and
One Tower Bridge Portfolio Manager; Managing Director, Morgan
West Conshohocken, PA 19428 Stanley & Co. Incorporated
- --------------------------------------------------------------------------------
Marna C. Whittington Principal executive officer; Managing
One Tower Bridge Director, Morgan Stanley & Co. Incorporated
West Conshohocken, PA 19428
- --------------------------------------------------------------------------------
Richard B. Worley Principal executive officer and Portfolio
One Tower Bridge Manager; Managing Director, Morgan
West Conshohocken, PA 19428 Stanley & Co. Incorporated
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
MS Group acquired MAS in January 1996. As part of that acquisition, the then
partners of MAS including each of the above-mentioned principal executive
officers, sold their partnership interests in MAS to Morgan Stanley Asset
Management Holdings Inc., a [direct/indirect wholly-owned subsidiary of MS
Group,] for cash and securities of MS Group.
Information Concerning Morgan Stanley Group
MS Group and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and MSAM, a registered investment adviser, and Morgan
Stanley International, provide a wide range of financial services on a global
basis. MS Group's principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring, real estate,
project finance and other corporate finance advisory activities; merchant
banking and other principal investment activities; stock brokerage and research
services; asset management; the trading of foreign exchange and commodities as
well as derivatives on a broad range of asset categories, rates and indices;
real estate advice, financing and investing; and global custody, securities
clearance services and securities lending.
Information Concerning Dean Witter, Discover & Co.
Dean Witter Discover is a diversified financial services company offering a
broad range of nationally marketed credit and investment products with a primary
focus on individual customers. Dean Witter Discover has two principal lines of
business: credit services and securities. Its credit services business consists
primarily of the issuance, marketing and servicing of general purpose credit
cards and the provision of transaction processing services, private-label credit
card services and real estate secured loans. It is the largest single issuer of
general purpose credit cards in the United States as measured by number of
accounts and cardmembers and the third largest originator and servicer of credit
card receivables, as measured by managed loans. Dean Witter Discover's
securities business is conducted primarily through its wholly-owned
subsidiaries, Dean Witter Reynolds Inc. ("DWR") and Dean Witter Intercapital
Inc. ("Intercapital"). DWR is a full-service securities firm offering in a wide
variety of securities products to serve the investment needs of individual
clients through over 9,100 professional account executives located in 371 branch
offices. DWR is among the largest NYSE members and is a member of other major
securities, futures and options exchanges. Intercapital is a registered
investment adviser that, along with its subsidiaries, services investment
companies, individual accounts and institutional portfolios.
11
<PAGE>
The Merger
- ----------
Pursuant to the Merger Agreement, MS Group will be merged (the "Merger")
with and into Dean Witter Discover and the surviving corporation will be named
Morgan Stanley, Dean Witter, Discover & Co. Following the Merger, MSAM will be a
direct subsidiary and MAS will be an indirect subsidiary of Morgan Stanley, Dean
Witter, Discover & Co.
Under the terms of the Merger Agreement, each of MS Group's common shares
will be converted into the right to receive 1.65 shares of Morgan Stanley, Dean
Witter, Discover & Co. common stock and each issued and outstanding share of
Dean Witter Discover common stock will remain outstanding and will thereafter
represent one share of Morgan Stanley, Dean Witter, Discover & Co. common stock.
Following the Merger, MS Group's former shareholders will own approximately 45%
and Dean Witter Discover's former shareholders will own approximately 55% of the
outstanding shares of common stock of Morgan Stanley, Dean Witter, Discover &
Co.
The Merger is expected to be consummated in mid-1997 and is subject to
certain closing conditions, including certain regulatory approvals and the
approval of shareholders of both MS Group and Dean Witter Discover.
The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co.
initially will consist of fourteen members, two of whom will be MS Group
insiders and two of whom will be Dean Witter Discover insiders. The remaining
ten directors will be independent directors, with MS Group and Dean Witter
Discover each nominating five of the ten. The Chairman and Chief Executive
Officer of Morgan Stanley, Dean Witter, Discover & Co. will be the current
Chairman and Chief Executive Officer of Dean Witter Discover, Phillip Purcell.
The President and Chief Operating Officer of Morgan Stanley, Dean Witter,
Discover & Co. will be the current President of MS Group, John Mack.
The Board has been advised that neither MSAM nor MAS anticipates any
reduction, as a result of the Merger, in the quality of services now provided to
the Company and that neither expects that the Merger will result in any material
changes in the business of the MSAM or MAS, respectively, or in the manner in
which they render services to the Company. The Board has also been advised that
neither MSAM nor MAS anticipates that the Merger or any ancillary transactions
will have any adverse effect on its ability to fulfill its obligations under the
applicable New Advisory Agreements (defined below) with the Company or to
operate its business in a manner consistent with past business practice.
12
<PAGE>
The Advisory Agreements
- -----------------------
In anticipation of the Merger, a majority of the Directors of the Company,
including a majority of the Directors who are not (i) parties to either New
Advisory Agreement (defined below) or (ii) interested persons of any such party,
approved a new investment advisory agreement between the Company and MSAM (the
"New MSAM Advisory Agreement") and a new advisory agreement between the Company
and MAS (the "New MAS Advisory Agreement" and, together with the New MSAM
Advisory Agreement, the "New Advisory Agreements"). The form of the New MSAM
Advisory Agreement is identical to the Current MSAM Advisory Agreement (defined
below) and the form of the New MAS Advisory Agreement is identical to the
Current MAS Advisory Agreement (defined below), except in each case for the
dates of execution, effectiveness and initial term. The holders of a majority of
the outstanding voting securities (within the meaning of the 1940 Act) of the
Portfolios are being asked to approve the appropriate New Advisory Agreement.
See "The New Advisory Agreements" below.
The following summary of the Current Advisory Agreements and the New
Advisory Agreements is qualified by reference to Annexes A and B.
The Current Advisory Agreements
Morgan Stanley Asset Management Inc.
The current advisory agreement between the Company and MSAM dated as of
September 9, 1996 (the "Current MSAM Agreement"), was last approved by the
initial Shareholder of the Portfolios on September 11, 1996 [?] for the Emerging
Markets Equity Portfolio, on January 3, 1997 for the Growth, Equity, and
International Equity Portfolios, and on ________ for the U.S. Real Estate and
Asian Equity Portfolios.
At a meeting of the Board held on August 15, 1996, a majority of the Board,
including a majority of the Directors who are not "interested parties" as
defined by the 1940 Act ("Independent Directors") approved the Current MSAM
Agreement with respect to each MSAM Advised Portfolio.
The Current MSAM Agreement provides that MSAM, as an investment adviser,
will manage the investments and the reinvestments of the MSAM Advised Portfolios
including the selection of securities for the Company to purchase, hold or sell,
the amount of assets to remain uninvested, and the selection of brokers through
whom the Company's portfolio transactions are executed. At its discretion MSAM
may also administer business affairs of the Company, furnish offices, necessary
facilities and equipment and provide administrative services.
The Current MSAM Agreement provides that MSAM shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Company in
connection with the matters to which the Current MSAM Agreement relates except a
loss resulting from willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties or breach of its fiduciary duty
with respect to the receipt of compensation for services.
MSAM's activities are subject to the review and supervision of the Board,
to which it renders periodic reports with respect to the MSAM Advised
Portfolios' investment activities. The Current MSAM Agreement may be terminated,
without penalty, on 60 days' written notice by the Company or upon 90 days'
written notice by MSAM and will terminate immediately upon assignment.
13
<PAGE>
Under the Current MSAM Agreement, the Company pays MSAM as compensation for
the services rendered annual fees equal to percentages listed below of the
respective Portfolio's average daily net assets.
<TABLE>
<CAPTION>
-------------------------------------------------------------
Portfolio Contractual Advisory Fee
--------- ------------------------
-------------------------------------------------------------
<S> <C>
Growth Portfolio First $500 Million 0.55%
From $500 Million
to $1 Billion 0.50%
More than $1 Billion 0.45%
-------------------------------------------------------------
U.S. Real Estate Portfolio First $500 Million 0.80%
From $500 Million
to $1 Billion 0.75%
More than $1 Billion 0.70%
-------------------------------------------------------------
Global Equity Portfolio First $500 Million 0.80%
From $500 Million
to $1 Billion 0.75%
More than $1 Billion 0.70%
-------------------------------------------------------------
International Magnum First $500 Million 0.80%
Portfolio From $500 Million
to $1 Billion 0.75%
More than $1 Billion 0.70%
-------------------------------------------------------------
Emerging Markets Equity First $500 Million 1.25%
Portfolio From $500 Million
to $1 Billion 1.20%
More than $1 Billion 1.15%
-------------------------------------------------------------
Asian Equity Portfolio First $500 Million 0.80%
From $500 Million
to $1 Billion 0.75%
More than $1 Billion 0.70%
-------------------------------------------------------------
</TABLE>
In the fiscal year ending December 31, 1996, MSAM received fees of $32,000
for services provided to the Emerging Markets Equity Portfolio, of which MSAM
waived all $32,000. MSAM's net advisory fee for the Emerging Markets Equity
Portfolio, after fee waivers, was 0.00%. The other MSAM Advised Portfolios did
not commence operations in this fiscal year and, therefore, MSAM did not receive
any compensation from the Company during this period for these Portfolios.
The net assets of the MSAM Advised Portfolios as of [Date], as well as
other investment companies advised by the Adviser, the rates of compensation to
the Adviser, the aggregate amount of advisory fees paid by the Company to the
Adviser and the aggregate amount of any other material payments by the Company
to MSAM are set forth at Annex C hereto.
14
<PAGE>
Miller Anderson & Sherrerd, LLP
The current advisory agreement between the Company and MAS dated as of
September 9, 1996 MAS Advised (the "Current MAS Agreement") was last approved by
the initial shareholder of the MAS Portfolios on January 3, 1997.
At a meeting of the Board held on August 15, 1996, a majority of the Board,
including a majority of the Independent Directors, approved the Current MAS
Agreement with respect to each MAS Advised Portfolio.
The Current MAS Agreement provides that MAS will manage the investments and
the reinvestments of the Portfolios including the selection of securities for
the Company to purchase, hold or sell, the amount of assets to remain
uninvested, and the selection of brokers through whom the Company's portfolio
transactions are executed. At its discretion MAS may also administer business
affairs of the Company, furnish offices, necessary facilities and equipment and
provide administrative services.
The Current MAS Agreement provides that MAS shall not be liable for any
error of judgment or mistake of law, or for any loss suffered by the Company in
connection with the matters to which the Current MAS Agreement relates except a
loss resulting from willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duty or breach of fiduciary duty with respect
to the receipt of compensation for services.
MAS's activities are subject to the review and supervision of the Board, to
which it renders periodic reports with respect to the MAS Advised Portfolios
investment activities. The Current MAS Agreement may be terminated without
penalty, on 60 days' written notice by the Company or upon 90 days' written
notice by MAS and will terminate immediately upon assignment.
Under the Current MAS Agreement the Company pays MAS as compensation for
the services rendered annual fees equal to percentages listed below of the
respective Portfolio's average daily net assets.
<TABLE>
<CAPTION>
----------------------------------------------------------
Portfolio Contractual Advisory Fee
--------- ------------------------
----------------------------------------------------------
<S> <C>
Fixed Income Portfolio First $500 Million 0.40%
From $500 Million
to $1 Billion 0.35%
More than $1 Billion 0.30%
----------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
----------------------------------------------------------
<S> <C>
High Yield Portfolio First $500 Million 0.50%
From $500 Million
to $1 Billion 0.45%
More than $1 Billion 0.40%
----------------------------------------------------------
Value Portfolio First $500 Million 0.55%
From $500 Million
to $1 Billion 0.50%
More than $1 Billion 0.45%
----------------------------------------------------------
Mid Cap Value Portfolio First $500 Million 0.75%
From $500 Million
to $1 Billion 0.70%
More than $1 Billion 0.65%
----------------------------------------------------------
</TABLE>
The MAS Advised Portfolios did not commence operations in the fiscal year
ending December 31, 1996 and, therefore, MAS received no compensation from the
Company during this period.
The net assets of the MAS Advised Portfolios as of [Date], as well as other
investment companies advised by the Adviser, the rates of compensation to the
Adviser, the aggregate amount of advisory fees paid by the Company to the
Adviser and the aggregate amount of any other material payments by the Company
to the Adviser are set forth at Annex D hereto.
The New Advisory Agreements
The Board approved the New MSAM Advisory Agreement and New MAS Advisory
Agreement on March 13, 1997, the forms of which are attached as Annex A and
Annex B, respectively. The form of the proposed New MSAM Advisory Agreement is
identical to the Current MSAM Agreement, except for the dates of execution,
effectiveness and initial term. Likewise, the form of the proposed New MAS
Advisory Agreement is identical to the Current MAS Agreement, except for the
dates of execution, effectiveness and initial term.
[The investment advisory fee as a percentage of net assets payable by each
Portfolio will be the same under each New Advisory Agreement as under the
applicable Current Advisory Agreement. If the investment advisory fee under
each of the New Advisory Agreements had been in effect for the Company's most
recently completed fiscal year, advisory fees paid to MSAM and MAS by the
Company would have been identical to those paid under the applicable Current
Advisory Agreements.]
16
<PAGE>
The Board held a meeting on March 13, 1997, at which meeting the Directors,
including the Directors who are not "interested persons" under the 1940 Act (the
"Independent Directors"), unanimously approved each New Advisory Agreement for
the Company and recommended the agreements for approval by the shareholders of
the MSAM Advised Portfolios and the MAS Advised Portfolios, as appropriate. Each
New Advisory Agreement would take effect upon the later to occur of (i) the
obtaining of shareholder approval or (ii) the closing of the Merger. Each New
Advisory Agreement will continue in effect for an initial two year term and
thereafter for successive annual periods as long as such continuance is approved
in accordance with the 1940 Act.
In evaluating each New Advisory Agreement, the Board took into account that
the Company's Current Advisory Agreements and the New Advisory Agreements,
including their terms relating to the services to be provided thereunder by the
respective Adviser and the fees and expenses payable by the Company, are
identical, except for the dates of execution, effectiveness and initial term.
The Board also considered other possible benefits to MSAM, MAS and Morgan
Stanley, Dean Witter, Discover & Co. that may result from the Merger including
the continued use of Morgan Stanley & Co. and Dean Witter Discover brokers
and its affiliates, to the extent permitted by law, for brokerage services.
The Board considered the terms of the Merger Agreement and the possible
effects of the Merger upon the organization of each of MSAM and MAS and upon
the ability of each Adviser to provide advisory services to the Company. The
Board considered the skills and capabilities of MSAM and MAS. In this regard,
the Board was informed of the resources of Morgan Stanley, Dean Witter, Discover
& Co. to be made available to each of MSAM and MAS.
The Board also considered the effect on the Company of MSAM and MAS each
becoming an affiliated person of Morgan Stanley, Dean Witter, Discover & Co.
Following the Merger, the 1940 Act will prohibit or impose certain conditions on
the ability of the Company to engage in certain transactions with Morgan
Stanley, Dean Witter, Discover & Co. and its affiliates. For example, absent
exemptive relief, the Company will be prohibited from purchasing securities from
Morgan Stanley & Co. and Dean Witter Discover in transactions in which Morgan
Stanley & Co. and Dean Witter Discover act as a principal. Currently the Company
is prohibited from making such purchases in only those transactions in which
Morgan Stanley & Co. or an affiliate acts as a principal. The Company will also
have to satisfy certain conditions in order to engage in securities transactions
in which Morgan Stanley & Co. or Dean Witter Discover is acting as an
underwriter. The Company is already required to satisfy such conditions when
engaging in transactions in which Morgan Stanley & Co. or an affiliate is acting
as an underwriter. In this connection, management of MSAM and management of MAS
each represented to the Board that they do not believe these prohibitions or
conditions will have a material effect on the management or performance of the
MSAM Advised Portfolios or the MAS Advised Portfolios, respectively.
17
<PAGE>
After consideration of the above factors and such other factors and
information that the Board deemed relevant, the Directors, including the
Independent Directors, unanimously: (i) approved the New MSAM Advisory
Agreement; (ii) approved the New MAS Advisory Agreement; (iii) voted to
recommend the approval of the New MSAM Advisory Agreement to the shareholders of
the MSAM Advised Portfolios; and (iv) voted to recommend the approval of the New
MAS Advisory Agreement to the Shareholders of the MAS Advised Portfolios.
In the event that shareholders of an MSAM Advised Portfolio or an MAS
Advised Portfolio do not approve the New MSAM Advisory Agreement or the New MAS
Advisory Agreement, respectively, the applicable Current Advisory Agreement will
remain in effect and the Board will take such action as it deems in the best
interest of the Company and its Shareholders, which may include proposing that
Shareholders approve an agreement in lieu of such New Advisory Agreement. If the
Merger is not consummated, each of MSAM and MAS would continue to serve as
investment adviser of the Company pursuant to the terms the applicable Current
Advisory Agreement.
18
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
NEW ADVISORY AGREEMENTS.
ADDITIONAL INFORMATION
Directors and Officers of the Company
Information is set forth below about the Company's current Directors and
principal executive officers, including their name, position with the Company,
and relationship to MSAM or MAS. None of the Directors own shares of the
Company.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Name and Position with Affiliation with MSAM
the Company or MAS
- -------------------------------------------------------------------
<S> <C>
Barton M. Biggs Chairman and Director of
Chairman and Director MSAM
- -------------------------------------------------------------------
Warren J. Olsen Principal of MSAM
Director and President
- -------------------------------------------------------------------
John D. Barrett, II N/A
Director
- -------------------------------------------------------------------
Gerard E. Jones N/A
Director
- -------------------------------------------------------------------
Andrew McNally IV N/A
Director
- -------------------------------------------------------------------
Samuel T. Reeves N/A
Director
- -------------------------------------------------------------------
Fergus Reid N/A
Director
- -------------------------------------------------------------------
Frederick O. Robertshaw N/A
Director
- -------------------------------------------------------------------
Michael F. Klein Principal of MSAM
Vice President
- -------------------------------------------------------------------
Harold J. Schaaff, Jr. General Counsel, Principal
Vice President and Secretary of MSAM
- -------------------------------------------------------------------
Joseph P. Stadler Vice President of MSAM
Vice President
- -------------------------------------------------------------------
Valerie Y. Lewis Vice President of MSAM
Secretary
- -------------------------------------------------------------------
Lorraine Truten Principal of Morgan Stanley &
Vice President Co. Incorporated, Head of
Mutual Fund Services of MAS
- -------------------------------------------------------------------
Douglas W. Kuglar Vice President of Morgan Stanley
Vice President & Co. Incorporated, Head
of Mutual Fund Administration
of MAS
- -----------------------------------------------------------------
Karl O. Hartman N/A
Assistant Secretary
- -----------------------------------------------------------------
James R. Rooney N/A
Treasurer
- -----------------------------------------------------------------
Joanna Haigney N/A
Assistant Treasurer
- -----------------------------------------------------------------
</TABLE>
19
<PAGE>
Transactions/Agreements with Affiliates
- ---------------------------------------
Administrator
- -------------
Pursuant to Administration Agreements between the Advisers, respectively,
and the Company, MSAM and MAS (each an "Administrator") provide administrative
services to the MSAM Advised Portfolios and the MAS Advised Portfolios,
respectively. For their services under separate administration agreements with
the Company (the "Administration Agreements"), the Company pays the
Administrators a monthly fee which on an annual basis equals 0.25% of the
average daily net assets of each Portfolio. For the fiscal year ended December
31, 1996, the Company paid administration fees to MSAM of approximately
$9,000.00. Administration fees were not paid to MAS in the fiscal year ending
December 31, 1996 because no MAS Advised Portfolio commenced operations during
this period. Whether or not a particular proposal is approved, MSAM and MAS will
continue to provide administrative services to the MSAM Advised Portfolios and
the MAS Advised Portfolios, respectively.
Custodian
- ---------
Morgan Stanley Trust Company, Brooklyn, New York ("MSTC"), acts as the
Company's custodian for foreign assets held outside the United States and
employs subcustodians who were approved by the Directors of the Company in
accordance with the regulations of the Securities and Exchange Commission for
the purpose of providing custodial services for such assets. For the fiscal year
ended December 31, 1996, the Company paid MSTC fees of approximately $39,000.
Whether or not a particular proposal is approved, MSTC will continue to act as
the Company's custodian for foreign assets held outside the United States.
Distributor
- -----------
Under a separate Distribution Agreement with the Company, Morgan Stanley &
Co., a wholly-owned subsidiary of the MS Group, serves as the exclusive
distributor of the Portfolios and sells shares of each Portfolio on the terms
described in the Company's prospectus. [As compensation for providing
distribution services to the Company for the fiscal year ended December 31,
1996, Morgan & Stanley & Co. received aggregate compensation of approximately
$__________ which was attributable to the Emerging Market Equity Portfolio.]
Whether or not a particular proposal is approved, Morgan Stanley & Co. will
continue to provide distribution services to the Portfolios.
Portfolio Transactions
- ----------------------
Each Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of investment securities for the Portfolios and
to use its best efforts to obtain the best available price and most favorable
execution with respect to all transactions for the Portfolios. The Company has
authorized each Adviser to pay higher commissions in recognition of brokerage
and research services which, in the opinion of the particular Adviser, are
necessary for the achievement of better execution, provided that the Adviser
believes this to be in the best interest of the Company.
In purchasing and selling securities for the Portfolios, it is the
Company's policy to seek to obtain quality execution at the most favorable
prices, through responsible broker-dealers. In selecting broker-dealers to
execute the securities transactions for the Portfolios, consideration will be
given to such factors as the price of the security, the rate of the commission,
the size and difficulty of the order, the reliability, integrity, financial
condition, general execution and operational capabilities of competing broker-
dealers, and the brokerage and research services which they provide to the
Company. Some securities considered for investment by a Portfolio may also be
appropriate for other clients served by that Portfolio's Adviser. If purchase
or sale of securities consistent with the investment policies of a Portfolio and
one or more of these other
20
<PAGE>
clients served by that Portfolio's Adviser is considered at or about the same
time, transactions in such securities will be allocated among the Portfolio and
clients in a manner deemed fair and reasonable by the Adviser. Although there is
no specified formula for allocating such transactions, the various allocation
methods used by the Advisers, and the results of such allocations, are subject
to periodic review by the Company's Directors.
Subject to the overriding objective of obtaining the best execution of
orders, each Adviser may allocate a portion of the Company's portfolio brokerage
transactions to Morgan Stanley & Co. or broker affiliates of Morgan Stanley &
Co. and, subsequent to the Merger, to DWR or broker affiliates of DWR, each
under procedures adopted by the Board of Directors. [For the fiscal year ended
December 31, 1996, the Company paid brokerage commissions of approximately
$26.00 to Morgan Stanley & Co., an affiliated broker-dealer. For the fiscal year
ended December 31, 1996, commissions paid to the Distributor represented
approximately 0.06% of the total amount of brokerage commissions paid in such
period and which were paid on transactions that represented __% of the aggregate
dollar amount of transactions that incurred commissions paid by the Company
during such period.]
21
<PAGE>
Expenses
- --------
In order to obtain the necessary quorum at the Meeting, additional
solicitation may be made by mail, telephone, telegraph, facsimile or personal
interview by representatives of the Fund, the Adviser or by Shareholder
Communications Services, a solicitation firm located in [place] that has been
engaged to assist in proxy solicitation at an estimated cost of approximately
[ ]. All costs of solicitation (including the printing and mailing of this proxy
statement, meeting notice and form of proxy, as well as any necessary
supplementary solicitations) will be paid by MSAM, MAS or their affiliates.
Persons holding shares as nominees will, upon request, be reimbursed for their
reasonable expenses in sending soliciting material to their principals. The
Company will not pay for the expenses relating to the approval.
Submission of Shareholder Proposals
- -----------------------------------
The Company does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a shareholder meeting
subsequent to the Meeting, if any, should send their written proposals to the
Secretary of Morgan Stanley Universal Funds, Inc., c/o Morgan Stanley Asset
Management Inc., Legal Department, 1221 Avenue of the Americas, New York, New
York 10020.
GENERAL
The Company knows of no business other than that mentioned in the Proposals
of the Notice that will be presented for consideration at the Meeting. If any
other matters are properly presented, it is the intention of the persons named
on the enclosed proxy to vote proxies in accordance with their best judgement.
In the event a quorum is present at the Meeting but sufficient votes to approve
a proposal are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of voting
instructions by the insurance companies, provided they determine that such an
adjournment and additional solicitation is reasonable and in the interest of
Shareholders based on a consideration of all relevant factors, including the
nature of the relevant proposal, the percentage of affirmative votes then cast,
the percentage of negative votes then cast the nature of the proposed
solicitation activities and the nature of the reasons for such further
solicitation.
A list of Shareholders of the Company entitled to be present and vote at
the Meeting will be available at the offices of the Company, 1221 Avenue of the
Americas, New York, NY 10020 for inspection by any Shareholder during regular
business hours for ten days prior to the date of the Meeting.
22
<PAGE>
Failure of a quorum to be present at the Meeting for the Company may
necessitate adjournment and additional proxy solicitations.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
March 27, 1997
Valerie Y. Lewis, Secretary
23
<PAGE>
ANNEX A
FORM OF NEW MSAM INVESTMENT ADVISORY AGREEMENT
[Insert a form of the Company's investment advisory agreement with MSAM]
24
<PAGE>
ANNEX B
FORM OF NEW MAS INVESTMENT ADVISORY AGREEMENT
[Insert a form of the Company's investment advisory agreement with MAS]
25
<PAGE>
ANNEX C
The following table indicates the size of each investment company advised or
subadvised by Morgan Stanley Asset Management Inc., the advisory fee rate, the
amount of advisory fees or subadvisory fees paid to MSAM for the last fiscal
year, and the amount of other material fees paid to such persons for such fiscal
year. Average net assets are calculated on a daily basis for registered open-
end investment companies and on a weekly basis for registered closed-end
investment companies.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Asset Aggregate
Management Amount of
Net Assets on Fee as Adviser/ Amount of Other
Name [Date] Percent of Subadviser's Material Payments to
(In Millions) Average Net Fee for Last Adviser/Subadviser for
Assets Fiscal Year the Last Fiscal Year
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[Insert
Appropriate
Information]
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
ANNEX D
The following table indicates the size of each investment company advised
or subadvised by the MAS, the advisory fee rate, the amount of advisory fees or
subadvisory fees paid to the MAS for the last fiscal year, and the amount of
other material fees paid to such persons for such fiscal year. Average net
assets are calculated on a daily basis for registered open-end investment
companies and on a weekly basis for registered closed-end investment companies.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Amount of
Other
Asset Aggregate Material
Management Amount of Payments to
Net Assets on Fee as Adviser/ Adviser/
Name [Date] Percent of Subadviser's Subadviser for
(In Millions) Average Net Fee for Last the Last Fiscal
Assets Fiscal Year Year
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[Insert
Appropriate
Information]
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
PRELIMINARY PROXY FOR SPECIAL MEETING OF SHAREHOLDERS, MAY 1, 1997
The undersigned Shareholder(s) of the _________________ Portfolio (the
"Portfolio") of Morgan Stanley Universal Funds, Inc. (the "Company") hereby
appoint(s) Warren J. Olsen, Harold J. Schaaff, Jr., Michael F. Klein and Valerie
Y. Lewis and each of them (with full power of substitution), the proxy or
proxies of the undersigned to attend the Special Meeting of Shareholders of the
Portfolio to be held on May 1, 1997, and any adjournments thereof, to vote all
of the shares of the Portfolio that the signer would be entitled to vote if
personally present at the Special Meeting of Shareholders on the following
Proposal and on any other matters brought before the Meeting, all as set forth
in the Notice of Special Meeting of Shareholders and Proxy Statement of the
Board of Directors. Said proxies are directed to vote or refrain from voting
pursuant to the Proxy Statement as checked below upon the following matters:
This proxy is solicited on behalf of the Board of Directors of the Company
and will be voted "FOR" the proposal unless otherwise indicated.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
Proposal: Approval of the investment advisory agreement by and between Morgan
Stanley Universal Funds, Inc. and Morgan Stanley Asset Management Inc.
[_] FOR [_] AGAINST [_] ABSTAIN
In accordance with their own discretion, the proxies are authorized to
vote on such other business as may properly come before the Meeting.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy
is returned, such shares will be voted in accordance with the recommendations of
the Board of Directors FOR the Proposal.
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement of the Board
of Directors.
Please date, sign and return promptly.
Dated: _______________________________, 1997
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
_____________________________________________
Signature
_____________________________________________
Signature
28
<PAGE>
MORGAN STANLEY UNIVERSAL FUNDS, INC.
PRELIMINARY PROXY FOR SPECIAL MEETING OF SHAREHOLDERS,
MAY 1, 1997
The undersigned Shareholder(s) of the _________________ Portfolio (the
"Portfolio") of Morgan Stanley Universal Funds, Inc. (the "Company") hereby
appoint(s) Warren J. Olsen, Harold J. Schaaff, Jr., Michael F. Klein and Valerie
Y. Lewis and each of them (with full power of substitution), the proxy or
proxies of the undersigned to attend the Special Meeting of Shareholders of the
Portfolio to be held on May 1, 1997, and any adjournments thereof, to vote all
of the shares of the Portfolio that the signer would be entitled to vote if
personally present at the Special Meeting of Shareholders on the following
Proposal and on any other matters brought before the Meeting, all as set forth
in the Notice of Special Meeting of Shareholders and Proxy Statement of the
Board of Directors. Said proxies are directed to vote or refrain from voting
pursuant to the Proxy Statement as checked below upon the following matters:
This proxy is solicited on behalf of the Board of Directors of the Company
and will be voted "FOR" the proposal unless otherwise indicated.
Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
Proposal: Approval of the investment advisory agreement by and between Morgan
Stanley Universal Funds, Inc. and Miller Anderson & Sherrerd, LLP.
[_] FOR [_] AGAINST [_] ABSTAIN
In accordance with their own discretion, the proxies are authorized to
vote on such other business as may properly come before the Meeting.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy
is returned, such shares will be voted in accordance with the recommendations of
the Board of Directors FOR the Proposal.
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement of the Board
of Directors.
Please date, sign and return promptly.
Dated: _______________________________, 1997
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
_____________________________________________
Signature
_____________________________________________
Signature
29
