UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to § 240.14a-12
MORGAN STANLEY INSTITUTIONAL FUND, INC.
MORGAN STANLEY INSTITUTIONAL FUND TRUST
(Names of Registrants as Specified in Their Charters)
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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) | Total fee paid:______________________ |
[ ] Fee paid previously with preliminary materials.
[ ] | 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 the 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 INSTITUTIONAL FUND, INC.
MORGAN STANLEY INSTITUTIONAL FUND TRUST
c/o Morgan Stanley Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
To Our Shareholders:
Notice is hereby given that Special Meetings of Shareholders of each portfolio (each, a ‘‘Portfolio’’ and, collectively, the ‘‘Portfolios’’) of Morgan Stanley Institutional Fund, Inc. and Morgan Stanley Institutional Fund Trust (each a ‘‘Company’’ and collectively, the ‘‘Companies’’) will be held on Tuesday, August 1, 2006, at the offices of Morgan Stanley Investment Management Inc., 1221 Avenue of the Americas, 3rd Floor, New York, New York 10020, at 10:30 a.m., Eastern Time.
The Meetings are being held for the following purposes:
1. | To elect Trustees/Directors of the Companies. |
2. | To modify certain fundamental investment restrictions of the Portfolios. |
3. | To consider and act upon any other business as may properly come before the Meeting or any adjournment thereof. |
Only shareholders of record of a particular Portfolio at the close of business on May 30, 2006, the record date for the Meetings, are entitled to notice of, and to vote at, the Meeting of that Portfolio or any adjournments thereof.
MARY E. MULLIN Secretary |
Dated: June 14, 2006
If you do not expect to attend the Meeting(s) for your Company(s), please sign and promptly return the enclosed Proxy Card(s) in the enclosed self-addressed envelope or vote by telephone or electronically on the Internet as indicated in each Company’s Proxy Card. In order to avoid the additional expense to the Companies of further solicitation, we ask your prompt cooperation in mailing in your Proxy Card(s) or voting by telephone or electronically on the Internet.
MORGAN STANLEY INSTITUTIONAL FUND, INC. (‘‘MSIF, INC.’’)
(a company consisting of 22 separate portfolios)
MORGAN STANLEY INSTITUTIONAL FUND TRUST (‘‘MSIF TRUST’’)
(a company consisting of 20 separate portfolios)
c/o Morgan Stanley Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
JOINT PROXY STATEMENT
Special Meetings of Shareholders
August 1, 2006
This statement is furnished by the Board of Trustees/Directors (each a ‘‘Board’’ and collectively, the ‘‘Boards’’) of each of the Companies listed above (each, a ‘‘Company’’ and, collectively, the ‘‘Companies’’) in connection with the solicitation of Proxies by the Board for use at the Special Meeting of Shareholders of each portfolio (each, a ‘‘Portfolio’’ and, collectively, the ‘‘Portfolios’’) of each Company (each, a ‘‘Meeting’’ and, collectively, the ‘‘Meetings’’) to be held on Tuesday, August 1, 2006, at the principal executive office of the investment adviser for each Company, Morgan Stanley Investment Management Inc. (hereinafter ‘‘MSIM’’ or the ‘‘Adviser’’), 1221 Avenue of the Americas, 3rd Floor, New York, New York 10020. It is expected that the Notice of Special Meetings, Joint Proxy Statement and Proxy Card(s) will first be mailed to holders of common stock of MSIF, Inc. and to holders of shares of beneficial interest of MSIF Trust (each, a ‘‘Shareholder’’ and, collectively, the ‘‘Shareholders’’) on or about June 14, 2006. The purpose of the Meetings, the matters to be acted upon and the commencement time of each Meeting are set forth in the accompanying Notice of Special Meetings of Shareholders.
If the accompanying Proxy Card for a Portfolio is executed properly and returned, shares represented by it will be voted at the Meeting for that Portfolio in accordance with the instructions on the Proxy Card. A Proxy may be revoked at any time prior to the time it is voted (i) by written notice to the Secretary of the Company or (ii) by attendance and voting at the Meeting of the Portfolio. If no instructions are specified, shares will be voted FOR each Proposal.
The Board has fixed the close of business on May 30, 2006 as the record date for the determination of Shareholders entitled to notice of, and to vote at, the Meetings and at any adjournments thereof. See Exhibit A for information relating to the number of shares of each Portfolio outstanding and entitled to vote.
The expense of solicitation, consisting primarily of printing and mailing, is estimated at $5,185,054 and will be borne by each respective Portfolio based on its net assets and will include reimbursement to brokerage firms and others for reasonable expenses in forwarding proxy solicitation materials to beneficial owners. The solicitation of Proxy Cards will be largely by mail, but may include, without cost to the Portfolios, telephonic, telegraphic, online or oral communications by regular employees of certain affiliates of each Company, including MSIM, having as its principal office 1221 Avenue of the Americas, New York, New York 10020, who will receive no extra compensation for their services. The solicitation of Proxy Cards is also expected to include communications by employees of Computershare Fund Services (‘‘Computershare’’), a proxy solicitation firm expected to be engaged by each Company, on behalf of the Portfolios, to solicit Proxy Cards by mail or by telephonic, telegraphic or oral communications at a cost not expected to exceed $7,500, plus out-of-pocket expenses.
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 Joint Proxy Statement. To vote by touchtone telephone or by Internet, 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 touchtone telephone or by Internet, Shareholders will need the number that appears on the Proxy Card in the shaded box.
In certain instances, Computershare 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 Boards. The Companies 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 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 Joint 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 solicitation expenses incurred for reminder calls, outbound telephone voting, confirmation of telephone votes, inbound telephone contact, obtaining Shareholders’ telephone numbers, and providing additional materials upon Shareholder request, Computershare will be paid at an estimated cost of $831,467, which would be borne by the Companies.
Each Company will furnish, without charge, a copy of its most recent annual report or semi-annual report to any Shareholder of such Company requesting such reports. Requests for annual and/or semi-annual reports should be made in writing to the respective Company, c/o JPMorgan Investor Services Co., P.O. Box 2798, Boston, Massachusetts 02208-2798, by calling 1-800-221-6726 or by visiting the Adviser’s Internet website at www.morganstanley.com/im.
Morgan Stanley Investment Management Inc. serves as each Company’s administrator. JPMorgan Investor Services Co. also provides administrative services to each Company. The business address of JPMorgan Investor Services Co. is 73 Tremont Street, Boston, Massachusetts 02108-2798.
This Joint Proxy Statement is being used in order to reduce the preparation, printing, handling and postage expenses that would result from the use of a separate proxy statement for each Company. Shares of a Company are entitled to one vote each at the respective Company’s Meeting and each fraction of a share will be entitled to the fraction of a vote equal to the proportion of a full share represented by the fractional share. To the extent information relating to common ownership is available to the Companies, a Shareholder that owns record shares in both Companies will receive a package containing a Joint Proxy Statement and Proxy Cards for both Companies. If the information relating to common ownership is not available to the Companies, a Shareholder that beneficially owns shares in both Companies may receive two or more packages each containing a Joint Proxy Statement and a Proxy Card for each Company in which such Shareholder is a beneficial owner. If the proposed election of Trustees/Directors is approved by Shareholders of one Company and disapproved by Shareholders of the other Company, the Proposal will be implemented for the Company that approved the Proposal and will not be implemented for the Company that did not approve the Proposal. Thus, it is essential that Shareholders complete, date, sign and return each enclosed Proxy Card or vote by telephone as indicated in each Company’s Proxy Card.
The Shareholders are being solicited and are entitled to vote on Proposals 1 and 2, which are outlined as follows:
Proposal 1 | For all Portfolios | To elect Trustees/Directors of each Company | ||||
Proposal 2 | For all Portfolios (except the Money Market and Municipal Money Market Portfolios of MSIF, Inc.) | To modify certain of the fundamental policies of the Portfolios | ||||
Under the By-Laws of MSIF, Inc., the presence at a meeting in person or by proxy of Shareholders entitled to cast a majority of the votes entitled to be cast thereat shall constitute a quorum. Under the By-Laws of MSIF Trust, 40% of the Shares entitled to vote shall constitute a quorum. For this purpose, abstentions and broker ‘‘non-votes’’ will be counted in determining whether a quorum is present at the Meeting, but will not be counted as votes cast at the Meeting.
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At a meeting held on April 25, 2006, the Board of each Company determined that it was in the best interest of the Company to approve each Proposal. After careful consideration, the Board approved the submission of each Proposal to Shareholders for their approval.
The Board of each Company unanimously recommends that you cast your vote ‘‘For’’ each Proposal set forth in this Proxy Statement as follows:
• | The election of all of the nominees as Trustees/Directors as set forth in Proposal 1. |
• | The modification of certain of the fundamental policies of the Portfolios as set forth in Proposal 2. |
Your vote is important. Please return your Proxy Card promptly no matter how many shares you own.
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PROPOSAL 1 — ELECTION OF TRUSTEES/DIRECTORS
At the Meetings, Shareholders of each Company will be asked to consider the election of four individuals to the Board of Trustees/Directors of that Company to hold office until their successors are duly elected and qualified. The same four individuals are nominees for each Company’s Board. It is the intention of the persons named in the accompanying Proxy Cards to vote, on behalf of the Shareholders, for the election of Frank L. Bowman, Kathleen A. Dennis, Michael F. Klein and W. Allen Reed as Trustees/Directors for an indefinite term commencing on August 1, 2006, for all Companies.
Pursuant to each Company’s By-Laws, each Trustee/Director holds office until (i) his or her successor has been elected and qualified, (ii) his or her death, (iii) his or her resignation or (iv) his or her removal as provided by statute or the charter.
Information Regarding Trustees/Directors and Nominee Trustees/Directors
Certain information regarding the incumbent Trustees/Directors of the Companies and nominees for election as Trustees/Directors is set forth below:
Name, Address and Age | Position(s) Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/ Director | Other Directorships Held by Trustee/ Director | ||||||||||
Interested Incumbent Trustees/Directors | |||||||||||||||
Charles A. Fiumefreddo* (73) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311 | Trustee/Director and Chairman of the Board of each of the Companies | Since July 2003 | Chairman and Director or Trustee of the funds advised by Morgan Stanley Investment Advisors, Inc. (the ‘‘Retail Funds’’) (since July 1991) and various U.S. registered investment companies managed by MSIM (the ‘‘Institutional Funds’’) (since July 2003); formerly Chief Executive Officer of the Retail Funds (until September 2002). | 187 | None. | ||||||||||
James F. Higgins* (58) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311 | Trustee/Director of each of the Companies | Since July 2003 | Director or Trustee of the Retail Funds (since June 2000) and the Institutional Funds (since July 2003); Senior Advisor of Morgan Stanley (since August 2000); Director of Dean Witter Realty Inc. | 187 | Director of AXA Financial, Inc. and The Equitable Life Assurance Society of the United States (financial services). | ||||||||||
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Name, Address and Age | Position Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/Director or Nominee for Trustee/ Director | Other Directorships Held by Trustee/Director or Nominee for Trustee/Director | ||||||||||
Independent Nominees for Trustee/Director | |||||||||||||||
Frank L. Bowman (61) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Nominee | N/A | President and Chief Executive Officer of the Nuclear Energy Institute (since February 2005) (policy organization); formerly variously, Admiral in the U.S. Navy, Director of Naval Nuclear Propulsion Program and Deputy Administrator—Naval Reactors in the National Nuclear Security Administration at the U.S. Department of Energy (1996-2004), Honorary Knight Commander of the Most Excellent Order of the British Empire. | 187 | Director of the National Energy Foundation, the U.S. Energy Association, the American Council for Capital Formation and the Armed Services YMCA of the USA. | ||||||||||
Kathleen A. Dennis (52) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Nominee | N/A | President, Cedarwood Associates (since 2006) (mutual fund consulting); formerly, Senior Managing Director of Victory Capital Management (1993-2006). | 187 | None. | ||||||||||
Michael F. Klein (47) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Nominee | N/A | Chief Operating Officer and Managing Director, Aetos Capital, LLC (since March 2000); Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management and President, Morgan Stanley Institutional Funds (June 1998-March 2000); Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997- December 1999). | 187 | Director of certain investment funds managed or sponsored by Aetos Capital LLC. | ||||||||||
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Name, Address and Age | Position Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/Director or Nominee for Trustee/ Director | Other Directorships Held by Trustee/Director or Nominee for Trustee/Director | ||||||||||
Independent Nominees for Trustee/Director | |||||||||||||||
W. Allen Reed (59) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Nominee | N/A | President and CEO of General Motors Asset Management, Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994- December 2005). | 187 | Director of GMAC (financial services), GMAC Insurance Holdings, iShares, Inc. (Exchange Traded Funds), and Temple-Inland Industries (Packaging, Banking and Forrest Products); member of the Board of Executives of the New York Stock Exchange, the Investment Advisory Committee for the New York State Retirement System and the Morgan Stanley Capital International Editorial Board; Director of various investment fund advisory boards. | ||||||||||
Independent Incumbent Trustees/Directors | |||||||||||||||
Michael Bozic (65) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Trustee/Director | Since July 2003 | Private investor; Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); formerly Vice Chairman of Kmart Corporation (December 1998- October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995- November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991- July 1995); formerly variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck & Co. | 187 | Director of various business organizations. | ||||||||||
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Name, Address and Age | Position Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/Director or Nominee for Trustee/ Director | Other Directorships Held by Trustee/Director or Nominee for Trustee/Director | ||||||||||
Independent Incumbent Trustees/Directors | |||||||||||||||
Edwin J. Garn (73) 1031 North Chartwell Court Salt Lake City, UT 84103 | Trustee/Director | Since July 2003 | Consultant; Director or Trustee of the Retail Funds (since January 1993) and the Institutional Funds (since July 2003); member of the Utah Regional Advisory Board of Pacific Corp. (utility company); formerly Managing Director of Summit Ventures LLC (lobbying and consulting firm) (2000- 2004); United States Senator (R-Utah) (1974-1992) and Chairman, Senate Banking Committee (1980-1986), Mayor of Salt Lake City, Utah (1971-1974), Astronaut, Space Shuttle Discovery (April 12-19, 1985), and Vice Chairman, Huntsman Corporation (chemical company). | 187 | Director of Franklin Covey (time management systems), BMW Bank of North America, Inc. (industrial loan corporation), Escrow Bank USA (industrial loan corporation), United Space Alliance (joint venture between Lockheed Martin and the Boeing Company) and Nuskin Asia Pacific (multilevel marketing); member of the board of various civic and charitable organizations. | ||||||||||
Wayne E. Hedien (72) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees/Directors 1177 Avenue of the Americas New York, NY 10036 | Trustee/Director | Since July 2003 | Retired; Director or Trustee of the Retail Funds (since September 1997) and the Institutional Funds (since July 2003); 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). | 187 | Director of The PMI Group Inc. (private mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural History; Director of various other business and charitable organizations. | ||||||||||
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Name, Address and Age | Position Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/Director or Nominee for Trustee/ Director | Other Directorships Held by Trustee/Director or Nominee for Trustee/Director | ||||||||||
Independent Incumbent Trustees/Directors | |||||||||||||||
Dr. Manuel H. Johnson (57) c/o Johnson Smick Group Inc. 888 16th Street, N.W. Suite 740 Washington, D.C. 20006 | Trustee/Director | Since July 2003 | Senior Partner, Johnson Smick International, Inc., a consulting firm; Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); Co-Chairman and a founder of the Group of Seven Council (G7C), an international economic commission; formerly Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury. | 187 | Director of NVR, Inc. (home construction); Director of KFX Energy; Director of RBS Greenwich Capital Holdings (financial holding company). | ||||||||||
Joseph J. Kearns (63) c/o Kearns & Associates LLC PMB 754 23852 Pacific Coast Highway Malibu, CA 90265 | Trustee/Director | Since August 1994 | President, Kearns & Associates LLC (investment consulting); Deputy Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since August 1994); previously Chairman of the Audit Committee of the Institutional Funds (October 2001- July 2003); formerly Chief Financial Officer of The J. Paul Getty Trust. | 188 | Director of Electro Rent Corporation (equipment leasing), The Ford Family Foundation and the UCLA Foundation. | ||||||||||
Michael E. Nugent (70) c/o Triumph Capital, L.P. 445 Park Avenue New York, NY 10022 | Trustee/Director | Since July 2001 | General Partner of Triumph Capital, L.P., a private investment partnership; Chairman of the Insurance Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2001); formerly Vice President, Bankers Trust Company and BT Capital Corporation (1984-1988). | 187 | None. | ||||||||||
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Name, Address and Age | Position Held with Companies | Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee/Director or Nominee for Trustee/ Director | Other Directorships Held by Trustee/Director or Nominee for Trustee/Director | ||||||||||
Independent Incumbent Trustees/Directors | |||||||||||||||
Fergus Reid (73) c/o Lumelite Plastics Corporation 85 Charles Colman Boulevard Pawling, NY 12564 | Trustee/Director | Since June 1992 | Chairman of Lumelite Plastics Corporation; Chairman of the Governance Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since June 1992). | 188 | Trustee and Director of certain investment companies in the JPMorgan Funds complex managed by J.P. Morgan Investment Management Inc. | ||||||||||
(1) | This is the earliest date the Trustee began serving the Institutional Funds. |
* | ‘‘Interested person’’ of the Companies within the meaning of the Investment Company Act of 1940, as amended (the ‘‘Investment Company Act’’). Mr. Fiumefreddo is the former Chairman, Chief Executive Officer and Director of Morgan Stanley Investment Advisors Inc. (‘‘MSIA’’), which is the investment adviser of the Retail Funds and affiliated with the Adviser. Mr. Higgins is Senior Advisor to Morgan Stanley, of which the Adviser is a subsidiary. |
No Trustee/Director or nominee for election as Trustee/Director who is not an interested person of the Companies, or any immediate family member of such person, owns securities in the Adviser, or a person directly or indirectly controlling, controlled by, or under common control with the Adviser.
Certain information regarding the executive officers of the Companies is set forth below:
Name, Address and Age | Position(s) Held with the Companies, and Length of Time Served | Principal Occupation(s) During Past Five Years | ||||
Ronald E. Robison* (67) 1221 Avenue of the Americas New York, NY 10020 | President since September 2005 and Principal Executive Officer since May 2003 or since Inception Date | President (since September 2005) and Principal Executive Officer (since May 2003) of funds in the Fund Complex; President (since September 2005) and Principal Executive Officer (since May 2003) of the Van Kampen Funds; Managing Director, Director and/or Officer of MSIM and various entities affiliated with MSIM; Director of Morgan Stanley SICAV (since May 2004). Formerly, Executive Vice President (July 2003-September 2005) of funds in the Fund Complex and the Van Kampen Funds; President and Director of the Institutional Funds (March 2001 – July 2003); Chief Global Operating Officer of the Adviser; Chief Administrative Officer of MSIM; Chief Administrative Officer of Morgan Stanley Services Company Inc. | ||||
J. David Germany* (51) Morgan Stanley Investment Management Ltd. 25 Cabot Square Canary Wharf London, United Kingdom E144QA | Vice President since February 2006 or since Inception Date | Managing Director and (since December 2005) Chief Investment Officer—Global Fixed Income of MSIM; Managing Director and Director of Morgan Stanley Investment Management Ltd.; Vice President (since February 2006) of the Retail Funds and the Institutional Funds. | ||||
Dennis F. Shea* (53) 1221 Avenue of the Americas New York, NY 10020 | Vice President since February 2006 or since Inception Date | Managing Director and (since February 2006) Chief Investment Officer—Global Equity of MSIM; Vice President (since February 2006) of the Retail Funds and the Institutional Funds. Formerly, Managing Director and Director of Global Equity Research at Morgan Stanley. | ||||
* | ‘‘Interested person’’ of the Companies within the meaning of the Investment Company Act. Messrs. Robison, Germany, Shea, Fink, Otto and Garrett, and Ms. Doberman, Chang Yu and Mullin are also officers of the Adviser or its affiliates. |
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Name, Address and Age | Position(s) Held with the Companies, and Length of Time Served | Principal Occupation(s) During Past Five Years | |||||||||||||
Barry Fink* (51) 1221 Avenue of the Americas New York, NY 10020 | Vice President since July 2003 or since Inception Date | Managing Director and General Counsel of Morgan Stanley Investment Management; Managing Director of MSIM, and various entities affiliated with MSIM; Vice President of the Retail Funds and (since July 2003) the Institutional Funds. Formerly, Secretary, General Counsel and/or Director of MSIM and various entities affiliated with MSIM; Secretary and General Counsel of the Retail Funds. | |||||||||||||
Amy R. Doberman* (44) 1221 Avenue of the Americas New York, NY 10020 | Vice President since July 2004 or since Inception Date | Managing Director and General Counsel, U.S. Investment Management of Morgan Stanley Investment Management (since July 2004); Vice President of the Retail Funds and the Institutional Funds (since July 2004); Vice President of the Van Kampen Funds (since August 2004); Secretary (since February 2006) and Managing Director (since July 2004) of MSIM and various entities affiliated with MSIM. Formerly, Managing Director and General Counsel—Americas, UBS Global Asset Management (July 2000-July 2004). | |||||||||||||
Carsten Otto* (42) 1221 Avenue of the Americas New York, NY 10020 | Chief Compliance Officer since October 2004 or since Inception Date | Managing Director and U.S. Director of Compliance for Morgan Stanley Investment Management (since October 2004); Managing Director and Chief Compliance Officer of MSIM. Formerly, Assistant Secretary and Assistant General Counsel of the Retail Funds. | |||||||||||||
Stefanie V. Chang Yu * (39) 1221 Avenue of the Americas New York, NY 10020 | Vice President since December 1997 or since Inception Date | Executive Director of MSIM and various entities affiliated with MSIM; Vice President of the Retail Funds (since July 2002) and the Institutional Funds (since December 1997). Formerly, Secretary of various entities affiliated with MSIM. | |||||||||||||
Mary E. Mullin* (39) 1221 Avenue of the Americas New York, NY 10020 | Secretary since June 1999 or since Inception Date | Executive Director of MSIM and various entities affiliated with MSIM; Secretary of the Retail Funds (since July 2003) and the Institutional Funds (since June 1999). | |||||||||||||
James Garrett* (36) 1221 Avenue of the Americas New York, NY 10020 | Treasurer since February 2002 and Chief Financial Officer since July 2003 | Head of Global Fund Administration; Executive Director of the Adviser and various entities affiliated with the Adviser; Treasurer and Chief Financial Officer of the Institutional Funds. | |||||||||||||
Michael Leary* (39) JPMorgan Investor Services Co. 73 Tremont Street Boston, MA 02108 | Director of Treasury and Compliance since March 2003 or since Inception Date | Director and Vice President of Fund Administration, JPMorgan Investors Services Co. (formerly Chase Global Funds Services Company). Formerly, Audit Manager at Ernst & Young LLP. | |||||||||||||
* | ‘‘Interested person’’ of the Companies within the meaning of the Investment Company Act. Messrs. Robison, Germany, Shea, Fink, Otto and Garrett, and Ms. Doberman, Chang Yu and Mullin are also officers of the Adviser or its affiliates. |
Each of the nominees for Trustee/Director has consented to be named in this Joint Proxy Statement and to serve as a Trustee/Director of the Companies if elected. The Board of each Company has no reason to believe that any of the nominees named above will become unavailable for election as a Trustee/Director, but if that should occur before the Meeting for that Company, Proxy Cards will be voted for such persons as the Board of the Company may recommend.
Share Ownership of Trustees/Directors
The Trustees/Directors have adopted a policy pursuant to which each Trustee/Director and/or his or her spouse is required to invest at least $100,000 in any of the funds in the Morgan Stanley Retail and Institutional Funds on whose boards the Trustee/Director serves. In addition, the policy contemplates that the Trustees/Directors will, over time, increase their aggregate investment in the funds above the $100,000 minimum requirement. The Trustees/Directors may allocate their investments among specific funds in any manner they determine is appropriate based on their individual investment objectives. Any new Trustee/Director will be given a one year period following his or her election within which to comply with the foregoing. As of the date of this Joint Proxy Statement, each incumbent Trustee/Director is in compliance with the policy. As of March 31, 2006, the total value of the investments by the Trustees/Directors and/or their spouses in shares of the Morgan Stanley Retail Funds and Institutional
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Funds was approximately $31.1 million. This amount includes compensation deferred by the Trustee/Director at his or her election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one or more of the Retail Funds or Institutional Funds (or portfolio thereof) that are offered as investment options under the plan.
Dollar Range of Equity Securities in the Companies
The following table sets forth information regarding the dollar range of beneficial ownership of shares in each Company and in certain registered investment companies, including the Companies, managed by the Adviser or an affiliate and held out to investors as related companies for purposes of investment and investor services (the ‘‘Family of Investment Companies’’) by the Trustees/Directors of the Companies and each nominee for election as a Trustee/Director, as of March 31, 2006. This information has been furnished by each Trustee/Director and nominee. The dollar values in the following table are based upon the market price of the relevant Company’s shares as of March 31, 2006.
Name of Trustee/Director | MSIF, Inc. | MSIF Trust | Aggregate Dollar Range of Equity Securities in All Funds Overseen or to be Overseen in Family of Investment Companies | ||||||
Interested Trustee | |||||||||
Fiumefreddo | None | None | Over $100,000 | ||||||
Higgins | None | None | Over $100,000 | ||||||
Independent Trustee/Nominee | |||||||||
Bowman | None | None | None | ||||||
Bozic | None | None | Over $100,000 | ||||||
Dennis | None | None | None | ||||||
Garn | None | None | Over $100,000 | ||||||
Hedien | None | None | Over $100,000 | ||||||
Johnson | None | None | Over $100,000 | ||||||
Kearns(1) | Over $100,000 | None | Over $100,000 | ||||||
Klein | $50,001-$100,000 | $10,001-$50,000 | Over $100,000 | ||||||
Nugent | $50,001-$100,000 | None | Over $100,000 | ||||||
Reed | None | None | None | ||||||
Reid(1) | Over $100,000 | None | Over $100,000 | ||||||
(1) | Includes the total amount of compensation deferred by the Trustee/Director at his election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one or more of the Retail Funds or Institutional Funds (or portfolios thereof) that are offered as investment options under the plan. As of March 31, 2006, the value (including interest) of the deferral accounts for Messrs. Kearns and Reid was $874,964 and $800,512, respectively, pursuant to the deferred compensation plan. |
Board Meetings and Committees
The Board of each Company has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). The Audit Committee provides assistance to the Board with respect to the engagement of that Company’s independent registered public accounting firm and the qualifications, independence and performance of the independent registered public accounting firm. The Audit Committee also, among other things, reviews with the independent registered public accounting firm the plan and results of the audit engagement and matters having a material effect on each Company’s financial operations. Each Company has adopted an Audit Committee Charter. The members of the Audit Committee of each Company are currently Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Joseph J. Kearns, Michael E. Nugent and Fergus Reid, none of whom is an ‘‘interested person,’’ as defined under the Investment Company Act, of either Company (with such disinterested Trustees/Directors being ‘‘Independent Trustees/Directors’’ or individually, an ‘‘Independent Trustee/Director’’). The current Chairman of each Audit Committee is Dr. Manuel H. Johnson and the Deputy Chairman is Joseph J. Kearns. The Audit Committees of both MSIF, Inc. and MSIF Trust each met six times during the fiscal years ended December 31, 2005 and September 30, 2005, respectively.
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The Board of each Company also has a Governance Committee. The Governance Committee identifies individuals qualified to serve as Independent Trustees/Directors on each Company’s Board and its committees and recommends such qualified individuals for nomination by the Independent Trustees/Directors as candidates for election as Independent Trustees/Directors, advises each Company’s Board with respect to Board composition, procedures and committees, develops and recommends to each Company’s Board a set of corporate governance principles applicable to each Company, monitors and makes recommendations on corporate governance matters and policies and procedures of the Company Board and its committees and oversees periodic evaluations of the Company Board and its committees. Each Company has adopted a formal, written Governance Committee Charter, a copy of which is attached hereto as Schedule A. The Governance Committee Charter is not available on the Companies’ websites. The members of the Governance Committee of each Company are currently Michael Bozic, Edwin J. Garn and Fergus Reid, each of whom is an Independent Trustee/Director. The current Chairman of each Governance Committee is Fergus Reid. The Governance Committee of MSIF, Inc. met two times during the fiscal year ended December 31, 2005. The Governance Committee of MSIF Trust met three times during the fiscal year ended September 30, 2005.
Neither of the Companies has a separate nominating committee. While each Company’s Governance Committee recommends qualified candidates for nominations as Independent Trustees/Directors, the Board of each Company believes that the task of nominating prospective Independent Trustees/Directors is important enough to require the participation of all current Independent Trustees/Directors, rather than a separate committee consisting of only certain Independent Trustees/Directors. Accordingly, each current Independent Trustee/Director (Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Joseph J. Kearns, Michael E. Nugent and Fergus Reid) has participated in the election and nomination of candidates for election as Independent Trustees/Directors for the respective Companies presented in this Proposal for which the Independent Trustee/Director serves. Persons recommended as candidates for nomination as Independent Trustees/Directors are required to possess such knowledge, experience, skills, expertise and diversity so as to enhance the Board’s ability to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law. While the Independent Trustees/Directors of each of the Companies expect to be able to continue to identify from their own resources an ample number of qualified candidates for each Company’s Board as they deem appropriate, they will consider nominations from Shareholders to the Board. Nominations from Shareholders should be in writing and sent to the Independent Trustees/Directors as described below under ‘‘Shareholder Communications.’’
There were 15 and 13 meetings of the Boards of Trustees/Directors of MSIF, Inc. and MSIF Trust held during the fiscal years ended December 31, 2005 and September 30, 2005, respectively. In addition, the Independent Directors of MSIF, Inc. and the Independent Trustees of MSIF Trust each met three times during that period.
Finally, each Company’s Board has formed an Insurance Committee to review and monitor the insurance coverage maintained by each Company. The Insurance Committee for each Company currently consists of Messrs. Nugent, Fiumefreddo and Hedien. Messrs. Nugent and Hedien are Independent Trustees/Directors. The Insurance Committee of MSIF, Inc. met six times during the fiscal year ended December 31, 2005. The Insurance Committee of MSIF Trust met seven times during the fiscal year ended September 30, 2005.
For the 2005 fiscal year, each incumbent Trustee/Director attended at least seventy-five percent of the aggregate number of meetings of the Boards and of any committee on which he served, held during the time such Trustee/Director was a member of the Boards.
Shareholder Communications
Shareholders may send communications to each Company’s Board by addressing the communication directly to that Board (or individual Board members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board members) and by sending the communication to either the Company’s office or directly to such Board member(s) at the address specified for each
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Trustee/Director below. Other Shareholder communications received by the Companies not directly addressed and sent to the Boards will be reviewed and generally responded to by management, and will be forwarded to the Boards only at management’s discretion based on the matters contained therein.
Compensation
Each Independent Trustee/Director receives an annual fee of $180,000 for serving the Retail Funds and the Institutional Funds. Prior to October 1, 2005, each Independent Trustee/Director received an annual retainer fee of $168,000 for serving the Retail Funds and the Institutional Funds. In addition, each Independent Trustee/Director received $2,000 for attending each of the four quarterly board meetings and two performance meetings that occurred each year, so that an Independent Trustee/Director who attended all six meetings received total compensation of $180,000 for serving the funds.
The Chairman of the Audit Committee of each Company receives an additional annual retainer fee of $60,000. Other Committee Chairmen and the Deputy Chairman of the Audit Committee receive an additional annual retainer fee of $30,000. The aggregate compensation paid to each Independent Trustee/Director is paid by the Retail Funds and the Institutional Funds, and is allocated on a pro rata basis among each of the operational funds/portfolios of the Retail Funds and the Institutional Funds based on the relative net assets of each of the funds/portfolios. Mr. Fiumefreddo receives an annual fee from the Retail Funds and the Institutional Funds for his services as Chairman of the Boards of the Retail Funds and the Institutional Funds and for administrative services provided to each Board.
Each Company also reimburses such Trustees/Directors for travel and other out-of-pocket expenses incurred by them in connection with attending such meetings. Trustees/Directors of the Company who are employed by the Adviser or an affiliated company receive no compensation or expense reimbursement from the Company for their services as Trustee/Director.
Effective April 1, 2004, the Companies began a Deferred Compensation Plan (the ‘‘DC Plan’’), which allows each Independent Trustee/Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees/Directors throughout the year. Each eligible Trustee/Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Retail Funds or Institutional Funds (or portfolios thereof) that are offered as investment options under the DC Plan. At the Trustee/Director’s election, distributions are either in one lump sum payment, or in the form of equal annual installments over a period of five years. The rights of an eligible Trustee/Director and the beneficiaries to the amounts held under the DC Plan are unsecured and such amounts are subject to the claims of the creditors of each Company.
Prior to April 1, 2004, the Institutional Funds maintained a similar Deferred Compensation (the ‘‘Prior DC Plan’’), which also allowed each Independent Trustee/Director to defer payment of all, or a portion, of the fees he or she received for serving on the Board of Trustees/Directors throughout the year. The DC Plan amends and supersedes the Prior DC Plan and all amounts payable under the Prior DC Plan are now subject to the terms of the DC Plan (except for amounts paid during the calendar year 2004, which remain subject to the terms of the Prior DC Plan).
Set forth below is a table showing the aggregate compensation paid by each Company to each of its Trustees/Directors, as well as the total compensation paid to each Trustee/Director of each Company by all of the Companies and by other U.S. registered investment companies advised by MSIM or any investment companies that have an investment adviser that is an affiliated person of MSIM (collectively, the ‘‘Fund Complex’’) for their services as Trustees/Directors of such investment companies. The aggregate compensation paid by MSIF, Inc. is as of the fiscal year ended December 31, 2005 and the aggregate compensation paid by MSIF Trust is as of the fiscal year ended September 30, 2005. In all cases, there were no pension or retirement benefits accrued as part of any fund’s expenses. The amounts reflected in the following table include amounts paid by the Fund Complex for services rendered during the calendar year ended December 31, 2005 for each fund within the Fund Complex, regardless of whether such amounts were actually received by the Trustees/Directors during such fiscal year.
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COMPENSATION
Name of Trustees/Directors | MSIF, Inc. | MSIF Trust | Total Compensation from Funds and Fund Complex Paid to Trustees/Directors(2)(4) | |||||||||||||||
Interested Trustee/Director | ||||||||||||||||||
Fiumefreddo(1) | $ | 39,245 | $ | 31,169 | $ | 360,000 | ||||||||||||
Higgins(1) | 0 | 0 | 0 | |||||||||||||||
Independent Trustee/Director | ||||||||||||||||||
Bozic | 19,698 | 15,734 | 180,000 | |||||||||||||||
Garn | 19,472 | 15,570 | 178,000 | |||||||||||||||
Hedien | 19,698 | 15,734 | 180,000 | |||||||||||||||
Johnson | 26,237 | 20,927 | 240,000 | |||||||||||||||
Kearns(3) | 23,126 | 18,228 | 217,000 | |||||||||||||||
Nugent | 22,967 | 18,330 | 210,000 | |||||||||||||||
Reid | 22,967 | 18,330 | 215,000 | |||||||||||||||
(1) | ‘‘Interested person’’ of the Company within the meaning of the Investment Company Act. Mr. Fiumefreddo receives an annual fee for his services as Chairman of the Boards of the Retail Funds and the Institutional Funds for administrative services provided to the Boards of the Retail Funds and the Institutional Funds. As of July 1, 2006, Mr. Fiumefreddo will resign as Chairman of the Boards of the Companies and will be replaced by Mr. Nugent. As a result, Mr. Nugent will receive the annual fee for his services as Chairman of the Boards of the Companies from that date. |
(2) | Amounts shown in this column also include amounts received by each Trustee/Director for service on the Boards of several other funds affiliated with the Companies, which are part of the Fund Complex. Because the funds in the Fund Complex have different fiscal year ends, the amounts shown in this column are presented on a calendar year basis. |
(3) | Amounts shown in this table include certain amounts deferred pursuant to the DC Plan. |
(4) | Prior to December 31, 2003, 49 of the Retail Funds (the ‘‘Adopting Funds’’), had adopted a retirement program under which an Independent Trustee/Director who retired after serving for at least five years as an Independent Trustee/Director of any such fund (an ‘‘Eligible Trustee/Director’’) would have been entitled to retirement payments based on factors such as length of service, upon reaching the eligible retirement age. On December 31, 2003, the amount of accrued retirement benefits for each Eligible Trustee/Director was frozen, and will be payable, together with a return of 8% per annum, at or following each such Eligible Trustee’s/Director’s retirement. Messrs. Bozic, Garn, Hedien, Johnson and Nugent were participants in this retirement program. As of the calendar year ended December 31, 2005, retirement benefits accrued by the Adopting Funds and their estimated benefits upon retirement from all Adopting Funds were $19,439 and $46,871, respectively for Bozic, $(10,738) and $46,917, respectively for Garn, $37,860 and $40,020, respectively for Hedien, $19,701 and $68,630, respectively for Johnson, and $35,471 and $61,377, respectively for Nugent. Mr. Garn’s retirement expense is negative due to the fact that his retirement date has been extended to October 31, 2007, and therefore the expense has been overaccrued. |
Assuming a quorum is present, approval of Proposal 1 with respect to each Company will require the affirmative vote of a majority of the Company’s shares represented in person or by proxy at the Meeting and entitled to vote at the Meeting. Shareholders of each Portfolio of a Company will vote together as a single class with respect to Proposal 1.
The Board of each Company recommends that you vote ‘‘For’’ the election of the nominees as Trustees/Directors.
OVERVIEW OF PROPOSAL 2 RELATED TO THE MODIFICATION OF
CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
The Investment Company Act requires a registered investment company, including each Company, to have certain specific investment policies that can be changed only with shareholder approval. Investment companies may also elect to designate other policies that may be changed only with a shareholder vote. Both types of policies are often referred to as ‘‘fundamental’’ policies. In this Proxy Statement, the word ‘‘restriction’’ or ‘‘limitation’’ is sometimes used to describe a policy. Certain fundamental policies have been adopted in the past by the Companies to reflect certain regulatory, business or industry conditions that are no longer in effect. For example, the National Securities Markets Improvement Act of 1996 (‘‘NSMIA’’) preempted many investment restrictions formerly imposed by state securities laws and regulations (these state laws and regulations are often referred to as ‘‘blue sky’’ laws and regulations), so those state requirements no longer apply. As a result, many of the current restrictions unnecessarily limit the investment strategies available to the Adviser in managing a Portfolio’s assets. In addition, the lack of uniform standards across the Companies leads to operating inefficiencies and
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increases the costs of compliance monitoring. Accordingly, the Adviser recently conducted a review of each Portfolio’s fundamental policies to simplify, modernize and make consistent with those of other investment companies advised by the Adviser or its affiliates, the Fund’s policies that are required to be fundamental under the Investment Company Act.
Proposal 2 seeks Shareholder approval of changes that are intended to accomplish the foregoing goals. Not all Proposals apply to all the Portfolios. The proposed changes to the fundamental policies are discussed in detail below. The table following this discussion will assist you in determining which Proposals apply to your Portfolio(s) and which investment policy or restriction changes are proposed for each Company. By reducing to a minimum those policies that can be changed only by a Shareholder vote, each Company should be able to avoid the costs and delay associated with a Shareholder meeting and the Boards believe that the Adviser’s ability to manage each Company’s portfolio in a changing regulatory or investment environment will be enhanced.
Shareholders should note that certain of the proposed fundamental policies are stated in terms of ‘‘to the extent permitted by the Investment Company Act or the rules and regulations thereunder.’’ Applicable law can change over time and may become more or less restrictive as a result. The fundamental policies have been drafted in this manner so that a change in law would not require the Companies to seek a Shareholder vote to amend the policy to conform to applicable law, as revised. Although the Proposal gives the Portfolios greater flexibility to respond to future investment opportunities, the Adviser does not anticipate that the changes, individually or in the aggregate, will result at this time in a material change in the level of investment risk associated with an investment in a Portfolio, nor does the Adviser anticipate that the proposed changes in the fundamental investment restrictions will, individually or in the aggregate, change materially the manner in which the Portfolios are managed and operated.
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2. | PROPOSALS TO MODIFY CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS |
2A Modify Diversification Policy | 2B Modify Borrowing Policy | 2C Modify Loan Policy | 2D Modify Commodities Policy | 2E Modify Senior Securities Policy | |||||||||||
MSIF, Inc. | |||||||||||||||
Active International Allocation Portfolio | X | X | X | X | X | ||||||||||
Emerging Markets Portfolio | X | X | X | X | X | ||||||||||
Emerging Markets Debt Portfolio | X | X | X | X | |||||||||||
Focus Equity Portfolio | X | X | X | X | |||||||||||
Global Franchise Portfolio | X | X | X | X | X | ||||||||||
Global Value Equity Portfolio | X | X | X | X | X | ||||||||||
International Equity Portfolio | X | X | X | X | X | ||||||||||
International Growth Equity Portfolio | X | X | X | X | X | ||||||||||
International Magnum Portfolio | X | X | X | X | X | ||||||||||
International Real Estate Portfolio | X | X | X | X | |||||||||||
International Small Cap Portfolio | X | X | X | X | X | ||||||||||
Large Cap Relative Value Portfolio | X | X | X | X | X | ||||||||||
Small Company Growth Portfolio | X | X | X | X | X | ||||||||||
Systematic Active Large Cap Core Portfolio | X | X | X | X | X | ||||||||||
Systematic Active Small Cap Core Portfolio | X | X | X | X | X | ||||||||||
Systematic Active Small Cap Growth Portfolio | X | X | X | X | X | ||||||||||
Systematic Active Small Cap Value Portfolio | X | X | X | X | X | ||||||||||
U.S. Large Cap Growth Portfolio | X | X | X | X | X | ||||||||||
U.S. Real Estate Portfolio | X | X | X | X | |||||||||||
MSIF Trust | |||||||||||||||
Advisory Foreign Fixed Income Portfolio | X | X | X | X | |||||||||||
Advisory Foreign Fixed Income II Portfolio | X | X | X | X | |||||||||||
Advisory Mortgage Portfolio | X | X | X | X | X | ||||||||||
Balanced Portfolio | X | X | X | X | X | ||||||||||
Core Fixed Income Portfolio | X | X | X | X | X | ||||||||||
Core Plus Fixed Income Portfolio | X | X | X | X | X | ||||||||||
Equities Plus Portfolio | X | X | X | X | X | ||||||||||
High Yield Portfolio | X | X | X | X | X | ||||||||||
Intermediate Duration Portfolio | X | X | X | X | X | ||||||||||
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2A Modify Diversification Policy | 2B Modify Borrowing Policy | 2C Modify Loan Policy | 2D Modify Commodities Policy | 2E Modify Senior Securities Policy | ||||||||||||||||||||||||||
International Fixed Income Portfolio | X | X | X | X | ||||||||||||||||||||||||||
Investment Grade Fixed Income Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
Limited Duration Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
Mid Cap Growth Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
Municipal Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
U.S. Mid Cap Value Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
U.S. Small Cap Value Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
Value Portfolio | X | X | X | X | X | |||||||||||||||||||||||||
Proposal 2.A. — Modify Fundamental Policy Regarding Diversification
Applicable Portfolios: See the Chart on Pages 16 and 17
Proposed New Fundamental Investment Policy: If the proposed modification is approved by Shareholders, the Portfolios’ fundamental policy would read:
‘‘The Portfolio may not invest in a manner inconsistent with its classification as a ‘‘diversified company’’ as provided by (i) the Investment Company Act, as amended from time to time, (ii) the rules and regulations promulgated by the SEC under the Investment Company Act, as amended from time to time, or (iii) an exemption or other relief applicable to the Portfolio from the provisions of the Investment Company Act, as amended from time to time.’’
Discussion of Proposed Modification:
Section 8(b) of the Investment Company Act requires an investment company to state whether it is ‘‘diversified’’ as that term is defined in the Investment Company Act. Consequently, the proposed modification is consistent with the Investment Company Act, which only requires that a fund state whether it is diversified. The Investment Company Act requires that funds classify themselves as either diversified or non-diversified. The difference is that diversified funds are subject to stricter percentage limits on the amount of assets that can be invested in any one company. Specifically, a diversified fund may not, with respect to 75% of its total assets: (1) invest more than 5% of its total assets in the securities of one issuer, or (2) hold more than 10% of the outstanding voting securities of such issuer.
No change is being proposed to a Portfolio’s designation as diversified. Instead, the proposed change would modify a Portfolio’s fundamental investment policies regarding its sub-classification under the Investment Company Act to rely on the definitions of the term ‘‘diversified’’ in the Investment Company Act rather than stating the relevant percentage limitations expressed under current law. As a result, without the Boards or Shareholders taking further action, the modified investment policy would automatically apply the requirements of ‘‘diversification’’ under the Investment Company Act to a Portfolio as those requirements may be amended from time to time.
It should be noted that the modification of this fundamental policy will not affect each Fund's intention to continue to comply with the diversification and other requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’), in order to continue to qualify for the special tax treatment afforded to ‘‘regulated investment companies.’’
Proposal 2.B. — Modify Fundamental Policy Regarding Borrowing Money
Applicable Portfolios: All Portfolios except the Money Market and Municipal Money Market Portfolios of MSIF, Inc.
Proposed New Fundamental Investment Policy: If the proposed modification is approved by Shareholders, the Portfolios’ fundamental policy regarding borrowing would read:
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‘‘The Portfolio may not borrow money, except the Portfolio may borrow money to the extent permitted by (i) the Investment Company Act, as amended from time to time, (ii) the rules and regulations promulgated by the SEC under the Investment Company Act, as amended from time to time, or (iii) an exemption or other relief applicable to the Company from the provisions of the Investment Company Act, as amended from time to time.’’
Discussion of Proposed Modification:
Each Company is required to have a fundamental policy with respect to borrowing. Each Portfolio (except as described below) is presently prohibited from borrowing, except as borrowings may be necessary for temporary or emergency purposes (such as meeting redemption requests that might otherwise require the untimely disposition of securities) and, in the case of each Portfolio of MSIF Trust, in connection with reverse repurchase agreements. These Portfolios have limited their permissible borrowings (i.e., for temporary or emergency purposes) to amounts not in excess of 33 1/3% of their total assets (including the amount borrowed) less liabilities (other than borrowings). The Emerging Markets Debt Portfolio of MSIF, Inc. may borrow from banks and other entities in an amount not in excess of 33 1/3% of its total assets (including the amount borrowed) less liabilities in accordance with its investment objectives and policies. In addition, each Portfolio of MSIF, Inc. (except the Emerging Markets Debt Portfolio) has adopted a non-fundamental investment policy to limit borrowing for extraordinary or emergency purposes to amounts up to 10% of the Portfolio's total assets. The language of these policies, however, varies widely among the various Morgan Stanley funds. It is therefore proposed that this language be simplified and standardized.
The proposed fundamental policy for borrowing would permit the Portfolios to borrow up to the full extent permitted under the Investment Company Act. There is no current intention, however, that any of the Portfolios would increase their borrowing capacity.
If a Portfolio borrows and uses the proceeds to make additional investments, the income and appreciation from such investments will improve its performance if they exceed the associated borrowing costs but such investments will impair its performance if the income and appreciation therefrom are less than such borrowing costs. This factor is known as leverage. The use of leverage is considered speculative and its use could increase the volatility of a Portfolio’s assets.
Proposal 2.C. — Modify Fundamental Policy Regarding Loans
Applicable Portfolios: All Portfolios except the Money Market and Municipal Money Market Portfolios of MSIF, Inc.
Proposed New Fundamental Investment Policy: If the proposed modification is approved by Shareholders, the Portfolios’ fundamental policy regarding loans would read:
‘‘The Portfolio may not make loans of money or property to any person, except (a) to the extent that securities or interests in which the Portfolio may invest are considered to be loans, (b) through the loan of portfolio securities, (c) by engaging in repurchase agreements or (d) as may otherwise be permitted by (i) the Investment Company Act, as amended from time to time, (ii) the rules and regulations promulgated by the SEC under the Investment Company Act, as amended from time to time, or (iii) an exemption or other relief applicable to the Fund from the provision of the Investment Company Act, as amended from time to time.’’
Discussion of Proposed Modification:
The proposed change is intended to clarify a Portfolio’s ability to engage in securities lending to the extent permitted by the Investment Company Act and the then-current SEC policy. The Investment Company Act currently limits loans of a Portfolio’s securities to one-third of the Portfolio’s assets, including any collateral received from the loan, provided that loans are 100% collateralized by cash or cash equivalents. In the future, should the rules and regulations governing loans by mutual funds change, the proposed restriction would automatically conform to those new requirements without the need to solicit Shareholder votes.
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The current restrictions of the Portfolios are consistent with the current limitation and the proposed amendment would not affect the Portfolios’ investment strategies. If this Proposal is approved by Shareholders, the Portfolios would be permitted to make loans to the maximum extent permitted by the Investment Company Act. Securities lending may be utilized in seeking to generate additional income for a Portfolio. In lending securities, the Portfolio will be subject to risk, which like those associated with other extensions of credit, include possible loss of rights in the collateral should the borrower fail financially.
Proposal 2.D. — Modify Fundamental Policy Regarding
Investment in Commodities, Commodity Contracts and Futures Contracts
Applicable Portfolios: All Portfolios except the Money Market and Municipal Money Market Portfolios of MSIF, Inc.
Proposed New Fundamental Investment Policy: If the proposed modification is approved by Shareholders, the Portfolios’ fundamental policy would read:
‘‘The Portfolio may not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments; provided that this restriction shall not prohibit the Portfolio from purchasing or selling options, futures contracts and related options thereon, forward contracts, swaps, caps, floors, collars and any other financial instruments or from investing in securities or other instruments backed by physical commodities or as otherwise permitted by (i) the Investment Company Act, as amended from time to time, (ii) the rules and regulations promulgated by the SEC under the Investment Company Act, as amended from time to time, or (iii) an exemption or other relief applicable to the Portfolio from the provisions of the Investment Company Act, as amended from time to time.’’
Discussion of Proposed Modification:
The proposed changes to a Portfolio’s policy are intended to make it clear that the Portfolios may use futures contracts, options on futures contracts and other derivatives. These instruments are generally accepted under modern portfolio management and are regularly used by many mutual funds and other institutional investors.
Derivatives involve the risk that interest rates, securities prices and currency markets will not move in the direction that the Portfolio’s portfolio manager anticipates and the risk of imperfect correlation between the price of derivative instruments and movements in the direct investments for which derivatives are a substitute. Other risks include the possible absence of a liquid secondary market for any particular instrument and possible exchange-imposed price fluctuation limits, either of which may make it difficult or impossible to close out a position when desired, the risk that adverse price movements in an instrument can result in a loss substantially greater than the Company’s initial investment in that instrument (in some cases, the potential loss is unlimited), and the risk that the counterparty will not perform its obligations.
Proposal 2.E. — Modify Fundamental Policy Regarding Issuance of Senior Securities
Applicable Portfolios: All Portfolios except the Money Market and Municipal Money Market Portfolios of MSIF, Inc.
Proposed New Fundamental Investment Policy: If the proposed modification is approved by Shareholders, the Portfolio’s fundamental policy would read:
‘‘The Portfolio may not issue senior securities, except the Portfolio may issue senior securities to the extent permitted by (i) the Investment Company Act, as amended from time to time, (ii) the rules and regulations promulgated by the SEC under the Investment Company Act, as amended from time to time, or (iii) an exemption or other relief applicable to the Portfolio from the provisions of the Investment Company Act, as amended from time to time.’’
Discussion of Proposed Modification:
Although the definition of a ‘‘senior security’’ involves complex statutory and regulatory concepts, a senior security is generally thought of as an obligation of a fund which has a claim to the fund’s assets or
19
earnings that takes precedence over the claims of the fund’s shareholders. The Investment Company Act generally prohibits mutual funds from issuing senior securities; however mutual funds are permitted to engage in certain types of transactions that might be considered ‘‘senior securities’’ as long as certain conditions are satisfied. For example, a transaction which obligates a fund to pay money at a future date (e.g., the purchase of securities to be settled on a date that is further away than the normal settlement period) may be considered a ‘‘senior security.’’ A mutual fund is permitted to enter into this type of transaction if it maintains a segregated account containing liquid securities in value equal to its obligation to pay cash for the securities at a future date. The Portfolios utilize transactions that may be considered to give rise to ‘‘senior securities’’ only in accordance with applicable regulatory requirements under the Investment Company Act.
The primary purpose of the Proposal is to revise the Portfolios’ fundamental limitation with respect to senior securities to conform to a limitation that is expected to become the standard for all Morgan Stanley Funds.* If the Proposal is approved, the new fundamental senior securities limitation cannot be changed without a vote of a Portfolio’s shareholders.
Adoption of the proposed limitation on senior securities is not expected to affect the way in which a Portfolio is managed, the investment performance of any Portfolio, or the securities or instruments in which a Portfolio invests. The proposed limitation would recognize that Portfolios may issue such securities only to the extent permitted under the Investment Company Act. To the extent a Portfolio becomes involved in such securities trading practices, its Board will carefully review the Portfolio’s prospectus and/or statement of additional information disclosure of its participation and the risks of loss to the Portfolio and its shareholders which may result from such trading practices. The Board will further determine whether such trading practices are consistent with the Portfolio’s investment policies.
REQUIRED VOTE FOR PROPOSAL 2
Approval of each investment policy Proposal requires the approval of the holders of a ‘‘majority of the outstanding voting securities’’ of a Portfolio which under the Investment Company Act means the affirmative vote of the lesser of (a) 67% or more of the voting securities present at the Meeting or represented by proxy if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy or (b) more than 50% of the outstanding voting securities of the Portfolio. The Board has considered various factors and believes that approval of these investment policy changes are in the best interest of the Portfolios of the Fund and its Shareholders. If these investment Proposals are not approved by any Portfolio, that Portfolio’s current fundamental investment policies will remain in effect.
The Board, including a majority of the independent board members, recommends that the Shareholders vote ‘‘For’’ the modification of the Portfolios' fundamental policies as described above.
SECURITY OWNERSHIP OF TRUSTEE/DIRECTORS, OFFICERS AND
CERTAIN BENEFICIAL OWNERS
As of May 11, 2006, the aggregate number of shares of each Company owned by the Company’s officers and Trustees/Directors as a group was less than 1% of the outstanding shares of each Company or any series thereof. For information regarding persons who owned beneficially more than 5% of each Company’s outstanding shares as of May 11, 2006, please see Exhibit A. Except as set forth in Exhibit A, to the knowledge of each Company, as of May 11, 2006, no person was the beneficial owner of more than 5% of a Portfolio’s shares, as of that date.
* | The Portfolios of MSIF Trust do not have a fundamental policy regarding issuance of senior securities and thus would be adopting a new fundamental policy as described above. |
20
AUDITOR FEES
Audit Fees
The aggregate fees billed by Ernst & Young LLP in connection with the annual audit of MSIF, Inc. and MSIF Trust’s financial statements for their fiscal years ended in 2005 and 2004 are set forth below:
2005 | 2004 | |||||||||||
MSIF, Inc. | $ | 500,334 | $ | 461,270 | ||||||||
MSIF Trust | 478,191 | 455,420 | ||||||||||
Audit-Related Fees
There were no fees billed by Ernst & Young LLP related to the annual audit of MSIF, Inc. and MSIF Trust’s financial statements for their 2005 and 2004 fiscal years.
Tax Fees
The aggregate fees billed by Ernst & Young LLP in connection with tax compliance, tax advice and tax planning for MSIF, Inc. and MSIF Trust for their respective fiscal years ended in 2005 and 2004 are set forth below, which represent fees paid for the review of the Federal, state and local tax returns for each Company.
2005 | 2004 | |||||||||||
MSIF, Inc. | $ | 45,938 | $ | 43,750 | ||||||||
MSIF Trust | 49,802 | 47,430 | ||||||||||
All Other Fees
The aggregate fees billed by Ernst & Young LLP for other products and services not set forth above for each Company for its respective fiscal years ended in 2005 and 2004 are set forth below:
2005 | 2004 | |||||||||||
MSIF, Inc. | $ | 27,587 | $ | 0 | ||||||||
MSIF Trust | 20,980 | 0 | ||||||||||
Audit Committee Pre-approval
Each Company’s Audit Committee’s policy is to review and pre-approve all auditing and non-auditing services to be provided to the Company by the Company’s independent auditors. The Audit Committee’s Audit and Non-Audit Pre-Approval Policy and Procedures requires each Company’s Audit Committee to either generally pre-approve certain services without consideration of specific case-by-case services, or requires the specific pre-approval of services by the Audit Committee or its delegate. Under the Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent auditors. Any services that are generally pre-approved may require specific pre-approval by the Audit Committee if the services exceed pre-approved cost levels or budgeted amounts. All of the audit, audit-related and the tax services described above for which Ernst & Young LLP billed each of the Company’s fees for their respective fiscal years ended in 2005 were pre-approved by the Audit Committee.
Aggregate Non-Audit Fees paid by the Adviser and Affiliated Entities
The aggregate fees billed for professional services rendered by Ernst & Young LLP for all other services provided to the Adviser and to any entities controlling, controlled by or under common control with the Adviser for the fiscal years ended in 2005 and 2004 amounted to $1,244,067 and $276,814, respectively. Such services for the 2005 and 2004 fiscal years included: (i) audit-related fees of $235,000 and $115,000, respectively, for the issuance of a report under Statement on Accounting Standards No. 70 titled ‘‘Reports on the Processing of Transactions by Service Organizations’’ and (ii) all other fees of $1,009,067 and $161,814, respectively, related to services such as performance attestation, operational control reviews and the provision of educational seminars.
21
The Audit Committee of each Company has considered whether the provision of non-audit services and the provision of services to affiliates of the Adviser is compatible with maintaining the independence of Ernst & Young LLP.
Representatives from Ernst & Young LLP are not expected to be present at the Meeting but are expected to be available by telephone. Ernst & Young LLP will have the opportunity to make a statement if they desire to do so and the representatives from Ernst & Young LLP, if available by telephone, will respond to appropriate questions.
OTHER MATTERS
No business other than as set forth herein is expected to come before any Meeting, but should any other matter requiring a vote of Shareholders arise, including any question as to an adjournment of the Meeting for a Portfolio, the persons named in the enclosed Proxy Card(s) will vote thereon according to their best judgment in the interests of the Portfolio.
SHAREHOLDER PROPOSALS
The Companies do not hold regular annual meetings of Shareholders. As a general matter, the Companies do not intend to hold future regular annual or special meetings of their Shareholders unless required by the Investment Company Act. Any Shareholder who wishes to submit proposals for consideration at a meeting of Shareholders of a Company should send such proposal to that Company, c/o Morgan Stanley Investment Management Inc., 1221 Avenue of the Americas, New York, New York 10020. To be considered for presentation at a Shareholder meeting, rules promulgated by the Securities and Exchange Commission require that, among other things, a Shareholder’s proposal must be received at the offices of the Company a reasonable time before a solicitation is made. Timely submission of a proposal does not necessarily mean that such proposal will be included.
MARY E. MULLIN Secretary |
Dated: June 14, 2006
Shareholders of a Portfolio who do not expect to be present at the Meeting for that Portfolio and who wish to have their shares voted are requested to date and sign the enclosed Proxy Card for the Portfolio and return it in the enclosed envelope. No postage is required if mailed in the United States.
22
Exhibit A
INFORMATION PERTAINING TO THE COMPANIES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the management of each Company, as of May 11, 2006, the following persons were beneficial owners of 5% or more of the outstanding shares of the following portfolios.
MORGAN STANLEY INSTITUTIONAL FUND, INC.
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
ACTIVE INTERNATIONAL ALLOCATION (CLASS A) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE LD PURCHASE, NY 10577 | 45,446,775.067 | 70.98% | ||||||
WALLACE GLOBAL FUND 1990 M ST, STE 250 WASHINGTON, DC 20036 | 4,828,013.109 | 7.54% | |||||||
ACTIVE INTERNATIONAL ALLOCATION (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 122,152.189 | 55.57% | ||||||
MORGAN STANLEY & CO. INC 1585 BROADWAY NEW YORK, NY 10036 | 19,349.845 | 8.80% | |||||||
IMS & CO. PO BOX 3865 ENGLEWOOD, CO 80155 | 19,275.948 | 8.77% | |||||||
MORGAN STANLEY & CO. INC. 1585 BROADWAY NEW YORK, NY 10036 | 18,044.015 | 8.21% | |||||||
MORGAN STANLEY & CO. INC. 1585 BROADWAY NEW YORK, NY 10036 | 17,447.117 | 7.94% | |||||||
EMERGING MARKETS PORTFOLIO (CLASS A) | THE BANK OF NEW YORK AS TRUSTEE FOR NEW YORK STATE DEFERRED ONE WALL STREET 12TH FLOOR NEW YORK, NY 10286 | 7,895,842.924 | 11.29% | ||||||
MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230 | 7,783,595.203 | 11.13% | |||||||
MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230 | 6,983,798.286 | 9.99% | |||||||
A-1
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 6,102,696.564 | 8.73% | |||||||
THE VANGUARD FIDUCIARY TRUST CO. PO BOX 2600 VALLEY FORGE, PA 19482 | 3,873,833.269 | 5.54% | |||||||
NORTHERN TRUST CO. PO BOX 92994 CHICAGO, IL 60675-2994 | 3,846,211.635 | 5.50% | |||||||
EMERGING MARKETS PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 5,869,004.566 | 95.60% | ||||||
EMERGING MARKETS DEBT PORTFOLIO (CLASS A) | MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230-3198 | 3,572,194.578 | 44.98% | ||||||
SBLI USA MUTUAL LIFE INSURANCE 460 WEST 34TH STREET SUITE 800 NEW YORK, NY 10001 | 3,505,382.935 | 44.14% | |||||||
IOWA MUNICIPAL FIRE AND POLICE 2836 104 STREET DES MOINES, IA 50322 | 404,483.820 | 5.09% | |||||||
EMERGING MARKETS DEBT PORTFOLIO (CLASS B) | BRENTON D. ANDERSON P.O. BOX 663 NORWICH, VT 05055 | 22,546.347 | 43.53% | ||||||
MORGAN STANLEY & CO. INC. 1585 BROADWAY NEW YORK, NY 10036 | 17,519.444 | 33.83% | |||||||
BROWN BROTHERS HARRIMAN & CO 525 WASHINGTON BLVD JERSEY CITY, NJ 07310 | 8,831.954 | 17.05% | |||||||
NAN B LEVY 18 MAYFAIR LN GREENWICH, CT 06831 | 2,890.026 | 5.58% | |||||||
FOCUS EQUITY PORTFOLIO (CLASS A) | MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230-3198 | 2,907,991.570 | 76.41% | ||||||
A-2
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
FOCUS EQUITY PORTFOLIO (CLASS B) | THE VANGUARD FIDUCIARY TRUST CO. PO BOX 2600 VM 613 OUTSIDE FUNDS VALLEY FORGE, PA 19482 | 716,712.647 | 74.08% | ||||||
GLOBAL FRANCHISE PORTFOLIO (CLASS A) | L-3 COMMUNICATIONS CANADA ATTN ELSPETH GAUKRODGER 105 COMMERCE VALLEY DRIVE W SUITE 410 MARKHAM, ONTARIO CANADA, 231 L3T7W3 | 2,493,884.512 | 31.42% | ||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 978,683.877 | 12.33% | |||||||
NORTHERN TRUST COMPANY CUSTODIAN PO BOX 92956 ATTN MUTUAL FUNDS CHICAGO, IL 60675 | 772,960.573 | 9.74% | |||||||
THE KOLBERG FOUNDATION INC. 111 RADIO CIRCLE MOUNT KISCO, NY 10549 | 685,120.836 | 8.63% | |||||||
BIRELEY'S ORANGE JAPAN SA PO BOX 1134 PANAMA, REPUBLIC OF PANAMA | 498,155.454 | 6.28% | |||||||
GLOBAL FRANCHISE PORTFOLIO (CLASS B) | MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 27,602.036 | 10.37% | ||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 27,418.842 | 10.30% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 25,386.337 | 9.54% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 17,294.683 | 6.50% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 16,188.917 | 6.08% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 14,483.939 | 5.44% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 13,982.693 | 5.25% | |||||||
A-3
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
GLOBAL VALUE EQUITY PORTFOLIO (CLASS A) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C BENEFIT PLAN COVINGTON, KY 41015 | 2,565,684.715 | 55.57% | ||||||
JUPITER & CO. C/O INVESTORS BANK & TRUST PO BOX 9130 FPG90 BOSTON, MA 02117 | 687,996.461 | 14.90% | |||||||
AIG LIFE OF BERMUDA, LTD. SEGREGATED ACCOUNT BERMUDA ALTA ADVISORS INVESTMENT SUBACCOUNT PO BOX HM152 AMERICAN INTERNATIONAL BUILDING HAMILTON, BERMUDA | 280,646.788 | 6.08% | |||||||
GLOBAL VALUE EQUITY PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 997,690.515 | 80.48% | ||||||
THE VANGUARD FIDUCIARY TRUST CO. MSDW CLASS B FUNDS PO BOX 2600 VM 613 VALLEY FORGE, PA 19482 | 184,570.981 | 14.89% | |||||||
INTERNATIONAL EQUITY PORTFOLIO (CLASS A) | CHARLES SCHWAB & CO. INC. 101 MONTGOMERY STREET ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 22,363,805.560 | 7.81% | ||||||
INTERNATIONAL EQUITY PORTFOLIO (CLASS B) | NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 23,568,498.250 | 40.25% | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 15,399,170.814 | 26.30% | |||||||
T ROWE PRICE TRUST CO. FBO: RETIREMENT PLAN CLIENTS PO BOX 17215 BALTIMORE, MD 21297 | 6,728,291.642 | 11.49% | |||||||
A-4
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
INTERNATIONAL GROWTH EQUITY PORTFOLIO (CLASS A) | MORGAN STANLEY INVESTMENT MANAGEMENT CONTROLLERS 19TH FLOOR 195 BROADWAY NEW YORK, NY 10007 | 490,000.000 | 100.00% | ||||||
INTERNATIONAL GROWTH EQUITY PORTFOLIO (CLASS B) | MORGAN STANLEY & CO. INC. 1585 BROADWAY NEW YORK, NY 10036 | 37,950.664 | 79.15% | ||||||
MORGAN STANLEY INVESTMENT MANAGEMENT CONTROLLERS 19TH FLOOR 195 BROADWAY NEW YORK, NY 10007 | 10,000.000 | 20.85% | |||||||
INTERNATIONAL MAGNUM PORTFOLIO (CLASS A) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 5,766,260.710 | 77.57% | ||||||
THRIVENT FINANCIAL FOR LUTHERANS ATTN PAUL MCCULLOUGH 625 4TH AVENUE SOUTH MINNEAPOLIS, MN 55415 | 1,401,687.280 | 18.86% | |||||||
INTERNATIONAL MAGNUM PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C BENEFIT PLANS COVINGTON, KY 41015 | 125,185.659 | 76.54% | ||||||
NORWEST BANK COLORADO CUSTODIAN BAYONNE HOSPITAL 403B TAX SHELTERED PLAN C/O GREAT WEST 8515 EAST ORCHARD ROAD ENGLEWOOD, CO 80111 | 21,222.728 | 12.98% | |||||||
MORGAN STANLEY & CO. INC. 1585 BROADWAY NEW YORK, NY 10036 | 12,225.175 | 7.47% | |||||||
INTERNATIONAL REAL ESTATE PORTFOLIO (CLASS A) | CHARLES SCHWAB & CO., INC. ATTN MUTUAL FUNDS 101 MONTGOMERY STREET SAN FRANCISCO, CA 94104 | 4,045,720.744 | 27.65% | ||||||
PATTERSON & CO. 1525 W WT HARRIS BLVD CHARLOTTE, NC 28288-1151 | 1,797,674.360 | 12.28% | |||||||
A-5
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 1,536,199.263 | 10.50% | |||||||
THE ANNIE E CASEY FOUNDATION INC., 701 ST PAUL STREET BALTIMORE, MD 21202 | 1,493,677.817 | 10.21% | |||||||
JP MORGAN CHASE BANK TRUSTEE FOR THE ALCON DEFINED CONTRIBUTION 3 CHASE METROTECH CENTER 5TH FLOOR ATTN STEVE RYAN BROOKLYN, NY 11245 | 917,864.959 | 6.27% | |||||||
NATIONAL INVESTOR SERVICES 55 WATER STREET 32ND FLOOR NEW YORK, NY 10041 | 837,762.416 | 5.72% | |||||||
INTERNATIONAL REAL ESTATE PORTFOLIO (CLASS B) | NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 741,264.739 | 91.24% | ||||||
INTERNATIONAL SMALL CAP PORTFOLIO (CLASS A) | CHARLES SCHWAB & CO. INC. 101 MONTGOMERY STREET ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 9,413,748.662 | 16.69% | ||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 7,157,177.407 | 12.69% | |||||||
NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 5,632,605.369 | 9.99% | |||||||
LARGE CAP RELATIVE VALUE PORTFOLIO (CLASS A) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 7,264,061.815 | 43.91% | ||||||
MORGAN STANLEY ASSET MGMT FOR THE ACCOUNT OF HUBBELL INC. 1221 AVENUE OF AMERICAS ATTN JOHN LAM 22ND FLOOR NEW YORK, NY 10020 | 2,222,939.617 | 13.44% | |||||||
A-6
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 1,354,738.069 | 8.19% | |||||||
MORGAN STANLEY CO. 1585 BROADWAY NEW YORK, NY 10036 | 874,168.881 | 5.28% | |||||||
LARGE CAP RELATIVE VALUE PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 5,174,737.721 | 98.42% | ||||||
SMALL COMPANY GROWTH PORTFOLIO (CLASS A) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 18,435,687.517 | 23.30% | ||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 9,588,871.172 | 12.12% | |||||||
MERRILL LYNCH TRUST CO. FSB TRUSTEE QUALIFIED RETIREMENT PLANS PO BOX 1542 PENNINGTON, NJ 08534 | 5,379,286.355 | 6.80% | |||||||
MG TRUST COMPANY TRUSTEE THE ASSET SHOW PRODUCTION SERVICES 401K SUITE 300 700 17TH STREET DENVER, CO 80202 | 4,679,485.593 | 5.91% | |||||||
MAC & CO PO BOX 3198 PITTSBURGH, PA 15230 | 4,033,449.464 | 5.10% | |||||||
SMALL COMPANY GROWTH PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 41,624,381.980 | 58.92% | ||||||
T ROWE PRICE TRUST CO. FBO: RETIREMENT PLAN CLIENTS PO BOX 17215 BALTIMORE, MD 21297 | 4,552,888.059 | 6.44% | |||||||
US REAL ESTATE PORTFOLIO (CLASS A) | NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 11,733,096.979 | 21.66% | ||||||
A-7
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 8,510,950.841 | 15.71% | |||||||
CHARLES SCHWAB & CO. INC. 101 MONTGOMERY STREET ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 5,486,943.899 | 10.13% | |||||||
MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230 | 4,010,319.684 | 7.40% | |||||||
LINSCO/PRIVATE LEDGER CORP ATTN MUTUAL FUND OPERATIONS PO BOX 509046 SAN DIEGO, CA 92150-9046 | 3,419,810.074 | 6.31% | |||||||
US REAL ESTATE PORTFOLIO (CLASS B) | MERRILL LYNCH TRUST CO. FBO: QUALIFIED RETIREMENT PLANS PO BOX 1501 PENNINGTON, NJ 08534-0671 | 3,238,021.808 | 45.25% | ||||||
THE UNION CENTRAL LIFE INSURANCE CO. 1876 WAYCROSS ROAD CINCINNATI, OH 45240 | 2,253,393.154 | 31.49% | |||||||
T ROWE PRICE TRUST CO. PO BOX 17215 BALTIMORE, MD 21297 | 487,376.610 | 6.81% | |||||||
US LARGE CAP GROWTH PORTFOLIO (CLASS A) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 32,276,595.445 | 66.90% | ||||||
MAC & CO. PO BOX 3198 PITTSBURGH, PA 15230 | 9,246,989.547 | 19.16% | |||||||
US LARGE CAP GROWTH PORTFOLIO (CLASS B) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO. FIIOC 100 MAGELLAN WAY KW1C COVINGTON, KY 41015 | 812,650,410 | 45.36% | ||||||
NATIONWIDE LIFE INSURANCE PO BOX 182029 C/O IPO PORTFOLIO ACCOUNTING COLUMBUS, OH 43218-2029 | 335,129.330 | 18.71% | |||||||
NATIONAL FINANCIAL SERVICES 200 LIBERTY STREET NEW YORK, NY 10281 | 220,266.400 | 12.30% | |||||||
A-8
MORGAN STANLEY INSTITUTIONAL FUND TRUST
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
ADVISORY FOREIGN FIXED INCOME II (INSTITUTIONAL CLASS) | KAISER PERMANANTE RETIREMENT PLANS ATTN VIVIAN HEATH 1 KAISER PLAZA OLDSWAY BLDG OAKLAND CA 94612-3610 | 56,785.940 | 63.94% | ||||||
MONSANTO COMPANY DEFINED CONTRIBUTION OWNERSHIP TRUST ATTN PAM MOENCH 800 N LINDBERGH BLVD ST, LOUIS MO 63167 | 10,155.716 | 11.44% | |||||||
CHASE MANHATTAN BANK AS CUSTODIAN FBO SMITHSONIAN INSTITUTION ATTN HAZEL DRINKARD 4 NEW YORK PLZ 4TH FLR NEW YORK, NY 10004 | 9,492.975 | 10.69% | |||||||
THE JOHNS HOPKINS UNIVERSITY 3400 NORTH CHARLES ST BALTIMORE MD 21218 | 6,136.773 | 6.91% | |||||||
ADVISORY FOREIGN FIXED INCOME (INSTITUTIONAL CLASS) | MINNESOTA STATE BOARD OF INVESTMENTS ATTN JASON MATZ SUITE 105 MEA BUILDING 55 SHERBURNE AVE ST PAUL MN 55155 | 2,758,370.211 | 16.04% | ||||||
STATE STREET BANK AS TTEE FBO PACIFIC GAS & ELECTRIC ATTN ARTHUR BARNES 1776 HERITAGE DR NORTH QUINCY MA 02171 | 2,308,840.587 | 13.42% | |||||||
FIRST ENERGY CORPORATION ATTN DON PERRINE 76 SOUTH MAIN ST AKRON OH 44308 | 1,317,538.382 | 7.66% | |||||||
NORTHERN TRUST COMPANY FBO DUKE ENERGY CORP. PO BOX 92956 CHICAGO, IL 60675 | 975,693.513 | 5.67% | |||||||
ADVISORY MORTGAGE (INSTITUTIONAL CLASS) | PACIFIC GAS & ELECTRIC COMPANY ATTN CAROLYN MARGIOTTI MAIL CODE B24K SAN FRANCISCO CA 94177 | 44,731,579.740 | 13.14% | ||||||
A-9
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
FIRST ENERGY CORPORATION ATTN DON PERRINE 76 SOUTH MAIN ST AKRON OH 44308 | 24,346,964.230 | 7.15% | |||||||
NORTHERN TRUST COMPANY FBO DUKE ENERGY CORP PO BOX 92956 CHICAGO, IL 60675 | 18,135,949.470 | 5.33% | |||||||
DAIMLER CHRYSLER CORPORATION PENSION FUND 100 PLAZA ONE M/S 3048 JERSEY CITY, NJ 07311 | 17,384,230.930 | 5.11% | |||||||
BALANCED (INSTITUTIONAL CLASS) | JP MORGAN CHASE AS TRUSTEE FBO SOUTHWEST AIRLINES CO. PROFIT SHARING PLAN 9300 WARD PARKWAY KANSAS CITY MO 64114 | 11,881,506.500 | 59.81% | ||||||
JP MORGAN CHASE AS TRUSTEE FBO SOUTHWEST AIRLINES CO. 401K PLAN 9300 WARD PARKWAY KANSAS CITY, MO 64114 | 3,801,308.912 | 19.13% | |||||||
UNION BANK OF CALIFORNIA N/A CORPORATE CO TRUSTEE SAN MATEO HOTEL 350 CALIFORNIA STREET 11TH FLOOR SAN FRANCISCO CA 94104 | 1,473,884.899 | 7.42% | |||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE LD PURCHASE, NY 10577 | 16,332,457.130 | 79.07% | |||||||
CORE FIXED INCOME (INSTITUTIONAL CLASS) | LOCKHEED MARTIN INVESTMENT MANAGEMENT COMPANY ATTENTION DAVID C TOTH 6705 ROCKLEDGE DR BETHESDA MD 20817 | 2,703,172.640 | 13.09% | ||||||
CORE PLUS FIXED INCOME (INSTITUTIONAL CLASS) | MAC & CO MUTUAL FUND OPERATIONS PO BOX 3198 PITTSBURGH, PA 15230-3198 | 45,963,543.340 | 24.48% | ||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 39,624,171.650 | 21.11% | |||||||
A-10
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS C/O FIIOC AS AGENT 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 10,473,539.390 | 5.58% | |||||||
EQUITIES PLUS (ADVISER CLASS) | MORGAN STANLEY INVESTMENT MANAGEMENT ATTN KAREN ROMERO 195 BROADWAY NEW YORK, NY 10077 | 50,000.000 | 100% | ||||||
EQUITIES PLUS (INSTITUTIONAL CLASS) | MORGAN STANLEY INVESTMENT MANAGEMENT ATTN KAREN ROMERO 195 BROADWAY NEW YORK, NY 10077 | 2,450,000.000 | 100% | ||||||
HIGH YIELD (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 26,861,022.040 | 61.81% | ||||||
MAC & CO PO BOX 3198 PITTSBURGH, PA 15230 | 7,248,014.029 | 16.68% | |||||||
INTERMEDIATE DURATION (INSTITUTIONAL CLASS) | NORTHERN CALIFORNIA BAKERY AND CONFECTIONER HEALTH AND WELFARE FUND 221 MAIN STREET 2ND FLOOR ATTN MERLIN YOUNG SAN FRANCISCO CA 94105 | 310,278.908 | 36.04% | ||||||
INTERMEDIATE DURATION (INSTITUTIONAL CLASS) | MORGAN STANLEY & CO 1585 BROADWAY NEW YORK NY 10036 | 295,004.851 | 34.27% | ||||||
SEI PRIVATE TRUST CO CO HARRIS BANK ID 940 ONE FREEDOM VALLEY DRIVE ATTN MUTUAL FUND ADMINISTRATOR OAKS PA 19456 | 122,027.589 | 14.18% | |||||||
MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 76,922.145 | 8.94% | |||||||
INTERNATIONAL FIXED INCOME (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 8,395,065.262 | 59.62% | ||||||
A-11
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
CHARLES SCHWAB & CO INC ATTN MUTUAL FUNDS 101 MONTGOMERY ST ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 2,164,350.345 | 15.37% | |||||||
PFPC, INC 760 MOORE RD. ATTN STEVE CANTZ KING OF PRUSSIA PA 19406 | 771,748.901 | 5.48% | |||||||
INVESTMENT GRADE FIXED INCOME (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 26,216,321.230 | 58.23% | ||||||
MAC & CO PO BOX 3198 PITTSBURGH, PA 15230 | 9,729,695.690 | 21.61% | |||||||
LIMITED DURATION (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 109,416,652.000 | 93.30% | ||||||
MID CAP GROWTH (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 12,156,106.540 | 31.37% | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS FIIOC AS AGENT 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 8,253,409.912 | 21.30% | |||||||
MAC & CO PO BOX 3198 PITTSBURGH, PA 15230 | 3,747,483.132 | 9.67% | |||||||
MAC & CO PO BOX 3198 PITTSBURGH, PA 15230 | 2,670,604.633 | 6.89% | |||||||
WILMINGTON TRUST COMPANY TTEE FBO FRANTZ WARD LLP RETIREMENT PLAN C/O MUTUAL FUNDS PO BOX 8971 WILMINGTON DE 19899-8880 | 2,303,737.644 | 5.94% | |||||||
MUNICIPAL (INSTITUTIONAL CLASS) | MORGAN STANLEY DW INC. 2000 WESTCHESTER AVE PURCHASE, NY 10577 | 21,834,571.100 | 45.86% | ||||||
CHARLES SCHWAB & CO INC ATTN MUTUAL FUNDS 101 MONTGOMERY ST SAN FRANCISCO, CA 94104 | 6,967,500.317 | 14.63% | |||||||
A-12
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
NATIONAL FINANCIAL SERVICES CORP FBO THEIR CUSTOMERS PO BOX 3908 CHURCH STREET STATION NEW YORK NY 10008-3908 | 3,295,952.370 | 6.92% | |||||||
LINSCO/PRIVATE LEDGER CORP PO BOX 509046 SAN DIEGO, CA 92150-9046 | 2,703,662.768 | 5.68% | |||||||
U.S. MID CAP VALUE (INSTITUTIONAL CLASS) | MAC & CO 525 WILLIAM PENN PLACE ATTN MUTUAL FUND OPERATIONS PITTSBURGH, PA 15219 | 1,296,739.090 | 31.35% | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS FIIOC CO AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 637,885.388 | 15.42% | |||||||
CHARLES SCHWAB & CO INC 101 MONTGOMERY STREET ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 535,608.307 | 12.95% | |||||||
NATIONAL FINANCIAL SERVICES CORP FBO THEIR CUSTOMERS PO BOX 3908 CHURCH STREET STATION NEW YORK NY 10008-3908 | 407,735.690 | 9.86% | |||||||
U.S. SMALL CAP VALUE (INSTITUTIONAL CLASS) | MORGAN STANLEY DEAN WITTER INC. 2000 WESTCHESTER AVE LD PURCHASE, NY 10577 | 22,608,064.660 | 78.25% | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 3,442,641.463 | 11.92% | |||||||
THE MCCONNELL FOUNDATION PO BOX 492050 REDDING CA 96049-2050 | 1,568,435.642 | 5.43% | |||||||
VALUE (INSTITUTIONAL CLASS) | MAC & CO MUTUAL FUND OPERATIONS PO BOX 3198 PITTSBURGH, PA 15230-3198 | 4,663,915.822 | 28.04% | ||||||
A-13
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
CHARLES SCHWAB & CO INC 101 MONTGOMERY STREET ATTN MUTUAL FUNDS SAN FRANCISCO, CA 94104 | 2,592,182.390 | 15.59% | |||||||
LA SALLE BANK PO BOX 1443 CHICAGO IL 60690 | 2,049,636.509 | 12.32% | |||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 1,006,277.992 | 6.05% | |||||||
BALANCED (INVESTMENT CLASS) | KANO PROFIT SHARING PLAN ATTN RHOADS ZIMMERMAN PO BOX 110098 NASHVILLE TN 37222 | 311,520.929 | 98.47% | ||||||
CORE PLUS FIXED INCOME (INVESTMENT CLASS) | SEI TRUST COMPANY FBO MORGAN STANLEY STABLE VALUE FUND ONE FREEDOM VALLEY DR ATT JOHN HEMAK OAKS PA 19456-1019 | 11,616,122.320 | 95.74% | ||||||
HIGH YIELD (INVESTMENT CLASS) | NORTHERN TRUST COMPANY AS CUSTODIAN FOR NOBLEHOUSE INTERNATIONAL LTD PO BOX 92956 CHICAGO, IL 60675 | 164,327.951 | 71.12% | ||||||
FRED K SCHOMER 12026 NORTH 118TH WAY SCOTTSDALE AZ 85259 | 58,106.400 | 25.15% | |||||||
INTERMEDIATE DURATION (INVESTMENT CLASS) | SEI TRUST COMPANY FBO MORGAN STANLEY STABLE VALUE FUND ONE FREEDOM VALLEY DR ATTENTION JOHN HEMAK OAKS PA 19456 | 13,086,523.360 | 100.00% | ||||||
U.S. MID CAP VALUE (INVESTMENT CLASS) | WTC TTEE FBO MULTICARE HEALTH SYS MULTI HEALTH CARE 403B AC 574192 PO BOX 8971 WILMINGTON DE 19899-8880 | 9,729,695.690 | 84.40% | ||||||
WTC TTEE FBD MULTICARE HEALTH SYS 457F CAPITAL ACCUM A/C 067233-001-2 1100 N. MARKET ST. WILMINGTON, DE 19801 | 5,266.078 | 6.15% | |||||||
A-14
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
VALUE (INVESTMENT CLASS) | THE BANK OF NEW YORK AS TRUSTEE FOR NEW YORK STATE DEFERRED ONE WALL STREET 12TH FLOOR NEW YORK NY 10286-0001 | 3,360,698.772 | 100.00% | ||||||
BALANCED (ADVISER CLASS) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 2,141,268.716 | 72.02% | ||||||
WACHOVIA BANK N.A. 1525 WEST W.T. HARRIS BOULEVARD CHARLOTTE NC 28288-1151 | 753,511.880 | 25.34% | |||||||
CORE FIXED INCOME (ADVISER CLASS) | AMERIPRISE TRUST COMPANY FBO THE BENEFIT OF AMERIPRISE 996 AXP FINANCIAL CTR TRUST RETIREMENT SERVICES PLANS MINNEAPOLIS, MN 55474 | 907,137.152 | 99.99% | ||||||
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 4,666,345.553 | 42.99% | |||||||
THE UNION CENTRAL LIFE INSURANCE COMPANY-GROUP SEPARATE ACCOUNT ATTN ROBERTA UJUARY 1876 WAYCROSS RD CINCINNATI OH 45240 | 4,129,295.868 | 38.04% | |||||||
FIDELITY MANAGEMENT TRUST COMPANY ATTN LITO JACO MAIL ZONE ZIM 82 DEVONSHIRE ST MAIL ZONE Z1M BOSTON MA 02109 | 5,600,775.122 | 11.26% | |||||||
HIGH YIELD (ADVISER CLASS) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 454,003.814 | 52.44% | ||||||
NATIONAL INVESTOR SERVICES 55 WATER STREET 32ND FLOOR NEW YORK NY 10041 | 107,478.210 | 12.42% | |||||||
A-15
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
NATIONAL FINANCIAL SERVICES CORPORATION FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS ATTN MUTUAL FUNDS DEPT 5TH FLOOR ONE WORLD FINANCIAL CENTER NEW YORK NY 10281 | 66,798.680 | 7.72% | |||||||
MORGAN STANLEY & CO. 1585 BROADWAY NEW YORK, NY 10036 | 59,687.908 | 6.89% | |||||||
INVESTMENT GRADE FIXED INCOME (ADVISER CLASS) | MORGAN STANLEY & CO 1585 BROADWAY NEW YORK NY 10036 | 28,598.415 | 27.93% | ||||||
MORGAN STANLEY & CO 1585 BROADWAY NEW YORK NY 10036 | 24,666.220 | 24.09% | |||||||
MORGAN STANLEY & CO 1585 BROADWAY NEW YORK NY 10036 | 17,681.114 | 17.27% | |||||||
CYNTHIA MOSELEY PERSONAL REPRESENTATIVE OF THE ESTATE OF DANIEL D. MOSELEY 662 OTIS BLVD SPARTANBURG, SC 29302 | 9,268.751 | 9.05% | |||||||
PAUL E HELLMERS & H ANTHY HELLMERS 6 SPRUCE DRIVE SALISBURY CT 06068 | 7,219.468 | 7.05% | |||||||
MID CAP GROWTH (ADVISER CLASS) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KWIC COVINGTON KY 41015 | 20,428,232.530 | 43.01% | ||||||
NATIONAL FINANCIAL SERVICES CORPORATION FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS ATTN MUTUAL FUNDS DEPT 5TH FLOOR ONE WORLD FINANCIAL CENTER NEW YORK NY 10281 | 11,561,619.890 | 24.34% | |||||||
A-16
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
MERRILL LYNCH TRUST CO TTEE FBO QUALIFIED RETIREMENT PLANS ATTN JERRY STONE PO BOX 1501 PENNINGTON NJ 08534-0671 | 5,600,775.122 | 11.79% | |||||||
VALIC C/O AMERICAN GENERAL 2919 ALLEN PKWY L7-01 HOUSTON TX 77019 | 5,445,659.252 | 11.46% | |||||||
U.S. MID CAP VALUE (ADVISER CLASS) | MERCER TRUST COMPANY TTEE IDX SYSTEMS CORP RETIREMENT INCOME PLAN INVESTORS WAY NORWOOD MA 02062 | 185,687.362 | 39.16% | ||||||
PRIAL AS TTEE/ CUSTODIAN FBO VARIOUS RETIREMENT PLANS 801 PENNSYLVANIA KANSAS CITY, MO 64105 | 52,360.078 | 11.04% | |||||||
MERCER TRUST COMPANY TTEE FBO KROLL INC 401K PLAN ONE INVESTORS WAY 195.C1C NORWOOD MA 02062 | 46,367.227 | 9.78% | |||||||
RETIREMENT PLAN FOR EMPLOYEES OF DEARBORN COUNTY HOSPITAL 600 WILSON CREEK ROAD ATTN PHIL MEYER LAWRENCEBURG IN 47025 | 41,878.993 | 8.83% | |||||||
MAC & CO 525 WILLIAMS PENN PLACE ATTN MUTUAL FUND OPERATIONS PITTSBURGH, PA 15219 | 38,207.993 | 8.06% | |||||||
U.S. SMALL CAP VALUE (ADVISER CLASS) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KW1C COVINGTON KY 41015 | 610,294.063 | 60.99% | ||||||
A-17
PORTFOLIO | NAME AND ADDRESS | NUMBER OF SHARES | % OF CLASS | ||||||
M & I 401K PLAN PO BOX 419692 MANAGEMENT REPORTING TEAM 1010 GRAND BLVD KANSAS CITY MO 64141-6692 | 155,937.241 | 15.58% | |||||||
VANGUARD FIDUCIARY TRUST CO MAS ADVISER CLASS FUNDS PO BOX 2600 VM 613 VALLEY FORGE PA 19482 | 90,771.019 | 9.07% | |||||||
WACHOVIA BANK 1525 WEST W T HARRIS BLVD CHARLOTTE NC 28288-1151 | 90,539.158 | 9.05% | |||||||
WORLDVISION INC PO BOX 9716 ATTN JOHN DAGGETT FEDERAL WAY WA 98063-9716 | 51,656,177 | 5.16% | |||||||
VALUE (ADVISER CLASS) | FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO FIIOC AS AGENT FOR 100 MAGELLAN WAY KW1C COVINGTON KY 41015-1987 | 9,160,665.258 | 93.59% | ||||||
A-18
SHARES OUTSTANDING AS OF THE RECORD DATE
Shares Outstanding | |||
MSIF, Inc. | |||
Portfolio | |||
Active International Allocation Portfolio | 64,513,114.583 | ||
Emerging Markets Portfolio | 73,061,084.671 | ||
Emerging Markets Debt Portfolio | 7,904,790.996 | ||
Focus Equity Portfolio | 4,654,350.876 | ||
Global Franchise Portfolio | 8,194,894.170 | ||
Global Value Equity Portfolio | 5,854,798.571 | ||
International Equity Portfolio | 334,475,192.244 | ||
International Growth Portfolio | 545,144.909 | ||
International Magnum Portfolio | 7,616,105.570 | ||
International Real Estate Portfolio | 18,517,342.095 | ||
International Small Cap Portfolio | 55,869,449.887 | ||
Large Cap Relative Value Portfolio | 21,643,859.075 | ||
Money Market Portfolio | 351,813,999.270 | ||
Municipal Money Market Portfolio | 277,155,334.980 | ||
Small Company Growth Portfolio | 149,913,550.600 | ||
Systematic Active Large Cap Core Portfolio | 600,000.000 | ||
Systematic Active Small Cap Core Portfolio | 660,000.000 | ||
Systematic Active Small Cap Growth Portfolio | 690,000.000 | ||
Systematic Active Small Cap Value Portfolio | 670,000.000 | ||
U.S. Large Cap Growth Portfolio | 50,427,137.378 | ||
U.S. Real Estate Portfolio | 61,654,971.139 | ||
MSIF Trust
Portfolio
Advisory Foreign Fixed Income Portfolio | 17,036,909.666 | ||
Advisory Foreign Fixed Income II Portfolio | 88,809.152 | ||
Advisory Mortgage Portfolio | 336,305,039.190 | ||
Balanced Portfolio | 24,248,680.050 | ||
Core Fixed Income Portfolio | 21,733,515.858 | ||
Core Plus Fixed Income Portfolio | 210,917,825.763 | ||
Equities Plus Portfolio | 2,500,000.000 | ||
High Yield Portfolio | 44,005,412.875 | ||
Intermediate Duration Portfolio | 13,952,485.168 | ||
International Fixed Income Portfolio | 14,254,347.419 | ||
Investment Grade Fixed Income Portfolio | 45,168,473.338 | ||
Limited Duration Portfolio | 116,870,389.941 | ||
Mid Cap Growth Portfolio | 80,325,943.766 | ||
Municipal Portfolio | 48,031,749.115 | ||
U.S. Mid Cap Value Portfolio | 4,595,120.712 | ||
U.S. Small Cap Value Portfolio | 29,765,188.776 | ||
Value Portfolio | 30,061,436.761 | ||
A-19
Schedule A
JOINT GOVERNANCE COMMITTEE CHARTER
OF THE
MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS
AS ADOPTED ON JULY 31, 2003
AND AS AMENDED ON
APRIL 22, 2004
1. | MISSION STATEMENT |
The Governance Committee (the ‘‘Governance Committee’’) is a committee of the Board of Trustees/Directors (referred to herein as the ‘‘Trustees’’ and collectively as the ‘‘Board’’) of each Fund listed in the attached Exhibit A .. The purpose of the Governance Committee is to: (1) evaluate the suitability of potential candidates for election to the Board and recommend candidates for nomination by the Independent Trustees (as defined below); (2) develop and recommend to the Board a set of corporate governance principles applicable to the Fund, monitor corporate governance matters and make recommendations to the Board and act as the administrative committee with respect to Board policies and procedures, and committee policies and procedures; and (3) oversee periodic evaluations of the Board and any committees of the Board.
2. | COMPOSITION |
The Governance Committee shall be comprised of three or more Trustees of the Board. Governance Committee members shall be designated by the full Board, and the manner of selection of the Governance Committee chair shall also be designated by the full Board.
Each member of the Governance Committee shall be an independent director or trustee. A person shall be considered to be independent if he or she: (a) is independent as defined in New York Stock Exchange Listed Company Standard 303.01 (2) and (3); (b) is a ‘‘disinterested person’’ as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended; and (c) does not accept, directly or indirectly, any consulting, advisory or other compensatory fee from any of the Funds or their investment advisor or any affiliated person of the advisor, other than fees from the Funds for serving as a member of the Funds' Boards or Committees of the Boards. Such independent directors or trustees are referred to herein as the ‘‘Independent Trustees.’’
3. | MEETINGS OF THE GOVERNANCE COMMITTEE |
The Governance Committee shall fix its own rules of procedure, which shall be consistent with the Fund's organizational documents and this Governance Committee Charter. The Governance Committee shall meet at such times as may be determined as appropriate by the Committee. The Governance Committee, in its discretion, may ask Trustees, members of management or others, whose advice and counsel are sought by the Governance Committee, to attend its meetings (or portions thereof) and to provide such pertinent information as the Governance Committee requests.
The Governance Committee shall cause to be maintained minutes of all meetings and records to those meetings and provide copies of such minutes to the Board and the Fund.
4. | AUTHORITY |
The Governance Committee shall have the authority to carry out its duties and responsibilities as set forth in this Governance Committee Charter.
1 | This Joint Governance Committee has been adopted by each Fund. Solely for the sake of clarity and simplicity, this Joint Governance Committee Charter has been drafted as if there is a single Fund, a single Governance Committee and a single board. The terms ‘‘Governance Committee,’’ ‘‘Trustees’’ and ‘‘Board’’ mean the Governance Committee, Trustees and the Board of each Fund, respectively, unless the context otherwise requires. The Governance Committee, Trustees and the Board of each Fund, however, shall act separately and in the best interests of its respective Fund. |
Sch A-1
5. | GOALS, DUTIES AND RESPONSIBILITIES OF THE GOVERNANCE COMMITTEE |
In carrying out its duties and responsibilities, the Governance Committee's policies and procedures will remain flexible, so that it may be in a position to react or respond to changing circumstances or conditions. The following are the duties and responsibilities of the Governance Committee:
a. | Board Candidates and Nominees |
The Governance Committee shall have the following goals and responsibilities with respect to Board candidates and nominees: |
i. | evaluate the suitability of potential trustee/director candidates proposed by Trustees, shareholders or others; |
ii. | recommend, for nomination by the Independent Trustees, candidates for election as an Independent Trustee by the shareholders or appointment by the Board, as the case may be, pursuant to the Fund's organizational documents. Persons recommended by the Governance Committee shall possess such knowledge, experience, skills, expertise and diversity so as to enhance the Board's ability to manage and direct the affairs and business of the Fund, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or any listing requirements of the New York Stock Exchange (‘‘NYSE’’) as applicable to the Fund; and |
iii. | review the suitability for continued service as a trustee/director of each Independent Trustee when his or her term expires and at such other times as the Governance Committee deems necessary or appropriate, and to recommend whether or not the Independent Trustee should be re-nominated by the Independent Trustees. |
b. | Corporate Governance |
The Governance Committee shall have the following goals and principles with respect to Board corporate governance: |
i. | monitor corporate governance principles for the Fund, which shall be consistent with any applicable laws, regulations and listing standards, considering, but not limited to, the following: |
(1) | trustee/director qualification standards to reflect the independence requirements of the Sarbanes-Oxley Act of 2002, as amended (‘‘SOX’’) and the rules thereunder, the Investment Company Act of 1940, as amended (‘‘the 1940 Act’’), and the NYSE; |
(2) | trustee/director duties and responsibilities; |
(3) | trustee/director access to management, and, as necessary and appropriate, independent advisers; and |
(4) | trustee/director orientation and continuing education; |
ii. | review periodically the corporate governance principles adopted by the Board to assure that they are appropriate for the Fund and comply with the requirements of SOX, the 1940 Act and the NYSE, and to recommend any desirable changes to the Board; |
iii. | consider other corporate governance issues that arise from time to time, and to develop appropriate recommendations for the Board; and |
c. | Periodic Evaluations |
The Governance Committee shall be responsible for overseeing the evaluation of the Board as a whole and each Committee. The Governance Committee shall establish procedures to allow it to exercise this oversight function.
In conducting this review, the Governance Committee shall evaluate whether the Board appropriately addresses the matters that are or should be within its scope pursuant to the set of
Sch A-2
corporate governance principles adopted by the Governance Committee. The Governance Committee shall address matters that the Governance Committee considers relevant to the Board's performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by management of the Fund to the Board, and whether the number and length of meetings of the Board were adequate for the Board to complete its work in a thorough and thoughtful manner.
The Governance Committee shall report to the Board on the results of its evaluation, including any recommended changes to the principles of corporate governance, and any recommended changes to the Fund's or the Board's or a Committee's policies or procedures. This report may be written or oral.
6. | EVALUATION OF THE GOVERNANCE COMMITTEE |
The Governance Committee shall, on an annual basis, evaluate its performance under this Joint Governance Committee Charter. In conducting this review, the Governance Committee shall evaluate whether this Joint Governance Committee Charter appropriately addresses the matters that are or should be within its scope. The Governance Committee shall address matters that the Governance Committee considers relevant to its performance, including at least the following: the adequacy, appropriateness and quality of the information and recommendations presented by the Governance Committee to the Board, and whether the number and length of meetings of the Governance Committee were adequate for the Governance Committee to complete its work in a thorough and thoughtful manner.
The Governance Committee shall report to the Board on the results of its evaluation, including any recommended amendments to this Joint Governance Committee Charter, and any recommended changes to the Fund's or the Board's policies or procedures. This report may be written or oral.
7. | INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS |
The Governance Committee may conduct or authorize investigations into or studies of matters within the Governance Committee's scope of responsibilities, and may retain, at the Fund's expense, such independent counsel or other advisers as it deems necessary.
Sch A-3
VOTING INSTRUCTION VOTING INSTRUCTION MORGAN STANLEY INSTITUTIONAL FUND, INC. PROXY FOR SPECIAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 1, 2006 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned hereby constitutes and appoints RONALD E. ROBISON, STEFANIE V. CHANG YU and BARRY FINK, and each of them, as proxies for the undersigned, with full power of substitution and resubstitution, and hereby authorizes said proxies, and each of them to represent and vote, as designated on the reverse side, all stock of Morgan Stanley Institutional Fund, Inc. Portfolio(s) held of record by the undersigned on May 30, 2006 at the Special Meeting of Stockholders to be held on Tuesday, August 1, 2006 at 1221 Avenue of the Americas, New York, New York 10020, and at any adjournment thereof. The undersigned hereby revokes any and all proxies with respect to such stock heretofore given by the undersigned. THE MATTERS BEING CONSIDERED HAVE BEEN PROPOSED BY MANAGEMENT. THE MATTERS BEING PROPOSED ARE RELATED TO, BUT NOT CONDITIONED ON, THE APPROVAL OF EACH OTHER. THIS PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER, AND, IN THE DISCRETION OF SUCH PROXIES, UPON ANY AND ALL OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. IF NO DIRECTION IS MADE, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTORS FOR THE PORTFOLIO(S) AND FOR THE OTHER PROPOSALS LISTED ON THIS PROXY CARD. VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM VOTE VIA THE TELEPHONE: 1-866-235-4258 [999 99999 999 999] [ ] NOTE: Please sign exactly as name(s) appear(s) on the records of a Fund. Joint owners should each sign personally. Trustees and other representatives should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation or another entity, the signature should be that of an authorized officer who should state his or her full title. ----------------------------------------------------- Signature ----------------------------------------------------- Signature (if held jointly) ----------------------------------------------------- Date 16427_IOE_A PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- Active International Alloc Emerging Markets Emerging Markets Debt Focus Equity Global Franchise Global Value Equity International Equity International Growth Equity International Magnum International Real Estate International Small Cap Large Cap Relative Value Money Market Municipal Money Market Small Company Growth Sys Active Large Cap Core Sys Active Small Cap Core Sys Active Sm Cap Growth Sys Active Sm Cap Value U.S. Large Cap Growth U.S. Real Estate TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD. THE BOARD OF DIRECTORS OF MORGAN STANLEY INSTITUTIONAL FUND, INC. RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS. PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X] -------------------------------------------------------------------------------- [ ] To vote FOR ALL Proposals for all Funds mark this box. No other vote is necessary. -------------------------------------------------------------------------------- 1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS: 01. Frank L. Bowman 02. Kathleen A. Dennis [ ] [ ] [ ] 03. Michael F. Klein 04. W. Allen Reed To withhold authority to vote for any individual, mark the box "FOR ALL EXCEPT" and write the nominee's number on the line provided. --------------------------- 2. TO MODIFY CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE PORTFOLIO(S) REGARDING: 2.a. DIVERSIFICATION POLICY. FOR AGAINST ABSTAIN Active International Alloc [ ] [ ] [ ] Global Value Equity [ ] [ ] [ ] International Magnum [ ] [ ] [ ] Small Company Growth [ ] [ ] [ ] Sys Active Sm Cap Growth [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Emerging Markets [ ] [ ] [ ] Global Franchise [ ] [ ] [ ] International Equity [ ] [ ] [ ] International Growth Equity [ ] [ ] [ ] International Small Cap [ ] [ ] [ ] Large Cap Relative Value [ ] [ ] [ ] Sys Active Large Cap Core [ ] [ ] [ ] Sys Active Small Cap Core [ ] [ ] [ ] Sys Active Sm Cap Value [ ] [ ] [ ] U.S. Large Cap Growth [ ] [ ] [ ] 2.b. BORROWING POLICY. FOR AGAINST ABSTAIN Active International Alloc [ ] [ ] [ ] Focus Equity [ ] [ ] [ ] International Equity [ ] [ ] [ ] International Real Estate [ ] [ ] [ ] Small Company Growth [ ] [ ] [ ] Sys Active Sm Cap Growth [ ] [ ] [ ] U.S. Real Estate [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Emerging Markets [ ] [ ] [ ] Emerging Markets Debt [ ] [ ] [ ] Global Franchise [ ] [ ] [ ] Global Value Equity [ ] [ ] [ ] International Growth Equity [ ] [ ] [ ] International Magnum [ ] [ ] [ ] International Small Cap [ ] [ ] [ ] Large Cap Relative Value [ ] [ ] [ ] Sys Active Large Cap Core [ ] [ ] [ ] Sys Active Small Cap Core [ ] [ ] [ ] Sys Active Sm Cap Value [ ] [ ] [ ] U.S. Large Cap Growth [ ] [ ] [ ] 2.c. LOAN POLICY. FOR AGAINST ABSTAIN Active International Alloc [ ] [ ] [ ] Focus Equity [ ] [ ] [ ] International Equity [ ] [ ] [ ] International Real Estate [ ] [ ] [ ] Small Company Growth [ ] [ ] [ ] Sys Active Sm Cap Growth [ ] [ ] [ ] U.S. Real Estate [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Emerging Markets [ ] [ ] [ ] Emerging Markets Debt [ ] [ ] [ ] Global Franchise [ ] [ ] [ ] Global Value Equity [ ] [ ] [ ] International Growth Equity [ ] [ ] [ ] International Magnum [ ] [ ] [ ] International Small Cap [ ] [ ] [ ] Large Cap Relative Value [ ] [ ] [ ] Sys Active Large Cap Core [ ] [ ] [ ] Sys Active Small Cap Core [ ] [ ] [ ] Sys Active Sm Cap Value [ ] [ ] [ ] U.S. Large Cap Growth [ ] [ ] [ ] 2.d. COMMODITIES POLICY. FOR AGAINST ABSTAIN Active International Alloc [ ] [ ] [ ] Focus Equity [ ] [ ] [ ] International Equity [ ] [ ] [ ] International Real Estate [ ] [ ] [ ] Small Company Growth [ ] [ ] [ ] Sys Active Sm Cap Growth [ ] [ ] [ ] U.S. Real Estate [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Emerging Markets [ ] [ ] [ ] Emerging Markets Debt [ ] [ ] [ ] Global Franchise [ ] [ ] [ ] Global Value Equity [ ] [ ] [ ] International Growth Equity [ ] [ ] [ ] International Magnum [ ] [ ] [ ] International Small Cap [ ] [ ] [ ] Large Cap Relative Value [ ] [ ] [ ] Sys Active Large Cap Core [ ] [ ] [ ] Sys Active Small Cap Core [ ] [ ] [ ] Sys Active Sm Cap Value [ ] [ ] [ ] U.S. Large Cap Growth [ ] [ ] [ ] 2.e. SENIOR SECURITIES POLICY. FOR AGAINST ABSTAIN Active International Alloc [ ] [ ] [ ] Focus Equity [ ] [ ] [ ] International Equity [ ] [ ] [ ] International Real Estate [ ] [ ] [ ] Small Company Growth [ ] [ ] [ ] Sys Active Sm Cap Growth [ ] [ ] [ ] U.S. Real Estate FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Emerging Markets [ ] [ ] [ ] Emerging Markets Debt [ ] [ ] [ ] Global Franchise [ ] [ ] [ ] Global Value Equity [ ] [ ] [ ] International Growth Equity [ ] [ ] [ ] International Magnum [ ] [ ] [ ] International Small Cap [ ] [ ] [ ] Large Cap Relative Value [ ] [ ] [ ] Sys Active Large Cap Core [ ] [ ] [ ] Sys Active Small Cap Core [ ] [ ] [ ] Sys Active Sm Cap Value [ ] [ ] [ ] U.S. Large Cap Growth [ ] [ ] [ ] 16427_IOE_A VOTING INSTRUCTION VOTING INSTRUCTION MORGAN STANLEY INSTITUTIONAL FUND TRUST PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 1, 2006 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The undersigned hereby constitutes and appoints RONALD E. ROBISON, STEFANIE V. CHANG YU and BARRY FINK, and each of them, as proxies for the undersigned, with full power of substitution and resubstitution, and hereby authorizes said proxies, and each of them to represent and vote, as designated on the reverse side, all shares of Morgan Stanley Institutional Fund Trust Portfolio(s) held of record by the undersigned on May 30, 2006 at the Special Meeting of Shareholders to be held on Tuesday, August 1, 2006 at 1221 Avenue of the Americas, New York, New York 10020, and at any adjournment thereof. The undersigned hereby revokes any and all proxies with respect to such shares heretofore given by the undersigned. THE MATTERS BEING CONSIDERED HAVE BEEN PROPOSED BY MANAGEMENT. THE MATTER BEING PROPOSED ARE RELATED TO, BUT NOT CONDITIONED ON, THE APPROVAL OF EACH OTHER. THIS PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER, AND, IN THE DISCRETION OF SUCH PROXIES, UPON ANY AND ALL OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. IF NO DIRECTION IS MADE, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AS TRUSTEES FOR THE PORTFOLIO(S) AND FOR THE OTHER PROPOSALS LISTED ON THIS PROXY CARD. VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM VOTE VIA THE TELEPHONE: 1-866-235-4258 [999 99999 999 999] [ ] NOTE: Please sign exactly as name(s) appear(s) on the records of a Fund. Joint owners should each sign personally. Trustees and other representatives should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation or another entity, the signature should be that of an authorized officer who should state his or her full title. ------------------------------------------------------------ Signature ------------------------------------------------------------ Signature (if held jointly) ------------------------------------------------------------ Date 16427_IOE-B PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- Advisory Frgn Fixed Inc Advisory Frgn Fixed Inc II Advisory Mortgage Balanced Core Fixed Core Plus Fixed Inc Equity Equities Plus High Yield Intermediate Duration International Fixed Inc Investment Grade Fixed Inc Limited Duration Mid-Cap Growth Municipal U.S. Mid-Cap Value U.S. Small-Cap Value Value TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD. THE BOARD OF TRUSTEES OF MORGAN STANLEY INSTITUTIONAL FUND TRUST RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS. PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X] -------------------------------------------------------------------------------- [ ] To vote FOR ALL Proposals for all Funds mark this box. No other vote is necessary. -------------------------------------------------------------------------------- 1. ELECTION OF THE FOLLOWING NOMINEES AS TRUSTEES: 01. Frank L. Bowman 02. Kathleen A. Dennis [ ] [ ] [ ] 03. Michael F. Klein 04. W. Allen Reed To withhold authority to vote for any individual, mark the box "FOR ALL EXCEPT" and write the nominee's number on the line provided. ---------------------------- 2. TO MODIFY CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE PORTFOLIO(S) REGARDING: 2.a. DIVERSIFICATION POLICY. FOR AGAINST ABSTAIN Advisory Mortgage [ ] [ ] [ ] Core Plus Fixed Inc [ ] [ ] [ ] High Yield [ ] [ ] [ ] Limited Duration [ ] [ ] [ ] U.S. Mid-Cap Value [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Balanced [ ] [ ] [ ] Core Fixed [ ] [ ] [ ] Equity [ ] [ ] [ ] Equities Plus [ ] [ ] [ ] Intermediate Duration [ ] [ ] [ ] Investment Grade Fixed Inc [ ] [ ] [ ] Mid-Cap Growth [ ] [ ] [ ] Municipal [ ] [ ] [ ] U.S. Small-Cap Value [ ] [ ] [ ] Value [ ] [ ] [ ] 2.b. BORROWING POLICY. FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc [ ] [ ] [ ] Balanced [ ] [ ] [ ] Equity [ ] [ ] [ ] International Fixed Inc [ ] [ ] [ ] Limited Duration [ ] [ ] [ ] U.S. Mid-Cap Value [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc II [ ] [ ] [ ] Advisory Mortgage [ ] [ ] [ ] Core Fixed [ ] [ ] [ ] Core Plus Fixed Inc [ ] [ ] [ ] Equities Plus [ ] [ ] [ ] High Yield [ ] [ ] [ ] Intermediate Duration [ ] [ ] [ ] Investment Grade Fixed Inc [ ] [ ] [ ] Mid-Cap Growth [ ] [ ] [ ] Municipal [ ] [ ] [ ] U.S. Small-Cap Value [ ] [ ] [ ] Value [ ] [ ] [ ] 2.c. LOAN POLICY. FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc [ ] [ ] [ ] Balanced [ ] [ ] [ ] Equity [ ] [ ] [ ] International Fixed Inc [ ] [ ] [ ] Limited Duration [ ] [ ] [ ] U.S. Mid-Cap Value [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc II [ ] [ ] [ ] Advisory Mortgage [ ] [ ] [ ] Core Fixed [ ] [ ] [ ] Core Plus Fixed Inc [ ] [ ] [ ] Equities Plus [ ] [ ] [ ] High Yield [ ] [ ] [ ] Intermediate Duration [ ] [ ] [ ] Investment Grade Fixed Inc [ ] [ ] [ ] Mid-Cap Growth [ ] [ ] [ ] Municipal [ ] [ ] [ ] U.S. Small-Cap Value [ ] [ ] [ ] Value [ ] [ ] [ ] 2.d. COMMODITIES POLICY. FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc [ ] [ ] [ ] Balanced [ ] [ ] [ ] Equity [ ] [ ] [ ] International Fixed Inc [ ] [ ] [ ] Limited Duration [ ] [ ] [ ] U.S. Mid-Cap Value [ ] [ ] [ ] FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN Advisory Frgn Fixed Inc II [ ] [ ] [ ] Advisory Mortgage [ ] [ ] [ ] Core Fixed [ ] [ ] [ ] Core Plus Fixed Inc [ ] [ ] [ ] Equities Plus [ ] [ ] [ ] High Yield [ ] [ ] [ ] Intermediate Duration [ ] [ ] [ ] Investment Grade Fixed Inc [ ] [ ] [ ] Mid-Cap Growth [ ] [ ] [ ] Municipal [ ] [ ] [ ] U.S. Small-Cap Value [ ] [ ] [ ] Value [ ] [ ] [ ] 16427_IOE_B