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                          SECOND AMENDED AND RESTATED RETIREMENT PLAN FOR
                            NON-INTERESTED TRUSTEES OR DIRECTORS

    Certain of the investment companies for which Morgan Stanley Dean Witter
Advisors Inc. ("MSDW Advisors") currently acts as manager or adviser adopted a
Retirement Plan for Non-Interested Trustees and Directors (the "Original Plan")
on February 21, 1991 (the "Commencement Date"). The Original Plan was amended
and restated on October 22, 1993, effective January 1, 1994 and further amended
by First Amendment dated December 19, 1995 and by Second Amendment dated May 8,
1997. The participating Funds now desire to amend and restate the Plan further
as provided herein effective as of the Commencement Date (as so amended, the
"Plan"), for the purposes of expanding the flexibility of Non-Interested
Trustees and Directors to make and change their elections of benefits.
    1.  DEFINITIONS
   (a) "Independent Board Member" shall mean (i) a Trustee of an Adopting Fund
if the Adopting Fund is organized as a Massachusetts business trust, (ii) a
Director of an Adopting Fund if the Adopting Fund is organized as a corporation,
and (iii) a "director" (as such term is defined in Section 2(a)(12) of the
Investment Company Act of 1940, as amended [the "Act"]) of an Adopting Fund if
the Adopting Fund is any other type of organization, who in any such case is not
an interested person (as such term is defined in Section 2(a)(19) of the Act) of
MSDW Advisors.

    (b) "Eligible Board Member" shall mean an Independent Board Member who at
the time of Retirement (as hereinafter defined) has served as an Independent
Board Member of any Adopting Fund for at least five years, or such lesser period
as may be determined by the Board.

    (c) "Eligible Service" shall mean service as an Independent Board Member.

   (d) "Eligible Retirement Date" shall mean, with respect to any Independent
Board Member, the later of (i) January 1, 1993, (ii) the first day of the
calendar month following the month in which such Independent Board Member's
seventy-second birthday occurs, or (iii) such later date as the Board may
establish as his or her "Eligible Retirement Date."

    (e) "Retirement" shall mean any termination of service of an Independent
Board Member except any termination which the Board determines to have resulted
from the Independent Board Member's willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Independent Board Member.

   (f) "Benefit" shall mean with respect to any Eligible Board Member, (i) the
Regular Benefit, unless the Alternate Benefit has been elected or the Early
Benefit granted, (ii) the Alternate Benefit, if elected by such Eligible Board
Member, unless the Early Benefit has been granted, or (iii) the Early Benefit,
if granted by the Board.

   (g) "Eligible Compensation" shall mean, with respect to any Eligible Board
Member of any Adopting Fund, an amount equal to one-fifth of the total
compensation, inclusive of compensation as a member of the Board or of a Board
Committee or as chairperson of a Board Committee, earned by such Eligible Board
Member for Eligible Service with respect to such Adopting Fund (other than under
this Plan) in the five year period prior to the date of his or her Retirement.

   (h) "Actuarial Equivalent" shall mean an actuarially equivalent benefit, as
computed by the Board with the advice of an enrolled actuary (as defined in the
Employee Retirement Income Security Act of 1974, as amended ["ERISA"]), using
assumptions determined by the Board at the time of the computation.

     (i) "Board" shall mean, with respect to any Adopting Fund, the Board of
Directors or Trustee or "directors," (as such term is defined in Section
2(a)(12) of the Act, of such Adopting Fund.
    (j) "Adoption Date" shall mean February 21, 1991.
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    2.  ELIGIBILITY

   Each Eligible Board Member will be eligible to receive a Benefit from each
Adopting Fund commencing on such Eligible Board Member's Eligible Retirement
Date.

    3.  RETIREMENT DATE; AMOUNT OF BENEFIT

    (a) RETIREMENT. Each Independent Board Member will retire not later than his
or her Eligible Retirement Date. The foregoing provision shall be deemed by the
adoption of this Plan by any Fund to be an amendment of such Fund's by-laws
superseding any provision therein that an Independent Board Member shall serve
until his or her successor shall have been elected and qualified.
Notwithstanding the foregoing, the Board of any Adopting Fund may, to avoid the
simultaneous retirement of more than one of the Independent Board Members or for
any other appropriate reason, waive the obligation of any Independent Board
Member to retire on such date and may establish a later date as his or her
"Eligible Retirement Date." Any establishment of an Eligible Retirement Date may
be further extended by the Board.

   (b) REGULAR RETIREMENT BENEFIT. Upon Retirement, each Eligible Board Member
will receive, commencing as of such Eligible Board Member's Eligible Retirement
Date and continuing for the remainder of the Eligible Board Member's life, from
each Adopting Fund a retirement benefit (the "Regular Benefit") paid at an
annual rate equal to the percentage of his or her Eligible Compensation
established by resolution of the Board of such Adopting Fund most recently
adopted prior to the date of his or her retirement (the "Most Recent
Resolution") as the "Minimum Percentage," plus an additional percentage of such
Eligible Compensation for each full month of Eligible Service for any of the
Adopting Funds in excess of five years established by the Most Recent Resolution
as the "Monthly Additional Percentage," up to the percentage established by the
Most Recent Resolution as the "Maximum Percentage" of such Eligible Compensation
for ten or more years of Eligible Service for any of the Adopting Funds.

   (c) ELECTION OF ALTERNATE PAYMENT OF BENEFIT. Each Independent Board Member
shall have the option, exercisable at any time, and revisable at any time and
from time to time, prior to his or her first acceptance of benefits under the
Plan to elect (i) to receive, subject to being or becoming an Eligible Board
Member, a retirement benefit (the "Alternate Benefit") based upon the combined
life expectancy of such Eligible Board Member and his or her spouse on the date
of such Eligible Board Member's Retirement (rather than solely upon such
Eligible Board Member's own life, as shall be the case unless such Eligible
Board Member shall otherwise elect as provided in this Section 3(c)), and (ii)
if the Independent Board Member elects to receive the Alternate Benefit, to
elect a benefit either (x) to the last survivor of the Eligible Board Member or
spouse, whether the Eligible Board Member or spouse is the last survivor (a
"joint and last survivor" benefit) or (y) to the Eligible Board Member's spouse
if the spouse survives the Eligible Board Member (a "joint and contingent
survivor" benefit) equal in periodic amount to a percentage (the "Designated
Survivor's Percentage") of the periodic amount that would be, or would be
assumed to be, in effect while both the Eligible Board Member and spouse were
alive. The Designated Survivor's Percentage shall be the percentage stated in
the most recently delivered notice of election given by such Independent Board
Member, or, if no percentage is stated in any such notice, 100%. Payment of the
Alternate Benefit shall commence on the later of such Eligible Board Member's
Eligible Retirement Date or the date of his or her Retirement, shall be reduced
to the Designated Survivor's Percentage (if less than 100%) upon the earlier of
the deceases of the Eligible Board Member and spouse in the case of a joint and
last survivor benefit, or of the Eligible Board Member in the case of a joint
and contingent survivor benefit, and shall be payable through the remainder of
the life of the survivor of such Eligible Board Member and spouse. The Alternate
Benefit shall be the Actuarial Equivalent of the Regular Benefit provided under
paragraph 3(b). In the event of the death of an Eligible Board Member who has
chosen the Alternate Benefit prior to such Eligible Board Member's Retirement,
his or her spouse shall be entitled to a retirement benefit, commencing upon
such death, which shall be the Actuarial Equivalent of the benefit such spouse
would have received had such Eligible Board Member died on his or her Eligible
Retirement Date.

    (d) EARLY PAYMENT OF BENEFIT. An Eligible Board Member for good cause may
apply to the Board of any Adopting Fund for, and, at the discretion of such
Board, may be granted, a retirement benefit (the "Early Benefit") which is the
Actuarial Equivalent of the Regular Benefit or Alternate Benefit previously
elected

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by such Eligible Board Member. Payment of the Early Benefit shall commence on a
date fixed by the Board in its sole discretion as such Eligible Board Member's
Eligible Retirement Date and shall be payable through the remainder of such
Eligible Board Member's life, or, if the Alternate Benefit had been elected, the
later of the lives of such Eligible Board Member and spouse. Good cause for
these purposes may include (but is not limited to) the permanent disability of
the Eligible Board Member.

    (e) Anything contained herein to the contrary notwithstanding, upon the
adoption by an Adopting Fund of a plan of liquidation, such Adopting Fund shall
pay to each Eligible Board Member who has retired, in lieu of his or her Benefit
from such Adopting Fund, an amount (the "Lump Sum") equal to the then present
value of the Benefit, using a discount rate determined by the Board at the time
of the computation. The Lump Sum shall be paid by such Adopting Fund at or
before the final liquidation and dissolution of such Adopting Fund.

    4.  TIME OF PAYMENT

   The Benefit to each Eligible Board Member or his or her spouse will, except
as provided in Section 3(c), 3(d) or 3(e) hereof, commence on such Eligible
Board Member's Eligible Retirement Date and will be paid each year in quarterly
installments that are as nearly equal as possible on the first day of each
calendar quarter.

    5.  PAYMENT OF BENEFIT; ALLOCATION OF COSTS

    Each Adopting Fund is responsible for the payment of Benefits based upon
Eligible Compensation from such Adopting Fund, as well as its proportionate
share of all expenses of administration of the Plan, including without
limitation all accounting and legal fees and expenses and fees and expenses of
any enrolled actuary. The obligations of each Adopting Fund to pay such benefits
and expenses will not be secured or funded in any manner, and such obligations
will not have any preference over the lawful claims of the Adopting Funds'
creditors and stockholders, shareholders, beneficiaries or limited partners, as
the case may be. To the extent that an Adopting Fund consists of one or more
separate portfolios, such costs and expenses will be allocated among such
portfolios in the proportion that compensation of Independent Board Members is
allocated among such portfolios.

    6.  ADMINISTRATION

   (a) ADMINISTRATION. Any question involving entitlement to payments under or
the administration of the Plan will be referred to the Board, which shall make
all interpretations and determinations necessary or desirable for the Plan's
administration (such interpretations and determinations to be final and
conclusive) and shall cause such records to be kept as may be necessary for the
administration of the Plan.

    7.  MISCELLANEOUS
   (a) RIGHTS NOT ASSIGNABLE. The right to receive any payment under the Plan
is not transferable or assignable. Except as otherwise provided herein with
respect to the Alternate Benefit, the Plan shall not create any benefit, cause
of action, right of sale, transfer, assignment, pledge, encumbrance, or other
such right in any spouse or heirs or the estate of any Eligible Board Member or
retired Eligible Board Member.

    (b) AMENDMENT, ETC. With respect to each Adopting Fund, the Board, including
a majority of the Independent Board Members of such Board, may at any time amend
or terminate the Plan or waive any provision of the Plan, PROVIDED, that except
as otherwise provided herein, no amendment, termination or waiver will impair
the rights of an Independent Board Member to receive upon Retirement the
payments which would have been made to such Independent Board Member had there
been no such amendment, termination or waiver (based upon such Board Member's
Eligible Service to the date of such amendment, termination or waiver) or the
rights of a retired Eligible Board Member to receive any Benefit due under the
Plan, without the consent of such Independent Board Member or Eligible Board
Member. Notwithstanding any provision to the contrary, the Board, with the
concurrence of a majority of the Independent Board Members of such Board and
without the consent of any individual Independent Board Member, may at any time
(i) amend or terminate the Plan to comply with any applicable provision of law
or any rule or regulation adopted, or proposed to be adopted, by any
governmental agency or any decision of any court or administrative agency, (ii)
change any assumptions used to determine what benefit may be an

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Actuarial Equivalent, or (iii) terminate the Plan of an Adopting Fund (an
"Acquired Adopting Fund") substantially all the assets of which are acquired by
an entity which is itself an Adopting Fund (the "Acquiring Adopting Fund")
pursuant to a plan of reorganization between the Acquired Adopting Fund and the
Acquiring Adopting Fund (the "Reorganization Plan"), such termination to be
deemed approved upon adoption of the Reorganization Plan and to be effective
upon the effectiveness of the reorganization contemplated thereby without
liability or further obligation for any benefits accrued or otherwise payable to
an Independent Board Member by the Acquired Adopting Fund.

   (c) NO RIGHT TO REELECTION. Nothing in the Plan will create any obligation
on the part of the Board to nominate any Independent Board Member for
reelection.

     (d) VACANCIES. Although the Board will retain the right to increase or
decrease its size, it shall be the general policy to replace each retired
Independent Board Member by selecting a new Independent Board Member from
candidates recommended by the remaining Independent Board Members.

    (e) CONSULTING. Each retired Eligible Board Member may render such services
for any of the Adopting Funds, for such compensation, as may be agreed upon from
time to time by such retired Eligible Board Member and the Board.

    (f) EFFECTIVENESS. The Plan will be effective for all Independent Board
Members who have dates of Retirement occurring on or after the Adoption Date.
Periods of Eligible Service shall include periods commencing prior to such date.

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                       MORGAN STANLEY DEAN WITTER FUNDS:
                  FUNDS THAT HAVE ADOPTED THE RETIREMENT PLAN FOR NON-INTERESTED
                    TRUSTEES OR DIRECTORS
                                   SCHEDULE A
                                   MARCH 1999
<TABLE>
<S>        <C>
1)         Active Assets California Tax-Free Trust
2)         Active Assets Government Securities Trust
3)         Active Assets Money Trust
4)         Active Assets Tax-Free Trust
5)         Morgan Stanley Dean Witter American Value Fund
6)         Morgan Stanley Dean Witter California Insured Municipal Income Trust
7)         Morgan Stanley Dean Witter California Quality Municipal Securities
8)         Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
9)         Morgan Stanley Dean Witter California Tax-Free Income Fund
10)        Morgan Stanley Dean Witter Capital Growth Securities
11)        Morgan Stanley Dean Witter Convertible Securities Trust
12)        Morgan Stanley Dean Witter Developing Growth Securities Trust
13)        Morgan Stanley Dean Witter Diversified Income Trust
14)        Morgan Stanley Dean Witter Dividend Growth Securities Inc.
15)        Morgan Stanley Dean Witter European Growth Fund Inc.
16)        Morgan Stanley Dean Witter Federal Securities Trust
17)        Morgan Stanley Dean Witter Global Dividend Growth Securities
18)        Morgan Stanley Dean Witter Government Income Trust
19)        Morgan Stanley Dean Witter Health Sciences Trust
20)        Morgan Stanley Dean Witter High Income Advantage Trust
21)        Morgan Stanley Dean Witter High Income Advantage Trust II
22)        Morgan Stanley Dean Witter High Yield Securities Inc.
23)        Morgan Stanley Dean Witter Income Securities Inc.
24)        Morgan Stanley Dean Witter Insured Municipal Bond Trust
25)        Morgan Stanley Dean Witter Insured Municipal Income Trust
26)        Morgan Stanley Dean Witter Insured Municipal Securities
27)        Morgan Stanley Dean Witter Insured Municipal Trust
28)        Morgan Stanley Dean Witter Intermediate Income Securities
29)        Morgan Stanley Dean Witter Limited Term Municipal Trust
30)        Morgan Stanley Dean Witter Liquid Asset Fund Inc.
31)        Morgan Stanley Dean Witter Multi-State Municipal Series Trust
32)        Morgan Stanley Dean Witter Municipal Income Opportunities Trust
33)        Morgan Stanley Dean Witter Municipal Income Opportunities Trust II
34)        Morgan Stanley Dean Witter Municipal Income Opportunities Trust III
35)        Morgan Stanley Dean Witter Municipal Income Trust
36)        Morgan Stanley Dean Witter Municipal Income Trust II
37)        Morgan Stanley Dean Witter Municipal Premium Income Trust
38)        Morgan Stanley Dean Witter Natural Resource Development Securities
Inc.
39)        Morgan Stanley Dean Witter New York Municipal Money Market Trust
40)        Morgan Stanley Dean Witter New York Tax-Free Income Fund
41)        Morgan Stanley Dean Witter Pacific Growth Fund Inc.
42)        Morgan Stanley Dean Witter Prime Income Trust
43)        Morgan Stanley Dean Witter Quality Municipal Income Trust
44)        Morgan Stanley Dean Witter Quality Municipal Investment Trust
45)        Morgan Stanley Dean Witter Quality Municipal Securities
46)        Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
47)        Morgan Stanley Dean Witter Strategist Fund
</TABLE>

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<TABLE>
<S>        <C>
48)        Morgan Stanley Dean Witter Tax-Exempt Securities Trust
49)        Morgan Stanley Dean Witter Tax-Free Daily Income Trust
50)        Morgan Stanley Dean Witter U.S. Government Money Market Trust
51)        Morgan Stanley Dean Witter U.S. Government Securities Trust
52)        Morgan Stanley Dean Witter Utilities Fund
53)        Morgan Stanley Dean Witter Value-Added Market Series
54)        Morgan Stanley Dean Witter Variable Investment Series
55)        Morgan Stanley Dean Witter World Wide Income Trust
</TABLE>

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