<PAGE>
Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities and 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
Morgan Stanley Dean Witter Municipal Income Trust III
------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Lou Anne D. McInnis
------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)
(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
Set forth the amount on which the filing fee is calculated and state
how it was determined.
4) Proposed maximum aggregate value of transaction:
5) Fee previously paid:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a) (2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PRELIMINARY FILING
MORGAN STANLEY DEAN WITTER MUNICIPAL INCOME TRUST III
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 22, 1999
The Annual Meeting of Shareholders (the "Meeting") of MORGAN STANLEY DEAN
WITTER MUNICIPAL INCOME TRUST III (the "Trust"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts, will be
held in Conference Room A, Forty-Fourth Floor, 2 World Trade Center, New York,
New York 10048, on June 22, 1999, at 11:00 a.m., New York City time, for the
following purposes:
1. To elect three (3) Trustees to serve until the year 2002 Annual
Meeting or until their successors shall have been elected and qualified;
2. To ratify or reject the selection of PricewaterhouseCoopers LLP as
the Trust's independent accountants for the fiscal year ending August 31,
1999;
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 22, 1999 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. Alternatively, if you are eligible to vote telephonically by touchtone
telephone or electronically on the Internet (as discussed in the enclosed proxy
statement) you may do so in lieu of attending the meeting in person.
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 , 1999
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. CERTAIN SHAREHOLDERS WILL BE ABLE TO VOTE TELEPHONICALLY BY
TOUCHTONE TELEPHONE OR ELECTRONICALLY ON THE INTERNET BY FOLLOWING
INSTRUCTIONS CONTAINED ON THEIR PROXY CARDS OR ON THE ENCLOSED VOTING
INFORMATION CARD.
- ------------------------------------------------------------------------------
<PAGE>
MORGAN STANLEY DEAN WITTER MUNICIPAL INCOME TRUST III
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
JUNE 22, 1999
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of MORGAN STANLEY DEAN WITTER MUNICIPAL
INCOME TRUST III (the "Trust"), for use at the Annual Meeting of Shareholders
of the Trust to be held on June 22, 1999 (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. 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 (whether by mail or, as discussed
below, by touchtone telephone or the Internet) (if returned and received in
time to be voted), or attendance and voting at the Meeting. Attendance at the
Meeting will not in and of itself revoke a proxy.
Holders of shares of the Trust ("Shareholders") as of the close of
business on April 22, 1999, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting (the "Record
Date"), are entitled to one vote for each share held and a fractional vote for
a fractional share. On the Record Date 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 Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"
or the "Investment Advisor"), (formerly named Dean Witter InterCapital Inc.),
Morgan Stanley Dean Witter Trust FSB ("MSDW Trust"), Morgan Stanley Dean Witter
Services Company Inc. ("MSDW Services") 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. The first mailing of
this Proxy Statement is expected to be made on or about May , 1999.
Shareholders whose shares are registered with MSDW Trust will be able to
vote their shares by touchtone telephone or by Internet by following the
instructions on the proxy card or on the Voting Information Card accompanying
this Proxy Statement. To vote by touchtone telephone, shareholders can call the
toll-free number 1-800-690-6903. To vote by Internet, Shareholders can access
the websites www.msdwt.com or www.proxyvote.com. Telephonic and Internet voting
with MSDW Trust presently are not available to Shareholders whose shares are
held in street name.
2
<PAGE>
In certain instances, 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 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 in this manner 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 or by touchtone telephone or the
Internet as set forth above. The last proxy vote received in time to be voted,
whether by proxy card, touchtone telephone or Internet, will be the vote that
is counted and will revoke all previous votes by the Shareholder. 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 eight. There are presently eight
Trustees, three of whom ( Wayne E. Hedien, Manuel H. Johnson, and John L.
Schroeder) are standing for election at this Meeting to serve until the year
2002 Annual Meeting, in accordance with the Trust's Declaration of Trust, as
amended.
Six of the current eight Trustees (Michael Bozic, Edwin J. Garn, 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 MSDW Advisors 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: Wayne E. Hedien,
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 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 previously has 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
3
<PAGE>
Fiumefreddo; Class II--Messrs. Hedien, Johnson and Schroeder; and Class
III--Messrs. Garn, 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 the above, the Trustees in Class II are
standing for election at this Meeting and, if elected, will serve until the
year 2002 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 22, 1999 (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 85 investment companies, including the Trust, for which MSDW Advisors
serves as investment manager or investment advisor (referred to herein as the
"Morgan Stanley Dean Witter Funds") and the 11 investment companies for which
MSDW Advisors' wholly-owned subsidiary, MSDW Services, serves as manager and
TCW Funds Management, Inc. serves as investment advisor (referred to herein as
the "TCW/DW Funds").
The nominees for Trustee to be elected at this Meeting are:
WAYNE E. HEDIEN, Trustee since September 1997; age 65; Retired; Director
or Trustee of the Morgan Stanley Dean Witter Funds and Discover Brokerage Index
Series; 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.
MANUEL H. JOHNSON, Trustee since July 1991; age 50; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Co-Chairman and a founder
of the Group of Seven Council (G7C), an international economic commission;
Chairman of the Audit Committee and Director or Trustee of the Morgan Stanley
Dean Witter Funds, the TCW/DW Funds and Discover Brokerage Index Series;
Director of NASDAQ (since June 1995); Director of Greenwich Capital Markets,
Inc. (broker-dealer) and NVR, Inc. (home construction); Chairman and Trustee of
the Financial Accounting Foundation (oversight organization of 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.
JOHN L. SCHROEDER, Trustee since April 1994; age 68; Retired; Chairman of
the Derivatives Committee and Director or Trustee of the Morgan Stanley Dean
Witter Funds, the TCW/DW Funds and Discover Brokerage Index Series; Director of
Citizens Utilities Company; formerly Executive Vice President and Chief
Investment Officer of the Home Insurance Company (August 1991-September 1995).
The Trustees who are not standing for re-election at this Meeting are:
MICHAEL BOZIC, Trustee since April 1994; age 58; Vice Chairman of Kmart
Corporation (since December 1998); Director or Trustee of the Morgan Stanley
Dean Witter Funds and Discover Brokerage Index Series; formerly Chairman and
Chief Executive Officer of Levitz Furniture Corporation (November 1995-November
1998) and 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.
4
<PAGE>
CHARLES A. FIUMEFREDDO, Trustee since July 1991; age 65, Chairman,
Director or Trustee and Chief Executive Officer of the Morgan Stanley Dean
Witter Funds, the TCW/DW Funds and Discover Brokerage Index Series; formerly
Chairman, Chief Executive Officer and Director of MSDW Advisors, MSDW Services
and Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"),
Executive Vice President and Director of DWR, Chairman and Director of MSDW
Trust and Director and/or officer of various Morgan Stanley Dean Witter & Co.
("MSDW") subsidiaries (until June, 1998).
EDWIN JACOB (JAKE) GARN, Trustee since January 1993; age 66; Director or
Trustee of the Morgan Stanley Dean Witter Funds and Discover Brokerage Index
Series; 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; Director of Franklin Covey (time
management systems), BMW Bank of North America Inc., United Space Alliance
(joint venture between Lockheed Martin and the Boeing Company) and Nuskin Asia
Pacific (multilevel marketing); member of the board of various civic and
charitable organizations.
MICHAEL E. NUGENT, Trustee since July, 1991; age 62; General Partner,
Triumph Capital, L.P., a private investment partnership; Chairman of the
Insurance Committee and Director or Trustee of the Morgan Stanley Dean Witter
Funds, the TCW/DW Funds and Discover Brokerage Index Series; 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 55; Chairman of the Board
of Directors and Chief Executive Officer of MSDW, DWR and Novus Credit Services
Inc.; Director or Trustee of the Morgan Stanley Dean Witter Funds; Director of
MSDW Distributors; Trustee of Discover Brokerage Index Series; Director and/or
officer of various MSDW subsidiaries.
The executive officers of the Trust are: Mitchell M. Merin, President;
Barry Fink, Vice President, Secretary and General Counsel; Ronald E. Robison,
Vice President; Joseph J. McAlinden, Vice President; Robert S. Giambrone, Vice
President; James F. Willison, Vice President; Joseph R. Arcieri, Vice
President; Gerard J. Lian, Vice President; Katherine H. Stromberg, Vice
President and Thomas F. Caloia, Treasurer. In addition, Frank Bruttomesso,
Marilyn K. Cranney, Todd Lebo, LouAnne D. McInnis, Carsten Otto and Ruth Rossi
serve as Assistant Secretaries of the Trust.
Mr. Merin is 45 years old and is currently President and Chief Operating
Officer of Asset Management of MSDW (since December, 1998), President, Chief
Executive Officer and Director of MSDW Advisors and MSDW Services, Chairman,
Chief Executive Officer and Director of the MSDW Distributors and MSDW Trust,
Executive Vice President and Director of DWR and Director of various other MSDW
subsidiaries. Mr. Fink is 44 years old and is currently Senior Vice President
(since March 1997), Secretary and General Counsel (since February 1997) and
Director (since July, 1998) of MSDW Advisors and MSDW Services and (since
August 1996) Assistant Secretary of DWR; he is also Senior Vice President
(since March 1997), Assistant Secretary and Assistant General Counsel of MSDW
Distributors (since February 1997). He was previously Vice President, Assistant
Secretary and Assistant General Counsel of MSDW Advisors and MSDW Services. Mr.
Robison is 60 years old and is currently Executive Vice President and Chief
Administrative Officer (since September 1998) and Director (since February,
1999) of MSDW Advisors and MSDW Services; prior thereto he was a Managing
Director of the TCW Group, Inc. Mr. McAlinden is 56 years old and is currently
Executive Vice President and Chief Investment Officer of MSDW Advisors and MSDW
Services (since April 1996) and Director of MSDW Trust (since April 1996). He
was previously Senior Vice President of MSDW Advisors (June 1995-April 1996)
and prior thereto was a Managing Director at Dillon Read. Mr. Giambrone is 44
years old and is currently Senior Vice President of MSDW Advisors, MSDW
Services, MSDW Distributors and
5
<PAGE>
MSDW Trust (since August 1995) and Director of MSDW Trust (since April 1996).
He was formerly a partner of KPMG Peat Marwick, LLP. Mr. Caloia is 53 years old
and is currently First Vice President and Assistant Treasurer of MSDW Advisors
and MSDW Services. Mr. Willison is 55 years old and is currently Senior Vice
President of MSDW Advisors. Mr. Arcieri is 50 years old and is currently Vice
President of MSDW Advisors. Mr. Lian is 44 years old and is currently Vice
President of MSDW Advisors. Ms. Stromberg is 50 years old and is currently Vice
President of MSDW Advisors. Other than Messrs. Robison, McAlinden and
Giambrone, each of the above officers has been an employee of MSDW Advisors or
its affiliates for over five years.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees currently consists of eight (8) trustees. These same
individuals also serve as directors or trustees for all of the Morgan Stanley
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 85 Morgan Stanley Dean
Witter Funds, comprised of 120 portfolios. As of March 31, 1999, the Morgan
Stanley Dean Witter Funds had total net assets of approximately $ billion
and more than six million shareholders.
Six Trustees (75% of the total number) have no affiliation or business
connection with MSDW Advisors or any of its affiliated persons and do not own
any stock or other securities issued by MSDW Advisors' parent company, MSDW.
These are the "disinterested" or "independent" Trustees. The other two Trustees
(the "Management Trustees") are affiliated with MSDW Advisors. Three of the six
Independent Trustees are also Independent Trustees of the TCW/DW Funds.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The Morgan Stanley 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.
Two of them also serve as members of the Derivatives Committee and the
Insurance Committee. The Committees hold some meetings at MSDW Advisors'
offices and some outside MSDW Advisors. Management Trustees or officers do not
attend these meetings unless they are invited for purposes of furnishing
information or making a report. The Trusts 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 Trust'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 Trust's system of internal
controls.
The Board of the Trust has formed a Derivatives Committee to approve
parameters for and monitor the activities of the Trust with respect to
derivative investments, if any, made by the Trust.
Finally, the Board of each has formed an Insurance Committee to review and
monitor the insurance coverage maintained by the Trust.
For the fiscal year ended August 31, 1998, the Board of Trustees of the
Trust held 6 meetings, and the Audit Committee, the Independent Trustees and
the Derivatives Committee of the Trust held 2, 11 and 2 meetings, respectively.
No Trustee attended fewer than 75% of the meetings of the Board of Trustees,
the Audit Committee, the Independent Trustees or the Derivatives Committee held
while he served in such positions.
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<PAGE>
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL MORGAN
STANLEY DEAN WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Morgan Stanley 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 of the caliber, experience
and business acumen of the individuals who serve as Independent Trustees of the
Morgan Stanley 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 Morgan Stanley 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, 1999, the total value of the
investments by the Trustees and/or their spouses in shares of the Morgan
Stanley 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 additional annual fee of $750 and the Chairmen of the
Derivatives and Insurance Committees additional annual fees of $500). 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 the 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
Advisor or an affiliated company receive no compensation or expense
reimbursement from the Trust for their services as Trustee.
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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, 1998.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- ------------------------------- ---------------
<S> <C>
Michael Bozic ................. $1,600
Edwin J. Garn ................. 1,650
Wayne E. Hedien ............... 1,682
Dr. Manuel H. Johnson ......... 1,600
Michael E. Nugent ............. 1,650
John L. Schroeder ............. 1,650
</TABLE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1998 for services
to the 85 Morgan Stanley Dean Witter Funds and, in the case of Messrs. Johnson,
Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at December
31, 1998. With respect to Messrs. Johnson, Nugent and Schroeder, the TCW/DW
Funds are included solely because of a limited exchange privilege between those
Funds and five Morgan Stanley Dean Witter Money Market Funds. No compensation
was paid to the Trust's Independent Trustees by Discover Brokerage Index Series
for the calendar year ended December 31, 1998.
CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE TOTAL CASH
AS DIRECTOR OR COMPENSATION
TRUSTEE AND FOR SERVICE AS FOR SERVICES TO
COMMITTEE MEMBER TRUSTEE AND 85 MORGAN STANLEY
OF 85 MORGAN STANLEY COMMITTEE MEMBER DEAN WITTER
NAME OF DEAN WITTER OF 11 TCW/DW FUNDS AND 11
INDEPENDENT TRUSTEE FUNDS FUNDS TCW/DW FUNDS
- --------------------------- ---------------------- ------------------ ------------------
<S> <C> <C> <C>
Michael Bozic ............. $120,150 -- $120,150
Edwin J. Garn ............. 132,450 -- 132,450
Wayne E. Hedien ........... 132,350 -- 132,350
Manuel H. Johnson ......... 128,400 $62,331 190,731
Michael E. Nugent ......... 132,450 62,131 194,581
John L. Schroeder ......... 132,450 64,731 197,181
</TABLE>
As of the date of this Proxy Statement, 55 of the Morgan Stanley 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 Morgan Stanley 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 30.22% of his or her Eligible Compensation plus 0.5036667%
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 60.44% after ten years
8
<PAGE>
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.
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the 55 Morgan Stanley Dean Witter Funds (not
including the Trust) for the year ended December 31, 1998, and the estimated
retirement benefits for the Trust's Independent Trustees, to commence upon
their retirement from the 55 Morgan Stanley Dean Witter Funds as of December
31, 1998.
RETIREMENT BENEFITS FROM THE MORGAN STANLEY DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
---------------------------------
ESTIMATED RETIREMENT
CREDITED BENEFITS
YEARS ESTIMATED ACCRUED AS ESTIMATED ANNUAL
OF SERVICE AT PERCENTAGE OF EXPENSES BY BENEFITS UPON
RETIREMENT ELIGIBLE ALL ADOPTING RETIREMENT FROM
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS ALL ADOPTING FUNS(2)
- ------------------------------- --------------- --------------- -------------- ---------------------
<S> <C> <C> <C> <C>
Michael Bozic ................. 10 60.44% $22,377 $52,250
Edwin J. Garn ................. 10 60.44 35,225 52,250
Wayne E. Hedien ............... 9 51.37 41,979 44,413
Dr. Manuel H. Johnson ......... 10 60.44 14,047 52,250
Michael E. Nugent ............. 10 60.44 25,336 52,250
John L. Schroeder ............. 8 50.37 45,117 44,343
</TABLE>
- --------------------
(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.
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
above.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
THE INVESTMENT ADVISOR AND THE INVESTMENT ADVISORY AGREEMENT
MSDW Advisors serves as the investment advisor for the Trust pursuant to
an investment advisory agreement entered into between the Trust and MSDW
Advisors 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 MSDW Advisors 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.
9
<PAGE>
THE ADVISORY AGREEMENT
The Advisory Agreement provides that MSDW Advisors shall continuously
manage the assets of the Trust in a manner consistent with the Trust's
investment objectives. MSDW Advisors 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, MSDW Advisors pays the compensation of all personnel, including
officers of the Trust, who are its employees. MSDW Advisors 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 MSDW Advisors
assumes under the Advisory Agreement, the Trust pays MSDW Advisors 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 Advisor total compensation of $254,169 during the fiscal year
ended August 31, 1998. The net assets of the Trust totalled $64,051,424 at
August 31, 1998.
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 Advisor, 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 Advisor 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 Advisor);
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, 1999 and and
provides that, after the initial period of effectiveness, it will continue in
effect from year to year thereafter, provided such continuance is approved at
least annually by vote of a majority, as defined in the 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
10
<PAGE>
in the 1940 Act) at a meeting called for the purpose of voting on such
approval. The Advisory Agreement's continuation until April 30, 2000 was
approved by the Trustees, including a majority of the Independent Trustees, at
a meeting of the Trustees held on April 22, 1999, 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 Advisor, 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 ADVISOR
Morgan Stanley Dean Witter Advisors Inc. is the Trust's investment
advisor. MSDW Advisors maintains its offices at Two World Trade Center, New
York, New York 10048. MSDW Advisors, which was incorporated in July 1992, under
the name Dean Witter InterCapital Inc., changed its name to Morgan Stanley Dean
Witter Advisors on June 22, 1998. MSDW Advisors 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.
MSDW Advisors' wholly-owned subsidiary, MSDW Services, 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, 1998, the Trust
accrued to MSDW Services, pursuant to the Administration Agreement, total
compensation of $158,855.
The Principal Executive Officer and Directors of MSDW Advisors are
Mitchell M. Merin, President and Chief Executive Officer, Ronald E. Robison,
Executive Vice President and Chief Administrative Officer and Barry Fink,
Senior Vice President, Secretary and General Counsel. The principal occupations
of Messrs. Merin, Robison and Fink are described under the section "Election of
Trustees." The business address of the Executive Officer and other Directors is
Two World Trade Center, New York, New York 10048.
MSDW Advisors and its wholly-owned subsidiary, MSDW Services, 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
MSDW Advisors 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 22, 1999.
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, 1998, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Investment Advisor,
transfer agency fees of $13,672.
AFFILIATED BROKER
Because DWR, Morgan Stanley & Co. Incorporated and MSDW Advisors 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, 1998, the
Trust paid no brokerage commissions to DWR or Morgan Stanley & Co.
Incorporated.
11
<PAGE>
(2) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Trustees have unanimously selected the firm of PricewaterhouseCoopers
LLP as the Trust's independent accountants for the fiscal year ending August
31, 1999. Its selection is being submitted for ratification or rejection by
Shareholders at the Meeting. PricewaterhouseCoopers 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 PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP as the independent accountants for
the Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS 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 approximately
shares at April 22, 1999 and Carol W. Mullett, a shareholder of record
residing at the same address who owned approximately shares at April
22, 1999 (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, will become a shareholder of the
Trust.
The Proponents have requested that the following statement be included
in support of their proposal:
We believe it's obvious that the Trustees could better understand and
represent our interests if they were shareholders themselves. You would
think that they would want to share the risks and rewards of our
investment. But not one of our Trustees owns even 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 seeking to convince you that you
are somehow better off because the Trustees WILL NOT invest in our Trust.
Let's look at their excuses: we call them the THREE LITTLE FIGS.
Fig Leaf #1 -- "The Trustees have adopted a policy" which requires
"each Trustee . . . to invest at least $25,000 in any of the Funds". But
they refuse to invest less than $10 in our Trust. And, believe-it-or-not,
the Trustees can satisfy their requirement with money market funds. By
the way, they adopted this policy only after our proposals. This is the
scantiest of the fig leaves.
Fig Leaf #2 -- "The Trust's objectives and policies may not be
appropriate for a Trustee". I guess this means that what's good for us
isn't good for them. Isn't it strange that not one of the Trustees shares
our interest in tax-free income? And, remember, they can meet our
proposed requirement by investing less than $10. Aw, come on guys.
Fig Leaf #3 -- "Any policy which requires the Trustees to own shares of
a specific Fund . . . could logically be extended to all Funds". This
excuse is pure smoke since our proposal applies only to
12
<PAGE>
Municipal Income Trust III and has no bearing on any other company. Will
logic oblige the Trustees to invest in all the Funds if our proposal
passes? The Trustees refuse to answer this question. Impaled on a fig
leaf?
We ask you to support our proposal and encourage 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 have three times requested that a similar proposal be
included in the proxy statement relating to the three previous annual meetings.
Each proposal was included and failed to obtain sufficient votes to be 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 Morgan Stanley 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 March 31, 1999, the total value of shares of
Morgan Stanley 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 Morgan Stanley 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 the three years'
proxy statements, 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 Morgan Stanley 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 Morgan
Stanley 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
13
<PAGE>
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.
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 January 3, 2000 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, 1998 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 NINA WESSEL 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, MSDW Advisors, DWR, MSDW Services 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
14
<PAGE>
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
15
<PAGE>
MSDW Advisors serves as investment advisor to the Trust and as investment
manager or investment advisor 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
22, 1999, 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 4/22/99 OF NET ASSETS
--------------- ---------------------------------
<S> <C> <C>
1. MORGAN STANLEY DEAN WITTER
CALIFORNIA TAX-FREE INCOME FUND* ...... $ 0.55% on assets up to $500
million, scaled down at
various asset levels to 0.45%
on assets over $1.25 billion
2. MORGAN STANLEY DEAN WITTER LIMITED
TERM MUNICIPAL TRUST* ................. 0.50%
3. MORGAN STANLEY DEAN WITTER
MULTI-STATE MUNICIPAL SERIES TRUST* ... 0.35%
4. MORGAN STANLEY DEAN WITTER
NEW YORK TAX-FREE INCOME FUND* ........ 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
5. MORGAN STANLEY DEAN WITTER
TAX-EXEMPT SECURITIES TRUST* .......... 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.325%
on assets over $1.25 billion
6. MORGAN STANLEY DEAN WITTER
CALIFORNIA INSURED MUNICIPAL INCOME
TRUST** ................................ 0.35%
7. MORGAN STANLEY DEAN WITTER
CALIFORNIA QUALITY MUNICIPAL
SECURITIES** .......................... 0.35%
8. MORGAN STANLEY DEAN WITTER INSURED
CALIFORNIA MUNICIPAL SECURITIES** ...... 0.35%
9. MORGAN STANLEY DEAN WITTER INSURED
MUNICIPAL BOND TRUST** ................ 0.35%
10. MORGAN STANLEY DEAN WITTER INSURED
MUNICIPAL INCOME TRUST** .............. 0.35%
11. MORGAN STANLEY DEAN WITTER INSURED
MUNICIPAL SECURITIES** ................ 0.35%
12. MORGAN STANLEY DEAN WITTER INSURED
MUNICIPAL TRUST** ..................... 0.35%
13. MORGAN STANLEY DEAN WITTER NEW
YORK QUALITY MUNICIPAL SECURITIES** ... 0.35%
14. MORGAN STANLEY DEAN WITTER QUALITY
MUNICIPAL INCOME TRUST** .............. 0.35%
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 4/22/99 OF NET ASSETS
--------------- ----------------------------------
<S> <C> <C>
15. MORGAN STANLEY DEAN WITTER QUALITY
MUNICIPAL INVESTMENT TRUST** .......... $ 0.35%
16. MORGAN STANLEY DEAN WITTER QUALITY
MUNICIPAL SECURITIES** ................ 0.35%
17. MORGAN STANLEY DEAN WITTER 0.35% on assets up to $250
MUNICIPAL INCOME TRUST** .............. million and 0.25% on assets
over $250 million
18. MORGAN STANLEY DEAN WITTER 0.40% on assets up to $250
MUNICIPAL INCOME TRUST II** ........... million and 0.30% on assets
over $250 million
19. MORGAN STANLEY DEAN WITTER 0.40% on assets up to $250
MUNICIPAL INCOME TRUST III** .......... million and 0.30% on assets
over $250 million
20. MORGAN STANLEY DEAN WITTER
MUNICIPAL INCOME OPPORTUNITIES 0.50%
TRUST** .................................
21. MORGAN STANLEY DEAN WITTER
MUNICIPAL INCOME OPPORTUNITIES 0.50%
TRUST II** ............................
22. MORGAN STANLEY DEAN WITTER
MUNICIPAL INCOME OPPORTUNITIES 0.50%
TRUST III** ...........................
23. MORGAN STANLEY DEAN WITTER 0.40%
MUNICIPAL PREMIUM INCOME TRUST** ......
24. MORGAN STANLEY DEAN WITTER SELECT
MUNICIPAL REINVESTMENT FUND*** ........ 0.50%
25. MORGAN STANLEY DEAN WITTER HAWAII
MUNICIPAL TRUST*(1) ................... 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) MSDW Advisors has undertaken, from January 1, 1999 through December 31,
1999, to continue to assume all operating expenses (except for any 12b-1
and brokerage fees) of Morgan Stanley Dean Witter Hawaii Municipal Trust
and to waive the compensation provided for in its investment management
agreement to the extent that such expenses exceed 0.55% of that company's
daily net assets.
A-2
<PAGE>
MORGAN STANLEY DEAN WITTER MUNICIPAL INCOME TRUST III
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, 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
Morgan Stanley Dean Witter Municipal Income Trust III on June 22, 1999, 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 , 1999 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>
- --------------------------------------------------------------------------------
PLEASE MARK VOTES AS
TO VOTE BY MAIL, PLEASE COMPLETE AND IN THE EXAMPLE USING [ X ]
RETURN THIS CARD BLACK OR BLUE INK
YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE
PHONE OR BY INTERNET
(SEE ENCLOSED VOTING INFORMATION CARD
FOR FURTHER INSTRUCTIONS)
TO VOTE A PROXY BY PHONE, call Toll-Free: 1-800-690-6903
TO VOTE A PROXY BY INTERNET, visit our Website(s): WWW.MSDWT.COM or
WWW.PROXYVOTE.COM
FOR ALL
FOR WITHHOLD EXCEPT
1. Election of three (3) Trustees: [ ] [ ] [ ]
01. Wayne E. Hedien 02. Manuel E. Johnson 03. John L. Schroeder
FOR AGAINST ABSTAIN
2. Ratification of appointment of [ ] [ ] [ ]
PricewaterhouseCoopers LLP
as independent accountants.
FOR AGAINST ABSTAIN
3. Shareholder Proposal. [ ] [ ] [ ]
(NOTE: THE TRUSTEES RECOMMEND A VOTE
AGAINST THIS PROPOSAL)
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.
Please make sure to sign and date this Proxy using black or blue ink.
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.
Date-----------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shareholder sign in the box above
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Co-Owner (if any) sign in the box above
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[arrow up] [arrow up] PLEASE FOLD AND DETACH AT [arrow up] [arrow up]
PERFORATION ALONG DOTTED LINES
MORGAN STANLEY DEAN WITTER
MUNICIPAL INCOME TRUST III
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IMPORTANT
USE ONE OF THESE THREE EASY WAYS TO VOTE YOUR PROXY
1. BY MAIL. PLEASE DATE, SIGN AND RETURN THE ABOVE PROXY CARD IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
2. BY INTERNET. HAVE YOUR PROXY CARD AT HAND. GO TO THE "VOTE YOUR PROXY HERE"
LINK ON THE WEBSITE WWW.MSDWT.COM OR WWW.PROXYVOTE.COM. ENTER YOUR
12-DIGIT CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-690-6903 ON A
TOUCH-TONE PHONE. ENTER YOUR 12-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
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PRX 00129
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MORGAN STANLEY DEAN WITTER FUNDS
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OFFERS TWO NEW WAYS TO VOTE YOUR PROXY
24 HOURS A DAY, 7 DAYS A WEEK
You can now vote your proxy in a matter of minutes with the ease and
convenience of the Internet or the telephone. You may still vote by mail.
But remember, if you are voting by Internet or telephone, do not mail the
proxy.
TO VOTE BY INTERNET:
1. Read the enclosed Proxy Statement and have your Proxy Card available.
2. Go to the "Proxy Voting" link on www.msdwt.com or to website
www.proxyvote.com.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Follow the simple instructions.
TO VOTE BY TELEPHONE:
1. Read the enclosed Proxy Statement and have your Proxy Card available.
2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Follow the simple recorded instructions.
Your Proxy Vote is Important!
Thank You for Submitting Your Proxy.
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