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-6 (e) (2) )
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11 ( c) or Section 240.14
Morgan Stanley Income Builder Fund
Morgan Stanley Intermediate Income Securities
Morgan Stanley U.S. Government Securities Trust
------------------------------------------------
(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:
MORGAN STANLEY INCOME BUILDER FUND
MORGAN STANLEY INTERMEDIATE INCOME SECURITIES
MORGAN STANLEY U.S GOVERNMENT SECURITIES TRUST
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD APRIL 22, 2003
Special Meetings of Shareholders ("Meeting(s)") of MORGAN STANLEY INCOME
BUILDER FUND, MORGAN STANLEY INTERMEDIATE INCOME SECURITIES and MORGAN STANLEY
U.S. GOVERNMENT SECURITIES TRUST, (individually, a "Fund" and, collectively,
the "Funds"), three unincorporated business trusts organized under the laws of
the Commonwealth of Massachusetts, will be held jointly in Room 209 at 1221
Avenue of the Americas, New York, New York 10020, on April 22, 2003 at 9:00
a.m., New York City time, for the following purposes:
1. For each Fund to approve or disapprove amendments to each Fund's
respective Investment Restrictions to enable the Fund to invest in
financial futures contracts and related options thereon; and
2. To transact such other business as may properly come before the
Meetings or any adjournments thereof.
Shareholders of record of each Fund as of the close of business on January
28, 2003 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 the 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 applicable Fund's shares
present in person or by proxy at the Meeting. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor of the proposal and will vote against any such adjournment those
proxies to be voted against the proposal.
BARRY FINK
Secretary
March 3, 2003
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IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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.
- --------------------------------------------------------------------------------
MORGAN STANLEY INCOME BUILDER FUND
MORGAN STANLEY INTERMEDIATE INCOME SECURITIES
MORGAN STANLEY U.S. GOVERNMENT SECURITIES TRUST
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
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JOINT PROXY STATEMENT
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SPECIAL MEETINGS OF SHAREHOLDERS
APRIL 22, 2003
This statement is furnished in connection with the solicitation of proxies
by the Boards of Trustees (the "Board(s)") of MORGAN STANLEY INCOME BUILDER
FUND, MORGAN STANLEY INTERMEDIATE INCOME SECURITIES and MORGAN STANLEY U.S.
GOVERNMENT SECURITIES TRUST (individually, a "Fund" and, collectively, the
"Funds") for use at the Special Meetings of Shareholders of the Funds to be
held jointly on April 22, 2003 (the "Meeting(s)"), and at any adjournments
thereof. The first mailing of this Proxy Statement is expected to be made on or
about March 7, 2003.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meetings, the proxies named therein will vote the shares/stock
("shares") represented by the proxy in accordance with the instructions marked
thereon. Unmarked proxies will be voted in favor of Proposal 1 set forth in the
attached Notice of Annual Meetings 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 Funds, execution and delivery of a later
dated proxy to the Secretary of the Funds (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 Meetings. Attendance at the
Meetings will not in and of itself revoke a proxy.
Shareholders of record ("Shareholders") of each Fund as of the close of
business on January 28, 2003, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meetings (the "Record
Date"), are entitled to one vote for each share held and a fractional vote for
a fractional share. On January 28, 2003, there were 17,780,564.286 shares of
beneficial interest of Morgan Stanley Income Builder Fund, 13,457,863.405
shares of beneficial interest of Morgan Stanley Intermediate Income Securities
and 537,487,502.575 shares of beneficial interest of Morgan Stanley U.S.
Government Securities Trust outstanding, all with $0.01 par value. The
following persons were known to own as much as 5% of the outstanding shares of
a class of the Funds on that date: Morgan Stanley Income Builder Fund: Class A
- -- Edwin A. Gallun c/o Metalcraft of Mayville, Inc. -- 11.81% (25,380.711
shares); Jean J. Cone TTEE, Wade M. Cone and Jean J. Cone Family TR -- 7.51%
(16,131.924 shares); MSDW Inc. Cust for Annette R. Poole IRA Rollver -- 5.78%
(12,408.088 shares). Morgan Stanley Intermediate Income Securities: Class A --
State Street BK FBO, ADP/Morgan Stanley Alliance -- 18.58% (129,066.194
shares); Robert J. Gullivar & Heather J. Gullivar Jt Ten -- 6.03% (41,884.817
shares); FIIOC FBO Syracuse Orthopedic Specialists PC Retirement Incentive
Savings Plan -- 5.97% (41,453.659 shares); Kristin Olson Jensen -- 5.12%
(35,595.043 shares); Class D -- Optimized Investment Strategies LP, Murray
Kornhauser GP -- 6.25% (64,475.623 shares). Morgan Stanley U.S. Government
Securities Trust: Class A -- State Street Bank and Trust Co. FBO ADP/Morgan
Stanley Alliance -- 57.22% (14,362,332.976 shares); Class D -- Commonwealth of
Pennsylvania, Pennsylvania Treasury
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Department -- 8.65% (2,790,178.571 shares); Commonwealth of Pennsylvania, State
Treasurer #99, Commonwealth of North STS -- Finance -- 8.25% (2,659,574.467
shares). The percentage ownership of shares of each Fund 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 of each Fund, consisting
principally of printing and mailing expenses, will be borne by each respective
Fund. The costs of preparing and mailing this Proxy Statement are expected to
approximate $18,000, for Morgan Stanley Income Builder Fund, $12,000, for
Morgan Stanley Intermediate Income Securities and $300,000, for Morgan Stanley
U.S. Government Securities Trust. The costs of printing the Proxy Statement are
allocated among the three Funds based upon the number of shareholder accounts,
and the costs of mailing the Proxy Statement for each Fund are based on the
number of shareholder accounts for each Fund. The solicitation of proxies will
be by mail, which may be supplemented by solicitation by mail, telephone or
otherwise through Trustees/Directors, officers of the Funds, or officers and
regular employees of Morgan Stanley Investment Advisors Inc. ("Morgan Stanley
Investment Advisors" or the "Investment Manager"), Morgan Stanley Trust
("Morgan Stanley Trust" or the "Transfer Agent"), Morgan Stanley Services
Company Inc. ("Morgan Stanley Services") and/or Morgan Stanley DW Inc. ("Morgan
Stanley DW"), without special compensation therefor. In addition, each Fund may
employ Alamo Direct Mail Services Inc. ("Alamo") as proxy solicitor, the cost
of which is not expected to exceed $3,000 for each Fund and will be borne by
each respective Fund.
In the event it appears that the required number of votes to achieve
quorum is not received, each Fund may utilize D.F. King & Co., Inc. ("D.F.
King"), as proxy solicitor, to obtain the necessary votes to achieve quorum at
a cost of approximately $3,000 to each Fund plus expenses as outlined below.
Shareholders 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 Internet or by
telephone, Shareholders can access the website or call the toll-free number
listed on the proxy card or noted in the enclosed voting instructions. To vote
by Internet or by telephone, Shareholders will need the "control number" that
appears on the proxy card.
In certain instances, D.F. King, Alamo and Morgan Stanley 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 Funds have 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 last vote that is counted and will revoke all previous
votes by the Shareholder. With respect to the solicitation of a telephonic vote
by D.F. King, approximate additional expenses would include $6.00 per telephone
vote transacted, $3.25 per outbound telephone contact and costs relating to
obtaining Shareholders' telephone numbers, which would be borne by each
respective Fund. With respect to telephone calls by Alamo, expenses would be
approximately $1.00 per outbound telephone contact.
3
APPROVAL OR DISAPPROVAL OF AMENDMENTS TO THE
INVESTMENT RESTRICTIONS OF MORGAN STANLEY INCOME BUILDER FUND,
MORGAN STANLEY INTERMEDIATE INCOME SECURITIES AND
MORGAN STANLEY U.S. GOVERNMENT SECURITIES TRUST
Each Fund has certain investment restrictions which are set forth in the
respective Fund's Prospectus and/or Statement of Additional Information which
are fundamental policies of the Fund. Under the Investment Company Act of 1940,
as amended ("the 1940 Act"), a fundamental policy may not be changed without
the favorable vote of a majority of the outstanding voting securities of the
Fund, as defined in the 1940 Act. Such a majority is defined as the lesser of
(a) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy, or (b) more than 50% of the outstanding shares.
On January 28, 2003, the Board of Trustees of each Fund unanimously
approved a recommendation by the Investment Manager that each Fund seek
authorization from their shareholders to amend their respective investment
restrictions to permit the Funds to invest in financial futures contracts and
related options thereon. The Investment Manager has proposed the amendments to
each Fund's investment restrictions in order to increase its flexibility in the
management of each Fund's portfolio. The Investment Manager believes that,
consistent with each Fund's investment objectives, the use of futures and
related options may enable the Investment Manager to hedge the interest rate
risks of the Funds' portfolios and possibly increase the yield of the Funds'
shares and, in the case of Morgan Stanley Income Builder Fund, to facilitate
trading, to increase or decrease the Fund's market exposure or to hedge against
a decline or increase in the prices of securities that the Fund may purchase.
If amended as proposed, the respective investment restrictions would read as
follows (the changes are italicized):
FOR MORGAN STANLEY INCOME BUILDER FUND
"The Fund may not:
7. Purchase or sell commodities, except that the Fund may purchase and
sell financial futures contracts and related options. . . .
12. Issue senior securities as defined in the Investment Company Act
except insofar as the Fund may be deemed to have issued a senior
security by reason of: (a) entering into any repurchase agreement; (b)
borrowing money; (c) purchasing any securities on a when-issued or
delayed delivery basis; (d) lending portfolio securities; or (e)
purchasing or selling any financial futures contracts and related
options...
15. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of portfolio securities. The deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin."
FOR MORGAN STANLEY INTERMEDIATE INCOME SECURITIES
"The Fund may not:
12. Issue senior securities as defined in the Investment Company Act
except insofar as the Fund may be deemed to have issued a senior
security by reason of borrowing money in accordance with restriction
(6) above [borrowing], or by purchasing or selling financial futures
contracts and related options....
15. Purchase or sell commodities or commodities futures contracts, except
that the Fund may purchase or sell financial futures contracts and
related options...
4
16. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of portfolio securities; the deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin."
FOR MORGAN STANLEY U.S. GOVERNMENT SECURITIES TRUST
"The Fund may not:
1. Purchase any securities other than obligations issued or guaranteed by
the United States Government, except that the Fund may purchase and
sell financial futures contracts and related options with respect to
such securities. Obligations issued or guaranteed by the United States
Government are backed by the full faith and credit of the United
States and there is no limit on the amount of the Fund's assets which
may be invested in the securities of any one issuer of such
obligations. . . .
4. Sell securities short or purchase securities on margin. The deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin.
6. Issue senior securities as defined in the Act except insofar as the
Fund may be deemed to have a senior security by reason of (a)
borrowing money in accordance with restriction (2) described above
[borrowing], or (b) by purchasing securities on a when-issued or
delayed delivery basis or purchasing or selling securities on a
forward commitment basis; or (c) purchasing or selling any financial
futures contracts and related options."
FUTURES CONTRACTS AND OPTIONS ON FUTURES
If the shareholders approve the amendments to the investment restrictions,
each Fund would be able to invest in financial futures contracts ("futures
contracts") and related options thereon as described below. For example, a
particular Fund may sell a futures contract or purchase a put option on such
futures contract if the Investment Manager anticipates interest rates to rise
or as a hedge against a decrease in the value of each Fund's fixed-income
portfolio securities. If the Investment Manager anticipates that interest rates
will decline, the Fund may purchase a futures contract or a call option thereon
to protect against an increase in the price of the securities the Fund intends
to purchase. In the case of Morgan Stanley Intermediate Income Securities and
Morgan Stanley U.S. Government Securities Trust, futures contracts and related
options thereon will be used primarily as a hedge against anticipated interest
rate changes. Morgan Stanley Income Builder Fund will use futures contracts and
options thereon primarily to lock in a price at which the Fund may purchase or
sell a security or to protect against declines in the value of the Fund's
portfolio securities or against increases in the prices of securities that the
Fund may purchase.
A futures contract sale creates an obligation by the Fund, as seller, to
deliver the specific type of instrument called for in the contract at a
specified future time for a specified price. A futures contract purchase would
create an obligation by the Fund, as purchaser, to take delivery of the
specific type of financial instrument at a specified future time at a specified
price. The specific securities delivered or taken, respectively, at settlement
date, would not be determined until or near that date. The determination would
be in accordance with the rules of the exchange on which the futures contract
sale or purchase was effected.
Although the terms of futures contracts specify actual delivery or receipt
of securities, in most instances the contracts are closed out before the
settlement date without making or taking of delivery of the securities. Closing
out of a futures contract is effected by entering into an off-setting purchase
or sale transaction. An off-setting transaction for a futures contract sale is
effected by the Fund entering into a futures contract purchase for the same
aggregate amount of the specific type of financial instrument and same delivery
date. If
5
the price in the sale exceeds the price in the off-setting purchase, the Fund
is immediately paid the difference and thus realizes a gain. If the off-setting
purchase price exceeds the sale price, the Fund pays the difference and
realizes a loss. Similarly, the closing out of a futures contract purchase is
effected by the Fund entering into a futures contract sale. If the off-setting
sale price exceeds the purchase price, the Fund realizes a gain, and if the
off-setting sale price is less than the purchase price, the Fund realizes a
loss.
If any Fund enters into a futures contract, it is initially required to
deposit an "initial margin" of cash, U.S. government securities or other liquid
portfolio securities ranging from approximately 2% to 5% of the contract
amount. Initial margin requirements are established by the exchanges on which
futures contracts trade and may, from time to time, change. In addition,
brokers may establish margin deposit requirements in excess of those required
by the exchanges. Initial margin in futures transactions is different from
margin in securities transactions in that initial margin does not involve the
borrowing of funds by a broker's client but is, rather, a good faith deposit on
the futures contract which will be returned to the Fund upon the proper
termination of the futures contract. The margin deposits made are marked to
market daily and the Fund may be required to make subsequent deposits of cash,
U.S. government securities or other liquid portfolio securities, called
"variation margin," which are reflective of price fluctuations in the futures
contract.
A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities (and
thereby the futures contract prices) subject to futures contracts may correlate
imperfectly with the behavior of the cash prices of the Funds' portfolio
securities. Also, the prices of futures contracts may not move in tandem with
the changes in prevailing interest rates or market movements against which the
Funds seek a hedge.
Another risk is that the Investment Manager could be incorrect in its
expectations as to the direction or extent of various interest rate movements
or the time span within which the movements take place. For example, if any of
the Funds sold futures contracts for the sale of securities in anticipation of
an increase in interest rates, and then interest rates went down instead,
causing bond prices to rise, the Fund would lose money on the sale; however,
the loss may be offset by an increase in the value of the underlying
securities.
Options on futures contracts involves purchasing and writing call and put
options on futures contracts and entering into closing transactions with
respect to such options to terminate an existing position. An option on a
futures contract gives the purchaser the right (in return for the premium
paid), and the writer the obligation, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the term of
the option. Upon exercise of the option, the delivery of the futures position
by the writer of the option to the holder of the option is accompanied by
delivery of the accumulated balance in the writer's futures margin account,
which represents the amount by which the market price of the futures contract
at the time of exercise exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures contract. The
writer of an option on a futures contract is required to deposit initial and
variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.
In addition to the risks described below which apply to all options
transactions, there are several special risks relating to options on futures,
in particular, the ability to establish and close out positions on such options
will be subject to the development and maintenance of a liquid secondary
market. It is not certain that this market will develop or be maintained.
If the Funds are permitted to invest in futures contracts and related
options thereon, they may not, however, enter into futures contracts or related
options thereon if immediately thereafter the amount committed to margin plus
the amount paid for option premiums exceeds 5% of the value of each Fund's
total
6
assets, after taking into account unrealized gains and unrealized losses on
such contracts into which it has entered; provided, however, that in the case
of an option that is in-the-money (the exercise price of the call (put) option
is less (more) than the market price of the underlying security) at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
However, there is no overall limitation on the percentage of each Fund's net
assets which may be subject to a hedge position.
There is no assurance that a liquid secondary market will exist for
futures contracts and related options in which the Funds may invest. In the
event a liquid market does not exist, it may not be possible to close out a
futures position and, in the event of adverse price movements, the Funds would
continue to be required to make daily cash payments of variation margin. The
absence of a liquid market in futures contracts might cause the Funds to make
or take delivery of the underlying securities at a time when it may be
disadvantageous to do so.
Exchanges also limit the amount by which the price of a futures contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit moves have ceased. In the event of adverse price movements, the
Funds would continue to be required to make daily cash payments of variation
margin on open futures positions. In these situations, if the Funds have
insufficient cash, they may have to sell portfolio securities to meet daily
variation margin requirements at a time when it may be disadvantageous to do
so. In addition, the Funds may be required to take or make delivery of the
instruments underlying interest rate futures contracts they hold at a time when
it is disadvantageous to do so. The inability to close out options and futures
positions could also have an adverse impact on the respective Fund's ability to
effectively hedge its portfolio. When required by law, the Funds will cover
certain futures positions and options thereon either through the maintenance of
segregated accounts or other permissible means.
In considering whether to recommend the adoption of the proposed
amendments, the Board of Trustees took cognizance of each Fund's primary
investment objective to provide either a high level of current income (Morgan
Stanley Intermediate Income Securities and Morgan Stanley U.S. Government
Securities Trust) or reasonable income (Morgan Stanley Income Builder Fund) for
distribution to shareholders as is consistent with prudent investment risk and
determined that the increased portfolio management flexibility in terms of
hedging and managing interest rate risk resulting from the adoption of these
amendments would be beneficial to each Fund in attempting to realize its
investment objective. The Trustees also noted that other registered investment
companies with similar investment objectives and policies managed by the Funds'
Investment Manager have the ability to invest in futures contracts and options
thereon and determined that these investment techniques should also be made
available to the Funds. After evaluating all factors considered relevant to the
matter, including the risks and costs associated with the use of futures and
options thereon, the Board of Trustees unanimously concluded that the adoption
of the amendments would be in the best interest of each Fund and its
shareholders.
A majority of the outstanding voting securities of each Fund is required
in order to approve the amendments to the Fund's investment restrictions. Such
a majority is defined as the affirmative vote of the holders of (a) 67% or more
of the shares of the Fund 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 Fund, whichever is less.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS APPROVE THE
PROPOSED AMENDMENTS TO EACH FUND'S INVESTMENT RESTRICTIONS.
THE INVESTMENT MANAGER
Morgan Stanley Investment Advisors currently serves as each Fund's
investment manager or investment advisor pursuant to an investment management
agreement. Morgan Stanley Investment Advisors maintains its
7
offices at 1221 Avenue of the Americas, New York, New York 10020. Morgan
Stanley Investment Advisors is a wholly-owned subsidiary of Morgan Stanley, a
preeminent global securities 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 business address of the
Executive Officer and other Directors is 1221 Avenue of the Americas, New York,
New York 10020.
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.
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.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal for any Fund is not obtained at the
Meetings, the persons named as proxies may propose one or more adjournments of
the Meeting of the applicable Fund to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of the holders of a
majority of the applicable Fund's shares present in person or by proxy at the
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the Proposal and will
vote against any such adjournment those proxies to be voted against the
Proposal. Abstentions and broker "non-votes" will not count in favor of or
against any such vote for adjournment.
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 of any Fund 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
The Funds do not hold regular shareholders' meetings. Proposals of
Shareholders of any Fund intended to be presented at a future meeting of
Shareholders must be received a reasonable time prior to the mailing of the
proxy materials to be sent in connection with that meeting in order to be
included in the proxy statement for that meeting.
REPORTS TO SHAREHOLDERS
EACH FUND'S MOST RECENT ANNUAL REPORT, AND FOR MORGAN STANLEY U.S.
GOVERNMENT SECURITIES TRUST, THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE
ANNUAL REPORT, PREVIOUSLY HAS BEEN SENT TO SHAREHOLDERS AND IS AVAILABLE
WITHOUT CHARGE UPON REQUEST FROM NINA WESSEL AT MORGAN STANLEY TRUST,
HARBORSIDE FINANCIAL CENTER, PLAZA TWO, 2ND FLOOR, JERSEY CITY, NJ 07311
(TELEPHONE 1-800-869-NEWS) (TOLL-FREE).
INTEREST OF CERTAIN PERSONS
Morgan Stanley, Morgan Stanley Investment Advisors, Morgan Stanley DW,
Morgan Stanley Services, and certain of their respective Directors, Officers,
and employees, including persons who are Trustees/Directors or
8
Officers of the Funds, 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 Funds, and certain of those individuals are compensated for
performing services relating to the Funds and may also own shares of Morgan
Stanley. 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 Funds knows of no other matters which may be
presented at the Meetings. However, if any matters not now known properly come
before the Meetings, 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 Boards of Trustees/Directors
BARRY FINK
Secretary
9
MORGAN STANLEY
U.S. GOVERNMENT SECURITIES TRUST
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, 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 Special Meeting of Shareholders of
Morgan Stanley U.S. Government Securities Trust on April 22, 2003, at 9:00
a.m., New York time, and at any adjournment thereof, on the proposals set forth
in the Notice of Meeting dated March 3, 2003 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 PROPOSAL 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.
- --------------------------------------------------------------------------------
PLEASE MARK VOTES AS
IN THE EXAMPLE USING [X]
BLACK OR BLUE INK
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: 1-800-597-7836
TO VOTE A PROXY BY INTERNET, visit our Website: https://vote.proxy-direct.com
FOR AGAINST ABSTAIN
1. Approval of Amendments to the Fund's [ ] [ ] [ ]
Investment Restrictions to permit the use of futures contracts and related
options
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 FOLD AND DETACH AT PERFORATION ALONG DOTTED LINES | |
MORGAN STANLEY
U.S. GOVERNMENT SECURITIES TRUST
- --------------------------------------------------------------------------------
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 HTTPS://VOTE.PROXY-DIRECT.COM. ENTER YOUR 14-DIGIT
CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-597-7836 ON A
TOUCH-TONE PHONE. ENTER YOUR 14-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
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PRX00123
MORGAN STANLEY
INCOME BUILDER FUND
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, 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 Special Meeting of Shareholders of
Morgan Stanley Income Builder Fund on April 22, 2003, at 9:00 a.m., New York
time, and at any adjournment thereof, on the proposal set forth in the Notice
of Meeting dated March 3, 2003 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 PROPOSAL 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.
- --------------------------------------------------------------------------------
PLEASE MARK VOTES AS TO
IN THE EXAMPLE USING [X]
BLACK OR BLUE INK
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: 1-800-597-7836
TO VOTE A PROXY BY INTERNET, visit our Website: https://vote.proxy-direct.com
FOR AGAINST ABSTAIN
1. Approval of Amendments to the Fund's [ ] [ ] [ ]
Investment Restrictions to permit the use of futures contracts and related
options.
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 FOLD AND DETACH AT PERFORATION ALONG DOTTED LINES | |
MORGAN STANLEY
INCOME BUILDER FUND
- --------------------------------------------------------------------------------
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 HTTPS://VOTE.PROXY-DIRECT.COM. ENTER YOUR 14-DIGIT
CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-597-7836 ON A
TOUCH-TONE PHONE. ENTER YOUR 14-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
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PRX00116
MORGAN STANLEY
INTERMEDIATE INCOME SECURITIES
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, 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
Morgan Stanley Intermediate Income Securities on April 22, 2003, at 9:00 a.m.,
New York time, and at any adjournment thereof, on the proposal set forth in the
Notice of Meeting dated March 3, 2003 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 PROPOSAL 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.
- --------------------------------------------------------------------------------
PLEASE MARK VOTES AS TO
IN THE EXAMPLE USING [X]
BLACK OR BLUE INK
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: 1-800-597-7836
TO VOTE A PROXY BY INTERNET, visit our Website: https://vote.proxy-direct.com
FOR AGAINST ABSTAIN
1. Approval of Amendments to the Fund's [ ] [ ] [ ]
Investment Restrictions to permit the use of futures contracts and related
options.
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 FOLD AND DETACH AT PERFORATION ALONG DOTTED LINES | |
MORGAN STANLEY
INTERMEDIATE INCOME SECURITIES
- --------------------------------------------------------------------------------
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 HTTPS://VOTE.PROXY-DIRECT.COM. ENTER YOUR 14-DIGIT
CONTROL NUMBER LOCATED ON THE PROXY CARD AND FOLLOW THE SIMPLE
INSTRUCTIONS.
3. BY TELEPHONE. HAVE YOUR PROXY CARD AT HAND. CALL 1-800-597-7836 ON A
TOUCH-TONE PHONE. ENTER YOUR 14-DIGIT CONTROL NUMBER LOCATED ON THE PROXY
CARD AND FOLLOW THE SIMPLE RECORDED INSTRUCTIONS.
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PRX00118
- --------------------------------------------------------------------------------
MORGAN STANLEY FUNDS
- --------------------------------------------------------------------------------
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 "Vote Your Proxy Here" link on the website
https://vote.proxy-direct.com.
3. Enter the 14-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 1-800-597-7836.
3. Enter the 14-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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