ALL AMERICAN TERM TRUST INC, DEFR14A, 1999-04-01

ALL AMERICAN TERM TRUST INC
DEFR14A, 1999-04-01

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] 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 (S) 240.14a-11(c) or (S) 240.14a-12

ALL-AMERICAN TERM TRUST, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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) Total fee paid:

-------------------------------------------------------------------------

[_] Fee paid previously with preliminary materials.

[_] 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:

-------------------------------------------------------------------------

Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

<PAGE>

ALL-AMERICAN TERM TRUST INC.

----------------

NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
May 20, 1999

----------------

TO THE SHAREHOLDERS:

The annual meeting of shareholders of All-American Term Trust Inc. ("Trust")
will be held on May 20, 1999 at 10:00 a.m., Eastern time, at 1285 Avenue of
the Americas, 14th Floor, New York, New York 10019 for the following purposes:

(1) To elect nine (9) directors to serve until the annual meeting of
shareholders in 2000, or until their successors are elected and qualified;

(2) To ratify the selection of Ernst & Young LLP as the Trust's
independent auditors for the fiscal year ending January 31, 2000; and

(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.

You are entitled to vote at the meeting and any adjournments thereof if you
owned Trust shares at the close of business on March 18, 1999. If you attend
the meeting, you may vote your shares in person. If you do not expect to
attend the meeting, please complete, date, sign and return the enclosed proxy
card in the enclosed postage paid envelope.

By order of the board of directors,

Dianne E. O'Donnell
Secretary

March 31, 1999
1285 Avenue of the Americas
New York, New York 10019

YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

Please indicate your voting instructions on the enclosed proxy card,
date and sign it, and return it in the envelope provided. If you sign,
date and return the proxy card but give no voting instructions, your
shares will be voted "FOR" the nominees for director named in the attached
proxy statement and "FOR" all other proposals noticed above. In order to
avoid the additional expense to the Trust of further solicitation, we ask
your cooperation in mailing in your proxy card promptly.
<PAGE>

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general guidelines for signing proxy cards may be of
assistance to you and avoid the time and expense to the Trust in validating
your vote if you fail to sign your proxy card properly.

1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.

2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy
card.

3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration. For example:

<TABLE>
<CAPTION>
Registration Valid Signature
------------ ---------------
<S> <C>
Corporate Accounts
(1) ABC Corp. .......................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp. .......................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer... John Doe
(4) ABC Corp. Profit Sharing Plan....... John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership................. Jane B. Smith, Partner
(2) Smith and Jones, Limited
Partnership............................ Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d
12/18/78............................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o John B.
Smith, Jr. UGMA/UTMA.................. John B. Smith
(2) Estate of John B. Smith............. John B. Smith, Jr., Executor
</TABLE>

2
<PAGE>

ALL-AMERICAN TERM TRUST INC.
1285 Avenue of the Americas
New York, New York 10019

----------------

PROXY STATEMENT

----------------

Annual Meeting of Shareholders to be Held on May 20, 1999

This statement is furnished to the shareholders of All-American Term Trust
Inc. ("Trust") in connection with the board of directors' solicitation of
proxies to be used at the annual meeting of the shareholders of the Trust to
be held on May 20, 1999, or any adjournment or adjournments thereof. This
proxy statement and the related proxy card will first be mailed to
shareholders on or about March 31, 1999.

A majority of the shares outstanding on March 18, 1999, represented in
person or by proxy, must be present for the transaction of business at the
meeting. In the event that a quorum is not present at the annual meeting, or
if such a quorum is present at the annual meeting but sufficient votes to
approve any of the proposals are not received, the persons named as proxies
may propose one or more adjournments of the annual meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative
vote of a majority of those shares represented at the annual meeting in person
or by proxy. The persons named as proxies will vote those proxies which they
are entitled to vote FOR any such proposal in favor of such an adjournment,
and will vote those proxies required to be voted AGAINST any such proposal
against such adjournment. A shareholder vote may be taken on one or more of
the proposals in this proxy statement prior to any such adjournment if
sufficient votes have been received and it is otherwise appropriate.

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. Abstentions and broker non-votes will be
counted as shares present for purposes of determining whether a quorum is
present but will not be voted for or against any adjournment or proposal.
Accordingly, abstentions and broker non-votes effectively will be a vote
against adjournment but will have no effect on Proposals 1 and 2, for which
the required vote is a plurality and majority, respectively, of the votes
cast.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or attorney-
in-fact. If you give no voting instructions, your shares will be voted FOR the
nine nominees for directors named herein and FOR the remaining proposals
described in this proxy statement. You may revoke any proxy card by giving
another proxy or by letter or telegram revoking the initial proxy. To be
effective, your revocation must be received by the Trust prior to the meeting
and must indicate your name and account number. In addition, if you attend the
meeting in person you may, if you wish, vote by ballot at the meeting, thereby
cancelling any proxy previously given.

As of the record date, March 18, 1999, the Trust had outstanding 13,706,667
shares of common stock. The solicitation of proxies, the cost of which will be
borne by the Trust, will be made primarily by mail but also may include
telephone or oral communications by regular employees of Mitchell Hutchins
Asset Management Inc. ("Mitchell Hutchins") or PaineWebber Incorporated
("PaineWebber"), who will not receive any compensation
<PAGE>

therefor from the Trust. Management does not know of any person who owns
beneficially 5% or more of the shares of the Trust. Each full share of the
Trust outstanding is entitled to one vote and each fractional share of the
Trust outstanding is entitled to a proportionate share of one vote.

Mitchell Hutchins serves as the Trust's investment adviser and
administrator. Mitchell Hutchins is a wholly owned asset management subsidiary
of PaineWebber, which is a wholly owned subsidiary of Paine Webber Group Inc.
("PW Group"), a publicly held financial services holding company. The
principal business address of each of Mitchell Hutchins, PaineWebber and PW
Group is 1285 Avenue of the Americas, New York, New York 10019.

The Trust's annual report containing financial statements for the fiscal
year ended January 31, 1999 is being mailed to shareholders concurrently with
this proxy statement.

PROPOSAL 1. ELECTION OF DIRECTORS

Proposal 1 related to the election of directors of the Trust. Management
proposes the election of the nine nominees named in the table below. Each
nominee, including those who are not "interested persons" of the Trust as that
term is defined by the Investment Company Act of 1940 ("1940 Act")
("Independent Directors"), has indicated his or her willingness to serve if
elected. If elected, each nominee will hold office until the next annual
meeting of shareholders or until his or her successor is elected and
qualified. Unless you give contrary instructions on the enclosed proxy card,
your shares will be voted FOR the election of the nine nominees. If any of the
nominees should withdraw or otherwise become unavailable for election, your
shares will be voted FOR such other nominee or nominees as management may
recommend.

Mr. Bewkes has served as a director from the Trust's inception except for a
brief period in 1993. Messrs. Armstrong and Burt have served as directors of
the Trust since May 18, 1995. Each of the other directors was first elected to
the board on April 11, 1996. Directors shall be elected by the affirmative
vote of the holders of a plurality of the shares of the Trust, present in
person or by proxy and entitled to vote thereon, provided a quorum is present.
If each of the nine nominees is elected, they will constitute the entire board
of directors of the Trust. None of the current directors and executive
officers (22 persons) beneficially owned any shares of the Trust on February
28, 1999.

Richard Q. Armstrong; 63 Director. Mr. Armstrong is chairman and --
principal of R.Q.A. Enterprises (management
consulting firm) (since April 1991 and principal
occupation since March 1995). Mr. Armstrong was
chairman of the board, chief executive officer
and co-owner of Adirondack Beverages (producer
</TABLE>

2
<PAGE>

E. Garrett Bewkes, Jr.*; Director and Chairman of the board of directors. --
72 Mr. Bewkes is a director of PW Group (holding
Company of PaineWebber and Mitchell Hutchins).
Prior to December 1995, he was a consultant to
PW Group. Prior to 1988, he was chairman of the
board, president and chief executive officer of
American Bakeries Company. Mr. Bewkes is a
director of Interstate Bakeries Corporation. Mr.
Bewkes is a director or trustee of 35 investment
companies for which Mitchell Hutchins,
PaineWebber or one of their affiliates serves as
investment adviser.

Richard R. Burt; 52 Director. Mr. Burt is chairman of IEP Advisors, --
Inc. (international investments and consulting
firm) (since March 1994) and a partner of
McKinsey & Company (management consulting firm)
(since 1991). He is also a director of Archer-
Daniels-Midland Co. (agricultural commodities),
Hollinger International Co. (publishing),
Homestake Mining Corp., Powerhouse Technologies
Inc. and Wierton Steel Corp. He was the chief
negotiator in the Strategic Arms Reduction Talks
with the former Soviet Union (1989-1991) and the
U.S. Ambassador to the Federal Republic of
Germany (1985-1989). Mr. Burt is a director or
trustee of 31 investment companies for which
Mitchell Hutchins, PaineWebber or one of their
affiliates serves as investment adviser.

Mary C Farrell*; 49 Director. Ms. Farrell is a managing director, --
senior investment strategist and member of the
Investment Policy Committee of PaineWebber. Ms.
Farrell joined PaineWebber in 1982. She is a
member of the Financial Women's Association and
Women's Economic Roundtable
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
Present Position with the Shares Owned
Trust; Business Experience During Beneficially on
Nominee; Age Past Five Years; Other Directorships February 28, 1999**
------------ ------------------------------------ -------------------
<S> <C> <C>
and appears as a regular panelist on Wall $treet
Week with Louis Rukeyser. She also serves on the
Board of Overseers of New York University's
Stern School of Business. Ms. Farrell is a
director or trustee of 31 investment companies
for which Mitchell Hutchins, PaineWebber or one
of their affiliates serves as investment
adviser.
Meyer Feldberg; 57 Director. Mr. Feldberg is Dean and Professor of --
Management of the Graduate School of Business,
Columbia University. Prior to 1989, he was
president of the Illinois Institute of
Technology. Dean Feldberg is a director of
Primedia Inc., Federated Department Stores, Inc.
and Revlon, Inc. Dean Feldberg is a director or
trustee of 34 investment companies for which
Mitchell Hutchins, PaineWebber or one of their
affiliates serves as investment adviser.
George W. Gowen; 69 Director. Mr. Gowen is a partner in the law firm --
of Dunnington, Bartholow & Miller. Prior to May
1994, he was a partner in the law firm of Fryer,
Ross & Gowen. Mr. Gowen is a director or trustee
of 34 investment companies for which Mitchell
Hutchins, PaineWebber or one of their affiliates
serves as investment adviser.
Frederic V. Malek; 62 Director. Mr. Malek is chairman of Thayer --
Capital Partners (merchant bank). From January
1992 to November 1992, he was campaign manager
of Bush-Quayle '92. From 1990 to 1992, he was
vice chairman and, from 1989 to 1990, he was
president of Northwest Airlines Inc., NWA Inc.
(holding company of Northwest Airlines Inc.) and
Wings Holdings Inc. (holding company of NWA
Inc.). Prior to 1989, he was employed by the
Marriott Corporation (hotels, restaurants,
airline catering and contract feeding), where he
most recently was an executive vice president
and president of Marriott Hotels and Resorts.
Mr. Malek is also a director of American
Management Systems, Inc. (management consulting
and computer related services), Automatic Data
Processing, Inc., CB Commercial Group, Inc.
(real estate services), Choice Hotels
International (hotel and hotel franchising), FPL
Group, Inc. (electric services), Manor Care,
Inc. (health care) and Northwest Airlines Inc.
Mr. Malek is a director or trustee of 31
investment companies for which Mitchell
Hutchins, PaineWebber or one of their affiliates
serves as investment adviser.
</TABLE>

4
<PAGE>

The board of directors of the Trust met eight times during the fiscal year
ended January 31, 1999. Each director attended 75% or more of the board
meetings during the last fiscal year. The Audit and Contract Review Committee
("ACR Committee") of the board currently consists of Messrs. Armstrong, Burt,
Feldberg, Gowen, Malek and Schafer. The ACR Committee has established a sub-
committee that periodically reviews the contractual and audit arrangements for
the Trust and reports back to the full ACR Committee. Messrs. Burt, Feldberg
and Schafer are members of this sub-committee. Each member of the Trust's ACR
Committee is also a member of a similar committee established by the boards of
other investment companies for which Mitchell Hutchins or PaineWebber serves
as investment adviser and also may be a member of a sub-committee established
by another fund's audit and contract review committee. The duties of the ACR
Committee are: (a) to review the financial and accounting policies of the
Trust, including internal accounting control procedures, and to review reports
prepared by the Trust's independent auditor's accounting reports on the
Trust's financial statements; (b) to review and recommend approval or
disapproval of audit and non-audit services and the fees charged for such
services; (c) to evaluate the independences of the independent auditors and to
recommend whether to retain such independent auditors for the next fiscal
year; and (d) to report to the board and make such recommendations as it deems
necessary. The ACR Committee and the related sub-committee each met once
during the fiscal year ended January 31, 1999. Each member of the ACR
Committee and sub-committee attended those meetings.

The board does not have a standing nominating or compensation committee. The
Trust pays the Independent Directors $1,000 annually and $150 for each board
meeting and for each separate meeting of a board committee. The chairmen of
the audit and contract review committees of individual funds within the
PaineWebber fund complex receive additional annual compensation aggregating
$15,000 annually each from the relevant funds. Directors of the Trust who are
"interested persons" as defined in the 1940 Act receive no compensation from
the Trust. Directors are reimbursed for any expenses incurred in attending
meetings.

5
<PAGE>

Each director will be subject to mandatory retirement at the end of the year
in which he or she becomes 72 years old. The board has waived this requirement
with respect to Mr. Bewkes for the next year. The table below includes certain
information relating to the compensation of the Trust's directors.

Compensation Table+
<TABLE>
<CAPTION>
Total
Compensation
Aggregate From the
Compensation Trust and the
From Fund
Name of Person, Position the Trust* Complex**
- ------------------------ ------------ -------------
<S> <C> <C>
Richard Q. Armstrong, Director....................... $1,930 $101,372
Richard R. Burt, Director............................ 1,930 101,372
Meyer Feldberg, Director............................. 2,642 116,222
George W. Gowen, Director............................ 1,780 108,272
Fredric V. Malek, Director........................... 1,930 101,372
Carl W. Schafer, Director............................ 1,930 101,372
</TABLE>
- --------
+ Only independent members of the board are compensated by the Trust and
identified above; directors who are "interested persons," as defined by the
1940 Act, do not receive compensation.
* Represents fees paid to each director during the fiscal year ended January
31, 1999.
** Represents total compensation paid to each director by 31 investment
companies (33 in the case of Messrs. Feldberg and Gowen) for which Mitchell
Hutchins, PaineWebber or one of their affiliates served as investment
adviser during the twelve months ended December 31, 1998; no fund within
the complex has a bonus, pension, profit sharing or retirement plan.

PROPOSAL 2. RATIFICATION OF SELECTION OF AUDITORS

The Trust's financial statements for the fiscal year ended January 31, 1999,
were audited by Ernst & Young LLP ("Ernst & Young"), independent auditors. In
addition, Ernst & Young prepares the Trust's federal and state annual income
tax returns.

The board of directors of the Trust has selected Ernst & Young as the
independent auditors for the Trust for the fiscal year ending January 31,
2000, subject to ratification by shareholders of the Trust at the annual
meeting. Ernst & Young has been the Trust's independent auditors since its
inception in March 1993. The ratification of Ernst & Young as independent
auditors is to be voted upon at the annual meeting, and it is intended that
the persons named in the accompanying proxy will vote FOR such ratification
unless contrary instructions are given. Ernst & Young has informed the Trust
that it has no material direct or indirect financial interest in the Trust.
The affirmative vote of the holders of a majority of the shares of the Trust
cast at the annual meeting is required for ratification, provided a quorum is
present.

Representatives of Ernst & Young are not expected to be present at the
meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 2.

6
<PAGE>

EXECUTIVE OFFICERS

Officers of the Trust are appointed by the directors and serve at the
pleasure of the board. None of the Trust's officers currently receives any
compensation from the Trust. The executive officers of the Trust, in addition
to Mrs. Alexander (about whom information is given previously), are:

Julieanna Berry, age 35, vice president of the Trust (appointed April 1996).
Ms. Berry is a first vice president and a portfolio manager of Mitchell
Hutchins. Ms. Berry is a vice president of two investment companies for which
Mitchell Hutchins, PaineWebber or one of their affiliates serves as investment
adviser.

James F. Keegan, age 38, vice president of the Trust (appointed April 1996).
Mr. Keegan is a senior vice president and a portfolio manager of Mitchell
Hutchins. Prior to March 1996, he was director of fixed income strategy and
research of Merrion Group, L.P. From 1987 to 1994, he was a vice president of
global investment management of Bankers Trust. Mr Keegan is a vice president
of three investment companies for which Mitchell Hutchins, PaineWebber or one
of their affiliates serves as investment adviser.

John J. Lee, age 30, vice president and assistant treasurer of the Trust
(appointed May 1998). Mr. Lee is a vice president and a manager of the mutual
fund finance department of Mitchell Hutchins. Prior to September 1997, he was
an audit manager in the financial services practice of Ernst & Young. Mr. Lee
is a vice president and assistant treasurer of 32 investment companies for
which Mitchell Hutchins, PaineWebber or one of their affiliates serves as
investment adviser.

Thomas J. Libassi, age 40, vice president of the Trust (appointed September
1995). Mr Libassi is a senior vice president and a portfolio manager of
Mitchell Hutchins. Prior to May 1994, he was a vice president of Keystone
Custodian Funds Inc. with portfolio management responsibility. Mr Libassi is a
vice president of six investment companies for which Mitchell Hutchins,
PaineWebber or one of their affiliates serves as investment adviser.

Dennis McCauley, age 52, vice president of the Trust (appointed September
1995). Mr. McCauley is a managing director and chief investment officer-fixed
income of Mitchell Hutchins. Prior to December 1994, he was director of fixed
income investments of IBM Corporation. Mr. McCauley is a vice president of 22
investment companies for which Mitchell Hutchins, PaineWebber or one of their
affiliates serves as investment adviser.

Ann E. Moran, age 41, vice president and assistant treasurer of the Trust
(appointed June 1993). Ms. Moran is a vice president and a manager of the
mutual fund finance division of Mitchell Hutchins. Ms. Moran is a vice
president and assistant treasurer of 32 investment companies for which
Mitchell Hutchins, PaineWebber or one of their affiliates serves as investment
adviser.

Dianne E. O'Donnell, age 46, vice president and secretary of the Trust
(appointed November 1992). Ms. O'Donnell is a senior vice president and deputy
general counsel of Mitchell Hutchins. Ms. O'Donnell is a vice president and
secretary of 31 investment companies and a vice president and assistant
secretary of one investment company for which Mitchell Hutchins, PaineWebber
or one of their affiliates serves as investment adviser.

Emil Polito, age 38, vice president of the Trust (appointed September 1996).
Mr. Polito is a senior vice president and director of operations and control
for Mitchell Hutchins. Mr Polito is a vice president of 32 investment
companies for which Mitchell Hutchins, PaineWebber or one of their affiliates
serves as investment adviser.

7
<PAGE>

Victoria E. Schonfeld, age 48, vice president of the Trust (appointed May
1994). Ms. Schonfeld is a managing director and general counsel of Mitchell
Hutchins. Prior to May 1994, she was a partner in the law firm of Arnold &
Porter. Ms. Schonfeld is a vice president of 31 investment companies and a
vice president and secretary of one investment company for which Mitchell
Hutchins, PaineWebber or one of their affiliates serves as investment adviser.

Paul H. Schubert, age 36, vice president (appointed September 1994) and
treasurer (appointed May 1997) of the Trust. Mr. Schubert is senior vice
president and the director of the mutual fund finance division of Mitchell
Hutchins. From August 1992 to August 1994, he was a vice president at
BlackRock Financial Management, L.P. Mr. Schubert is a vice president and
treasurer of 32 investment companies for which Mitchell Hutchins, PaineWebber
or one of their affiliates serves as investment adviser.

Barney A. Taglialatela, age 38, vice president and assistant treasurer of
the Trust (appointed May 1997). Mr. Taglialatela is a vice president and a
manager of the mutual fund finance division of Mitchell Hutchins. Prior to
February 1995, he was a manager of the mutual fund finance division of Kidder
Peabody Asset Management, Inc. Mr. Taglialatela is a vice president and
assistant treasurer of 32 investment companies for which Mitchell Hutchins,
PaineWebber or one of their affiliates serves as investment adviser.

Mark A. Tincher, age 43, vice president of the Trust (appointed September
1995). Mr. Tincher is a managing director and chief investment officer--
equities of Mitchell Hutchins. Prior to March 1995, he was a vice president
and directed the U.S. funds management and equity research areas of Chase
Manhattan Private Bank. Mr. Tincher is a vice president of 13 investment
companies for which Mitchell Hutchins, PaineWebber or one of their affiliates
serves as investment adviser.

Keith A. Weller, age 37, vice president and assistant secretary of the Trust
(appointed September 1995). Mr. Weller is a first vice president and associate
general counsel of Mitchell Hutchins. Prior to joining Mitchell Hutchins in
June 1995, he was an attorney with the law firm of Brown & Wood. Mr. Weller is
a vice president and assistant secretary of 31 investment companies for which
Mitchell Hutchins, PaineWebber or one of their affiliates serves as investment
adviser.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

An initial report under Section 16(a) of the Securities Exchange Act of 1934
was not timely filed for Mr. Lee. This delayed report did not involve any
transactions in the Trust's common stock but related to his election as an
officer. The Trust is not aware of any outstanding report required to be filed
pursuant to Section 16(a).

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit proposals to be considered at the
Trust's 2000 annual meeting of shareholders should send such proposals to the
Trust at 1285 Avenue of the Americas, New York, New York 10019. In order to be
considered at that meeting, shareholder proposals must be received by the
Trust no later than December 1, 1999 and must satisfy the other requirements
of the federal securities laws.

8
<PAGE>

OTHER BUSINESS

Management knows of no business to be presented at the meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interest of the Trust.

By order of the board of directors,

Dianne E. O'Donnell
Secretary

March 31, 1999

It is important that you execute and return your proxy promptly.

9
<PAGE>

Proxy
Statement

- --------------------

ALL-AMERICAN
TERM TRUST INC.

- --------------------

-------------------

ALL-AMERICAN
TERM TRUST INC.

-------------------

----------------

Notice of
Annual Meeting
to be held on
May 20, 1999
and
Proxy Statement

----------------

<PAGE>

All-American Term Trust Inc.
Notice of Annual Meeting of Shareholders - May 20, 1999

The undersigned hereby appoints as proxies Andrew S. Novak and Stephanie
Hemphill-Johnson and each of them (with power of substitution) to vote for the
undersigned all shares of common stock of the undersigned at the aforesaid
meeting and any adjournment thereof with all the power the undersigned would
have if personally present. The shares represented by this proxy will be voted
as instructed. Unless indicated to the contrary, this proxy shall be deemed to
grant authority to vote "FOR" all proposals. This proxy is solicited on behalf
of the Board of Directors of All-American Term Trust Inc.

YOUR VOTE IS IMPORTANT

Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to:

PFPC Inc., P.O. Box 9426, Wilmington, DE 19809-9938. PFPC Inc. has been engaged
to forward the enclosed proxy material and to tabulate proxies by mail.

Please indicate your vote by an "X" in the appropriate box below. The
Board of Directors recommends a vote "FOR".

1. ELECTION OF DIRECTORS:

(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below and mark center box
to right).

Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes, Jr.,
Richard R. Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen, Frederick V.
Malek, Carl W. Schafer.

/ / FOR ALL OR / / FOR ALL EXCEPT OR / / WITHHOLD

2. To ratify the selection of Ernst & Young LLP as the Trust's
independent auditors for the fiscal year ending January 31, 2000.

/ / FOR / / AGAINST / / ABSTAIN

Continued and to be signed on reverse side
<PAGE>

This proxy will not be voted unless it is dated and signed exactly as instructed
below.

If shares are held by an individual, sign your name exactly as it appears on
this card. If shares are held jointly, either party may sign, but the name of
the party signing should conform exactly to the name shown on this proxy card.
If shares are held by a corporation, partnership or similar account, the name
and the capacity of the individual signing the proxy card should be indicated
unless it is reflected in the form of registration. For example: "ABC Corp.,
John Doe, Treasurer."

Sign exactly as name appears hereon.

- ----------------------------------------(L.S.)

Date -----------------------------------, 1999