<PAGE>
Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or Section 240.14a-12
InterCapital Quality Municipal Income Trust
---------------------------------------
(Name of Registrant as Specified in its Charter)
LouAnne McInnis
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(j)(1), or 14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(j)(3)
[ ] 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:
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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:
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<PAGE>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 29, 1996
The Annual Meeting of Shareholders of INTERCAPITAL QUALITY MUNICIPAL
INCOME TRUST (the "Trust"), an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts, will be held in the Conference
Center, Forty-Fourth Floor, 2 World Trade Center, New York, New York 10048,
on October 29, 1996, at 2:00 P.M., New York City time, for the following
purposes:
MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:
1. To elect one (1) Trustee to serve until the 1999 Annual Meeting, or
until his successor shall have been elected and qualified;
2. To approve or disapprove continuance of the Trust's currently
effective Investment Management Agreement with Dean Witter InterCapital
Inc.;
3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending October 31,
1996;
4. Shareholder proposal to amend the Trust's Declaration of Trust to
require each Trustee, within thirty days of election, to become a
Shareholder of the Trust (Note: The Trustees unanimously recommend a vote
AGAINST this proposal); and
5. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
MATTERS TO BE VOTED ON ONLY BY PREFERRED SHAREHOLDERS:
To elect one (1) Trustee to serve until the 1999 Annual Meeting or until
his successor shall have been elected and qualified.
Shareholders of record as of the close of business on July 23, 1996 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of the proposal to approve continuance of the Investment Management
Agreement and will vote against any such adjournment those proxies required
to be voted against that proposal.
SHELDON CURTIS,
Secretary
August 26, 1996
New York, New York
IMPORTANT
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 29, 1996
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of INTERCAPITAL QUALITY MUNICIPAL
INCOME TRUST (the "Trust"), for use at the Annual Meeting of Shareholders of
the Trust to be held on October 29, 1996 (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 to be elected by all Shareholders and for the nominee for election as
Trustee to be elected by only the Preferred Shareholders and in favor of
Proposals 2 and 3 and against Proposal 4. 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.
Shareholders of record as of the close of business on July 23, 1996, the
record date for the determination of Shareholders entitled to notice of and
to vote at the Meeting, are entitled to one vote for each share held and a
fractional vote for a fractional share. On July 23, 1996, there were
outstanding 34,416,513 Common Shares of beneficial interest and 4,160
Preferred Shares of beneficial interest of the Trust, all with $.01 par
value. No person was known to own as much as 5% of the outstanding shares of
the Trust on that date. The Trustees and officers of the Trust, together,
owned less than 1% of the Trust's outstanding shares on that date. The
percentage ownership of shares of the Trust changes from time to time
depending on purchases and sales by shareholders and the total number of
shares outstanding.
The cost of soliciting proxies for the Meeting, consisting principally of
mailing and printing expenses, will be borne by the Trust. The solicitation
of proxies will be by mail, which may be supplemented by solicitation by
mail, telephone or otherwise through Trustees, officers and regular employees
of the Trust or Dean Witter InterCapital Inc. ("InterCapital" or the
"Investment Manager"), and employees of broker-dealers, including Dean Witter
Reynolds Inc. ("DWR") without special compensation therefor. In addition, the
Trust may employ William F. Doring and 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 26, 1996.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at eight. At the Meeting, two Trustees are to
be elected to the Trust's Board of Trustees. There are currently eight
2
<PAGE>
Trustees, two of whom (Michael Bozic and Charles A. Fiumefreddo) are standing
for election at this Meeting to serve until the 1999 Annual Meeting, in
accordance with the Trust's Declaration of Trust. At the Meeting, pursuant to
the Trust's Declaration of Trust, one Trustee is to be elected to the Trust's
Board of Trustees by the holders of the Common Shares and the Preferred
Shares voting together as a single class. Additionally, pursuant to the
Declaration of Trust and the Investment Company Act of 1940, as amended (the
"Act"), one Trustee is to be elected to the Trust's Board of Trustees by the
holders of the Preferred Shares voting separately as a single class.
Six of the current eight Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, 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 Act. The nominees for election as
Trustees have been proposed by the Trustees now serving or, in the case of
the nominees for positions as Independent Trustees, by the Independent
Trustees now serving. All of the Trustees have been elected by the
shareholders of the Trust.
The nominees of the Board of Trustees for election as Trustees are listed
below. It is the intention of the persons named in the enclosed form of proxy
to vote the shares represented by them for the election of these nominees:
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 of Trustees of the Trust 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. Trustees will be elected by a plurality of
the votes cast at the meeting.
Pursuant to the provisions of the Declaration of Trust, the nominees for
election as Trustees are divided into three separate classes, each class
having a term of three years. The term of office of one of each of the three
classes will expire each year.
The Board has determined that the nominees for election as Trustee shall
be standing for election as Trustee in each of the three classes of Trustee
as follows: Class I--Messrs. Bozic and Fiumefreddo; Class II--Messrs. Johnson
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 addition, the Board has further determined
that one each of the Class I Trustees and the Class III Trustees will be
designated to be elected by the Preferred Shareholders voting separately. In
this regard, Charles A. Fiumefreddo and John R. Haire have been designated as
the nominees to be elected to the Trust's Board of Trustees by the Preferred
Shareholders, the term of each to expire with his designated Class. In
accordance with the above, the Trustees in Class I are standing for election
at this Meeting and, if elected, will serve until the 1999 Annual Meeting or
until their successors shall have been elected and qualified.
The following information regarding each of the nominees for election as
Trustee, and each of the 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 July 23, 1996 (shown in parentheses),
positions with the Trust, and directorships or trusteeships in companies
which file periodic reports with the Securities and Exchange Commission,
including the 81 investment companies, including the Trust, for which
InterCapital serves as investment manager or investment adviser (referred to
herein as the "Dean Witter Funds") and the 13 investment companies for which
InterCapital's wholly-owned subsidiary, Dean Witter Services Company Inc.
("DWSC"), serves as manager and TCW Funds Management, Inc. serves as
investment adviser (referred to herein as the "TCW/DW Funds").
3
<PAGE>
The nominee for Trustee to be elected at the Meeting by all Shareholders
is:
MICHAEL BOZIC, Trustee since April, 1994; age 55; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director and Trustee of the Dean Witter Funds; formerly President and Chief
Executive Officer of Hills Department Stores (May, 1991-July, 1995); formerly
variously Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck and Co.;
Director of Eaglemark Financial Services, Inc., United Negro College Fund and
Weirton Steel Corporation.
The nominee to be elected by only the Preferred Shareholders is:
CHARLES A. FIUMEFREDDO,* Trustee since June, 1991; age 63; Chairman, Chief
Executive Officer and Director of InterCapital, Dean Witter Services Company,
Inc. ("DWSC") and Dean Witter Distributors Inc. ("Distributors"); Executive
Vice President and Director of Dean Witter Reynolds Inc. ("DWR"); Chairman,
Director or Trustee, President and Chief Executive Officer of the Dean Witter
Funds; Chairman, Chief Executive Officer and Trustee of the TCW/DW Funds;
Chairman and Director of Dean Witter Trust Company ("DWTC") (since October,
1989); Director and/or Officer of various DWDC subsidiaries (until February,
1993); formerly Executive Vice President and Director of Dean Witter,
Discover & Co. ("DWDC") (until February, 1993).
The Trustees who are not standing for reelection at the Meeting are:
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 63; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly
Mayor of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Discovery (April 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation
(since January, 1993); Director of Franklin Quest (time management systems)
and John Alden Corp.; Member of the board of various civic and charitable
organizations.
JOHN R. HAIRE, Trustee since July, 1992, age 71; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or
Trustees and Director or Trustee of the Dean Witter Funds; Chairman of the
Audit Committee and Chairman of the Committee of the Independent Trustees and
Trustee of the TCW/DW Funds; formerly President, Council for Aid to Education
(1978-1989) and Chairman and Chief Executive Officer of Anchor Corporation,
an investment adviser (1964-1978); Director of Washington National
Corporation (insurance).
DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 47; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Koch Professor of
International Economics and Director of the Center for Global Market Studies
at George Mason University; Co-Chairman and a founder of the Group of Seven
Council (G7C), an international economic commission; Director or Trustee of
the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of NASDAQ (since
June, 1995); Director of Greenwich Capital Markets Inc. (broker-dealer);
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 60; General Partner,
Triumph Capital, L.P., a private investment partnership; Director or Trustee
of the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly Vice
President, Bankers Trust Company and BT Capital Corporation (1984-1988);
Director of various business organizations.
- ------------
* Messrs. Fiumefreddo and Purcell may be deemed "interested persons" as
defined in Section 2(a)(19) of the Act, of the Trust and its Investment
Manager due to their affiliation with the Investment Manager and/or its
affiliated companies.
4
<PAGE>
PHILIP J. PURCELL,* Trustee since April, 1994; age 52; Chairman of the
Board of Directors and Chief Executive Officer of DWDC, DWR and Novus Credit
Services Inc.; Director of InterCapital, DWSC and Distributors; Director or
Trustee of the Dean Witter Funds; Director and/or officer of various DWDC
subsidiaries.
JOHN L. SCHROEDER, Trustee since April, 1994; age 66; Retired; Director or
Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Citizens Utilities Company; formerly Executive Vice President and Chief
Investment Officer of The Home Insurance Company (August, 1991-September,
1995), Chairman and Chief Investment Officer of Axe-Houghton Management and
the Axe-Houghton Funds (1983-1991) and President of USF&G Financial Services,
Inc. (1990-1991.)
The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; 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, Peter M. Avelar, Jonathan R. Page, Katherine H.
Stromberg, Gerard J. Lian and Joseph Arcieri are Vice Presidents of the Trust
and Marilyn K. Cranney, Barry Fink, Lou Anne D. McInnis and Ruth Rossi and
Carsten Otto serve as Assistant Secretaries. Mr. Curtis is 64 years old and
is currently Senior Vice President and General Counsel of InterCapital and
DWSC and Assistant Secretary of DWR; he is also Senior Vice President,
Assistant Secretary and Assistant General Counsel of Distributors and Senior
Vice President and Secretary of DWTC. Mr. Scanlan is 60 years old and is
currently President and Chief Operating Officer of InterCapital (since March,
1993) and DWSC; he is also Executive Vice President of Distributors and
Executive Vice President and Director of DWTC. He was previously Executive
Vice President of InterCapital (July, 1992-March, 1993) and prior thereto was
Chairman of Harborview Group Inc. Mr. McAlinden is 53 years old and is
currently Executive Vice President of InterCapital and Director of DWTC
(since April, 1996); he is also Chief Investment Officer of InterCapital. He
was previously Senior Vice President of InterCapital (June, 1995-April,
1996). He was formerly a Managing Director of Dillon Reed. Mr. Giambrone is
42 years old and is currently Senior Vice President of InterCapital, DWSC,
Distributors and DWTC (since August, 1995) and a Director of DWTC (since
April, 1996). He was formerly a partner of KPMG Peat Marwick, LLP. Mr.
Willison is 52 years old and is currently Senior Vice President of
InterCapital. Mr. Caloia is 50 years old and is currently First Vice
President of InterCapital and Assistant Treasurer of InterCapital and DWSC.
Mr. Avelar is 38 years old and is currently Senior Vice President of
InterCapital. Mr. Lian is 41 years old and is Assistant Vice President of
InterCapital. He was formerly a Senior Municipal Analyst with the American
Express Company (1984-1991). Mr. Page is 49 years old and is currently Senior
Vice President of InterCapital. Ms. Stromberg is 48 years old and is
currently Vice President of InterCapital (since April, 1992). She was
formerly a portfolio manager with InterCapital (October, 1991-April, 1992)
and Vice President of Kidder Peabody Asset Management (October, 1985-October,
1991). Mr. Arcieri is 48 years old and is currently Vice President of
InterCapital. Other than Messrs. Scanlan, Giambrone, McAlinden and Lian and
Ms. Stromberg, each of the above officers has been an employee of
InterCapital or DWR (formerly the corporate parent of InterCapital) for over
five years.
5
<PAGE>
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of eight (8) trustees. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of
this Proxy Statement, there are a total of 81 Dean Witter Funds, comprised of
121 portfolios. As of June 30, 1996, the Dean Witter Funds had total net
assets of approximately $76.2 billion and more than five million
shareholders.
Six Trustees (75% of the total number) have no affiliation or business
connection with InterCapital or any of its affiliated persons and do not own
any stock or other securities issued by InterCapital's parent company, DWDC.
These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "management Trustees") are affiliated with InterCapital. Four
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 Dean Witter Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Funds' Boards, such individuals may reject other attractive
assignments because the Funds make substantial demands on their time. Indeed,
by serving on the Funds' Boards, certain Trustees who would otherwise be
qualified and in demand to serve on bank boards would be prohibited by law
from doing so.
All of the Independent Trustees serve as members of the Audit Committee
and the Committee of the Independent Trustees. Three of them also serve as
members of the Derivatives Committee. The Committees hold some meetings at
InterCapital's offices and some outside InterCapital. Management Trustees or
officers do not attend these meetings unless they are invited for purposes of
furnishing information or making a report. There are no nominating or
compensation committees of the Trustees.
The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and distribution and underwriting agreements; continually
reviewing Fund performance; checking on the pricing of portfolio securities,
brokerage commissions, transfer agent costs and performance, and trading
among Funds in the same complex; and approving fidelity bond and related
insurance coverage and allocations, as well as other matters that arise from
time to time. The Independent Trustees are required to select and nominate
individuals to fill any Independent Trustee vacancy on the Board of any Fund
that has a Rule 12b-1 plan of distribution. Most of the Dean Witter Funds
have such a plan.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing
engagement; approving professional services provided by the independent
accountants and other accounting firms prior to the performance of such
services; reviewing the independence of the independent accountants;
considering the range of audit and non-audit fees; reviewing the adequacy of
the Fund's system of internal controls; and preparing and submitting
Committee meeting minutes to the full Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect
to derivative investments, if any, made by the Fund.
For the fiscal year ended October 31, 1995, the Board of Trustees of the
Trust held four meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust
6
<PAGE>
held two, ten and five meetings, respectively. No Trustee attended fewer than
75% of the meetings of the Board of Trustees, the Audit Committee, the
Committee of the Independent Trustees or the Derivatives Committee held while
he served in such positions.
DUTIES OF CHAIRMAN OF COMMITTEE OF THE INDEPENDENT TRUSTEES AND THE AUDIT
COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and
the Funds' operations and management. He screens and/or prepares written
materials and identifies critical issues for the Independent Trustees to
consider, develops agendas for Committee meetings, determines the type and
amount of information that the Committees will need to form a judgment on
various issues, and arranges to have that information furnished to Committee
members. He also arranges for the services of independent experts and
consults with them in advance of meetings to help refine reports and to focus
on critical issues. Members of the Committees believe that the person who
serves as Chairman of both Committees and guides their efforts is pivotal to
the effective functioning of the Committees.
The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment advisory, management and
other operating contracts of the Funds and, on behalf of the Committees,
conducts negotiations with the Investment Manager and other service
providers. In effect, the Chairman of the Committees serves as a combination
of chief executive and support staff of the Independent Trustees.
The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and
the Audit Committee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of Independent
Trustees, and a Chairman of their Committees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Dean Witter Funds.
SHARE OWNERSHIP BY TRUSTEES
The Trustees have adopted a policy pursuant to which each Trustee and/or
his or her spouse is required to invest at least $25,000 in any of the Funds
in the Dean Witter Funds complex (and, if applicable, in the
7
<PAGE>
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, 1996, the total value of shares of the Dean Witter
Funds (and, if applicable, the TCW/DW Funds) owned by the Trustees and/or
their spouses was approximately $8.6 million.
As of July 23, 1996, 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 $1,000 plus a per
meeting fee of $50 for meetings of the Board of Trustees or committees of the
Board of Trustees attended by the Trustee (the Trust pays the Chairman of the
Audit Committee an annual fee of $750 and pays the Chairman of the Committee
of the Independent Trustees an additional annual fee of $1,200). The Trust
also reimburses such Trustees for travel and other out-of-pocket expenses
incurred by them in connection with attending such meetings. Trustees and
officers of the Trust who are or have been employed by the Investment Manager
or an affiliated company receive no compensation or expense reimbursement
from the Trust.
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended October 31, 1995.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
Michael Bozic .............. $1,850
Edwin J. Garn .............. 1,950
John R. Haire .............. 4,550(1)
Dr. Manuel H. Johnson ..... 1,950
Michael E. Nugent .......... 1,850
John L. Schroeder .......... 1,950
</TABLE>
- ------------
(1) Of Mr. Haire's compensation from the Trust, $3,150 was paid to him as
Chairman of the Committee of the Independent Trustees ($2,400) and as
Chairman of the Audit Committee ($750).
8
<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1995 for
services to the 79 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at
December 31, 1995. With respect to Messrs. Haire, Johnson, Nugent and
Schroeder, the TCW/DW Funds are included solely because of a limited exchange
privilege between those Funds and five Dean Witter Money Market Funds. Mr.
Schroeder was elected as a Trustee of the TCW/DW Funds on April 20, 1995.
COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS TOTAL
FOR SERVICE AS CHAIRMAN OF COMPENSATION
DIRECTOR OR FOR SERVICE AS COMMITTEE OF PAID FOR
TRUSTEE AND TRUSTEE AND INDEPENDENT SERVICES TO 79
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ DEAN WITTER
OF 79 DEAN WITTER OF 11 TCW/DW TRUSTEES AND FUNDS AND 11
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS AUDIT COMMITTEE TCW/DW FUNDS
- --------------------------- ----------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Michael Bozic .............. $126,050 -- -- $126,050
Edwin J. Garn .............. 136,450 -- -- 136,450
John R. Haire .............. 98,450 $82,038 $217,350(2) 397,838
Dr. Manuel H. Johnson ..... 136,450 82,038 -- 218,488
Michael E. Nugent .......... 124,200 75,038 -- 199,238
John L. Schroeder .......... 136,450 46,964 -- 183,414
</TABLE>
- ------------
(2) For the 79 Dean Witter Funds in operation at December 31, 1995. As
noted above, on July 1, 1996, Mr. Haire became Chairman of the
Committee of the Independent Trustees and the Audit Committee of the
TCW/DW Funds in addition to continuing to serve in such positions for
the Dean Witter Funds.
As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Trust, have adopted a retirement program under which an
Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent
Director or Trustee of any Dean Witter Fund that has adopted the retirement
program (each such Fund referred to as an "Adopting Fund" and each such
Trustee referred to as an "Eligible Trustee") is entitled to retirement
payments upon reaching the eligible retirement age (normally, after attaining
age 72). Annual payments are based upon length of service. Currently, upon
retirement, each Eligible Trustee is entitled to receive from the Adopting
Fund, commencing as of his or her retirement date and continuing for the
remainder of his or her life, an annual retirement benefit (the "Regular
Benefit") equal to 25.0% of his or her Eligible Compensation plus 0.4166666%
of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years
up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(3) "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.
9
<PAGE>
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended October
31, 1995 and by the 57 Dean Witter Funds (including the Trust) as of December
31, 1995, and the estimated retirement benefits for the Trust's Independent
Trustees from the Trust as of October 31, 1995 and from the 57 Dean Witter
Funds as of December 31, 1995.
RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL FUNDS
------------------------------- RETIREMENT ESTIMATED ANNUAL
BENEFITS BENEFITS UPON
ESTIMATED ACCRUED AS RETIREMENT(4)
CREDITED YEARS ESTIMATED EXPENSES -----------------------
OF SERVICE AT PERCENTAGE OF --------------------------- FROM
NAME OF INDEPENDENT RETIREMENT ELIGIBLE BY THE BY ALL THE FROM ALL
TRUSTEE (MAXIMUM 10) COMPENSATION TRUST ADOPTING FUNDS TRUST ADOPTING FUNDS
- -------------------------- -------------- --------------- ------------ -------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 50.0% $ 379 $ 26,359 $1,121 $ 51,550
Edwin J. Garn ............. 10 50.0 739 41,901 1,121 51,550
John R. Haire ............. 10 50.0 6,151 261,763 2,541 130,404
Dr. Manuel H. Johnson .... 10 50.0 290 16,748 1,121 51,550
Michael E. Nugent ......... 10 50.0 552 30,370 1,121 51,550
John L. Schroeder ......... 8 41.7 744 51,812 934 42,958
</TABLE>
- ------------
(3) 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.
(4) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (3)
above.
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT MANAGEMENT AGREEMENT
The Trust's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Manager" or "InterCapital"), pursuant
to an Investment Management Agreement dated June 30, 1993 (referred to herein
as the "Management Agreement") which took effect upon the distribution by
Sears Roebuck and Co. ("Sears") to its shareholders of all the common shares
of DWDC (the parent company of InterCapital and DWR) then owned by Sears.
The Management Agreement was initially approved by the Board of Trustees
on October 30, 1992, and by the shareholders of the Trust at a Special
Meeting of Shareholders held on January 13, 1993. The present Management
Agreement supersedes an earlier management agreement originally entered into
by the Trust with DWR, through its InterCapital Division, and initially
approved by the Board, including a majority of the Independent Trustees, on
April 29, 1992. In an internal reorganization which took place in January,
1993, InterCapital assumed the investment management activities previously
performed by the InterCapital Division of DWR. The assumption by InterCapital
of DWR's rights and obligations under this earlier management agreement in
connection with the reorganization was approved by the Trustees at a meeting
held on October 30, 1992. The Management Agreement was last approved by the
shareholders of the Trust as a routine matter at their Annual Meeting held on
October 31, 1995. In the event shareholders do not approve continuance of the
Management Agreement by the required majority vote at the forthcoming meeting
or an adjournment
10
<PAGE>
thereof, the Board of Trustees of the Trust will take such action as it deems
to be in the best interest of the Trust and its shareholders, which may
include calling a special meeting of shareholders to vote on a new investment
management agreement or continuance of the present Management Agreement until
the next Annual Meeting of Shareholders.
In considering whether or not to approve the Management Agreement, the
Board of Trustees reviewed the terms of the agreement and considered all
materials and information deemed relevant to its determination. Among other
things, the Board considered the nature and scope of services to be rendered,
the quality of the Manager's services and personnel, and the appropriateness
of the fees that are paid under the Management Agreement. Based upon its
review, the Board of Trustees, including all of the Independent Trustees,
determined that the approval of the Management Agreement was in the best
interests of the Trust and its shareholders.
The favorable vote of a majority of the outstanding voting securities of
the Trust is required for the approval of the Management Agreement. Such a
majority is defined in the Act as the lesser of: (a) 67% or more of the
shares present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Trust are present or represented by proxy, or (b)
more than 50% of the outstanding shares.
THE INDEPENDENT TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS
APPROVE THE MANAGEMENT AGREEMENT.
THE MANAGEMENT AGREEMENT
The Management Agreement provides that the Investment Manager shall obtain
and evaluate such information and advice relating to the economy, securities
and commodity markets and securities and commodities as it deems necessary or
useful to discharge its duties under the Management 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 may, from
time to time, prescribe.
Under the Management Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Manager, 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 cost
and expense of 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 Investment Manager or any
corporate affiliate of the Investment Manager; 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 Investment Manager);
membership dues for industry associations; interest payable on the Trust's
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
11
<PAGE>
and Trustees) of the Trust which inure to its benefit; and extraordinary
expenses (including, but not limited to, legal claims and liabilities and
litigation costs and any indemnification related thereto); and all other
charges and costs of the Trust's operations unless otherwise explicitly
provided in the Management Agreement.
The Management Agreement provides that the Investment Manager shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Manager 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 addition, the Investment
Manager pays the compensation of the officers of the Trust and provides the
Trust with office space and equipment, and clerical and bookkeeping services
and telephone service, heat, light, power and other utilities. The Investment
Manager 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 the Investment Manager,
necessary or desirable). In return for its services and the expenses the
Investment Manager assumes under the Management Agreement, the Trust pays the
Investment Manager compensation which is accrued daily and payable monthly
and which is determined by applying the annual rate of 0.35% to the Trust's
average weekly net assets. For the fiscal year ended October 31, 1995, the
Trust accrued to the Investment Manager pursuant to the Management Agreement,
total compensation of $2,588,394. The net assets of the Trust totalled
$752,840,465 at October 31, 1995.
The Management Agreement had an initial term ending April 30, 1994 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 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 Management Agreement or "interested
persons" of any such party (as defined in the Act) at a meeting called for
the purpose of voting on such approval. The Management Agreement's most
recent continuation until April 30, 1997 was approved by the Trustees,
including a majority of the Independent Trustees, at a Meeting of the
Trustees held on April 17, 1996, called for the purpose of approving the
Management Agreement.
The Management Agreement also provides that it may be terminated at any
time by the Investment Manager, 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 provides for its automatic
termination in the event of its assignment.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, a wholly-owned subsidiary of InterCapital, DWSC began
to provide the administrative services to the Trust which were previously
performed directly by InterCapital. On April 17, 1995, DWSC was reorganized
in the State of Delaware, necessitating the entry into a new Services
Agreement by InterCapital and DWSC on such date. The foregoing internal
reorganizations did not result in any change in the nature or scope of the
administrative services being provided to the Trust or any of the fees being
paid by the Trust for the overall services being performed under the terms of
the Management Agreement.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. is the Trust's investment manager.
InterCapital maintains its offices at Two World Trade Center, New York, New
York 10048. InterCapital, which was incorporated in July, 1992, is a
wholly-owned subsidiary Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services organization providing a broad range of nationally
marketed credit and investment products.
12
<PAGE>
The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:
Philip J. Purcell, Chairman of the Board of Directors and Chief Executive
Officer of DWDC and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Dean Witter
Capital, Executive Vice President of DWDC and Director of DWR, Distributors,
InterCapital, DWSC and DWTC; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and
Director of DWR, Distributors, InterCapital, DWSC and DWTC; Charles A.
Fiumefreddo, Executive Vice President and Director of DWR, Chairman of the
Board of Directors, Chief Executive Officer and Director of InterCapital,
DWSC and Distributors and Chairman of the Board of Directors and Director of
DWTC; Christine A. Edwards, Executive Vice President, Secretary and General
Counsel of DWDC, Executive Vice President, Secretary, General Counsel and
Director of DWR, Executive Vice President, Secretary, Chief Legal Officer and
Director of Distributors, and Director of InterCapital and DWSC; and Thomas
C. Schneider, Executive Vice President and Chief Financial Officer of DWDC
and Executive Vice President, Chief Financial Officer and Director of DWR,
Distributors and InterCapital and DWSC.
The business address of the foregoing Executive Officer and Directors is
Two World Trade Center, New York, New York 10048.
InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. The Appendix lists the investment companies for which InterCapital
provides investment management or investment advisory services and which have
similar investment objectives to that of the Trust and sets forth the fees
payable to InterCapital by such companies, including the Trust, and their net
assets as of July 23, 1996.
DWDC has its offices at Two World Trade Center, New York, New York 10048.
There are various lawsuits pending against DWDC involving material amounts
which, in the opinion of its management, will be resolved with no material
effect on the consolidated financial position of the company.
During the fiscal year ended October 31, 1995, the Trust accrued to DWTC,
the Trust's Transfer Agent and an affiliate of the Investment Manager,
transfer agency fees of $213,592.
AFFILIATED BROKERAGE
Because DWR and InterCapital are under the common control of DWDC, DWR is
an affiliated broker of InterCapital. During the fiscal year ended October
31, 1995, the Trust did not pay any brokerage commissions to DWR.
(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Trustees have unanimously selected the firm of Price Waterhouse LLP as
the Trust's independent accountants for the fiscal year ending October 31,
1996. Its selection is being submitted for ratification or rejection by
shareholders at the meeting. Price Waterhouse LLP has been the independent
accountants for the Trust since its inception, and has no direct or indirect
financial interest in the Trust.
A representative of Price Waterhouse LLP is expected to be present at the
Meeting and will be available to make a statement, if he or she so desires,
and to respond to appropriate questions of Shareholders.
The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required for
ratification of the selection of Price Waterhouse LLP as the independent
accountants for the Trust.
13
<PAGE>
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
TRUST.
(4) SHAREHOLDER PROPOSAL TO AMEND THE TRUST'S DECLARATION
OF TRUST TO REQUIRE THAT EACH TRUSTEE, WITHIN THIRTY DAYS
OF ELECTION, BECOME A SHAREHOLDER OF THE TRUST
The Trust has been informed by Edwin S. Mullett, 1420 Fern Court, Vero
Beach, Florida 32963-4009, Executor for the Estate of Marie T. Mullett which
owned 1,006 Common Shares at July 23, 1996 (the "Proponent"), that he intends
to submit the following proposal at the meeting:
"RESOLVED, that the Declaration of Trust be amended to require that each
Trustee, within thirty days of election, become a shareholder of the Trust."
The Proponent has requested that the following statement be included in
support of his proposal:
"It seems obvious that the Trustees could best represent the shareholders
if they were shareholders themselves. Yet, according to the last proxy, not
one of our Trustees owned a single share of our Trust. You will soon read a
litany of excuses and explanations designed to convince you that we are
better off because our Trustees don't own any shares. Aw, come on guys! I
urge you to support the 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 Trustees have considered whether a share ownership requirement for
Trustees such as that proposed by the Proponent for this Trust is in the best
interests of the Trust and its shareholders and have concluded that, for
several reasons outlined below, it is not. However, to address any
expectation of shareholders that the Trustees own shares of Funds in the Dean
Witter complex, the Trustees have adopted a share ownership policy as
described below.
THE SHARE OWNERSHIP POLICY
The Trustees are aware that there may be an expectation among shareholders
that the Trustees own shares of the Funds in the Dean Witter complex. To
address shareholder concerns in this regard, the Trustees, on July 23, 1996,
adopted a policy pursuant to which each Trustee, and/or his or her spouse, is
required to invest at least $25,000 in any of the Funds in the Dean Witter
complex (and, if applicable, in the TCW/DW Funds) 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. 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
June 30, 1996, the total value of shares of the Dean Witter Funds (and, if
applicable, the TCW/DW Funds) owned by the Trustees and/or their spouses was
approximately $8.6 million.
REASONS FOR OPPOSING SHAREHOLDER PROPOSAL
The Trustees believe it is not necessary to own shares of the Trust to act
in the best interests of shareholders and that they can carry out their
duties and functions diligently and effectively without owning
14
<PAGE>
shares of the Trust. In addition, the Trust's objectives and policies may not
be appropriate for a Trustee's individual financial circumstances and 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 believe that any policy requiring the Trustees to own shares
of a specific Fund for which they serve as Trustees, without regard to their
own respective investment objectives, could logically be extended to all the
Funds in the Dean Witter complex. The Trustees believe that such a
complex-wide share ownership requirement would be impractical and undesirable
because it could make it more difficult to maintain the same board of
directors for all the Funds given the large number of Funds in the complex.
The Trustees believe that having the same Trustees for each of the Dean
Witter Funds is in the best interests of all the Funds' shareholders for
several reasons. First, a common board enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of high caliber
Trustees. In addition, having a common board avoids the duplication of effort
that would arise from having different groups of individuals serving as
Trustees for each of the Funds and avoids the cost and confusion that may
arise from different conclusions being reached by different boards on the
same operations and management issues. Finally, serving as Trustees of all
Funds tends to increase a Trustee's knowledge and expertise regarding matters
which affect all the Funds in the complex and enhances the ability to
negotiate on behalf of each Fund with the Funds' 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 each of the Common
Shares and Preferred Shares outstanding and entitled to vote at the Annual
Meeting, each voting as a separate class, is required for the approval of the
shareholder proposal.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of Proposal Two and will vote against any such adjournment these
proxies required to be voted against that proposal.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed
to be present at the Meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares
held in street name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than April 30, 1997, 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.
15
<PAGE>
REPORTS TO SHAREHOLDERS
The Trust's Annual Report, for its fiscal year ended October 31, 1995, and
its most recent Semi-Annual Report succeeding the Annual Report, are
available without charge upon request from Adrienne Ryan-Pinto at Dean Witter
Trust Company, Harborside Financial Center, Plaza Two, Jersey City, New
Jersey 07311 (telephone 1-800-869-NEWS) (toll-free).
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is the intention of the persons named in the enclosed form of
proxy, or their substitutes, to vote all shares that they are entitled to
vote on any such matter, utilizing such proxy in accordance with their best
judgment on such matters.
By Order of the Board of Trustees
SHELDON CURTIS
Secretary
16
<PAGE>
APPENDIX
InterCapital serves as investment manager or investment adviser to the
Trust and the other investment companies listed below which have similar
investment objectives to that of the Trust, with the net assets shown as of
July 23, 1996.
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 07/23/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
1.DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND* ... $ 983,493,037 0.55% on assets up to $500
million, scaled down at
various asset levels to 0.45%
on assets over $1.25 billion
2.DEAN WITTER LIMITED TERM MUNICIPAL TRUST* ...... $ 64,374,559 0.50%
3.DEAN WITTER MULTI-STATE MUNICIPAL SERIES TRUST* $ 403,792,976 0.35% (1)
4.DEAN WITTER NATIONAL MUNICIPAL TRUST* .......... $ 78,941,362 0.35% (2)
5.DEAN WITTER NEW YORK TAX-FREE INCOME FUND* ..... $ 200,099,913 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
6.DEAN WITTER TAX-EXEMPT SECURITIES TRUST* ....... $1,214,902,093 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.325%
on assets over $1.25 billion
7.INTERCAPITAL CALIFORNIA INSURED MUNICIPAL INCOME $ 241,189,812 0.35%
TRUST** .........................................
8.INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL $ 200,478,533 0.35%
SECURITIES** ....................................
9.INTERCAPITAL INSURED CALIFORNIA MUNICIPAL $ 63,133,473 0.35%
SECURITIES** ....................................
10.INTERCAPITAL INSURED MUNICIPAL BOND TRUST** ... $ 108,176,997 0.35%
11.INTERCAPITAL INSURED MUNICIPAL INCOME TRUST** . $ 587,553,551 0.35%
12.INTERCAPITAL INSURED MUNICIPAL SECURITIES** ... $ 136,379,389 0.35%
13.INTERCAPITAL INSURED MUNICIPAL TRUST** ........ $ 477,811,073 0.35%
14.INTERCAPITAL NEW YORK QUALITY MUNICIPAL $ 92,218,748 0.35%
SECURITIES** ...................................
15.INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST** . $ 728,987,051 0.35%
16.INTERCAPITAL QUALITY MUNICIPAL INVESTMENT $ 375,066,087 0.35%
TRUST** ........................................
17.INTERCAPITAL QUALITY MUNICIPAL SECURITIES** ... $ 361,449,247 0.35%
18.MUNICIPAL INCOME TRUST** ....................... $ 302,661,126 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
19.MUNICIPAL INCOME TRUST II** .................... $ 276,004,729 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
A-1
<PAGE>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 07/23/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
20.MUNICIPAL INCOME TRUST III** ................... $ 62,531,432 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
21.MUNICIPAL INCOME OPPORTUNITIES TRUST** ........ $176,265,118 0.50%
22.MUNICIPAL INCOME OPPORTUNITIES TRUST II** ..... $173,881,790 0.50%
23.MUNICIPAL INCOME OPPORTUNITIES TRUST III** .... $102,406,299 0.50%
24.MUNICIPAL PREMIUM INCOME TRUST** ............... $355,579,060 0.40%
25.DEAN WITTER SELECT MUNICIPAL REINVESTMENT $ 91,718,259 0.50%
FUND*** ........................................
26.DEAN WITTER HAWAII MUNICIPAL TRUST* ............ $ 2,359,162 0.35% (3)
<FN>
- ------------
* Open-end investment company
** Closed-end investment company
*** Open-end investment company offered only to the holders of units of
certain unit investment trusts (UITs) in connection with the
reinvestment of UIT distributions
(1) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of the
Massachusetts, Michigan, Minnesota, New York and Ohio Series of Dean
Witter Multi-State Municipal Series Trust and to waive the compensation
provided for in its investment management agreement with that company
in respect to the aforementioned Series to the extent that such
expenses and compensation on an annualized basis exceed 0.50% of the
average daily net assets of the pertinent Series.
(2) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter National Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company to the
extent that such expenses and compensation on an annualized basis
exceed 0.50% of the average daily net assets of that company.
(3) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter Hawaii Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company.
</TABLE>
A-2
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS-OCTOBER 29, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, JOSEPH J. MCALINDEN,
ROBERT M. SCANLAN, 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 INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST on October 29,
1996 at 2:00 p.m., New York City time, and at any adjournment thereof, on the
proposals set forth in the Notice of Meeting dated August 26, 1996 as
follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR THE NOMINEE FOR TRUSTEE AND
FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN the Proxy Card in the enclosed
envelope so that your vote on all matters may be counted.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [X] OR [X] IN BLUE OR BLACK INK. COMMON SHARES
1. ELECTION OF TRUSTEES:
[ ] FOR THE NOMINEE
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for the nominees listed below)
Michael Bozic
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. APPROVAL OF CURRENT INVESTMENT MANAGEMENT
AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE LLP AS
INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. SHAREHOLDER PROPOSAL: FOR [ ] AGAINST [ ] ABSTAIN [ ] 099
(NOTE: THE TRUSTEES RECOMMEND A VOTE AGAINST THIS PROPOSAL)
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the shares
are registered in more than one name, each
joint owner or each fiduciary should sign
personally. Only authorized officers
should sign for corporations.
Dated
--------------------------------
--------------------------------
Signature
--------------------------------
Signature
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS-OCTOBER 29, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, JOSEPH J. MCALINDEN,
ROBERT M. SCANLAN, 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 INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST on October 29,
1996 at 2:00 p.m., New York City time, and at any adjournment thereof, on the
proposals set forth in the Notice of Meeting dated August 26, 1996 as
follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR THE NOMINEE FOR TRUSTEE AND
FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN the Proxy Card in the enclosed
envelope so that your vote on all matters may be counted.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [X] OR [X] IN BLUE OR BLACK INK. PREFERRED SHARES
1. ELECTION OF TRUSTEES: [ ] FOR THE NOMINEE [ ] WITHHOLD
AUTHORITY
(except as marked to the contrary below)
(to vote for
all nominees
listed
below)
Michael Bozic
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
ELECTION OF PREFERRED TRUSTEE: [ ] FOR THE NOMINEE [ ] WITHHOLD
AUTHORITY
(except as marked to the contrary below)
(to vote for
all nominees
listed
below)
Charles A. Fiumefreddo
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
2. APPROVAL OF CURRENT INVESTMENT MANAGEMENT
AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF
PRICE WATERHOUSE LLP AS
INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. SHAREHOLDER PROPOSAL: FOR [ ] AGAINST [ ] ABSTAIN [ ]
(NOTE: THE TRUSTEES RECOMMEND A VOTE AGAINST THIS PROPOSAL)
099
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign
personally. If the
shares are registered
in more than one name,
each joint owner or
each fiduciary should
sign personally. Only
authorized officers
should sign for
corporations.
Dated
----------------------
----------------------
Signature
----------------------
Signature
