<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
Intercapital Quality Municipal Income Trust
- -------------------------------------------------------------------------------
(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>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 20, 1998
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 Career
Development Room, 61st Floor, 2 World Trade Center, New York, New York 10048,
on October 20, 1998, at 11:00 a.m., New York City time, for the following
purposes:
MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:
1. To elect three (3) 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 October 31,
1998;
3. Shareholder proposal to amend the Trust's Declaration of Trust to
require each Trustee, within thirty days of election, to become a
Shareholder of the Trust (Note: The Trustees unanimously recommend a vote
AGAINST this proposal); and
4. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
MATTERS TO BE VOTED ON ONLY BY PREFERRED SHAREHOLDERS:
To elect one (1) Trustee to serve until the year 2001 Annual Meeting or
until his successor shall have been elected and qualified.
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 24, 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>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
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 INTERCAPITAL QUALITY MUNICIPAL INCOME
TRUST (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. The first mailing of this proxy statement is expected to be made on or
about August 24, 1998.
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 ("Shareholders") and for the nominee to be
elected by only the preferred shareholders ("Preferred Shareholders") and in
favor of Proposal 2 and against Proposal 3. A proxy may be revoked at any time
prior to its exercise by any of the following: written notice of revocation to
the Secretary of the Trust, execution and delivery of a later dated proxy to
the Secretary of the Trust (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 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
outstanding 33,365,413 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 of the Trust or officers and
regular employees of Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"
or the "Investment Manager") (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.
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'
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<PAGE>
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 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. At the Meeting, three Trustees (Edwin J.
Garn, Michael E. Nugent and Philip J. Purcell) are to be elected to the Trust's
Board of Trustees, by the holders of the Common Shares and Preferred Shares
voting together as a single class, to serve until the year 2001 Annual Meeting,
in accordance with the Trust's Declaration of Trust. Additionally, pursuant to
the Trust's Declaration of Trust and the Investment Company Act of 1940, as
amended (the "1940 Act"), one Trustee (John R. Haire) is to be elected to the
Trust's Board of Trustees by the holders of the Preferred Shares voting
separately as a single class.
Seven of the current 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 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 Trustee 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 previously 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:
Edwin J. Garn, John R. Haire, Michael E. Nugent and Philip J. Purcell. 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 or, in the case of
an Independent Trustee nominee, as the Independent Trustees 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 the said nominees would
be unable or unwilling to accept nomination or election. The election of the
nominees listed above to be elected by all Shareholders requires the approval
of a majority of shares of the Trust represented and entitled to vote at the
Meeting (Common Shares and Preferred Shares voting together as a single class).
The election of the nominee listed above to be elected by only the Preferred
Shareholders requires the approval of a majority of the Preferred Shares of the
Trust represented and entitled to vote at the Meeting (voting separately as a
single class).
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.
3
<PAGE>
The Board 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. Johnson, Hedien and Schroeder; and Class III--Messrs. Garn, Haire,
Nugent and Purcell. Each nominee for Trustee at any Annual Meeting will, if
elected, serve a term of up to approximately three years running for the period
assigned to that class and terminating at the date of the Annual Meeting of
Shareholders so designated by the Board, or any adjournment thereof. In
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 III are standing for election at this Meeting and, if
elected, will serve until the year 2001 Annual Meeting or until their
successors shall have been elected and qualified. As a consequence of this
method of election, the replacement of a majority of the Board could be delayed
for up to two years.
The following information regarding each of the nominees for election as
Trustee, and each of the other members of the Board includes his principal
occupations and employment for at least the last five years, his age, shares of
the Trust owned, if any, as of 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 the Meeting by all Shareholders
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 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.
MICHAEL E. NUGENT, Trustee since July, 1992; age 62; 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 Morgan Stanley Dean Witter &
Co. ("MSDW"), DWR and Novus Credit Services Inc.; Director of Morgan Stanley
Dean Witter Distributors Inc. ("MSDW Distributors"); Director or Trustee of the
Morgan Stanley Dean Witter Funds; Director and/or officer of various MSDW
subsidiaries.
The nominee for Trustee to be elected at the Meeting by only the Preferred
Shareholders is:
JOHN R. HAIRE, Trustee since July, 1992, 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
President, Council for Aid to Education (1978-1989) and Chairman and Chief
Executive Officer of Anchor Corporation, an investment adviser (1964-1978).
4
<PAGE>
The Trustees who are not standing for reelection at the Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 57; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director and 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 June, 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, MSDW Services and MSDW Distributors, Executive Vice President and
Director of DWR, Chairman and Director of MSDW Trust and Director and/or
Officer of various MSDW subsidiaries (until June, 1998).
WAYNE E. HEDIEN, Trustee since September, 1997; page 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.
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 the
TCW/DW Funds; Director of NASDAQ (since June, 1995), Greenwich Capital Markets
Inc. (broker-dealer) and NVR (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).
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 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, 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, 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,
Assistant Secretary and Assistant General Counsel of MSDW Distributors (since
February 1997). He was previously First Vice President, Assistant Secretary and
Assistant General Counsel of MSDW Advisors. 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 and
Director of 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
5
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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 of MSDW Advisors and Director of
MSDW Trust (since April, 1996); he is also Chief Investment Officer of MSDW
Advisors. He was previously Senior Vice President of MSDW Advisors (June,
1995-April, 1996). He was formerly a Managing Director of 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 a 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 of MSDW Advisors and Assistant Treasurer of MSDW Advisors
and MSDW Services. Mr. Avelar is 39 years old and is currently Senior Vice
President of MSDW Advisors. Mr. Lian is 43 years old and is currently Vice
President of MSDW Advisors. Mr. Page is 51 years old and is currently Senior
Vice President of MSDW Advisors. Ms. Stromberg is 49 years old and is currently
Vice President of MSDW Advisors. Mr. Arcieri is 49 years old and is currently
Vice President of MSDW Advisors. Other than Mr. Giambrone and Mr. McAlinden,
each of the above officers has been an employee of MSDW Advisors or its
affiliates for over five years.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees 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.
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<PAGE>
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Trust's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of such services; and reviewing
the independence of the independent accountants; considering the range of audit
and non-audit fees and reviewing the adequacy of the Trust's system of internal
controls.
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 October 31, 1997, the Board of Trustees of the
Trust held 5 meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held 2, 9 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.
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.
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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.
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Fund for the fiscal year ended October 31, 1997.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- ---------------
<S> <C>
Michael Bozic ................. $1,700
Edwin J. Garn ................. 1,900
John R. Haire ................. 3,850
Wayne E. Hedien ............... 482
Dr. Manuel H. Johnson ......... 1,850
Michael E. Nugent ............. 1,900
John L. Schroeder ............. 1,900
</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>
8
<PAGE>
As of the date of this Statement of Additional Information, 57 of the
Morgan Stanley 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 Morgan Stanley Dean Witter
Fund that has adopted the retirement program (each such Fund referred to as an
"Adopting Fund" and each such Trustee referred to as an "Eligible Trustee") is
entitled to retirement payments upon reaching the eligible retirement age
(normally, after attaining age 72). Annual payments are based upon length of
service. Currently, upon retirement, each Eligible Trustee is entitled to
receive from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "Regular Benefit") equal to 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 Fund for the fiscal year ended October 31,
1997 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 October 31, 1997 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% $ 388 $ 20,499 $ 875 $ 55,026
Edwin J. Garn ................. 10 58.82 577 30,878 875 55,026
John R. Haire ................. 10 58.82 1,527 (19,823)(3) 2,211 132,002
Wayne E. Hedien ............... 9 50.00 0 0 794 46,772
Dr. Manuel H. Johnson ......... 10 58.82 233 12,832 875 55,026
Michael E. Nugent ............. 10 58.82 436 22,546 875 55,026
John L. Schroeder ............. 8 49.02 667 39,350 729 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.
9
<PAGE>
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
FOR EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
THE INVESTMENT MANAGER AND THE INVESTMENT MANAGEMENT AGREEMENT
MSDW Advisors serves as the investment manager for the Trust pursuant to
an investment management agreement entered into between the Trust and MSDW
Advisors dated May 31, 1997 (the "Management Agreement") which took effect upon
the consummation of the merger of Dean Witter, Discover & Co. with Morgan
Stanley Group Inc. The Management 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 Management Agreement
supersedes an earlier investment management 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 management agreement, except
for the dates of effectiveness and termination.
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 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 Investment Manager pays the compensation of the officers of the Trust
who are also directors, officers or employees of the Investment Manager and
provides the Trust with office space and equipment, and clerical
10
<PAGE>
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 weekly 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,
1997, the Trust accrued to the Investment Manager pursuant to the Management
Agreement, total compensation of $2,568,624. The net assets of the Trust
totalled $742,503,958 at October 31, 1997. The administrative services called
for under the Management Agreement are performed by MSDW Services, a
wholly-owned subsidiary of MSDW Advisors, pursuant to a Services Agreement
between MSDW Advisors and MSDW Services.
The Management Agreement will continue in effect for an initial term
ending April 30, 1999 and will continue in effect from year to year thereafter
provided such continuance is approved by the vote of a majority, as defined in
the 1940 Act, of the outstanding voting securities of the Trust or by the
Trustees of the Trust, and, in either event, by the vote cast in person by a
majority of the Independent Trustees at a meeting called for the purpose of
voting on such approval.
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 (Common Shares and Preferred Shares voting
together as a single class) 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.
THE INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc. is the Trust's investment
manager. 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.
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.
11
<PAGE>
During the fiscal year ended October 31, 1997, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Investment Manager,
transfer agency fees of $164,585.
AFFILIATED BROKERAGE
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. During the fiscal year ended October 31, 1997,
the Trust did not pay any brokerage commissions to DWR and 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 October
31, 1998. 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 BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
TRUST.
(3) SHAREHOLDER PROPOSAL TO AMEND THE TRUST'S DECLARATION
OF TRUST TO REQUIRE THAT EACH TRUSTEE, WITHIN THIRTY DAYS
OF ELECTION, BECOME A SHAREHOLDER OF THE TRUST
The Trust has been informed by Carol W. Mullett, 239 East Shore Drive,
Lake Toxaway, North Carolina 28747, a shareholder of record who owned 1,154.3
Common Shares at July 31, 1998 (the "Proponent"), that she 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 her proposal:
I believe that the Trustees could better understand and represent our
interests if they were shareholders themselves. Yet not one of the Trustees
owns a single share of our Trust. In fact, no Trustee has EVER been a
shareholder. You can read below a litany of excuses seeking to convince you
that you are somehow better off because the Trustees WILL NOT invest in our
Trust. Let's look at their excuses: I call them the THREE LITTLE FIGS.
Fig Leaf #1 -- "The Trustees have adopted a policy" which requires "each
Trustee . . . to invest at least $25,000 in any of the Funds." Sounds good but
they unanimously refuse to invest less than $10 in our Trust. Amazing but true
- -- the Trustees can meet their requirement with money market funds! By the way,
they adopted this policy only after my proposals. This is the scantiest of the
fig leaves.
Fig Leaf #2 -- "The Trust's objectives and policies may not be appropriate
for a Trustee." Isn't it strange that apparently not one of the Trustees shares
our interest in tax-free income. And remember, they can meet our proposed
requirement by investing less than $10. Aw, come on guys.
12
<PAGE>
Fig Leaf #3 -- "Any policy which requires the Trustees to own shares of a
specific Fund . . . could logically be extended to all Funds." This excuse is
pure smoke since my proposal applies only to InterCapital Quality Municipal
Income Trust and has no bearing on any other company. However, will logic
oblige the Trustees to invest in all the Funds if my proposal passes? Impaled
on a fig leaf?
I hope you will vote for my proposal and encourage the Trustees to join us
as stockholders so they can share the risks and rewards of our investment.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE
SHAREHOLDER PROPOSAL.
RECOMMENDATION OF THE BOARD OF TRUSTEES
The Proponent or Mr. Edwin Mullett has previously requested that a similar
proposal be included in the proxy statement relating to two previous annual
meetings. The proposal was included and failed to obtain sufficient votes to be
adopted by shareholders. The Trustees determined to oppose the proposal. The
Trustees considered whether a share ownership requirement for Trustees such as
that proposed by the Proponent was in the best interests of the Trust and its
shareholders and they concluded that it was not. The Trustees continue to
adhere to this view. The reasons for the Trustees' decision are, once again,
reiterated below.
THE SHARE OWNERSHIP POLICY
The Trustees have adopted a policy pursuant to which each Trustee, and/or
his or her spouse, is required to invest at least $25,000 in any of the Funds
in the Morgan Stanley Dean Witter Complex, including the Trust (and, if
applicable, in the TCW/DW Funds), on whose boards the Trustee serves. 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, 1998, the total value of shares
of the Morgan Stanley Dean Witter Funds (and, if applicable, the TCW/DW Funds)
owned by the Trustees and/or their spouses was approximately $10.6 million.
REASONS FOR OPPOSING THE SHAREHOLDER PROPOSAL
The share ownership policy requires the Trustees to make a significant
investment in the Funds in the Morgan Stanley Dean Witter complex, which
includes the Trust (and, if applicable, the TCW/DW Funds), while allowing the
Trustees to select the specific Funds that meet their individual investment
needs. As stated in the two previous years' proxy statements, the Trustees
believe it is not necessary to own shares of this particular Trust to act in
the best interests of shareholders and that they can carry out their duties and
functions diligently and effectively without owning shares of the Trust. In
addition, because the Trust's objectives and policies may not be appropriate
for a Trustee's individual financial circumstances, the Trust could be
inhibited in its ability to attract Trustees if the available pool is limited
to those whose personal financial needs are met by the Trust's objectives and
policies.
The Trustees continue to believe that any policy requiring the Trustees to
own shares of a specific Fund for which they serve as Trustees, without regard
to their own respective investment objectives, could logically be extended to
all the Funds in the Morgan Stanley Dean Witter complex. The Trustees believe
that such a complex-wide share ownership requirement would be impractical and
undesirable because it could make it more difficult to maintain the same board
of directors for all the Funds given the large number of Funds in the complex.
The Trustees believe that having the same Trustees for each of the Morgan
Stanley Dean Witter
13
<PAGE>
Funds is in the best interests of all the Funds' shareholders for several
reasons. First, a common board enhances the ability of each Fund to obtain, at
modest cost to each separate Fund, the services of high caliber Trustees. In
addition, having a common board avoids the duplication of effort that would
arise from having different groups of individuals serving as Trustees for each
of the Funds and avoids the cost and confusion that may arise from different
conclusions being reached by different boards on the same operations and
management issues. Finally, serving as Trustees of all Funds tends to increase
a Trustee's knowledge and expertise regarding matters which affect all the
funds in the complex and enhances the ability to negotiate on behalf of each
Fund with the Fund's service providers.
For the reasons stated above and in light of the fact that they have
adopted the share ownership policy described above, the Trustees unanimously
recommend that shareholders vote AGAINST the shareholder proposal.
The affirmative vote of the holders of a majority of each of the common
and preferred shares outstanding and entitled to vote at the 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 have been received by the date of the Meeting.
Abstentions and, if applicable, broker non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed to
be present at the Meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares held
in street name for which the broker indicates that instructions have not been
received from the beneficial owners or other persons entitled to vote and for
which the broker does not have discretionary voting authority.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than April 29, 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 Annual Report, for its fiscal year ended October 31, 1997, and
its most recent Semi-Annual Report succeeding the Annual Report, have been sent
previously to Shareholders and are available without charge upon request from
Adrienne Ryan-Pinto at Morgan Stanley Dean Witter Trust FSB, Harborside
Financial Center, Plaza Two, Jersey City, New Jersey 07311 (telephone
1-800-869-NEWS) (toll-free).
INTEREST OF CERTAIN PERSONS
MSDW, 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
14
<PAGE>
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 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
BARRY FINK
Secretary
15
<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 .55% on assets up to $500
million and 0.525% on assets
over $500 million
5. MORGAN STANLEY DEAN WITTER
TAX-EXEMPT SECURITIES TRUST* .......... 1,165,842,738 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%
15. INTERCAPITAL QUALITY MUNICIPAL
INVESTMENT TRUST** .................... $ 384,875,411 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>
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* ..................... 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>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
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
InterCapital Quality Municipal Income Trust on October 20, 1998, at 11:00 a.m.,
New York City time, and at any adjournment thereof, on the proposals set forth
in the Notice of Meeting dated August 24, 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 NOMINEES FOR TRUSTEE AND FOR PROPOSAL 2 AND AGAINST PROPOSAL 3
SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
[x] PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
1. Election of three (3) Trustees: FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
Edwin J. Garn, Michael E. Nugent, Philip J. Purcell
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY PARTICULAR NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME.
2. Ratification of PricewaterhouseCoopers LLP FOR AGAINST ABSTAIN
as independent accountants. [ ] [ ] [ ]
COMMON SHARES
3. Shareholder Proposal FOR AGAINST ABSTAIN
(NOTE: THE TRUSTEES RECOMMEND [ ] [ ] [ ]
A VOTE AGAINST THIS PROPOSAL)
Date _____________________
Please make sure to sign and date this Proxy using black or blue ink.
[ ]
Shareholder sign in the box above
[ ]
Co-Owner (if any) sign in the box above
- -------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
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.
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
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
InterCapital Quality Municipal Income Trust on October 20, 1998, at 11:00 a.m.,
New York City time, and at any adjournment thereof, on the proposals set forth
in the Notice of Meeting dated August 24, 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 NOMINEES FOR TRUSTEE AND FOR PROPOSAL 2 AND AGAINST PROPOSAL 3
SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
[x] PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
1. Election of three (3) Trustees: FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
Edwin J. Garn, Michael E. Nugent, Philip J. Purcell
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.
Election of Preferred Trustee: FOR WITHHOLD
John R. Haire [ ] [ ]
2. Ratification of PricewaterhouseCoopers LLP FOR AGAINST ABSTAIN
as independent accountants. [ ] [ ] [ ]
PREFERRED SHARES
3. Shareholder Proposal FOR AGAINST ABSTAIN
(NOTE: THE TRUSTEES RECOMMEND [ ] [ ] [ ]
A VOTE AGAINST THIS PROPOSAL)
Date _____________________
Please make sure to sign and date this Proxy using black or blue ink.
[ ]
Shareholder sign in the box above
[ ]
Co-Owner (if any) sign in the box above
- -------------------------------------------------------------------------------
PLEASE DETACH AT PERFORATION
INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
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.
