<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
TCW/DW Term Trust 2002
- -------------------------------------------------------------------------------
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
Set forth the amount on which the filing fee is calculated and state how
it was determined.
4) Proposed maximum aggregate value of transaction:
5) Fee previously paid:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
TCW/DW TERM TRUST 2002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 17, 1998
The Annual Meeting of Shareholders of TCW/DW TERM TRUST 2002 (the
"Trust"), an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts, will be held in Conference Room A, Forty-Fourth
Floor, Two World Trade Center, New York, New York 10048, on December 17, 1998,
at 11:00 a.m., New York City time, for the following purposes:
1. To elect two (2) Trustees to serve until the year 2001 Annual
Meeting or until their successors shall have been elected and qualified;
2. To approve or disapprove the continuance of the currently
effective Investment Advisory Agreement between the Trust and TCW Funds
Management, Inc.;
3. To ratify or reject the selection of PricewaterhouseCoopers LLP as
the Trust's independent accountants for the fiscal year ending September
30, 1999;
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 adjournment thereof.
Shareholders of record as of the close of business on October 28, 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 they are entitled to vote in favor of the
proposal to approve continuance of the Investment Advisory Agreement and will
vote against any such adjournment those proxies required to be voted against
that proposal.
BARRY FINK,
Secretary
November 5, 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>
TCW/DW TERM TRUST 2002
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 17, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of TCW/DW TERM TRUST 2002
(the "Trust"), for use at the Annual Meeting of Shareholders of the Trust to be
held on December 17, 1998, (the "Meeting"), and at any adjournments thereof.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted for each of the nominees for election as Trustee
and in favor of 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.
Holders of shares of the Trust ("Shareholders") as of the close of
business on October 28, 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
October 28, 1998 there were 40,560,440 shares of beneficial interest of the
Trust outstanding, all with $0.01 par value. No person was known to own as much
as 5% of the outstanding shares of the Trust on that date. The percentage
ownership of shares of the Trust changes from time to time depending on
purchases and sales by Shareholders and the total number of shares outstanding.
The first mailing of this Proxy Statement is expected to be made on or about
November 5, 1998.
The cost of soliciting proxies for the Meeting, consisting principally of
printing and mailing expenses, will be borne by the Trust. The solicitation of
proxies will be by mail, which may be supplemented by solicitation by mail,
telephone or otherwise through Trustees, officers of the Trust, officers and
regular employees of Morgan Stanley Dean Witter Services Company Inc. ("MSDW
Services" or the "Manager")(formerly named Dean Witter Services Company Inc.)
or its parent company Morgan Stanley Dean Witter Advisors Inc. ("MSDW
Advisors") (formerly named Dean Witter InterCapital Inc.), Morgan Stanley Dean
Witter Trust FSB ("MSDW Trust") and/or 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.
William F. Doring & Co. and MSDW Trust may call Shareholders to ask if
they would be willing to have their votes recorded by telephone. The telephone
voting procedure is designed to authenticate Shareholders' identities, to allow
Shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that their instructions have been recorded
properly. No recommendation will be made as to how a Shareholder should vote on
any Proposal other than to refer to the recommendations of the Board. The Trust
has been advised by counsel that these procedures are consistent with the
requirements of applicable law. Shareholders voting by telephone will be asked
for their social security number or other identifying information and will be
given an opportunity to authorize proxies to vote their shares in accordance
with their instruction.
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<PAGE>
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 currently been fixed by the Trustees, pursuant
to the Trust's Declaration of Trust, at nine. There are currently nine
Trustees, two of whom (Richard M. DeMartini and Thomas E. Larkin, Jr. ) are
standing for election at this Meeting to serve until the year 2001 Annual
Meeting in accordance with the Trust's Declaration of Trust.
Five of the current nine Trustees (John C. Argue, 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 Investment Company Act of 1940, as amended (the "1940 Act").
The nominees for election as Trustees of the Trust have been proposed by the
Trustees now serving or, in the case of the nominees for positions as
Independent Trustees, by the Independent Trustees now serving. All of the
Trustees have been elected 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:
Richard M. DeMartini and Thomas E. Larkin, Jr. Should any of the nominees
become unable or unwilling to accept nomination or election, the persons named
in the proxy will exercise their voting power in favor of such person or
persons as the Board may recommend. All of the nominees have consented to being
named in this Proxy Statement and to serve if elected. The Trust knows of no
reason why said nominees would be unable or unwilling to accept nomination or
election. The election of each Trustee requires the approval of a majority of
the shares of the Trust represented and entitled to vote at the Meeting.
Pursuant to the provisions of the Trust's Declaration of Trust, the
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 of Trustees previously determined that any nominee for election
as Trustee will stand for election as Trustee and serve as Trustee in one of
the three classes of Trustees as follows: Class I--Messrs. Haire, Johnson,
Schroeder and Stern; Class II--Messrs. DeMartini and Larkin; and Class
III--Messrs. Argue, Fiumefreddo and Nugent. Each nominee 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 of Trustees, or any adjournment thereof. As a
consequence of this method of election, the replacement of a majority of the
Board could be delayed for up to two years. In accordance with the above, the
Class II Trustees are standing for election and will serve until the year 2001
Annual Meeting or until their successors shall have been elected and qualified.
The following information regarding each of the nominees for election as
Trustee and each of the other members of the Board includes his principal
occupations and employment for at least the last five years, his age, shares of
the Trust owned, if any, as of October 28, 1998 (shown in parentheses),
positions with the Trust, and directorships (or trusteeships) in other
companies which file periodic reports with the Securities and Exchange
Commission, including the 11 investment companies, including the Trust, for
which TCW Funds Management,
3
<PAGE>
Inc. serves as investment adviser (the "Investment Adviser" or the "Adviser"),
and MSDW Advisors' wholly-owned subsidiary, MSDW Services, serves as manager
(referred to herein as the "TCW/DW Funds"), and the 85 investment companies for
which MSDW Advisors serves as investment manager or investment adviser
(referred to herein as the "Morgan Stanley Dean Witter Funds").
The nominees for Trustee to be elected at this Meeting are:
RICHARD M. DeMARTINI,* Trustee since January, 1993; age 46; President and
Chief Operating Officer of Morgan Stanley Dean Witter Individual Asset
Management Group, a business unit of Morgan Stanley Dean Witter & Co. ("MSDW");
President and Chief Operating Officer of DWR. Trustee of the TCW/DW Funds and
the Van Kampen Funds; Director and/or officer of various MSDW subsidiaries;
formerly Vice Chairman of the Board of the National Association of Securities
Dealers, Inc.; formerly Chairman of the Board of Directors of the Nasdaq
Market, Inc.
THOMAS E. LARKIN, Jr.,* Trustee since September, 1992; age 59; Executive
Vice President and Director, The TCW Group, Inc.; President and Director of
Trust Company of the West; Vice Chairman and Director of TCW Asset Management
Company; Chairman of the Adviser; Member of the Board of Trustees of the
University of Notre Dame; Director of Orthopaedic Hospital of Los Angeles;
President and Director of TCW Galileo Funds, Inc.; Senior Vice President of TCW
Convertible Securities Fund, Inc.; President and Trustee of the TCW/DW Funds.
The Trustees who are not standing for reelection at this Meeting are:
JOHN C. ARGUE, Trustee since September, 1992; age 66; Of Counsel, Argue
Pearson Harbison & Myers (law firm); Director, Avery Dennison Corporation
(manufacturer of self-adhesive products and office supplies) and CalMat Company
(producer of aggregates, asphalt and ready mixed concrete); Chairman, The Rio
Hondo Memorial Foundation (charitable foundation); advisory director, LAACO
Ltd. (owner and operator of private clubs and real estate); director or trustee
of various business and not-for-profit corporations; Director, TCW Galileo
Funds, Inc. and TCW Convertible Securities Fund, Inc; Director, Apex Mortgage
Capital, Inc. and Nationwide Health Properties, Inc. (real estate investment
trust.); Trustee of the TCW/DW Funds.
CHARLES A. FIUMEFREDDO,* Trustee since August, 1992; 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 Morgan Stanley Dean Witter Distributors Inc. ("MSDW
Distributors"), Executive Vice President and Director of DWR, Chairman and
Director of MSDW Trust and Director and/or officer of various MSDW subsidiaries
(until June, 1998).
JOHN R. HAIRE, Trustee since September, 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 Chairman of the Independent Directors or Trustees of the Morgan
Stanley Dean Witter Funds and the TCW/DW Funds (until June, 1998); formerly
President, Council for Aid to Education (1978-1989) and Chairman and Chief
Executive Officer of Anchor Corporation, an investment adviser (1964-1978).
DR. MANUEL H. JOHNSON, Trustee since September, 1992; 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, Greenwich Capital Markets,
Inc. (broker-dealer) and NVR Inc.
4
<PAGE>
(home construction); Chairman and Trustee of the Financial Accounting
Foundation (oversight organization for the Financial Accounting Standards
Board); formerly Vice Chairman of the Board of Governors of the Federal Reserve
System (1986-1990) and Assistant Secretary of the U.S. Treasury (1982-1986).
MICHAEL E. NUGENT, Trustee since September, 1992; age 62; General Partner,
Triumph Capital, L.P.; 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.
JOHN L. SCHROEDER, Trustee since April, 1995; age 68; 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).
MARC I. STERN,* Trustee since April, 1995; age 54; Vice President of the
Trust; President and Director, The TCW Group Inc.; President and Director of
the Adviser; Vice Chairman and Director of TCW Asset Management Company;
Executive Vice President and Director of Trust Company of the West; Chairman
and Director of the TCW Galileo Funds, Inc.; Trustee of the TCW/DW Funds;
formerly President of SunAmerica, Inc. (financial services company)
(1988-1990); Director of Qualcomm, Incorporated (wireless communications);
Director or Trustee of various not-for-profit organizations.
The executive officers of the Trust are: Barry Fink, Vice President,
Secretary and General Counsel; Mitchell M. Merin, Vice President; Robert M.
Scanlan, Vice President; Ronald E. Robison, Vice President; Robert S.
Giambrone, Vice President; Philip A. Barach, Vice President, Jeffrey E.
Gundlach, Vice President; Frederick H. Horton, Vice President; and Thomas F.
Caloia, Treasurer. In addition, Marilyn K. Cranney, Lou Anne D. McInnis,
Carsten Otto, Ruth Rossi, 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 Assistant Secretary
of DWR (since August, 1996); he is also Senior Vice President (since March,
1997), Assistant Secretary and Assistant General Counsel (since February, 1997)
of MSDW Distributors. He was previously First Vice President, Assistant
Secretary and Assistant General Counsel of MSDW Advisors. Mr. Merin is 45 years
old and is currently President, Chief Executive Officer and Director of MSDW
Advisors and MSDW Services, Chairman and Director of MSDW Distributors and MSDW
Trust, Executive Vice President and Director of DWR and Director of SPS
Transaction Services, Inc. and various other MSDW subsidiaries. Mr. Scanlan is
62 years old and is currently President, Chief Operating Officer and Director
of MSDW Advisors and MSDW Services; he is also Executive Vice President of MSDW
Distributors and Executive Vice President and Director of MSDW Trust. Mr.
Robison is 59 years old and is currently Executive Vice President and Chief
Administrative Officer of MSDW Advisors and MSDW Services (since September
1998); prior thereto he was a Managing Director of the TCW Group, Inc. 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. Caloia is 52 years old and is currently First Vice
President and Assistant Treasurer of MSDW Advisors and MSDW Services. Other
than Messrs. Robison and Giambrone, each of the above officers has been an
employee of MSDW Advisors or its affiliates for over five years. Mr. Barach is
46 years old and is currently a Managing
- ----------
* Messrs. DeMartini, Fiumefreddo, Larkin and Stern may be deemed "interested
persons" of the Trust and/or its Investment Adviser as defined in Section
2(a)(19) of the 1940 Act, due to their affiliation with the Investment Adviser
or Manager and/or their affiliated companies.
5
<PAGE>
Director of Trust Company of the West, TCW Asset Management Company and TCW
Funds Management, Inc. Mr. Gundlach is 39 years old and is currently a Managing
Director of Trust Company of the West, TCW Asset Management Company and TCW
Funds Management, Inc. Mr. Horton is 40 years old and is currently a Managing
Director of Trust Company of the West, TCW Asset Management Company and TCW
Funds Management, Inc. Messrs. Barach, Gundlach and Horton have been associated
with The TCW Group, Inc. and/or its subsidiaries 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 trustees for all of the TCW/DW Funds. As of the date
of this Proxy Statement, there are a total of 11 TCW/DW Funds. As of September
30, 1998, the TCW/DW Funds had total net assets of approximately $3.7 billion
and approximately a quarter of a million shareholders.
Five Trustees (56% of the total number) have no affiliation or business
connection with TCW Funds Management, Inc. or MSDW Services or any of their
affiliated persons and do not own any stock or other securities issued by MSDW
or TCW, the parent companies of MSDW Services and TCW Funds Management, Inc.,
respectively. These are the "disinterested" or "independent" Trustees. Four of
the five independent Trustees are also Independent Trustees of the Morgan
Stanley Dean Witter Funds.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The TCW/DW 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. In addition,
two of the Trustees, including one Independent Trustee, serve as members of the
Insurance Committee. During the calendar year ended December 31, 1997, the
Audit Committee, the Derivatives Committee and the Independent Trustees held a
combined total of sixteen 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 Trust performance; checking
on the pricing of portfolio securities, brokerage commissions, transfer agent
costs and performance, and trading among Funds in the same complex; and
approving fidelity bond and related insurance coverage and allocations, as well
as other matters that arise from time to time.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Trust's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of such services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; and reviewing the adequacy of the Trust's system of internal
controls.
The Board of 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.
6
<PAGE>
Finally, the Board of each Fund has formed an Insurance Committee to
review and monitor the insurance coverage maintained by the Fund.
For the fiscal year ended September 30, 1998, the Board of Trustees of the
Trust held 6 meetings, and the Audit Committee, the Independent Trustees, the
Derivatives Committee and the Insurance Committee of the Trust held 2, 8, 4 and
1 meeting(s), respectively. No Trustee attended fewer than 75% of the meetings
of the Board of Trustees, the Audit Committee, the Independent Trustees, the
Derivatives Committee or the Insurance Committee held while he served in such
positions.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL TCW/DW
FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the TCW/DW 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 TCW/DW 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 TCW/DW Funds complex (and, if applicable, in the Morgan Stanley Dean Witter
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 the date of this Proxy Statement, the
total value of the investments by the Trustees and/or their spouses in shares
of the TCW/DW Funds (and, if applicable, the Morgan Stanley Dean Witter Funds)
was approximately $14.7 million.
As of October 28, 1998, 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 $2,225 plus a per
meeting fee of $200 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 and officers of
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the Trust who are or have been employed by the Manager or the Adviser or an
affiliated company of either 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 Trustees of the TCW/DW Funds do not
have retirement or deferred compensation plans.
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended September 30, 1998.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
John C. Argue ................................................ $5,656
John R. Haire ................................................ 6,906
Dr. Manuel H. Johnson ........................................ 5,456
Michael E. Nugent ............................................ 5,456
John L. Schroeder ............................................ 5,656
</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 14 TCW/DW Funds and, in the case of Messrs. Haire, Johnson, Nugent and
Schroeder, the 84 Morgan Stanley Dean Witter Funds that were in operation at
December 31, 1997, and, in the case of Mr. Argue, TCW Galileo Funds, Inc. and
TCW Convertible Securities Fund, Inc. Mr. Haire serves as Chairman of the Audit
Committee of each TCW/DW Fund and each Morgan Stanley Dean Witter 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 Morgan Stanley Dean Witter Funds are included solely because of
a limited exchange privilege between various TCW/DW Funds and five Morgan
Stanley Dean Witter Money Market Funds. With respect to Mr. Argue, TCW Galileo
Funds, Inc. and TCW Convertible Securities Fund, Inc. are included solely
because the Fund's Adviser, TCW Funds Management, Inc., also serves as Adviser
to those investment companies.
CASH COMPENSATION FROM FUND GROUPS
<TABLE>
<CAPTION>
FOR SERVICE
AS DIRECTOR OR
FOR SERVICE AS TRUSTEE AND
TRUSTEE AND COMMITTEE FOR SERVICE AS
COMMITTEE MEMBER DIRECTOR OF
MEMBER OF 84 TCW GALILEO
OF 14 MORGAN STANLEY FUNDS, INC. AND
TCW/DW DEAN WITTER TCW CONVERTIBLE
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS SECURITIES FUND, INC.
- --------------------------- ----- ----- ---------------------
<S> <C> <C> <C>
John C. Argue ............... $71,125 -- $43,250
John R. Haire ............... 73,725 $149,702 --
Dr. Manuel H. Johnson........ 71,125 145,702 --
Michael E. Nugent ........... 73,725 149,702 --
John L. Schroeder ........... 73,725 149,702 --
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF TOTAL
FOR SERVICES AS INDEPENDENT CASH COMPENSATION
CHAIRMAN OF DIRECTORS/ FOR SERVICES TO
INDEPENDENT TRUSTEES 84 MORGAN STANLEY
TRUSTEES AND AUDIT DEAN WITTER
AND AUDIT COMMITTEES FUNDS, 14
COMMITTEES OF 84 TCW/DW FUNDS,
OF 14 MORGAN STANLEY TCW GALILEO FUNDS, INC.
TCW/DW DEAN WITTER AND TCW CONVERTIBLE
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS SECURITIES FUND, INC.
- --------------------------- ----- ----- ---------------------
<S> <C> <C> <C>
John C. Argue ............... -- -- $114,375
John R. Haire ............... $25,350 $157,463 406,240
Dr. Manuel H. Johnson........ -- -- 216,827
Michael E. Nugent ........... -- -- 223,427
John L. Schroeder ........... -- -- 223,427
</TABLE>
8
<PAGE>
As of the date of this Proxy Statement, 57 of the Morgan Stanley Dean
Witter Funds 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 Messrs.
Haire, Johnson, Nugent and Schroeder by the 57 Morgan Stanley Dean Witter Funds
for the year ended December 31, 1997, and the estimated retirement benefits for
Messrs. Haire, Johnson, Nugent and Schroeder, to commence upon their
retirement, from the 57 Morgan Stanley Dean Witter Funds as of December 31,
1997.
RETIREMENT BENEFITS FROM ALL MORGAN STANLEY DEAN WITTER FUNDS
<TABLE>
<CAPTION>
ESTIMATED
CREDITED YEARS ESTIMATED RETIREMENT BENEFITS ESTIMATED ANNUAL BENEFITS
OF SERVICE AT PERCENTAGE OF ACCRUED AS EXPENSES UPON RETIREMENT
RETIREMENT ELIGIBLE BY ALL ADOPTING FROM ALL ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS FUNDS(2)
- --------------------------- ------------ ------------ ----- --------
<S> <C> <C> <C> <C>
John R. Haire ................. 10 58.82% $(19,823)(3) $132,002
Dr. Manuel H. Johnson ......... 10 58.82 12,832 55,026
Michael E. Nugent ............. 10 58.82 22,546 55,026
John L. Schroeder ............. 8 49.02 39,350 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.
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT ADVISORY AGREEMENT
The Trust's investments are managed by TCW Funds Management, Inc.
(referred to herein as the "Investment Adviser"), pursuant to an Investment
Advisory Agreement dated November 20, 1992 (referred to herein as the "Advisory
Agreement").
9
<PAGE>
THE ADVISORY AGREEMENT
The Advisory Agreement was initially approved by the Board of Trustees of
the Trust, including all of the Independent Trustees, at a meeting held on
September 24, 1992, and was approved by DWR, the then sole shareholder of the
Trust, on November 19, 1992. The Trust's Shareholders last approved the
continuance of the Advisory Agreement at their Annual Meeting on December 18,
1997. In the event Shareholders do not approve continuance of the Advisory
Agreement by the required majority vote at the forthcoming meeting or an
adjournment 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 advisory agreement or continuance of the present Advisory Agreement
until the next Annual Meeting of Shareholders.
In considering whether or not to approve the Advisory 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 Adviser's services and personnel, and the appropriateness of the fees
that are paid under the Advisory Agreement. Based upon its review, the Board of
Trustees, including all of the Independent Trustees, determined that the
approval of the Advisory 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 Advisory Agreement. Such a
majority is defined in the 1940 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 ADVISORY AGREEMENT.
The Advisory Agreement provides that the Investment Adviser shall
continuously invest the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Adviser obtains and evaluates
such information and advice relating to the economy, securities markets and
specific securities as it considers necessary or useful to continuously manage
the assets of the Trust in a manner consistent with its investment objectives
and policies. In addition, the Investment Adviser pays the compensation of all
personnel, including officers of the Trust, who are its employees. The
Investment Adviser 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.
Under the Advisory Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Adviser or the 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 costs and expense
of preparation, 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
10
<PAGE>
board or committee who are not employees of the Trust's Manager or Investment
Adviser or any of their corporate affiliates; all expenses incident to the
payment of any dividend or distribution program; charges and expenses of any
outside pricing services; charges and expenses of legal counsel, including
counsel to the Independent Trustees of the Trust, and independent accountants
in connection with any matter relating to the Trust (not including compensation
or expenses of attorneys employed by the Trust's Manager or Investment
Adviser); membership dues of industry associations; interest payable on Trust
borrowings; fees and expenses incident to the listing of the Trust's shares on
any stock exchange; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Trust which inure to its benefit;
extraordinary expenses (including, but not limited to, legal claims,
liabilities, litigation costs and any indemnification related thereto); and all
other charges and costs of the Trust's operations unless otherwise explicitly
provided in the Advisory Agreement.
The Advisory Agreement had an initial term ending April 30, 1994 and
provides that, after this period, 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 Advisory
Agreement or "interested persons" of any such party (as defined in the 1940
Act) at a meeting called for the purpose of voting on such approval. The
Advisory Agreement's most recent continuation, until April 30, 1999 was
approved by the Trustees, including a majority of Independent Trustees at a
meeting held on April 30, 1998, called for the purpose of approving the
Advisory Agreement.
The Advisory Agreement also provides that it may be terminated at any time
by the Investment Adviser, the Trustees of the Trust or by a vote of a majority
of the outstanding voting securities of the Trust, in each instance without the
payment of any penalty, on thirty days' notice and will automatically terminate
upon any assignment (as defined in the 1940 Act).
In return for its investment services and the expenses which the
Investment Adviser assumes under the Advisory Agreement, the Trust pays the
Investment Adviser compensation which is computed weekly and payable monthly
and which is determined by applying the annual rate of 0.26% to the Trust's
average weekly net assets. Pursuant to the Advisory Agreement, the Trust
accrued to the Investment Adviser total compensation of $1,115,200 during the
fiscal year ended September 30, 1998. The net assets of the Trust totalled
$435,627,259 at September 30, 1998.
INVESTMENT ADVISER
TCW Funds Management, Inc. (the "Investment Adviser") is the Trust's
investment adviser. The Investment Adviser, a California corporation, is a
wholly-owned subsidiary of The TCW Group, Inc. (formerly TCW Management
Company) ("The TCW Group"), a Nevada corporation, whose direct and indirect
subsidiaries, including Trust Company of the West and TCW Asset Management
Company, provide a variety of trust, investment management and investment
advisory services. As of September 30, 1998, the Investment Adviser and its
affiliates had approximately $50 billion under management or committed to
management. The Investment Adviser is headquartered at 865 South Figueroa
Street, Suite 1800, Los Angeles, California 90017.
The Principal Executive Officers and Directors of the Investment Adviser,
and their principal occupations, are:
Thomas E. Larkin, Jr., Chairman, Marc I. Stern, President and Alvin R.
Albe, Jr., Executive Vice President. Mr. Robert A. Day may be deemed to be a
control person of the Adviser by virtue of the aggregate
11
<PAGE>
ownership of Mr. Robert Day and his family of more than 25% of the outstanding
voting stock of The TCW Group, Inc. The principal occupations of Messrs. Larkin
and Stern are described in the preceding tables. Mr. Albe is an Executive Vice
President of The TCW Group, Inc.
The business address of the foregoing Directors and Executive Officers is
865 South Figueroa Street, Suite 1800, Los Angeles, California 90017.
The Appendix lists the investment companies for which the Adviser provides
investment advisory or sub-advisory services and which have similar investment
objectives to that of the Trust, and sets forth the fees payable to the Adviser
by such investment companies, including the Trust, and their net assets as of
October 28, 1998.
MANAGER
Morgan Stanley Dean Witter Services Company Inc. ("MSDW Services") is the
Trust's Manager. MSDW Services, which maintains its offices at Two World Trade
Center, New York, New York 10048, is a wholly-owned subsidiary of Morgan
Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). 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.
As the Trust's Manager, MSDW Services receives from the Trust compensation
which is computed weekly and payable monthly and which is determined by
applying the annual rate of 0.39% to the Trust's weekly net assets. For the
fiscal year ended September 30, 1998, the Trust accrued to MSDW Services,
pursuant to a Management Agreement, total compensation of $1,672,801.
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 MSDW Services serve in various investment management,
advisory, management and administrative capacities to investment companies and
pension plans and other institutional and individual investors.
MSDW has its offices at 1585 Broadway, New York, New York 10036. There are
various lawsuits pending against MSDW involving material amounts which, in the
opinion of its management, will be resolved with no material effect on the
consolidated financial position of the Company.
During the fiscal year ended September 30, 1998, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Manager, transfer
agency fees of $141,987.
(3) 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 September
30, 1999. PricewaterhouseCoopers LLP has been the independent accountants for
the Trust since its inception, and has no direct or indirect financial interest
in the Trust.
12
<PAGE>
A representative of PricewaterhouseCoopers LLP is expected to be present
at the Annual Meeting of Shareholders and will be available to respond to
appropriate questions of Shareholders.
The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required for
ratification of the selection of PricewaterhouseCoopers LLP as the independent
accountants for the Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
TRUST.
(4) SHAREHOLDER PROPOSAL TO AMEND THE DECLARATION OF TRUST OF TCW/DW TERM
TRUST 2002 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, a shareholder of record who owned approximately
2,381.5 shares at October 28, 1998 (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:
I believe it's obvious 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 we 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." But they
refuse to invest less than $10 in our Trust. And, believe-it-or-not, 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." I guess this means that what's good for us isn't good for
them. Aw, come on guys--you can meet our proposed requirement by investing
less than $10.
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 TCW/DW 2002 and has no
application to any other company. 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 has three times requested that a similar proposal be
included in the proxy statement relating to each of the three previous annual
meetings. Each proposal was included and failed to obtain sufficient votes to
be adopted by shareholders. The Trustees determined to oppose the proposal each
year. The
13
<PAGE>
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 TCW/DW complex, including the Trust (and, if applicable, in the Morgan
Stanley Dean Witter 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 the date of this Proxy Statement, the total
value of shares of the TCW/DW Funds (and, if applicable, the Morgan Stanley
Dean Witter Funds) owned by the Trustees and/or their spouses was approximately
$14.7 million.
REASONS FOR OPPOSING THE SHAREHOLDER PROPOSAL
The share ownership policy requires the Trustees to make a significant
investment in the Funds in the TCW/DW complex, which includes the Trust (and,
if applicable, the Morgan Stanley Dean Witter Funds), while allowing the
Trustees to select the specific Funds that meet their individual investment
needs. As stated in last year's proxy statement, 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 TCW/DW complex (and, if applicable, the Morgan Stanley
Dean Witter Funds). 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 Trustees for all the Funds
given the large number of Funds in the complex(es). The Trustees believe that
having the same Trustees for each of the TCW/DW 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 the shares
outstanding and entitled to vote at the Meeting is required for the approval of
the shareholder proposal.
14
<PAGE>
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
2 and will vote against any such adjournment those 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.
Four purported class action lawsuits have been filed in the Superior Court
for the State of California, County of Orange, against some of the Trust's
Trustees and officers, one of its underwriters, the lead representative of its
underwriters, the Adviser, the Manager and other defendants -- but not against
the Trust -- by certain shareholders of the Trust and other trusts for which
the defendants act in similar capacities. These plaintiffs generally allege
violations of state statutory and common law in connection with the marketing
of the Trust to customers of one of the underwriters. Damages, including
punitive damages, are sought in an unspecified amount. On or about October 20,
1995, the plaintiffs filed an amended complaint consolidating these four
actions. The defendants filed answers and affirmative defenses to the
consolidated amended complaint. The defendants' answers deny all of the
material allegations of the plaintiffs' complaint. In 1996, the plaintiffs
voluntarily dismissed, without prejudice, their claims against two defendants
who were independent Trustees of the Trusts. In March 1997, all of the
remaining defendants in the litigation filed motions for judgment on the
pleadings, seeking dismissal of all of the claims asserted against them. The
defendants' motions were fully briefed by all parties and were the subject of a
hearing before the Court on April 18, 1997. In July, 1997, the Court denied the
motion for judgment on the pleadings. In August, 1997, plaintiffs filed a
motion for class certification. In their motion, the plaintiffs requested
certification of a "nationwide" class of Term Trust purchasers. On June 1,
1998, the Court granted in part and denied in part the plaintiff's motion for
class certification. The Court ruled that plaintiff's motion was "granted as to
[a California] statewide class," but was "denied as to a nationwide class."
Certain of the defendants in these suits have asserted their right to
indemnification from the Trust.
The ultimate outcome of these matters is not presently determinable, and
no provision has been made in the Trust's financial statements for the effect,
if any, of such matters.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than July 9, 1999 for
inclusion in the proxy statement and proxy for that meeting. The mere
submission of a proposal does not guarantee its inclusion in the proxy
materials or its presentation at the meeting. Certain rules under the federal
securities laws must be met.
REPORTS TO SHAREHOLDERS
THE TRUST'S MOST RECENT ANNUAL REPORT AND ITS MOST RECENT SEMI-ANNUAL
REPORT SUCCEEDING THE ANNUAL REPORT PREVIOUSLY HAVE BEEN SENT 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).
15
<PAGE>
INTEREST OF CERTAIN PERSONS
MSDW, MDSW Advisors, DWR, MSDW Services, The TCW Group, Inc. and its
affiliates, and certain of the respective Directors, Officers, and employees of
each, including persons who are Trustees or Officers of the Trust, may be
deemed to have an interest in certain of the proposals described in this Proxy
Statement to the extent that certain of such companies and their affiliates
have contractual and other arrangements, described elsewhere in this Proxy
Statement, pursuant to which they are paid fees by the Trust, and certain of
those individuals are compensated for performing services relating to the Trust
and may also own shares of MSDW and The TCW Group, Inc. Such companies and
persons may thus be deemed to derive benefits from the approvals by
Shareholders of such proposals.
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is intended that the persons named in the attached form of proxy,
or their substitutes, will vote such proxy in accordance with their judgment on
such matters.
By Order of the Board of Trustees
BARRY FINK
Secretary
16
<PAGE>
APPENDIX
TCW Funds Management Inc. serves as investment adviser to the Trust as
well as investment adviser to the other investment companies listed below which
have similar investment objectives to that of the Trust, with net assets shown
as of October 28, 1998.
<TABLE>
<CAPTION>
ANNUAL
MANAGEMENT
FEE AS PERCENT
NET ASSETS ON OF AVERAGE
NAME OCTOBER 28, 1998 NET ASSETS
- ---- ---------------- ----------
<S> <C> <C>
TCW/DW Term Trust 2003 ......... $942,551,539 (1)
TCW/DW Term Trust 2002 ......... $427,361,950 (1)
TCW/DW Term Trust 2000 ......... $459,209,671 (2)
</TABLE>
- ----------
1. 0.26% of the Trust's weekly net assets.
2. 0.24% of the Trust's weekly net assets.
I-1
<PAGE>
TCW/DW TERM TRUST 2002
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Robert M. Scanlan, Barry Fink, and Robert S.
Giambrone, 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
TCW/DW Term Trust 2002 on December 17, 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 November 5, 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 PROPOSALS 2 AND 3 AND AGAINST
PROPOSAL 4 SET FORTH ON THE REVERSE HEREOF AND AS RECOMMENDED BY THE BOARD OF
TRUSTEES.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
PLEASE MARK VOTES AS
[X] IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
FOR WITHHOLD EXCEPT
1. Election of two (2) Trustees: [ ] [ ] [ ]
Richard M. DeMartini, Thomas E. Larkin, Jr.
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.
FOR AGAINST ABSTAIN
2. Approval of the continuance of the [ ] [ ] [ ]
Investment Advisory Agreement
with TCW Funds Management, Inc.
FOR AGAINST ABSTAIN
3. Ratification of appointment of [ ] [ ] [ ]
PricewaterhouseCoopers LLP
as independent accountants.
FOR AGAINST ABSTAIN
4. Shareholder proposal [ ] [ ] [ ]
(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 | |
TCW/DW TERM TRUST 2002
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
