Registration File No. 33-59282
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. )
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[ ] Soliciting Material Pursuant to Section 240.149-11(c) or
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InterCapital Quality Municipal Securities . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement)
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INTERCAPITAL QUALITY MUNICIPAL SECURITIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 27, 1996
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 at the Conference
Center, Forty-fourth Floor, 2 World Trade Center, New York, New York 10048,
on June 27, 1996, at 2:00 p.m., New York City time, for the following
purposes:
MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:
1. To elect two (2) Trustees to serve until the 1999 annual meeting or
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 LLP as the
Trust's independent accountants for the fiscal year ending October 31,
1996;
4. Shareholder proposal to require the Trust to convert into an
open-end fund (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 adjournments thereof.
Shareholders of record as of the close of business on April 17, 1996 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 Management
Agreement and will vote against any such adjournment those proxies to be
voted against that proposal.
SHELDON CURTIS,
Secretary
May 1, 1996
New York, New York
IMPORTANT
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED
PROXY. IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE
REPRESENTED AT THE MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 27, 1996
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 27, 1996 (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 in favor of Proposals 2 and 3
and against Proposal 4 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 17, 1996, 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 17, 1996, there were
20,777,113 Common Shares of beneficial interest outstanding and 1,940
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 May 1, 1996.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at nine. At the Meeting, pursuant to the
Trust's Declaration of Trust, two nominees 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. There are presently nine Trustees,
two of whom (Manuel H. Johnson and John L. Schroeder) are standing for
election at this Meeting to serve until the 1999 Annual Meeting in accordance
with the Trust's Declaration of Trust.
Seven of the current nine Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, 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 Investment
Company Act of 1940 (the "Act"). Mr. Paul Kolton, whose term as Trustee ends
at the Meeting, will retire as a Trustee on the date of the Meeting. The
Trustees have determined that the number of Trustees of the Trust is to be
fixed at eight, effective
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<PAGE>
on the date of Mr. Kolton's retirement. 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. All of the Trustees currently serving have been elected by the
shareholders of the Trust.
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:
Manuel H. Johnson and John L. Schroeder. 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.
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. Bozic and Fiumefreddo; Class II -- Messrs.
Johnson, Kolton and Schroeder; 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. 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 II Trustees (other than Mr. Kolton) are standing for
election at this Meeting and, if elected, will serve until the 1999 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 17, 1996 (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 80 investment companies, including the Trust, for
which InterCapital serves as investment manager or investment adviser
(referred to herein as the "Dean Witter Funds") and the 12 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 (referred to herein as the "TCW/DW Funds").
The nominees for Trustees to be elected by all Shareholders are:
DR. MANUEL H. JOHNSON, Trustee since April, 1993; age 47; 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 NASDAQ (since June, 1995); 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).
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JOHN L. SCHROEDER, Trustee since April, 1994; age 65; Retired; Director or
Trustee of the 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); 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).
The Trustees who are not standing for reelection at this Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 55; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director or Trustee of the Dean Witter Funds; formerly President and Chief
Executive Officer of Hills Department Stores (May, 1991-July, 1995); 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 of
Eaglemark Financial Services, Inc., the United Negro College Fund,Weirton
Steel Corporation and Domain Inc. (home decor retailer).
CHARLES A. FIUMEFREDDO,* Trustee since March, 1993; age 62; Chairman,
Chief Executive Officer and Director of InterCapital, DWSC and Dean Witter
Distributors Inc. ("Distributors"); Executive Vice President and Director of
Dean Witter Reynolds ("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 Dean Witter,
Discover & Co. ("DWDC") subsidiaries; formerly Executive Vice President and
Director of DWDC (until February, 1993).
EDWIN JACOB (JAKE) GARN, Trustee since April, 1993; age 63; 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); Director of Franklin Quest (time management systems)
and John Alden Financial Corp.; Member of the board of various civic and
charitable organizations.
JOHN R. HAIRE, Trustee since April, 1993; age 71; 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 (1978-1989)
and Chairman and Chief Executive Officer of Anchor Corporation, an investment
adviser (1964-1978); Director of Washington National Corporation (insurance).
PAUL KOLTON, Trustee since April, 1993; age 72; 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.
MICHAEL E. NUGENT, Trustee since April, 1993; age 59; General Partner,
Triumph Capital, L.P., a private investment partnership (since 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
(1984-1988); Director of various business organizations.
- - ------------
* Messrs. Fiumefreddo and Purcell 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.
4
<PAGE>
PHILIP J. PURCELL,* Trustee since April, 1994; age 52; Chairman of the
Board of Directors and Chief Executive Officer of DWDC, DWR and Novus Credit
Services Inc; Director of InterCapital, DWSC and Distributors; Director or
Trustee of the Dean Witter Funds; Director and/or officer of various DWDC
subsidiaries.
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; Robert S. Giambrone, Vice
President; Joseph J. McAlinden, Vice President; James F. Willison, Vice
President; and Thomas F. Caloia, Treasurer. In addition, Peter M. Avelar,
Katherine H. Stromberg, Joseph Arcieri, Gerard J. Lian and Jonathan R. Page
are Vice Presidents of the Trust and Marilyn K. Cranney, Barry Fink, Lou Anne
D. McInnis, Carsten Otto and Ruth Rossi serve as Assistant Secretaries. Mr.
Curtis is 64 years old and is currently Senior Vice President, Secretary and
General Counsel of InterCapital and DWSC and Assistant Secretary of DWR; 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 60 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 (July,
1992-March, 1993) and prior thereto was Chairman of Harborview Group Inc. Mr.
Hughey is 64 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. Giambrone is 42 years old and is currently Senior Vice
President of InterCapital, DWSC, Distributors and DWTC (since August, 1995)
and a Director of DWTC (since April, 1995). He was formerly a partner of KPMG
Peat Marwick, LLP. Mr. McAlinden is 52 years old and is currently Executive
Vice President of InterCapital (since April, 1996); he is also Chief
Investment Officer of InterCapital. He was previously a Senior Vice President
of InterCapital (June, 1995-April, 1996) and prior thereto was a Managing
Director of Dillon Read. Mr. Willison is 52 years old and is currently Senior
Vice President of InterCapital. Mr. Caloia is 50 years old and is currently
First Vice President of InterCapital and DWSC. Mr. Avelar is 36 years old and
is currently Senior Vice President of InterCapital. Ms. Stromberg is 47 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 47 years old and is currently Vice
President of InterCapital. Mr. Lian is 41 years old and is currently Vice
President of InterCapital (since June, 1995). He was formerly a Senior
Municipal Analyst with the American Express Company (1984-1992). Mr. Page is
49 years old and is currently Senior Vice President of InterCapital. Other
than Mr. Scanlan, Mr. Giambrone, Mr. McAlinden, Mr. Lian 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.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of nine (9) trustees. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of
this Proxy Statement, there are a total of 80 Dean Witter Funds, comprised of
120 portfolios. As of March 31, 1996, the Dean Witter Funds had total net
assets of approximately $75.2 billion and more than five million
shareholders.
Seven Trustees (77% of the total number) have no affiliation or business
connection with InterCapital or any of its affiliated persons and do not own
any stock or other securities issued by InterCapital's parent company, DWDC.
These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "Management Trustees") are affiliated with InterCapital. Five
of the seven independent Trustees are also Independent Trustees of the TCW/DW
Funds.
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Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The Dean Witter Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Funds' Boards, such individuals may reject other attractive
assignments because the Funds make substantial demands on their time. Indeed,
by serving on the Funds' Boards, certain Trustees who would otherwise be
qualified and in demand to serve on bank boards would be prohibited by law
from doing so.
All of the Independent Trustees serve as members of the Audit Committee
and the Committee of the Independent Trustees. Three of them also serve as
members of the Derivatives Committee. The Committees hold some meetings at
InterCapital's offices and some outside InterCapital. Management Trustees or
officers do not attend these meetings unless they are invited for purposes of
furnishing information or making a report.
The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans 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 Independent Trustees are required to select and nominate
individuals to fill any Independent Trustee vacancy on the Board of any Fund
that has a Rule 12b-1 plan of distribution. Most of the Dean Witter Funds
have such a plan.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund'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; reviewing the adequacy of
the Fund's system of internal controls; and preparing and submitting
Committee meeting minutes to the full Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect
to derivative investments, if any, made by the Fund.
For the fiscal year ended October 31, 1995, the Board of Trustees of the
Trust held four meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held, two,
ten and five 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.
DUTIES OF CHAIRMAN OF COMMITTEES
The Chairman of the Committees maintains an office at the Funds'
headquarters in New York. He is responsible for keeping abreast of regulatory
and industry developments and the Funds' operations and management. He
screens and/or prepares written materials and identifies critical issues for
the Independent Trustees to consider, develops agendas for Committee
meetings, determines the type and amount of information that the Committees
will need to form a judgment on various issues, and arranges to have that
information furnished to Committee members. He also arranges for the services
of independent experts and consults with them in advance of meetings to help
refine reports and to focus on critical issues. Members of the Committees
believe that the person who serves as Chairman of all three Committees and
guides their efforts is pivotal to the effective functioning of the
Committees.
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The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment advisory, management and
other operating contracts of the Funds and, on behalf of the Committees,
conducts negotiations with the Investment Manager and other service
providers. In effect, the Chairman of the Committees serves as a combination
of chief executive and support staff of the Independent Trustees.
The Chairman of the Committees is not employed by any other organization
and devotes his time primarily to the services he performs as Committee
Chairman and Independent Trustee of the Dean Witter Funds and as an
Independent Trustee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of Independent
Trustees, and a Chairman of their Committees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Dean Witter Funds.
COMPENSATION OF INDEPENDENT TRUSTEES
The Trust pays each Independent Trustee an annual fee of $1,000 ($1,200
prior to September 30, 1995) plus a per meeting fee of $50 for meetings of
the Board of Trustees or committees of the Board of Trustees attended by the
Trustee (the Trust pays the Chairman of the Audit Committee an annual fee of
$750 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). 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 Investment Manager or an affiliated company receive no compensation or
expense reimbursement from the Trust.
The Trust has 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 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 Trust, 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 25.0% of his or
her Eligible Compensation plus 0.4166666% of such Eligible Compensation for
each full month of service as an Independent Director or Trustee of any
Adopting Fund in excess of five years up to a maximum of 50.0% after ten
years of service. The foregoing
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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 Trust 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 Trust. As of the date of this Proxy Statement, 57
Dean Witter Funds have adopted the retirement program.
The following table illustrates the compensation paid and the retirement
benefits accrued to the Trust's Independent Trustees by the Trust for the
fiscal year ended October 31, 1995 and the estimated retirement benefits for
the Trust's Independent Trustees as of October 31, 1995.
<TABLE>
<CAPTION>
TRUST COMPENSATION ESTIMATED RETIREMENT BENEFITS
------------------------------ ----------------------------------------------------------------
ESTIMATED
RETIREMENT CREDIT YEARS OF ESTIMATED ESTIMATED
AGGREGATE BENEFITS SERVICE AT PERCENTAGE OF ESTIMATED ANNUAL
NAME OF INDEPENDENT COMPENSATION ACCRUED AS RETIREMENT ELIGIBLE ELIGIBLE BENEFITS UPON
TRUSTEE FROM THE TRUST TRUST EXPENSES (MAXIMUM 10) COMPENSATION COMPENSATION(2) RETIREMENT(3)
- - -------------------------- -------------- -------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. $1,850 $ 379 10 57.5% $1,950 $1,121
Edwin J. Garn ............. 1,950 739 10 57.5% 1,950 1,121
John R. Haire ............. 4,550(4) 4,714 10 57.5% 3,383 1,945
Dr. Manuel H. Johnson .... 1,950 290 10 57.5% 1,950 1,121
Paul Kolton ............... 1,950 1,859 10 57.0% 1,085 619
Michael E. Nugent ......... 1,850 552 10 57.5% 1,950 1,121
John L. Schroeder ......... 1,950 744 8 47.9% 1,950 934
</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.
(3) Based on current levels of compensation. Amount of annual benefits
also varies depending on the Trustee's elections described in Footnote (1)
above.
(4) Of Mr. Haire's compensation from the Trust, $3,150 is paid to him as
Chairman of the Committee of the Independent Trustees ($2,400) and as
Chairman of the Audit Committee ($750).
8
<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1995 for
services to the 79 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Kolton and Nugent, the 11 TCW/DW Funds that were in operation at
December 31, 1995. With respect to Messrs. Haire, Johnson, Kolton and Nugent,
the TCW/DW Funds are included solely because of a limited exchange privilege
between those Funds and five Dean Witter Money Market Funds. Mr. Schroeder
was elected as a Trustee of the TCW/DW Funds on April 20, 1995.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
FOR SERVICE AS CHAIRMAN OF TOTAL CASH
DIRECTOR OR FOR SERVICE AS COMMITTEES OF COMPENSATION
TRUSTEE AND TRUSTEE AND INDEPENDENT FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ 79 DEAN WITTER
NAME OF INDEPENDENT OF 79 DEAN WITTER OF 11 TCW/DW TRUSTEES AND FUNDS AND 11
TRUSTEE FUNDS FUNDS AUDIT COMMITTEES TCW/DW FUNDS
- - -------------------------- ----------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Michael Bozic ............. $126,050 -- -- $126,050
Edwin J. Garn ............. 136,450 -- -- 136,450
John R. Haire ............. 98,450 $82,038 $217,350(5) 397,838
Dr. Manuel H. Johnson .... 136,450 82,038 -- 218,488
Paul Kolton ............... 136,450 54,788 36,900(6) 228,138
Michael E. Nugent ......... 124,200 75,038 -- 199,238
John L. Schroeder ......... 136,450 46,964 -- 183,414
</TABLE>
(5) For the 79 Dean Witter Funds in operation at December 31, 1995.
(6) For the 11 TCW/DW Funds in operation at December 31, 1995. Mr. Kolton
will retire as a Director or Trustee of each Dean Witter Fund and each TCW/DW
Fund by July 1, 1996. Upon Mr. Kolton's retirement, Mr. Haire will become
Chairman of the Committee of the Independent Trustees and the Audit Committee
of the TCW/DW Funds in addition to serving in such positions for the Dean
Witter Funds.
(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 Agreement").
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. The Management Agreement was last
approved by the shareholders of the Trust as a routine matter at their Annual
Meeting of Shareholders held on June 22, 1995. In the event shareholders do
not approve continuance of the Management 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 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.
9
<PAGE>
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.
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 $1,266,219 during the fiscal year ended October 31, 1995. The
net assets of the Trust totalled $376,157,575 at October 31, 1995.
Under the Management Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Manager, including, without limitation: charges and expenses of
any registrar, custodian or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Trust; brokers' commissions chargeable to the Trust in connection with
portfolio securities transactions to which the Trust is a party; all taxes,
including securities or commodities issuance and transfer taxes, and fees
payable by the Trust to Federal, state or other 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
10
<PAGE>
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 continued in effect until April 30, 1995 and
provides 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's most
recent continuation until April 30, 1997 was approved by the Trustees,
including a majority of Independent Trustees, at a Meeting of the Trustees
held on April 17, 1996, called for the purpose of approving the Management
Agreement.
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. On April 17, 1995, DWSC was reorganized in the
State of Delaware, necessitating the entry into a new Services Agreement by
InterCapital and DWSC on such date. The foregoing internal reorganizations
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.
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 and Chief Operating Officer of Dean Witter
Capital, Executive Vice President of DWDC and Director of DWR, Distributors,
InterCapital, DWSC and DWTC; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and
Director of DWR, Distributors, InterCapital, DWSC and DWTC; Charles A.
Fiumefreddo, Executive Vice President and Director of DWR, Chairman of the
Board of Directors, Chief Executive Officer and Director of InterCapital,
DWSC and Distributors and Chairman of the Board of Directors and Director of
DWTC; Christine A. Edwards, Executive Vice President, Secretary and General
Counsel of DWDC, Executive Vice President, Secretary, General Counsel and
Director of DWR,
11
<PAGE>
Executive Vice President, Secretary, Chief Legal Officer and Director of
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 which have
similar investment objectives to that of the Trust, and sets forth the net
assets and fees payable by such companies, including the Trust.
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 year ended October 31, 1995, the Trust accrued to Dean
Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $126,468.
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is
an affiliated broker of InterCapital. For the fiscal year ended October 31,
1995, 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 LLP as
the Trust's independent accountants for the fiscal year ending October 31,
1996. Its selection is being submitted for ratification or rejection by
Shareholders at the Meeting. Price Waterhouse 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 Price Waterhouse LLP 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 LLP as the independent accountants for the
Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS RATIFY THE SELECTION
OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE TRUST.
12
<PAGE>
(4) SHAREHOLDER PROPOSAL TO REQUIRE THE
FUND TO CONVERT INTO AN OPEN-END FUND.
The Trust has been informed by Ellis L. Bert and Allyne Bert, shareholders
of record of the Trust who owned 7,164.331 shares at April 17, 1996, that
they intend to submit the following proposal (the "Proposal") at the meeting:
"RESOLVED, The Charter and By-Laws of InterCapital Quality Municipal
Securities (IQM) be amended upon approval by the stockholders of the
following proposal at the next meeting of stockholders:
InterCapital Quality Municipal Securities (IQM) shall be converted into
an open-end mutual fund no later than one hundred and eighty (180) days
after the approval of this proposal by the stockholders."
The Board of Trustees unanimously recommends that you vote AGAINST the
Proposal for the reasons set forth below.
The proponents of the Proposal did not provide any statement in support of
it. One apparent reason, and perhaps the key reason, for the Proposal would
be to eliminate the difference between the price per share of the Trust's
common shares (the "Common Shares") on the New York Stock Exchange (the
"market price") and its net asset value ("NAV") per share. Upon commencement
of operations of the Trust on September 29, 1993, the Common Shares traded at
a price higher than NAV. Soon thereafter the Common Shares began trading at a
price lower than NAV (the "market discount") and has continued to trade at a
discount. The amount of the discount has fluctuated over time. As of April
17, 1996, the discount was $1.96 or 15.42%.
The occurrence of a discount is a common feature of many closed-end
investment companies, such as the Trust, and may exist for a number of
reasons, including such factors as investor sentiment regarding the future
trend of the market and the Trust's yield in relation to the current yield of
municipal securities. The discount for most closed-end funds fluctuates
continuously. At times, instead of a discount, shares of a closed-end fund
may trade at a premium, that is, the share's market price may be higher than
its NAV.
The Board of Trustees of the Trust considered the advantages and
disadvantages of converting the Trust into an open end investment company and
concluded that it would not be in the best interests of shareholders to do so
for the reasons discussed below. Accordingly, the Board of Trustees
unanimously recommends that shareholders vote AGAINST the Proposal.
LEVERAGED CAPITAL STRUCTURE
As a closed-end fund the Trust is permitted, under the Investment Company
Act of 1940, as amended (the "1940 Act"), to maintain its two class,
leveraged capital structure of Common Shares and the auction rate preferred
shares of the Trust (the "Preferred Shares"). By contrast, an open-end fund
is prohibited by the 1940 Act from maintaining such a two class structure. As
a result, the Trust would be required to redeem its Preferred Shares before
converting to an open-end structure. The two class structure is designed to
enable the holders of Common Shares to realize higher current tax-exempt
income on the Common Shares than could be obtained if the Trust were not so
leveraged. The dividends paid to holders of Preferred Shares are generally
based on short-term or medium-term rates, while the assets attributable to
the Preferred Shares are generally invested in longer-term, municipal
securities which typically have higher yields than short-term or medium term
obligations.
As long as the Trust is able to invest the assets attributable to the
Preferred Shares in securities that provide a higher net return than the then
current dividend rate of the Preferred Shares (after taking into account
expenses associated with the Preferred Shares) the leverage provided by the
Preferred Shares enables the Trust to realize higher current income than
would be realized if the Trust were not so leveraged. Thus, for
13
<PAGE>
example, during the Trust's last fiscal year the leverage attributable to the
Preferred Shares resulted in dividends to holders of the Common Shares of 4
cents more per share than would have been the case had the Trust not been
leveraged with Preferred Shares. Of course, as stated in the prospectus,
leveraging involves additional risks, including higher volatility of the
Trust's net asset value and possibly the market value of its Common Shares.
Presumably, however, holders of Common Shares are willing to assume these
risks in exchange for the opportunity for increased current tax exempt
income.
The Trustees are concerned that conversion to an open-end fund would
frustrate shareholder expectations to the extent that it would reduce the
opportunity for the Trust to generate as high a level of current tax-exempt
income. As noted above, the conversion to an open-end fund would require the
elimination of the Preferred Shares. The leverage afforded by the Preferred
Shares, and its potential for higher current income, might be achieved by
borrowing from a bank, which is permitted by the 1940 Act for open-end funds
(subject to 300% asset coverage requirements). However, the Trustees were
informed by the Investment Manager that the interest rate the Trust would
have to pay on such borrowing is almost certainly likely to be greater than
the cost of paying tax-exempt dividends to holders of Preferred Shares. Thus,
under most conditions, such borrowing would be unprofitable.
PORTFOLIO MANAGEMENT
Because a closed-end fund does not have to redeem its shares, it may keep
all of its assets fully invested and invest based on long-term considerations
without having to adjust for cash inflows and outflows from continuous sales
and redemptions of its shares. In contrast, open-end funds must maintain
sufficient cash reserves to provide for redemption requests in uncertain
amounts. In addition, open-end funds may be subject to pressure to sell
portfolio securities at disadvantageous times or prices in order to satisfy
such redemption requests.
LONG-TERM SHAREHOLDERS
The prospectus for the original offering of the Trust's shares stated that
"[t]he Trust is designed primarily as a long-term investment and not as a
trading vehicle." If the Trust is converted into an open end investment
company, only those shareholders who actually sell their shares at NAV will
realize the "benefit" of the conversion. Longer-term shareholders, for whom
the Trust was created, who prefer to retain their investment will be
disadvantaged in the process.
FORCED SALES OF PORTFOLIO SECURITIES
The Proposal, if approved by shareholders, would require conversion to the
open-end structure within 180 days of such approval. This, in turn, would
require the Trust to redeem its Preferred Shares, necessitating the sale of
approximately as much as twenty-seven percent of the Trust's portfolio
securities (approximately $97,000,000) within that specific time frame. The
Trust currently has unrealized depreciation on its portfolio of approximately
$19,575,000. If forced to sell the amount required to redeem the Preferred
Shares the Trust would realize a loss estimated at approximately $5,300,000.
REDEMPTION EXPENSES
In the event that the Trust is open-ended, some shareholders would
probably redeem their shares to realize the immediate profit. This would
require the Trust to sell additional portfolio securities and perhaps to
realize additional capital losses. Moreover, substantial redemptions could
result in a significant reduction in the size of
14
<PAGE>
the Trust which in turn would cause an increase in the Trust's expense ratio.
In this regard the Trustees took note of information provided to them by the
Investment Manager demonstrating that in the case of some recent conversions
of closed-end funds up to 15% to 20% of shareholders redeemed immediately
after the conversion.
CONVERSION COSTS
Certain legal, accounting and registration costs would be incurred to
open-end the Trust. The Investment Manager estimates that these costs will be
approximately $248,000.
ONGOING OPERATING COSTS
Conversion of the Trust to an open-end fund would require the Trust to
bear additional expenses. For example, if the Trust were open-ended, it would
have to arrange for continuous marketing of its shares, as most open-end
funds do, and for the processing of continuous sales and redemptions. Other
additional operating costs include registration of the Trust's shares with
federal and state regulatory agencies, printing and distributing
prospectuses, and legal and accounting services. While the Trust would
realize some savings from the delisting of its shares on the New York Stock
Exchange this would likely be offset by the increase in other expenses.
MARKET PRICE FLUCTUATION
As stated above, the Trust's shares are selling a discount from NAV.
However, under favorable conditions, the Trust's market price could trade at
a premium. Conversion to an open-end fund would eliminate the possibility of
the Trust's Common Shares trading at a premium.
In view of all of the above, the Trustees unanimously recommend that
shareholders vote AGAINST the Proposal.
The Trust's Declaration of Trust requires the affirmative vote of the
holders of eighty percent (80%) of each of the Common Shares and the
Preferred Shares outstanding and entitled to vote, each voting as separate
classes, for approval of the Proposal.
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.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed
to be present at the meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares
held in street name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than December 20, 1996 for
inclusion in the proxy statement for that meeting.
15
<PAGE>
REPORTS TO SHAREHOLDERS
The Trust's most recent Annual Report, for the fiscal year ended October
31, 1995, has been previously sent to Shareholders and is available without
charge upon request from Adrienne Ryan-Pinto at Dean Witter Trust Company,
Harborside Financial Center, Plaza Two, Jersey City, New Jersey 07311
(telephone 1-800-869- NEWS) (toll-free).
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is the intention of the persons named in the enclosed form of
proxy or their substitutes, to vote all shares that they are entitled to vote
on any such matter, utilizing such proxy in accordance with their best
judgment on such matters.
By Order of the Board of Trustees
SHELDON CURTIS
Secretary
16
<PAGE>
APPENDIX
InterCapital serves as investment manager or investment adviser to the
Trust and the other investment companies listed below which have similar
investment objectives to that of the Trust, with the net assets shown as of
April 17, 1996.
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 04/17/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
1.DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND* ... $1,300,553,513 0.55% on assets up to $500
million, scaled down at
various asset levels to 0.45%
on assets over $1.25 billion
2.DEAN WITTER LIMITED TERM MUNICIPAL TRUST* ...... $ 72,074,852 0.50%
3.DEAN WITTER MULTI-STATE MUNICIPAL SERIES TRUST* $ 409,740,249 0.35% (1)
4.DEAN WITTER NATIONAL MUNICIPAL TRUST* .......... $ 79,671,913 0.35% (2)
5.DEAN WITTER NEW YORK TAX-FREE INCOME FUND* ..... $ 205,210,883 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
6.DEAN WITTER TAX-EXEMPT SECURITIES TRUST* ....... $1,241,295,785 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.325%
on assets over $1.25 billion
7.INTERCAPITAL CALIFORNIA INSURED MUNICIPAL INCOME $ 239,422,959 0.35%
TRUST** .........................................
8.INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL $ 199,154,445 0.35%
SECURITIES** ....................................
9.INTERCAPITAL INSURED CALIFORNIA MUNICIPAL $ 62,705,464 0.35%
SECURITIES** ....................................
10.INTERCAPITAL INSURED MUNICIPAL BOND TRUST** ... $ 108,224,922 0.35%
11.INTERCAPITAL INSURED MUNICIPAL INCOME TRUST** . $ 585,642,124 0.35%
12.INTERCAPITAL INSURED MUNICIPAL SECURITIES** ... $ 135,956,546 0.35%
13.INTERCAPITAL INSURED MUNICIPAL TRUST** ........ $ 478,090,568 0.35%
14.INTERCAPITAL NEW YORK QUALITY MUNICIPAL $ 91,766,895 0.35%
SECURITIES** ...................................
15.INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST** . $ 731,208,857 0.35%
16.INTERCAPITAL QUALITY MUNICIPAL INVESTMENT $ 373,911,360 0.35%
TRUST** ........................................
17.INTERCAPITAL QUALITY MUNICIPAL SECURITIES** ... $ 360,997,056 0.35%
18.MUNICIPAL INCOME TRUST** ....................... $ 303,209,570 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
19.MUNICIPAL INCOME TRUST II** .................... $ 276,906,689 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 04/17/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C>
20.MUNICIPAL INCOME TRUST III** ................... $ 62,587,700 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
21.MUNICIPAL INCOME OPPORTUNITIES TRUST** ........ $175,002,787 0.50%
22.MUNICIPAL INCOME OPPORTUNITIES TRUST II** ..... $174,588,791 0.50%
23.MUNICIPAL INCOME OPPORTUNITIES TRUST III** .... $102,089,048 0.50%
24.MUNICIPAL PREMIUM INCOME TRUST** ............... $357,398,091 0.40%
25.DEAN WITTER SELECT MUNICIPAL REINVESTMENT $ 92,410,322 0.50%
FUND*** ........................................
26.DEAN WITTER HAWAII MUNICIPAL TRUST* ............ $ 2,300,823 0.35% (3)
<FN>
- - ------------
* Open-end investment company
** Closed-end investment company
*** Open-end investment company offered only to the holders of units of
certain unit investment trusts (UITs) in connection with the
reinvestment of UIT distributions
(1) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of the
Massachusetts, Michigan, Minnesota, New York and Ohio Series of Dean
Witter Multi-State Municipal Series Trust and to waive the compensation
provided for in its investment management agreement with that company
in respect to the aforementioned Series to the extent that such
expenses and compensation on an annualized basis exceed 0.50% of the
average daily net assets of the pertinent Series.
(2) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter National Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company to the
extent that such expenses and compensation on an annualized basis
exceed 0.50% of the average daily net assets of that company.
(3) InterCapital has undertaken, until December 31, 1996, to assume all
operating expenses (except for any 12b-1 and brokerage fees) of Dean
Witter Hawaii Municipal Trust and to waive the compensation provided
for in its investment management agreement with that company.
</TABLE>
A-2
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
ANNUAL MEETING OF SHAREHOLDERS--JUNE 27, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, JOSEPH J. MCALINDEN,
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 27, 1996 at
2: 00 p.m., New York City time, and at any adjournment thereof, on the
proposals set forth in the Notice of Meeting dated May 1, 1996 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEE AND
FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN the Proxy Card in the Enclosed
Envelope so that your vote on all matters will be counted.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [ ] OR [X] IN BLUE OR BLACK INK. COMMON SHARES
1. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD
AUTHORITY
(to vote for all
nominees listed
below)
Manuel H. Johnson, John L. Schroeder
(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
INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
126
4. SHAREHOLDER PROPOSAL: FOR [ ] AGAINST [ ] ABSTAIN [ ]
(NOTE: THE TRUSTEES RECOMMEND A VOTE AGAINST THIS PROPOSAL)
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the
shares are 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
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
ANNUAL MEETING OF SHAREHOLDERS--JUNE 27, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, JOSEPH J. MCALINDEN,
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 27, 1996 at
2:00 p.m., New York City time, and at any adjournment thereof, on the
proposals set forth in the Notice of Meeting dated May 1, 1996 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEE AND
FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSAL 4.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN the Proxy Card in the Enclosed
Envelope so that your vote on all matters may be counted.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [ ] OR [X] IN BLUE OR BLACK INK. PREFERRED SHARES
1. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD
AUTHORITY
(to vote for all
nominees listed
below)
Manuel H. Johnson, John L. Schroeder
(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
INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
126
4. SHAREHOLDER PROPOSAL: FOR [ ] AGAINST [ ] ABSTAIN [ ]
(NOTE: THE TRUSTEES RECOMMEND A VOTE AGAINST THIS PROPOSAL)
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the
shares are 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
