Registration File No.: 33-29765
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 ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or
Section 240.14a-12
Municipal Income Trust III . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
LouAnne McInnis . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
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[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
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<PAGE>
MUNICIPAL INCOME TRUST III
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 27, 1996
The Annual Meeting of Shareholders of MUNICIPAL INCOME TRUST III (the
"Trust"), an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts, will be held in the Conference Center,
Forty-Fourth Floor, 2 World Trade Center, New York, New York 10048, on June
27, 1996 at 9:00 a.m., New York City time, for the following purposes:
1. To elect two (2) Trustees to serve until the 1999 Annual Meeting or
until their successors shall have been elected and qualified;
2. To approve or disapprove continuance of the currently effective
Investment Advisory Agreement with Dean Witter InterCapital Inc.;
3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending August 31,
1996;
4. Shareholder proposal to amend the Trust's Declaration of Trust to
require each Trustee, within thirty days of election, to become a
Shareholder of the Trust (Note: The Trustees unanimously recommend a vote
AGAINST this proposal); and
5. 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 April 17, 1996 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 the proposal to approve continuance of the Investment Advisory
Agreement and will vote against any such adjournment those proxies required
to be voted against that proposal.
SHELDON CURTIS,
Secretary
May 1, 1996
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>
MUNICIPAL INCOME TRUST III
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 27, 1996
This statement is furnished in connection with the solicitation of proxies
by the Trustees of MUNICIPAL INCOME TRUST III (the "Trust") for use at the
Annual Meeting of Shareholders of the Trust to be held on June 27, 1996, 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 and against Proposal 4 as set forth
in the 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, execution and delivery of a later dated proxy to the Secretary of
the Trust, or attendance and voting at the Annual Meeting of Shareholders.
Shareholders as of the close of business on April 17, 1996, 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 April 17, 1996 there were 6,404,186 shares of
beneficial interest of the Trust outstanding, all with $0.01 par value. No
person was known to own as much as 5% of the outstanding shares of the Trust
on that date. 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 cost of soliciting proxies for this Annual Meeting of Shareholders,
consisting principally of printing and mailing expenses, will be borne by the
Trust. The solicitation of proxies will be by mail, which may be supplemented
by solicitation by mail, telephone or otherwise through Trustees, officers
and regular employees of the Trust, or Dean Witter InterCapital Inc.
("InterCapital" or the "Investment Adviser"), without special compensation
therefor. The first mailing of this proxy statement is expected to be made on
or about May 1, 1996.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at nine. At the Meeting, two nominees are to be
elected to the Trust's Board of Trustees. There are presently nine Trustees,
two of whom (Manuel H. Johnson and John L. Schroeder) are standing for
election at this Meeting to serve until the 1999 Annual Meeting in accordance
with the Trust's Declaration of Trust, as amended.
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<PAGE>
Seven of the current nine Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, Paul Kolton, 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 "Act"). Mr. Paul Kolton, whose term as
Trustee ends at the Meeting, will retire as a Trustee on the date of the
Meeting. The Trustees have determined that the number of Trustees of the
Trust is to be fixed at eight, effective on the date of Mr. Kolton's
retirement. The nominees for election as Trustees have been proposed by the
Trustees now serving or, in the case of the nominees for positions as
Independent Trustees, by the Independent Trustees now serving. All of the
Trustees have been elected by the shareholders of the Trust.
The nominees of the Board of Trustees 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:
Manuel H. Johnson and John L. Schroeder. 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 said nominees would be unable or unwilling to accept nomination or
election. Trustees will be elected by a plurality of the votes cast at the
meeting.
Pursuant to the provisions of the Trust's Declaration of Trust, 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 each of the three classes will expire each year.
The Board of Trustees has determined that the nominees for election as
Trustee shall be standing for election as Trustee in each of the three
classes of Trustee as follows: Class I -- Messrs. Bozic and Fiumefreddo;
Class II -- Messrs. Johnson, Kolton and Schroeder; and Class III -- Messrs.
Garn, Haire, Nugent and Purcell. Each nominee will, if elected, 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 of Trustees, or any adjournment thereof. As a
consequence of this method of election, the replacement of a majority of the
Board of Trustees could be delayed for up to two years. As stated above, the
Trustees in Class II (other than Mr. Kolton) are standing for election at
this Meeting and, if elected, will serve until the 1999 Annual Meeting or
until their successors shall have been elected and qualified.
The following information regarding each of the nominees for election as
Trustee, and each of the 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 April 17, 1996 (shown in parentheses),
positions with the Trust, and directorships (or trusteeships) in companies
which file periodic reports with the Securities and Exchange Commission,
including the 80 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 12 investment companies for which
InterCapital's wholly-owned subsidiary, Dean Witter Services Company Inc.
("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:
DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 47; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Koch Professor of
International Economics and Director of the Center for Global Market Studies
at George Mason University (since September, 1990); Director or Trustee of
the Dean Witter Funds; Trustee of the TCW/DW Funds; Co-Chairman and a founder
of the Group of Seven Council (G7C), an international economic commission
(since September, 1990); Director of NASDAQ (since June, 1995); Director of
Greenwich Capital Markets, Inc. (broker-dealer); formerly Vice Chairman of
the Board of Governors of the Federal Reserve System (February, 1986-August,
1990) and Assistant Secretary of the U.S. Treasury (1982-1986).
3
<PAGE>
JOHN L. SCHROEDER, Trustee since April, 1994; age 65; Retired; Director or
Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Citizens Utility Company; formerly Executive Vice President and Chief
Investment Officer of The Home Insurance Company (since August,
1991-September, 1995); Chairman and Chief Investment Officer of Axe-Houghton
Management and the Axe-Houghton Funds (April, 1983-June, 1991) and President
of USF&G Financial Services, Inc. (June, 1990-June, 1991).
The Trustees who are not standing for reelection at this Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 55; 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
Chairman and Chief Executive Officer (January, 1987-August, 1990) and
President and Chief Operating Officer (August, 1990-February, 1991) of the
Sears Merchandise Group of Sears, Roebuck and Co. ("Sears"); Director of
Eaglemark Financial Services, Inc., the United Negro College Fund, Weirton
Steel Corporation and Domain Inc. (home decor retailer).
CHARLES A. FIUMEFREDDO,* Trustee since July, 1991; age 62; Chairman, Chief
Executive Officer and Director of InterCapital, DWSC and Dean Witter
Distributors Inc. ("Distributors"); Executive Vice President and Director of
Dean Witter Reynolds Inc. ("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
Dean Witter Trust Company ("DWTC"); Director and/or officer of various Dean
Witter, Discover & Co. ("DWDC") subsidiaries; formerly Executive Vice
President and Director of DWDC (until February, 1993).
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 63; 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 Chemical 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.
JOHN R. HAIRE, Trustee since July, 1989; age 71; 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; Trustee of the
TCW/DW Funds; formerly President, Council for Aid to Education (from
1978-1989) and Chairman and Chief Executive Officer of Anchor Corporation, an
investment adviser (1964-1978); Director of Washington National Corporation
(insurance).
PAUL KOLTON, Trustee since July, 1989; age 72; 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 Chairman of the Financial Accounting Standards Advisory Council;
formerly Chairman and Chief Executive Officer of the American Stock Exchange;
Director of UCC Investors Holding Inc. (Uniroyal Chemical Company, Inc.);
director or trustee of various not-for-profit organizations.
- ------------------------
* Messrs. Fiumefreddo and Purcell may be deemed "interested persons" of
the Trust and its Investment Adviser as defined in Section 2(a)(19) of the
Act, due to their affiliation with the Investment Adviser and/or its
affiliated companies.
4
<PAGE>
MICHAEL E. NUGENT, Trustee since July, 1991; age 59; General Partner,
Triumph Capital, L.P., a private investment partnership (since 1988);
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 52; 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.
The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; Robert M. Scanlan,
Vice President; David A. Hughey, Vice President; Robert S. Giambrone, Vice
President; Joseph J. McAlinden, Vice President; James F. Willison, Vice
President; and Thomas F. Caloia, Treasurer. In addition, Katherine H.
Stromberg, Joseph Arcieri and Gerald J. Lian serve as Vice Presidents and
Marilyn K. Cranney, Barry Fink, Lou Anne D. McInnis, Carsten Otto and Ruth
Rossi serve as Assistant Secretaries. Mr. Curtis is 64 years old and is
currently Senior Vice President, Secretary and General Counsel of
InterCapital and DWSC and Assistant Secretary of DWR; he is also Senior Vice
President, Assistant Secretary and Assistant General Counsel of Distributors
and Senior Vice President and Secretary of DWTC. 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. Hughey is 64 years old and
is currently Executive Vice President and Chief Administrative Officer of
InterCapital and DWSC; he is also Executive Vice President and Chief
Administrative Officer of Distributors and DWTC as well as a Director of
DWTC. He was previously President of DWTC (October, 1989-March, 1993). Mr.
Giambrone is 42 years old and is currently Senior Vice President of
InterCapital, DWSC, Distributors and DWTC (since August, 1995) and a Director
of DWTC (since April, 1995). He was formerly a partner of KPMG Peat Marwick,
LLP. Mr. McAlinden is 52 years old and is currently Executive Vice President
of InterCapital (since April, 1996); he is also Chief Investment Officer of
InterCapital. He was previously a Senior Vice President of InterCapital
(June, 1995-April, 1996) and prior thereto was a Managing Director at Dillon
Read. Mr. Willison is 52 years old and is currently Senior Vice President of
InterCapital. Mr. Caloia is 50 years old and is currently First Vice
President and Assistant Treasurer of InterCapital and DWSC. Ms. Stromberg is
47 years old and is currently Vice President of InterCapital (since April,
1992). She was formerly a portfolio manager with InterCapital (October,
1991-April, 1992) and Vice President of Kidder Peabody Asset Management
(October, 1985-October, 1991). Mr. Arcieri is 47 years old and is currently
Vice President of InterCapital. Mr. Lian is 41 years old and is currently
Vice President of InterCapital (since June, 1995). He was formerly a Senior
Municipal Analyst with the American Express Company (1984-1992). Other than
Messrs. Scanlan, Giambrone, McAlinden and Lian and Ms. Stromberg, 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 consists of nine (9) 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 80 Dean Witter Funds, comprised of
120 portfolios. As of March 31, 1996, the Dean Witter Funds had total net
assets of approximately $75.2 billion and more than five million
shareholders.
5
<PAGE>
Seven Trustees (77% 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.
These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "Management Trustees") are affiliated with InterCapital. Five
of the seven 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 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 Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and 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 Independent Trustees are required to select and nominate
individuals to fill any Independent Trustee vacancy on the Board of any Fund
that has a Rule 12b-1 plan of distribution. Most of the Dean Witter Funds
have such a plan.
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 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 August 31, 1995, the Board of Trustees of the
Trust held four meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held two, ten
and four 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 COMMITTEES
The Chairman of the Committees 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
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<PAGE>
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 all three 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 Manager 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 Committees 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 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 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.
COMPENSATION OF INDEPENDENT TRUSTEES
The Trust pays each Independent Trustee an annual fee of $1,000 ($1,200
prior to September 30, 1995) 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 $2,400, in each case inclusive of the Committee
meeting fees). 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 Manager or an affiliated company receive no compensation or
expense reimbursement from the Trust.
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<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended August 31, 1995.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
Michael Bozic .............. $1,900
Edwin J. Garn .............. 2,000
John R. Haire .............. 4,850(1)
Dr. Manuel H. Johnson ..... 2,000
Paul Kolton ................ 2,000
Michael E. Nugent .......... 1,900
John L. Schroeder .......... 2,000
</TABLE>
- ---------------
(1) Of Mr. Haire's compensation from the Trust, $3,150 is paid to him as
Chairman of the Committee of the Independent Trustees ($2,400) and as
Chairman of the Audit Committee ($750).
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1995 for
services to the 79 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Kolton and Nugent, the 11 TCW/DW Funds that were in operation at
December 31, 1995. With respect to Messrs. Haire, Johnson, Kolton and Nugent,
the TCW/DW Funds are included solely because of a limited exchange privilege
between those Funds and five Dean Witter Money Market Funds. Mr. Schroeder
was elected as a Trustee of the TCW/DW Funds on April 20, 1995.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
FOR SERVICE AS CHAIRMAN OF TOTAL CASH
DIRECTOR OR FOR SERVICE AS COMMITTEES OF COMPENSATION
TRUSTEE AND TRUSTEE AND INDEPENDENT FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ 79 DEAN WITTER
OF 79 DEAN WITTER OF 11 TCW/DW TRUSTEES AND FUNDS AND 11
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS AUDIT COMMITTEES TCW/DW FUNDS
- --------------------------- ----------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Michael Bozic .............. $126,050 -- -- $126,050
Edwin J. Garn .............. 136,450 -- -- 136,450
John R. Haire .............. 98,450 $82,038 $217,350(2) 397,838
Dr. Manuel H. Johnson ..... 136,450 82,038 -- 218,488
Paul Kolton ................ 136,450 54,788 36,900(3) 228,138
Michael E. Nugent .......... 124,200 75,038 -- 199,238
John L. Schroeder .......... 136,450 46,964 -- 183,414
</TABLE>
- ---------------
(2) For the 79 Dean Witter Funds in operation at December 31, 1995.
(3) For the 11 TCW/DW Funds in operation at December 31, 1995. Mr. Kolton
will retire as a Director or Trustee of each Dean Witter Fund and each
TCW/DW Fund by July 1, 1996. Upon Mr. Kolton's retirement, Mr. Haire
will become Chairman of the Committee of the Independent Trustees and
the Audit Committee of the TCW/DW Funds in addition to serving in such
positions for the Dean Witter Funds.
8
<PAGE>
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY
EFFECTIVE INVESTMENT ADVISORY AGREEMENT
The Trust's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Adviser" or "InterCapital"), pursuant
to an Investment Advisory Agreement dated June 30, 1993 (referred to herein
as the "Advisory Agreement") which took effect upon the distribution by Sears
to its shareholders of all the common shares of DWDC (the parent company of
InterCapital) then owned by Sears. The Advisory Agreement was 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 Advisory
Agreement was approved for an initial term ending April 30, 1994. The present
Advisory 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 Advisory Agreement are described below. The Advisory Agreement was
last approved by the shareholders of the Trust as a routine matter at their
Annual Meeting held on June 22, 1995. The Agreement's continuation until
April 30, 1997 was approved by the Trustees, including a majority of the
Independent Trustees, at a meeting of the Board held on April 17, 1996. In
the event shareholders do not approve continuance of the Advisory Agreement
by the required majority vote at the forthcoming meeting or any adjournment
thereof, the Board of Trustees of the Trust will take such action as it deems
to be in the best interest of the Trust and its shareholders, which may
include calling a special meeting of shareholders to vote on a new investment
advisory agreement.
In considering whether or not to approve the Advisory Agreement, the Board
of Trustees reviewed the terms of the agreement and considered all materials
and information deemed relevant to its determination. Among other things, the
Board considered the nature and scope of services to be rendered, the quality
of the Investment Adviser's services and personnel, and the appropriateness
of the fees that are paid under the Advisory Agreement, taking into account
other fees paid to affiliates with the Investment Adviser, pursuant to
Administration and Transfer Agency Agreements (see below). Based upon its
review, the Board of Trustees, including all of the Independent Trustees,
determined that the approval of the Advisory Agreement was in the best
interests of the Trust and its shareholders.
The favorable vote of a majority of the outstanding voting securities of
the Trust is required for the approval of the Advisory Agreement. Such a
majority is defined in the Act as the lesser of: (a) 67% or more of the
shares present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Trust are present or represented by proxy, or (b)
more than 50% of the outstanding shares.
THE INDEPENDENT TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS
APPROVE THE ADVISORY AGREEMENT.
THE ADVISORY AGREEMENT
The Advisory 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 Advisory Agreement,
the Trust pays the Investment Adviser compensation which is computed weekly
and payable monthly and which is determined by applying the following annual
rates to the Trust's weekly net assets: 0.40% of the portion of the average
weekly net assets
9
<PAGE>
not exceeding $250 million and 0.30% of the portion of average weekly net
assets exceeding $250 million. Pursuant to the Advisory Agreement, the Trust
accrued to the Investment Adviser total compensation of $249,483 during the
fiscal year ended August 31, 1995. The net assets of the Trust totalled
$63,515,018 at August 31, 1995.
Under the Advisory 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 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 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 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 Advisory
Agreement.
The Advisory Agreement had an initial term ending April 30, 1994 and
provides that, after this period, 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 Advisory 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 Advisory 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 Advisory Agreement.
The Advisory 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.
THE INVESTMENT ADVISER
Dean Witter InterCapital Inc. ("InterCapital") 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 Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services
10
<PAGE>
organization providing a broad range of nationally marketed credit and
investment products. In an internal reorganization which took place in
January, 1993, InterCapital assumed the investment advisory, management and
administrative activities previously performed by the InterCapital Division
of DWR.
InterCapital's wholly-owned subsidiary, Dean Witter Services Company Inc.
("DWSC"), 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 0.25% to the portion of the Fund's
average weekly net assets not exceeding $250 million and 0.20% to the portion
of the Fund's average weekly net assets exceeding $250 million but not
exceeding $500 million; 0.167% to the portion of the Fund's average weekly
net assets exceeding $500 million but not exceeding $750 million; and 0.133%
to the portion of the Fund's average weekly net assets exceeding $750
million. Prior to December 31, 1993, InterCapital served as Administrator of
the Trust and received compensation at the same annual rate. For the fiscal
year ended August 31, 1995, the Trust accrued to DWSC, pursuant to an
Administration Agreement, total compensation of $155,927.
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, 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.
InterCapital and 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 net assets of and the
fees payable by such companies, including the Trust.
DWDC has its offices at Two World Trade Center, New York, New York 10048.
There are various lawsuits pending against DWDC involving material amounts
which, in the opinion of its management, will be resolved with no material
effect on the consolidated financial position of the company.
During the fiscal year ended August 31, 1995, the Trust accrued to Dean
Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Adviser, transfer agency fees of $26,682.
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 August 31,
1995, the Trust paid no brokerage commissions to DWR.
11
<PAGE>
(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 August 31,
1996. 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, if
he or she so desires, and to respond to appropriate questions of
shareholders.
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. Abstentions and broker "non-votes" will have the
same effect as a vote against the proposal.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
TRUST.
(4) SHAREHOLDER PROPOSAL TO AMEND THE TRUST'S DECLARATION
OF TRUST TO REQUIRE EACH TRUSTEE, WITHIN THIRTY DAYS
OF ELECTION, TO BECOME A SHAREHOLDER IN THE TRUST
The Trust has been informed by Edwin S. Mullett, 1420 Fern Court, Vero
Beach, Florida 32963-4009, Executor for the Estate of Marie T. Mullett which
owned 5,000 shares at April 17, 1996 and Carol W. Mullett, a shareholder of
record residing at the same address who owned 3,000 shares at April 17, 1996
(together with Edwin S. Mullett, the "Proponents"), that they intend to
submit the following proposal at the meeting:
RESOLVED, that the Declaration of Trust be amended to require each
Trustee, within thirty days of election, to become a shareholder of the
Trust by acquiring at least 100 shares.
The Proponents have requested that the following statement be included in
support of their proposal:
Last year's proxy statement quoted a federal court ruling, "Directors
. . . . are expected to look after the interests of shareholders." We
believe that the Trustees could better appreciate and look after our
interests if they were also shareholders. Yet, according to our last
proxy, not one of our Trustees owned a single share of our Trust. We had
previously proposed to Municipal Income Trust (which has the same
trustees) that the Trustees could meet this requirement by purchase of a
single share. However, the Trustees derided this as a "meaningless
gesture" so we have increased the number of shares to meet their
objection. We suspect that the Trustees oppose this proposal because they
consider it a nuisance since they serve on so many boards. We urge you to
support this proposal and send a message to the Trustees to join us as
shareholders.
The Board of Trustees unanimously recommends that you vote AGAINST the
Shareholder Proposal.
RECOMMENDATION OF THE BOARD OF TRUSTEES
The Proponents' statement in support of their proposal indicates that they
previously made a proposal to the Trustees and shareholders of another trust
in the Dean Witter complex requiring the Trustees of that Trust to own shares
of that Trust. That proposal did not pass because it failed to obtain a
quorum at the shareholder meeting.
The Trustees have considered whether a share ownership requirement for
Trustees such as that proposed by the Proponents for this Trust is in the
best interests of the Trust and its shareholders and have concluded that, for
several reasons outlined below, it is not. The Trustees' opposition to this
proposal is not dependent on
12
<PAGE>
the exact number of shares required to be owned, whether one hundred shares,
as in this proposal, or any greater or lesser number. Rather, the Trustees
believe that share ownership is unrelated to their ability to act in the best
interests of shareholders and that they can carry out their duties and
functions diligently and effectively without owning shares of the Trust. In
addition, the Trust's objectives and policies may not be appropriate for a
Trustee's individual financial circumstances and needs and the Trust could,
therefore, be inhibited in its ability to attract Trustees if the available
pool consists only of those whose personal financial needs are met by the
Trust's objectives and policies.
The Trustees believe that if a share ownership requirement were adopted by
the Trust such a requirement could then logically be extended to all the
Funds in the Dean Witter complex. The Trustees believe that such a
complex-wide share ownership requirement would be impractical and undesirable
because it could make it more difficult to maintain the same board of
directors for all the Funds given the large number of Funds in the complex.
The Trustees believe that having the same Trustees for each of the Dean
Witter Funds is in the best interests of all the Funds' shareholders for
several reasons. First, a common board enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of high caliber
Trustees. In addition, having a common board avoids the duplication of effort
that would arise from having different groups of individuals serving as
Trustees for each of the Funds and avoids the cost and confusion that may
arise from different conclusions being reached by different boards on the
same operations and management issues. Finally, serving as Trustees of all
Funds tends to increase a Trustee's knowledge and expertise regarding matters
which affect all the Funds in the complex and enhances the ability to
negotiate on behalf of each Fund with the Funds' service providers.
In view of the above, the Trustees unanimously recommend that shareholders
vote AGAINST the shareholder proposal.
The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required for the
approval of the shareholder proposal.
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 Two 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 December 20, 1996 for
inclusion in the proxy statement and proxy for that meeting.
13
<PAGE>
REPORTS TO SHAREHOLDERS
The Trust's most recent Annual Report, for the fiscal year ended August
31, 1995, 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).
OTHER BUSINESS
The management 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 enclosed 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 judgment on
such matters.
By Order of the Trustees
SHELDON CURTIS
Secretary
14
<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
April 17, 1996.
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 04/17/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
1. DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND* ... $1,300,553,513 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* ...... $ 72,074,852 0.50%
3. DEAN WITTER MULTI-STATE MUNICIPAL SERIES TRUST* $ 409,740,249 0.35% (1)
4. DEAN WITTER NATIONAL MUNICIPAL TRUST* .......... $ 79,671,913 0.35% (2)
5. DEAN WITTER NEW YORK TAX-FREE INCOME FUND* ..... $ 205,210,883 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
6. DEAN WITTER TAX-EXEMPT SECURITIES TRUST* ....... $1,241,295,785 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** ......................................... $ 239,422,959 0.35%
8. INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL
SECURITIES** .................................... $ 199,154,445 0.35%
9. INTERCAPITAL INSURED CALIFORNIA MUNICIPAL
SECURITIES** .................................... $ 62,705,464 0.35%
10. INTERCAPITAL INSURED MUNICIPAL BOND TRUST** ... $ 108,224,922 0.35%
11. INTERCAPITAL INSURED MUNICIPAL INCOME TRUST** . $ 585,642,124 0.35%
12. INTERCAPITAL INSURED MUNICIPAL SECURITIES** ... $ 135,956,546 0.35%
13. INTERCAPITAL INSURED MUNICIPAL TRUST** ........ $ 478,090,568 0.35%
14. INTERCAPITAL NEW YORK QUALITY MUNICIPAL
SECURITIES** ................................... $ 91,766,895 0.35%
15. INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST** . $ 731,208,857 0.35%
16. INTERCAPITAL QUALITY MUNICIPAL INVESTMENT
TRUST** ........................................ $ 373,911,360 0.35%
17. INTERCAPITAL QUALITY MUNICIPAL SECURITIES** ... $ 360,997,056 0.35%
18. MUNICIPAL INCOME TRUST** ....................... $ 303,209,570 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
19. MUNICIPAL INCOME TRUST II** .................... $ 276,906,689 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 04/17/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
20. MUNICIPAL INCOME TRUST III** ................... $ 62,587,700 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
21. MUNICIPAL INCOME OPPORTUNITIES TRUST** ........ $175,002,787 0.50%
22. MUNICIPAL INCOME OPPORTUNITIES TRUST II** ..... $174,588,791 0.50%
23. MUNICIPAL INCOME OPPORTUNITIES TRUST III** .... $102,089,048 0.50%
24. MUNICIPAL PREMIUM INCOME TRUST** ............... $357,398,091 0.40%
25. DEAN WITTER SELECT MUNICIPAL REINVESTMENT
FUND*** ........................................ $ 92,410,322 0.50%
26. DEAN WITTER HAWAII MUNICIPAL TRUST* ............ $ 2,300,823 0.35% (3)
<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 December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of the
Massachusetts, Michigan, Minnesota, New York and Ohio Series of Dean
Witter Multi-State Municipal Series Trust and to waive the compensation
provided for in its investment management agreement with that company
in respect to the aforementioned Series to the extent that such
expenses and compensation on an annualized basis exceed 0.50% of the
average daily net assets of the pertinent Series.
(2) InterCapital has undertaken, until December 31, 1996, 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.
(3) InterCapital has undertaken, until December 31, 1996, 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
<PAGE>
MUNICIPAL INCOME TRUST III
ANNUAL MEETING OF SHAREHOLDERS--JUNE , 1996
PROXY
The undersigned hereby appoints ROBERT M. SCANLAN, SHELDON CURTIS, JAMES
F. WILLISON, 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 Trust III on June , 1996 at 9:00 a.m., New York City time,
and at any adjournment thereof, on the proposals set forth in the Notice of
Meeting dated April , 1996 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEE AND FOR
THE PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE SO THAT YOUR VOTE ON ALL MATTERS WILL BE COUNTED.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES \b OR [X] IN BLUE OR BLACK INK.
1. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)
Manuel H. Johnson, Paul Kolton, John L. Schroeder
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
2. APPROVAL OF INVESTMENT ADVISORY AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. SHAREHOLDER PROPOSAL:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Note: The Trustees recommend a vote AGAINST this proposal)
and in their discretion in the transaction of any other business which may
properly come before the meeting.
129
Please sign personally. If the
shares are registered in more than
one name, each joint owner or
each fiduciary should sign
personally. Only authorized
officers should sign for
corporations.
Dated ---------------------------
---------------------------------
Signature
---------------------------------
Signature
