Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or
Section 240.14a-12
InterCapital Quality Municipal Securities . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
LouAnne McInnis ..... . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ X ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(j)(1), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(j)(3)
[ ] Fee computed on table below per Exchange Act Rules
14a-6(j)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 15, 1994
The Annual Meeting of Shareholders of INTERCAPITAL QUALITY MUNICIPAL
SECURITIES (the "Trust"), an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts, will be held in the Conference
Center, Forty-Fourth Floor, 2 World Trade Center, New York, New York 10048, on
June 15, 1994, at 9:00 a.m., New York City time, for the following purposes:
MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:
1. To elect ten (10) Trustees, three (3) to serve until the
1995 annual meeting, four (4) to serve until the 1996 annual meeting,
and three (3) to serve until the 1997 annual meeting, or, in each case,
until their successors shall have been elected and qualified;
2. To approve or disapprove the continuance of the Trust's
currently effective Investment Management Agreement with Dean Witter
InterCapital Inc.;
3. To ratify or reject the selection of Price Waterhouse as the
Trust's independent accountants for the fiscal year ending October 31,
1994; and
4. To transact such other business as may properly come before
the meeting or any adjournments thereof.
MATTER TO BE VOTED ON ONLY BY PREFERRED SHAREHOLDERS:
To elect two (2) Trustees, one (1) to serve until the 1995 annual
meeting, and one (1) to serve until the 1997 annual meeting, or, in each case,
until his successor shall have been elected and qualified.
Shareholders of record as of the close of business on April 14, 1994
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 at the
meeting or the vote required to approve or reject any proposal is not obtained,
the persons named as proxies may propose one or more adjournments of the
meeting for a total of not more than 60 days in the aggregate to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Trust's shares present in person or by
proxy at the meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
proposal to approve continuance of the Investment Management Agreement and will
vote against any such adjournment those proxies to be voted against that
proposal.
SHELDON CURTIS,
Secretary
April 21, 1994
New York, New York
===============================================================================
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE
UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED
PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
===============================================================================
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS
JUNE 15, 1994
This statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board") of INTERCAPITAL QUALITY
MUNICIPAL SECURITIES (the "Trust"), for use at the Annual Meeting of
Shareholders of the Trust to be held on June 15, 1994 (the "Meeting"), and at
any adjournments thereof.
If the enclosed form of proxy is properly executed and returned in time
to be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted for each of the nominees for election as Trustee
to be elected by all Shareholders and for each of the nominees for election as
Trustee to be elected by only the Preferred Shareholders and in favor of
Proposals 2 and 3 as set forth in the attached Notice of Annual Meeting of
Shareholders. 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, or
attendance and voting at the Meeting.
Shareholders of record as of the close of business on April 14, 1994,
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 April 14, 1994, there were
23,453,213 Common Shares of beneficial interest outstanding and 3,500 Preferred
Shares of beneficial interest outstanding, all with $.01 par value. No person
was known to own as much as 5% of the outstanding shares of the Trust on that
date. The Trustees and officers of the Trust, together, owned less than 1% of
the Trust's outstanding shares on that date.
The cost of soliciting proxies for the Meeting, consisting principally
of mailing and printing expenses, will be borne by the Trust. The solicitation
of proxies will be by mail, which may be supplemented by solicitation by mail,
telephone or otherwise through Trustees and officers of the Trust and officers
and regular employees of Dean Witter InterCapital Inc. ("InterCapital" or the
"Investment Manager"), without special compensation therefor. The first mailing
of this proxy statement is expected to be made on or about
April 21, 1994.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at twelve. At this first Shareholder Meeting of
the Trust, twelve nominees are to be elected to the Trust's Board of Trustees
in accordance with the Trust's Declaration of Trust. At the Meeting pursuant to
the Trust's Declaration of Trust, ten Trustees are to be elected to the Trust's
Board of Trustees by the holders of the Common Shares and the Preferred Shares
voting together as a single class. Additionally, pursuant to the
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Declaration of Trust and the Investment Company Act of 1940 (the "Act"), two
Trustees are to be elected to the Trust's Board of Trustees by the holders of
the Preferred Shares voting separately as a single class.
Nine of the current twelve Trustees (Jack F. Bennett, Michael Bozic,
Edwin J. Garn, John R. Haire, John E. Jeuck, Manuel H. Johnson, Paul Kolton,
Michael E. Nugent, and John L. Schroeder) are "Independent Trustees", that is,
Trustees who are not "interested persons" of the Trust, as that term is defined
in the Act. The nominees for election as Trustees have been proposed by the
Trustees now serving or, in the case of the nominees for positions as
Independent Trustees, by the Independent Trustees now serving. Messrs. Bozic,
Purcell and Schroeder were elected as Trustees by the Trustees on April 8,
1994. All of the other Trustees were previously elected by InterCapital, the
Trust's then sole shareholder, prior to the public offering of shares of the
Trust.
The Board has two committees--an Audit Committee and a Committee of the
Independent Trustees, consisting, in both cases, of the Independent Trustees.
Mr. Haire serves as the Chairman of both Committees. There are no nominating or
compensation committees of the Board.
The functions of the Audit Committee are: recommendation to the
Trustees of the engagement or discharge of the Trust's independent accountants;
direction and supervision of investigations into matters within the scope of
the independent accountants' duties, including the power to retain outside
specialists; review with the independent accountants of the audit plan and
results of the auditing engagement; approval of each professional service,
audit and non-audit, provided by the independent accountants and other
accounting firms prior to the performance of such service; review of the
independence of the independent accountants; consideration of the range of
audit and non-audit fees; review of the adequacy of the Trust's system of
internal accounting controls; advice to the independent accountants and
personnel of management that they have direct access to the Committee at all
times; and preparation and submission of Committee meeting minutes to the full
Board.
The functions of the Committee of the Independent Trustees are:
recommendation to the full Board of approval of any management, advisory and/or
administration agreements; recommendations to the full Board of any
underwriting and/or distribution agreements; review of the fidelity bond and
premium allocation; review of errors and omissions, uncollectible items of
deposit and any other joint insurance policies and premium allocation; review
of, and monitoring of compliance with, procedures adopted pursuant to certain
rules promulgated under the Act; review of, and monitoring of compliance with,
guidelines and procedures for effecting principal transactions in certain
taxable money market instruments with Dean Witter Reynolds Inc. ("DWR"); and
such other duties as the Independent Trustees shall, from time to time,
conclude are necessary to carry out their duties under the Act.
The nominees of the Board of Trustees for election as Trustees are
listed below. It is the intention of the persons named in the enclosed form of
proxy to vote the shares represented by them for the election of these
nominees: Jack F. Bennett, Michael Bozic, Charles A. Fiumefreddo, Edwin J.
Garn, John R. Haire, John E. Jeuck, Manuel H. Johnson, Paul Kolton, Michael E.
Nugent, Philip J. Purcell, John L. Schroeder and Edward R. Telling. Should any
of the nominees become unable or unwilling to accept nomination or election,
the persons named in the proxy will exercise their voting power in favor of
such person or persons as the Board of Trustees of the Trust may recommend. All
of the nominees have consented to being named in this proxy statement and to
serve if elected. The Trust knows no reason why said nominees would be unable
or unwilling to accept nomination or election. Trustees will be elected by a
plurality of the votes cast at the meeting. Abstentions and broker "non-votes"
will have the same effect as a vote against the proposal.
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Pursuant to the provisions of the Declaration of Trust, the nominees
for election as Trustees are divided into three separate classes, each class
having a term of three years. The term of office of one of each of the three
classes will expire each year.
The Board has determined that the nominees for election as Trustee
shall be standing for election as Trustee in each of the three classes of
Trustee as follows: Class I--Messrs. Bennett, Bozic, Fiumefreddo and Jeuck;
Class II--Messrs. Johnson, Kolton, Schroeder and Telling; and Class III--
Messrs. Garn, Haire, Nugent and Purcell. 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, or any adjournment thereof. The term of office of
Trustees of Class I shall expire on the date of the Trust's second annual
meeting of Shareholders; of Class II on the date of the Trust's third annual
meeting; and of Class III on the date of the Trust's fourth annual meeting. As
a consequence of this method of election, the replacement of a majority of the
Board could be delayed for up to two years. In addition, the Board has further
determined that one each of the Class I Trustees and the Class III Trustees
will be designated to be elected by the Preferred Shareholders voting
separately. In this regard, Charles A. Fiumefreddo and John R. Haire have been
designated as the nominees to be elected to the Trust's Board of Trustees by
the Preferred Shareholders, the terms of each to expire with his designated
Class. In accordance with the above, the Class I Trustees will serve until the
1995 Annual Meeting, the Class II Trustees will serve until the 1996 Annual
Meeting and the Class III Trustees will serve until the 1997 Annual Meeting or
until their successors shall have been elected and qualified.
The following information regarding each of the nominees for election
as Trustee and each of the 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 April 14, 1994 (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 other
investment companies for which InterCapital serves as investment manager or
investment adviser, namely, InterCapital Income Securities Inc., InterCapital
Insured Municipal Bond Trust, InterCapital Quality Municipal Investment Trust,
InterCapital Quality Municipal Income Trust, InterCapital Insured Municipal
Trust, InterCapital Insured Municipal Income Trust, InterCapital California
Insured Municipal Income Trust, InterCapital California Quality Municipal
Securities, InterCapital New York Quality Municipal Securities, InterCapital
Insured Municipal Securities, InterCapital Insured California Municipal
Securities, Dean Witter High Yield Securities Inc., Dean Witter Liquid Asset
Fund Inc., Dean Witter Variable Investment Series, Dean Witter Select Municipal
Reinvestment Fund, Dean Witter U.S. Government Money Market Trust, Dean Witter
U.S. Government Securities Trust, Dean Witter Tax-Exempt Securities Trust, Dean
Witter Tax-Free Daily Income Trust, Dean Witter American Value Fund, Dean
Witter Convertible Securities Trust, Dean Witter Dividend Growth Securities
Inc., Dean Witter Global Short-Term Income Fund Inc., Dean Witter Natural
Resource Development Securities Inc., Dean Witter Pacific Growth Fund Inc.,
Dean Witter Federal Securities Trust, Dean Witter World Wide Investment Trust,
Dean Witter Developing Growth Securities Trust, Dean Witter California Tax-Free
Income Fund, Dean Witter New York Tax-Free Income Fund, Dean Witter Strategist
Fund, Dean Witter Managed Assets Trust, Dean Witter Value-Added Market Series,
Dean Witter Utilities Fund, Dean Witter California Tax-Free Daily Income Trust,
Dean Witter Global Dividend Growth Securities, Dean Witter Limited Term
Municipal Trust, Dean Witter Short-Term Bond Fund, Dean Witter Global Utilities
Fund, High Income Advantage Trust, High Income Advantage Trust II, High Income
Advantage Trust III, Dean Witter World Wide Income Trust, Dean Witter
Intermediate Income Securities, Dean Witter European Growth Fund Inc., Dean
Witter Precious Metals and Minerals Trust, Dean Witter Capital Growth
Securities, Dean Witter New York Municipal Money Market Trust, Dean Witter
Multi-State Municipal Series Trust, Dean Witter Short-Term U.S. Treasury Trust,
Dean Witter Retirement Series, Active Assets California Tax-Free Trust, Active
Assets Money Trust,
4
<PAGE>
Active Assets Tax-Free Trust, Active Assets Government Securities Trust, Dean
Witter Diversified Income Trust, Dean Witter Government Income Trust, Dean
Witter Premier Income Trust, Municipal Income Trust, Municipal Income Trust II,
Municipal Income Trust III, Municipal Income Opportunities Trust, Municipal
Income Opportunities Trust II, Municipal Income Opportunities Trust III, Prime
Income Trust, Municipal Premium Income Trust, and Dean Witter Health Sciences
Trust (these investment companies, including the Trust, are referred to herein
collectively as the "Dean Witter Funds"), and investment companies for which
InterCapital's wholly-owned subsidiary, Dean Witter Services Company Inc.
("DWSC"), serves as manager and TCW Funds Management, Inc. serves as investment
adviser, namely, TCW/DW Core Equity Trust, TCW/DW North American Government
Income Trust, Dean Witter Latin American Growth Fund, TCW/DW Income and Growth
Fund, TCW/DW Balanced Fund, TCW/DW Small Cap Growth Fund, TCW/DW North American
Intermediate Income Trust, TCW/DW Emerging Markets Opportunities Trust, TCW/DW
Term Trust 2000, TCW/DW Term Trust 2002 and TCW/DW Term Trust 2003 (the "TCW/DW
Funds").
The nominees for Trustees to be elected by all Shareholders are:
JACK F. BENNETT, Trustee since April, 1993; age 70; retired; Director
or Trustee of the Dean Witter Funds; formerly Senior Vice President and
Director of Exxon Corporation (1975-1989) and Under Secretary of the U.S.
Treasury for Monetary Affairs (1974-1975); Director of Philips Electronics
N.V., Tandem Computers Inc. and Massachusetts Mutual Insurance Co.; Director or
Trustee of various not-for-profit and business organizations.
MICHAEL BOZIC, Trustee since April, 1994; age 53; President and Chief
Executive Officer of Hills Department Stores (since May, 1991); formerly
Chairman and Chief Executive Officer (January, 1987-August, 1990) and President
and Chief Operating Officer (August, 1990-February, 1991) of the Sears
Merchandise Group of Sears, Roebuck and Co. ("Sears"); Director or Trustee of
the Dean Witter Funds; Director of Harley Davidson Credit Inc., the United
Negro College Fund and Domain Inc. (home decor retailer).
EDWIN JACOB (JAKE) GARN, Trustee since April, 1993; age 61; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly Mayor
of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Discovery (April 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation
(since January, 1993); Member of the board of various civic and charitable
organizations.
DR. JOHN E. JEUCK, Trustee since April, 1993; age 77; retired; Director
or Trustee of the Dean Witter Funds; formerly Robert Law Professor of Business
Administration, Graduate School of Business, University of Chicago (until July,
1989); Business consultant.
DR. MANUEL H. JOHNSON, Trustee since April, 1993; age 45; Senior
Partner, Johnson Smick International, Inc., a consulting firm; Koch Professor
of International Economics and Director of the Center for Global Market Studies
at George Mason University (since September, 1990); Co-Chairman and a founder
of the Group of Seven Council (G7C), an international economic commission
(since September, 1990); Director or Trustee of the Dean Witter Funds; Trustee
of the TCW/DW Funds; Director of Greenwich Capital Markets Inc. (broker-
dealer); formerly Vice Chairman of the Board of Governors of the Federal
Reserve System (February, 1986-August, 1990) and Assistant Secretary of the
U.S. Treasury (1982-1986).
PAUL KOLTON, Trustee since April, 1993; age 70; Director or Trustee of
the Dean Witter Funds; Chairman of the Audit Committee and Chairman of the
Committee of the Independent Trustees and Trustee of the TCW/DW Funds; formerly
Chairman of Financial Accounting Standards Advisory Council; formerly Chairman
and Chief Executive Officer of the American Stock Exchange; Director of UCC
Investors Holding Inc. (Uniroyal Chemical Company, Inc.); Director or Trustee
of various not-for-profit organizations.
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<PAGE>
MICHAEL E. NUGENT, Trustee since April, 1993; age 58; General Partner,
Triumph Capital, L.P., a private investment partnership (since April, 1988);
Director or Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds;
formerly Vice President, Bankers Trust Company and BT Capital Corporation
(September, 1984-March, 1988); Director of various business organizations.
PHILIP J. PURCELL,* Trustee since April, 1994; age 50; Chairman of the
Board of Directors and Chief Executive Officer of Dean Witter, Discover & Co.
("DWDC"), Dean Witter Reynolds Inc. ("DWR") and Novus Credit Services Inc;
Director of InterCapital, DWSC and Dean Witter Distributors Inc.
("Distributors"); Director or Trustee of the Dean Witter Funds; Director and/or
officer of various DWDC subsidiaries.
JOHN L. SCHROEDER, Trustee since April, 1994; age 63; Executive Vice
President and Chief Investment Officer of The Home Insurance Company (since
August, 1991); Director or Trustee of the Dean Witter Funds; Director of
Citizens Utilities Company; formerly Chairman and Chief Investment Officer of
Axe-Houghton Management and the Axe-Houghton Funds (April, 1983-June, 1991) and
President of USF&G Financial Services, Inc. (June, 1990-June, 1991).
EDWARD R. TELLING,* Trustee since April, 1993; age 75; retired;
Director or Trustee of the Dean Witter Funds; formerly Chairman of the Board of
Directors and Chief Executive Officer (1978-1985) and President (January, 1981-
March, 1982 and February, 1984-August, 1984) of Sears; formerly Director of
Sears.
The nominees to be elected by only the Preferred Shareholders are:
Charles A. FIUMEFREDDO,* Trustee since March, 1993; age 60; Chairman,
Chief Executive Officer and Director of InterCapital, DWSC and Distributors;
Executive Vice President and Director of DWR; Chairman, Director or Trustee,
President and Chief Executive Officer of the Dean Witter Funds; Chairman, Chief
Executive Officer and Trustee of the TCW/DW Funds; Chairman and Director of
Dean Witter Trust Company ("DWTC"); Director and/or officer of various DWDC
subsidiaries; formerly Executive Vice President and Director of DWDC (until
February, 1993).
JOHN R. HAIRE, Trustee since April, 1993; age 69; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or
Trustees and Director or Trustee of the Dean Witter Funds; Trustee of the
TCW/DW Funds; formerly President, Council for Aid to Education (1978-October,
1989) and Chairman and Chief Executive Officer of Anchor Corporation, an
investment adviser (1964-1978); Director of Washington National Corporation
(insurance) and Bowne & Co., Inc. (printing).
The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; David A. Hughey, Vice
President; Robert M. Scanlan, Vice President; Edmund C. Puckhaber, Vice
President; James F. Willison, Vice President; and Thomas F. Caloia, Treasurer.
In addition, Peter M. Avelar, Katherine H. Stromberg, Joseph Arcieri and
Jonathan R. Page are Vice Presidents of the Trust and Marilyn K. Cranney, Barry
Fink, Lawrence S. Lafer, Lou Anne D. McInnis and Ruth Rossi serve as Assistant
Secretaries. Mr. Curtis is 62 years old and is currently Senior Vice President
and General Counsel of InterCapital and DWSC and Assistant Secretary of DWR and
DWDC; he is also Senior Vice President, Assistant Secretary and Assistant
General Counsel of Distributors and Senior Vice President and Secretary of
DWTC. Mr. Scanlan is 58 years old and is currently President and Chief
Operating Officer of InterCapital (since March, 1993) and DWSC; he is also
Executive Vice President of Distributors and Executive Vice President and
Director of DWTC. He was previously Executive Vice President of InterCapital
(November, 1990-March, 1993) and prior thereto was Chairman of Harborview Group
Inc. Mr. Hughey
- ------------
* Messrs. Fiumefreddo, Purcell and Telling may be deemed "interested persons",
as defined in Section 2(a)(19) of the Act, of the Trust and its Investment
Manager, due to their affiliation with the Investment Manager and/or its
affiliated companies.
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is 62 years old and is currently Executive Vice President and Chief
Administrative Officer of InterCapital and DWSC; he is also Executive Vice
President and Chief Administrative Officer of Distributors and DWTC as well as
a Director of DWTC. He was previously President of DWTC (October, 1989-March,
1993). Mr. Puckhaber is 54 years old and is currently Executive Vice President
of InterCapital (since January, 1991). Mr. Willison is 50 years old and is
currently Senior Vice President of InterCapital. Mr. Caloia is 47 years old and
is currently First Vice President of InterCapital and DWSC. Mr. Avelar is 34
years old and is currently Senior Vice President of InterCapital. He was
previously employed by PaineWebber Asset Management as a senior portfolio
manager (March, 1989-December, 1990). Ms. Stromberg is 45 years old and is
currently Vice President of InterCapital (since April, 1992). She was formerly
a portfolio manager with InterCapital (October, 1991-April, 1992) and Vice
President of Kidder Peabody Asset Management (October, 1985-October, 1991). Mr.
Arcieri is 45 years old and is currently Vice President of InterCapital. Mr.
Page is 47 years old and is currently Senior Vice President of InterCapital.
Other than Mr. Scanlan, Mr. Avelar and Ms. Stromberg, each of the above
officers has been an employee of InterCapital or DWR (formerly the corporate
parent of InterCapital) for over five years.
Messrs. Fiumefreddo, Purcell and Telling, who serve as Trustees of the
Trust, own securities of DWDC which, in the aggregate, constitute less than 1%
of the securities of each class outstanding.
Each of the Independent Trustees is paid by the Trust an annual
retainer fee of $1,200 plus $50 for each meeting of the Board, the Audit
Committee or the Committee of the Independent Trustees attended by the Trustee
in person (the Trust pays the Chairman of the Audit Committee an additional
annual fee of $1,000 and pays the Chairman of the Committee of the Independent
Trustees an additional annual fee of $2,400, in each case inclusive of the
Committee meeting fees), together with any out-of-pocket expenses incurred by
them in connection with attendance at any such meetings. The Trust pays no
remuneration to any Trustee who is not an Independent Trustee or to any of the
Trust's officers. For the period from September 29, 1993 (commencement of
operations) through October 31, 1993, the Trust accrued a total of $1,910 for
Trustees' fees and expenses. Commencing January 1, 1994, the Trust has adopted
a retirement program under which an Independent Trustee who retires after a
minimum required period of service would be entitled to retirement payments
upon reaching the eligible retirement date (normally, after attaining age 72)
based upon length of service and computed as a percentage of one-fifth of the
total compensation earned by such Trustee for service to the Trust in the five-
year period prior to the date of the Trustee's retirement. During the period
ended October 31, 1993, the Board held one meeting, and the Audit Committee and
the Committee of the Independent Trustees, which are both presently comprised
of the nine Independent Trustees, held no meetings and one meeting,
respectively. No Independent Trustee attended fewer than 75% of the meetings of
the Board of Trustees, the Audit Committee and the Committee of the Independent
Trustees held while he served in such positions.
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT MANAGEMENT AGREEMENT
The Trust's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Manager" or "InterCapital"), pursuant to
an Investment Management Agreement dated September 22, 1993 (referred to herein
as the "Management Agreeent"), a copy of which is attached hereto as Exhibit A.
The Management Agreement was initially approved by the Board of
Trustees of the Trust, including all of the Independent Trustees, at a meeting
held on April 28, 1993, and was approved by InterCapital, the then sole
shareholder of the Trust, on September 21, 1993. In the event shareholders do
not approve continuance of the Management Agreement by the required majority
vote at the forthcoming meeting or an adjournment
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thereof, the Board of Trustees of the Trust will take such action as it deems
to be in the best interest of the Trust and its shareholders, which may include
calling a special meeting of shareholders to vote on a new investment
management agreement or continuance of the present Management Agreement until
the next Annual Meeting of Shareholders.
In considering whether or not to approve the Management Agreement, the
Board of Trustees reviewed the terms of the agreement and considered all
materials and information deemed relevant to its determination. Among other
things, the Board considered the nature and scope of services to be rendered,
the quality of the Investment Manager's services and personnel, and the
appropriateness of the fees that are paid under the Management Agreement. Based
upon its review, the Board of Trustees, including all of the Independent
Trustees, determined that the approval of the Management Agreement was in the
best interests of the Trust and its shareholders.
The favorable vote of a majority of the outstanding voting securities
of the Trust is required for the approval of the Management Agreement. Such a
majority is defined in the Act as the lesser of (a) 67% or more of the shares
present at the Meeting, if the holders of more than 50% of the outstanding
shares of the Trust are present or represented by proxy, or (b) more than 50%
of the outstanding shares. Abstentions and broker "non-votes" will have the
same effect as a vote against the proposal.
THE INDEPENDENT TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS
APPROVE THE MANAGEMENT AGREEMENT.
THE MANAGEMENT AGREEMENT
The Management Agreement provides that the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodity markets and securities and commodities as it deems
necessary or useful to discharge its duties under the Management Agreement, and
that it shall continuously supervise the management of the assets of the Trust
in a manner consistent with the investment objectives and policies of the Trust
and subject to such other limitations and directions as the Board may, from
time to time, prescribe.
The Management Agreement provides that the Investment Manager shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Manager has authority to place
orders for the purchase and sale of portfolio securities on behalf of the Trust
without prior approval of its Trustees. The Trustees review the investment
portfolio at their regular meetings. In addition, the Investment Manager pays
the compensation of the officers of the Trust and provides the Trust with
office space and equipment and such clerical help and bookkeeping services and
telephone service, heat, light, power and other utilities. The Investment
Manager also pays for the services of personnel in connection with the pricing
of the Trust's shares and the preparation of prospectuses, proxy statements and
reports required to be filed with the Federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In return for its investment services and the expenses which the
Investment Manager assumes under the Management Agreement, the Trust pays the
Investment Manager compensation which is accrued daily and payable monthly and
which is determined by applying the annual rate of 0.35% to the Trust's average
weekly net assets. Pursuant to the Management Agreement, the Trust accrued to
the Investment Manager total compensation of $94,504 during the fiscal period
ended October 31, 1993. The net assets of the Trust totalled $333,938,111 at
October 31, 1993.
Under the Management Agreement, the Trust is obligated to bear all of
the costs and expenses of its operation, except those specifically assumed by
the Investment Manager, including, without limitation: charges and expenses of
any registrar, custodian or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or
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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 govenmental
agencies; costs and expenses of engraving or printing 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) and the costs and
expense of preparing, printing (including typesetting) and distributing
prospectuses for such purposes; all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Manager or any
corporate affiliate of the Investment Manager; all expenses incident to the
payment of any dividend or distribution program; charges and expenses of any
outside pricing services; charges and expenses of legal counsel, including
counsel to the Independent Trustees of the Trust, and independent accountants
in connection with any matter relating to the Trust (not including compensation
or expenses of attorneys employed by the Investment Manager); membership dues
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 Management
Agreement.
The Management Agreement provides that it shall continue in effect
until April 30, 1995 and that, after the initial period of effectiveness, it
will continue in effect from year to year thereafter provided such continuance
is approved at least annually by vote of a majority, as defined in the Act, of
the outstanding voting securities of the Trust or by the Trustees of the Trust,
and, in either event, by the vote cast in person by a majority of the Trustees
who are not parties to the Management Agreement or "interested persons" of any
such party (as defined in the Act) at a meeting called for the purpose of
voting on such approval.
The Management Agreement also provides that it may be terminated at any
time by the Investment Manager, 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.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and its wholly-owned subsidiary, DWSC, DWSC began to provide the
administrative services to the Trust which were previously performed directly
by InterCapital. The foregoing internal reorganization did not result in any
change in the nature or scope of the administrative services being provided to
the Trust or any of the fees being paid by the Trust for the overall services
being performed under the terms of the Management Agreement.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. is the Trust's investment manager.
InterCapital maintains its offices at Two World Trade Center, New York, New
York 10048. InterCapital, which was incorporated in July, 1992, is a wholly-
owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a balanced financial
services organization providing a broad range of nationally marketed credit and
investment products.
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The Principal Executive Officer and Directors of InterCapital, and
their principal occupations, are:
Philip J. Purcell, Chairman of the Board of Directors and Chief
Executive Officer of DWDC and DWR and Director of InterCapital, DWSC and
Distributors; Richard M. DeMartini, President, Chief Operating Officer of Dean
Witter Capital and Director of DWR, Distributors, InterCapital and DWSC; James
F. Higgins, President, Chief Operating Officer of Dean Witter Financial and
Director of DWR, Distributors, InterCapital and DWSC; Charles A. Fiumefreddo,
Executive Vice President and Director of DWR and Chairman of the Board of
Directors and Chief Executive Officer of InterCapital, DWSC and Distributors;
Christine A. Edwards, Executive Vice President, Secretary, General Counsel and
Director of DWR and Distributors, and Director of InterCapital and DWSC; and
Thomas C. Schneider, Executive Vice President, Chief Financial Officer and
Director of DWR, Distributors, InterCapital and DWSC.
The business address of the foregoing Directors and Executive Officers
is Two World Trade Center, New York, New York 10048.
InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. The Appendix lists the investment companies for which InterCapital
provides investment management or investment advisory services and sets forth
the net assets and fees payable by such companies.
DWDC has its offices at Two World Trade Center, New York, New York
10048. There are various lawsuits pending against DWDC involving material
amounts which, in the opinion of its management, will be resolved with no
material effect on the consolidated financial position of the company.
During the fiscal period ended October 31, 1993, the Trust accrued to
Dean Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $19,648.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the general supervision of the Board, the Investment Manager
is responsible for decisions to buy and sell securities for the Trust and
arranges for the execution of portfolio securities transactions on behalf of
the Trust. Purchases of portfolio securities are made from dealers,
underwriters and issuers; sales, if any, prior to maturity, are made to dealers
and issuers. The Trust does not normally incur any brokerage commission expense
on such transactions. In accordance with its investment policies, the Trust's
principal investments are in debt securities which are generally traded on a
"net" basis with dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually includes a profit
to the dealer. Securities purchased in underwritten offerings include a fixed
amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. When securities are purchased or sold
directly from or to an issuer, no commissions or discounts are paid. Options
and futures transactions will usually be effected through a broker and a
commission will be charged. On occasion, the Trust may also purchase certain
money market instruments directly from an issuer, in which case no commissions
or discounts are paid.
The policy of the Trust regarding purchases and sales of securities for
its portfolio is that primary consideration will be given to obtaining the most
favorable price and efficient execution of transactions. In seeking to
implement the Trust's policy, the Investment Manager will effect transactions
with those dealers who the Investment Manager believes provide the most
favorable prices and are capable of providing efficient executions. If the
Investment Manager believes such price and execution can be obtained from more
than one dealer, it may give consideration to placing portfolio transactions
with those dealers who also furnish research and other services to the Trust or
the Investment Manager. Such services may include, but are
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not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments; wire services; and
appraisals or evaluations of portfolio securities. In transactions effected
with a dealer, acting as principal, who furnishes research services to the
Trust, the Trust will not purchase securities at a higher price, or sell
securities at a lower price, than would be the case if the dealer had not
furnished such services.
The information and services received by the Investment Manager from
brokers and dealers may be of benefit to the Investment Manager in the
management of accounts of some or all of its other clients and may not in all
cases benefit the Trust directly. While such services are useful and important
in supplementing its own research and facilities, the Investment Manager
believes the value of such services is not determinable and does not
significantly reduce its expenses. The Trust does not reduce the management fee
it pays to the Investment Manager by any amount that may be attributable to the
value of such services. During the fiscal period ended October 31, 1993, the
Trust paid no brokerage commissions and the portfolio turnover rate of the
Trust was 0.0%.
Pursuant to an Order of the Securities and Exchange Commission, the
Trust may effect principal transactions in certain money market instruments
with DWR. The Trust will limit its transactions with DWR to U.S. Government and
Government Agency Securities, bank money instruments (i.e., certificates of
deposit and banker's acceptances) and commercial paper. Such transactions will
be effected with DWR only when the price available from DWR is better than that
available from other dealers.
Consistent with the policies described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may
be effected through DWR. In order for DWR to effect any portfolio transactions
for the Trust, the commissions, fees or other remuneration received by DWR must
be reasonable and fair compared to the commissions, fees or other remuneration
paid to other brokers in connection with comparable transactions involving
similar securities being purchased or sold on an exchange during a comparable
period of time. This standard would allow DWR to receive no more than the
remuneration which would be expected to be received by an unaffiliated broker
in a commensurate arm's-length transaction. Furthermore, the Board, including a
majority of the Independent Trustees, have adopted procedures which are
reasonably designed to provide that any commissions, fees or other remuneration
paid to DWR are consistent with the foregoing standard. During the period ended
October 31, 1993, the Trust paid no brokerage commissions to DWR.
(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Trustees have unanimously selected the firm of Price Waterhouse as
the Trust's independent accountants for the fiscal year ending October 31,
1994. Its selection is being submitted for ratification or rejection by
Shareholders at the Meeting. Price Waterhouse has been the independent
accountants for the Trust since its inception, and has no direct or indirect
financial interest in the Trust.
A representative of Price Waterhouse is expected to be present at the
Meeting and will be available to make a statement, if he or she so desires, and
to respond to appropriate questions of Shareholders.
The affirmative vote of the holders of a majority of shares represented
and entitled to vote at the Annual Meeting is required for ratification of the
selection of Price Waterhouse as the independent accountants for the Trust.
Abstentions and broker "non-votes" will have the same effect as a vote against
a proposal.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE AS THE INDEPENDENT ACCOUNTANTS FOR THE TRUST.
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ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business at the
Meeting or the vote required to approve or reject any proposal is not obtained,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Trust's shares present in person or by
proxy at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of proposal
Two and will vote against any such adjournment those proxies required to be
voted against that proposal.
SHAREHOLDERS PROPOSALS
Proposals of security holders intended to be presented at the next
Annual Meeting of Shareholders must be received no later than February 23, 1995
for inclusion in the proxy statement for that meeting.
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is the intention of the persons named in the enclosed form of proxy
or their substitutes, to vote all shares that they are entitled to vote on any
such matter, utilizing such proxy in accordance with their best judgment on
such matters.
FINANCIAL STATEMENTS OF THE INVESTMENT MANAGER
The balance sheet of InterCapital, annexed hereto as Exhibit B, is
required by Rule 20a-2 under the Act. THIS IS NOT A FINANCIAL STATEMENT OF THE
TRUST. THE TRUST'S FINANCIAL STATEMENTS ARE SET FORTH IN ITS ANNUAL REPORT FOR
THE FISCAL PERIOD ENDED OCTOBER 31, 1993, COPIES OF WHICH WERE PREVIOUSLY SENT
TO SHAREHOLDERS.
By Order of the Board of Trustees
SHELDON CURTIS
Secretary
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APPENDIX
InterCapital serves as investment manager or investment adviser to the
following investment companies, with the net assets shown as of April 14, 1994:
(1) Dean Witter High Yield Securities Inc., with assets of
approximately $551 million, for an investment management fee at an annual rate
of 0.50% on assets up to $500 million, scaled down at various asset levels to
0.30% on assets over $3 billion; (2) Dean Witter Liquid Asset Fund Inc., with
assets of approximately $8.8 billion, for an investment management fee at an
annual rate of 0.50% on assets up to $500 million, scaled down at various asset
levels to 0.248% on assets over $17.5 billion; (3) Dean Witter Tax-Exempt
Securities Trust, with assets of approximately $1.5 billion, for an investment
management fee at an annual rate of 0.50% on assets up to $500 million, scaled
down at various assets levels to 0.325% on assets over $1.25 billion; (4) Dean
Witter Tax-Free Daily Income Trust, with assets of approximately $638 million,
for an investment management fee at an annual rate of 0.50% on assets up to
$500 million, scaled down at various asset levels to 0.25% on assets over $3
billion; (5) Dean Witter American Value Fund, with assets of approximately $.4
billion, for an investment management fee at an annual rate of 0.625% on assets
up to $250 million and 0.50% on assets over $250 million; (6) Dean Witter
Dividend Growth Securities Inc., with assets of approximately $6.5 billion, for
an investment management fee at an annual rate of 0.625% on assets up to $250
million, scaled down at various asset levels to 0.325% on assets over $8
billion; (7) Dean Witter Variable Investment Series, with assets of
approximately $2.5 billion, for an investment management fee at an annual rate
of 1.0% (of which 40% is paid to a Sub-Adviser) of the net assets of each of
the European Growth Portfolio and the Pacific Growth Portfolio, 0.75% of the
net assets of the Global Dividend Growth Portfolio, 0.65% of the net assets of
the Capital Growth Portfolio, 0.65% of the net assets of the Utilities
Portfolio up to $500 million and 0.55% of the net assets of the Portfolio over
$500 million, 0.625% of the net assets of the Dividend Growth Portfolio up to
$500 million and 0.50% of the net assets of the Portfolio over $500 million,
and 0.50% of the net assets of each of the other five Portfolios; (8) Dean
Witter Select Municipal Reinvestment Fund, with assets of approximately $92
million, for an investment management fee at an annual rate of 0.50%; (9)
Active Assets Money Trust, with assets of approximately $4.2 billion, for an
investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various asset levels to 0.25% on assets over $3
billion; (10) Active Assets Tax-Free Trust, with assets of approximately $1.5
billion, for an investment management fee at an annual rate of 0.50% on assets
up to $500 million, scaled down at various asset levels to 0.25% on assets over
$3 billion; (11) Active Assets California Tax-Free Trust, with assets of
approximately $296 million, for an investment management fee of 0.50% on assets
up to $500 million, scaled down at various levels to 0.25% on assets over $3
billion; (12) Active Assets Government Securities Trust, with assets of
approximately $532 million, for an investment management fee at an annual rate
of 0.50% on assets up to $500 million, scaled down at various asset levels to
0.25% on assets over $3 billion; (13) Dean Witter Natural Resource Development
Securities Inc., with assets of approximately $136 million, for an investment
management fee at an annual rate of 0.625% on assets up to $250 million and
0.50% on assets over $250 million; (14) Dean Witter U.S. Government Money
Market Trust, with assets of approximately $80 million, for an investment
management fee at an annual rate of 0.50% on assets up to $500 million, scaled
down at various asset levels to 0.25% on assets over $3 billion; (15) Dean
Witter Developing Growth Securities Trust, with assets of approximately $310
million, for an investment management fee at an annual rate of 0.50% on assets
up to $500 million and 0.475% on assets over $500 million; (16) Dean Witter
U.S. Government Securities Trust, with assets of approximately $11 billion, for
an investment management fee at an annual rate of 0.50% on assets up to $1
billion, scaled down at various asset levels to 0.30% on assets over $12.5
billion; (17) Dean Witter California Tax-Free Income Fund, with assets of
approximately $1.1 billion, for an investment management fee at an annual rate
of 0.55% on assets up to $500 million, scaled down at various asset levels to
0.475% on assets over $1 billion; (18) Dean Witter New York Tax-Free Income
Fund, with assets of approximately $229 million, for an investment management
fee at an annual rate of 0.55% on assets up to $500 million and 0.525% on
assets over $500 million; (19) Dean Witter Convertible Securities Trust, with
assets of approximately $199 million, for an investment management fee at an
annual rate of 0.60% on assets up to $750 million, scaled down
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at various asset levels to 0.425% on assets over $3 billion; (20) Dean Witter
Federal Securities Trust, with assets of approximately $969 million, for an
investment management fee at an annual rate of 0.55% on assets up to $1
billion, scaled down at various asset levels to 0.35% on assets over $12.5
billion; (21) InterCapital Income Securities Inc., with assets of approximately
$216 million, for an investment management fee at an annual rate of 0.50%; (22)
Dean Witter Value-Added Market Series, with assets of approximately $345
million, for an investment management fee at an annual rate of 0.50% on assets
up to $500 million and 0.45% on assets over $500 million; (23) Dean Witter
Utilities Fund, with assets of approximately $3.4 billion, for an investment
management fee at an annual rate of 0.65% on assets up to $500 million, scaled
down at various asset levels to 0.425% on assets over $5 billion; (24) Dean
Witter California Tax-Free Daily Income Trust, with assets of approximately
$275 million, for an investment management fee at an annual rate of 0.50% on
assets up to $500 million, scaled down at various asset levels to 0.25% on
assets over $3 billion; (25) Dean Witter Managed Assets Trust, with assets of
approximately $267 million, for an investment management fee at an annual rate
of 0.60% on assets up to $500 million and 0.55% on assets over $500 million;
(26) High Income Advantage Trust, with assets of approximately $181 million,
for an investment management fee at an annual rate of 0.75% on assets up to
$250 million, scaled down at various asset levels to 0.30% on assets over $1
billion; (27) High Income Advantage Trust II, with assets of approximately $241
million, for an investment management fee at an annual rate of 0.75% on assets
up to $250 million, scaled down at various asset levels to 0.30% on assets over
$1 billion; (28) High Income Advantage Trust III, with assets of approximately
$93 million, for an investment management fee at an annual rate of 0.75% on
assets up to $250 million, scaled down at various asset levels to 0.30% on
assets over $1 billion; (29) Dean Witter Strategist Fund, with assets of
approximately $802 million, for an investment management fee at an annual rate
of 0.60% on assets up to $500 million, scaled down at various asset levels to
0.50% on assets over $1 billion; (30) Dean Witter Intermediate Income
Securities, with assets of approximately $248 million, for an investment
management fee at an annual rate of 0.60% on assets up to $500 million, scaled
down at various asset levels to 0.30% on assets over $1 billion; (31) Dean
Witter World Wide Income Trust, with assets of approximately $220 million, for
an investment management fee at an annual rate of 0.75% on assets up to $250
million, scaled down at various asset levels to 0.30% on assets over $1
billion; (32) Dean Witter Government Income Trust, with assets of approximately
$512 million, for an investment management fee at an annual rate of 0.60%; (33)
Dean Witter New York Municipal Money Market Trust, with assets of approximately
$43 million, for an investment management fee at an annual rate of 0.50% on
assets up to $500 million, scaled down at various asset levels to 0.25% on
assets over $3 billion; (34) Dean Witter European Growth Fund Inc., with assets
of approximately $636 million, for an investment management fee at an annual
rate of 1.0% on assets up to $500 million and 0.95% on assets over $500 million
(of which 40% is paid to a Sub-Adviser); (35) Dean Witter Capital Growth
Securities, with assets of approximately $527 million, for an investment
management fee at an annual rate of 0.65% on assets up to $500 million, scaled
down at various asset levels to 0.475% on assets over $1.5 billion; (36) Dean
Witter Precious Metals and Minerals Trust, with assets of approximately $70
million, for an investment management fee at an annual rate of 0.80%; (37) Dean
Witter Global Short-Term Income Fund Inc., with assets of approximately $237
million, for an investment management fee at an annual rate of 0.55% on assets
up to $500 million and 0.50% on assets over $500 million; (38) Dean Witter
Pacific Growth Fund Inc., with assets of approximately $1.2 billion, for an
investment management fee at an annual rate of 1.0% on assets up to $1 billion
and 0.95% on assets over $1 billion (of which 40% is paid to a Sub-Adviser);
(39) InterCapital Insured Municipal Bond Trust, with assets of approximately
$118 million, for an investment management fee at an annual rate of 0.35%; (40)
InterCapital Quality Municipal Investment Trust, with assets of approximately
$415 million, for an investment management fee at an annual rate of 0.35%; (41)
InterCapital Insured Municipal Trust, with assets of approximately $534
million, for an investment management fee at an annual rate of 0.35%; (42)
InterCapital Quality Municipal Income Trust, with assets of approximately $842
million, for an investment management fee at an annual rate of 0.35%; (43) Dean
Witter Multi-State Municipal Series Trust, with assets of approximately $462
million, for an investment management fee at an annual rate of 0.35% of the net
assets of each Series; (44) Dean Witter Premier Income Trust, with assets of
approximately $59 million, for an investment management fee at
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an annual rate of 0.50% (of which 40% is paid to a Sub-Adviser); (45) Dean
Witter Short-Term U.S. Treasury Trust, with assets of approximately $572
million, for an investment management fee at an annual rate of 0.35%; (46) Dean
Witter Diversified Income Trust, with assets of approximately $323 million, for
an investment management fee at an annual rate of 0.40%; (47) Dean Witter
Health Sciences Trust, with assets of approximately $262 million, for an
investment management fee at an annual rate of 1.0%; (48) Dean Witter
Retirement Series, with assets of approximately $29 million, for an investment
management fee at an annual rate of 1.0% of the net assets of the Global Equity
Series, 0.85% of the net assets of each of the American Value Series, the
Capital Growth Series and the Strategist Series, 0.75% of the net assets of
each of the Dividend Growth Series and the Utilities Series, 0.65% of the net
assets of each of the U.S. Government Securities Series and the Intermediate
Income Securities Series, and 0.50% of the net assets of each of the Liquid
Asset Series, the U.S. Government Money Market Series and the Value-Added
Market Series; (49) InterCapital Insured Municipal Income Trust, with assets of
approximately $697 million, for an investment management fee at an annual rate
of 0.35%; (50) InterCapital California Insured Municipal Income Trust, with
assets of approximately $274 million, for an investment management fee at an
annual rate of 0.35%; (51) Dean Witter Global Dividend Growth Securities, with
assets of approximately $1.2 billion, for an investment management fee at an
annual rate of 0.75%; (52) InterCapital Quality Municipal Securities, with
assets of approximately $454 million, for an investment management fee at an
annual rate of 0.35%; (53) InterCapital California Quality Municipal
Securities, with assets of approximately $36 million, for an investment
management fee at an annual rate of 0.35%; (54) InterCapital New York Quality
Municipal Securities, with assets of approximately $107 million, for an
investment management fee at an annual rate of 0.35%; (55) Dean Witter Limited
Term Municipal Trust, with assets of approximately $159 million, for an
investment management fee at an annual rate of 0.50%; (56) Dean Witter Short-
Term Bond Fund, with assets of approximately $43 million, for an investment
management fee at an annual rate of 0.70%; (57) InterCapital Insured Municipal
Securities, with assets of approximately $143 million, for an investment
management fee at an annual rate of 0.35%; (58) InterCapital Insured California
Municipal Securities, with assets of approximately $63 million, for an
investment management fee at an annual rate of 0.35%; (59) Municipal Income
Trust, with assets of approximately $334 million, for an investment advisory
fee at an annual rate of 0.35% on assets up to $250 million and 0.25% on assets
over $250 million; (60) Municipal Income Trust II, with assets of approximately
$291 million, for an investment advisory fee at an annual rate of 0.40% on
assets up to $250 million and 0.30% on assets over $250 million; (61) Municipal
Income Trust III, with assets of approximately $64 million, for an investment
advisory fee at an annual rate of 0.40% on assets up to $250 million and 0.30%
on assets over $250 million; (62) Municipal Income Opportunities Trust, with
assets of approximately $180 million, for an investment advisory fee at an
annual rate of 0.50%; (63) Municipal Income Opportunities Trust II, with assets
of approximately $177 million, for an investment advisory fee at an annual rate
of 0.50%; (64) Municipal Income Opportunities Trust III, with assets of
approximately $107 million, for an investment advisory fee at an annual rate of
0.50%; (65) Municipal Premium Income Trust, with assets of approximately $391
million, for an investment advisory fee at an annual rate of 0.40%; (66) Prime
Income Trust, with assets of approximately $269 million, for an investment
advisory fee at an annual rate of 0.90% on assets up to $500 million and 0.85%
on assets over $500 million; and (67) Dean Witter Global Utilities Fund, a new
investment company, for an investment management fee at an annual rate of
0.65%. InterCapital also serves as Investment Adviser of Dean Witter World Wide
Investment Trust and Dean Witter World Wide Investment Fund, along with Daiwa
International Capital Management Corp. and NatWest Investment Management
Limited. Dean Witter World Wide Investment Trust had assets of approximately
$502 million and InterCapital receives an Investment Adviser's fee at an annual
rate of 0.55% of the Trust's daily net assets up to $500 million and 0.5225% of
the Trust's daily net assets over $500 million. Shares of Dean Witter World
Wide Investment Fund, an investment company organized under the laws of
Luxembourg, are not offered for purchase in the United States or to American
citizens outside of the United States. InterCapital also serves as sub-adviser
to Templeton Global Opportunities Trust, with assets of approximately $441
million, for which it receives a fee of 0.25% per annum.
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EXHIBIT A
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 22nd day of September, 1993, by and between
InterCapital Quality Municipal Securities, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Fund"), and Dean Witter InterCapital Inc., a Delaware corporation
(hereinafter called the "Investment Manager"):
WHEREAS, The Fund intends to engage in business as a closed-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment adviser; and
WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, The Investment Manager desires to be retained to perform
services on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously
manage the assets of the Fund in a manner consistent with the investment
objectives and policies of the Fund; shall determine the securities and
commodities to be purchased, sold or otherwise disposed of by the Fund and the
timing of such purchases, sales and dispositions; and shall take such further
action, including the placing of purchase and sale orders on behalf of the
Fund, as the Investment Manager shall deem necessary or appropriate. The
Investment Manager shall also furnish to or place at the disposal of the Fund
such of the information, evaluations, analyses and opinions formulated or
obtained by the Investment Manager in the discharge of its duties as the Fund
may, from time to time, reasonably request.
2. The Investment Manager shall, at its own expense, maintain such
staff and employ or retain such personnel and consult with such other persons
as it shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without limiting the
generality of the foregoing, the staff and personnel of the Investment Manager
shall be deemed to include persons employed or otherwise retained by the
Investment Manager to furnish statistical and other factual data, advice
regarding economic factors and trends, information with respect to technical
and scientific developments, and such other information, advice and assistance
as the Investment Manager may desire. The Investment Manager shall, as agent
for the Fund, maintain the Fund's records and books of account (other than
those maintained by the Fund's transfer agent, registrar, custodian and other
agencies). All such books and records so maintained shall be the property of
the Fund and, upon request therefor, the Investment Manager shall surrender to
the Fund such of the books and records so requested.
A-1
<PAGE>
3. The Fund will, from time to time, furnish or otherwise make
available to the Investment Manager such financial reports, proxy statements
and other information relating to the business and affairs of the Fund as the
Investment Manager may reasonably require in order to discharge its duties and
obligations hereunder.
4. The Investment Manager shall bear the cost of rendering the
investment management and supervisory services to be performed by it under this
Agreement, and shall, at its own expense, pay the compensation of the officers
and employees, if any, of the Fund, and provide such office space, facilities
and equipment and such clerical help and bookkeeping services as the Fund shall
reasonably require in the conduct of its business. The Investment Manager shall
also bear the cost of telephone service, heat, light, power and other utilities
provided to the Fund.
5. The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund, including without limitation: the charges and expenses of
any registrar, any custodian or depository appointed by the Fund 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
Fund; brokers' commissions chargeable to the Fund in connection with portfolio
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and fees payable by the Fund to
federal, state or other governmental agencies; the cost and expense of
engraving or printing of certificates representing shares of the Fund, all
costs and expenses in connection with the registration and maintenance of
registration of the Fund and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing fees
and legal fees and disbursements of counsel) the cost and expense of printing,
including typesetting, and distributing prospectuses for such purposes; all
expenses of shareholders' and trustees' meetings and of preparing, printing and
mailing of proxy statements and reports to shareholders; fees and travel
expenses of trustees or members of any advisory board or committee who are not
employees of the Investment Manager or any corporate affiliate of the
Investment Manager; all expenses incident to the payment of any dividend or
distribution program; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel, including
counsel to the Trustees of the Fund who are not interested persons (as defined
in the Act) of the Fund or the Investment Manager, and of independent
accountants, in connection with any matter relating to the Fund; membership
dues of industry associations; interest payable on Fund borrowings; fees and
expenses incident to the listing of the Fund's shares on any stock exchange;
postage; insurance premiums on property or personnel (including officers and
Trustees) of the Fund which inure to its benefit; extraordinary expenses
(including but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto); and all other charges and costs
of the Fund's operation unless otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the
Investment Manager monthly compensation, calculated from the day following
effectiveness hereof, determined by applying the annual rate of 0.35% to the
Fund's average weekly net assets. For the purposes of calculating the
management fee, the liquidation preference of any Preferred Shares issued by
the Fund will not be deducted from the Fund's total assets. Except as
hereinafter set forth, compensation under this Agreement shall be calculated
and accrued weekly and paid monthly by applying the annual rates to the average
weekly net assets of the Fund determined as of the close of the last business
day of each week. At the request of the Investment Manager, compensation
hereunder shall be calculated and accrued at more frequent intervals in a
manner consistent with the calculation of fees on a weekly basis. If this
Agreement becomes effective subsequent to the first day of a month or shall
terminate before the last day of a month, compensation for that part of the
month this Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above.
A-2
<PAGE>
7. The Investment Manager will use its best efforts in the supervision
and management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund
or any of its investors for any error of judgment or mistake of law of for any
act or omission by the Investment Manager or for any losses sustained by the
Fund or its investors.
8. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or commodities
for their own accounts or for the account of others for whom they may be
acting. Nothing in this Agreement shall limit or restrict the right of any
Trustee, officer of employee of the Investment Manager to engage in any other
business or to devote his time and attention in part to the management or other
aspects of any other business whether of a similar or dissimilar nature.
9. This Agreement shall remain in effect until April 30, 1995 and from
year to year thereafter provided such continuance is approved at least annually
by the vote of holders of a majority, as defined in the Act, of the outstanding
voting securities of the Fund (Common Shares and Preferred Shares voting
together as a single class) or by the Trustees of the Fund; provided, that in
either event such continuance is also approved annually by the vote of a
majority of the Trustees of the Fund who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party, which vote must
be cast in person at a meeting called for the purpose of voting on such
approval; provided, however, that (a) the Fund may, at any time and without the
payment of any penalty, terminate this Agreement upon thirty days' written
notice to the Investment Manager, either by majority vote of the Trustees of
the Fund or by the vote of a majority of the outstanding voting securities of
the Fund (Common Shares and Preferred Shares voting together as a single
class); (b) this Agreement shall immediately terminate in the event of its
assignment (to the extent required by the Act and the rules thereunder) unless
such automatic terminations shall be prevented by an exemptive order of the
Securities and Exchange Commission; and (c) the Investment Manager may
terminate this Agreement without payment of penalty on thirty days' written
notice to the Fund. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed post-paid, to the other party at the
principal office of such party.
10. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.
11. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the Act. To the extent
the applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
12. The Declaration of Trust, as amended, establishing InterCapital
Quality Municipal Securities, dated March 3, 1993, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the office of
the Secretary of the Commonwealth of Massachusetts, provides that the name
InterCapital Quality Municipal Securities, as amended, refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, shareholder, officer, employee or agent of
A-3
<PAGE>
InterCapital Quality Municipal Securities shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said InterCapital Quality Municipal Securities, but the Trust Estate
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the day and year first above written in New York, New York.
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
/s/ Sheldon Curtis
By .......................................
Sheldon Curtis
Attest:
/s/ Lou Anne McInnis
..............................
Lou Anne McInnis
DEAN WITTER INTERCAPITAL INC.
/s/ Charles A. Fiumefreddo
By .......................................
Charles A. Fiumefreddo
Attest:
/s/ Barry Fink
............. ................
Barry Fink
A-4
<PAGE>
EXHIBIT B
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders of
Dean Witter InterCapital Inc.:
We have audited the accompanying balance sheet of Dean Witter
InterCapital Inc. (the "Company") (a wholly-owned subsidiary of Dean Witter,
Discover & Co.) as of December 31, 1993. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of Dean Witter InterCapital Inc. at December
31, 1993 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE
February 28, 1994
B-1
<PAGE>
<TABLE>
DEAN WITTER INTERCAPITAL, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
(IN THOUSANDS)
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents........................................ $ 57,810
Management and administration fees receivable.................... 27,010
Investments...................................................... 7,644
Office facilities, at cost (less accumulated depreciation
and amortization of $5,122)..................................... 3,892
Other assets..................................................... 18,176
--------
$114,532
========
<CAPTION>
LIABILITIES AND
STOCKHOLDER'S EQUITY
<S> <C>
Income taxes payable (Note 3).................................... $ 45,545
Dividends payable................................................ 12,662
Accrued compensation and employee benefits....................... 12,337
Payable to affiliate............................................. 4,000
Other liabilities................................................ 14,988
--------
Total liabilities........................................... 89,532
--------
Stockholder's equity:
Common stock, $.01 par value;
1,000 shares authorized and outstanding........................ --
Additional paid-in capital...................................... 10,000
Retained earnings............................................... 15,000
--------
Total stockholder's equity.................................. 25,000
--------
$114,532
========
See notes to consolidated balance sheet.
</TABLE>
B-2
<PAGE>
DEAN WITTER INTERCAPITAL INC.
NOTES TO CONSOLIDATED BALANCE SHEET
1. INTRODUCTION AND BASIS OF PRESENTATION
The consolidated balance sheet includes the accounts of Dean Witter
InterCapital Inc. and its wholly-owned subsidiaries (the "Company"). The
Company is wholly-owned by Dean Witter, Discover & Co. ("DWDC"), which was
formerly a subsidiary of Sears, Roebuck and Co. ("Sears"). All material
intercompany balances and transactions with its subsidiaries have been
eliminated.
On March 1, 1993, DWDC completed an initial public offering of 33.8
million shares of its common stock at $27 per share. This transaction had the
effect of reducing Sears ownership in DWDC to 80.1 percent. On June 30, 1993,
Sears divested its remaining ownership of DWDC's common stock by means of a
special dividend to Sears shareholders.
On December 22, 1993, Dean Witter Reynolds Inc. ("DWR") transferred
the net assets of the Company in the form of a dividend to DWDC. Prior to
December 22, 1993, the Company was wholly-owned by DWR, a wholly-owned
subsidiary of DWDC.
The Company is a registered investment adviser under the Investment
Advisers Act of 1940. The Company sponsors and performs management and
administrative services for mutual funds, principally those sold by DWR ("DWR
funds"). The Company also performs such services for individual, institutional,
trust and estate accounts.
The Company commenced operations in January 1993 and assumed the
advisory business of DWR.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash equivalents consist of highly liquid investments not held for
resale with maturities, when purchased, of three months or less.
Fixed assets are generally depreciated utilizing accelerated methods
over useful lives of five to eight years. Leasehold improvements are amortized
over the lesser of the lease term or useful life.
3. INCOME TAXES
The Company provides deferred income taxes which result from recording
certain transactions in different years for tax and financial reporting
purposes.
Payments for income taxes are limited to those which would result from
the Company filing a separate federal income tax return.
The Company has available net operating loss carryforwards at December
31, 1993 in the amount of $112,200,000 which begin to expire in 2002.
4. RELATED PARTY TRANSACTIONS
Certain administrative services are provided by DWR which are
reimbursed by the Company.
5. EMPLOYEE BENEFIT PLANS
Substantially all employees are covered by a non-contributory defined
benefit pension plan sponsored by DWR. Pension benefits are based on length of
service and average annual compensation.
B-3
<PAGE>
Certain employees are covered by postretirement plans sponsored by DWR
that provide medical and life insurance for retirees and eligible dependents.
Eligibility for retiree medical and life benefits is generally based on a
combination of age and years of service at retirement.
The Company reimburses DWR for pension and other postretirement
benefit expenses.
6. LITIGATION
The Company has been named as a defendant in various lawsuits. It is
the opinion of management, after consultation with outside counsel, that the
resolution of such suits will not have a material adverse effect on the
consolidated financial condition of the Company.
7. FINANCIAL INSTRUMENTS FAIR VALUE INFORMATION
The estimated fair value amounts of financial instruments have been
determined by the Company using available market information and appropriate
valuation methodologies. Considerable judgment is required to develop estimates
of fair value.
Substantially all financial instruments on the Company's consolidated
balance sheet are carried at fair value or at amounts which approximate fair
value.
B-4
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
ANNUAL MEETING OF SHAREHOLDERS--JUNE 15, 1994
PROXY
The undersigned hereby appoints SHELDON CURTIS, EDMUND C. PUCKHABER, ROBERT M.
SCANLAN, or any of them, proxies, each with the power of substitution, to vote
on behalf of the undersigned at the Annual Meeting of Shareholders of
INTERCAPITAL QUALITY MUNICIPAL SECURITIES on June 15, 1994 at 9:00 a.m., New
York City time, and at any adjournment thereof, on the proposals set forth in
the Notice of Meeting dated April 21, 1994 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEES AND FOR
THE PROPOSALS.
(Continued, and to be dated and signed on reverse side.)
PLEASE MARK BOXES [ ] OR [X] IN BLUE OR BLACK INK. COMMON SHARES
1. ELECTION OF TRUSTEES:
[ ] FOR THE NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)
Jack F. Bennett, Michael Bozic, Edwin J. Garn, John E. Jeuck,
Manuel H. Johnson, Paul Kolton, Michael E. Nugent, Philip J. Purcell,
John L. Schroeder, Edward R. Telling
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. APPROVAL OF CURRENT INVESTMENT MANAGEMENT AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
126
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the share is
registered in more than one name, each joint
owner or each fiduciary should sign
personally. Only authorized officers should
sign for corporations.
Dated .................................
.......................................
Signature
.......................................
Signature
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE.
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
ANNUAL MEETING OF SHAREHOLDERS--JUNE 15, 1994
PROXY
The undersigned hereby appoints SHELDON CURTIS, EDMUND C. PUCKHABER, ROBERT M.
SCANLAN, or any of them, proxies, each with the power of substitution, to vote
on behalf of the undersigned at the Annual Meeting of Shareholders of
INTERCAPITAL QUALITY MUNICIPAL SECURITIES on June 15, 1994 at 9:00 a.m., New
York City time, and at any adjournment thereof, on the proposals set forth in
the Notice of Meeting dated April 21, 1994 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEES AND FOR
THE PROPOSALS.
(Continued, and to be dated and signed on reverse side.)
PLEASE MARK BOXES [ ] OR [X] IN BLUE OR BLACK INK. PREFERRED SHARES
1. ELECTION OF TRUSTEES:
[ ] FOR THE NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)
Jack F. Bennett, Michael Bozic, Edwin J. Garn, John E. Jeuck,
Manuel H. Johnson, Paul Kolton, Michael E. Nugent, Philip J. Purcell,
John L. Schroeder, Edward R. Telling
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
ELECTION OF PREFERRED TRUSTEES:
[ ] FOR THE NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)
Charles A. Fiumefreddo (until 1995), John R. Haire (until 1997)
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. APPROVAL OF CURRENT INVESTMENT MANAGEMENT AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
126
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the share is
registered in more than one name, each joint
owner or each fiduciary should sign
personally. Only authorized officers should
sign for corporations.
Dated .................................
.......................................
Signature
.......................................
Signature
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE.
