<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
[Date], 1999
Dear Shareholder:
The enclosed proxy statement relates to a special meeting of the
Shareholders of the Money Market Portfolio and the Municipal Money Market
Portfolio (each a "Portfolio" and, together, the "Portfolios") of the Morgan
Stanley Dean Witter Institutional Fund, Inc. (the "Fund"). The primary purpose
of the special meeting is to permit Shareholders to consider a proposal to
appoint an investment sub-adviser for the Portfolios.
The attached proxy statement seeks Shareholder approval of this proposal. We
encourage you to read carefully the full proxy statement, and have created a
brief question-and-answer section for your convenience.
YOUR VOTE IS IMPORTANT AND YOUR PARTICIPATION
IN THE GOVERNANCE OF THE FUND DOES MAKE A DIFFERENCE.
The proposal has been unanimously approved by the Board of Directors of the
Fund, who recommend you vote "FOR" the proposal. YOUR IMMEDIATE RESPONSE WILL
HELP PREVENT THE NEED FOR ADDITIONAL SOLICITATIONS. We look forward to your
participation, and we thank you for your continued confidence in the Fund.
PLEASE SIGN AND RETURN YOUR PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Sincerely,
Michael F. Klein
PRESIDENT
<PAGE>
INFORMATION ABOUT YOUR PROXY STATEMENT
<TABLE>
<S><C>
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. The Board of Directors is recommending that Shareholders approve
Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors") as
investment sub-adviser for the Money Market Portfolio and the
Municipal Money Market Portfolio (each a "Portfolio" and, together,
the "Portfolios") of the Morgan Stanley Dean Witter Institutional
Fund, Inc. (the "Fund"). MSDW Advisors and Morgan Stanley Dean Witter
Investment Management Inc. ("MSDW Investment Management"), the
Portfolios' current investment adviser, are each wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. You can expect the same level of management expertise and shareholder
service that you currently receive. The nominee for investment
sub-adviser has extensive experience in the management of money market
and municipal money market funds.
Q. HOW WILL THIS AFFECT THE FEES THAT I PAY?
A. The new investment sub-advisory arrangement will not affect the
overall fees paid by the Portfolios.
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(s) will help
prevent the need for any further solicitations for a Shareholder vote.
We encourage all Shareholders to participate in the governance of the
Fund.
Q. HOW DOES THE BOARD OF DIRECTORS SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Directors unanimously
recommends that you vote "FOR" the proposals.
Q. WHO IS PAYING FOR EXPENSES RELATED TO THE SHAREHOLDER MEETING?
A. The Fund will pay for expenses related to the Shareholder meeting.
Q. WHERE DO I MAIL MY PROXY CARD?
A. You may use the enclosed postage-paid envelope or mail your proxy
card(s) to:
[Proxy Tabulator
P.O. Box 9113
Hingham, MA 02043-9888]
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. We will be happy to answer your questions about the proxy
solicitation. Please call us at [1-800-733-8481 Ext. 453 between 9:00
a.m. and 11:00 p.m. (Eastern Time), Monday through Friday.]
</TABLE>
<PAGE>
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 1999
------------------------
TO THE SHAREHOLDERS OF
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.:
You are cordially invited to attend a special meeting of the Shareholders of
the Money Market and Municipal Money Market Portfolios (each a "Portfolio," and
collectively, the "Portfolios") of the Morgan Stanley Dean Witter Institutional
Fund, Inc. (the "Fund") on April 23, 1999 at 10:00 a.m. (Eastern Time) or at any
adjournment thereof (the "Special Meeting"), at the offices of Morgan Stanley
Dean Witter Investment Management Inc., 1221 Avenue of the Americas, New York,
New York 10021. Shareholders of the Portfolios will be asked to consider the
following proposals at the Special Meeting:
1. To approve or disapprove a new investment sub-advisory agreement; and
2. To transact such other business as may properly come before the Special
Meeting or any adjournments thereof.
Shareholders of record at the close of business on March 2, 1999 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof. 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 Fund and a separate proxy card
for each Portfolio in which such accounts have an investment.)
By Order of the Board of Directors
Stefanie V. Chang
ACTING SECRETARY
[Date], 1999
- --------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD. A POSTAGE PAID ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE SO THAT YOU MAY RETURN YOUR PROXY CARD AS SOON AS
POSSIBLE. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO SIGN AND DATE
YOUR PROXY CARD AND RETURN IT SO THAT A QUORUM WILL BE PRESENT AND A MAXIMUM
NUMBER OF SHARES MAY BE VOTED. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO
ITS USE.
- --------------------------------------------------------------------------------
<PAGE>
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
P.O. BOX 2798
BOSTON, MASSACHUSETTS 02208-2798
------------------------
PROXY STATEMENT
---------------------
SPECIAL MEETING OF SHAREHOLDERS
APRIL 23, 1999
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors (the "Board") of Morgan Stanley Dean
Witter Institutional Fund, Inc. (the "Fund"), for use at the Special Meeting of
Shareholders of the Money Market Portfolio and the Municipal Money Market
Portfolio (each a "Portfolio," and collectively, the "Portfolios"), or at any
adjournment thereof (the "Special Meeting"). The Special Meeting will be held on
April 23, 1999, at 10:00 a.m. (Eastern Time) at the offices of Morgan Stanley
Dean Witter Investment Management Inc. ("MSDW Investment Management"), 1221
Avenue of the Americas, New York, New York 10021. The approximate mailing date
of this proxy statement and accompanying form of proxy is [Date], 1999.
The primary purpose of the Special Meeting is to permit Shareholders to
consider an investment sub-advisory agreement (the "Sub-Advisory Agreement")
between MSDW Investment Management, the Portfolios' investment adviser, and
Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). MSDW Investment
Management and MSDW Advisors are both wholly-owned subsidiaries of Morgan
Stanley Dean Witter & Co. ("MSDW&Co.").
Shareholders of record of the Portfolios on February 26, 1999 (the "Record
Date") may participate and vote at the Special Meeting. Shareholders of each
Portfolio on the Record Date will be entitled to one vote for each Share of the
Portfolio they hold and a fraction of a vote equal to the proportion of a full
Share represented by the fractional Share. Shareholders of each Portfolio will
vote separately on the proposal.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR ITS
FISCAL YEAR ENDED DECEMBER 31, 1998 TO ANY SHAREHOLDER REQUESTING SUCH REPORT.
REQUESTS FOR THE ANNUAL REPORT SHOULD BE MADE IN WRITING TO MORGAN STANLEY DEAN
WITTER INSTITUTIONAL FUND, INC., P.O. BOX 2798, BOSTON, MASSACHUSETTS 02208-2798
OR BY CALLING 1-800-867-5309.
On the Record Date, there were issued and outstanding the following number
of Shares of each Portfolio:
<TABLE>
<CAPTION>
SHARES
PORTFOLIO OUTSTANDING
- -------------------------------------------------------------------------------------- -----------
<S> <C>
Money Market Portfolio................................................................
Municipal Money Market Portfolio......................................................
</TABLE>
VOTING
Approval of the Sub-Advisory Agreement with respect to a Portfolio requires
the vote of a majority of the outstanding voting securities of that Portfolio,
each Portfolio voting separately. The "vote of a majority of the outstanding
voting securities" is defined under the Investment Company Act of 1940, as
amended (the "1940 Act") as the lesser of the vote of (i) 67% or more of the
Shares of the Portfolio entitled to vote thereon present at the Special Meeting
if the holders of more than 50% of the outstanding Shares are
1
<PAGE>
present in person or represented by proxy; or (ii) more than 50% of the
outstanding Shares of the Portfolio entitled to vote thereon.
The Board recommends that you cast your vote:
- FOR approval of the Sub-Advisory Agreement with MSDW Advisors
All properly executed proxies received prior to the Special Meeting will be
voted at the Special Meeting in accordance with the instructions marked thereon.
Proxies received prior to the Special Meeting on which no vote is indicated will
be voted "FOR" each proposal as to which it is entitled to vote. Abstentions and
proxies signed and returned by brokers without voting on a proposal ("broker
non-votes") will not be counted for or against the proposal, but WILL be counted
as votes present for purposes of determining a "majority of the outstanding
voting securities" present at the Special Meeting. Abstentions and broker
non-votes, therefore, have the effect of counting against the proposal. 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
Special Meeting.
Shareholders who execute proxies may revoke them at any time before they are
voted by sending the Fund a written notice of revocation, by delivering a duly
executed proxy bearing a later date or by attending the Special Meeting and
voting in person.
THE PROPOSAL: APPROVAL OF A NEW SUB-ADVISORY AGREEMENT
OVERVIEW OF THE PROPOSAL
MSDW Advisors, the proposed investment Sub-Adviser, and MSDW Investment
Management, the Fund's current investment adviser, are each wholly-owned
subsidiaries of MSDW&Co. MSDW Investment Management would remain as the primary
investment Adviser to the Portfolios, but would delegate the day-to-day
investment management responsibilities to MSDW Advisors. Under the proposed
Sub-Advisory Agreement, MSDW Investment Management will pay a portion of the
advisory fee it receives from each Portfolio to MSDW Advisors for the
sub-advisory services provided to the Portfolios. Approval of the proposal will
not result in an increase in the advisory fee that the Portfolios pay to MSDW
Investment Management or an increase in fund expenses.
MORGAN STANLEY DEAN WITTER ADVISORS INC. ("MSDW ADVISORS")
MSDW Advisors, located at Two World Trade Center, New York, New York 10048,
is a wholly-owned subsidiary of MSDW&Co. MSDW Advisors develops, markets and
manages a broad spectrum of proprietary mutual funds that are sold by Morgan
Stanley Dean Witter financial advisors and offers professional money management
services on a customized basis to individuals, institutional investors and
retirement plan sponsors. MSDW Advisors and its wholly-owned subsidiary, Morgan
Stanley Dean Witter Services Company, Inc., serve in various investment
management, advisory, management and administrative capacities to 100 investment
companies and other portfolios with net assets under management of approximately
$127.1 billion at January 31, 1999.
2
<PAGE>
Set forth below is the name, address and principal occupation of the
principal executive officer and each director of MSDW Advisors:
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ------------------------------------------------------ ------------------------------------------------------
<S> <C>
Mitchell M. Merin Director, President and Chief Executive Officer
Two World Trade Center, New York, New York 10048
Ronald E. Robison Director, Executive Vice President and Chief
Two World Trade Center, New York, New York 10048 Administrative Officer
Barry Fink Director, Senior Vice President, Secretary and General
Two World Trade Center, New York, New York 10048 Counsel
</TABLE>
MORGAN STANLEY DEAN WITTER INVESTMENT MANAGEMENT INC. ("MSDW INVESTMENT
MANAGEMENT")
MSDW Investment Management, located at 1221 Avenue of the Americas, New
York, New York 10020, is a wholly-owned subsidiary of MSDW&Co. MSDW Investment
Management acts as investment adviser for each Portfolio of the Fund pursuant to
an investment advisory agreement dated May 1, 1997. MSDW Investment Management
has acted as investment adviser for the Portfolios since each Portfolio
commenced operations.
MSDW Investment Management currently provides investment advice and
portfolio management services to the Portfolios pursuant to the investment
advisory agreement and, subject to the supervision of the Board, makes the
Portfolios' day-to-day investment decisions, arranges for the execution of
portfolio transactions and generally manages the Portfolios' investments. As
discussed below under "The Proposed Sub-Advisory Agreement," however, such
day-to-day investment management duties are proposed to be assigned to MSDW
Advisors. MSDW Investment Management would retain responsibility for the general
management of the Portfolios. MSDW Investment Management also conducts a
worldwide portfolio management business and provides a broad range of portfolio
management services to customers in the United States and abroad. As of December
31, 1998, MSDW Investment Management, together with its affiliated institutional
asset management companies, managed assets of approximately $ billion,
including assets under fiduciary advice.
MORGAN STANLEY DEAN WITTER & CO. ("MSDW&CO.")
MSDW&Co., located at 1585 Broadway, New York, New York 10036, is the direct
parent of MSDW Advisors and MSDW Investment Management. MSDW&Co. is 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 PROPOSED SUB-ADVISORY AGREEMENT
The Board approved the proposed Sub-Advisory Agreement for the Portfolios
between MSDW Investment Management and MSDW Advisors at a meeting held on
February 17, 1999. A form of the proposed Sub-Advisory Agreement is attached
hereto as Annex A.
The proposed Sub-Advisory Agreement provides for the payment of a fee to
MSDW Advisors out of the fee MSDW Investment Management receives from each
Portfolio. As set forth in the proposed Sub-Advisory Agreement, MSDW Advisors
will be paid 40% of the fee that MSDW Investment Management receives from each
Portfolio as compensation for advisory services. Approval of the Sub-Advisory
Agreement, therefore, will not result in an increase of fees paid from the
Portfolios' assets. If the proposed
3
<PAGE>
Sub-Advisory Agreement had been in effect for each Portfolio's most recently
completed fiscal year, MSDW Investment Management would have paid a sub-advisory
fee of $ to MSDW Advisors.
At a meeting held on February 17, 1999, the Board, including all of the
Directors who are not "interested persons" of the Fund ("Independent
Directors"), unanimously approved the Sub-Advisory Agreement for each Portfolio
and recommended the Sub-Advisory Agreement for approval by the Shareholders of
the Portfolios. The Sub-Advisory Agreement would take effect with respect to a
Portfolio upon Shareholder approval. The proposed Sub-Advisory Agreement will
continue in effect for an initial term of two years and thereafter for
successive annual periods as long as such continuance is approved in accordance
with the 1940 Act.
In evaluating the proposed Sub-Advisory Agreement, the Board took into
account the potential benefits of utilizing MSDW Advisors' extensive investment
experience and resources to provide the Portfolios with advisory services. MSDW
Advisors currently manages over [$34 billion] in money market fund assets and
[$2.4 billion] in municipal money market fund assets. The Board also considered
that MSDW Advisors manages a larger pool of money market funds, which could
result in increased efficiencies for the Portfolios. The Board also considered
the fact that the hiring of MSDW Advisors would not affect the fees paid by
Shareholders for investment advisory services.
After consideration of the above factors and such other factors and
information the Board deemed relevant, the Board, including the Independent
Directors, unanimously approved the Sub-Advisory Agreement and voted to
recommend its approval to the Shareholders of the Portfolios.
Effectiveness of the Sub-Advisory Agreement with respect to a Portfolio is
contingent on the approval by Shareholders of the Portfolio. If Shareholders of
a Portfolio do not approve the Sub-Advisory Agreement, then the Board will take
such action as it deems is in the best interest of that Portfolio and its
Shareholders, which may include proposing that Shareholders approve an agreement
in lieu of the Sub-Advisory Agreement.
MSDW Advisors currently provides investment services to the following
investment companies having an investment objective similar to the investment
objective of the Portfolios:
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS
AS OF MANAGEMENT
JANUARY 31, 1999 FEE AS OF
OTHER FUND NAME (IN MILLIONS) DECEMBER 31, 1998
-------------------------------------------------- ---------------- -----------------
<S> <C> <C>
Morgan Stanley Dean Witter Liquid Asset Fund,
Inc............................................. 17,075.0 0.27%*
Morgan Stanley Dean Witter U. S. Government Money
Market Trust.................................... 1,017.5 0.46%**
Active Assets Money Trust......................... 15,164.3 0.29%**
Active Assets Government Securities Trust......... 838.1 0.48%**
</TABLE>
4
<PAGE>
MUNICIPAL MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS
AS OF MANAGEMENT
JANUARY 31, 1999 FEE AS OF
OTHER FUND NAME (IN MILLIONS) DECEMBER 31, 1998
-------------------------------------------------- ---------------- -----------------
<S> <C> <C>
Morgan Stanley Dean Witter Tax-Free Daily Income
Trust........................................... 540.7 0.49%**
Morgan Stanley Dean Witter California Tax-Free
Daily Income Trust.............................. 666.2 0.50%**
Morgan Stanley Dean Witter New York Tax-Free
Municipal Money Market Trust.................... 77.4 0.50%**
Active Assets Tax-Free Trust...................... 2,256.2 0.41%**
Active Assets California Tax-Free Trust........... 280.6 0.50%**
</TABLE>
- ------------------------
*Based on the following contractual rate:
<TABLE>
<CAPTION>
ASSETS FEE
-------------------------------------------------- ------
<S> <C>
Less than $500 million: 0.500%
$500 million to $750 million: 0.425%
$750 million to $1.0 billion: 0.375%
$1.0 billion to $1.35 billion: 0.350%
$1.35 billion to $1.75 billion: 0.325%
$1.75 billion to $2.15 billion: 0.300%
$2.15 billion to $2.5 billion: 0.275%
$2.5 billion to $15.0 billion: 0.250%
$15.0 billion to $17.5 billion: 0.249%
More than $17.5 billion: 0.248%
</TABLE>
** Based on the following contractual rate:
<TABLE>
<CAPTION>
ASSETS FEE
-------------------------------------------------- ------
<S> <C>
Less than $500 million: 0.500%
$500 million to $750 million: 0.425%
$750 million to $1.0 billion: 0.375%
$1.0 billion to $1.5 billion: 0.350%
$1.5 billion to $2.0 billion: 0.325%
$2.0 billion to $2.5 billion: 0.300%
$2.5 billion to $3.0 billion: 0.275%
More than $3.0 billion: 0.250%
</TABLE>
SHAREHOLDER APPROVAL OF THE SUB-ADVISORY AGREEMENT
Approval of the Sub-Advisory Agreement for the Portfolios requires the
affirmative vote of a majority of the outstanding shares of each Portfolio. For
purposes of this proposal, a "majority of outstanding shares" means the vote of
(i) 67% or more of a Portfolio's outstanding shares present at the Special
Meeting, if the holders of more than 50% of the outstanding shares of the
Portfolio are present in person or represented by proxy; or (ii) more than 50%
of the Portfolio's outstanding shares whichever is less.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF EACH PORTFOLIO OF
THE FUND VOTE FOR APPROVAL OF THE SUB-ADVISORY AGREEMENT.
5
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ADDITIONAL INFORMATION
BENEFICIAL OWNERS
To the knowledge of Fund's management, as of February 26, 1999, the
following were beneficial owners of 5% or more of the outstanding Shares of the
Portfolios:
[Insert 5% Shareholders]
EXPENSES
The Fund will bear the expense of preparing, printing and mailing the
enclosed form of proxy, the accompanying Notice and this Proxy Statement. In
order to obtain the necessary quorum at the Special Meeting, additional
solicitation may be made by mail, telephone, telegraph, facsimile or personal
interview by representatives of the Fund, MSDW Investment Management [or by
Shareholder Communication Services, a solicitation firm located in New York, New
York that has been engaged to assist in proxy solicitation at an estimated cost
of approximately $ .]
TRANSACTIONS/AGREEMENTS WITH AFFILIATES
ADMINISTRATION
Pursuant to an administration agreement between MSDW Investment Management
and the Fund, MSDW Investment Management provides administrative services to the
Portfolios. For its services under the administration agreement with the Fund
(the "Administration Agreement"), the Fund pays MSDW Investment Management a
monthly fee which on an annual basis equals 0.15% of the average daily net
assets of each Portfolio, plus reimbursement of out-of-pocket expenses. For the
fiscal year ended December 31, 1998, The Money Market and Municipal Money Market
Portfolios paid administration fees to MSDW Investment Management of
approximately $ and $ , respectively.
DISTRIBUTION
Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), located at 1221
Avenue of the Americas, New York, New York 10020, serves as the Portfolios'
Distributor and provides Class B Shareholders of the Money Market Portfolio with
distribution services pursuant to a plan adopted under Rule 12b-1 under the 1940
Act (the "Plan"). Under the Plan, the Distributor is entitled to receive from
the Money Market Portfolio a distribution fee, which is accrued daily and paid
quarterly, of 0.25% of the Class B shares' average daily net assets on an
annualized basis. The Plan is designed to compensate the Distributor for its
services in connection with distribution assistance. The Distributor may retain
any portion of the fee that it does not expend in meeting its obligations to the
Money Market Portfolio. The Distributor may compensate financial intermediaries,
plan fiduciaries and administrators for providing distribution-related services,
including account maintenance services, to shareholders (including, where
applicable, underlying beneficial owners) of Class B shares. For the fiscal year
ended December 31, 1998, the Money Market Portfolio paid the Distributor fees of
approximately $ pursuant to the Plan.
GENERAL
The Fund knows of no business other than the Proposal that will be presented
for consideration at the Special Meeting. Management of the Fund does not intend
to present, and does not have reason to believe that others will present, any
other items of business at the Special 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 judgment. In the event a
quorum is present at the Special Meeting but sufficient votes to approve the
Proposal are not received, the persons named as proxies may propose one or more
adjournments of the Special Meeting to permit further solicitation of proxies,
provided they determine that such an adjournment and additional solicitation is
reasonable and in the interest of Shareholders based on
6
<PAGE>
a consideration of all relevant factors, including 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 Fund entitled to be present and vote at the
Special Meeting will be available at the offices of MSDW Investment Management
at 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
Special Meeting.
Failure of a quorum to be present at the Special Meeting may necessitate
adjournment and may necessitate 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.
Stefanie V. Chang
ACTING SECRETARY
[Date], 1999
7
<PAGE>
ANNEX A
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the ___day of ________, 1999 by and between Morgan
Stanley Dean Witter Investment Management Inc., a Delaware corporation (herein
referred to as the "Investment Manager"), and Morgan Stanley Dean Witter
Advisors Inc., a Delaware corporation, (herein referred to as the
"Sub-Advisor").
WHEREAS, Morgan Stanley Dean Witter Institutional Fund, Inc. (herein
referred to as the "Fund") is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, the Investment Manager has entered into an Investment Management
Agreement with the Fund (the "Investment Management Agreement") wherein the
Investment Manager has agreed to provide investment management services to the
various portfolios of the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as an
investment adviser; and
WHEREAS, Investment Manager desires to retain the services of the
Sub-Advisor to render investment advisory services for the Money Market
Portfolio and the Municipal Money Market Portfolio of the Fund (each a
"Portfolio" and together the "Portfolios") in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Sub-Advisor desires to be retained by the Investment Manager to
perform services on said terms and conditions:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Subject to the supervision of the Fund, its officers and Directors, and the
Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then-current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Directors of the Fund with
respect to the Portfolios and communicated by the Investment Manager to the
Sub-Advisor, the Sub-Advisor agrees to provide the Fund with investment
advisory services with respect to the Portfolios' investments to obtain and
evaluate such information and advice relating to the economy, securities
markets and securities as it deems necessary or useful to discharge its
duties hereunder; to continuously manage the assets of each Portfolio in a
manner consistent with the investment objective and policies of the
applicable Portfolio; to make decisions as to foreign currency matters and
make determinations as to forward foreign exchange contracts and options and
futures contracts in foreign currencies; shall determine the securities to
be purchased, sold or otherwise disposed of by the Fund and the timing of
such purchases, sales and dispositions; to take such further action,
including the placing of purchase and sale orders on behalf of the
Portfolios, as it shall deem necessary or appropriate; to furnish to or
place at the disposal of the Fund and Investment Manager such of the
information, evaluations, analyses and opinions formulated or obtained by it
in the discharge of its duties as the Fund and the Investment Manager may,
from time to time, reasonably request. The Investment Manager and the
Sub-Advisor shall each make its officers and employees available to the
other from time to time at reasonable times to review investment policies of
the Portfolios and to consult with each other.
2. The Sub-Advisor shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it shall from
time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Sub-Advisor shall be deemed to
include persons employed or
A-1
<PAGE>
otherwise retained by the Sub-Advisor to furnish statistical and other
factual data, advice regarding economic factors and trends, information with
respect to technical and scientific developments, and such other
information, advice and assistance as the Investment Manager may desire. The
Sub-Advisor shall maintain whatever records as may be required to be
maintained by it under the Act. All such records so maintained shall be made
available to the Fund, upon the request of the Investment Manager or the
Fund.
3. The Fund will, from time to time, furnish or otherwise make available to the
Sub-Advisor such financial reports, proxy statements and other information
relating to the business and affairs of the Portfolios as the Sub-Advisor
may reasonably require in order to discharge its duties and obligations
hereunder or to comply with any applicable law and regulations and the
investment objectives, policies and restrictions from time to time
prescribed by the Directors of the Fund.
4. The Sub-Advisor shall bear the cost of rendering the investment advisory
services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees, if any, of the
Fund, employed by the Sub-Advisor, and such clerical help and bookkeeping
services as the Sub-Advisor shall reasonably require in performing its
duties hereunder.
5. The Fund assumes and shall pay or cause to be paid all other expenses of the
Fund, including, without limitation: any fees paid to the Investment
Manager; fees pursuant to any plan of distribution that the Fund may adopt;
the charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer or dividend agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to federal, state or other governmental agencies or
pursuant to any foreign laws; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund
and its shares with the Securities and Exchange Commission and various
states and other jurisdictions or pursuant to any foreign laws (including
filing fees and legal fees and disbursements of counsel); the cost and
expense of printing (including typesetting) and distributing prospectuses of
the Fund and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Directors' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Directors or members of any advisory board or committee who are not
employees of the Investment Manager or Sub-Advisor; all expenses incident to
the payment of any dividend, distribution, withdrawal or redemption whether
in shares or in cash; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel,
including counsel to the Directors of the Fund who are not interested
persons (as defined in the Act) of the Fund, the Investment Manager or the
Sub-Advisor, and of independent accountants, in connection with any matter
relating to the Fund; membership dues of industry associations; interest
payable on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Directors) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to legal claims
and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the expenses
assumed by the Sub-Advisor, the Investment Manager shall pay to the
Sub-Advisor monthly compensation equal to 40% of the fee that the Investment
Manager receives from each Portfolio pursuant to the Investment Management
Agreement. Any subsequent change in the Investment Management Agreement
which has the effect of raising or lowering the compensation of the
Investment Manager will have the concomitant effect of raising or lowering
the fee payable to the Sub-Advisor under this Agreement. In addition, if the
Investment Manager has undertaken in the Fund's Registration Statement as
filed under the Act (the "Registration Statement") or elsewhere to waive all
or part of its fee under the Investment
A-2
<PAGE>
Management Agreement, the Sub-Advisor's fee payable under this Agreement
will be proportionately waived in whole or in part. The calculation of the
fee payable to the Sub-Advisor pursuant to this Agreement will be made, each
month, at the time designated for the monthly calculation of the fee payable
to the Investment Manager pursuant to the Investment Management Agreement.
If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for the part
of the month this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fee as set forth above.
7. The Sub-Advisor will use its best efforts in the performance of investment
activities on behalf of the Fund, but in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations
hereunder, the Sub-Advisor shall not be liable to the Investment Manager or
the Fund or any of its investors for any error of judgment or mistake of law
or for any act or omission by the Sub-Advisor or for any losses sustained by
the Fund or its investors.
8. It is understood that any of the shareholders, Directors, officers and
employees of the Fund may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Sub-Advisor, and in any person
controlled by or under common control with the Sub-Advisor, and that the
Sub-Advisor and any person controlled by or under common control with the
Sub-Advisor may have an interest in the Fund. It is also understood that the
Sub-Advisor and any affiliated persons thereof or any persons controlled by
or under common control with the Sub-Advisor have and may have advisory,
management service or other contracts with other organizations and persons,
and may have other interests and businesses, and further may purchase, sell
or trade any securities or commodities for their own accounts or for the
account of others for whom they may be acting.
9. This Agreement shall remain in effect with respect to each Portfolio until
________, 2001 and from year to year thereafter provided such continuance is
approved at least annually by the vote of holders of a majority, as defined
in the Act, of the outstanding voting securities of the applicable Portfolio
or by the Directors of the Fund, provided, that in either event such
continuance is also approved annually by the vote of a majority of the
Directors of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party, which vote must be cast
in person at a meeting called for the purpose of voting on such approval;
provided, however, that (a) the Fund may, at any time and without the
payment of any penalty, terminate this Agreement with respect to either
Portfolio or both Portfolios upon thirty days' written notice to the
Investment Manager and the Sub-Advisor, either by majority vote of the
Directors of the Fund or by the vote of a majority of the outstanding voting
securities of the applicable Portfolio(s); (b) this Agreement shall
immediately terminate in the event of its assignment (within the meaning of
the Act) unless such automatic termination shall be prevented by an
exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement with respect to either Portfolio or both Portfolios without
payment of penalty on thirty days' written notice to the Fund and the
Sub-Advisor; and (e) the Sub-Advisor may terminate this Agreement with
respect to either Portfolio or both Portfolios without the payment of
penalty on thirty days' written notice to the Fund and the Investment
Manager. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed post-paid, to the other party at the
principal office of such party.
10. This Agreement may be amended by the parties without the vote or consent of
the shareholders of the Portfolios to supply any omission, to cure, correct
or supplement any ambiguous, defective or inconsistent provision hereof, or
if they deem it necessary to conform this Agreement to the requirements of
applicable federal laws or regulations, but neither the Fund, the Investment
Manager nor the Sub-Advisor shall be liable for failing to do so.
A-3
<PAGE>
11. This Agreement shall be construed in accordance with the law of the State of
New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall
control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
By:
------------------------------
Attest:
------------------------------
MORGAN STANLEY DEAN WITTER
ADVISORS INC.
By:
------------------------------
Attest:
------------------------------
Accepted and agreed to as of
the day and year first above written:
MORGAN STANLEY DEAN WITTER
INSTITUTIONAL FUND, INC.
By:
--------------------------------------
Attest:
--------------------------------------
A-4
<PAGE>
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
PRELIMINARY PROXY FOR SPECIAL MEETING OF SHAREHOLDERS APRIL 23, 1999
The undersigned Shareholder(s) of the Money Market Portfolio (the
"Portfolio") of Morgan Stanley Dean Witter Institutional Fund, Inc. (the "Fund")
hereby appoint(s) Harold J. Schaaff, Jr., Michael F. Klein and Stefanie V. Chang
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 Fund to be held
on April 23, 1999, 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 FUND
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 sub-advisory agreement by and between
Morgan Stanley Dean Witter Investment Management Inc. and Morgan
Stanley Dean Witter Advisors 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.
(CONTINUED ON REVERSE SIDE)
<PAGE>
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 ______________________, 1999
__________________________________
Signature
__________________________________
Signature
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.
<PAGE>
MORGAN STANLEY DEAN WITTER INSTITUTIONAL FUND, INC.
PRELIMINARY PROXY FOR SPECIAL MEETING OF SHAREHOLDERS APRIL 23, 1999
The undersigned Shareholder(s) of the Municipal Money Market Portfolio (the
"Portfolio") of Morgan Stanley Dean Witter Institutional Fund, Inc. (the "Fund")
hereby appoint(s) Harold J. Schaaff, Jr., Michael F. Klein and Stefanie V. Chang
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 Fund to be held
on April 23, 1999, 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 FUND
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 sub-advisory agreement by and between
Morgan Stanley Dean Witter Investment Management Inc. and Morgan
Stanley Dean Witter Advisors 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.
(CONTINUED ON REVERSE SIDE)
<PAGE>
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 ______________________, 1999
__________________________________
Signature
__________________________________
Signature
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.
