<PAGE>
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 Trust III
(Name of Registrants as specified in their charter)
.....Lou Anne 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.
4) Proposed maximum aggregate value of transaction:
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
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
TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ONLY
MUNICIPAL INCOME TRUST III
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 1998
The Annual Meeting of Shareholders (the "Meeting") 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 Career
Development Room, Sixty-First Floor, 2 World Trade Center, New York, New York
10048, on June 23, 1998, at 11:00 a.m., New York City time, for the following
purposes:
1. To elect two (2) Trustees to serve until the year 2001 Annual Meeting
or until their successors shall have been elected and qualified;
2. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending August 31,
1998;
3. 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
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 April 30, 1998 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 have been received by the
date of the Meeting.
BARRY FINK
Secretary
May , 1998
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 23, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of MUNICIPAL INCOME
TRUST III (the "Trust") for use at the Annual Meeting of Shareholders of the
Trust to be held on June 23, 1998 (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 Proposal 2 and against Proposal 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. The first mailing of this
Proxy Statement is expected to be made on or about May , 1998.
Holders of shares of the Trust ("Shareholders") as of the close of
business on April 30, 1998, 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 30, 1998 there were shares of beneficial interest
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 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 the Meeting, 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 of the Trust, or
officers and regular employees of Dean Witter InterCapital Inc.
("InterCapital" or the "Investment Adviser"), Morgan Stanley Dean Witter
Trust FSB ("MSDW Trust"), Dean Witter Services Company Inc. ("DWSC") and/or
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 $3,000 and will be borne by the
Trust.
William F. Doring & Co. and MSDW Trust 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
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<PAGE>
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. With respect to the solicitation of a telephonic vote by William F.
Doring & Co., additional expenses would include $7.00 per telephone vote
transacted, $3.00 per outbound telephone contact and costs relating to
obtaining Shareholders' telephone numbers which would be borne by the Trust.
(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 nine. There are presently nine
Trustees, two of whom (Michael Bozic and Charles A. Fiumefreddo) are standing
for election at this Meeting to serve until the year 2001 Annual Meeting, in
accordance with the Trust's Declaration of Trust, as amended.
Seven of the current nine Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, Wayne E. Hedien, 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"). 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 Trustees of the Trust 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 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
and 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 of 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 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 stand for election as Trustee and serve as Trustee in one of
the three classes of Trustees as follows: Class I--Messrs. Bozic and
Fiumefreddo; Class II--Messrs. Hedien, Johnson and Schroeder; and Class
III--Messrs. Garn, Haire, Nugent and Purcell. Each nominee for Trustee at any
Annual Meeting 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, or any
adjournment thereof. In accordance with
3
<PAGE>
the above, the Trustees in Class I are standing for election at this Meeting
and, if elected, will serve until the year 2001 Annual Meeting 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 April 30, 1998 (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 86 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 11 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 57; 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.;
Director of Eaglemark Financial Services, Inc. and Weirton Steel Corporation.
CHARLES A. FIUMEFREDDO, Trustee since July, 1991; age 64; 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 MSDW Trust; Director and/or officer of
various Morgan Stanley Dean Witter & Co. ("MSDW") subsidiaries; formerly
Executive Vice President and Director of Dean Witter, Discover & Co. (until
February, 1993).
The Trustees who are not standing for re-election at this Meeting are:
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 65; 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 Covey (time management systems) and John
Alden Financial Corp. (health insurance); United Space Alliance (joint
venture between Lockheed Martin and Boeing Company) and Nuskin Asia Pacific
(multilevel marketing); member of the board of various civic and charitable
organizations.
JOHN R. HAIRE, Trustee since April, 1989; age 73; 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).
* Effective June 1, 1998, Mr. Fiumefreddo will retire from InterCapital,
DWSC, Distributors, DWR and MSDW Trust.
4
<PAGE>
WAYNE E. HEDIEN, Trustee since September, 1997; age 64; Retired; Director
or Trustee of the Dean Witter Funds; Director of The PMI Group, Inc. (private
mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural
History; formerly associated with the Allstate Companies (1966-1994), most
recently as Chairman of The Allstate Corporation (March 1993-December 1994)
and Chairman and Chief Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July 1989-December 1994); director of various
other business and charitable organizations.
DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 49; 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) and NRV Inc. (home construction);
Chairman and Trustee of the Financial Accounting Foundation (oversight
organization for the Financial Accounting Standards Board); 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 61; 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 54; Chairman of the
Board of Directors and Chief Executive Officer of MSDW, 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 MSDW
subsidiaries.
JOHN L. SCHROEDER, Trustee since April, 1994; age 67; 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).
The executive officers of the Trust other than shown above are: Barry
Fink, Vice President, Secretary and General Counsel; Mitchell M. Merin, Vice
President; 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 R. Arcieri,
Katherine H. Stromberg, Gerard J. Lian and Jonathan R. Page are Vice
Presidents of the Trust and Marilyn K. Cranney, Lou Anne D. McInnis, Ruth
Rossi, Carsten Otto, Frank Bruttomesso and Todd Lebo, serve as Assistant
Secretaries. Mr. Fink is 43 years old and is currently Senior Vice President
(since March, 1997), Secretary and General Counsel (since February 1997) of
InterCapital and DWSC and (since August 1996) Assistant Secretary of DWR; he
is also Senior Vice President (since March, 1997), Assistant Secretary and
Assistant General Counsel of Distributors (since February 1997). He was
previously First Vice President (June, 1993-February, 1997) and Vice
President, Assistant Secretary and Assistant General Counsel of InterCapital
and DWSC. Mr. Merin is 44 years old and is currently President and Chief
Strategic Officer of InterCapital and DWSC, Executive Vice President of
Distributors and MSDW Trust, Executive Vice President, Chief Administrative
Officer and Director of DWR, and Director of SPS Transaction Services, Inc.
and various other MSDW subsidiaries. Mr. Scanlan is 61 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 MSDW Trust. He was previously
Executive Vice President of InterCapital (July, 1992-March, 1993). Mr.
McAlinden is 55 years old and is currently Executive Vice President of
InterCapital (since April, 1996); he is also Chief Investment Officer of
InterCapital and Director of MSDW Trust (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 43
years old and is currently Senior Vice President of InterCapital, DWSC,
Distributors and MSDW Trust (since August, 1995) and Director of MSDW Trust
(since April, 1996). He was formerly a partner of KPMG Peat Marwick, LLP. Mr.
Willison is 54 years old and is currently Senior Vice President of
InterCapital. Mr. Caloia is 52 years
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<PAGE>
old and is currently First Vice President and Assistant Treasurer of
InterCapital and DWSC. Mr. Arcieri is 49 years old and is currently Vice
President of InterCapital. Ms. Stromberg is 49 years old and is currently
Vice President of InterCapital (since April, 1992). Mr. Lian is 43 years old
and is currently Vice President of InterCapital. Mr. Page is 51 years old and
is currently Senior Vice President of InterCapital. Other than Messrs.
Giambrone and McAlinden, 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 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 Dean Witter Funds, comprised of
portfolios. As of April 30, 1998, the Dean Witter Funds had total net
assets of approximately $ billion and more than million shareholders.
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, MSDW.
These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "Management Trustees") are affiliated with InterCapital. Four
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.
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 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 and reviewing the adequacy
of the Fund's system of internal controls.
Finally, the Board of each Fund has formed a Derivatives Committee to
approve parameters for and monitor the activities of the Fund with respect to
derivative investments, if any, made by the Fund.
For the fiscal year ended August 31, 1997, the Board of Trustees of the
Trust held 3 meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held 2, 9 and
3 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.
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
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<PAGE>
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 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 March 31, 1998,
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 $ 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 $800 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). If a Board
meeting and a Committee meeting, or more than one Committee meeting, take
place on a single day, the Trustees are paid a single meeting fee by each
Trust. 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 August 31, 1997.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
Michael Bozic .............. $1,650
Edwin J. Garn .............. 1,850
John R. Haire .............. 3,800
Dr. Manuel H. Johnson....... 1,800
Michael E. Nugent .......... 1,850
John L. Schroeder........... 1,850
</TABLE>
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<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1997 for
services to the 84 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, 1997. 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. Mr.
Hedien's term as Director or Trustee of each Dean Witter Fund commenced on
September 1, 1997.
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 84 AND AUDIT 84 DEAN WITTER
NAME OF OF 84 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 ........ $133,602 -- -- -- $133,602
Edwin J. Garn ........ 149,702 -- -- -- 149,702
John R. Haire ........ 149,702 $73,725 $157,463 $25,350 406,240
Wayne E. Hedien ...... 39,010 -- -- -- 39,010
Dr. Manuel H.
Johnson.............. 145,702 71,125 -- -- 216,827
Michael E. Nugent ... 149,702 73,725 -- -- 223,427
John L. Schroeder .... 149,702 73,725 -- -- 223,427
</TABLE>
As of the date of this Proxy Statement, 57 of the Dean Witter Funds, not
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.
8
<PAGE>
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the 57 Dean Witter Funds (not including the
Trust) for the year ended December 31, 1997, and the estimated retirement
benefits for the Trust's Independent Trustees, to commence upon their
retirement from the 57 Dean Witter Funds as of December 31, 1997.
RETIREMENT BENEFITS FROM ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
ESTIMATED RETIREMENT
CREDITED BENEFITS ESTIMATED ANNUAL
YEARS ESTIMATED ACCRUED AS BENEFITS UPON
OF SERVICE AT PERCENTAGE OF EXPENSES BY RETIREMENT FROM
RETIREMENT ELIGIBLE ALL ADOPTING ALL ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS FUNDS(2)
- --------------------------- --------------- --------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Michael Bozic .............. 10 50.0% $ 20,499 $ 47,025
Edwin J. Garn .............. 10 50.0 30,878 47,025
John R. Haire .............. 10 50.0 (19,823)(3) 127,897
Wayne E. Hedien ............ 9 42.5 0 39,971
Dr. Manuel H. Johnson ..... 10 50.0 12,832 47,025
Michael E. Nugent .......... 10 50.0 22,546 47,025
John L. Schroeder .......... 8 41.7 39,350 39,504
</TABLE>
- ------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
on page 9.
(3) This number reflects the effect of the extension of Mr. Haire's term as
Director or Trustee until June 1, 1998.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
THE INVESTMENT ADVISER AND THE INVESTMENT ADVISORY AGREEMENT
InterCapital serves as the investment adviser for the Trust pursuant to an
investment advisory agreement entered into between the Trust and InterCapital
dated May 31, 1997 ("Advisory Agreement") which took effect upon the
consummation of the merger of Dean Witter, Discover & Co. with Morgan Stanley
Group Inc. The Agreement was approved by the Board of Trustees of the Trust
on February 21, 1997 and by the Trust's Shareholders at an Annual Meeting of
Shareholders held on May 21, 1997. The Advisory Agreement supersedes an
earlier investment advisory agreement between the Trust and InterCapital and
is identical in all material respects, including fees payable by the Trust
thereunder, to the earlier investment advisory agreement, except for the
dates of effectiveness and termination.
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.
9
<PAGE>
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 and accrued weekly and
payable monthly and which is determined by applying the following annual
rates to the Trust's average weekly net assets: 0.40% of the portion of the
average weekly net assets not exceeding $250 million and 0.30% of the portion
of the average weekly net assets exceeding $250 million. Pursuant to the
Advisory Agreement, the Trust accrued to the Investment Adviser total
compensation of $250,068 during the fiscal year ended August 31, 1997. The
net assets of the Trust totalled $62,969,986 at August 31, 1997.
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 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 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 will continue in effect for an initial term
expiring April 30, 1999 and 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 1940 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 1940 Act) at a meeting called for the purpose of voting on
such approval.
The Advisory Agreement also provides that it may be terminated at any time
by the Investment Adviser, the Trustees 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 MSDW, a preeminent global financial services firm
that maintains leading market positions in each of its three primary
businesses--securities, asset management and credit services.
10
<PAGE>
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 and accrued weekly and
payable monthly and which is determined by applying the annual rate of 0.25%
to the portion of the Trust's average weekly net assets not exceeding $250
million; 0.20% to the portion of the Trust's average weekly net assets
exceeding $250 million but not exceeding $500 million; 0.167% to the portion
of the Trust's average weekly net assets exceeding $500 million but not
exceeding $750 million; and 0.133% of the portion of the Trust's average
weekly net assets exceeding $750 million. For the fiscal year ended August
31, 1997, the Trust accrued to DWSC, pursuant to the Administration
Agreement, total compensation of $156,293.
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 MSDW and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Morgan Stanley
Dean Witter Individual Asset Management Group, and Director of DWR,
Distributors, InterCapital, DWSC and MSDW Trust; James F. Higgins, President
and Chief Operating Officer of Dean Witter Financial and Director of DWR,
Distributors, InterCapital, DWSC and MSDW Trust; 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 MSDW
Trust; Christine A. Edwards, Executive Vice President, Secretary and Chief
Legal Officer of MSDW, 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 Strategic and
Administrative Officer of MSDW and Executive Vice President, Chief Financial
Officer and Director of DWR, Distributors, InterCapital and DWSC.
The business address of Mr. Purcell, Ms. Edwards and Mr. Schneider is 1585
Broadway, New York, New York 10036; the business address of the Executive
Officer and other Directors is 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
April 30, 1998.
MSDW has offices at 1585 Broadway, New York, New York 10036. There are
various lawsuits pending against MSDW 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, 1997, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Investment Adviser,
transfer agency fees of $10,475.
AFFILIATED BROKER
Because DWR, Morgan Stanley & Co. Incorporated and InterCapital are under
the common control of MSDW, DWR and Morgan Stanley & Co. Incorporated are
affiliated brokers of the Trust. For the fiscal year ended August 31, 1997,
the Trust paid no brokerage commissions to DWR. During the period June 1
through August 31, 1997, the Trust did not pay any brokerage commissions to
Morgan Stanley & Co. Incorporated which broker-dealer became an affiliate of
InterCapital on May 31, 1997 upon consummation of the merger of Dean Witter
Discover & Co. with Morgan Stanley Group Inc.
11
<PAGE>
(2) 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,
1998. Its selection is being submitted for ratification or rejection by
Shareholders at the Meeting. 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
Meeting and will be available 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 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.
(3) 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
The Trust has been informed by Edwin S. Mullett, 1420 Fern Court, Vero
Beach, Florida 32963-4009, a shareholder of record who owned shares at
April 30, 1998 and Carol W. Mullett, a shareholder of record residing at the
same address who owned shares at April 30, 1998 (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 that each
Trustee, within 30 days of election, become a shareholder in the Trust.
The Proponents have requested that the following statement be included in
support of their proposal:
We believe that the Trustees could better understand and represent
the interests of the shareholders if they were shareholders
themselves. Yet, according to the last proxy, not one of our Trustees
owns a single share of our Trust. In fact, no Trustee has EVER been a
shareholder of our Trust.
You can read below a litany of excuses and explanations seeking to
convince you that somehow we are better off because the Trustees
choose not to join us as shareholders. You can also read about a
policy that is supposed to meet your "concerns" and "expectations" by
requiring the Trustees to invest in OTHER companies. You will be
surprised to learn that they can meet this requirement by investing in
money market funds. For amusement you may want to count the number of
times the Trustees urge you to vote AGAINST (always in capital
letters) our proposal. Then you may ask yourself why the Trustees are
so determined to avoid joining us as shareholders. After all, they
could meet this obligation by investing less than $10, although one
would hope for a somewhat greater commitment. We urge you to support
this proposal and encourage the Trustees to become shareholders in OUR
Trust.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE
SHAREHOLDER PROPOSAL.
RECOMMENDATION OF THE BOARD OF TRUSTEES
The Proponents have twice requested that a similar proposal be included in
the proxy statement relating to the two previous annual meetings. Each
proposal was included and failed to obtain sufficient votes to be
12
<PAGE>
adopted by shareholders. The Trustees determined to oppose the proposal each
year. The Trustees considered whether a share ownership requirement for
Trustees such as that proposed by the Proponents was in the best interests of
the Trust and its shareholders and they concluded that it was not. The
Trustees continue to adhere to this view. The reasons for the Trustees'
decision are, once again, reiterated below.
The Share Ownership Policy
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 complex, including the Trust (and, if applicable, in the
TCW/DW Funds), on whose boards the Trustee serves. Thus, the Proponent
misstates the policy since it does include the Trust. 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. Any
future Trustee will be given a one year period within which to comply with
the foregoing policy. As of the date of this proxy statement, each Trustee is
in compliance with the policy. As of April 30, 1998, the total value of
shares of Dean Witter Funds (and, if applicable, the TCW/DW Funds) owned by
the Trustees and/or their spouses was approximately $ million.
Reasons for Opposing the Shareholder Proposal
The share ownership policy requires the Trustees make a significant
investment in the Funds in the Dean Witter complex, which includes the Trust,
while allowing the Trustees to select the specific Funds that meet their
individual investment needs. As they stated in last year's proxy statement,
the Trustees believe it is not necessary to own shares of this particular
Trust 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, because the Trust's objectives and policies
may not be appropriate for a Trustee's individual financial circumstances,
the Trust could be inhibited in its ability to attract Trustees if the
available pool is limited to those whose personal financial needs are met by
the Trust's objectives and policies.
The Trustees continue to believe that any policy requiring the Trustees to
own shares of a specific Fund for which they serve as Trustees, without
regard to their own respective investment objectives, could 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 Fund's service providers.
For the reasons stated above and in light of the fact that they have
adopted the share ownership policy described 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 Meeting is required for the approval
of the shareholder proposal.
13
<PAGE>
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 have been received by the
date of the Meeting.
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 , 1998 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 AUGUST
31, 1997 AND THE 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 MORGAN STANLEY DEAN WITTER TRUST
FSB, HARBORSIDE FINANCIAL CENTER, PLAZA TWO, JERSEY CITY, NEW JERSEY 07311
(TELEPHONE 1-800-869-NEWS) (TOLL-FREE).
INTEREST OF CERTAIN PERSONS
MSDW, 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 MSDW.
Such companies and persons may thus be deemed to derive benefits from the
approvals by Shareholders of such proposals.
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
14
<PAGE>
APPENDIX
InterCapital serves as investment adviser to the Trust and as investment
manager or investment adviser to the other investment companies listed below
which have similar investment objectives to those of the Trust. Set forth
below is a chart showing the net assets of each such investment company as of
April 30, 1998 and the investment management or advisory fee rate(s)
applicable to such investment company.
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 4/30/98 OF NET ASSETS
------------------------- ----------------------------------
<S> <C> <C>
1. DEAN WITTER CALIFORNIA TAX-FREE INCOME
FUND*................................... $ (Class A) 0.55% on assets up to
(Class B) $500 million, scaled down at
(Class C) various asset levels to 0.45% on
(Class D) 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 NEW YORK TAX-FREE INCOME
FUND*..................................... $ (Class A) 0.55% on assets up to
(Class B) $500 million and 0.525% on assets
(Class C) over $500 million
(Class D)
5. DEAN WITTER TAX-EXEMPT SECURITIES TRUST* .
$ (Class A) 0.50% on assets up to
(Class B) $500 million, scaled down at
(Class C) various asset levels to 0.325% on
(Class D) assets over $1.25 billion
6. INTERCAPITAL CALIFORNIA INSURED MUNICIPAL
INCOME TRUST**............................ $ 0.35%
7. INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL
SECURITIES**.............................. $ 0.35%
8. INTERCAPITAL INSURED CALIFORNIA MUNICIPAL
SECURITIES**.............................. $ 0.35%
9. INTERCAPITAL INSURED MUNICIPAL BOND
TRUST**................................... $ 0.35%
10. INTERCAPITAL INSURED MUNICIPAL INCOME
TRUST**................................... $ 0.35%
11. INTERCAPITAL INSURED MUNICIPAL
SECURITIES**.............................. $ 0.35%
12. INTERCAPITAL INSURED MUNICIPAL TRUST** ... $ 0.35%
13. INTERCAPITAL NEW YORK QUALITY MUNICIPAL
SECURITIES**.............................. $ 0.35%
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 4/30/98 OF NET ASSETS
---------------------------- ----------------------------------
<S> <C> <C>
14. INTERCAPITAL QUALITY MUNICIPAL INCOME
TRUST**................................... $ 0.35%
15. INTERCAPITAL QUALITY MUNICIPAL INVESTMENT
TRUST**................................... $ 0.35%
16. INTERCAPITAL QUALITY MUNICIPAL
SECURITIES**.............................. $ 0.35%
17. MUNICIPAL INCOME TRUST**.................. $ 0.35% on assets up to
$250 million and 0.25% on assets
over $250 million
18. MUNICIPAL INCOME TRUST II**............... $ 0.40% on assets up to
$250 million and 0.30% on assets
over $250 million
19. MUNICIPAL INCOME TRUST III**.............. 0.40% on assets up to
$250 million and 0.30% on assets
$ over $250 million
20. MUNICIPAL INCOME OPPORTUNITIES TRUST** ... $ 0.50%
21. MUNICIPAL INCOME OPPORTUNITIES
TRUST II**................................ $ 0.50%
22. MUNICIPAL INCOME OPPORTUNITIES
TRUST III**............................... $ 0.50%
23. MUNICIPAL PREMIUM INCOME TRUST**.......... $ 0.40%
24. DEAN WITTER SELECT MUNICIPAL REINVESTMENT
FUND***................................... $ 0.50%
25. DEAN WITTER HAWAII MUNICIPAL TRUST* ..... $ 0.35% (1)
</TABLE>
- ------------
* 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, through December 31, 1998, to continue 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.
A-2
<PAGE>
MUNICIPAL INCOME TRUST III
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 Trust III on June 23, 1998, at 11:00 a.m., New York City
time, and at any adjournment thereof, on the proposals set forth in the
Notice of Meeting dated May , 1998 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 PROPOSAL 2 AND "AGAINST" PROPOSAL 3 SET FORTH ON
THE REVERSE HEREOF AND AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
1. Election of two (2) Trustees: FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
Michael Bozic, Charles 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.
2. Ratification of appointment of Price FOR AGAINST ABSTAIN
Waterhouse LLP as independent [ ] [ ] [ ]
accountants.
3. Shareholder Proposal. (NOTE: THE FOR AGAINST ABSTAIN
TRUSTEES RECOMMEND A VOTE [ ] [ ] [ ]
AGAINST THIS PROPOSAL)
Date ____________
Please make sure to sign and date this Proxy using black or blue ink.
---------------------------------------------------
Shareholder sign in the box above
PRX 00129
PLEASE DETACH AT PERFORATION
---------------------------------------------------
Co-Owner (if any) sign in the box above
MUNICIPAL INCOME TRUST III
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.
