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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
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or
Section 240.14a-12
.... InterCapital Quality Municipal Securities . . . . . . . . . .
(Name of Registrant(s) Specified in its Charter)
.... Lou Anne McInnis. . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(j)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Set forth the amount on which the filing fee is calculated and state
how it was determined.
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4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Fee previously paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Filing Party:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1997
The Annual Meeting of Shareholders (the "Meeting") 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 Career Development Room, Sixty-First Floor, 2 World Trade Center, New
York, New York 10048, on May 20, 1997, at 10:00 a.m., New York City time, for
the following purposes:
MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:
1. To elect four (4) Trustees, three (3) to serve until the 2000 Annual
Meeting and one (1) to serve until the 1999 Annual Meeting, or, in each
case, until their successors shall have been elected and qualified;
2. To approve or disapprove a new Investment Management Agreement between
the Trust and Dean Witter InterCapital Inc. a wholly-owned subsidiary of
Dean Witter, Discover & Co. ("DWDC") in connection with the proposed
merger of Morgan Stanley Group Inc. with DWDC;
3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending October 31,
1997;
4. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
MATTERS TO BE VOTED ON ONLY BY PREFERRED SHAREHOLDERS:
To elect one (1) Trustee to serve until the 2000 Annual Meeting or until
his successor shall have been elected and qualified.
Shareholders of record as of the close of business on March 12, 1997 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 Proposal 2 and will vote against any such adjournment those proxies
required to be voted against that Proposal.
BARRY FINK
Secretary
March 19, 1997
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
MAY 20, 1997
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of INTERCAPITAL QUALITY
MUNICIPAL SECURITIES (the "Trust"), for use at the Annual Meeting of
Shareholders of the Trust to be held on May 20, 1997 (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 the nominee for election as
Trustee to be elected by only the Preferred Shareholders and in favor of
Proposals 2 and 3 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
(if returned and received in time to be voted), or attendance and voting at
the Meeting. Attendance at the Meeting will not in and of itself revoke a
proxy.
Holders of shares of the Trust ("Shareholders") of record as of the close
of business on March 12, 1997, 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 March 12, 1997, there were 19,376,613 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 percentage ownership of
shares of the Trust changes from time to time depending on purchases and
sales by Shareholders and the total number of shares outstanding. The first
mailing of this Proxy Statement is expected to be made on or about March 19,
1997.
The cost of soliciting proxies for the Meeting, consisting principally of
mailing and printing expenses, is expected to be approximately $28,000, of
which approximately $19,800 will be borne by the Trust, the remainder of
which will be borne by Dean Witter, Discover & Co. ("DWDC"). The solicitation
of proxies will be by mail, which may be supplemented by solicitation by
mail, telephone or otherwise through Trustees, officers of the Trust or
officers and regular employees of Dean Witter InterCapital Inc.
("InterCapital" or the "Investment Manager"), Dean Witter Trust Company
("DWTC"), Dean Witter Services Company Inc. ("DWSC") and/or employees of
broker-dealers, including Dean Witter Reynolds Inc. ("DWR") without special
compensation therefor. In addition, the Trust may employ William F. Doring &
Co. as proxy solicitor, the cost of which is not expected to exceed $5,000
and will be borne by DWDC.
William F. Doring & Co. and DWTC may call Shareholders to ask if they
would be willing to have their votes recorded by telephone. The telephone
voting procedure is designed to authenticate Shareholders' identities, to
allow Shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been recorded
properly. No recommendation will be made as to how a Shareholder should vote
on any Proposal other than to refer to the recommendation of the Board. The
Trust
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has been advised by counsel that these procedures are consistent with the
requirements of applicable law. Shareholders voting by telephone will be
asked for their social security number or other identifying information and
will be given an opportunity to authorize proxies to vote their shares in
accordance with their instructions. To ensure that the Shareholders'
instructions have been recorded correctly they will receive a confirmation of
their instructions in the mail. A special toll-free number will be available
in case the information contained in the confirmation is incorrect. Although
a Shareholder's vote may be taken by telephone, each Shareholder will receive
a copy of this Proxy Statement and may vote by mail using the enclosed proxy
card. With respect to the solicitation of a telephonic vote by William F.
Doring & Co., additional expenses would include $7.00 per telephone vote
transacted, $3.00 per outbound telephone contact and costs relating to
obtaining Shareholders' telephone numbers which would be borne by DWDC.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, as amended, at nine. At the Meeting, pursuant
to the Trust's Declaration of Trust, five nominees are to be elected to the
Trust's Board of Trustees. There are currently eight Trustees, four of whom
(Edwin J. Garn, John R. Haire, Michael E. Nugent and Philip J. Purcell) are
standing for election at this Meeting to serve until the 2000 Annual Meeting.
Additionally, one nominee to the Trust's Board of Trustees, Wayne E. Hedien,
is standing for election at the Meeting for the first time, and, if elected,
to serve until the 1999 Annual Meeting in accordance with the Trust's
Declaration of Trust. At the Meeting, pursuant to the Trust's Declaration of
Trust, four Trustees are to be elected to the Trust's Board of Trustees by
the holders of the Common Shares and Preferred Shares voting together as a
single class. Additionally, pursuant to the Declaration of Trust and the
Investment Company Act of 1940, as amended ("the 1940 Act"), one Trustee is
to be elected to the Trust's Board of Trustees at the Meeting by the holders
of the Preferred Shares voting separately as a single class.
Six of the current eight Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, Michael E. Nugent, and John L. Schroeder) are
"Independent Trustees", that is, Trustees who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act. Mr. Hedien, who has been
nominated for election at the Meeting, if elected, also will be an
Independent Trustee. The other two current Trustees, Charles A. Fiumefreddo
and Philip J. Purcell are "interested persons" (as that term is defined in
the 1940 Act) of the Trust and InterCapital and thus are not Independent
Trustees. The nominees for election as Independent 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 previously 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:
Edwin J. Garn, John R. Haire, Wayne E. Hedien, Michael E. Nugent and Philip
J. Purcell. 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 (if elected, Mr. Hedien's term
will commence September 1, 1997). The Trust knows no reason why any of said
nominees would be unable or unwilling to accept nomination or election. The
election of each Trustee not designated to be elected by only the Preferred
Shareholders requires the approval of a majority of shares of the Trust
(Common and Preferred Shares voting together) represented and entitled to
vote at the Meeting. The election of the Trustee to be elected by only the
Preferred Shareholders requires the approval of a majority of the Preferred
Shares of the Trust represented and entitled to vote at the Meeting.
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Pursuant to the provisions of the Declaration of Trust, the Trustees are
divided into three separate classes, each class having a term of three years.
The term of office of one of each of the three classes will expire each year.
The Board previously determined that any nominee for election as Trustee
shall stand for election as Trustee and serve as Trustee in one of the three
classes of Trustees as follows: Class I -- Messrs. Bozic and Fiumefreddo;
Class II -- Messrs. Hedien, Johnson and Schroeder; and Class III -- Messrs.
Garn, Haire, Nugent and Purcell. Each nominee for Trustee at the Annual
Meeting 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. In addition, the Board further determined that one of
the Class I Trustees and one of 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 serve as Trustees on behalf of the
Preferred Shareholders, the terms of each to expire with his designated
Class. Mr. John R. Haire, one of the Class III Trustees, is standing for
election at the Meeting to be elected by the Preferred Shareholders. In
accordance with the above, the Trustees in Class III are standing for
election at the Meeting and, if elected, will serve until the 2000 Annual
Meeting or until their successors shall have been elected and qualified.
Additionally, the new nominee is standing for election as Trustee in Class
II, and, if elected at the Meeting, will serve until the 1999 Annual Meeting
or until his successor shall have been elected and qualified. As a
consequence of this method of election, the replacement of a majority of the
Board could be delayed for up to two years.
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 March 12, 1997 (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 84 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 14 investment
companies for which InterCapital's wholly-owned subsidiary, DWSC, serves as
manager and TCW Funds Management, Inc. serves as investment adviser (referred
to herein as the "TCW/DW Funds").
The nominees for Trustee to be elected at the Meeting by all Shareholders
are:
EDWIN JACOB (JAKE) GARN, Trustee since April, 1993; age 64; 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 Corporation (since
January, 1993); Director of Franklin Quest (time management systems) and John
Alden Financial Corp. (health insurance); Member of the board of various
civic and charitable organizations.
WAYNE E. HEDIEN, age 63; Retired; Director of The PMI Group, Inc. (private
mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural
History; formerly associated with the Allstate Companies (1966-1994), most
recently as Chairman of The Allstate Corporation (March 1993-December 1994)
and Chairman and Chief Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July 1989-December 1994); director of various
other business and charitable organizations.
MICHAEL E. NUGENT, Trustee since April, 1993; age 60; 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.
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PHILIP J. PURCELL, Trustee since April, 1994; age 53; Chairman of the
Board of Directors and Chief Executive Officer of DWDC, 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.
The nominee for Trustee to be elected by only the Preferred Shareholders
is:
JOHN R. HAIRE, Trustee since April, 1993; age 72; 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; Chairman of the
Audit Committee and Chairman of the Committee of the Independent Trustees and
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).
The Trustees who are not standing for re-election at this Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 56; 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
variously Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck and Co.;
Director of Eaglemark Financial Services, Inc., the United Negro College
Fund, and Weirton Steel Corporation.
CHARLES A. FIUMEFREDDO, Trustee since March, 1993; age 63; 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 DWTC; Director and/or officer of various DWDC subsidiaries;
formerly Executive Vice President and Director of DWDC (until February,
1993).
MANUEL H. JOHNSON, Trustee since April, 1993; age 48; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Co-Chairman and a
founder of the Group of Seven Council (G7C), an international economic
commission; Director or Trustee of the Dean Witter Funds; Trustee of the
TCW/DW Funds; Director of NASDAQ (since June, 1995); Director of Greenwich
Capital Markets Inc. (broker-dealer); Trustee of the Financial Accounting
Foundation (oversight organization for the FASB); formerly Vice Chairman of
the Board of Governors of the Federal Reserve System (1986-1990) and
Assistant Secretary of the U.S. Treasury (1982-1986).
JOHN L. SCHROEDER, Trustee since April, 1994; age 66; 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) and formerly Chairman and Chief Investment Officer of Axe-Houghton
Management and the Axe-Houghton Funds (April, 1983-June, 1991).
The executive officers of the Trust other than shown above are: Barry
Fink, Vice President, Secretary and General Counsel; 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 R.
Arcieri, Gerard J. Lian and Jonathan R. Page are Vice Presidents of the Trust
and Frank Bruttomesso, Marilyn K. Cranney, Lou Anne D. McInnis, Carsten Otto
and Ruth Rossi serve as Assistant Secretaries. Mr. Fink is 42 years old and
is currently First Vice President (since June 1993), Secretary and General
Counsel (since February 1997) of InterCapital and DWSC and (since
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August 1996) Assistant Secretary of DWR; he is also First Vice President,
Assistant Secretary and Assistant General Counsel of Distributors (since
February 1997). He was previously Vice President, Assistant Secretary and
Assistant General Counsel of InterCapital and DWSC. 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. 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, 1996). He was formerly a partner of KPMG Peat Marwick, LLP. Mr.
McAlinden is 54 years old and is currently Executive Vice President of
InterCapital (since April, 1996); he is also Chief Investment Officer of
InterCapital and Director of DWTC (since April, 1996). 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 53 years old
and is currently Senior Vice President of InterCapital. Mr. Caloia is 51
years old and is currently First Vice President of InterCapital and DWSC. Mr.
Avelar is 38 years old and is currently Senior Vice President of
InterCapital. Ms. Stromberg is 48 years old and is currently Vice President
of InterCapital (since April, 1992). She was formerly a portfolio manager
with InterCapital (October, 1991-April, 1992). Mr. Arcieri is 48 years old
and is currently Vice President of InterCapital. Mr. Lian is 42 years old and
is currently Vice President of InterCapital. Mr. Page is 50 years old and is
currently Senior Vice President of InterCapital. Other than Mr. Scanlan, Mr.
Giambrone and Mr. McAlinden, 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 currently consists of eight (8) 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 84 Dean Witter Funds, comprised of
127 portfolios. As of February 28, 1997, the Dean Witter Funds had total net
assets of approximately $84.2 billion and more than six million shareholders.
Six Trustees and the new nominee (77% of the total number) have no
affiliation or business connection with InterCapital or any of its affiliated
persons. The other two Trustees (the "Management Trustees") are affiliated
with InterCapital. For a period of at least three years after the
consummation of the Merger, at least 75% of the members of the Board of
Trustees of the Trust will not be "interested persons" (as defined in the
1940 Act) of the Investment Manager. Four of the six Independent Trustees are
also Independent Trustees of the TCW/DW Funds.
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 Funds do not have any
nominating or compensation committees.
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The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
distribution and underwriting agreements; continually reviewing Fund
performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage
and allocations, as well as other matters that arise from time to time.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the 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, 1996, the Board of Trustees of the
Trust held 6 meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held 3, 10
and 3 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 COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT
COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee 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 both Committees and guides their efforts is pivotal to
the effective functioning of the Committees.
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 Committee of the Independent Trustees and the Audit
Committee 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 and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and
the Audit Committee 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.
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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.
SHARE OWNERSHIP BY TRUSTEES
The Trustees have adopted a policy pursuant to which each Trustee and/or
his or her spouse is required to invest at least $25,000 in any of the Funds
in the Dean Witter Funds complex (and, if applicable, in the TCW/DW Funds
complex) on whose boards the Trustee serves. In addition, the policy
contemplates that the Trustees will, over time, increase their aggregate
investment in the Funds above the $25,000 minimum requirement. The Trustees
may allocate their investments among specific Funds in any manner they
determine is appropriate based on their individual investment objectives. As
of the date of this Proxy Statement, each Trustee is in compliance with the
policy. Any future Trustee will be given a one year period following his or
her election within which to comply with the foregoing. As of December 31,
1996, the total value of the investments by the Trustees and/or their spouses
in shares of the Dean Witter Funds (and, if applicable, the TCW/DW Funds) was
approximately $9.8 million.
As of the record date for this meeting, the aggregate number of shares of
beneficial interest of the Trust owned by the Trust's officers and Trustees
as a group was less than 1 percent of the Trust's shares of beneficial
interest outstanding.
COMPENSATION OF INDEPENDENT TRUSTEES
The Trust pays each Independent Trustee an annual fee of $1,000 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 $1,200). 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.
8
<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended October 31, 1996.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
Michael Bozic .............. $1,750
Edwin J. Garn .............. 1,800
John R. Haire .............. 3,850
Dr. Manuel H. Johnson....... 1,750
Michael E. Nugent .......... 1,750
John L. Schroeder........... 1,750
</TABLE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1996 for
services to the 82 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 14 TCW/DW Funds that were in operation at
December 31, 1996. With respect to Messrs. Haire, Johnson, Nugent and
Schroeder, the TCW/DW Funds are included solely because of a limited exchange
privilege between those Funds and five Dean Witter Money Market Funds.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF
COMMITTEES OF FOR SERVICE AS
INDEPENDENT CHAIRMAN OF
FOR SERVICE DIRECTORS/ COMMITTEES OF TOTAL CASH
AS DIRECTOR OR FOR SERVICE AS TRUSTEES AND INDEPENDENT COMPENSATION
TRUSTEE AND TRUSTEE AND AUDIT TRUSTEES FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER COMMITTEES OF 82 AND AUDIT 82 DEAN WITTER
NAME OF OF 82 DEAN WITTER OF 14 TCW/DW DEAN WITTER COMMITTEES OF 14 FUNDS AND 14
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS TCW/DW FUNDS TCW/DW FUNDS
- --------------------- ----------------- ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Michael Bozic ........ $138,850 -- -- -- $138,850
Edwin J. Garn ........ 140,900 -- -- -- 140,900
John R. Haire ........ 106,400 $64,283 $195,450 $12,187 378,320
Dr. Manuel H.
Johnson.............. 137,100 66,483 -- -- 203,583
Michael E. Nugent ... 138,850 64,283 -- -- 203,133
John L. Schroeder .... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Trust, have adopted a retirement program under which an
Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent
Director or Trustee of any Dean Witter Fund that has adopted the retirement
program (each such Fund referred to as an "Adopting Fund" and each such
Trustee referred to as an "Eligible Trustee") is entitled to retirement
payments upon reaching the eligible retirement age (normally, after attaining
age 72). Annual payments are based upon length of service. Currently, upon
retirement, each Eligible Trustee is entitled to receive from the Adopting
Fund, commencing as of his or her retirement date and continuing for the
remainder of his or her life, an annual retirement benefit (the "Regular
Benefit") equal to 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
9
<PAGE>
excess of five years up to a maximum of 50.0% after ten years of service. The
foregoing percentages may be changed by the Board.(1) "Eligible Compensation"
is one-fifth of the total compensation earned by such Eligible Trustee for
service to the Adopting Fund in the five year period prior to the date of the
Eligible Trustee's retirement. Benefits under the retirement program are not
secured or funded by the Adopting Funds.
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended October
31, 1996 and by the 57 Dean Witter Funds (including the Trust) for the year
ended December 31, 1996, and the estimated retirement benefits for the
Trust's Independent Trustees, to commence upon their retirement, from the
Trust as of October 31, 1996 and from the 57 Dean Witter Funds as of December
31, 1996.
RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL FUNDS RETIREMENT ESTIMATED ANNUAL
------------------------------- BENEFITS BENEFITS
ESTIMATED ACCRUED AS UPON RETIREMENT(2)
CREDITED YEARS ESTIMATED EXPENSES ---------------------
OF SERVICE AT PERCENTAGE OF ------------------------- FROM
NAME OF INDEPENDENT RETIREMENT ELIGIBLE BY THE BY ALL THE FROM ALL
TRUSTEE (MAXIMUM 10) COMPENSATION TRUST ADOPTING FUNDS TRUST ADOPTING FUNDS
- -------------------------- -------------- --------------- ------------ -------------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 50.0% 357 $20,147 850 $ 51,325
Edwin J. Garn ............. 10 50.0 595 27,772 850 51,325
John R. Haire ............. 10 50.0 2,343 46,952 1,448 129,550
Dr. Manuel H. Johnson .... 10 50.0 240 10,926 850 51,325
Michael E. Nugent ......... 10 50.0 450 19,217 850 51,325
John L. Schroeder.......... 8 41.7 686 38,700 708 42,771
</TABLE>
- ------------
(1) An Eligible Trustee may elect alternate payments of his or her
retirement benefits based upon the combined life expectancy of such
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. The amount estimated to be payable under this
method, through the remainder of the later of the lives of such
Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit. In addition, the Eligible Trustee may elect that the
surviving spouse's periodic payment of benefits will be equal to either
50% or 100% of the previous periodic amount, an election that,
respectively, increases or decreases the previous periodic amount so
that the resulting payments will be the actuarial equivalent of the
Regular Benefit.
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
above.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
(2) APPROVAL OR DISAPPROVAL OF NEW INVESTMENT
MANAGEMENT AGREEMENT
BACKGROUND
InterCapital currently serves as investment manager of the Trust pursuant
to an investment management agreement entered into by the Trust and
InterCapital (the "Current Agreement"), and in that capacity provides
investment advisory and certain other services to the Trust. InterCapital is
a wholly-owned subsidiary of DWDC. The approval of a new investment
management agreement between the Trust and InterCapital (the "New Agreement")
is being sought in connection with the proposed merger of Morgan Stanley
Group Inc. ("Morgan Stanley") and DWDC (the "Merger").
INFORMATION CONCERNING MORGAN STANLEY GROUP
Morgan Stanley and various of its directly or indirectly owned
subsidiaries, including Morgan Stanley & Co. Incorporated ("Morgan Stanley &
Co."), a registered broker-dealer and investment adviser, and Morgan
10
<PAGE>
Stanley International, provide a wide range of financial services on a global
basis. Their principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring, real estate,
project finance and other corporate finance advisory activities; merchant
banking and other principal investment activities; stock brokerage and
research services; asset management; the trading of foreign exchange and
commodities on a broad range of asset categories, rates and indices; and
global custody, securities clearance services and securities lending.
THE MERGER
Pursuant to the terms of the Merger, Morgan Stanley will be merged with
and into DWDC with the surviving corporation to be named Morgan Stanley, Dean
Witter, Discover & Co. Following the Merger, InterCapital will be a direct
wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Under the terms of the Merger, each share of Morgan Stanley common stock
will be converted into the right to receive 1.65 shares of DWDC common stock
and each issued and outstanding share of DWDC common stock will remain
outstanding and will thereafter represent one share of Morgan Stanley, Dean
Witter, Discover & Co. common stock. Following the Merger, Morgan Stanley's
shareholders will own approximately 45% and DWDC's shareholders will own
approximately 55% of the outstanding shares of common stock of Morgan
Stanley, Dean Witter, Discover & Co.
The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co. will
consist of fourteen members, two of which will be Morgan Stanley insiders and
two of which will be DWDC insiders. The remaining ten directors will be
outside directors, with Morgan Stanley and DWDC each designating five of the
ten. The Chairman and Chief Executive Officer of Morgan Stanley, Dean Witter,
Discover & Co. will be Philip J. Purcell who is the current Chairman and
Chief Executive Officer of DWDC. The President and Chief Operating Officer of
Morgan Stanley, Dean Witter, Discover & Co. will be the current President of
Morgan Stanley, John Mack.
The Merger is expected to be completed in mid-1997 and is subject to
certain closing conditions, including certain regulatory approvals and the
approval of shareholders of both DWDC and Morgan Stanley.
APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENT
In order to assure continuity of investment management services to the
Trust after the Merger, the Board of the Trust met in person for the purpose
of considering whether it would be in the best interests of the Trust and its
Shareholders to enter into a New Agreement between the Trust and the
Investment Manager which would become effective upon the later of Shareholder
approval of the New Agreement or consummation of the Merger. At its meeting,
and for the reasons discussed below (see "The Board's Consideration"), the
Board of the Trust, including each of the Independent Trustees, unanimously
approved the New Agreement and recommended its approval by Shareholders.
THE TERMS OF THE NEW AGREEMENT, INCLUDING FEES PAYABLE BY THE TRUST
THEREUNDER, ARE IDENTICAL, IN ALL MATERIAL RESPECTS, TO THOSE OF THE
CORRESPONDING CURRENT AGREEMENT, EXCEPT FOR THE DATES OF EFFECTIVENESS AND
EXPIRATION. The terms of the Current Agreement are fully described under "The
Current Investment Management Agreement" below. If approved by Shareholders,
the New Agreement will continue in effect for an initial term expiring April
30, 1999 and will continue in effect from year to year thereafter if such
continuance is approved by the Board or by a majority of the outstanding
voting securities (as defined below) of the Trust and, in either event, by
the vote cast in person of a majority of the Independent Trustees. In the
event that Shareholders of the Trust do not approve a New Agreement, the
Current Agreement will remain in effect and the Board will take such action,
if any, as it deems to be in the best interests of the Trust and its
11
<PAGE>
Shareholders, which may include proposing that Shareholders approve an
agreement in lieu of the New Agreement. In the event that the Merger is not
consummated, the Investment Manager will continue to provide services to the
Trust in accordance with the terms of the Current Agreement for such periods
as may be approved at least annually by the Board, including a majority of
the Independent Trustees of the Trust.
REQUIRED VOTE
The New Agreement cannot be implemented unless approved at the Meeting, or
any adjournment thereof, by a majority of the outstanding voting securities
of the Trust (Common Shares and Preferred Shares voting together as a single
class). Such a majority means the affirmative vote of the holders of (a) 67%
or more of the shares of the Trust present, in person or by proxy, at the
Meeting, if the holders of more than 50% of the outstanding shares are so
present, or (b) more than 50% of the outstanding shares of the Trust,
whichever is less.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THE NEW INVESTMENT MANAGEMENT AGREEMENT.
THE BOARD'S CONSIDERATION
At a special meeting of the Committee of the Independent Trustees of the
Trust held on February 20, 1997, at which each of the Independent Trustees of
the Trust was present, and a meeting of the full Board on February 21, 1997,
the Trustees evaluated the New Agreement (the form of which is attached
hereto as an Exhibit). Prior to and during the meeting, the Independent
Trustees requested and received all information they deemed necessary to
enable them to determine whether the New Agreement is in the best interests
of the Trust and its Shareholders. They were assisted in their review and
deliberations by independent legal counsel. In determining whether to approve
the New Agreement, the Trustees assessed the implications of the Merger for
the Investment Manager and its ability to continue to provide services to the
Trust of the same scope and quality as are presently provided. In particular,
the Trustees inquired as to the impact of the Merger on the Investment
Manager's personnel, management, facilities and financial capabilities and
received assurances in this regard from senior management of DWDC and the
Investment Manager that the Merger would not adversely affect the Investment
Manager's ability to fulfill its obligations under its agreement with the
Trust or to operate its business in a manner consistent with past practices.
In addition, the Trustees considered the effects of the Investment Manager
and Morgan Stanley becoming affiliated persons of such other. Following the
Merger, the 1940 Act will prohibit or impose certain conditions on the
ability of the Trust to engage in certain transactions with Morgan Stanley
and its affiliates. For example, absent exemptive relief, the Trust will be
prohibited from purchasing securities from Morgan Stanley & Co., a
wholly-owned broker-dealer subsidiary of Morgan Stanley, in transactions in
which Morgan Stanley & Co. acts as principal, and the Trust will have to
satisfy certain conditions in order to engage in securities transactions in
which Morgan Stanley & Co. acts as broker or to purchase securities in an
underwritten offering in which Morgan Stanley & Co. acts as an underwriter.
In this connection, senior management of the Investment Manager represented
to the Trustees that they do not believe these prohibitions or conditions
will have a material effect on the management or performance of the Trust.
The Trustees also considered that the New Agreement is identical, in all
material respects, to the Current Agreement (other than the dates of
effectiveness and termination).
Based upon the Trustees' review and the evaluations of the materials they
received, and in consideration of all factors deemed relevant to them, the
Trustees of the Trust, including all of the Independent Trustees, determined
that the New Agreement is in the best interests of the Trust and its
Shareholders. ACCORDINGLY, THE BOARD, INCLUDING ALL OF THE INDEPENDENT
TRUSTEES, APPROVED THE NEW AGREEMENT AND VOTED TO RECOMMEND APPROVAL BY
SHAREHOLDERS OF THE TRUST.
12
<PAGE>
THE CURRENT INVESTMENT MANAGEMENT AGREEMENT
The Current 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 Current 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 Current 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 Current
Agreement, the Trust pays the Investment Manager compensation which is
accrued weekly 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 Current Agreement, the Trust accrued to the Investment Manager total
compensation of $1,296,790 during the fiscal year ended October 31, 1996. The
net assets of the Trust totalled $364,858,422 at October 31, 1996.
Under the Current 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 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 Current Agreement.
13
<PAGE>
The Current Agreement was initially approved by the Board, 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 Current Agreement was last approved by the
Shareholders of the Trust as a routine matter at their Annual Meeting of
Shareholders held on June 27, 1996.
The Current Agreement had an initial term ending 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 1940 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 Current Agreement or "interested persons"
of any such party (as defined in the 1940 Act) at a meeting called for the
purpose of voting on such approval. The Current 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 Current Agreement.
The Current 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.
The administrative services called for under the Current Agreement are
performed by DWSC, a wholly-owned subsidiary of InterCapital, pursuant to a
Services Agreement between InterCapital and DWSC.
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 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, 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 Officer is
Two World Trade Center, New York, New York 10048. DWDC has its offices at 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
14
<PAGE>
of the Trust, and sets forth the fees payable by such companies, including
the Trust, and their net assets as of March 12, 1997. DWSC also has its
offices at Two World Trade Center, New York, New York 10048.
During the fiscal year ended October 31, 1996, the Trust accrued to DWTC,
the Trust's Transfer Agent and an affiliate of the Investment Manager,
transfer agency fees of $98,375. After the consummation of the Merger and
approval of the New Agreement, DWTC will continue to provide the same
services to the Trust as are being provided currently.
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is
an affiliated broker of the Trust. For the fiscal year ended October 31,
1996, the Trust paid no brokerage commissions to DWR.
(4) 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,
1997. 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.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of proposal 2 and will vote against any such adjournment those proxies
required to be voted against that proposal.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed
to be present at the meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares
held in street name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority.
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than November 25, 1997 for
inclusion in the proxy statement for that meeting. The mere submission of a
proposal does not guarantee its inclusion in the proxy materials or its
presentation at the meeting. Certain rules under the federal securities laws
must be met.
15
<PAGE>
REPORTS TO SHAREHOLDERS
THE TRUST'S MOST RECENT ANNUAL REPORT, FOR THE FISCAL YEAR ENDED OCTOBER
31, 1996, 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).
INTEREST OF CERTAIN PERSONS
DWDC, InterCapital, DWR, DWSC and certain of their respective Directors,
Officers, and employees, including persons who are Trustees or Officers of
the Trust, may be deemed to have an interest in certain of the proposals
described in this Proxy Statement to the extent that certain of such
companies and their affiliates have contractual and other arrangements,
described elsewhere in this Proxy Statement, pursuant to which they are paid
fees by the Trusts, and certain of those individuals are compensated for
performing services relating to the Trust and may also own shares of DWDC.
Such companies and persons may thus be deemed to derive benefits from the
approvals by Shareholders of such proposals.
OTHER BUSINESS
The management of the Trust 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
BARRY FINK
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. Set forth below is a chart
showing the net assets of each such investment company as of March 12, 1997
and the investment management or advisory fee rate(s) applicable to such
investment company.
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
-------------- ------------------------------
<S> <C> <C>
1. DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND* .... $ 945,010,134 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* ....... 61,210,093 0.50%
3. DEAN WITTER MULTI-STATE MUNICIPAL SERIES TRUST* . 388,189,887 0.35%
4. DEAN WITTER NATIONAL MUNICIPAL TRUST*............ 84,362,522 0.35% (1)
5. DEAN WITTER NEW YORK TAX-FREE INCOME FUND* ...... 185,662,118 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
6. DEAN WITTER TAX-EXEMPT SECURITIES TRUST* ........ 1,158,271,636 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
TRUST**.......................................... 240,850,768 0.35%
8. INTERCAPITAL CALIFORNIA QUALITY MUNICIPAL
SECURITIES**..................................... 201,480,242 0.35%
9. INTERCAPITAL INSURED CALIFORNIA MUNICIPAL
SECURITIES**..................................... 62,879,708 0.35%
10.INTERCAPITAL INSURED MUNICIPAL BOND TRUST** .... 108,687,697 0.35%
11.INTERCAPITAL INSURED MUNICIPAL INCOME TRUST** .. 577,173,893 0.35%
12.INTERCAPITAL INSURED MUNICIPAL SECURITIES** .... 136,016,212 0.35%
13.INTERCAPITAL INSURED MUNICIPAL TRUST** ......... 481,829,417 0.35%
14.INTERCAPITAL NEW YORK QUALITY MUNICIPAL
SECURITIES**.................................... 92,491,556 0.35%
15.INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST** .. 726,527,989 0.35%
16.INTERCAPITAL QUALITY MUNICIPAL INVESTMENT
TRUST**......................................... 377,428,244 0.35%
17.INTERCAPITAL QUALITY MUNICIPAL SECURITIES** .... 356,447,008 0.35%
18.MUNICIPAL INCOME TRUST**........................ 299,197,956 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
A-1
<PAGE>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
-------------- ------------------------------
19.MUNICIPAL INCOME TRUST II**..................... $273,432,009 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
20.MUNICIPAL INCOME TRUST III**.................... 61,981,499 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
21.MUNICIPAL INCOME OPPORTUNITIES TRUST** ......... 176,784,608 0.50%
22.MUNICIPAL INCOME OPPORTUNITIES TRUST II** ...... 174,666,431 0.50%
23.MUNICIPAL INCOME OPPORTUNITIES TRUST III** ..... 102,809,085 0.50%
24.MUNICIPAL PREMIUM INCOME TRUST**................ 350,292,786 0.40%
25.DEAN WITTER SELECT MUNICIPAL REINVESTMENT
FUND***......................................... 90,885,593 0.50%
26.DEAN WITTER HAWAII MUNICIPAL TRUST* ............ 3,522,850 0.35% (2)
<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 June 30, 1997, 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.
(2) InterCapital has undertaken, until June 30, 1997, 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>
EXHIBIT
FORM OF NEW INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the day of , 1997 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.
EX-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 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) and the costs and
expenses 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 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
commencement of operations of the Fund, 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.
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
EX-2
<PAGE>
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
or 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 or employee of the Investment Manager to engage in any
other business or to devote his or her 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, 1999 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,
conflicts with the applicable provisions of the Act, the latter shall
control.
12. The Investment Manager and the Fund each agree that the name
"InterCapital," which comprises a component of the Fund's name, is a property
right of the Investment Manager. The Fund agrees and consents that (i) it
will only use the name "InterCapital" as a component of its name and for no
other purpose, (ii) it will not purport to grant to any third party the right
to use the name "InterCapital" for any purpose, (iii) the Investment Manager
or its parent, Dean Witter, Discover & Co., or any corporate affiliate of the
Investment Manager's parent, may use or grant to others the right to use the
name "InterCapital," or any combination or abbreviation thereof, as all or a
portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, (iv) at the
request of the Investment Manager or its parent, the Fund will take such
action as may be required to provide its consent to the use of the name
"InterCapital," or any combination or abbreviation thereof, by the Investment
Manager or its parent of any corporate affiliate of the Investment Manager's
parent, or by any person to whom the Investment Manager or its parent or any
corporate affiliate of the Investment Manager's parent shall have granted the
right to such use,
EX-3
<PAGE>
and (v) upon the termination of any investment advisory agreement into which
the Investment Manager and the Fund may enter, or upon termination of
affiliation of the Investment Manager with its parent, the Fund shall, upon
request by the Investment Manager or its parent, cease to use the name
"InterCapital" as a component of its name, and shall not use the name, or any
combination or abbreviation thereof, as a part of its name or for any other
commercial purpose, and shall cause its officers, Trustees and shareholders
to take any and all actions which the Investment Manager or its parent may
request to effect the foregoing and to reconvey to the Investment Manager or
its parent any and all rights to such name.
13. The Declaration of Trust 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 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 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
By
---------------------------------
Attest:
- ----------------------------------
DEAN WITTER INTERCAPITAL INC.
By
---------------------------------
Attest:
- ----------------------------------
EX-4
<PAGE>
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
ANNUAL MEETING OF SHAREHOLDERS--MAY 20, 1997
PROXY
The undersigned hereby appoints ROBERT M. SCANLAN, BARRY FINK, JOSEPH J.
MCALINDEN, 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 May 20, 1997 at 10:00 a.m., New
York City time, and at any adjournment thereof, on the proposals set forth in
the Notice of Meeting dated March 19, 1997 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 THE PROPOSALS.
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. 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)
Edwin J. Garn, Michael E. Nugent, Philip J. Purcell
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
ELECTION OF PREFERRED TRUSTEE:
[ ] FOR THE NOMINEE
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for the nominee listed below)
John R. Haire
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
2. APPROVAL OF NEW INVESTMENT MANAGEMENT
AGREEMENT IN CONNECTION WITH THE MERGER:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
126
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Robert M. Scanlan, Barry Fink, and Joseph J.
McAlinden, 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 May 20, 1997, at 10:00 a.m., New
York City time, and at any adjournment thereof, on the proposals set forth in
the Notice of Meeting dated March 19, 1997 as follows:
(Continued on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE TRUSTEES AND THE PROPOSALS SET FORTH ON THE REVERSE HEREOF AND
AS RECOMMENDED BY THE BOARD OF TRUSTEES.
IMPORTANT--THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE>
[X] PLEASE MARK VOTES
AS IN THE EXAMPLE
USING BLACK OR
BLUE INK
FOR ALL
FOR WITHHOLD EXCEPT
1. Election of five (5) Trustees: [ ] [ ] [ ]
Edwin J. Garn, Michael E. Nugent, Philip
J. Purcell
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY PARTICULAR NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NOMINEE'S NAME.
FOR AGAINST ABSTAIN
2. Approval of New Investment Management [ ] [ ] [ ]
Agreement with Dean Witter InterCapital
Inc. in connection with proposed merger.
FOR AGAINST ABSTAIN
3. Ratification of appointment of Price [ ] [ ] [ ]
Waterhouse LLP as independent accoun-
tants.
Please make sure to sign and date
this Proxy using black or blue ink. Date
-----------------
- --------------------------------- ---------------------------------------
- --------------------------------- ---------------------------------------
Shareholder sign in the box above Co-Owner (if any) sign in the box above
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PLEASE DETACH AT PERFORATION
INTERCAPITAL QUALITY MUNICIPAL SECURITIES
IMPORTANT
PLEASE SEND IN YOUR PROXY............TODAY!
YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO
SHAREHOLDERS WHO HAVE NOT RESPONDED.