<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:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or Section 240.14a-12
Municipal Income Opportunities Trust III
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its 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 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>
MUNICIPAL INCOME OPPORTUNITIES TRUST III
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 20, 1998
The Annual Meeting of Shareholders of MUNICIPAL INCOME OPPORTUNITIES 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,
61st Floor, 2 World Trade Center, New York, New York 10048, on October 20, 1998
at 9:00 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 PricewaterhouseCoopers LLP as
the Trust's independent accountants for the fiscal year ending March 31,
1999; and
3. 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 July 31, 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
August 7, 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 OPPORTUNITIES TRUST III
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 20, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of MUNICIPAL INCOME OPPORTUNITIES TRUST
III (the "Trust"), for use at the Annual Meeting of Shareholders of the Trust
to be held on October 20, 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. A proxy may be revoked at any time prior to its
exercise by any of the following: written notice of revocation to the Secretary
of the Trust, execution and delivery of a later dated proxy to the Secretary of
the Trust (if returned and received in time to be voted), or attendance and
voting at the Meeting. Attendance at the Meeting will not in and of itself
revoke a proxy.
Holders of shares of the Trust ("Shareholders") as of the close of
business on July 31, 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
July 31, 1998 there were 10,573,906 shares of beneficial interest of the Trust
outstanding, all with $0.01 par value. No person was known to own as much as 5%
of the outstanding shares of the Trust on that date. The 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 August 7, 1998.
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 will be asked
for their social security number or other identifying information
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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, 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 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 of Trustees for election as Trustee 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 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 of Trustees previously determined that any nominee for election
as Trustee will 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. As a consequence of this method of election, the
replacement of a majority of the Board could be delayed for up to two years. In
accordance with the above, the Class I Trustees 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.
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
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<PAGE>
age, shares of the Trust owned, if any, as of July 31, 1998 (shown in
parentheses), positions with the Trust, and directorships or trusteeships in
companies which file periodic reports with the Securities and Exchange
Commission, including the 87 investment companies, including the Trust, for
which MSDW Advisors serves as investment manager or investment adviser
(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
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 Morgan Stanley 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 65; Chairman,
Director or Trustee, President and Chief Executive Officer of the Morgan
Stanley Dean Witter Funds; Chairman, Chief Executive Officer and Trustee of the
TCW/DW Funds; formerly Chairman, Chief Executive Officer and Director of MSDW
Advisors, Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors")
and MSDW Services, 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).
The Trustees who are not standing for reelection at this Meeting are:
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 65; Director or
Trustee of the Morgan Stanley 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 the Boeing Company) and Nuskin Asia Pacific
(multilevel marketing); member of the board of various civic and charitable
organizations.
JOHN R. HAIRE, Trustee since March, 1990; age 73; Chairman of the Audit
Committee and Director or Trustee of the Morgan Stanley Dean Witter Funds;
Chairman of the Audit Committee and Trustee of the TCW/DW Funds; formerly
Chairman of the Independent Directors or Trustees of the Morgan Stanley Dean
Witter Funds and the TCW/DW Funds (until June, 1998); formerly President,
Council for Aid to Education (1978-1989) and Chairman and Chief Executive
Officer of Anchor Corporation, an investment adviser (1964-1978).
WAYNE E. HEDIEN, age 64; Retired; Director or Trustee of the Morgan
Stanley 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 of Seven Council (G7C), an international economic commission;
Director or Trustee of the Morgan Stanley Dean Witter Funds; Trustee of
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<PAGE>
the TCW/DW Funds; Director of NASDAQ (since June, 1995), Greenwich Capital
Markets Inc. (broker-dealer); and NVR 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, 1992; age 61; General Partner,
Triumph Capital, L.P., a private investment partnership; Director or Trustee of
the Morgan Stanley 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 MSDW Distributors; Director or Trustee of the Morgan
Stanley 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 Morgan Stanley Dean Witter Funds; Trustee of the TCW/DW Funds;
Director of the 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, Katherine H.
Stromberg, Joseph Arcieri and Gerard J. Lian serve as Vice Presidents 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) 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 (since February, 1997) of MSDW Distributors. He was
previously First Vice President, Assistant Secretary and Assistant General
Counsel of MSDW Advisors and MSDW Services. Mr. Merin is 44 years old and is
currently President, Chief Executive Officer and Director of MSDW Advisors and
MSDW Services, Chairman and Director of MSDW Distributors and MSDW Trust,
Executive Vice President and Director of DWR, and Director of SPS Transaction
Services, Inc. and various other MSDW subsidiaries. Mr. Scanlan is 62 years old
and is currently President, Chief Operating Officer and Director of MSDW
Advisors and MSDW Services; he is also Executive Vice President of MSDW
Distributors and Executive Vice President and Director of MSDW Trust. Mr.
McAlinden is 55 years old and is currently Executive Vice President and Chief
Investment Officer of MSDW Advisors (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 a Managing Director at
Dillon Reed. Mr. Giambrone is 44 years old and is currently Senior Vice
President of MSDW Advisors, MSDW Services, MSDW 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 MSDW Advisors. Mr. Caloia is 52 years old
and is currently First Vice President and Assistant Treasurer of MSDW Advisors
and MSDW Services. Ms. Stromberg is 50 years old and is currently Vice
President of MSDW Advisors. Mr. Arcieri is 49 years old and is currently Vice
President of MSDW Advisors. Mr. Lian is 43 years old and is currently Vice
President of MSDW Advisors. Other than Messrs. Giambrone and McAlinden, each of
the above officers has been an employee of MSDW Advisors or its affiliates for
over five years.
5
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THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of nine (9) trustees. These same
individuals also serve as directors or trustees for all of the 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 87 Morgan Stanley Dean
Witter Funds, comprised of 133 portfolios. As of June 30, 1998, the Morgan
Stanley Dean Witter Funds had total net assets of approximately $106.8 billion
and more than six million shareholders.
Seven Trustees (77% 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. 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 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.
Three of them also serve as members of the Derivatives Committee. During the
calendar year ended December 31, 1997, the Audit Committee, the Derivatives
Committee and the Independent Trustees held a combined total of seventeen
meetings.
The Independent Trustees are charged with recommending to the full Board
approval of management, advisory and administration contracts, and distribution
and underwriting agreements; continually reviewing Fund performance; checking
on the pricing of portfolio securities, brokerage commissions, transfer agent
costs and performance, and trading among Funds in the same complex; and
approving fidelity bond and related insurance coverage and allocations, as well
as other matters that arise from time to time.
The 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; and reviewing
the independence of the independent accountants; considering the range of audit
and non-audit fees; reviewing the adequacy of the Fund's system of internal
controls.
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 March 31, 1998, the Board of Trustees of the
Trust held 4 meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held 2, 10 and
2 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.
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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 June 30, 1998, 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 $10.6 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, the Independent
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). If a Board meeting and a meeting of the Independent Trustees or a
Committee meeting, or a meeting of the Independent Trustees and/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 who are or have been employed by the
Investment Manager or an affiliated company receive no compensation or expense
reimbursement from the Trust for their services as Trustee. Mr. Haire currently
serves as Chairman of the Audit Committee. Prior to June 1, 1998, Mr. Haire
also served as Chairman of the Independent Trustees, for which services the
Trust paid him an additional annual fee of $1,200.
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The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended March 31, 1998.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- ------------------------------- --------------
<S> <C>
Michael Bozic ................. $1,550
Edwin J. Garn ................. 1,650
John R. Haire ................. 3,500
Wayne E. Hedien ............... 1,082
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, 1997 for services
to the 84 Morgan Stanley 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. Mr. Haire serves as Chairman of the Audit Committee of each
Morgan Stanley Dean Witter Fund and each TCW/DW Fund and, prior to June 1,
1998, also served as Chairman of the Independent Directors or Trustees of those
Funds. 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 Morgan Stanley Dean Witter Money Market Funds. Mr. Hedien's term
as Director or Trustee of each Morgan Stanley Dean Witter Fund commenced on
September 1, 1997.
CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF
INDEPENDENT FOR SERVICE AS TOTAL CASH
FOR SERVICE DIRECTORS/ CHAIRMAN OF COMPENSATION
AS DIRECTOR OR FOR SERVICE AS TRUSTEES AND INDEPENDENT FOR SERVICES TO
TRUSTEE AND TRUSTEE AND AUDIT TRUSTEES 84 MORGAN STANLEY
COMMITTEE MEMBER COMMITTEE MEMBER COMMITTEES OF 84 AND AUDIT DEAN WITTER
NAME OF OF 84 MORGAN STANLEY OF 14 TCW/DW MORGAN STANLEY COMMITTEES OF 14 FUNDS AND 14
INDEPENDENT TRUSTEE DEAN WITTER FUNDS FUNDS DEAN WITTER 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 Statement of Additional Information, 57 of the
Morgan Stanley Dean Witter Funds, including the Fund, 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
8
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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 29.41% of his or her Eligible Compensation
plus 0.4901667% 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 58.82% 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.
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended March 31,
1998 and by the 57 Morgan Stanley Dean Witter Funds (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 Trust
as of March 31, 1998 and from the 57 Morgan Stanley Dean Witter Funds as of
December 31, 1997.
RETIREMENT BENEFITS FROM THE FUND AND ALL MORGAN STANLEY DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
-------------------------------
ESTIMATED ANNUAL
ESTIMATED RETIREMENT BENEFITS BENEFITS
CREDITED ACCRUED AS EXPENSES UPON RETIREMENT(2)
YEARS ESTIMATED ---------------------------- -------------------
OF SERVICE AT PERCENTAGE OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION TRUST FUNDS TRUST FUNDS
- ---------------------------- --------------- --------------- ----------- ---------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ................. 10 58.82% $ 361 $ 20,499 $ 971 $ 55,026
Edwin J. Garn ................. 10 58.82 522 30,878 971 55,026
John R. Haire ................. 10 58.82 (559)(3) (19,823)(3) 2,280 132,002
Wayne E. Hedien ............... 9 50.00 185 0 825 46,772
Dr. Manuel H. Johnson ......... 10 58.82 217 12,832 971 55,026
Michael E. Nugent ............. 10 58.82 371 22,546 971 55,026
John L. Schroeder ............. 8 49.02 706 39,350 815 46,123
</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.
(3) This number reflects the effect of the extension of Mr. Haire's term as
Director or Trustee until May 1, 1999.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
FOR EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
THE INVESTMENT ADVISER AND THE INVESTMENT ADVISORY AGREEMENT
MSDW Advisors serves as the investment adviser for the Trust pursuant to
an investment advisory agreement entered into between the Trust and MSDW
Advisors dated May 31, 1997 ("Advisory Agreement")
9
<PAGE>
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 a
Special Meeting of Shareholders held on May 20, 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.
THE ADVISORY AGREEMENT
The Advisory Agreement provides that MSDW Advisors shall obtain and
evaluate such information and advice relating to the economy and securities and
commodity markets as it deems necessary or useful to discharge its duties under
the Advisory Agreement and that it shall continuously supervise the management
of the assets of the Trust in a manner consistent with the investment
objectives and policies of the Trust and subject to such other limitations and
directions as the Board of the Trust may, from time to time, prescribe.
MSDW Advisors pays the compensation of the officers of the Trust who are
also directors, officers or employees of MSDW Advisors and provides the Trust
with office space and equipment, and clerical and bookkeeping services and
telephone service, heat, light, power and other utilities. MSDW Advisors also
pays for the services of personnel in connection with the pricing of the
Trust's shares and the preparation of prospectuses, proxy statements and
reports required to be filed with federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of MSDW Advisors, necessary or desirable). In
return for its services and the expenses MSDW Advisors assumes under the
Advisory Agreement, the Trust pays MSDW Advisors compensation which is computed
weekly and payable monthly and which is determined by applying the annual rate
of 0.50% to the Trust's average weekly net assets. Pursuant to the Advisory
Agreement, the Trust accrued to the Investment Adviser total compensation of
$523,806 during the fiscal year ended March 31, 1998. The net assets of the
Trust totalled $105,909,192 at March 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 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 corporate 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) and 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
10
<PAGE>
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 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
Morgan Stanley Dean Witter Advisors Inc. is the Trust's investment
adviser. 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 Inc. 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 weekly and payable monthly and
which is determined by applying the annual rate of 0.30% to the Trust's weekly
net assets. For the fiscal year ended March 31, 1998, the Trust accrued to MSDW
Services administrative fees of $314,284.
The Principal Executive Officer and Directors of MSDW Advisors are
Mitchell M. Merin, President and Chief Executive Officer, Robert M. Scanlan,
President and Chief Operating Officer and Barry Fink, Senior Vice President,
Secretary and General Counsel. The principal occupations of Messrs. Merin,
Scanlan and Fink are described in the preceding paragraph 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 to MSDW Advisors by such companies, including the Trust,
and their net assets as of July 31, 1998.
MSDW has its 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 March 31, 1998, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Investment Adviser,
transfer agency fees of $37,197.
11
<PAGE>
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 March 31, 1998, the
Trust paid no brokerage commissions to DWR or Morgan Stanley & Co.
Incorporated.
(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 March 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 Annual 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.
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.
12
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than April 12, 1999, 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 ITS FISCAL YEAR ENDED MARCH 31,
1998, HAS BEEN PREVIOUSLY SENT TO SHAREHOLDERS AND IS 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, 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 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 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
13
<PAGE>
APPENDIX
MSDW Advisors serves as investment manager or investment adviser to the
Trust and the other investment companies listed below which have similar
investment objectives to that of the Trust. Set forth below is a chart showing
the net assets of each such investment company as of July 31, 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 07/31/98 OF NET ASSETS
---------------- ---------------------------------
<S> <C> <C>
1. MORGAN STANLEY DEAN WITTER
CALIFORNIA TAX-FREE INCOME FUND* ...... $ 899,701,615 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* ................. 54,982,854 0.50%
3. MORGAN STANLEY DEAN WITTER
MULTI-STATE MUNICIPAL SERIES TRUST* ... 374,559,658 0.35%
4. MORGAN STANLEY DEAN WITTER NEW
YORK TAX-FREE INCOME FUND* ............ 161,886,915 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* .......... 1,615,842,738 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.325%
on assets over $1.25 billion
6. INTERCAPITAL CALIFORNIA INSURED
MUNICIPAL INCOME TRUST** .............. 252,642,344 0.35%
7. INTERCAPITAL CALIFORNIA QUALITY
MUNICIPAL SECURITIES** ................ 213,113,218 0.35%
8. INTERCAPITAL INSURED CALIFORNIA
MUNICIPAL SECURITIES** ................ 66,110,944 0.35%
9. INTERCAPITAL INSURED MUNICIPAL BOND
TRUST** ............................... 109,738,803 0.35%
10. INTERCAPITAL INSURED MUNICIPAL
INCOME TRUST** ........................ 589,723,988 0.35%
11. INTERCAPITAL INSURED MUNICIPAL
SECURITIES** .......................... 140,038,039 0.35%
12. INTERCAPITAL INSURED MUNICIPAL
TRUST** ............................... 487,357,105 0.35%
13. INTERCAPITAL NEW YORK QUALITY
MUNICIPAL SECURITIES** ................ 97,537,403 0.35%
14. INTERCAPITAL QUALITY MUNICIPAL
INCOME TRUST** ........................ 744,210,387 0.35%
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 07/31/98 OF NET ASSETS
---------------- ----------------------------------
<S> <C> <C>
15. INTERCAPITAL QUALITY MUNICIPAL
INVESTMENT TRUST** ................... $384,875,411 0.35 %
16. INTERCAPITAL QUALITY MUNICIPAL
SECURITIES** ......................... 366,549,431 0.35 %
17. MUNICIPAL INCOME TRUST** ............. 300,015,985 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
18. MUNICIPAL INCOME TRUST II** .......... 273,078,337 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
19. MUNICIPAL INCOME TRUST III** ......... 63,248,388 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
20. MUNICIPAL INCOME OPPORTUNITIES
TRUST** .............................. 185,081,017 0.50 %
21. MUNICIPAL INCOME OPPORTUNITIES
TRUST II** ........................... 179,840,147 0.50 %
22. MUNICIPAL INCOME OPPORTUNITIES
TRUST III** .......................... 105,492,514 0.50 %
23. MUNICIPAL PREMIUM INCOME TRUST** ..... 352,886,392 0.40 %
24. MORGAN STANLEY DEAN WITTER SELECT
MUNICIPAL REINVESTMENT FUND*** ....... 91,142,928 0.50 %
25. MORGAN STANLEY DEAN WITTER HAWAII
MUNICIPAL TRUST*(1) .................. 5,923,320 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, until January 1, 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 with
that company.
A-2
<PAGE>
MUNICIPAL INCOME OPPORTUNITIES 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 Opportunities Trust III on October 20, 1998, at 9:00 a.m., New
York City time, and at any adjournment thereof, on the proposals set forth in
the Notice of Meeting dated August 7, 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 THE PROPOSAL 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>
[X] PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
1. Election of two (2) Trustees: FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
2. Ratification of appointment of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP [ ] [ ] [ ]
as independent accountants.
Michael Bozic, Charles A. Fiumefreddo
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY PARTICULAR NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME.
Date ___________________
Please make sure to sign and date this Proxy using black or blue ink.
[ ]
Shareholder sign in the box above
[ ]
Co-Owner (if any) sign in the box above
- -------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION
MUNICIPAL INCOME OPPORTUNITIES 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.
