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Schedule 14A Information required in proxy statement.
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
[ ] Preliminary Additional Materials
[ ] 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 240.149-11(c) or
Section 240.14a-12
.... Municipal Income Opportunities Trust II . . . . . . . . . . .
(Name of Registrant(s) Specified in its Charter)
.... Lou Anne D. McInnis . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(j)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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.
<PAGE>
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Fee previously paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] 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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
PRELIMINARY COPY--FOR THE INFORMATION OF
THE SECURITIES AND EXCHANGE COMMISSION ONLY
MUNICIPAL INCOME OPPORTUNITIES TRUST II
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 1997
The Annual Meeting of Shareholders (the "Meeting") of MUNICIPAL INCOME
OPPORTUNITIES TRUST II (the "Trust"), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts, will be held
in the Career Development Room, Sixty-First Floor, 2 World Trade Center, New
York, New York 10048, on May 1, 1997, at 10:00 a.m., New York City time, for
the following purposes:
1. To elect four (4) Trustees, two (2) to serve until the 2000 Annual
Meeting, one (1) to serve until the Annual Meeting and one (1) to
serve until the Annual Meeting, or, in each case, until their
successors shall have been elected and qualified;
2. To approve or disapprove a new Investment Advisory Agreement between
the Trust and Dean Witter InterCapital Inc., a wholly-owned subsidiary of
Dean Witter, Discover & Co. ("DWDC") in connection with the proposed
merger of Morgan Stanley Group Inc. with DWDC;
3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending February 28,
1998; and
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record as of the close of business on March 12, 1997 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of Proposal 2 and will vote against any such adjournment those proxies
required to be voted against that proposal.
BARRY FINK
Secretary
March 17, 1997
New York, New York
IMPORTANT
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
PRELIMINARY COPY--FOR THE INFORMATION OF
THE SECURITIES AND EXCHANGE COMMISSION ONLY
MUNICIPAL INCOME OPPORTUNITIES TRUST II
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
- -----------------------------------------------------------------------------
PROXY STATEMENT
- -----------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1997
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of MUNICIPAL INCOME
OPPORTUNITIES TRUST II (the "Trust") for use at the Annual Meeting of
Shareholders of the Trust to be held on May 1, 1997 (the "Meeting"), and at
any adjournments thereof.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted for each of the nominees for election as
Trustee and in favor of Proposals 2 and 3 set forth in the attached Notice of
Annual Meeting of Shareholders. A proxy may be revoked at any time prior to
its exercise by any of the following: written notice of revocation to the
Secretary of the Trust, execution and delivery of a later dated proxy to the
Secretary of the Trust (if returned and received in time to be voted), or
attendance and voting at the Meeting. Attendance at the Meeting will not in
and of itself revoke a proxy.
Holders of shares of the trust ("Shareholders") of record as of the close
of business on March 12, 1997, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting, are entitled
to one vote for each share held and a fractional vote for a fractional share.
On March 12, 1997 there were shares of beneficial interest
outstanding, all with $0.01 par value. The Trustees and Officers of the Trust,
together, owned less than 1% of the Trust's outstanding shares on that date.
The percentage ownership of shares of the Trust changes from time to time
depending on purchases and sales by Shareholders and the total number
of shares outstanding. The first mailing of this Proxy Statement is expected
to be made on or about March 17, 1997.
The cost of soliciting proxies for the Meeting, consisting principally of
printing and mailing expenses, which is not expected to exceed $ ,
will be borne by the Trust, except that costs relating to Proposal 2 will be
borne by Dean Witter, Discover & Co. ("DWDC"). The solicitation of proxies
will be by mail, which may be supplemented by solicitation by mail, telephone
or otherwise through Trustees, officers of the Trust, or officers and regular
employees of Dean Witter InterCapital Inc. ("InterCapital" or the "Investment
Adviser"), Dean Witter Trust Company ("DWTC"), Dean Witter Services Company
Inc. ("DWSC") and employees of broker-dealers, including Dean Witter Reynolds
Inc. ("DWR"), without special compensation therefor. In addition, the Trust
may employ William F. Doring & Co. as proxy solicitor, the cost of which is
not expected to exceed $ and will be borne by DWDC. With respect to a
telephone solicitation by William F. Doring & Co., additional expenses would
include $ per telephone vote transacted, $ per outbound
telephone contact and costs relating to obtaining Shareholders' telephone
numbers.
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<PAGE>
William F. Doring & Co. and DWTC may call Shareholders to ask if they
would be willing to have their votes recorded by telephone. The telephone
voting procedure is designed to authenticate Shareholders' identities, to
allow Shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been recorded
properly. No recommendation will be made as to how a Shareholder should vote
on any Proposal other than to refer to the recommendations of the Board. The
Trust has been advised by counsel that these procedures are consistent with
the requirements of applicable law. Shareholders voting by telephone will be
asked for their social security number or other identifying information and
will be given an opportunity to authorize proxies to vote their shares in
accordance with their instructions. To ensure that the Shareholders'
instructions have been recorded correctly they will receive a confirmation of
their instructions in the mail. A special toll-free number will be available
in case the information contained in the confirmation is incorrect. Although
a Shareholder's vote may be taken by telephone, each Shareholder will receive
a copy of this Proxy Statement and may vote by mail using the enclosed proxy
card.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, as amended, at ten. There are presently eight
Trustees, two of whom (Michael Bozic and Charles A. Fiumefreddo) are standing
for election at this Meeting to serve until the 2000 Annual Meeting.
Additionally, two nominees to the Trust's Board of Trustees are standing for
election at the Meeting for the first time, one, if elected, to serve until
the Annual Meeting and one, if elected, to serve until the Annual
Meeting, all in accordance with the Trust's Declaration of Trust, as amended.
Six of the current eight Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, Michael E. Nugent and John L. Schroeder) are
"Independent Trustees," that is, Trustees who are not "interested persons" of
the Trust, as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). Mr. and Mr. who have been
nominated for election at the Meeting, if elected, also will be Independent
Trustees. The other two current Trustees, Charles A. Fiumefreddo and Philip
J. Purcell are "interested persons" (as that term is defined in the 1940 Act)
of the Trust and InterCapital and thus are not Independent Trustees. The
nominees for election as Independent Trustees have been proposed by the
Independent Trustees now serving. All of the Trustees currently serving have
been elected previously by the Shareholders of the Trust.
The nominees of the Board for election as Trustees are listed
below. It is the intention of the persons named in the enclosed form of proxy
to vote the shares represented by them for the election of these nominees:
Michael Bozic, Charles A. Fiumefreddo, ,
. Should any of the nominees become unable or
unwilling to accept nomination or election, the persons named in the proxy
will exercise their voting power in favor of such person or persons as the
Board may recommend. All of the nominees have consented to being named in
this Proxy Statement and to serve if elected. The Trust knows no reason why
any of said nominees would be unable or unwilling to accept nomination or
election. The election of each Trustee requires the approval of a majority of
the shares of the Trust represented and entitled to vote at the Meeting.
Pursuant to the provisions of the Trust's Declaration of Trust (Section
2.2, as amended), the nominees for election as Trustees are divided into
three separate classes, each class having a term of three years. The term of
office of one of the three classes will expire each year.
The Board has previously determined that any nominee for election as
Trustee shall be standing for election as Trustee and serve as Trustee in one
of the three classes of Trustees as follows: Class I--Messrs. Bozic,
Fiumefreddo and [ ]; Class II--Messrs. Johnson, Schroeder and [ ];
and Class III--Messrs. Garn, Haire, Nugent and Purcell. Each nominee for
Trustee will, if elected,
3
<PAGE>
serve a term of up to approximately three years running for the period
assigned to that class and terminating at the date of the Annual Meeting of
Shareholders so designated by the Board, or any adjournment thereof. In
accordance with the above, the Trustees in Class I are standing for election
at this Meeting and, if elected, will serve until the 2000 Annual Meeting or
until their successors shall have been elected and qualified and, with respect
to the new nominees, one Trustee in Class and one Trustee in Class are
standing for election at the Meeting, and, if elected, will serve until the
and Annual Meetings, respectively, or until their successors shall
have been elected and qualified. As a consequence of this method of election,
the replacement of a majority of the Board could be delayed for up to two
years.
The following information regarding each of the nominees for election as
Trustee, and each of the other members of the Board, includes his principal
occupations and employment for at least the last five years, his age, shares
of the Trust owned, if any, as of March 12, 1997 (shown in parentheses),
positions with the Trust, and directorships (or trusteeships) in other
companies which file periodic reports with the Securities and Exchange
Commission, including the 84 investment companies, including the Trust, for
which InterCapital serves as investment manager or investment adviser
(referred to herein as the "Dean Witter Funds") and the 14 investment
companies for which InterCapital's wholly-owned subsidiary, DWSC, serves as
manager and TCW Funds Management, Inc. serves as investment adviser (referred
to herein as the "TCW/DW Funds").
The nominees for Trustee to be elected at this Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 56; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director or Trustee of the Dean Witter Funds; formerly President and Chief
Executive Officer of Hills Department Stores (May, 1991-July, 1995); formerly
variously Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck and Co.
("Sears"); Director of Eaglemark Financial Services, Inc., the United Negro
College Fund and Weirton Steel Corporation.
CHARLES A. FIUMEFREDDO, Trustee since July, 1991; age 63; Chairman, Chief
Executive Officer and Director of InterCapital, DWSC and Dean Witter
Distributors Inc. ("Distributors"); Executive Vice President and Director of
DWR; Chairman, Director or Trustee, President and Chief Executive Officer of
the Dean Witter Funds; Chairman, Chief Executive Officer and Trustee of the
TCW/DW Funds; Chairman and Director of DWTC; Director and/or officer of
various DWDC subsidiaries; formerly Executive Vice President and Director of
DWDC (until February, 1993).
[New person]
[New person]
The Trustees who are not standing for re-election at this Meeting are:
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 64; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly
Mayor of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Discovery (April 12-19, 1985); Vice Chairman, Huntsman Corporation (since
January, 1993); Director of Franklin Quest (time management systems) and John
Alden Financial Corp.; member of the board of various civic and charitable
organizations.
4
<PAGE>
JOHN R. HAIRE, Trustee since April, 1989; age 72; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or
Trustees and Director or Trustee of the Dean Witter Funds; Chairman of the
Audit Committee and Chairman of the Committee of the Independent Trustees and
Trustee of the TCW/DW Funds; formerly President, Council for Aid to Education
(1978-1989) and Chairman and Chief Executive Officer of Anchor Corporation,
an investment adviser (1964-1978); Director of Washington National
Corporation (insurance).
DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 48; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Co-Chairman and a
founder of the Group Seven Council (G7C), and international economic
commission; Director or Trustee of the Dean Witter Funds; Trustee of the
TCW/DW Funds; Director of NASDAQ (since June, 1995); Director of Greenwich
Capital Markets, Inc. (broker-dealer); Trustee of the Financial Accounting
Foundation (oversight organization for the FASB); formerly Vice Chairman of
the Board of Governors of the Federal Reserve System (1986-1990) and
Assistant Secretary of the U.S. Treasury (1982-1986).
MICHAEL E. NUGENT, Trustee since July, 1991; age 60; General Partner,
Triumph Capital, L.P., a private investment partnership; Director or Trustee
of the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly Vice
President, Bankers Trust Company and BT Capital Corporation (1984-1988);
director of various business organizations.
PHILIP J. PURCELL, Trustee since April, 1994; age 53; Chairman of the
Board of Directors and Chief Executive Officer of DWDC, DWR and Novus Credit
Services Inc; Director of InterCapital, DWSC and Distributors; Director or
Trustee of the Dean Witter Funds; Director and/or officer of various DWDC
subsidiaries.
JOHN L. SCHROEDER, Trustee since April, 1994; age 66; Retired; Director or
Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Citizens Utilities Company; formerly Executive Vice President and Chief
Investment Officer of The Home Insurance Company (August, 1991-September,
1995) and formerly Chairman and Chief Investment Officer of Axe-Houghton
Management and the Axe-Houghton Funds (1983-1991).
The executive officers of the Trust other than shown above are: Barry
Fink, Vice President, Secretary and General Counsel; Robert M. Scanlan, Vice
President; Joseph J. McAlinden, Vice President; Robert S. Giambrone, Vice
President; James F. Willison, Vice President; and Thomas F. Caloia,
Treasurer. In addition, Joseph Arcieri, Katherine H. Stromberg, Gerard J.
Lian and Jonathan R. Page are Vice Presidents of the Trust and Marilyn K.
Cranney, , Ruth Rossi, Carsten Otto and Frank Bruttomesso,
serve as Assistant Secretaries. Mr. Fink is 42 years old and is currently
First Vice President (since June 1993), Secretary and General Counsel (since
February 1997) of InterCapital and DWSC and (since August 1996) Assistant
Secretary of DWR; he is also First Vice President, Assistant Secretary and
Assistant General Counsel of Distributors (since February 1997). He was
previously Vice President, Assistant Secretary and Assistant General Counsel
of InterCapital and DWSC. Mr. Scanlan is 60 years old and is currently
President and Chief Operating Officer of InterCapital (since March, 1993) and
DWSC; he is also Executive Vice President of Distributors and Executive Vice
President and Director of DWTC. He was previously Executive Vice President of
InterCapital (July, 1992-March, 1993) and prior thereto was Chairman of
Harborview Group Inc. Mr. McAlinden is 54 years old and is currently
Executive Vice President of InterCapital (since April, 1996); he is also
Chief Investment Officer of InterCapital and Director of DWTC (since April,
1996). He was previously Senior Vice President of InterCapital (June,
1995-April, 1996) and prior thereto was a Managing Director at Dillon Read.
Mr. Giambrone is 42 years old and is currently Senior Vice President of
InterCapital, DWSC, Distributors and DWTC (since August, 1995) and Director
of DWTC (since April, 1996). He was formerly a
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<PAGE>
partner of KPMG Peat Marwick, LLP. Mr. Willison is 53 years old and is
currently Senior Vice President of InterCapital. Mr. Caloia is 51 years old
and is currently First Vice President and Assistant Treasurer of InterCapital
and DWSC. Mr. Arcieri is 48 years old and is currently Vice President of
InterCapital. Ms. Stromberg is 48 years old and is currently Vice President
of InterCapital (since April, 1992). She was formerly a portfolio manager
with InterCapital (October, 1991-April, 1992). Mr. Lian is 42 years old and
is currently Vice President of InterCapital. Mr. Page is 50 years old and is
currently Senior Vice President of InterCapital. Other than Messrs. Scanlan,
Giambrone, McAlinden and Lian, each of the above officers has been an
employee of InterCapital or DWR (formerly the corporate parent of
InterCapital) for over five years.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees currently consists of eight (8) trustees. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of
this Proxy Statement, there are a total of 84 Dean Witter Funds, comprised of
127 portfolios. As of February 28, 1997, the Dean Witter Funds had total net
assets of approximately $ billion and more than six million shareholders.
Six Trustees and the two new nominees (80% of the total number) have no
affiliation or business connection with InterCapital or any of its affiliated
persons and do not own any stock or other securities issued by InterCapital's
parent company, DWDC. The other two Trustees (the "Management Trustees") are
affiliated with InterCapital. For a period of at least three years after the
consummation of the Merger, at least 75% of the members of the Board of
Trustees of the Trust will not be "interested persons" (as defined in the
1940 Act) of the Investment Manager. Four of the six Independent Trustees are
also Independent Trustees of the TCW/DW Funds.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The Dean Witter Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Funds' Boards, such individuals may reject other attractive
assignments because the Funds make substantial demands on their time. Indeed,
by serving on the Funds' Boards, certain Trustees who would otherwise be
qualified and in demand to serve on bank boards would be prohibited by law
from doing so.
All of the current Independent Trustees serve as members of the Audit
Committee and the Committee of the Independent Trustees. Three of them also
serve as members of the Derivatives Committee. The Committees hold some
meetings at InterCapital's offices and some outside InterCapital. Management
Trustees or officers do not attend these meetings unless they are invited for
purposes of furnishing information or making a report. The Funds do not have
any nominating or compensation committees.
The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
distribution and underwriting agreements; continually reviewing Fund
performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage
and allocations, as well as other matters that arise from time to time.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing
engagement; approving professional services provided by the independent
accountants and other accounting firms prior to the performance of such
services; reviewing
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the independence of the independent accountants; considering the range of
audit and non-audit fees; reviewing the adequacy of the Fund's system of
internal controls; and preparing and submitting Committee meeting minutes to
the full Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect
to derivative investments, if any, made by the Fund.
For the fiscal year ended February 28, 1997, the Board of Trustees of the
Trust held five meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held two,
eleven and three meetings, respectively. No Trustee attended fewer than 75%
of the meetings of the Board of Trustees, the Audit Committee, the Committee
of the Independent Trustees or the Derivatives Committee held while he served
in such positions.
DUTIES OF CHAIRMAN OF COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT
COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and
the Funds' operations and management. He screens and/or prepares written
materials and identifies critical issues for the Independent Trustees to
consider, develops agendas for Committee meetings, determines the type and
amount of information that the Committees will need to form a judgment on
various issues, and arranges to have that information furnished to Committee
members. He also arranges for the services of independent experts and
consults with them in advance of meetings to help refine reports and to focus
on critical issues. Members of the Committees believe that the person who
serves as Chairman of both Committees and guides their efforts is pivotal to
the effective functioning of the Committees.
The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment advisory, management and
other operating contracts of the Funds and, on behalf of the Committees,
conducts negotiations with the Investment Adviser and other service
providers. In effect, the Chairman of the Committees serves as a combination
of chief executive and support staff of the Independent Trustees.
The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and
the Audit Committee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to
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<PAGE>
each separate Fund, the services of Independent Trustees, and a Chairman of
their Committees, of the caliber, experience and business acumen of the
individuals who serve as Independent Trustees of the Dean Witter Funds.
SHARE OWNERSHIP BY TRUSTEES
The Trustees have adopted a policy pursuant to which each Trustee and/or
his or her spouse is required to invest at least $25,000 in any of the Funds
in the Dean Witter Funds complex (and, if applicable, in the TCW/DW Funds
complex) on whose boards the Trustee serves. In addition, the policy
contemplates that the Trustees will, over time, increase their aggregate
investment in the Funds above the $25,000 minimum requirement. The Trustees
may allocate their investments among specific Funds in any manner they
determine is appropriate based on their individual investment objectives. As
of the date of this Proxy Statement, each Trustee is in compliance with the
policy. Any future Trustee will be given a one year period following his or
her election within which to comply with the foregoing. As of December 31,
1996, the total value of the investments by the Trustees and/or their spouses
in shares of the Dean Witter Funds (and, if applicable, the TCW/DW Funds) was
approximately $9.8 million.
As of the record date for this Meeting, the aggregate number of shares of
beneficial interest of the Trust owned by the Trust's officers and Trustees
as a group was less than 1 percent of the Trust's shares of beneficial
interest outstanding.
COMPENSATION OF INDEPENDENT TRUSTEES
The Trust pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 for meetings of the Board of Trustees or committees of the
Board of Trustees attended by the Trustee (the Trust pays the Chairman of the
Audit Committee an annual fee of $750 and pays the Chairman of the Committee
of the Independent Trustees an additional annual fee of $1,200). The Trust
also reimburses such Trustees for travel and other out-of-pocket expenses
incurred by them in connection with attending such meetings. Trustees and
officers of the Trust who are or have been employed by the Investment Adviser
or an affiliated company receive no compensation or expense reimbursement
from the Trust.
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended February 28,
1997.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- ------------------------------- ------------------
<S> <C>
Michael Bozic ..................
Edwin J. Garn ..................
John R. Haire ..................
Dr. Manuel H. Johnson ..........
Michael E. Nugent ..............
John L. Schroeder ..............
</TABLE>
8
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The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1996 for
services to the 82 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 14 TCW/DW Funds that were in operation at
December 31, 1996. With respect to Messrs. Haire, Johnson, Nugent and
Schroeder, the TCW/DW Funds are included solely because of a limited exchange
privilege between those Funds and five Dean Witter Money Market Funds.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF
COMMITTEES OF FOR SERVICE AS
INDEPENDENT CHAIRMAN OF
FOR SERVICE DIRECTORS/ COMMITTEES OF TOTAL CASH
AS DIRECTOR OR FOR SERVICE AS TRUSTEES AND INDEPENDENT COMPENSATION
TRUSTEE AND TRUSTEE AND AUDIT TRUSTEES FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER COMMITTEES OF 82 AND AUDIT 82 DEAN WITTER
NAME OF OF 82 DEAN WITTER OF 14 TCW/DW DEAN WITTER COMMITTEES OF 14 FUNDS AND 14
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS TCW/DW FUNDS TCW/DW FUNDS
- --------------------- ----------------- ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Michael Bozic ........ $138,850 -- -- -- $138,850
Edwin J. Garn ........ 140,900 -- -- -- 140,900
John R. Haire ........ 106,400 $64,283 $195,450 $12,187 378,320
Dr. Manuel H. Johnson 137,100 66,483 -- -- 203,583
Michael E. Nugent ... 138,850 64,283 -- -- 203,133
John L. Schroeder ... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Trust, have adopted a retirement program under which an
Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent
Director or Trustee of any Dean Witter Fund that has adopted the retirement
program (each such Fund referred to as an "Adopting Fund" and each such
Trustee referred to as an "Eligible Trustee") is entitled to retirement
payments upon reaching the eligible retirement age (normally, after attaining
age 72). Annual payments are based upon length of service. Currently, upon
retirement, each Eligible Trustee is entitled to receive from the Adopting
Fund, commencing as of his or her retirement date and continuing for the
remainder of his or her life, an annual retirement benefit (the "Regular
Benefit") equal to 25.0% of his or her Eligible Compensation plus 0.4166666%
of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years
up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(1) "Eligible Compensation" is
one-fifth of the total compensation earned by such Eligible Trustee for
service to the Adopting Fund in the five year period prior to the date of the
Eligible Trustee's retirement. Benefits under the retirement program are not
secured or funded by the Adopting Funds.
- ------------
(1) An Eligible Trustee may elect alternate payments of his or her
retirement benefits based upon the combined life expectancy of such
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. The amount estimated to be payable under this
method, through the remainder of the later of the lives of such
Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit. In addition, the Eligible Trustee may elect that the
surviving spouse's periodic payment of benefits will be equal to either
50% or 100% of the previous periodic amount, an election that,
respectively, increases or decreases the previous periodic amount so
that the resulting payments will be the actuarial equivalent of the
Regular Benefit.
9
<PAGE>
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended February
28, 1997 and by the 57 Dean Witter Funds (including the Trust) for the year
ended December 31, 1996, and the estimated retirement benefits for the
Trust's Independent Trustees, to commence upon their retirement, from the
Trust as of February 28, 1997 and from the 57 Dean Witter Funds as of
December 31, 1996.
RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
RETIREMENT
BENEFITS ESTIMATED ANNUAL
ACCRUED AS BENEFITS
FOR ALL FUNDS EXPENSES UPON RETIREMENT(2)
------------------------------- --------------------------- ------------------------
ESTIMATED
CREDITED YEARS ESTIMATED
OF SERVICE AT PERCENTAGE OF FROM
NAME OF INDEPENDENT RETIREMENT ELIGIBLE BY THE BY ALL THE FROM ALL
TRUSTEE (MAXIMUM 10) COMPENSATION TRUST ADOPTING FUNDS TRUST ADOPTING FUNDS
- -------------------------- -------------- --------------- ------------ -------------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 50.0% $20,147 $ 51,325
Edwin J. Garn ............. 10 50.0 27,772 51,325
John R. Haire ............. 10 50.0 46,952 129,550
Dr. Manuel H. Johnson .... 10 50.0 10,926 51,325
Michael E. Nugent ......... 10 50.0 19,217 51,325
John L. Schroeder ......... 8 41.7 38,700 42,771
</TABLE>
- ------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
above.
The Board of Trustees of each Trust unanimously recommends that
Shareholders vote FOR the election of each of the Trustees nominated for
election.
(2) APPROVAL OR DISAPPROVAL OF NEW
INVESTMENT ADVISORY AGREEMENT
BACKGROUND
InterCapital currently serves as investment manager of the Trust pursuant
to an investment advisory agreement entered into by the Trust and
InterCapital (the "Current Agreement"), and in that capacity provides
investment advisory and certain other services to the Trust. InterCapital is
a wholly-owned subsidiary of DWDC. The approval of a new investment advisory
agreement between the Trust and InterCapital (the "New Agreement") is being
sought in connection with the proposed merger of Morgan Stanley Group Inc.
("Morgan Stanley") and DWDC (the "Merger").
INFORMATION CONCERNING MORGAN STANLEY GROUP
Morgan Stanley and various of its directly or indirectly owned
subsidiaries, including Morgan Stanley & Co. Incorporated ("Morgan Stanley &
Co."), a registered broker-dealer and investment adviser, and Morgan Stanley
International, are engaged in a wide range of financial services. Their
principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring and other corporate finance
advisory activities; merchant banking; stock brokerage and research services;
asset management; trading of futures, options, foreign exchange, commodities
and swaps (involving foreign exchange, commodities, indices and interest
rates); real estate advice, financing and investing; and global custody,
securities clearance services and securities lending.
THE MERGER
Pursuant to the terms of the Merger, Morgan Stanley will be merged with
and into DWDC with the surviving corporation to be named Morgan Stanley, Dean
Witter, Discover & Co. Following the Merger, InterCapital will be a direct
wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
10
<PAGE>
Under the terms of the Merger, each share of Morgan Stanley common stock
will be exchanged for 1.65 shares of DWDC common stock. Following the Merger,
Morgan Stanley's shareholders will own approximately 45% and DWDC's
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 completed in mid-1997.
The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co. will
consist of fourteen members, two of which will be Morgan Stanley insiders and
two of which will be DWDC insiders. The remaining ten directors will be
outside directors, with Morgan Stanley and DWDC each designating five of the
ten. The Chairman and Chief Executive Officer of Morgan Stanley, Dean Witter,
Discover & Co. will be Philip J. Purcell who is the current Chairman and
Chief Executive Officer of DWDC. The President and Chief Operating Officer of
Morgan Stanley, Dean Witter, Discover & Co. will be the current President of
Morgan Stanley, John Mack.
The Merger is subject to certain closing conditions, including certain
regulatory approvals and the approval of shareholders of both DWDC and Morgan
Stanley.
APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
In order to assure continuity of investment advisory services to the Trust
after the Merger, the Board of the Trust met in person for the purpose of
considering whether it would be in the best interests of the Trust and its
Shareholders to enter into a New Agreement between the Trust and the
Investment Adviser which would become effective upon the later of Shareholder
approval of the New Agreement or consummation of the Merger. At its meeting,
and for the reasons discussed below (see "The Board's Consideration"), the
Board of the Trust, including each of the Independent Trustees, unanimously
approved the New Agreement and recommended its approval by Shareholders.
THE TERMS OF THE NEW AGREEMENT, INCLUDING FEES PAYABLE BY THE TRUST
THEREUNDER, ARE IDENTICAL, IN ALL MATERIAL RESPECTS, TO THOSE OF THE
CURRENT AGREEMENT, EXCEPT FOR THE DATES OF EFFECTIVENESS AND
EXPIRATION. The terms of the Current Agreement are fully described under "The
Current Investment Advisory Agreement" below. If approved by Shareholders,
the New Agreement will continue in effect for an initial term expiring April
30, 1999 and will continue in effect from year to year thereafter if such
continuance is approved by the Board or by a majority of the outstanding
voting securities (as defined below) of the Trust and, in either event, by
the vote cast in person of a majority of the Independent Trustees. In the
event that Shareholders of the Trust do not approve a New Agreement, the
Current Agreement will remain in effect and the Board will take such action,
if any, as it deems to be in the best interests of the Trust and its
Shareholders, which may include proposing that Shareholders approve an
agreement in lieu of the New Agreement. In the event that the Merger is not
consummated, the Investment Adviser will continue to provide services to the
Trust in accordance with the terms of the Current Agreement for such periods
as may be approved at least annually by the Board, including a majority of
the Independent Trustees of the Trust.
REQUIRED VOTE
The New Agreement cannot be implemented unless approved at the Meeting, or
any adjournment thereof, by a majority of the outstanding voting securities
of the Trust. Such a majority means the affirmative vote of the holders of
(a) 67% or more of the shares of the Trust present, in person or by proxy, at
the Meeting, if the holders of more than 50% of the outstanding shares are so
present, or (b) more than 50% of the outstanding shares of the Trust,
whichever is less.
11
<PAGE>
THE BOARD OF THE TRUST UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT.
THE BOARD'S CONSIDERATION
At a special meeting of the Committee of the Independent Trustees of the
Trust held on February 20, 1997, at which each of the Independent Trustees of
the Trust was present, and a meeting of the full Board on February 21, 1997,
the Trustees evaluated the New Agreement (the form of which is attached
hereto as an Exhibit). Prior to and during the meeting, the Independent
Trustees requested and received all information they deemed necessary to
enable them to determine whether the New Agreement is in the best interests
of the Trust and its Shareholders. They were assisted in their review and
deliberations by independent legal counsel. In determining whether to approve
the New Agreement, the Trustees assessed the implications of the Merger for
the Investment Adviser and its ability to continue to provide services to the
Trust of the same scope and quality as are presently provided. In particular,
the Trustees inquired as to the impact of the Merger on the Investment
Adviser's personnel, management, facilities and financial capabilities and
received assurances in this regard from senior management of DWDC and the
Investment Adviser that the Merger would not adversely affect the Investment
Adviser's ability to fulfill its obligations under its agreement with the
Trust or to operate its business in a manner consistent with past practices.
In addition, the Trustees considered the effects of the Investment Adviser
and Morgan Stanley becoming affiliated persons of each other. Following the
Merger, the 1940 Act will prohibit or impose certain conditions on the
ability of the Trust to engage in certain transactions with Morgan Stanley
and its affiliates. For example, absent exemptive relief, the Trust will be
prohibited from purchasing securities from Morgan Stanley & Co., a
wholly-owned broker-dealer subsidiary of Morgan Stanley, in transactions in
which Morgan Stanley & Co. acts as principal, and the Trust will have to
satisfy certain conditions in order to engage in securities transactions in
which Morgan Stanley & Co. acts as broker or to purchase securities in an
underwritten offering in which Morgan Stanley & Co. acts as an underwriter.
In this connection, senior management of the Investment Adviser represented
to the Trustees that they do not believe these prohibitions or conditions
will have a material effect on the management or performance of the Trust.
The Trustees also considered that the New Agreement is identical, in all
material respects, to the Current Agreement (other than the dates of
effectiveness and termination).
Based upon the Trustees' review and the evaluations of the materials they
received, and in consideration of all factors deemed relevant to them, the
Trustees, including all of the Independent Trustees, determined
that the New Agreement is in the best interests of the Trust and its
Shareholders. ACCORDINGLY, THE BOARD, INCLUDING ALL OF THE
INDEPENDENT TRUSTEES, APPROVED THE NEW AGREEMENT AND VOTED TO RECOMMEND
APPROVAL BY SHAREHOLDERS OF THE TRUST.
THE CURRENT INVESTMENT ADVISORY AGREEMENT
The Current Agreement provides that the Investment Adviser shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Adviser obtains and evaluates
such information and advice relating to the economy, securities markets and
specific securities as it considers necessary or useful to continuously
manage the assets of the Trust in a manner consistent with its investment
objectives and policies. In addition, the Investment Adviser pays the
compensation of all personnel, including officers of the Trust, who are its
employees. The Investment Adviser has authority to place orders for the
purchase and sale of portfolio securities on behalf of the Trust without
prior approval of its Trustees. The Trustees review the investment portfolio
at their regular meetings.
In return for its investment services and the expenses which the
Investment Adviser assumes under the Current Agreement, the Trust pays the
Investment Adviser compensation which is computed weekly and
12
<PAGE>
payable monthly and which is determined by applying the annual rate of 0.50%
to the Trust's average weekly net assets. Pursuant to the Current Agreement,
the Trust accrued to the Investment Adviser total compensation of $
during the fiscal year ended February 28, 1997. The current assets of the
Trust totalled $ at February 28, 1997.
Under the Current Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Adviser, including, without limitation: charges and expenses of
any registrar, custodian or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Trust; brokers' commissions chargeable to the Trust in connection with
portfolio securities transactions to which the Trust is a party; all taxes,
including securities or commodities issuance and transfer taxes, and fees
payable by the Trust to Federal, state or other governmental agencies; costs
and expenses of engraving or printing of certificates representing shares of
the Trust; all costs and expenses in connection with registration and
maintenance of registration of the Trust and of its shares with the
Securities and Exchange Commission and various states and other jurisdictions
(including filing fees and legal fees and disbursements of counsel); the
costs and expense of preparation, printing, including typesetting, and
distributing prospectuses for such purposes; all expenses of Shareholders'
and Trustees' meetings and of preparing, printing and mailing proxy
statements and reports to Shareholders; fees and travel expenses of Trustees
or members of any advisory board or committee who are not employees of the
Trust's Administrator or Investment Adviser or any of their corporate
affiliates; all expenses incident to the payment of any dividend or
distribution program; charges and expenses of any outside pricing services;
charges and expenses of legal counsel, including counsel to the Independent
Trustees of the Trust, and independent accountants in connection with any
matter relating to the Trust (not including compensation or expenses of
attorneys employed by the Trust's Administrator or Investment Adviser);
membership dues of industry associations; interest payable on Trust
borrowings; fees and expenses incident to the listing of the Trust's shares
on any stock exchange; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Trust which inure to its benefit;
extraordinary expenses (including, but not limited to, legal claims,
liabilities, litigation costs and any indemnification related thereto); and
all other charges and costs of the Trust's operations unless otherwise
explicitly provided in the Current Agreement.
The Current Agreement was initially approved by the Board of Trustees
on October 30, 1992 and by the shareholders of the Trust at a Special
Meeting of Shareholders held on February 25, 1993. The Current Agreement
supersedes an earlier advisory agreement also approved by shareholders on
February 25, 1993 in connection with the assumption by InterCapital of the
investment advisory activities previously performed by another investment
adviser and which took effect on March 1, 1993. The terms of the Current
Agreement are described below. The Current Agreement was last approved by
the shareholders of the Trust as a routine matter at their Annual
Meeting held on June 27, 1996.
The Current Agreement had an initial term ending April 30, 1994 and
provides that, after the initial period of effectiveness, it will continue in
effect from year to year thereafter provided such continuance is approved at
least annually by vote of a majority, as defined in the Act, of the
outstanding voting securities of the Trust or by the Trustees of the Trust,
and, in either event, by the vote cast in person by a majority of the
Trustees who are not parties to the Current Agreement or, "interested
persons" of any such party (as defined in the Act) at a meeting called for
the purpose of voting on such approval. The Current Agreement's most recent
continuation until April 30, 1997 was approved by the Trustees, including a
majority of the Independent Trustees, at a meeting of the Trustees held on
April 17, 1996, called for the purpose of approving the Current Agreement.
The Current Agreement also provides that it may be terminated at any time
by the Investment Adviser, the Trustees of the Trust or by a vote of a
majority of the outstanding voting securities of the Trust, in each instance
without the payment of any penalty, on thirty days' notice and will
automatically terminate upon any assignment.
INVESTMENT ADVISER
Dean Witter InterCapital Inc. is the Trust's investment adviser.
InterCapital maintains its offices at Two World Trade Center, New York, New
York 10048. InterCapital, which was incorporated in July 1992, is a
wholly-owned subsidiary of DWDC, a balanced financial services organization
providing a broad range of nationally marketed credit and investment
products.
13
<PAGE>
The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:
Philip J. Purcell, Chairman of the Board of Directors and Chief Executive
Officer of DWDC and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Dean Witter
Capital, Executive Vice President of DWDC and Director of DWR, Distributors,
InterCapital, DWSC and DWTC; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and
Director of DWR, Distributors, InterCapital, DWSC and DWTC; Charles A.
Fiumefreddo, Executive Vice President and Director of DWR, Chairman of the
Board of Directors, Chief Executive Officer and Director of InterCapital,
DWSC and Distributors and Chairman of the Board of Directors and Director of
DWTC; Christine A. Edwards, Executive Vice President, Secretary and General
Counsel of DWDC, Executive Vice President, Secretary, General Counsel and
Director of DWR, Executive Vice President, Secretary, Chief Legal Officer and
Director of Distributors and Director of InterCapital and DWSC; and Thomas C.
Schneider, Executive Vice President and Chief Financial Officer of DWDC and
Executive Vice President, Chief Financial Officer and Director of DWR,
Distributors, InterCapital and DWSC.
The business address of the foregoing Directors and Executive Officer is
Two World Trade Center, New York, New York 10048. DWDC has its offices at Two
World Trade Center, New York, New York 10048.
InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. The Appendix lists the investment companies for which InterCapital
provides investment management or investment advisory services and which have
similar investment objectives to that of the Trust, and sets forth the fees
payable by such companies, including the Trust, and their net assets as of
March 12, 1997.
InterCapital's wholly-owned subsidiary, DWSC, pursuant to an
Administration Agreement, serves as the Administrator of the Trust and
receives from the Trust compensation which is computed weekly and payable
monthly and which is determined by applying the annual rate of 0.30% to the
Trust's weekly net assets. For the fiscal year ended February 28, 1997, the
Trust accrued to DWSC, pursuant to the Administration Agreement, total
compensation of $ .
During the fiscal year ended February 28, 1997, the Trust accrued to DWTC,
the Trust's Transfer Agent and an affiliate of the Investment Adviser,
transfer agency fees of $ .
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is
an affiliated broker of InterCapital. For the fiscal year ended February 28,
1997, the Trust paid no brokerage commissions to DWR.
(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Trustees have unanimously selected the firm of Price Waterhouse LLP as
the Trust's independent accountants for the fiscal year ending February 28,
1998. Price Waterhouse LLP has been the independent accountants for the Trust
since its inception, and has no direct or indirect financial interest in the
Trust.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting of Shareholders and will be available to make a statement, and
to respond to appropriate questions of shareholders.
14
<PAGE>
The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required for
ratification of the selection of Price Waterhouse LLP as the independent
accountants for the Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
TRUST.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of Proposal 2 and will vote against any such adjournment those
proxies required to be voted against that proposal.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed
to be present at the meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares
held in street name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than , 1997
for inclusion in the proxy statement for that meeting. The mere submission of
a proposal does not guarantee its inclusion in the proxy materials or its
presentation at the meeting. Certain rules under the federal securities laws
must be met.
REPORTS TO SHAREHOLDERS
THE TRUST'S MOST RECENT ANNUAL REPORT, FOR THE FISCAL YEAR ENDED FEBRUARY
28, 1996, AND ITS MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL
REPORT, HAVE BEEN PREVIOUSLY SENT TO SHAREHOLDERS AND ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST FROM ADRIENNE RYAN-PINTO AT DEAN WITTER TRUST COMPANY,
HARBORSIDE FINANCIAL CENTER, PLAZA TWO, JERSEY CITY, NEW JERSEY 07311
(TELEPHONE 1-800-869-NEWS) (TOLL-FREE).
INTEREST OF CERTAIN PERSONS
DWDC, InterCapital, DWR, DWSC and certain of their respective Directors,
Officers, and employees, including persons who are Trustees or Officers of
the Trust, may be deemed to have an interest in certain of the proposals
described in this Proxy Statement to the extent that certain of such
companies and their affiliates have contractual and other arrangements,
described elsewhere in this Proxy Statement, pursuant to which they are paid
fees by the Trust, and certain of those individuals are compensated for
performing services relating to the Trust and may also own shares of DWDC.
Such companies and persons may thus be deemed to derive benefits from the
approvals by Shareholders of such proposals.
15
<PAGE>
OTHER BUSINESS
The management of the Trust knows of no other matters which may be
presented at the Meeting. However, if any matters not now known properly come
before the Meeting, it is intended that the persons named in the attached
form of proxy, or their substitutes, to vote all shares that they are
entitled to vote on any such matter, utilizing such proxy in accordance with
their best judgment on such matters.
By Order of the Board of Trustees
BARRY FINK
Secretary
16
<PAGE>
APPENDIX
InterCapital serves as investment manager or investment adviser to the
Trust and the other investment companies listed below which have similar
investment objectives to that of the Trust, with the net assets shown as of
March 12, 1997.
<TABLE>
<CAPTION>
CURRENT INVESTMENT
NET ASSETS MANAGEMENT OR
AS OF 03/12/97 ADVISORY FEE RATE(S)
------------------ ----------------------------------
<S> <C> <C>
1. DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND* ...... $ 0.55% on assets up to $500
million, scaled down at various
asset levels to 0.45% on assets
over $1.25 billion
2. DEAN WITTER LIMITED TERM MUNICIPAL TRUST* ......... 0.50%
3. DEAN WITTER MULTI-STATE MUNICIPAL SERIES TRUST* ... 0.35%
4. DEAN WITTER NATIONAL MUNICIPAL TRUST* .............. 0.35% (1)
5. DEAN WITTER NEW YORK TAX-FREE INCOME FUND* ........ 0.55% on assets up to $500 million
and 0.525% on assets over $500
million
6. DEAN WITTER TAX-EXEMPT SECURITIES TRUST* ........... 0.50% on assets up to $500
million, scaled down at various
asset levels to 0.325% on assets
over $1.25 billion
7. INTERCAPITAL CALIFORNIA INSURED MUNICIPAL INCOME
TRUST** ............................................ 0.35%
8. INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL
SECURITIES** ....................................... 0.35%
9. INTERCAPITAL INSURED CALIFORNIA MUNICIPAL
SECURITIES** ....................................... 0.35%
10. INTERCAPITAL INSURED MUNICIPAL BOND TRUST** ....... 0.35%
11. INTERCAPITAL INSURED MUNICIPAL INCOME TRUST** ..... 0.35%
12. INTERCAPITAL INSURED MUNICIPAL SECURITIES** ....... 0.35%
13. INTERCAPITAL INSURED MUNICIPAL TRUST** ............. 0.35%
14. INTERCAPITAL NEW YORK QUALITY MUNICIPAL
SECURITIES** ....................................... 0.35%
15. INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST** ..... 0.35%
16. INTERCAPITAL QUALITY MUNICIPAL INVESTMENT TRUST** . 0.35%
17. INTERCAPITAL QUALITY MUNICIPAL SECURITIES** ....... 0.35%
18. MUNICIPAL INCOME TRUST** ........................... 0.35% on assets up to $250 million
and 0.25% on assets over $250
million
19. MUNICIPAL INCOME TRUST II** ....................... 0.40% on assets up to $250 million
and 0.30% on assets over $250
million
A-1
<PAGE>
CURRENT INVESTMENT
NET ASSETS MANAGEMENT OR
AS OF 03/12/97 ADVISORY FEE RATE(S)
------------------ ----------------------------------
20. MUNICIPAL INCOME TRUST III** ....................... $ 0.40% on assets up to $250 million
and 0.30% on assets over $250
million
21. MUNICIPAL INCOME OPPORTUNITIES TRUST** ............. 0.50%
22. MUNICIPAL INCOME OPPORTUNITIES TRUST II** ......... 0.50%
23. MUNICIPAL INCOME OPPORTUNITIES TRUST III** ........ 0.50%
24. MUNICIPAL PREMIUM INCOME TRUST** ................... 0.40%
25. DEAN WITTER SELECT MUNICIPAL REINVESTMENT FUND*** . 0.50%
26. DEAN WITTER HAWAII MUNICIPAL TRUST* ................ 0.35% (2)
<FN>
- ------------
* Open-end investment company
** Closed-end investment company
*** Open-end investment company offered only to the holders of units of
certain unit investment trusts (UITs) in connection with the
reinvestment of UIT distributions
(1) InterCapital has undertaken, until June 30, 1997, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter National Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company to the
extent that such expenses and compensation on an annualized basis
exceed 0.50% of the average daily net assets of that company.
(2) InterCapital has undertaken, until June 30, 1997, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter Hawaii Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company.
</TABLE>
A-2
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EXHIBIT
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the th day of , 1997 by and between
Municipal Income Opportunities Trust II, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Fund"), and Dean Witter InterCapital Inc., a Delaware corporation
(hereinafter called the "Investment Adviser").
WHEREAS, The Fund is engaged in business as a closed-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, The Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940 (the "Advisers Act"), and engages
in the business of acting as investment adviser; and
WHEREAS, The Fund desires to retain the Investment Adviser to render
investment advisory services in the manner and on the terms and conditions
hereafter set forth; and
WHEREAS, The Investment Adviser desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Adviser agree as follows:
1. The Fund hereby retains the Investment Adviser to act as investment
adviser of the Fund and, subject to the supervision of the Trustees of the
Fund (the "Trustees"), to supervise the investment activities of the Fund as
hereinafter set forth. Without limiting the generality of the foregoing, the
Investment Adviser shall obtain and evaluate such information and advice
relating to the economy, securities and commodities markets and securities
and commodities as it deems necessary or useful to discharge its duties
hereunder; shall continuously manage the assets of the Fund in a manner
consistent with the investment objectives and policies of the Fund; shall
determine the securities and commodities to be purchased, sold or otherwise
disposed of by the Fund and the timing of such purchases, sales and
dispositions; and shall take such further action, including the placing of
purchase and sale orders on behalf of the Fund, as the Investment Adviser
shall deem necessary or appropriate. The Investment Adviser shall also
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses and opinions formulated or obtained by the Investment
Adviser in the discharge of its duties as the Fund may, from time to time,
reasonably request.
2. The Investment Adviser 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 Investment
Adviser shall be deemed to include persons employed or otherwise retained by
the Investment Adviser 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 Adviser may desire. The Investment Adviser
shall, as agent for the Fund, maintain the Fund's records required in
connection
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with the performance of its obligations under this Agreement and required to
be maintained under the Act. All such records so maintained shall be the
property of the Fund and, upon request therefor, the Investment Adviser shall
surrender to the Fund such of the records so requested.
3. The Fund will, from time to time, furnish or otherwise make available
to the Investment Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the
Investment Adviser may reasonably require in order to discharge its duties
and obligations hereunder.
4. The Investment Adviser 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 its officers and employees, if any,
who are also officers of the Fund.
5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including without limitation: the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities 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 transactions to which the Fund is a party; all taxes, including
securities or commodities issuance and transfer taxes, and fees payable by
the Fund to federal, state or other governmental agencies; 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 (including
filing fees and legal fees and disbursements of counsel and the costs and
expenses of preparing, printing, including typesetting, and distributing
prospectuses for such purposes); all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing proxy statements and reports
to shareholders; fees and travel expenses of Trustees or members of any
advisory board or committee who are not employees of the Investment Adviser
or the Fund's administrator or any corporate affiliate of either of them; all
expenses incident to the payment of any dividend or distribution program;
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
Trustees of the Fund who are not interested persons (as defined in the Act)
of the Fund or the Investment Adviser or the Fund's administrator, and of
independent accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund
borrowings; fees and expenses incident to the listing of the Fund's shares on
any stock exchange; postage; insurance premiums on property or personnel
(including officers and Trustees) 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 by the Investment Adviser, the Fund
shall pay to the Investment Adviser monthly compensation determined by
applying the annual rate of 0.50% to the Fund's average weekly net assets.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued weekly and paid monthly by applying the annual rate to
the average weekly net assets of the Fund determined as of the close of the
last business day of each week. At the request of the Investment Adviser,
compensation hereunder shall be calculated and accrued at more frequent
intervals in a manner consistent with the calculation of fees on a weekly
basis. 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
that part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above.
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7. The Investment Adviser will use its best efforts in the management of
the investment activities of the Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Adviser shall not be liable to the Fund
or any of its investors for any error of judgment or mistake of law or for
any act or omission by the Investment Adviser or for any losses sustained by
the Fund or its investors.
8. Nothing contained in this Agreement shall prevent the Investment
Adviser or any affiliated person of the Investment Adviser from acting as
investment adviser or manager for any other person, firm or corporation
(including any other investment company), whether or not the investment
objectives or policies of any such other person, firm or corporation are
similar to those of the Fund, and shall not in any way bind or restrict the
Investment Adviser or any such affiliated person from buying, selling or
trading any securities or commodities for their own accounts or for the
account of others for whom the Investment Adviser or any such affiliated
person may be acting. Nothing in this Agreement shall limit or restrict the
right of any Trustee, officer or employee of the Investment Adviser to engage
in any other business or to devote his or her time and attention in part to
the management or other aspects of any other business whether of a similar or
dissimilar nature.
9. This Agreement shall remain in effect until April 30, 1999 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 Fund or by the Board of Trustees of the
Fund; provided that in either event such continuance is also approved
annually by the vote of a majority of the Trustees 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 upon thirty days' written notice to the Investment Adviser, either
by majority vote of the Trustees of the Fund or by the vote of a majority of
the outstanding voting securities of the Fund; (b) this Agreement shall
immediately terminate in the event of its assignment (to the extent required
by the Act and the rules thereunder) unless such automatic terminations shall
be prevented by an exemptive order of the Securities and Exchange Commission;
and (c) the Investment Adviser may terminate this Agreement without payment
of penalty on thirty days' written notice to the Fund. 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 Fund 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
nor the Investment Adviser shall be liable for failing to do so.
11. This Agreement shall be construed in accordance with the laws 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,
conflicts with the applicable provisions of the Act, the Advisers Act or any
rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.
12. The Declaration of Trust establishing Municipal Income Opportunities
Trust II, dated March 8, 1989, a copy of which, together with all amendments
thereto (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name Municipal Income
Opportunities Trust II refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no
Trustee, shareholder, officer, employee or agent of Municipal Income
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Opportunities Trust II shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said
Municipal Income Opportunities Trust II, but the Trust Estate only shall be
liable.
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.
MUNICIPAL INCOME OPPORTUNITIES TRUST II
By: ..................................
Attest:
.....................................
DEAN WITTER INTERCAPITAL INC.
By: ..................................
Attest:
.....................................
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MUNICIPAL INCOME OPPORTUNITIES TRUST II
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Robert M. Scanlan, Barry Fink, and Joseph J.
McAlinden, or any of them, proxies, each with the power of substitution, to
vote on behalf of the undersigned at the Annual Meeting of Shareholders of
Municipal Income Opportunities Trust II on May 1, 1997, at 10:00 a.m., New York
City time, and at any adjournment thereof, on the proposals set forth in the
Notice of Meeting dated , 1997 as follows:
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE TRUSTEES AND THE PROPOSALS SET FORTH ON THE REVERSE HEREOF
AND AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
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[X] PLEASE MARK VOTES
AS IN THE EXAMPLE
USING BLACK OR
BLUE INK
FOR WITHHOLD FOR ALL
EXCEPT
1. Election of four (4) Trustees: [ ] [ ] [ ]
Michael Bozic, Charles A. Fiumefreddo
If you wish to withhold authority for any particular nominee, mark the
"For All Except" Box and strike a line through the nominee's name.
FOR WITHHOLD ABSTAIN
2. Approval of New Investment Advisory
Agreement with Dean Witter InterCapital
Inc. in connection with proposed merger.
FOR WITHHOLD ABSTAIN
3. Ratification of appointment of Price [ ] [ ] [ ]
Waterhouse LLP as independent accoun-
tants.
Please make sure to sign and date
this Proxy using black or blue ink. Date
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Shareholder sign in the box above Co-Owner (if any) sign in the box above
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PLEASE DETACH AT PERFORATION
MUNICIPAL INCOME OPPORTUNITIES TRUST II
IMPORTANT
PLEASE SEND IN YOUR PROXY............TODAY!
YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO
SHAREHOLDERS WHO HAVE NOT RESPONDED.
