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MORGAN STANLEY DEAN WITTER FUNDS
MULTIPLE CLASS PLAN
PURSUANT TO RULE 18F-3
INTRODUCTION
This plan (the "Plan") is adopted pursuant to Rule 18f-3(d) of the
Investment Company Act of 1940, as amended (the "1940 Act"), effective as of
July 28, 1997, and amended as of June 22, 1998, August 15, 2000, and December
1, 2000. The Plan relates to shares of the open-end investment companies to
which Morgan Stanley Dean Witter Advisors Inc. acts as investment manager, that
are listed on Schedule A, as may be amended from time to time (each, a "Fund"
and collectively, the "Funds"). The Funds are distributed pursuant to a system
(the "Multiple Class System") in which each class of shares (each, a "Class"
and collectively, the "Classes") of a Fund represents a pro rata interest in
the same portfolio of investments of the Fund and differs only to the extent
outlined below.
I. DISTRIBUTION ARRANGEMENTS
One or more Classes of shares of the Funds are offered for purchase by
investors with the sales load structures described below. In addition, pursuant
to Rule 12b-1 under the 1940 Act, the Funds have each adopted a Plan of
Distribution (the "12b-1 Plan") under which shares of certain Classes are
subject to the service and/or distribution fees ("12b-1 fees") described below.
1. Class A Shares
Class A shares are offered with a front-end sales load ("FESL"). The
schedule of sales charges applicable to a Fund and the circumstances under
which the sales charges are subject to reduction are set forth in each Fund's
current prospectus. As stated in each Fund's current prospectus, Class A shares
may be purchased at net asset value (without a FESL): (i) in the case of
certain large purchases of such shares; and (ii) by certain limited categories
of investors, in each case, under the circumstances and conditions set forth in
each Fund's current prospectus. Class A shares purchased at net asset value may
be subject to a contingent deferred sales charge ("CDSC") on redemptions made
within one year of purchase. Further information relating to the CDSC,
including the manner in which it is calculated, is set forth in paragraph 6
below. Class A shares are also subject to payments under each Fund's 12b-1 Plan
to reimburse Morgan Stanley Dean Witter Distributors Inc. ("MSDW
Distributors"), Dean Witter Reynolds Inc. ("DWR"), its affiliates and other
broker-dealers for distribution expenses incurred by them specifically on
behalf of the Class, assessed at an annual rate of up to 0.25% of average daily
net assets. The entire amount of the 12b-1 fee represents a service fee within
the meaning of National Association of Securities Dealers, Inc. ("NASD")
guidelines.
2. Class B Shares
Class B shares are offered without a FESL, but will in most cases be
subject to a six-year declining CDSC which is calculated in the manner set
forth in paragraph 6 below. The schedule of CDSC charges applicable to each
Fund is set forth in each Fund's current prospectus. With the exception of
certain of the Funds which have a different formula described below (Morgan
Stanley Dean Witter American Opportunities Fund, Morgan Stanley Dean Witter
Natural Resource Development Securities Inc., Morgan Stanley Dean Witter
Strategist Fund and Morgan Stanley Dean Witter Dividend Growth
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Securities Inc.)(1), Class B shares are also subject to a fee under each Fund's
respective 12b-1 Plan, assessed at the annual rate of up to 1.0% of either: (a)
the lesser of (i) the average daily aggregate gross sales of the Fund's Class B
shares since the inception of the Fund (not including reinvestment of dividends
or capital gains distributions), less the average daily aggregate net asset
value of the Fund's Class B shares redeemed since the Fund's inception upon
which a CDSC has been imposed or waived, or (ii) the average daily net assets
of Class B; or (b) the average daily net assets of Class B. A portion of the
12b-1 fee equal to up to 0.25% of the Fund's average daily net assets is
characterized as a service fee within the meaning of the NASD guidelines and
the remaining portion of the 12b-1 fee, if any, is characterized as an
asset-based sales charge. Also, Class B shares have a conversion feature
("Conversion Feature") under which such shares convert to Class A shares after
a certain holding period. Details of the Conversion Feature are set forth in
Section IV below.
3. Class C Shares
Class C shares are offered without imposition of a FESL, but will in most
cases be subject to a CDSC of 1.0% on redemptions made within one year after
purchase. Further information relating to the CDSC is set forth in paragraph 6
below. In addition, Class C shares, under each Fund's 12b-1 Plan, are subject
to 12b-1 payments to reimburse MSDW Distributors, DWR, its affiliates and other
broker-dealers for distribution expenses incurred by them specifically on
behalf of the Class, assessed at the annual rate of up to 1.0% of the average
daily net assets of the Class. A portion of the 12b-1 fee equal to up to 0.25%
of the Fund's average daily net assets is characterized as a service fee within
the meaning of NASD guidelines. Unlike Class B shares, Class C shares do not
have the Conversion Feature.
4. Class D Shares
Class D shares are offered without imposition of a FESL, CDSC or a 12b-1
fee for purchases of Fund shares by (i) investors meeting an initial minimum
investment requirement and (ii) certain other limited categories of investors,
in each case, as may be approved by the Boards of Directors/Trustees of the
Funds and as disclosed in each Fund's current prospectus. Class D shares may
not be offered for purchases of Fund shares made through certain investment
programs approved by MSDW Distributors.
5. Additional Classes of Shares
The Boards of Directors/Trustees of the Funds have the authority to create
additional Classes, or change existing Classes, from time to time, in
accordance with Rule 18f-3 under the 1940 Act.
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(1) The payments under the 12b-1 Plan for each of Morgan Stanley Dean Witter
American Opportunities Fund, Morgan Stanley Dean Witter Natural Resource
Development Securities Inc. and Morgan Stanley Dean Witter Dividend Growth
Securities Inc. are assessed at the annual rate of 1.0% of the lesser of: (a)
the average daily aggregate gross sales of the Fund's Class B shares since the
inception of the Fund's Plan (not including reinvestment of dividends or
capital gains distributions), less the average daily aggregate net asset value
of the Fund's Class B shares redeemed since the Plan's inception upon which a
CDSC has been imposed or waived, or (b) the average daily net assets of Class B
attributable to shares issued, net of related shares redeemed, since inception
of the Plan. The payments under the 12b-1 Plan for the Morgan Stanley Dean
Witter Strategist Fund are assessed at the annual rate of: (i) 1% of the lesser
of (a) the average daily aggregate gross sales of the Fund's Class B shares
since the effectiveness of the first amendment of the Plan on November 8, 1989
(not including reinvestment of dividends or capital gains distributions), less
the average daily aggregate net asset value of the Fund's Class B shares
redeemed since the effectiveness of the first amended Plan, upon which a CDSC
has been imposed or waived, or (b) the average daily net assets of Class B
attributable to shares issued, net of related shares redeemed, since the
effectiveness of the first amended Plan; plus (ii) 0.25% of the average daily
net assets of Class B attributable to shares issued, net of related shares
redeemed, prior to effectiveness of the first amended Plan.
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6. Calculation of the CDSC
Any applicable CDSC is calculated based upon the lesser of net asset value
of the shares at the time of purchase or at the time of redemption. The CDSC
does not apply to amounts representing an increase in share value due to
capital appreciation and shares acquired through the reinvestment of dividends
or capital gains distributions. The CDSC schedule applicable to a Fund and the
circumstances in which the CDSC is subject to waiver are set forth in each
Fund's prospectus.
II. EXPENSE ALLOCATIONS
Expenses incurred by a Fund are allocated among the various Classes of
shares pro rata based on the net assets of the Fund attributable to each Class,
except that 12b-1 fees relating to a particular Class are allocated directly to
that Class. In addition, other expenses associated with a particular Class
(except advisory or custodial fees), may be allocated directly to that Class,
provided that such expenses are reasonably identified as specifically
attributable to that Class and the direct allocation to that Class is approved
by the Fund's Board of Directors/Trustees.
III. CLASS DESIGNATION
All shares of the Funds held prior to July 28, 1997 (other than the shares
held by certain employee benefit plans established by DWR, shares of Funds
offered with a FESL, and shares of Morgan Stanley Dean Witter Balanced Growth
Fund and Morgan Stanley Dean Witter Balanced Income Fund) have been designated
Class B shares. Shares held prior to July 28, 1997 by such employee benefit
plans have been designated Class D shares. Shares held prior to July 28, 1997
of Funds offered with a FESL have been designated Class D shares. In addition,
shares of Morgan Stanley Dean Witter American Opportunities Fund purchased
prior to April 30, 1984, shares of Morgan Stanley Dean Witter Strategist Fund
purchased prior to November 8, 1989 and shares of Morgan Stanley Dean Witter
Natural Resource Development Securities Inc. and Morgan Stanley Dean Witter
Dividend Growth Securities Inc. purchased prior to July 2, 1984 (with respect
to such shares of each Fund, including such proportion of shares acquired
through reinvestment of dividends and capital gains distributions as the total
number of shares acquired prior to each of the preceding dates in this sentence
bears to the total number of shares purchased and owned by the shareholder of
that Fund) have been designated Class D shares. Shares of Morgan Stanley Dean
Witter Balanced Growth Fund and Morgan Stanley Dean Witter Balanced Income Fund
held prior to July 28, 1997 have been designated Class C shares except that
shares of Morgan Stanley Dean Witter Balanced Growth Fund and Morgan Stanley
Dean Witter Balanced Income Fund held prior to July 28, 1997 that were acquired
in exchange for shares of an investment company offered with a CDSC have been
designated Class B shares and those that were acquired in exchange for shares
of an investment company offered with a FESL have been designated Class A
shares.
IV. CONVERSION FEATURES
1. Class B to Class A
Class B shares held before May 1, 1997 will convert to Class A shares in
May, 2007, except that Class B shares which were purchased before July 28, 1997
by trusts for which Morgan Stanley Dean Witter Trust FSB ("MSDW Trust")
provides discretionary trustee services converted to Class A shares on August
29, 1997 (the CDSC was not applicable to such shares upon the conversion). In
all other instances, Class B shares of each Fund will automatically convert to
Class A shares, based on the relative net asset values of the shares of the two
Classes on the conversion date, which will be approximately ten (10) years
after the date of the original purchase. Conversions will be effected once a
month. The 10 year period will be calculated from the last day of the month in
which the shares were purchased or, in the case of Class B shares acquired
through an exchange or a series of exchanges, from the last day of the month in
which the original Class B shares were purchased, provided that shares
originally purchased before May 1, 1997 will convert to Class A shares in May,
2007. Except as set forth below, the conversion of shares purchased on or after
May 1, 1997 will take place in the month following the tenth anniversary of the
purchase. There will also be converted at that time such proportion of Class B
shares acquired through automatic reinvestment of dividends owned by the
shareholder as the total number of his or her Class B shares converting at the
time bears to the total number of outstanding Class B shares purchased and
owned by
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the shareholder. In the case of Class B shares held by employer-sponsored
employee benefit plans (whether or not qualified under the Internal Revenue
Code) for which MSDW Trust serves as Trustee or Morgan Stanley Dean Witter &
Co.'s Retirement Plan Services serves as recordkeeper pursuant to a written
Recordkeeping Services Agreement, all Class B shares will convert to Class A
shares on the conversion date of the first shares of a Fund purchased by that
plan. In the case of Class B shares previously exchanged for shares of Morgan
Stanley Dean Witter North American Government Income Trust, Morgan Stanley Dean
Witter Short-Term U.S. Treasury Trust, a "Money Market Fund" or a "No-Load
Fund" (as such terms are defined in the prospectus of each Fund), the period of
time the shares were held in any of such Funds (calculated from the last day of
the month in which the shares of any of such Funds were acquired) is excluded
from the holding period for conversion. If those shares are subsequently
re-exchanged for Class B shares of a Fund, the holding period resumes on the
last day of the month in which Class B shares are reacquired.
Effectiveness of the Conversion Feature is subject to the continuing
availability of a ruling of the Internal Revenue Service or an opinion of
counsel to the effect that (i) the conversion of shares does not constitute a
taxable event under the Code; (ii) Class A shares received on conversion will
have a basis equal to the shareholder's basis in the converted Class B shares
immediately prior to the conversion; and (iii) Class A shares received on
conversion will have a holding period that includes the holding period of the
converted Class B shares. The Conversion Feature may be suspended if the Ruling
or opinion is no longer available. In such event, Class B shares would continue
to be subject to Class B fees under the applicable Fund's 12b-1 Plan.
2. Choice Program Conversions
Effective on or about December 1, 2000, all Class D shares held through
the Morgan Stanley Dean Witter Choice Program (the "Choice Program") will
automatically be converted to Class A shares in the same Fund at such time as
those Fund shares are no longer held through the Choice Program (unless the
affected shareholder is otherwise eligible to purchase Class D shares).
On December 8, 2000, any Class A shares held through the Choice Program
will automatically be converted to Class D shares in the same Fund.
Both conversions will be effected based on then current relative net asset
values of the shares of the two classes on the conversion date.
Effectiveness of these conversions is subject to the continuing
availability of an opinion of counsel to the effect that the conversion of
shares does not constitute a taxable event under the Internal Revenue Code.
V. EXCHANGE PRIVILEGES
Shares of each Class may be exchanged for shares of the same Class of the
other Funds and for shares of certain other investment companies without the
imposition of an exchange fee as described in the prospectuses and statements
of additional information of the Funds. The exchange privilege of each Fund may
be terminated or revised at any time by the Fund upon such notice as may be
required by applicable regulatory agencies as described in each Fund's
prospectus.
VI. VOTING
Each Class shall have exclusive voting rights on any matter that relates
solely to its 12b-1 Plan, except that Class B shareholders will have the right
to vote on any proposed material increase in Class A's expenses, including
payments under the Class A 12b-1 Plan, if such proposal is submitted separately
to Class A shareholders. If the amount of expenses, including payments under
the Class A 12b-1 Plan, is increased materially without the approval of Class B
shareholders, the Fund will establish a new Class A for Class B shareholders
whose shares automatically convert on the same terms as applied to Class A
before the increase. In addition, each Class shall have separate voting rights
on any matter submitted to shareholders in which the interests of one Class
differ from the interests of any other Class.
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MORGAN STANLEY DEAN WITTER FUNDS
MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
SCHEDULE A
AT AUGUST 15, 2000
1) Morgan Stanley Dean Witter 21st Century Trend Fund
2) Morgan Stanley Dean Witter Aggressive Equity Fund
3) Morgan Stanley Dean Witter American Opportunities Fund
4) Morgan Stanley Dean Witter Balanced Growth Fund
5) Morgan Stanley Dean Witter Balanced Income Fund
6) Morgan Stanley Dean Witter California Tax-Free Income Fund
7) Morgan Stanley Dean Witter Capital Growth Securities
8) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas" Portfolio
9) Morgan Stanley Dean Witter Convertible Securities Trust
10) Morgan Stanley Dean Witter Developing Growth Securities Trust
11) Morgan Stanley Dean Witter Diversified Income Trust
12) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
13) Morgan Stanley Dean Witter Equity Fund
14) Morgan Stanley Dean Witter European Growth Fund Inc.
15) Morgan Stanley Dean Witter Federal Securities Trust
16) Morgan Stanley Dean Witter Financial Services Trust
17) Morgan Stanley Dean Witter Fund of Funds
18 Morgan Stanley Dean Witter Global Dividend Growth Securities
19) Morgan Stanley Dean Witter Global Utilities Fund
20) Morgan Stanley Dean Witter Growth Fund
21) Morgan Stanley Dean Witter Health Sciences Trust
22) Morgan Stanley Dean Witter High Yield Securities Inc.
23) Morgan Stanley Dean Witter Income Builder Fund
24) Morgan Stanley Dean Witter Information Fund
25) Morgan Stanley Dean Witter Intermediate Income Securities
26) Morgan Stanley Dean Witter International Fund
27) Morgan Stanley Dean Witter International SmallCap Fund
28) Morgan Stanley Dean Witter Japan Fund
29) Morgan Stanley Dean Witter Latin American Growth Fund
30) Morgan Stanley Dean Witter Market Leader Trust
31) Morgan Stanley Dean Witter Mid-Cap Equity Trust
32) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
33) Morgan Stanley Dean Witter New Discoveries Fund
34) Morgan Stanley Dean Witter New York Tax-Free Income Fund
35) Morgan Stanley Dean Witter Next Generation Trust
36) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
37) Morgan Stanley Dean Witter Real Estate Fund
38) Morgan Stanley Dean Witter Small Cap Growth Fund
39) Morgan Stanley Dean Witter Special Value Fund
40) Morgan Stanley Dean Witter S&P 500 Index Fund
41) Morgan Stanley Dean Witter S&P 500 Select Fund
42) Morgan Stanley Dean Witter Strategist Fund
43) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
44) Morgan Stanley Dean Witter Tax-Managed Growth Fund
45) Morgan Stanley Dean Witter Technology Fund
46) Morgan Stanley Dean Witter Total Market Index Fund
47) Morgan Stanley Dean Witter Total Return Trust
48) Morgan Stanley Dean Witter U.S. Government Securities Trust
49) Morgan Stanley Dean Witter Utilities Fund
50) Morgan Stanley Dean Witter Value-Added Market Series
51) Morgan Stanley Dean Witter Value Fund
52) Morgan Stanley Dean Witter World Wide Income Trust
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