Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities and 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-(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or Section 240.14
TCW/DW Term Trust 2003
---------------------------
(Name of Registrant as Specified in its Charter)
LouAnne D. 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.
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:
TCW/DW TERM TRUST 2003
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 23, 2001
The Annual Meeting of Shareholders of TCW/DW TERM TRUST 2003 (the
"Trust"), an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts, will be held in the Career Development Room,
Sixty-First Floor, Two World Trade Center, New York, New York 10048, on October
23, 2001 at 9:00 a.m., New York City time, for the following purposes:
1. To elect three (3) Trustees to serve until the year 2004 Annual
Meeting or, until their successors shall have been elected and qualified;
and
2. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record as of the close of business on July 26, 2001 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. Alternatively, if you are eligible to vote telephonically by touchtone
telephone or electronically on the Internet (as discussed in the enclosed Proxy
Statement) you may do so in lieu of attending the Meeting in person.
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 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 have been received by the date of
the Meeting.
BARRY FINK,
Secretary
August 15, 2001
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. CERTAIN SHAREHOLDERS WILL BE ABLE TO VOTE TELEPHONICALLY BY TOUCHTONE
TELEPHONE OR ELECTRONICALLY ON THE INTERNET BY FOLLOWING INSTRUCTIONS
CONTAINED ON THEIR PROXY CARDS OR ON THE ENCLOSED VOTING INFORMATION CARD.
- --------------------------------------------------------------------------------
TCW/DW TERM TRUST 2003
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 23, 2001
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of TCW/DW TERM TRUST 2003 (the "Trust"),
for use at the Annual Meeting of Shareholders of the Trust to be held on
October 23, 2001 (the "Meeting"), and at any adjournments thereof. The first
mailing of this Proxy Statement is expected to be made on or about August 17,
2001.
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. 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
(whether by mail or, as discussed below, by touchtone telephone or the
Internet) (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.
Shareholders of record ("Shareholders") as of the close of business on
July 26, 2001, the record date for the determination of Shareholders entitled
to notice of and to vote at the Meeting (the "Record Date"), are entitled to
one vote for each share held and a fractional vote for a fractional share. On
the Record Date there were 77,855,780 shares of beneficial interest of the
Trust outstanding, all with $0.01 par value. No person was known to own as much
as 5% of the outstanding shares of the Trust on that date. The percentage
ownership of shares of the Trust changes from time to time depending on
purchases and sales by Shareholders and the total number of shares outstanding.
The cost of soliciting proxies for the Meeting, consisting principally of
printing and mailing expenses, will be borne by the Trust. The solicitation of
proxies will be by mail, which may be supplemented by solicitation by mail,
telephone or otherwise through Trustees, officers of the Trust, or officers and
regular employees of Morgan Stanley Services Company Inc. ("Morgan Stanley
Services" or the "Manager") or its parent company Morgan Stanley Investment
Advisors Inc. ("Morgan Stanley Investment Advisors"), Morgan Stanley Dean
Witter Trust FSB ("MSDW Trust") and/or Morgan Stanley DW Inc. ("Morgan Stanley
DW"), without special compensation therefor. In addition, the Trust may employ
William F. Doring & Co. as proxy solicitor, the cost of which is not expected
to exceed $3,000 and will be borne by the Trust.
Shareholders whose shares are registered with MSDW Trust will be able to
vote their shares by touchtone telephone or by Internet by following the
instructions on the proxy card or on the Voting Information Card accompanying
this Proxy Statement. To vote by touchtone telephone, Shareholders can call the
toll-free number 1-800-690-6903. To vote by Internet, Shareholders can access
the websites www.msdwt.com or www.proxyvote.com. Telephonic and Internet voting
with MSDW Trust presently are not available to Shareholders whose shares are
held in street name.
2
In certain instances, William F. Doring & Co. and MSDW Trust may call
Shareholders to ask if they would be willing to have their votes recorded by
telephone. The telephone voting procedure is designed to authenticate
Shareholders' identities, to allow Shareholders to authorize the voting of
their shares in accordance with their instructions and to confirm that their
instructions have been recorded properly. No recommendation will be made as to
how a Shareholder should vote on any Proposal other than to refer to the
recommendations of the Board. The Trust has been advised by counsel that these
procedures are consistent with the requirements of applicable law. Shareholders
voting by telephone in this manner 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 set forth in the confirmation 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
or by touchtone telephone or the Internet as set forth above. The last proxy
vote received in time to be voted, whether by proxy card, touchtone telephone
or Internet, will be the vote that is counted and will revoke all previous
votes by the Shareholder. With respect to the solicitation of a telephonic vote
by William F. Doring & Co., additional expenses would include $7.00 per
telephone vote transacted, $3.00 per outbound telephone contact and costs
relating to obtaining Shareholders' telephone numbers, which would be borne by
the Trust.
(1) ELECTION OF TRUSTEES
The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at nine. There are presently nine Trustees, three
of whom (Edwin J. Garn, Michael E. Nugent and Philip J. Purcell) are standing
for election at this Meeting to serve until the year 2004 Annual Meeting, in
accordance with the Trust's Declaration of Trust.
Six of the current nine Trustees (Michael Bozic, Edwin J. Garn, Wayne E.
Hedien, Manuel H. Johnson, Michael E. Nugent and John L. Schroeder) are
"Independent Trustees," that is, Trustees who are not "interested persons" of
the Trust, as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). The nominees for election as Trustees of the Trust
have been proposed by the Trustees now serving or, in the case of the nominees
for positions as Independent Trustees, by the Independent Trustees now serving.
All of the Trustees have previously been elected by the Shareholders of the
Trust.
The nominees of the Board of Trustees for election as Trustee are listed
below. It is the intention of the persons named in the enclosed form of proxy,
unless instructed by proxy to withhold authority to vote for the nominees, to
vote all validly executed proxies for the election of these nominees: Edwin J.
Garn, 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 may recommend or, in the case of an Independent Trustee
nominee, as the Independent 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 any of the said nominees would be unable
or unwilling to accept nomination or election. The election of the nominees
listed above requires the approval of a majority of the shares of the Trust
represented and entitled to vote at the Meeting.
Pursuant to the provisions of the Trust's Declaration of Trust, the
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.
3
The Board of Trustees previously has determined that any nominee for
election as Trustee will stand for election as Trustee and serve as Trustee in
one of the three classes of Trustees as follows: Class I--Messrs. Bozic,
Fiumefreddo and Higgins; Class II--Messrs. Hedien, Johnson and Schroeder; and
Class III--Messrs. Garn, 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 accordance with the above, the Class III
Trustees are standing for election and, if elected, will serve until the year
2004 Annual Meeting or, in each case, 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 other members of the Board includes his principal
occupations and employment for at least the last five years, his age, shares of
the Trust owned, if any, as of July 26, 2001 (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 TCW/DW
Term Trust 2002, for which TCW Investment Management Company serves as
investment adviser (the "Investment Adviser" or the "Adviser"), and Morgan
Stanley Investment Advisors' wholly-owned subsidiary Morgan Stanley Services
serves as manager (referred to herein as the "TCW/DW Term Trusts"), and the 98
investment companies for which Morgan Stanley Investment Advisors serves as
investment manager or investment advisor (referred to herein as the "Morgan
Stanley Funds").
The nominees for Trustee to be elected at this Meeting are:
EDWIN JACOB (JAKE) GARN, Trustee since June 1999; age 68; Director or
Trustee of the Morgan Stanley Funds and the TCW/DW Term Trusts; 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 (chemical company); Director of Franklin Covey (time management
systems), BMW Bank of North America, Inc. (industrial loan corporation), United
Space Allliance (joint venture between Lockheed Martin and the Boeing Company)
and Nuskin Asia Pacific (multilevel marketing); member of the Utah Regional
Advisory Board of Pacific Corp.; member of the board of various civic and
charitable organizations.
MICHAEL E. NUGENT, Trustee since February 1993; age 65; General Partner,
Triumph Capital, L.P., a private investment partnership; Chairman of the
Insurance Committee and Director or Trustee of the Morgan Stanley Funds and the
TCW/DW Term Trusts; Director of various investment companies managed by Morgan
Stanley Investment Management Inc. and Morgan Stanley Investments LP (since July
2001); formerly Vice President, Bankers Trust Company and BT Capital
Corporation; director of various business organizations.
PHILIP J. PURCELL*, Trustee since June 1999; age 57; Chairman of the Board
of Directors and Chief Executive Officer of Morgan Stanley Dean Witter & Co.
("Morgan Stanley"), Morgan Stanley DW and Novus Credit Services Inc.; Director
of Morgan Stanley Distributors Inc. ("Morgan Stanley Distributors"); Director
or Trustee of the Morgan Stanley Funds and the TCW/DW Term Trusts; Director of
American Airlines, Inc. and its parent company, AMR Corporation; Director
and/or officer of various Morgan Stanley subsidiaries.
The Trustees who are not standing for reelection at the Meeting are:
MICHAEL BOZIC, Trustee since June 1999; age 60; Retired; Director or
Trustee of the Morgan Stanley Funds and the TCW/DW Term Trusts; formerly Vice
Chairman of Kmart Corporation (December 1998-October 2000); formerly Chairman
and Chief Executive Officer of Levitz Furniture Corporation (November
- ----------
* Messrs. Fiumefreddo, Higgins and Purcell may be deemed "interested persons"
of the Trust as defined in Section 2(a)(19) of the 1940 Act, due to their
affiliation with the Manager and/or its affiliated companies.
4
1995-November 1998); formerly President and Chief Executive Officer of Hills
Department Stores (1991-1995); 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 Weirton Steel
Corporation.
CHARLES A. FIUMEFREDDO*, Trustee since February 1993; age 68; Chairman,
Director or Trustee and Chief Executive Officer of the Morgan Stanley Funds and
the TCW/DW Term Trusts; formerly Chairman, Chief Executive Officer and Director
of Morgan Stanley Investment Advisors, Morgan Stanley Services and Morgan
Stanley Distributors, Executive Vice President and Director of Morgan Stanley
DW, Chairman and Director of MSDW Trust and Director and/or officer of various
Morgan Stanley subsidiaries (until June 1998).
WAYNE E. HEDIEN, Trustee since June 1999; age 67; Retired; Director or
Trustee of the Morgan Stanley Funds and the TCW/DW Term Trusts; 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.
JAMES F. HIGGINS*, Trustee since June 2000; age 53; Chairman of the
Private Client Group of Morgan Stanley (since August 2000); Director of MSDW
Trust and Dean Witter Realty Inc.; Director or Trustee of the Morgan Stanley
Funds and the TCW/DW Term Trusts (since June 2000); previously President and
Chief Operating Officer of the Private Client Group of Morgan Stanley (May
1999-August 2000), President and Chief Operating Officer of Individual
Securities of Morgan Stanley (February 1997-May 1999), President and Chief
Operating Officer of Dean Witter Securities of Morgan Stanley (1995-February
1997), and Director (1985-1997) of Morgan Stanley DW.
MANUEL H. JOHNSON, Trustee since February 1993; age 52; 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;
Chairman of the Audit Committee and Director or Trustee of the Morgan Stanley
Funds and the TCW/DW Term Trusts; Director of NVR, Inc. (home construction);
Chairman and Trustee of the Financial Accounting Foundation (oversight
organization for the Financial Accounting Standards Board); formerly Vice
Chairman of the Board of Governors of the Federal Reserve System and Assistant
Secretary of the U.S. Treasury.
JOHN L. SCHROEDER, Trustee since April 1995; Age 71; Retired; Chairman of
the Derivatives Committee and Director or Trustee of the Morgan Stanley Funds
and the TCW/DW Term Trusts; Director of Citizens Communications Company
(telecommunications company); formerly Executive Vice President and Chief
Investment Officer of the Home Insurance Company.
The executive officers of the Trust other than shown above are: Mitchell
M. Merin, President; Barry Fink, Vice President, Secretary and General Counsel;
Ronald E. Robison, Vice President; Robert S. Giambrone, Vice President; Philip
A. Barach, Vice President, Jeffrey E. Gundlach, Vice President; Frederick H.
Horton, Vice President; and Thomas F. Caloia, Treasurer. In addition, Marilyn
K. Cranney, Natasha Kassian, Todd Lebo, Lou Anne D. McInnis, Carsten Otto, Ruth
Rossi and George Silfen serve as Assistant Secretaries of the Trust.
Mr. Merin is 47 years old and is currently President and Chief Operating
Officer of Morgan Stanley Investment Management (since December 1998),
President, Director (since April 1997) and Chief Executive
- ----------
* Messrs. Fiumefreddo, Higgins and Purcell may be deemed "interested persons"
of the Trust as defined in Section 2(a)19) of the 1940 Act, due to their
affiliation with the Manager and/or its affiliated companies.
5
Officer (since June 1998) of Morgan Stanley Investment Advisors and Morgan
Stanley Services, Chairman, Chief Executive Officer and Director of Morgan
Stanley Distributors (since June 1998), Chairman and Chief Executive Officer
(since June 1998) and Director (since January 1998) of MSDW Trust, President of
the Morgan Stanley Funds and the TCW/DW Term Trusts (since May 1999), Trustee
of various Van Kampen investment companies (since December 1999) and Director
of various other Morgan Stanley subsidiaries. Mr. Fink is 46 years old and is
currently General Counsel (since May 2000) and Managing Director (since
December 2000) of Morgan Stanley Investment Management; Managing Director
(since December 2000), Secretary and General Counsel (since February 1997) and
Director (since July 1998) of Morgan Stanley Investment Advisors and Morgan
Stanley Services and Assistant Secretary of Morgan Stanley DW (since August
1996); he is also Vice President and Secretary of Morgan Stanley Distributors
and Vice President, Secretary and General Counsel of the Morgan Stanley Funds
and the TCW/DW Term Trusts (since February 1997). He was previously Senior Vice
President, Assistant Secretary and Assistant General Counsel of Morgan Stanley
Investment Advisors and Morgan Stanley Services. Mr. Robison is 62 years old
and is currently Managing Director and Chief Administrative Officer (since
September 1998) and Director (since February 1999) of Morgan Stanley Investment
Advisors and Morgan Stanley Services; prior thereto he was a Managing Director
of the TCW Group, Inc. Mr. Giambrone is 46 years old and is currently Managing
Director of Morgan Stanley Investment Advisors, Morgan Stanley Services, Morgan
Stanley Distributors and MSDW Trust and Director of MSDW Trust. Mr. Caloia is
55 years old and is currently First Vice President and Assistant Treasurer of
Morgan Stanley Investment Advisors and Morgan Stanley Services. Mr. Barach is
48 years old and is currently a Group Managing Director of Trust Company of the
West, TCW Asset Management Company and TCW Investment Management Company. Mr.
Gundlach is 41 years old and is currently a Group Managing Director of Trust
Company of the West, TCW Asset Management Company and TCW Investment Management
Company. Mr. Horton is 43 years old and is currently a Managing Director of
Trust Company of the West, TCW Asset Management Company and TCW Investment
Management Company. Messrs. Barach, Gundlach and Horton have been associated
with The TCW Group, Inc. and/or its subsidiaries for over five years.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of nine (9) trustees. These same
individuals also serve as trustees for TCW/DW Term Trust 2002. As of June 30,
2001, the TCW/DW Term Trusts had total net assets of approximately $1.2 billion
and approximately 18,000 shareholders.
Six Trustees (67% of the total number) have no affiliation or business
connection with TCW Investment Management Company or Morgan Stanley Services or
any of their affiliated persons and do not own any stock or other securities
issued by Morgan Stanley or TCW, the parent companies of Morgan Stanley
Services and TCW Investment Management Company, respectively. These are the
"disinterested" or "independent" Trustees.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The TCW/DW Term Trusts 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 TCW/DW Term Trusts Boards, such individuals may reject other
attractive assignments because the TCW/DW Term Trusts make substantial demands
on their time.
All of the Independent Trustees serve as members of the Audit Committee.
In addition, three of the Trustees, including two Independent Trustees, also
serve as members of the Derivatives Committee and the Insurance Committee. The
Trust does not have any nominating or compensation committee.
6
The Independent Trustees are charged with recommending to the full Board
approval of management, advisory and administration contracts, and distribution
and underwriting agreements; continually reviewing Trust performance; checking
on the pricing of portfolio securities, brokerage commissions, transfer agent
costs and performance, and trading among the TCW/DW Term Trusts; and approving
fidelity bond and related insurance coverage and allocations, as well as other
matters that arise from time to time.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Trust's independent auditors; directing
investigations into matters within the scope of the independent auditors'
duties, including the power to retain outside specialists; reviewing with the
independent auditors the audit plan and results of the auditing engagement;
approving professional services provided by the independent auditors and other
accounting firms prior to the performance of such services; reviewing the
independence of the independent auditors; considering the range of audit and
non-audit fees; reviewing the adequacy of the Trust's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
Board. All of the members of the Audit Committee are independent as defined in
the New York Stock Exchange Corporate Governance Standards for audit
committees.
The Board of each TCW/DW Term Trust has formed a Derivatives Committee to
approve parameters for and monitor the activities of the TCW/DW Term Trusts
with respect to derivative investments, if any, made by each TCW/DW Term Trust.
Finally, the Board of each TCW/DW Term Trust has formed an Insurance Committee
to review and monitor the insurance coverage maintained by each TCW/DW Term
Trust.
For the fiscal year ended March 31, 2001, the Board of Trustees of the
Trust held 4 meetings, and the Audit Committee, the Independent Trustees, the
Derivatives Committee and the Insurance Committee of the Trust held 8, 9, 5 and
1 meeting(s), respectively. No Trustee attended fewer than 75% of the meetings
of the Board of Trustees, the Audit Committee, the Independent Trustees, the
Derivatives Committee or the Insurance Committee held while he served in such
positions.
AUDIT COMMITTEE REPORT
The Board of Trustees of the Trust has adopted a formal written charter
for the Audit Committee which sets forth the Audit Committee's
responsibilities. A copy of the Audit Committee charter is attached to this
Proxy Statement as Exhibit A.
The Audit Committee has reviewed and discussed the financial statements of
the Trust with management as well as with Deloitte & Touche LLP, the
independent auditors for the Trust. In the course of its discussions, the Audit
Committee also discussed with Deloitte & Touche LLP any relevant matters
required to be discussed under Statement on Auditing Standards No. 61. Based on
this review, the Audit Committee recommended to the Board of Trustees that the
Trust's audited financial statements be included in the Trust's Annual Report
to Shareholders for the most recent fiscal year for filing with the Securities
and Exchange Commission. The Audit Committee has received the written
disclosures and the letter from Deloitte & Touche LLP required under
Independence Standards Board No. 1 and has discussed with the independent
auditors their independence.
The Audit Committee
Manuel H. Johnson (Chairman)
Michael Bozic
Edwin J. Garn
Wayne E. Hedien
Michael E. Nugent
John L. Schroeder
7
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL TCW/DW
TERM TRUSTS
The Independent Trustees and the TCW/DW Term Trusts' management believe
that having the same Independent Trustees for each of the TCW/DW Term Trusts
avoids the duplication of effort that would arise from having different groups
of individuals serving as Independent Trustees for each of the TCW/DW Term
Trusts. They believe that having the same individuals serve as Independent
Trustees of all the TCW/DW Term Trusts tends to increase their knowledge and
expertise regarding matters which affect the TCW/DW Term Trusts generally and
enhances their ability to negotiate on behalf of each TCW/DW Term Trust with
the TCW/DW Term Trust'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 TCW/DW Term Trusts and
avoids the cost and confusion that would likely ensue. Finally, having the same
Independent Trustees serve on all TCW/DW Term Trust Boards enhances the ability
of each TCW/DW Term Trust to obtain, at modest cost to each separate TCW/DW
Term Trust, the services of Independent Trustees of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
TCW/DW Term Trusts.
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 TCW/DW
Term Trusts or the Morgan Stanley Funds on whose boards the Trustee serves. In
addition, the policy contemplates that the Trustees will, over time, increase
their aggregate investment in the aforementioned funds above the $25,000
minimum requirement. The Trustees may allocate their investments among specific
funds in any manner they determine is appropriate based on their individual
investment objectives. As of the date of this Proxy Statement, each Trustee is
in compliance with the policy. Any future Trustee will be given a one year
period following his or her election within which to comply with the foregoing.
As of June 30, 2001, the total value of the investments by the Trustees and/or
their spouses in shares of the aforementioned funds was approximately $50.6
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 $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (the
Trust pays the Chairman of the Audit Committee an additional annual fee of $750
and the Chairmen of the Derivatives and Insurance Committees additional annual
fees of $500). If a Board meeting and a meeting of the Independent Trustees or
a Committee meeting, or a meeting of the Independent Trustees and/or more than
one Committee meeting, take place on a single day, the Trustees are paid a
single meeting fee by the Trust. The Trust also reimburses such Trustees for
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Trustees and officers of the Trust who are or have
been employed by the Manager or the Adviser or an affiliated company of either
receive no compensation or expense reimbursement from the Trust for their
services as Trustee. The Trustees of the TCW/DW Term Trusts do not have
retirement or deferred compensation plans.
8
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended March 31, 2001.
TRUST COMPENSATION
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- ---------------
Michael Bozic ................. $1,600
Edwin J. Garn ................. 1,650
Wayne E. Hedien ............... 1,650
Dr. Manuel H. Johnson ......... 2,400
Michael E. Nugent ............. 2,150
John L. Schroeder ............. 2,100
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 2000 for services
to the 2 TCW/DW Term Trusts.
CASH COMPENSATION FROM TCW/DW TERM TRUSTS
TOTAL CASH
COMPENSATION FOR
SERVICES TO
NAME OF INDEPENDENT TRUSTEE 2 TCW/DW TERM TRUSTS
- --------------------------- ---------------------
Michael Bozic ................. $3,100
Edwin J. Garn ................. 3,200
Wayne E. Hedien ............... 3,200
Dr. Manuel H. Johnson ......... 4,750
Michael E. Nugent ............. 4,250
John L. Schroeder ............. 4,150
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
FOR EACH OF THE TRUSTEES NOMINATED FOR ELECTION.
INVESTMENT ADVISER
TCW Investment Management Company (the "Investment Adviser") currently
serves as the Trust's investment adviser pursuant to an investment advisory
agreement. The Investment Adviser, a California corporation, is a wholly-owned
subsidiary of The TCW Group, Inc. (formerly TCW Management Company) ("The TCW
Group"), a Nevada corporation, whose direct and indirect subsidiaries,
including Trust Company of the West and TCW Asset Management Company, provide a
variety of trust, investment management and investment advisory services. As of
June 30, 2001, the Investment Adviser and its affiliates had approximately $80
billion under management or committed to management. The Investment Adviser is
headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles, California
90017. Effective July 6, 2001, the Investment Adviser became an indirect
subsidiary of Societe Generale Asset Management, S.A. ("SGAM") upon the sale of
a majority of the shares of The TCW Group, Inc. to SGAM. With the combining of
the Investment Adviser and its affiliates, SGAM has over $240 billion dollars
in assets under management.
The Principal Executive Officers and Directors of the Investment Adviser,
and their principal occupations, are:
Marc I. Stern, Chairman, Thomas E. Larkin, Jr., Vice Chairman and Alvin R.
Albe, Jr., President. SGAM may be deemed to be a control person of the
Investment Adviser by virtue of the ownership of SGAM of more
9
than 50% of the outstanding voting stock of The TCW Group, Inc. Mr. Stern is
currently Chairman and Director of the Investment Adviser, President and
Director of The TCW Group, Inc. and Vice Chairman and Director of Trust Company
of the West. Mr. Larkin is currently Vice Chairman and Director of the
Investment Adviser, Executive Vice President of The TCW Group, Inc. and Vice
Chairman and Director of Trust Company of the West. Mr. Albe is an Executive
Vice President of The TCW Group, Inc., Director and Executive Vice President of
Trust Company of the West and Director and President of the Investment Adviser.
The business address of the foregoing Directors and Executive Officers is
865 South Figueroa Street, Suite 1800, Los Angeles, California 90017.
MANAGER
Morgan Stanley Services Company Inc. ("Morgan Stanley Services") is the
Trust's Manager. Morgan Stanley Services, which maintains its offices at Two
World Trade Center, New York, New York 10048, is a wholly-owned subsidiary of
Morgan Stanley Investment Advisors Inc. ("Morgan Stanley Investment Advisors").
Morgan Stanley Investment Advisors maintains its offices at Two World Trade
Center, New York, New York 10048. Morgan Stanley Investment Advisors is a
wholly-owned subsidiary of Morgan Stanley, a preeminent global financial
services firm that maintains leading market positions in each of its three
primary businesses--securities, asset management and credit services.
The Principal Executive Officer and Directors of Morgan Stanley Investment
Advisors are Mitchell M. Merin, President and Chief Executive Officer, Ronald
E. Robison, Managing Director and Chief Administrative Officer, and Barry Fink,
Managing Director, Secretary and General Counsel. The principal occupations of
Messrs. Merin, Robison and Fink are described above in the paragraph under the
section "Election of Trustees." The business address of the Executive Officer
and other Directors is Two World Trade Center, New York, New York 10048.
Morgan Stanley Investment Advisors and its wholly-owned subsidiary, Morgan
Stanley Services, serve in various investment management, advisory, management
and administrative capacities to investment companies and pension plans and
other institutional and individual investors.
Morgan Stanley has its offices at 1585 Broadway, New York, New York 10036.
There are various lawsuits pending against Morgan Stanley 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.
FEES PAID TO INDEPENDENT AUDITORS
AUDIT FEES PAID BY THE TRUST
The fees for professional services rendered by Deloitte & Touche LLP in
connection with the annual audit and review of financial statements of the
Trust for its fiscal year ended March 31, 2001 were $33,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no professional services rendered by Deloitte & Touche LLP to
the Trust, the investment advisor, or affiliated entities that provide services
to the Trust during its most recent fiscal year ended, relating to financial
information systems design and implementation.
ALL OTHER FEES
The aggregate fees for professional services rendered by Deloitte & Touche
LLP for other non-audit services provided to the Trust, the investment advisor,
the manager, and to affiliated entities that provided services to the Trust
amounted to $10.6 million, which fees related to services such as tax and
regulatory consultation, tax return preparation, agreed upon procedures,
compliance and improving business and operational processes.
10
The Audit Committee of the Trust considered whether Deloitte & Touche
LLP's provision of non-audit services is compatible with maintaining their
independence.
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 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 have been received by the date of
the Meeting.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed to
be present at the Meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares held
in street name for which the broker indicates that instructions have not been
received from the beneficial owners or other persons entitled to vote and for
which the broker does not have discretionary voting authority.
Four purported class actions have been filed in the Superior Court for the
State of California, County of Orange, against some of the Trust's Trustees and
officers, one of its underwriters, the lead representative of its underwriters,
the Adviser, the Manager and other defendants but not against the Trust by
certain shareholders of the Trust and other trusts for which the defendants act
in similar capacities. These plaintiffs generally allege violations of state
statutory and common law in connection with the marketing of the Trust to
customers of one of the underwriters. Damages, including punitive damages, are
sought in an unspecified amount. On or about October 20, 1995, the plaintiffs
filed an amended complaint consolidating these four actions. The defendants
thereafter filed answers and affirmative defenses to the consolidated amended
complaint. The defendants' answers deny all of the material allegations of the
plaintiff's complaint. In 1996, the plaintiffs voluntarily dismissed, without
prejudice, their claims against two defendants who were independent Trustees of
the Trust. In March 1997, all of the remaining defendants in the litigation
filed motions for judgment on the pleadings, seeking dismissal of all of the
claims asserted against them. The defendants' motions were fully briefed by all
parties and were the subject of a hearing before the Court on April 18, 1997. In
July 1997, the Court denied the motion for judgment on the pleadings. In August
1997, plaintiffs filed a motion for class certification. In their motion, the
plaintiffs requested certification of a "nationwide" class of Term Trust
purchasers. On June 1, 1998, the Court granted in part and denied in part the
plaintiff's motion for class certification. The Court ruled that plaintiff's
motion was "granted as to [a California] statewide class," but was "denied as to
a nationwide class." On October 13, 1998, three separate class actions alleging
similar claims on behalf of the residents of the states of Florida, New Jersey
and New York were filed in the state courts of those states. The defendants
removed the Florida action to federal court and the plaintiffs' motion to remand
the action to state court was denied. Motions to dismiss were filed by the
defendants in the Florida action in August 1999, in the New Jersey action in
July 1999 and in the New York action in September 1999. The New Jersey action
was dismissed by the Court with prejudice and no appeal was filed. The motion to
dismiss the Florida action was denied in January 2000, and the litigation
remains pending. The Supreme Court of the State of New York dismissed the New
York action with prejudice on April 25, 2000 and no appeal was filed.
Certain of the defendants in these suits have asserted their right to
indemnification from the Trust.
The ultimate outcome of these matters is not presently determinable, and
no provision has been made in the Trust's financial statements for the effect,
if any, of such matters.
11
SHAREHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than April 23, 2002 for
inclusion in the proxy statement and proxy for that meeting. The mere
submission of a proposal does not guarantee its inclusion in the proxy
materials or its presentation at the meeting. Certain rules under the federal
securities laws must be met.
REPORTS TO SHAREHOLDERS
THE TRUST'S MOST RECENT ANNUAL REPORT, FOR THE FISCAL YEAR ENDED MARCH 31,
2001, HAS BEEN PREVIOUSLY SENT TO SHAREHOLDERS AND IS AVAILABLE WITHOUT CHARGE
UPON REQUEST FROM NINA WESSEL AT MORGAN STANLEY DEAN WITTER TRUST FSB,
HARBORSIDE FINANCIAL CENTER, PLAZA TWO, 2ND FLOOR, JERSEY CITY, NEW JERSEY
07311 (TELEPHONE 1-800-869-NEWS) (TOLL-FREE).
INTEREST OF CERTAIN PERSONS
Morgan Stanley, Morgan Stanley Investment Advisors, Morgan Stanley DW,
Morgan Stanley Services, The TCW Group, Inc. and its affiliates, 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 Trust, and certain of those individuals are compensated for
performing services relating to the Trust and may also own shares of Morgan
Stanley and The TCW Group, Inc. Such companies and persons may thus be deemed
to derive benefits from the approvals by Shareholders of such proposals.
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is intended that the persons named in the attached form of proxy,
or their substitutes, will vote such proxy in accordance with their judgment on
such matters.
By Order of the Trustees
BARRY FINK
Secretary
12
APPENDIX A
CHARTER OF THE
AUDIT COMMITTEE
OF THE
TCW/DW TERM TRUSTS
The Board of Trustees (the "Board") of each fund advised or managed by TCW
Investment Management Company or Morgan Stanley Services Company Inc. (each, a
"Fund," collectively, the "Funds") has adopted and approved this charter for
the audit committee of each Fund (the "Audit Committee").
1. Structure and Membership Requirements:
1.01 The Audit Committee shall consist of at least three "independent"
trustees. "Independent" shall have the meaning ascribed to it in New
York Stock Exchange Listed Company Standard 303.01(2) and (3).
1.02 Each member of the Audit Committee shall not be an "interested person"
of the Funds, as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940.
1.03 Each member of the Audit Committee shall be "financially literate," as
such term is interpreted by the Fund's Board in its business judgment,
or must become financially literate within a reasonable period of time
after his or her appointment to the Audit Committee.
1.04 At least one member of the Audit Committee must have accounting or
related financial management expertise, as such qualification is
interpreted by the Fund's Board in its business judgment.
2. Meetings:
2.01 The Audit Committee shall meet at least twice each calendar year.
3. Duties and Powers:
3.01 Each Fund's outside auditor is ultimately accountable to the Audit
Committee and to the Board. The Audit Committee, subject to the Board's
approval and oversight, has the authority and responsibility, to
select, evaluate and, where appropriate, replace the outside auditor.
To the extent required by law, this includes nominating the selected
outside auditor to be considered for approval or ratification by
shareholders at their next annual meeting.
3.02 The Audit Committee shall approve the scope of professional services
to be provided to the Funds by the outside auditor.
3.03 The Audit Committee shall review with the outside auditor the audit
plan and results of the auditing engagement.
3.04 The Audit Committee shall review the independence of the outside
auditor, including:
(a) ensuring that the outside auditor submits to the Audit Committee,
at least annually, a letter delineating all relationships between the
auditor and the Funds;
(b) engaging in a dialogue with the outside auditor with respect to any
disclosed relationships or services that may impact the objectivity and
independence of the outside auditor; and
A-1
(c) recommending the Board take action in response to the outside
auditor's report of any of the relationships discussed in (b) above, to
the extent necessary and appropriate for the Audit Committee to satisfy
itself of the outside auditor's independence.
3.05 The Audit Committee shall oversee any other aspects of the Funds'
audit process as it deems necessary and appropriate.
3.06 The Audit Committee is empowered to review the Funds' system of
internal controls.
3.07 The Audit Committee shall have the resources and authority as it deems
appropriate to discharge its responsibilities, including the authority
to retain special counsel and other experts or consultants at the
expense of the appropriate Fund(s).
4. Review of Charter:
4.01 The Audit Committee shall review and assess the adequacy of this
charter annually.
4.02 Any changes to the charter must be recommended by the Audit Committee
and approved by the Board.
A-2
TCW/DW TERM TRUST 2003
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, Barry Fink and Robert S.
Giambrone, or any of them, proxies, each with the power of substitution, to
vote on behalf of the undersigned at the Annual Meeting of Shareholders of
TCW/DW Term Trust 2003 on October 23, 2001, at 9:00 a.m., New York City time,
and at any adjournment thereof, on the proposal set forth in the Notice of
Meeting dated August 15, 2001 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 NOMINEES FOR TRUSTEE 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.
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TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD
YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE PHONE OR BY INTERNET
(SEE ENCLOSED VOTING INFORMATION CARD FOR FURTHER INSTRUCTIONS)
TO VOTE A PROXY BY PHONE, call Toll-Free: 1-800-690-6903
TO VOTE A PROXY BY INTERNET, visit our Website(s): WWW.MSDWT.COM or
WWW.PROXYVOTE.COM
PLEASE MARK VOTES AS
[X] IN THE EXAMPLE USING
BLACK OR BLUE INK
FOR ALL
1. Election of three (3) Trustees: FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
01. Edwin J. Garn 02. Michael E. Nugent
03. 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.
Please make sure to sign and date this Proxy using black or blue ink.
Date
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Shareholder sign in the box above
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Co-Owner (if any) sign in the box above
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PLEASE FOLD AND DETACH AT PERFORATION ALONG DOTTED LINES
TCW/DW TERM TRUST 2003
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IMPORTANT
USE ONE OF THESE THREE EASY WAYS TO VOTE YOUR PROXY
1. BY MAIL. PLEASE DATE, SIGN AND RETURN THE ABOVE PROXY CARD IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
2. BY INTERNET. HAVE YOUR PROXY CARD AT HAND. GO TO THE "VOTE YOUR PROXY HERE"
LINK ON THE WEBSITE WWW.MSDWT.COM OR WWW.PROXYVOTE.COM. ENTER YOUR 12-DIGIT
CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-690-6903 ON A
TOUCH-TONE PHONE. ENTER YOUR 12-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
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MORGAN STANLEY FUNDS
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OFFERS TWO NEW WAYS TO VOTE YOUR PROXY
24 HOURS A DAY, 7 DAYS A WEEK
You can now vote your proxy in a matter of minutes with the ease and
convenience of the Internet or the telephone. You may still vote by mail.
But remember, if you are voting by Internet or telephone, do not mail the
proxy.
TO VOTE BY INTERNET:
1. Read the enclosed Proxy Statement and have your Proxy Card available.
2. Go to the "Proxy Voting" link on www.msdwt.com or to website
www.proxyvote.com.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Follow the simple instructions.
TO VOTE BY TELEPHONE:
1. Read the enclosed Proxy Statement and have your Proxy Card available.
2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Follow the simple recorded instructions.
Your Proxy Vote is Important!
Thank You for Submitting Your Proxy.
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