<PAGE>
TCW/DW TERM TRUST 2003
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 20, 1998
The Annual Meeting of Shareholders of TCW/DW TERM TRUST 2003 (the
"Trust"), an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts, will be held in the Career Development Room,
61st Floor, 2 World Trade Center, New York, New York 10048, on October 20, 1998
at 11:00 a.m., New York City time, for the following purposes:
1. To elect four (4) 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 March
31, 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 July 31, 1998 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting
for a total of not more than 60 days in the aggregate to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Trust's shares present in person or by
proxy at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which 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
August 24, 1998
New York, New York
- -------------------------------------------------------------------------------
IMPORTANT
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
- -------------------------------------------------------------------------------
<PAGE>
TCW/DW TERM TRUST 2003
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 20, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of TCW/DW TERM TRUST 2003
(the "Trust"), for use at the Annual Meeting of Shareholders of the Trust to be
held on October 20, 1998, (the "Meeting"), and at any adjournments thereof.
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 July 31, 1998, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting, are entitled to
one vote for each share held and a fractional vote for a fractional share. On
July 31, 1998 there were 90,657,040 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 August 24,
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 & 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
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has been advised by counsel that these procedures are consistent with the
requirements of applicable law. Shareholders voting by telephone will be asked
for their social security number or other identifying information and will be
given an opportunity to authorize proxies to vote their shares in accordance
with their instructions. To ensure that the Shareholders' instructions have
been recorded correctly they will receive a confirmation of their instructions
in the mail. A special toll-free number will be available in case the
information contained in the confirmation is incorrect. Although a
Shareholder's vote may be taken by telephone, each Shareholder will receive a
copy of this Proxy Statement and may vote by mail using the enclosed proxy
card. With respect to the solicitation of a telephonic vote by William F.
Doring & Co., additional expenses would include $7.00 per telephone vote
transacted, $3.00 per outbound telephone contact and costs relating to
obtaining Shareholders' telephone numbers which would be borne by the Trust.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at nine. There are currently nine Trustees, four
of whom (John R. Haire, Manuel H. Johnson, John L. Schroeder and Marc I. Stern)
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: John
R. Haire, Manuel H. Johnson, John L. Schroeder and Marc I. Stern. 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 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
nominees for election as Trustee 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 I Trustees are standing for election and will serve until the year 2001
Annual Meeting or until their successors shall have been elected and qualified.
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The following information regarding each of the nominees for election as
Trustee and each of the other members of the Board includes his principal
occupations and employment for at least the last five years, his age, shares of
the Trust owned, if any, as of July 31, 1998 (shown in parentheses), positions
with the Trust, and directorships (or trusteeships) in 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, 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 87 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:
JOHN R. HAIRE, Trustee since February, 1993; age 73; Chairman of the Audit
Committee and Director or Trustee of the Morgan Stanley Dean Witter Funds;
Trustee and Chairman of the Audit Committee of the TCW/DW Funds; formerly
President, Council for Aid to Education (1978-1989) and Chairman and Chief
Executive Officer of Anchor Corporation, an investment adviser (1964-1978).
DR. MANUEL H. JOHNSON, Trustee since February, 1993; age 49; Senior
Partner, Johnson Smick International, Inc., a consulting firm; Co-Chairman and
a founder of the Group of Seven Council (G7C), an international economic
commission; Director or Trustee of the Morgan Stanley Dean Witter Funds;
Trustee of the TCW/DW Funds; Director of NASDAQ (since June, 1995), Greenwich
Capital Markets, Inc. (broker-dealer) and NVR Inc. (home construction);
Chairman and Trustee of the Financial Accounting Foundation (oversight
organization for the Financial Accounting Standards Board); formerly Vice
Chairman of the Board of Governors of the Federal Reserve System (1986-1990)
and Assistant Secretary of the U.S. Treasury (1982-1986).
JOHN L. SCHROEDER, Trustee since April, 1995; age 67; 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;
Chairman of TCW Americas Development, Inc. Chairman of TCW Asia, Limited (since
January, 1993); Chairman of TCW Americas Development, Inc.; Chairman of TCW
London International, Limited (since March, 1993); 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 Trustees who are not standing for reelection at the Meeting are:
JOHN C. ARGUE, Trustee since February, 1993; 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
- ----------
* 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 Act, due to their affiliation with the Investment Adviser or
Manager and/or their affiliated companies.
4
<PAGE>
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.
RICHARD M. DeMARTINI,* Trustee since February, 1993; age 45; President and
Chief Operating Officer of Morgan Stanley Dean Witter Individual Asset
Management Group, a business unit of Morgan Stanley Dean Witter & Co. ("MSDW");
Executive Vice President of Morgan Stanley Dean Witter Distributors Inc. ("MSDW
Distributors") and DWR; Trustee of the TCW/DW Funds and the Van Kampen American
Capital 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.
CHARLES A. FIUMEFREDDO,* Trustee since February, 1993; age 65; Chairman,
Director or Trustee, President and Chief Executive Officer of the Morgan
Stanley Dean Witter Funds; Chairman, Chief Executive Officer and Trustee of the
TCW/DW Funds; formerly Chairman, Chief Executive Officer and Director of MSDW
Advisors, MSDW Services and MSDW Distributors, Executive Vice President and
Director of DWR, Chairman and Director of MSDW Trust and Director and/or
officer of various MSDW subsidiaries (until June, 1998).
THOMAS E. LARKIN, Jr.,* Trustee since February, 1993; age 58; 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.
MICHAEL E. NUGENT, Trustee since February, 1993; 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.
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; 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. He has been an employee of MSDW Advisors for over five years. Mr.
Merin is 44 years old and is currently President, Chief Executive Officer and
Director of MSDW Advisors and MSDW Services, Chairman and Director of MSDW
Distributors and MSDW Trust, Executive Vice President and Director of DWR and
Director of SPS Transaction Services, Inc. and various other MSDW subsidiaries.
He has been an employee of affiliates of MSDW Advisors for over five years. Mr.
Scanlan is 62 years old and is currently President, Chief Operating Officer and
Director of MSDW Advisors (since March, 1993) and MSDW Services; he is also
Executive Vice President of MSDW Distributors and Executive Vice President and
Director of MSDW Trust. He was previously Executive Vice President of MSDW
Advisors (November, 1990-March, 1993). Mr. Giambrone is 44 years old and is
currently Senior Vice President
5
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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. Barach is 46 years old and is
currently a Managing Director of Trust Company of the West, TCW Asset
Management Company and TCW Funds Management, Inc. Mr. Gundlach is 38 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. Mr. Caloia is 52 years old and is currently First Vice
President and Assistant Treasurer of MSDW Advisors and MSDW Services. He has
been an employee of MSDW Advisors 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 June 30,
1998, the TCW/DW Funds had total net assets of approximately $3.2 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. 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 Fund performance; checking
on the pricing of portfolio securities, brokerage commissions, transfer agent
costs and performance, and trading among Funds in the same complex; and
approving fidelity bond and related insurance coverage and allocations, as well
as other matters that arise from time to time.
The 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.
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Finally, the Board of each Fund has formed a Derivatives Committee to
approve parameters for and monitor the activities of the Fund with respect to
derivative investments, if any, made by the Fund.
For the fiscal year ended March 31, 1998, the Board of Trustees of the
Trust held 5 meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held 2, 9 and 4
meetings, respectively. No Trustee attended fewer than 75% of the meetings of
the Board of Trustees, the Audit Committee, the Committee of the Independent
Trustees or the Derivatives Committee held while he served in such positions.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL 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 June 30, 1998, 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
$5.5 million.
As of July 31, 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 the Trust who are or have been employed
by the Manager or the Adviser or an affiliated company of either
7
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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 March 31, 1998.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
John C. Argue .................................................. $5,169
John R. Haire .................................................. 7,219
Dr. Manuel H. Johnson .......................................... 4,969
Michael E. Nugent .............................................. 5,169
John L. Schroeder .............................................. 5,369
</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 Trust's Adviser, TCW Funds Management, Inc., also serves as Adviser
to those investment companies.
CASH COMPENSATION FROM FUND GROUPS
<TABLE>
<CAPTION>
FOR SERVICE AS
FOR CHAIRMAN OF TOTAL
FOR SERVICE SERVICES AS INDEPENDENT CASH COMPENSATION
FOR AS DIRECTOR OR CHAIRMAN OF DIRECTORS/ FOR SERVICES TO
SERVICE AS TRUSTEE AND INDEPENDENT TRUSTEES 84 MORGAN STANLEY
TRUSTEE AND COMMITTEE FOR SERVICE AS TRUSTEES AND AUDIT DEAN WITTER
COMMITTEE MEMBER DIRECTOR OF AND AUDIT COMMITTEES FUNDS, 14
MEMBER OF 84 TCW GALILEO COMMITTEES OF 84 TCW/DW FUNDS, TCW
OF 14 MORGAN STANLEY FUNDS, INC. AND OF 14 MORGAN STANLEY GALILEO FUNDS, INC.
TCW/DW DEAN WITTER TCW CONVERTIBLE TCW/DW DEAN WITTER AND TCW CONVERTIBLE
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS SECURITIES FUND, INC. FUNDS FUNDS SECURITIES FUND, INC.
- --------------------------- ----- ----- --------------------- ----- ----- ---------------------
<S> <C> <C> <C> <C> <C> <C>
John C. Argue .............. $71,125 -- $43,250 -- -- $114,375
John R. Haire .............. 73,725 $149,702 -- $25,350 $157,463 406,240
Dr. Manuel H. Johnson....... 71,125 145,702 -- -- -- 216,827
Michael E. Nugent .......... 73,725 149,702 -- -- -- 223,427
John L. Schroeder .......... 73,725 149,702 -- -- -- 223,427
</TABLE>
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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 maximumof 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 April 22, 1993 (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
February 24, 1993, and was approved by MSDW Advisors, the then sole shareholder
of the Trust, on April 21, 1993. The Trust's Shareholders last approved the
continuance of the Advisory Agreement at their Annual Meeting of Shareholders
held on October 24, 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
continously 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, 1995 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 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 $2,420,445 during the
fiscal year ended March 31, 1998. The net assets of the Trust totalled
$934,981,132 at March 31, 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 June 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 Day may be deemed to be a
control person of the Adviser by virtue of the aggregate 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.
11
<PAGE>
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 similiar 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
July 31, 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 March 31, 1998, the Trust accrued to MSDW Services, pursuant
to a Management Agreement, total compensation of $3,630,668.
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 March 31, 1998, the Trust accrued to MSDW
Trust, the Trust's Transfer Agent and an affiliate of the Manager, transfer
agency fees of $315,769.
(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 March 31, 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.
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.
12
<PAGE>
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 2003 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, 239 East Shore Drive,
Lake Toxaway, North Carolina 28747, a shareholder of record who owned 2328.6
shares at July 31, 1998 and Carol W. Mullett, a shareholder of record residing
at the same address who owned 764.2 shares at July 31, 1998, (the
"Proponents"), that they intend to submit the following proposal at the
Meeting:
"RESOLVED, that the Declaration of Trust be amended to require that
each Trustee, within 30 days of election, become a shareholder of the
Trust."
The Proponents have requested that the following statement be
included in support of their proposal:
We believe that the Trustees could better understand and represent
our interests if they were shareholders themselves. Yet not one of the
Trustees owns a single share of our Trust. In fact, no Trustee has EVER
been a shareholder. You can read below a litany of excuses seeking to
convince you that you are somehow better off because the Trustees WILL NOT
invest in our Trust. Let's look at their excuses: we 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 unanimously refuse to invest even $10 in OUR Trust. Amazing but true
-- the Trustees can meet their requirement with money market funds! BY the
way, they adopted this policy only after our 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". 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 our proposal applies only to TCW/DW 03 and has
no bearing on any other company. Heck, it's possible the Trustees don't
even believe this one. The Chairman was asked if this statement meant the
Trustees would feel obliged to invest in all Funds if our proposal passed
-- his response "We would consider it".
We hope you will vote for this proposal and encourage the Trustees to
join us as shareholders in OUR Trust.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST
THE SHAREHOLDER PROPOSAL.
RECOMMENDATION OF THE BOARD OF TRUSTEES
The Proponents have twice requested that a similar proposal be included in
the proxy statement relating to the two 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
Trustees considered whether a share ownership requirement for Trustees such as
that proposed by the Proponents was in the best
13
<PAGE>
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 June 30, 1998, 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 $5.5 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 they 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 directors 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 Prosposal
Two 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 actions 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
thereafter filed answers and affirmative defenses to the consolidated amended
complaint. The defendants' answers deny all of the material allegations of the
plaintiff's complaint. In 1996, the plaintiffs voluntarily dismissed, without
prejudice, their claims against two defendants who were independent Trustees of
the Trust. 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.
15
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than April 29, 1999 for
inclusion in the proxy statement 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, FOR THE FISCAL YEAR ENDED MARCH 31,
1998, IS AVAILABLE WITHOUT CHARGE UPON REQUEST FROM ADRIENNE RYAN-PINTO AT
MORGAN STANLEY DEAN WITTER TRUST FSB, HARBORSIDE FINANCIAL CENTER, PLAZA TWO,
JERSEY CITY, NEW JERSEY 07311 (TELEPHONE 1-800-869-NEWS) (TOLL-FREE).
INTEREST OF CERTAIN PERSONS
MSDW, MSDW Advisors, DWR, MSDW Services, 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 Trustees
BARRY FINK
Secretary
16
<PAGE>
APPENDIX
TCW Funds Management Inc. serves as investment adviser to the Trust as
well as investment adviser or sub-adviser to the other investment companies
listed below which have similar investment objectives to that of the Trust,
with net assets shown as of July 31, 1998.
<TABLE>
<CAPTION>
ANNUAL
ADVISORY
FEE AS PERCENT
NET ASSETS ON OF AVERAGE
NAME JULY 31, 1998 NET ASSETS
- ---- ------------- ----------
<S> <C> <C>
TCW/DW Term Trust 2003 ......... $927,388,278 (1)
TCW/DW Term Trust 2002 ......... 422,107,657 (1)
TCW/DW Term Trust 2000 ......... 455,627,429 (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 2003
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 2003 on October 20, 1998, at 11:00 a.m., New York City time,
and at any adjournment thereof, on the proposals set forth in the Notice of
Meeting dated August 24, 1998 as follows:
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDER-SIGNED 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>
[X] PLEASE MARK VOTES AS
IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
FOR WITHHOLD EXCEPT
1. Election of four (4) Trustees: [ ] [ ] [ ]
John R. Haire, Manuel H. Johnson, John L. Schroeder, Marc I. Stern
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY PARTICULAR NOMINEE, MARK THE THIS
PROPOSAL) "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.
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.
---------------------------------------------------------------------
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Shareholder sign in the box above
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Co-Owner (if any) sign in the box above
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PLEASE DETACH AT PERFORATION
TCW/DW TERM TRUST 2003
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
PRX 00090
