<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 18, 1997
REGISTRATION NOS.: 2-74980
811-3326
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 17 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/
AMENDMENT NO. 18 /X/
-------------------
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
(FORMERLY DEAN WITTER/SEARS U.S. GOVERNMENT MONEY MARKET TRUST)
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
-------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Post-Effective Amendment becomes effective.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE
BOX)
____ immediately upon filing pursuant to paragraph (b)
_X_ on March 19, 1997 pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)
____ on (date) pursuant to paragraph (a) of rule 485.
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF ITS SHARES UNDER THE
SECURITIES ACT OF 1933 PURSUANT TO SECTION (A)(1) OF RULE 24F-2 UNDER THE
INVESTMENT COMPANY ACT OF 1940. THE REGISTRANT HAS FILED THE RULE 24F-2 NOTICE,
FOR ITS FISCAL YEAR ENDED JANUARY 31, 1997, WITH THE SECURITIES AND EXCHANGE
COMMISSION ON MARCH 4, 1997.
AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
-------------------------------------------------------
-------------------------------------------------------
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
CROSS-REFERENCE SHEET
FORM N-1A
<TABLE>
<CAPTION>
ITEM CAPTION
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<S> <C>
PART A PROSPECTUS
1. ............... Cover Page
2. ............... Prospectus Summary; Summary of Trust Expenses
3. ............... Financial Highlights
4. ............... Investment Objective and Policies; The Trust and Its Management; Cover
Page; Investment Restrictions; Prospectus Summary
5. ............... The Trust and Its Management; Back Cover; Investment Objective and
Policies
6. ............... Dividends, Distributions and Taxes; Additional Information
7. ............... Purchase of Trust Shares; Shareholder Services
8. ............... Redemption of Trust Shares; Shareholder Services
9. ............... Not Applicable
PART B STATEMENT OF ADDITIONAL INFORMATION
10. ............... Cover Page
11. ............... Table of Contents
12. ............... The Trust and its Management
13. ............... Investment Practices and Policies; Investment Restrictions; Portfolio
Transactions and Brokerage
14. ............... The Trust and its Management; Trustees and Officers
15. ............... The Trust and its Management; Trustees and Officers
16. ............... The Trust and its Management; Purchase of Trust Shares; Custodian and
Transfer Agent; Independent Accountants
17. ............... Portfolio Transactions and Brokerage
18. ............... Shares of the Trust
19. ............... Purchase of Trust Shares; Redemption of Trust Shares
20. ............... Dividends, Distributions and Taxes
21. ............... Purchase of Trust Shares
22. ............... Dividends, Distributions and Taxes
23. ............... Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
PROSPECTUS
MARCH 19, 1997
Dean Witter U.S. Government Money Market Trust (the "Trust") is a
no-load, open-end diversified management investment company investing primarily
in money market instruments maturing in thirteen months or less which are issued
or guaranteed, as to principal and interest, by the U.S. Government, its
agencies or instrumentalities. The Trust has a Rule 12b-1 Distribution Plan (see
below). The investment objectives of the Trust are security of principal, high
current income and liquidity. (See "Investment Objectives and Policies".)
AN INVESTMENT IN THE TRUST IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE TRUST WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
In accordance with a Plan of Distribution pursuant to Rule 12b-1
under the Investment Company Act of 1940 with Dean Witter Distributors Inc. (the
"Distributor"), the Trust is authorized to reimburse for specific expenses
incurred in promoting the distribution of the Trust's shares. Reimbursement may
in no event exceed an amount equal to payments at the annual rate of 0.15% of
the average daily net assets of the Trust.
This Prospectus sets forth concisely the information you should
know before investing in the Trust. It should be read and retained for future
reference. Additional information about the Trust is contained in the Statement
of Additional Information, dated March 19, 1997, which has been filed with the
Securities and Exchange Commission, and which is available at no charge upon
request of the Trust at its address or at one of the telephone numbers listed on
this page. The Statement of Additional Information is incorporated herein by
reference.
<TABLE>
<S> <C>
Minimum initial investment.................. $1,000
Minimum additional investment............... $ 50
</TABLE>
DEAN WITTER DISTRIBUTORS INC.
DISTRIBUTOR
TABLE OF CONTENTS
Prospectus Summary/2
Summary of Trust Expenses/3
Financial Highlights/4
The Trust and its Management/4
Investment Objectives and Policies/5
Purchase of Trust Shares/7
Shareholder Services/9
Redemption of Trust Shares/12
Dividends, Distributions and Taxes/14
Additional Information/15
Financial Statements--January 31, 1997/17
Report of Independent Accountants/24
For information about the Trust, including information on opening an account,
registration of shares, and other information relating to a specific account,
call:
- - 800-869-NEWS (toll-free) or
- - 212-392-2550
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Dean Witter
U.S. Government Money Market Trust
Two World Trade Center
New York, New York 10048
<PAGE>
PROSPECTUS SUMMARY
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<TABLE>
<S> <C>
The An open-end diversified management investment company investing primarily in money market instruments maturing
Trust in thirteen months or less which are issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
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Shares Offered Shares of beneficial interest of $0.01 par value (see page 15).
- ------------------------------------------------------------------------------------------------------------------------------------
Purchase Investments may be made:
of Shares - By wire
- By mail
- By EasyInvest-SM-
- Through Dean Witter Reynolds Inc. account executives and other Selected Broker-Dealers.
Purchases are at net asset value, without a sales charge. Minimum initial investment: $1,000. Subsequent
investments: $50 or more (by wire or by mail), $1,000 or more (through account executives) or $100 to $5,000 (by
EasyInvest).
Orders for purchase of shares are effective on day of receipt of payment in Federal Funds if payment is received
by the Trust's transfer agent before 12:00 noon New York time (see page 7).
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Investment To provide security of principal, high current income and liquidity (see page 5).
Objectives
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Investment A diversified portfolio of U.S. Government securities with short-term maturities (see page 5).
Policy
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Investment Dean Witter InterCapital Inc., the Investment Manager of the Trust, and its wholly-owned subsidiary, Dean Witter
Manager Services Company Inc., serve in various investment management, advisory, management and administrative
capacities to 102 investment companies and other portfolios with assets of approximately $93 billion at February
28, 1997 (see page 4).
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Management Monthly fee at an annual rate of 1/2 of 1% of average daily net assets up to $500 million, scaled down at
Fee various levels of net assets to 1/4 of 1% on assets over $3 billion (see page 5).
- ------------------------------------------------------------------------------------------------------------------------------------
Distributor Dean Witter Distributors Inc. (the "Distributor") sells shares of the Trust through Dean Witter Reynolds Inc.
("DWR") and other Selected Broker-Dealers pursuant to selected dealer agreements. Other than the reimbursement
to the Distributor pursuant to the Rule 12b-1 Distribution Plan, the Distributor receives no distribution fees
(see page 7).
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Plan of The Trust is authorized to reimburse specific expenses incurred in promoting the distribution of the Trust's
Distribution shares pursuant to a Plan of Distribution with the Distributor pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Reimbursement may in no event exceed an amount equal to payments at the annual rate of 0.15
of 1% of average daily net assets of the Trust (see page 8).
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Dividends Declared and automatically reinvested daily in additional shares; cash payments of dividends available monthly
(see page 14).
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Reports Individual periodic account statements; annual and semi-annual Trust financial statements.
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Redemption Shares are redeemable at net asset value without any charge (see pages 12-14):
of Shares - By check
- By telephone or wire instructions, with proceeds wired or mailed to a predesignated bank account.
- By mail
- Via an automatic redemption procedure
A shareholder's account is subject to possible involuntary redemption if its value falls below $500 (see page
14).
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Risks The Trust invests principally in high quality, short-term fixed income securities issued or guaranteed as to
principal and interest by the U.S. Government, its agencies or instrumentalities, which are subject to minimal
risk of loss of income and principal. However, the investor is directed to the discussions concerning
"repurchase agreements", "reverse repurchase agreements" and "when-issued and delayed delivery securities" on
page 6 of the Prospectus and on pages 11 and 12 of the Statement of Additional Information concerning any risks
associated with such portfolio securities and management techniques.
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</TABLE>
THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
ELSEWHERE
IN THE PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
2
<PAGE>
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
The following table illustrates all expenses and fees that a shareholder of
the Trust will incur. The expenses and fees set forth in the table are for the
fiscal year ended January 31, 1997.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
- ---------------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases.............................................. None
Maximum Sales Charge Imposed on Reinvested Dividends................................... None
Deferred Sales Charge.................................................................. None
Redemption Fees........................................................................ None
Exchange Fee........................................................................... None
</TABLE>
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------
Management Fees......................... 0.46%
12b-1 Fees*............................. 0.10%
Other Expenses.......................... 0.55%
Total Fund Operating Expenses........... 1.11%
<FN>
- ------------
* THE 12B-1 FEE IS CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") GUIDELINES (SEE "PURCHASE OF
TRUST SHARES").
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ---------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each
time period:......................................................... $ 11 $ 35 $ 61 $ 135
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE TRUST MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Trust will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Trust and its Management" and "Purchase of Trust Shares" in this
Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following ratios and per share data for a share of beneficial interest
outstanding throughout each period have been audited by Price Waterhouse LLP,
independent accountants. The financial highlights should be read in conjunction
with the financial statements, the notes thereto and the unqualified report of
independent accountants which are contained in this Prospectus commencing on
page 17.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED JANUARY 31,
--------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net investment income......... 0.043 0.049 0.034 0.023 0.029 0.050 0.070 0.082 0.068 0.058
Less dividends from net
investment income............ (0.043) (0.049) (0.034) (0.023) (0.029) (0.050) (0.070) (0.082) (0.068) (0.058)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period....................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL INVESTMENT RETURN+...... 4.41% 5.00% 3.47% 2.28% 2.89% 5.14% 7.20% 8.59% 7.02% 5.90%
RATIOS TO AVERAGE NET ASSETS:
Expenses...................... 1.11% 1.09% 1.08% 1.00% 0.93% 0.89% 0.99% 0.83% 0.87% 0.85%
Net investment income......... 4.29% 4.86% 3.38% 2.23% 2.87% 5.02% 6.97% 8.19% 6.77% 5.85%
SUPPLEMENTAL DATA:
Net assets, end of period, in
millions..................... $927 $903 $809 $818 $1,027 $1,115 $1,217 $873 $661 $636
</TABLE>
- ------------------------
<TABLE>
<S> <C>
+ Calculated based on the net asset value as of the last business day of the
period.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
THE TRUST AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
Dean Witter U.S. Government Money Market Trust (the "Trust") is an open-end
diversified management investment company which was organized under the laws of
the Commonwealth of Massachusetts as a business trust on November 18, 1981.
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the
Trust's Investment Manager. The Investment Manager, which was incorporated in
July, 1992, is a wholly-owned subsidiary of Dean Witter, Discover & Co.
("DWDC"), a balanced financial services organization providing a broad range of
nationally marketed credit and investment products.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to a total of 102 investment companies, thirty of
which are listed on the New York Stock Exchange, with combined total assets of
approximately $89.8 billion at February 28, 1997. The Investment Manager also
manages portfolios of pension plans, other institutions and individuals which
aggregated approximately $3.2 billion at such date.
The Trust has retained the Investment Manager to provide administrative
services, manage its business affairs and manage the investment of the Trust's
assets, including the placing of orders for the purchase and sale of portfolio
securities. InterCapital has retained Dean Witter Services Company Inc. to
perform the aforementioned administrative services for the Trust. The Trust's
Trustees review the various services provided by or under the direction of the
Investment Manager to ensure that the Trust's general investment policies and
programs are being properly carried out and that
administra-
4
<PAGE>
tive services are being provided to the Trust in a satisfactory manner.
On February 5, 1997, DWDC and Morgan Stanley Group Inc. announced that they
had entered into an Agreement and Plan of Merger, with the combined company to
be named Morgan Stanley, Dean Witter, Discover & Co. The business of Morgan
Stanley Group Inc. and its affiliated companies is providing a wide range of
financial services for sovereign governments, corporations, institutions and
individuals throughout the world. DWDC is the direct parent of InterCapital and
Dean Witter Distributors Inc., the Trust's distributor. It is currently
anticipated that the transaction will close in mid-1997. Thereafter,
InterCapital and Dean Witter Distributors Inc. will be direct subsidiaries of
Morgan Stanley, Dean Witter, Discover & Co.
As full compensation for the services and facilities furnished to the Trust
and expenses of the Trust assumed by the Investment Manager, the Trust pays the
Investment Manager monthly compensation calculated daily at an annual rate of
0.50% of the daily net assets of the Trust up to $500 million, scaled down at
various asset levels to 0.25% on assets over $3 billion. For the fiscal year
ended January 31, 1997, the Trust accrued total compensation to the Investment
Manager amounting to 0.46% of the Trust's average daily net assets and the
Trust's total expenses amounted to 1.11% of the Trust's average daily net
assets.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objectives of the Trust are security of principal, high
current income and liquidity.
The Trust seeks to achieve its objectives by investing in U.S. Government
securities, including a variety of securities which are issued or guaranteed, as
to principal and interest, by the United States Treasury, by various agencies of
the United States Government, and by various instrumentalities which have been
established or sponsored by the United States Government, and in certain
interests in the foregoing securities. Except for U.S. Treasury securities,
these obligations, even those which are guaranteed by Federal agencies or
instrumentalities, may or may not be backed by the "full faith and credit" of
the United States. In the case of securities not backed by the full faith and
credit of the United States, they may be backed, in part, by a line of credit
with the U.S. Treasury (such as the Federal National Mortgage Association), or
the Trust must look to the agency issuing or guaranteeing the obligation for
ultimate repayment (such as securities of the Federal Farm Credit System), in
which case the Trust may not be able to assert a claim against the United States
itself in the event the agency or instrumentality does not meet its commitments.
Treasury securities include Treasury bills, Treasury notes, and Treasury
bonds. Some of the government agencies and instrumentalities which issue or
guarantee securities include the Federal Farm Credit System, the Federal Home
Loan Banks, the Federal Home Loan Mortgage Corporation, the Government National
Mortgage Association, the Federal National Mortgage Association, the Farmers
Home Administration, the Federal Land Banks, the Small Business Administration,
the Student Loan Marketing Association, the Export-Import Bank, the Federal
Intermediate Credit Banks, the Tennessee Valley Authority and the Banks for
Cooperatives.
The Trust may invest in securities issued or guaranteed, as to principal and
interest, by any of the foregoing entities or by any other agency or
instrumentality established or sponsored by the United States Government. Such
investments may take the form of participation interests in, and may be
evidenced by deposit or safekeeping receipts for, any of the foregoing.
Participation interests are pro rata interests in U.S. Government securities
such as interests in pools of mortgages sold by the Government National Mortgage
Association; instruments evidencing deposit or safekeeping are
docu-
5
<PAGE>
mentary receipts for such original securities held in custody by others.
The Federal Deposit Insurance Corporation is the administrative authority
over the Bank Insurance Fund and the Savings Association Insurance Fund, which
are the agencies of the U.S. Government which insure (including both principal
and interest) the deposits of certain banks and savings and loan associations up
to $100,000 per deposit. Current federal regulations also permit such
institutions to issue insured negotiable certificates of deposit ("CDs") in
principal amounts of $100,000 or more without regard to the interest rate
ceilings on other deposits. To remain fully insured as to principal, these
investments must currently be limited to $100,000 per bank or savings and loan
association. The interest on such investments is not insured. The Trust may
invest in such CDs of banks and savings and loan institutions limited to the
insured amount of principal ($100,000) in each case and limited with regard to
all such CDs and all illiquid assets, in the aggregate, to 10% of the Trust's
total assets.
The Trust intends normally to hold its portfolio securities to maturity.
Historically, securities issued or guaranteed by the U.S. Government or its
agencies and instrumentalities have involved minimal risk of loss of principal
or interest, if held to maturity.
The investment objectives and policies stated above may not be changed
without shareholder approval. There is no assurance that the Trust's objectives
will be achieved.
PORTFOLIO MANAGEMENT
REPURCHASE AGREEMENTS. When cash may be available for only a few days, it
may be invested by the Trust in repurchase agreements until such time as it may
otherwise be invested or used for payments of obligations of the Trust. A
repurchase agreement may be viewed as a type of secured lending by the Trust
which typically involves the acquisition by the Trust of government securities
from a selling financial institution such as a bank, savings and loan
association or broker-dealer. The agreement provides that the Trust will sell
back to the institution, and that the institution will repurchase, the
underlying security ("collateral") at a specified price and at a fixed time in
the future, usually not more than seven days from the date of purchase. The
Trust will accrue interest from the institution until the time when the
repurchase is to occur. Although such date is deemed by the Trust to be the
maturity date of a repurchase agreement, the maturities of securities subject to
repurchase agreements are not subject to any limits and may exceed thirteen
months. While repurchase agreements involve certain risks not associated with
direct investments in U.S. Government securities, the Trust follows procedures
designed to minimize such risks. These procedures include effecting repurchase
transactions only with large, well capitalized and well established financial
institutions and specifying the required value of the collateral underlying the
agreement.
REVERSE REPURCHASE AGREEMENTS. The Trust may also use reverse repurchase
agreements as part of its investment strategy. Reverse repurchase agreements
involve sales by the Trust of portfolio assets concurrently with an agreement by
the Trust to repurchase the same assets at a later date at a fixed price.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Trust may purchase
securities on a when-issued or delayed delivery basis; i.e., delivery and
payment can take place a month or more after the date of the transaction. These
securities are subject to market fluctuation and no interest accrues to the
purchaser during this period. At the time the Trust makes the commitment to
purchase securities on a when-issued or delayed delivery basis, it will record
the transaction and thereafter reflect the value, each day, of such security in
determining its net asset value. The Trust will not purchase securities on a
when-issued or delayed delivery basis if, as a result, more than 15% of the
Trust's net assets would be so invested.
6
<PAGE>
The Trust will generally not seek profits through short-term trading,
although it may dispose of any portfolio security prior to maturity if, on the
basis of a revised evaluation or other circumstance or consideration, the
Investment Manager deems such disposition advisable.
The Trust will attempt to balance its objectives of security of principal,
high current income and liquidity by investing in securities of varying
maturities and risks. The Trust will not, however, invest in securities with an
effective maturity of more than thirteen months from the date of purchase (see
"Purchase of Trust Shares--Determination of Net Asset Value"). The amounts
invested in obligations of various maturities of thirteen months or less will
depend on management's evaluation of the risks involved. Longer-term U.S.
Government issues, while generally paying higher interest rates, are subject to
greater fluctuations in value resulting from general changes in interest rates
than shorter-term issues. Thus, when rates on new securities increase, the value
of outstanding securities may decline, and vice versa. Such changes may also
occur, to a lesser degree, with short-term issues. These changes, if realized,
may cause fluctuations in the amount of daily dividends and, in extreme cases,
could cause the net asset value per share to decline (see "Purchase of Trust
Shares--Determination of Net Asset Value"). In the event of unusually large
redemption demands, such securities may have to be sold at a loss prior to
maturity, or the Trust might have to borrow money and incur interest expenses.
Either occurrence would adversely impact upon the amount of daily dividend and
could result in a decline in daily net asset value per share or the redemption
by the Trust of shares held in a shareholder's account. The Trust will attempt
to minimize these risks by investing in relatively longer-term securities when
it appears to management that yields on such securities are not likely to
increase substantially during the period of expected holding, and then only in
securities which are readily marketable. However, there can be no assurance that
the Trust will be successful in achieving this objective.
BROKERAGE ALLOCATION. Brokerage commissions are not normally charged on the
purchase or sale of money market instruments such as U.S. Government
obligations, but such transactions may involve transaction costs in the form of
spreads between bid and asked prices. Pursuant to an order of the Securities and
Exchange Commission, the Trust may effect principal transactions in certain
money market instruments with Dean Witter Reynolds Inc. ("DWR"), a broker-dealer
affiliate of InterCapital. In addition, the Trust may incur brokerage
commissions on transactions conducted through DWR.
PURCHASE OF TRUST SHARES
- --------------------------------------------------------------------------------
The Trust offers its shares for sale to the public on a continuous basis,
without a sales charge. Pursuant to a Distribution Agreement between the Trust
and Dean Witter Distributors Inc. (the "Distributor"), shares of the Trust are
distributed by the Distributor and offered by DWR and other dealers who have
entered into selected dealer agreements with the Distributor ("Selected
Broker-Dealers"). The principal executive office of the Distributor is located
at Two World Trade Center, New York, New York 10048. The offering price of the
shares will be at their net asset value next determined (see "Determination of
Net Asset Value" below) after receipt of a purchase order and acceptance by the
Trust's transfer agent, Dean Witter Trust Company (the "Transfer Agent"), in
proper form and accompanied by payment in Federal Funds (i.e., monies of member
banks within the Federal Reserve System held on deposit at a Federal Reserve
Bank) available to the Trust for investment. Shares commence earning income on
the day following the date of purchase.
To initiate purchase by mail or wire, a completed Investment Application
(contained in the Prospectus) must be sent to the Transfer Agent at P.O. Box
1040, Jersey City, NJ 07303. Checks
7
<PAGE>
should be made payable to Dean Witter U.S. Government Money Market Trust and
sent to the Transfer Agent at the above address. Purchases by wire must be
preceded by a call to the Transfer Agent advising it of the purchase (see
Investment Application or the front cover of this Prospectus for the telephone
number) and must be wired to The Bank of New York for credit to the Account of
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey City,
NJ, Account No. 8900188413. Wire purchase instructions must include the name of
the Trust and the shareholder's account number. Purchases made by check are
normally effective within two business days for checks drawn on Federal Reserve
System member banks, and longer for most other checks. Wire purchases received
by the Transfer Agent prior to 12:00 noon, New York time, on any business day
are normally effective that day and wire purchases received after 12:00 noon,
New York time, are normally effective the next business day. Initial investments
by mail or wire must be at least $1,000. Subsequent investments must be $50 or
more and may be made through the Transfer Agent. The Trust will waive the
minimum initial investment for the automatic reinvestment of distributions from
certain Unit Investment Trusts. The Trust reserves the right to reject any
purchase order.
Sales personnel of a Selected Broker-Dealer are compensated for shares of
the Trust sold by them by the Distributor or any of its affiliates and/or the
Selected Broker-Dealer. In addition, some sales personnel of the Selected
Broker-Dealer will receive various types of non-cash compensation as special
sales incentives, including trips, educational and/or business seminars and
merchandise.
Orders for the purchase of Trust shares placed by customers through DWR or
other Selected Broker-Dealers with payment in clearing house funds will be
transmitted to the Trust with payment in Federal Funds on the business day
following the day the order is placed by the customer with DWR or another
Selected Broker-Dealer. Investors desiring same day effectiveness should wire
Federal Funds directly to the Transfer Agent. An order procedure exists pursuant
to which customers of DWR and other Selected Broker-Dealers can, upon request:
(a) have the proceeds from the sale of listed securities invested in shares of
the Trust on the day following the day the customer receives such proceeds in
his or her DWR or other Selected Broker-Dealer brokerage account; and (b) pay
for the purchase of certain listed securities by automatic liquidation of Trust
shares owned by the customer. In addition, there is an automatic purchase
procedure whereby consenting DWR or other Selected Broker-Dealer customers who
are shareholders of the Trust will have free cash credit balances in their DWR
or other Selected Broker-Dealer brokerage accounts as of the close of business
(4:00 p.m., New York time) on the last business day of each week (where such
balances do not exceed $5,000) automatically invested in shares of the Trust the
next business day. Investors with free cash credit balances (i.e., immediately
available funds) in brokerage accounts at DWR or other Selected Broker-Dealers
will not have any of such funds invested in the Trust until the business day
after the customer places an order with DWR or another Selected Broker-Dealer to
purchase shares of the Trust and will not receive the daily dividend which would
have been received had such funds been invested in the Trust on the day the
order was placed with DWR or other Selected Broker-Dealer. Accordingly, DWR or
other Selected Broker-Dealers may have the use of such free credit balances
during such period.
PLAN OF DISTRIBUTION
In accordance with a Plan of Distribution between the Trust and the
Distributor, pursuant to Rule 12b-1 under the Act, certain services and
activities in connection with the distribution of the Trust's shares are
reimbursable expenses. The principal activities and services which may be
provided by the Distributor, DWR, its affiliates and other Selected
Broker-Dealers under the Plan include: (1) compensation to, and expenses of,
DWR's and other Selected Broker-Dealers' account executives and other employees,
including overhead and
tele-
8
<PAGE>
phone expenses; (2) sales incentives and bonuses to sales representatives and
marketing personnel in connection with promoting sales of the Trust's shares;
(3) expenses incurred in connection with promoting sales of the Trust's shares;
(4) preparing and distributing sales literature; and (5) providing advertising
and promotional activities, including direct mail solicitation and television,
radio, newspaper, magazine and other media advertisements. Reimbursements for
these services may be made in monthly payments by the Trust, which in no event
exceed an amount equal to a payment at the annual rate of 0.15 of 1% of the
Trust's average daily net assets. For its fiscal year ended January 31, 1997,
the fee paid was accrued at the annual rate of 0.10 of 1% of the Trust's average
daily net assets. Expenses incurred pursuant to the Plan in any fiscal year will
not be reimbursed by the Trust through payments accrued in any subsequent fiscal
year.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Trust is determined as of 4:00 p.m.,
New York time (or, on days when the New York Stock Exchange closes prior to 4:00
p.m., at such earlier time), on each day that the New York Stock Exchange is
open by taking the value of all assets of the Trust, subtracting its liabilities
and dividing the result by the number of shares outstanding. The net asset value
per share will not be determined on Good Friday and on such other federal and
non-federal holidays as are observed by the New York Stock Exchange.
The Trust utilizes the amortized cost method in valuing its portfolio
securities, which method involves valuing a security at its cost adjusted by a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. The
purpose of this method of calculation is to facilitate the maintenance of a
constant net asset value per share of $1.00. However, there is no assurance that
the $1.00 net asset value will be maintained.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan is available for
shareholders who own or purchase shares of the Trust having a minimum value of
at least $5,000. The plan provides for monthly or quarterly (March, June,
September, December) checks in any dollar amount, not less than $25, or in any
whole percentage of the account balance, on an annualized basis. The shares will
be redeemed at their net asset value, determined at the shareholder's option, on
the tenth or twenty-fifth day (or next business day) of the relevant month or
quarter and normally a check for the proceeds will be mailed by the Transfer
Agent, or amounts credited to a shareholder's DWR or other Selected Broker-
Dealer brokerage account, within five days after the date of redemption. A
shareholder wishing to make this election should do so on the Investment
Application. The withdrawal plan may be terminated at any time by the Trust.
TARGETED DIVIDENDS. In states where it is legally permissible, shareholders
may elect to have all shares of the Trust earned as a result of dividends paid
in any given month redeemed as of the end of the month and invested in shares of
any other designated open-end investment company for which InterCapital serves
as investment manager (collectively, with the Trust, the "Dean Witter Funds"),
other than Dean Witter U.S. Government Money Market Trust, at the net asset
value per share of the selected Dean Witter Fund determined as of the last
business day of the month, without the imposition of any applicable front-end
sales charge or without the imposition of any applicable contingent deferred
sales charge upon ultimate redemption. All such shares invested will begin to
earn dividends, if any, in the selected Dean Witter Fund on the first business
day of the succeeding month. Shareholders of the Trust must be shareholders of
the Dean Witter
9
<PAGE>
Fund targeted to receive investments from dividends at the time they enter the
Targeted Dividends program. Investors should review the prospectus of the
targeted Dean Witter Fund before entering the program.
EASYINVEST-SM-. Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a semi-monthly,
monthly or quarterly basis, to the Transfer Agent for investment in shares of
the Trust. Shares purchased through EasyInvest will be added to the
shareholder's existing account at the net asset value calculated the same
business day the transfer of funds is effected.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about any of the
above services.
TAX SHELTERED RETIREMENT PLANS. Retirement plans are available for use by
the self-employed, Individual Retirement Accounts and Custodial Accounts under
Section 403(b)(7) of the Internal Revenue Code. Adoption of such plans should be
on advice of legal counsel or tax adviser.
For further information regarding plan administration, custodial fees and
other details, investors should contact their DWR or other Selected Broker-
Dealer account executive or the Transfer Agent.
SYSTEMATIC PAYROLL DEDUCTION PLAN. There is also available to employers a
Systematic Payroll Deduction Plan by which their employees may invest in the
Trust. For further information, investors should contact their DWR or other
Selected Broker-Dealer account executive or the Transfer Agent.
EXCHANGE PRIVILEGE. An "Exchange Privilege", that is, the privilege of
exchanging shares of certain Dean Witter Funds for shares of the Trust, exists
whereby shares of various Dean Witter Funds which are open-end investment
companies sold with either a front-end (at time of purchase) sales charge ("FESC
funds") or a contingent deferred sales charge ("CDSC funds") may be exchanged
for shares of the Trust, Dean Witter Liquid Asset Fund Inc., Dean Witter
Tax-Free Daily Income Trust, Dean Witter California Tax-Free Daily Income Trust
and Dean Witter New York Municipal Money Market Trust (which five funds are
called "money market funds") and for shares of Dean Witter Short-Term U.S.
Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean Witter Short-Term
Bond Fund, Dean Witter Balanced Growth Fund, Dean Witter Balanced Income Fund
and Dean Witter Intermediate Term U.S. Treasury Trust (which eleven funds,
including the Trust, are referred to herein as the "Exchange Funds"). When
exchanging into a money market fund from an FESC fund or a CDSC fund, shares of
the FESC fund or the CDSC fund are redeemed at their next calculated net asset
value and exchanged for shares of the money market fund at their net asset value
determined the following business day. An exchange from an FESC fund or a CDSC
fund to an Exchange Fund that is not a money market fund is on the basis of the
next calculated net asset value per share of each Fund after the exchange order
is received. Subsequently, shares of the Exchange Fund received in an exchange
for shares of an FESC fund (regardless of the type of fund originally purchased)
may be redeemed and exchanged for shares of the other Exchange Funds, FESC funds
or CDSC funds (however, shares of CDSC funds, including shares acquired in
exchange for (i) shares of FESC funds or (ii) shares of the Exchange Funds which
were acquired in exchange for shares of FESC funds, may not be exchanged for
shares of FESC funds). Additionally, shares of the Exchange Funds received in an
exchange for shares of a CDSC fund (regardless of the type of fund originally
purchased) may be redeemed and exchanged for shares of the other Exchange Funds
or CDSC funds. Ultimately, any applicable contingent deferred sales charge
("CDSC") will have to be paid upon redemption of shares originally purchased
from a CDSC fund. (If shares of the Exchange Funds received in
10
<PAGE>
exchange for shares originally purchased from a CDSC fund are exchanged for
shares of another CDSC fund having a different schedule than that of the CDSC
fund from which the Exchange Funds shares were acquired, the shares will be
subject to the higher CDSC schedule.) During the period of time the shares
originally purchased from a CDSC fund remain in the Exchange Fund (calculated
from the last day of the month in which the Exchange Fund shares were acquired),
the holding period (for the purpose of determining the rate of the CDSC) is
frozen. If those shares are subsequently reexchanged for shares of a CDSC fund,
the holding period previously frozen when the first exchange was made resumes on
the last day of the month in which shares of a CDSC fund are reacquired. Thus,
the CDSC is based upon the time (calculated as described above) the shareholder
was invested in a CDSC fund. However, in the case of shares exchanged into an
Exchange Fund on or after April 23, 1990, upon a redemption of shares which
results in a CDSC being imposed, a credit (not to exceed the amount of the CDSC)
will be given in an amount equal to the Exchange Fund 12b-1 distribution fees,
if any, incurred on or after that date which are attributable to those shares
(see "Purchase of Fund (Trust) Shares--Plan of Distribution" in the respective
Exchange Funds Prospectuses for a description of Exchange Fund distribution
fees). Exchanges involving FESC funds or CDSC funds may be made after the shares
of the FESC fund or CDSC fund acquired by purchase (not by exchange or dividend
reinvestment) have been held for thirty days. There is no waiting period for
exchanges of shares acquired by exchanges or dividend reinvestment.
Exchange Privilege accounts may also be maintained for shareholders of the
money market funds who acquired their shares in exchange for shares of various
TCW/DW Funds, a group of funds distributed by the Distributor for which TCW
Funds Management, Inc. serves as Adviser, under the terms and conditions
described in the Prospectus and Statement of Additional Information of each
TCW/DW Fund.
Purchases and exchanges should be made for investment purposes only. A
pattern of frequent exchanges may be deemed by the Investment Manager to be
abusive and contrary to the best interests of the Trust and its other
shareholders and, at the Investment Manager's discretion, may be limited by the
Trust's refusal to accept additional purchases and/or exchanges from the
investor. Although the Trust does not have any specific definition of what
constitutes a pattern of frequent exchanges, and will consider all relevant
factors in determining whether a particular situation is abusive and contrary to
the best interests of the Trust and its other shareholders, investors should be
aware that the Trust and each of the other Funds may in their discretion limit
or otherwise restrict the number of times this Exchange Privilege may be
exercised by any investor. Any such restriction will be made by the Trust on a
prospective basis only, upon notice to the shareholder not later than ten days
following such shareholder's most recent exchange.
The Exchange Privilege may be terminated or revised at any time by the Trust
and/or any of such Funds for which shares of the Trust may be exchanged, upon
such notice as may be required by applicable regulatory agencies (presently
sixty days' prior written notice for termination or material revision), provided
that six months' prior written notice of termination will be given to the
shareholders who hold shares of Exchange Funds, TCW/DW North American Government
Income Trust, TCW/ DW Income and Growth Fund and TCW/DW Balanced Fund pursuant
to the Exchange Privilege, and provided further that the Exchange Privilege may
be terminated or materially revised without notice under certain unusual
circumstances. Shareholders maintaining margin accounts with DWR or another
Selected Broker-Dealer are referred to their account executive regarding
restrictions on exchange of shares of the Trust pledged in their margin account.
11
<PAGE>
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain one and read it carefully before
investing. Exchanges are subject to the minimum investment requirement and any
other conditions imposed by each fund. An exchange will be treated for federal
income tax purposes the same as a repurchase or redemption of shares on which
the shareholder has realized a capital gain or loss. However, the ability to
deduct capital losses on an exchange may be limited in situations where there is
an exchange of shares within ninety days after the shares are purchased. The
Exchange Privilege is only available in states where an exchange may legally be
made.
If DWR or another Selected Broker-Dealer is the current dealer of record and
its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Trust for shares of any of the above Funds
pursuant to this Exchange Privilege by contacting their account executive (no
Exchange Privilege Authorization Form is required). Other shareholders (and
those who are clients of DWR or another Selected Broker-Dealer but who wish to
make exchanges directly by telephoning the Transfer Agent) must complete and
forward to the Transfer Agent an Exchange Privilege Authorization Form, copies
of which may be obtained from the Trust, to initiate an exchange. If the
Authorization Form is used, exchanges may be made in writing or by contacting
the Transfer Agent at (800) 869-NEWS (toll-free). The Trust will employ
reasonable procedures to confirm that exchange instructions communicated over
the telephone are genuine. Such procedures may include requiring various forms
of personal identification such as name, mailing address, social security or
other tax identification number and DWR or other Selected Broker-Dealer account
number (if any). Telephone instructions may also be recorded. If such procedures
are not employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 a.m. and 4:00 p.m., New York time, on any day the New York
Stock Exchange is open. Any shareholder wishing to make an exchange who has
previously filed an Exchange Privilege form and who is unable to reach the Trust
by telephone should contact his or her DWR or other Selected Broker-Dealer
account executive, if appropriate, or make a written exchange request.
Shareholders are advised that during periods of drastic economic or market
changes it is possible that the telephone exchange procedures may be difficult
to implement, although this has not been the experience of the Dean Witter Funds
in the past.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about the
Exchange Privilege.
REDEMPTION OF TRUST SHARES
- --------------------------------------------------------------------------------
A shareholder may withdraw all or any of his or her investments at any time,
without penalty or charge, by redeeming shares through the Transfer Agent at the
net asset value per share next determined (see "Purchase of Trust
Shares--Determination of Net Asset Value") after the receipt of a redemption
request meeting the applicable requirements as follows (all of which are subject
to the General Redemption Requirements set forth below).
1. BY CHECK
The Transfer Agent will supply blank checks to any shareholder who has
requested them on an Investment Application. The shareholder may make checks
payable to the order of anyone in any amount not less than $500 (checks written
in amounts under $500 will not be honored by the Transfer Agent). Shareholders
must sign checks exactly as their shares are registered. If the account is a
joint account, the check may contain one
signa-
12
<PAGE>
ture unless the joint owners have specified on an Investment Application that
all owners are required to sign checks.
Shares will be redeemed at their net asset value next determined (See
"Purchase of Trust Shares-- Determination of Net Asset Value") after receipt by
the Transfer Agent of a check which does not exceed the value of the account.
Payment of the proceeds of a check will normally be made on the next business
day after receipt by the Transfer Agent of the check in proper form. Shares
purchased by check (including a certified or bank cashier's check) are not
normally available to cover redemption checks until fifteen days after receipt
of the check used for investment by the Transfer Agent. The Transfer Agent will
not honor a check in an amount exceeding the value of the account at the time
the check is presented for payment.
2. BY TELEPHONE OR WIRE INSTRUCTIONS WITH
PAYMENT TO PREDESIGNATED BANK ACCOUNT
A shareholder may redeem shares by telephoning or sending wire instructions
to the Transfer Agent. Payment will be made by the Transfer Agent to the
shareholder's bank account at any commercial bank designated by the shareholder
in an Investment Application, by wire if the amount is $1,000 or more and the
shareholder so requests, and otherwise by mail. Normally, the Transfer Agent
will transmit payment the next business day following receipt of a request for
redemption in proper form.
DWR and other participating Selected Broker-Dealers have informed the
Distributor and the Trust that, on behalf of and as agent for their customers
who are shareholders of the Trust, they will transmit to the Trust requests for
redemption of shares owned by their customers. In such cases, the Transfer Agent
will wire proceeds of redemptions to DWR's or another Selected Broker-Dealer's
bank account for credit to the shareholders' accounts the following business
day. DWR and other participating Selected Broker-Dealers have also informed the
Distributor and the Trust that they do not charge for this service.
Redemption instructions must include the shareholder's name and account
number and be wired or called to the Transfer Agent:
--800-869-NEWS (toll-free)
--Telex No. 125076
3. BY MAIL
A shareholder may redeem shares by sending a letter to Dean Witter Trust
Company, P.O. Box 983, Jersey City, NJ 07303, requesting redemption.
Redemption proceeds will be mailed to the shareholder at his or her
registered address or mailed or wired to his or her predesignated bank account,
as requested. Proceeds of redemption may also be sent to some other person, as
requested by the shareholder.
GENERAL REDEMPTION REQUIREMENTS
Written requests for redemption must be signed by the registered
shareholder(s). If the proceeds are to be paid to anyone other than the
registered shareholder(s) or sent to any address other than the shareholder's
registered address or predesignated bank account, signatures must be guaranteed
by an eligible guarantor acceptable to the Transfer Agent (shareholders should
contact the Transfer Agent for a determination as to whether a particular
institution is such an eligible guarantor), except in the case of redemption by
check. Additional documentation may be required where shares are held by a
corporation, partnership, trustee or executor. With regard to shares of the
Trust acquired pursuant to the Exchange Privilege, any applicable contingent
deferred sales charge will be imposed upon the redemption of such shares (see
"Purchase of Trust Shares--Exchange Privilege").
All requests for redemption should be sent to Dean Witter Trust Company,
P.O. Box 983, Jersey City, NJ 07303.
13
<PAGE>
Generally, the Trust will attempt to make payment for all redemptions within
one business day, but in no event later than seven days after receipt of such
redemption request in proper form. However, if the shares being redeemed were
purchased by check (including a certified or bank cashier's check), payment may
be delayed for the minimum time needed to verify that the check used for
investment has been honored (not more than fifteen days from the time of
investment of the check by the Transfer Agent). In addition, the Trust may
postpone redemptions at certain times when normal trading is not taking place on
the New York Stock Exchange.
The Trust reserves the right, on sixty days' notice, to redeem at net asset
value the shares of any shareholder (other than shares held in an Individual
Retirement Account or custodial account under Section 403(b)(7) of the Internal
Revenue Code) whose shares due to redemptions by the shareholder have a value of
less than $500, or such lesser amount as may be fixed by the Board of Trust
ees.
AUTOMATIC REDEMPTION PROCEDURE
The Distributor has instituted an automatic redemption procedure which it
may utilize to satisfy amounts due by a shareholder maintaining a brokerage
account with DWR or another Selected Broker-Dealer as a result of purchases of
securities or other transactions in the shareholder's brokerage account. Under
this procedure, if the shareholder elects to participate by so notifying DWR or
another Selected Broker-Dealer, the shareholder's DWR or other Selected
Broker-Dealer brokerage account will be scanned each business day prior to the
close of business (4:00 p.m., New York time). After application of any cash
balances in the account, a sufficient number of Trust shares may be redeemed at
the close of business to satisfy any amounts for which the shareholder is
obligated to make payment to DWR or another Selected Broker-Dealer. Redemptions
will be effected on the business day preceding the date the shareholder is
obligated to make such payment, and DWR or another Selected Broker-Dealer will
receive the redemption proceeds on the day following the redemption date.
Shareholders will receive all dividends declared and reinvested through the date
of redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Trust declares dividends, payable on each
day the New York Stock Exchange is open for business, of all of its daily net
investment income (and net short-term capital gains, if any) to shareholders of
record as of the close of business the preceding business day. The amount of
dividend may fluctuate from day to day and may be omitted on some days if net
realized losses on portfolio securities exceed the Trust's net investment
income. Dividends are automatically reinvested daily in additional full and
fractional shares of the Trust (rounded to the last 1/100 of a share) at the net
asset value per share at the close of business on that day. Any dividends
declared in the last quarter of any calendar year which are paid in the
following year prior to February 1 will be deemed received by the shareholder in
the prior calendar year.
Shareholders may instruct the Transfer Agent (in writing) to have their
dividends paid out monthly in cash. For such shareholders, the shares reinvested
and credited to their account during the month will be redeemed as of the close
of business on the monthly payment date (which will be no later than the last
business day of the month) and the proceeds will be paid to them by check.
Processing of dividend checks begins immediately following the monthly payment
date. Shareholders who have requested to receive dividends in cash will normally
receive their monthly dividend check during the first ten days of the following
month.
14
<PAGE>
TAXES. Because the Trust intends to distribute substantially all of its net
investment income and net capital gains, if any, to shareholders and intends to
otherwise comply with all of the provisions of Subchapter M of the Internal
Revenue Code to qualify as a regulated investment company, it is not expected
that the Trust will be required to pay any federal income tax.
Distributions of net investment income and realized net short-term capital
gains, if any, are taxable to shareholders subject to tax on their income as
ordinary dividend income, whether such distributions are taken in cash or
reinvested in additional shares.
The Trust advises its shareholders annually as to the federal income tax
status of distributions paid during each calendar year. To avoid being subject
to a 31% federal backup withholding tax on taxable dividends, capital gains
distributions and proceeds of redemptions, shareholders' taxpayer identification
numbers must be furnished and certified as to accuracy.
Shareholders are urged to consult their own tax advisers regarding specific
questions as to federal, state or local taxes.
CURRENT AND EFFECTIVE YIELD
From time to time the Trust advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Trust refers to the income
generated by an investment in the Trust over a given period (which period will
be stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by investment during that seven-day period is assumed
to be generated each seven-day period within a 365 day period and is shown as a
percentage of investment. The "effective yield" for a seven-day period is
calculated similarly but, when annualized, the income earned by an investment in
the Trust is assumed to be reinvested each week within a 365 day period. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment. The Trust's yield for the seven
days ended January 31, 1997 was 3.93%. The effective annual yield on 3.93% is
4.01%, assuming daily compounding. The Trust may also advertise the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in shares of the
Trust.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS. All shares of beneficial interest of the Trust are of $0.01
par value and are equal as to earnings, assets and voting privileges.
The Trust is not required to hold Annual Meetings of Shareholders and, in
ordinary circumstances, the Trust does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. Under certain
circumstances, the Trustees may be removed by action of the Trustees or by the
shareholders.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Trust, requires that notice
of such disclaimer be given in each instrument entered into or executed by the
Trust and provides for indemnification and reimbursement of expenses out of the
Trust's property for any shareholder held personally liable for the obligations
of the Trust. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations. Given the above limitations on
shareholder personal liability and the nature of the Trust's assets and
operations, the possibility of the Trust being unable to meet its obligations is
remote and, in the opinion of
Massa-
15
<PAGE>
chusetts counsel to the Trust, the risk to Trust shareholders of personal
liability is remote.
CODE OF ETHICS. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code of
Ethics adopted by those companies. The Code of Ethics is intended to ensure that
the interests of shareholders and other clients are placed ahead of any personal
interest, that no undue personal benefit is obtained from a person's employment
activities and that actual and potential conflicts of interest are avoided. To
achieve these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by employees
of the companies be subject to an advance clearance process to monitor that no
Dean Witter Fund is engaged at the same time in a purchase or sale of the same
security. The Code of Ethics bans the purchase of securities in an initial
public offering, and also prohibits engaging in futures and options transactions
and profiting on short-term trading (that is, a purchase within sixty days of a
sale or a sale within sixty days of a purchase) of a security. In addition,
investment personnel may not purchase or sell a security for their personal
account within thirty days before or after any transaction in any Dean Witter
Fund managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and the
recommendations in the 1994 report by the Investment Company Institute Advisory
Group on Personal Investing.
SHAREHOLDER INQUIRIES. All inquiries regarding the Trust should be directed
to the Trust, the Distributor or the Transfer Agent at one of the telephone
numbers or at the address set forth on the front cover of this Prospectus.
16
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 3 0 --
for office use only
</TABLE>
[LOGO]
APPLICATION
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
Send to: Dean Witter Trust Company (the "Transfer Agent"), P.O. Box 1040, Jersey
City, NJ 07303
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INSTRUCTIONS For assistance in completing this application, telephone Dean Witter Trust Company at (800) 869-NEWS (toll-free).
TO REGISTER
SHARES 1.
(please print)
First Name Last Name
- -As joint
tenants,
use line 1 & 2 2.
First Name Last Name
(Joint tenants with rights of survivorship unless otherwise
specified)
Social Security Number
- -As custodian
for a minor, 3.
use lines 1 &
3
Minor's Name
Under the Uniform Gifts to Minors Act Minor's Social Security
Number
State of Residence of Minor
- -In the name of a
corporation, 4.
trust,
partnership
or other Name of Corporation, Trust (including trustee name(s)) or Other
Organization
institutional
investors, use
line 4
If Trust, Date of Trust Instrument: Tax Identification Number
ADDRESS
City State Zip
Code
</TABLE>
<TABLE>
<S> <C>
TO PURCHASE
SHARES:
Minimum Initial / / CHECK (enclosed) $ (Make Payable to Dean Witter U.S. Government Money Market Trust)
Investment:
$1,000 / / WIRE* On MF*
(Date) (Control number, this transaction)
<CAPTION>
TO PURCHASE
Minimum Initial
Investment:
$1,000
<CAPTION>
SHARES:
</TABLE>
<TABLE>
<S> <C>
Name of Bank Branch
Address
Telephone Number
* For an initial investment made by wiring funds, obtain a control number by calling: (800) 869-NEWS
(toll-free).
Your bank should wire to:
Bank of New York for credit to account of Dean Witter Trust Company
<CAPTION>
</TABLE>
<TABLE>
<S> <C>
Account Number: 8900188413
Re: Dean Witter U.S. Government Money Market Trust
Account Of:
(Investor's Account as Registered at the Transfer Agent)
Control or Account Number:
(Assigned by Telephone)
OPTIONAL SERVICES
<CAPTION>
<CAPTION>
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NOTE: If you are a current shareholder of Dean Witter U.S. Government Money Market Trust, please indicate
your fund account number here.
[ 2 ] [ 3 ] [ 0 ] -
<CAPTION>
<CAPTION>
<CAPTION>
</TABLE>
<TABLE>
<S> <C>
DIVIDENDS All dividends will be reinvested daily in additional shares, unless the following option is selected:
/ / Pay income dividends by check at the end of each month.
WRITE YOUR OWN / / Send an initial supply of checks.
CHECK FOR JOINT ACCOUNTS:
/ / CHECK THIS BOX IF ALL OWNERS ARE REQUIRED TO SIGN CHECKS.
SYSTEMATIC / / Systematic Withdrawal Plan ($25 minimum) / / Percentage of balance
WITHDRAWAL (annualized basis)
PLAN $ / / Monthly or / / Quarterly % / / Monthly or / / Quarterly
Minimum / / 10th or / / 25th of Month/Quarter / / 10th or / / 25th of
Account Value: Month/Quarter
$5,000 / / Pay shareholder(s) at address of record.
/ / Pay to the following: (If this payment option is selected a signature guarantee is required)
</TABLE>
<TABLE>
<S> <C> <C>
Name
Address
City State Zip
Code
</TABLE>
<PAGE>
<TABLE>
<S> <C>
/ / Dean Witter Trust Company is hereby authorized to honor telephonic or other
PAYMENT TO instructions, without signature guarantee, from any person for the redemption of any or
PREDESIGNATED all shares of Dean Witter U.S. Government Money Market Trust held in my (our) account
BANK ACCOUNT provided that proceeds are transmitted only to the following bank account. (Absent
its own negligence, neither Dean Witter U.S. Government Money Market Trust nor Dean
Witter Trust Company (the "Transfer Agent") shall be liable for any redemption caused
by unauthorized instruction(s)):
Bank Account must be in
same name as shares are
registered
NAME & BANK ACCOUNT NUMBER
Minimum Amount:
$1,000 NAME OF BANK
ADDRESS OF BANK
()
TELEPHONE NUMBER OF BANK
SIGNATURE AUTHORIZATION
FOR ALL ACCOUNTS NOTE: RETAIN A COPY OF THIS DOCUMENT FOR YOUR RECORDS. ANY MODIFICATION OF THE INFORMATION
BELOW WILL REQUIRE AN AMENDMENT TO THIS FORM. THIS DOCUMENT IS IN FULL FORCE AND EFFECT
UNTIL ANOTHER DULY EXECUTED FORM IS RECEIVED BY THE TRANSFER AGENT.
The "Transfer Agent" is hereby authorized to act as agent for the registered owner of
shares of Dean Witter U.S. Government Money Market Trust (the "Fund") in effecting
redemptions of shares and is authorized to recognize the signature(s) below in payment of
funds resulting from such redemptions on behalf of the registered owners of such shares.
The Transfer Agent shall be liable only for its own negligence and not for default or
negligence of its correspondents, or for losses in transit. The Fund shall not be liable
for any default or negligence of the Transfer Agent.
I (we) certify to my (our) legal capacity, or the capacity of the investor named above, to
invest in and redeem shares of, and I (we) acknowledge receipt of a current prospectus of,
Dean Witter U.S. Government Money Market Trust and (we) further certify my (our) authority
to sign and act for and on behalf of the investor.
Under penalties of perjury, I certify (1) that the number shown on this form is my correct
taxpayer identification number and (2) that I am not subject to backup withholding either
because I have not been notified that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or the Internal Revenue Service has notified
me that I am no longer subject to backup withholding. (Note: You must cross out item (2)
above if you have been notified by IRS that you are currently subject to backup
withholding because of underreporting interest or dividends on your tax return.)
For Individual, Joint and Custodial Accounts for Minors, Check Applicable Box:
/ / I am a United States Citizen. / / I am not a United States
Citizen.
SIGNATURE(S) (IF JOINT TENANTS, ALL MUST SIGN)
<CAPTION>
PAYMENT TO
PREDESIGNATED
BANK ACCOUNT
Bank Account must be in
same name as shares ar
registered
BANK'S ROUTING TRANSMIT
CODE
(ASK YOUR BANK)
Minimum Amount:
$1,000
FOR ALL ACCOUNTS
</TABLE>
<TABLE>
<S> <C> <C>
Name(s) must be
signed exactly the
same as shown on
lines 1 to 4 on the
reverse side of this
application
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNED THIS DAY OF , 19.
FOR CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER ORGANIZATIONS
The following named persons are currently officers/trustees/general partners/other authorized
signatories of the Registered Owner, and any * of them ("Authorized Person(s)") is/are currently
authorized under the applicable governing document to act with full power to sell, assign or
transfer securities of the the Fund for the Registered Owner and to execute and deliver any
instrument necessary to effectuate the authority hereby conferred:
NAME/TITLE SIGNATURE
</TABLE>
<TABLE>
<S> <C>
In addition, complete
Section A or B below.
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNED THIS DAY OF , 19.
The Transfer Agent may, without inquiry, act only upon the instruction of
ANY PERSON(S) purporting to be (an) Authorized Person(s) as named in the
Certification Form last received by the Transfer Agent. The Transfer
Agent and the Fund shall not be liable for any claims, expenses
(including legal fees) or losses resulting from the Transfer Agent having
acted upon any instruction reasonably believed genuine.
*INSERT A NUMBER. UNLESS OTHERWISE INDICATED, THE TRANSFER AGENT MAY
HONOR INSTRUCTIONS OF ANY ONE OF THE PERSONS NAMED ABOVE.
<CAPTION>
Section A or B below.
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
SIGNATURE MUST BE KEPT WITHIN ABOVE AREA
<CAPTION>
In addition, complete
</TABLE>
<TABLE>
<S> <C>
SECTION (A) NOTE: EITHER A SIGNATURE GUARANTEE OR CORPORATE SEAL IS REQUIRED.
CORPORATIONS AND
INCORPORATED
ASSOCIATIONS ONLY. I, , Secretary of the Registered Owner, do hereby certify that at a meeting on at which a quorum
SIGN ABOVE AND COM- was present throughout, the Board of Directors of the corporation/the officers of the association
PLETE THIS duly adopted a resolution, which is in full force and effect and in accordance with the Registered
SECTION Owner's charter and by-laws, which resolution did the following: (1) empowered the above-named
Authorized Person(s) to effect securities transactions for the Registered Owner on the terms
described above; (2) authorized the Secretary to certify, from time to time, the names and titles
of the officers of the Registered Owner and to notify the Transfer Agent when changes in office
occur; and (3) authorized the Secretary to certify that such a resolution has been duly adopted
and will remain in full force and effect until the Transfer Agent receives a duly executed
amendment to the Certification Form.
SIGNATURE
GUARANTEE** Witness my hand on behalf of the corporation/association this day of , 19.
(or Corporate Seal)
Secretary**
The undersigned officer (other than the Secretary) hereby certifies that the foregoing instrument
has been signed by the Secretary of the
corporation/association.
SIGNATURE
GUARANTEE**
(or Corporate Seal) Certifying Officer of the Corporation or Incorporated Association**
SECTION (B) ALL NOTE: A SIGNATURE GUARANTEE IS REQUIRED.
OTHER
INSTITUTIONAL
INVESTORS Certifying
SIGNATURE Trustee(s)/General Partner(s)/Other(s)**
GUARANTEE**
SIGN ABOVE AND COM- Certifying
PLETE THIS SECTION Trustee(s)/General Partner(s)/Other(s)**
**SIGNATURE(S) MUST BE GUARANTEED BY AN ELIBIGLE GUARANTOR
</TABLE>
<TABLE>
<S> <C> <C>
DEALER Above signature(s) guaranteed. Prospectus has been delivered
by undersigned to above-named applicant(s).
(if any)
Completion by dealer only
Firm Name
Address
City, State, Zip Code
<CAPTION>
DEALER
(if any)
Completion by dealer only
Office Number-Account Number at Dealer-A/E Number
Account Executive's Last Name
Branch Office
</TABLE>
- -Registered Trademark- 1997 Dean Witter Distributors Inc.
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS JANUARY 31, 1997
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATE PURCHASE VALUE
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCIES (98.4%)
$ 122,470 Federal Farm Credit Bank 02/07/97-07/31/97................ 5.22-5.40% $ 120,832,566
352,405 Federal Home Loan Banks 02/03/97-07/07/97................. 5.28-5.44 348,965,152
189,700 Federal Home Loan Mortgage Corp.
02/04/97-04/04/97....................................... 5.28-5.45 188,738,916
188,460 Federal National Mortgage Assoc.
02/03/97-07/21/97....................................... 5.26-5.65 186,012,709
47,505 Student Loan Marketing Assoc.
02/24/97-03/21/97....................................... 5.24-5.27 47,273,804
20,000 Tennessee Valley Authority 04/09/97....................... 5.33 19,804,956
---------------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $911,628,103)........................................... 911,628,103
---------------
U.S. GOVERNMENT OBLIGATION (0.5%)
5,000 U.S. Treasury Bill (Amortized Cost $4,996,274) 02/06/97... 5.52 4,996,274
---------------
REPURCHASE AGREEMENTS (1.7%)
13,000 Dillon Read & Co., Inc. due 02/03/97 (dated 01/31/97;
proceeds $13,005,958; collateralized by $12,250,000 U.S.
Treasury Bond 7.50% due 11/15/16 valued at $13,260,625)
(Identified Cost $13,000,000)........................... 5.50 13,000,000
---------------
2,987 The Bank of New York due 02/03/97 (dated 01/31/97;
proceeds $2,987,807; collateralized by $4,363,475 U.S.
Treasury Strip 0.00% due 11/15/02 valued at $3,046,231)
(Identified Cost $2,986,501)............................ 5.25 2,986,501
---------------
TOTAL REPURCHASE AGREEMENTS
(IDENTIFIED COST $15,986,501).............. 15,986,501
------------
TOTAL INVESTMENTS
(IDENTIFIED COST $932,610,878) (A)......... 100.6% 932,610,878
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS..................................... (0.6) (5,526,257)
----- ------------
NET ASSETS................................. 100.0% $927,084,621
----- ------------
----- ------------
<FN>
- ---------------------
(a) Cost is the same for federal income tax purposes.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $932,610,878)............................ $932,610,878
Cash........................................................ 89,901
Receivable for:
Shares of beneficial interest sold...................... 347,440
Interest................................................ 2,422
Prepaid expenses and other assets........................... 89,392
------------
TOTAL ASSETS........................................... 933,140,033
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased............... 5,011,735
Investment management fee............................... 359,080
Plan of distribution fee................................ 78,815
Accrued expenses and other payables......................... 605,782
------------
TOTAL LIABILITIES...................................... 6,055,412
------------
NET ASSETS:
Paid-in-capital............................................. 927,082,675
Accumulated undistributed net investment income............. 1,946
------------
NET ASSETS............................................. $927,084,621
------------
------------
NET ASSET VALUE PER SHARE,
927,082,675 SHARES OUTSTANDING (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$1.00
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 1997
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................................. $49,586,539
-----------
EXPENSES
Transfer agent fees and expenses............................ 4,716,932
Investment management fee................................... 4,190,754
Plan of distribution fee.................................... 879,924
Shareholder reports and notices............................. 194,134
Registration fees........................................... 77,425
Custodian fees.............................................. 58,104
Professional fees........................................... 52,037
Trustees' fees and expenses................................. 16,625
Other....................................................... 8,142
-----------
TOTAL EXPENSES......................................... 10,194,077
-----------
NET INVESTMENT INCOME AND NET INCREASE................. $39,392,462
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS, CONTINUED
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, 1997 JANUARY 31, 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and net increase...................... $ 39,392,462 $ 42,906,083
Dividends from net investment income........................ (39,391,745) (42,906,345)
Net increase from transactions in shares of beneficial
interest.................................................. 24,364,860 93,226,032
---------------- ----------------
NET INCREASE........................................... 24,365,577 93,225,770
NET ASSETS:
Beginning of period......................................... 902,719,044 809,493,274
---------------- ----------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $1,946
AND $1,229, RESPECTIVELY)............................... $ 927,084,621 $ 902,719,044
---------------- ----------------
---------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter U.S. Government Money Market Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Trust's investment objectives are
security of principal, high current income and liquidity. The Trust was
organized as a Massachusetts business trust on November 18, 1981 and commenced
operations on February 17, 1982.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Premiums are amortized and discounts are accreted over the life of the
respective securities.
C. FEDERAL INCOME TAX STATUS -- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Trust records dividends
and distributions as of the close of each business day.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Trust pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Trust determined as of the close of each
business day: 0.50% to the portion of the daily net assets not exceeding $500
million; 0.425% to the portion of the daily net assets exceeding $500 million
but not exceeding $750 million; 0.375% to the portion of the daily net assets
exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of the
daily net assets exceeding $1 billion but not exceeding $1.5
21
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1997, CONTINUED
billion; 0.325% to the portion of the daily net assets exceeding $1.5 billion
but not exceeding $2 billion; 0.30% to the portion of the daily net assets
exceeding $2 billion but not exceeding $2.5 billion; 0.275% to the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and
0.25% to the portion of the daily net assets exceeding $3 billion.
Under the terms of the Agreement, the Investment Manager maintains certain of
the Trust's books and records and furnishes, at its own expense, office space,
facilities, equipment, clerical, bookkeeping and certain legal services and pays
the salaries of all personnel, including officers of the Trust who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Trust.
3. PLAN OF DISTRIBUTION
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Trust's shares and, in accordance
with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act,
finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Trust, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter Reynolds
Inc. ("DWR"), an affiliate of the Investment Manager and Distributor, its
affiliates and other selected broker-dealers under the Plan: (1) compensation
to, and expenses of, account executives of DWR's and other selected
broker-dealers and other employees, including overhead and telephone expenses;
(2) sales incentives and bonuses to sales representatives and to marketing
personnel in connection with promoting sales of the Trust's shares; (3) expenses
incurred in connection with promoting sales of the Trust's shares; (4) preparing
and distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio, newspaper,
magazine and other media advertisements.
The Trust is authorized to reimburse the Distributor for specific expenses the
Distributor incurs or plans to incur in promoting the distribution of the
Trust's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of 0.15% of the Trust's
average daily net assets during the month. Expenses incurred by the Distributor
pursuant to the Plan in any fiscal year will not be reimbursed by the Trust
through payments accrued in any subsequent fiscal year. For the year ended
January 31, 1997, the distribution fee was accrued at the annual rate of 0.10%.
22
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1997, CONTINUED
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio securities
for the year ended January 31, 1997 aggregated $12,548,196,296 and
$12,575,267,370, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Trust's transfer agent. At January 31, 1997, the Trust had
transfer agent fees and expenses payable of approximately $513,000.
The Trust has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Trust who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended January 31, 1997 included
in Trustees' fees and expenses in the Statement of Operations amounted to $851.
At January 31, 1997, the Trust had an accrued pension liability of $47,889 which
is included in accrued expenses in the Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JANUARY 31, JANUARY 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Shares sold...................................................... 1,937,077,890 1,866,242,509
Shares issued in reinvestment of dividends....................... 39,246,217 42,762,335
--------------- ---------------
1,976,324,107 1,909,004,844
Shares repurchased............................................... (1,951,959,247) (1,815,778,812)
--------------- ---------------
Net increase..................................................... 24,364,860 93,226,032
--------------- ---------------
--------------- ---------------
</TABLE>
6. SELECTED PER SHARE DATA AND RATIOS
See the "Financial Highlights" table on page 4 of this Prospectus.
23
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights (appearing in the "Financial
Highlights" table on page 4 of this Prospectus) present fairly, in all material
respects, the financial position of Dean Witter U.S. Government Money Market
Trust (the "Trust") at January 31, 1997, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the ten years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at January
31, 1997 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
MARCH 6, 1997
24
<PAGE>
Dean Witter Dean Witter
U. S. Government U.S. Government
Money Market Trust
Two World Trade Center Money Market
New York, New York 10048
TRUSTEES Trust
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive
Officer
Barry Fink
Vice President, Secretary and
General Counsel
Jonathan R. Page
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
PROSPECTUS -- MARCH 19, 1997
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MARCH 19, 1997 DEAN WITTER
U.S. GOVERNMENT
MONEY MARKET
TRUST
- ----------------------------------------------------------------------
Dean Witter U.S. Government Money Market Trust (the "Trust") is an open-end
diversified management investment company whose investment objectives are
security of principal, high current income and liquidity. The Trust seeks to
achieve its objectives by investing primarily in money market instruments
maturing in thirteen months or less which are issued or guaranteed by the United
States Government, its agencies or instrumentalities. (See "Investment Practices
and Policies".) Shares of the Trust are not sponsored, guaranteed, endorsed or
insured by the U.S. Government or any agency thereof.
The Trust is authorized to reimburse for specific expenses incurred in
promoting the distribution of the Trust's shares pursuant to a Plan of
Distribution with Dean Witter Distributors Inc. pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Reimbursement may in no event exceed an amount
equal to payments at the annual rate of 0.15% of the average daily net assets of
the Trust.
A Prospectus for the Trust, dated March 19, 1997, which provides the basic
information you should know before investing in the Trust, may be obtained
without charge by request of the Trust at its address or at one of the telephone
numbers listed below or from the Fund's Distributor, Dean Witter Distributors
Inc., or from Dean Witter Reynolds Inc. at any of its branch offices or from any
other Selected Broker-Dealer. This Statement of Additional Information is not a
Prospectus. It contains information in addition to and more detailed than that
set forth in the Prospectus. It is intended to provide additional information
regarding the activities and operations of the Trust, and should be read in
conjunction with the Prospectus.
Dean Witter
U.S. Government Money Market Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or (800) 869-NEWS (toll-free)
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The Trust and its Management........................................................... 3
Trustees and Officers.................................................................. 6
Investment Practices and Policies...................................................... 11
Investment Restrictions................................................................ 13
Portfolio Transactions and Brokerage................................................... 14
Purchase of Trust Shares............................................................... 15
Redemption of Trust Shares............................................................. 23
Dividends, Distributions and Taxes..................................................... 24
Shares of the Trust.................................................................... 26
Custodian and Transfer Agent........................................................... 26
Independent Accountants................................................................ 27
Reports to Shareholders................................................................ 27
Legal Counsel.......................................................................... 27
Experts................................................................................ 27
Registration Statement................................................................. 27
Financial Statements................................................................... 27
</TABLE>
2
<PAGE>
THE TRUST AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
THE TRUST
The Trust is a Trust of the type commonly known as a "Massachusetts business
trust" and was organized under the laws of the Commonwealth of Massachusetts on
November 18, 1981 under the name Sears U.S. Government Money Market Trust. On
January 18, 1983 the Trustees approved a change in the Trust's name, which
became effective March 21, 1983, to Dean Witter/Sears U.S. Government Money
Market Trust. On February 19, 1993, the Trustees changed the name of the Trust
to Dean Witter U.S. Government Money Market Trust.
As of January 31, 1997, no shareholder was known to own beneficially or of
record as much as 5% of the outstanding shares of the Trust. The percentage
ownership of the Trust changes from time to time depending on purchases and
redemptions by shareholders and the total number of shares outstanding.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. (the "Investment Manager" or "InterCapital"),
a Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048, is the Trust's Investment Manager. The Investment Manager, which was
incorporated in July, 1992, is a wholly-owned subsidiary of Dean Witter,
Discover & Co. ("DWDC"), a Delaware corporation. In an internal reorganization
which took place in January, 1993, InterCapital assumed the investment advisory,
administrative and management activities previously performed by the
InterCapital Division of Dean Witter Reynolds Inc. ("DWR"), a broker-dealer
affiliate of InterCapital. (As hereinafter used in this Statement of Additional
Information, the terms "InterCapital" and "Investment Manager" refer to DWR's
InterCapital Division prior to the reorganization and to Dean Witter
InterCapital Inc. thereafter.) The daily management of the Trust and research
relating to the Trust's portfolio are conducted by or under the direction of
officers of the Trust and of the Investment Manager, subject to periodic review
by the Trust's Board of Trustees. Information as to these Trustees and officers
is contained under the caption "Trustees and Officers."
The Investment Manager is also the investment manager or investment adviser
of the following investment companies: Dean Witter Liquid Asset Fund Inc.,
InterCapital Income Securities Inc., InterCapital Insured Municipal Bond Trust,
InterCapital Insured Municipal Trust, InterCapital Insured Municipal Income
Trust, InterCapital California Insured Municipal Income Trust, InterCapital
Insured Municipal Securities, InterCapital Insured California Municipal
Securities, InterCapital Quality Municipal Investment Trust, InterCapital
Quality Municipal Income Trust, InterCapital Quality Municipal Securities,
InterCapital California Quality Municipal Securities, InterCapital New York
Quality Municipal Securities, High Income Advantage Trust, High Income Advantage
Trust II, High Income Advantage Trust III, Dean Witter Government Income Trust,
Dean Witter High Yield Securities Inc., Dean Witter Tax-Free Daily Income Trust,
Dean Witter Developing Growth Securities Trust, Dean Witter Tax-Exempt
Securities Trust, Dean Witter Natural Resource Development Securities Inc., Dean
Witter Dividend Growth Securities Inc., Dean Witter American Value Fund, Dean
Witter Select Municipal Reinvestment Fund, Dean Witter Variable Investment
Series, Dean Witter World Wide Investment Trust, Dean Witter U.S. Government
Securities Trust, Dean Witter California Tax-Free Income Fund, Dean Witter New
York Tax-Free Income Fund, Dean Witter Convertible Securities Trust, Dean Witter
Federal Securities Trust, Dean Witter Value-Added Market Series, Dean Witter
Utilities Fund, Dean Witter Strategist Fund, Dean Witter California Tax-Free
Daily Income Trust, Dean Witter World Wide Income Trust, Dean Witter
Intermediate Income Securities, Dean Witter Capital Growth Securities, Dean
Witter New York Municipal Money Market Trust, Dean Witter European Growth Fund
Inc., Dean Witter Pacific Growth Fund Inc., Dean Witter Precious Metals and
Minerals Trust, Dean Witter Global Short-Term Income Fund Inc., Dean Witter
Multi-State Municipal Series Trust, Dean Witter Premier Income Trust, Dean
Witter Short-Term U.S. Treasury Trust, Dean Witter Diversified Income Trust,
Dean Witter Health Sciences Trust, Dean Witter Retirement Series, Dean Witter
Global Dividend Growth Securities, Dean Witter Limited Term Municipal Trust,
Dean Witter Short-Term Bond Fund, Dean Witter Global Utilities Fund, Dean Witter
International SmallCap Fund, Dean Witter Mid-Cap Growth Fund, Dean Witter High
Income Securities, Dean Witter National Municipal Trust, Dean Witter Select
Dimensions Investment Series, Dean Witter Global Asset Allocation Fund, Dean
Witter Balanced Growth Fund, Dean Witter Balanced Income Fund, Dean Witter
Hawaii Municipal Trust, Dean Witter Capital Appreciation Fund, Dean Witter
Information Fund, Dean Witter Intermediate Term U.S.
3
<PAGE>
Treasury Trust, Dean Witter Japan Fund, Dean Witter Income Builder Fund, Dean
Witter Special Value Fund, Dean Witter Financial Services Trust, Dean Witter
Market Leader Trust, Active Assets Tax-Free Trust, Active Assets California
Tax-Free Trust, Active Assets Government Securities Trust, Municipal Income
Trust, Municipal Income Trust II, Municipal Income Trust III, Municipal Income
Opportunities Trust, Municipal Income Opportunities Trust II, Municipal Income
Opportunities Trust III, Municipal Premium Income Trust and Prime Income Trust.
The foregoing investment companies, together with the Trust, are collectively
referred to as the Dean Witter Funds.
In addition, Dean Witter Services Company Inc. ("DWSC"), a wholly-owned
subsidiary of InterCapital, serves as manager for the following companies for
which TCW Funds Management, Inc. is the investment adviser: TCW/DW Core Equity
Trust, TCW/DW North American Government Income Trust, TCW/DW Latin American
Growth Fund, TCW/DW Income and Growth Fund, TCW/DW Small Cap Growth Fund, TCW/DW
Balanced Fund, TCW/DW Mid-Cap Equity Trust, TCW/DW Global Telecom Trust, TCW/ DW
Strategic Income Trust, TCW/DW Total Return Trust, TCW/DW Emerging Markets
Opportunities Trust, TCW/DW Term Trust 2000, TCW/DW Term Trust 2002 and TCW/DW
Term Trust 2003 (the "TCW/ DW Funds"). InterCapital also serves as: (i)
sub-adviser to Templeton Global Opportunities Trust, an open-end investment
company; (ii) administrator of The BlackRock Strategic Term Trust Inc., a
closed-end investment company; and (iii) sub-administrator of MassMutual
Participation Investors and Templeton Global Governments Income Trust,
closed-end investment companies.
Pursuant to an Investment Management Agreement (the "Agreement") with the
Investment Manager, the Trust has retained the Investment Manager to manage the
investment of the Trust's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Investment Manager obtains and
evaluates such information and advice relating to the economy, securities
markets and specific securities as it considers necessary or useful to
continuously manage the assets of the Trust in a manner consistent with its
investment objectives and policies.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books and
records and furnishes, at its expense, such office space, facilities, equipment,
clerical help, bookkeeping and certain legal services as the Trust may
reasonably require in the conduct of its business, including the services of
personnel in connection with the pricing of the Trust's shares and the
preparation of prospectuses, proxy statements and reports required to be filed
with federal and state securities commissions (except insofar as the
participation or assistance of independent accountants and attorneys is, in the
opinion of the Investment Manager, necessary or desirable). In addition, the
Investment Manager pays the salaries of all personnel, including officers of the
Trust, who are employees of the Investment Manager. The Investment Manager also
bears the cost of telephone service, heat, light, power and other utilities
provided to the Trust.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, DWSC began to provide the administrative services to the
Trust which were previously performed directly by InterCapital. On April 17,
1995, DWSC was reorganized in the State of Delaware, necessitating the entry
into a new Services Agreement by InterCapital and DWSC on that date. The
foregoing internal reorganizations did not result in any change in the nature or
scope of the administrative services being provided to the Trust or any of the
fees being paid by the Trust for the overall services being performed under the
terms of the existing Management Agreement.
Expenses not expressly assumed by the Investment Manager under the Agreement
or by the Distributor of the Trust's shares, Dean Witter Distributors Inc.
("Distributors" or the "Distributor"), (see "Purchase of Trust Shares") will be
paid by the Trust. The expenses borne by the Trust include, but are not limited
to: the distribution fee under the Plan of Distribution pursuant to Rule 12b-1
(see "Purchase of Trust Shares"), charges and expenses of any registrar,
custodian, stock transfer and dividend disbursing agent; brokerage commissions;
taxes; engraving and printing certificates representing shares of the Trust;
registration costs of the Trust and its shares under federal and state
securities laws; the cost and expense of printing, including typesetting, and
distributing prospectuses of the Trust and supplements thereto to the Trust's
shareholders; all expenses of shareholders' and Trustees' meetings and of
printing, including typesetting, and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the
4
<PAGE>
Investment Manager or any corporate affiliate of the Investment Manager; all
expenses incident to any dividend, distribution, withdrawal or redemption
options; fees and expenses of legal counsel, including counsel to the Trustees
who are not interested persons of the Trust or of the Investment Manager (not
including compensation or expenses of attorneys who are employees of the
Investment Manager) and independent accountants; membership dues of industry
associations; interest on Trust borrowings; postage; insurance premiums on
property or personnel (including officers and Trustees) of the Trust which inure
to its benefit; extraordinary expenses (including, but not limited to, legal
claims and liabilities and litigation costs and any indemnification relating
thereto); and all other costs of the Trust's operation.
As full compensation for the services and facilities furnished to the Trust
and expenses of the Trust assumed by the Investment Manager, the Trust pays the
Investment Manager monthly compensation calculated daily by applying the
following annual rates to the net assets of the Trust determined as of the close
of each business day: 0.50% of the portion of the daily net assets not exceeding
$500 million; 0.425% of the portion of the daily net assets exceeding $500
million but not exceeding $750 million; 0.375% of the portion of the daily net
assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion
of the daily net assets exceeding $1 billion but not exceeding $1.5 billion;
0.325% of the portion of the daily net assets exceeding $1.5 billion but not
exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net
assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the
portion of the daily net assets exceeding $3 billion. For the fiscal years ended
January 31, 1995, 1996 and 1997, the Trust accrued to the Investment Manager
total compensation of $3,716,376, $4,061,755 and $4,190,754, respectively.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder, the
Investment Manager is not liable to the Trust or any of its investors for any
act or omission by the Investment Manager or for any losses sustained by the
Trust or its investors. The Agreement in no way restricts the Investment Manager
from acting as investment manager or adviser to others.
The Agreement was initially approved by the Trustees on October 30, 1992 and
by the shareholders of the Trust at a Meeting of Shareholders held on January
12, 1993. The Agreement is substantially identical to a prior investment
management agreement which was initially approved by the Trustees on January 18,
1983 and by the shareholders of the Trust at a Meeting of Shareholders held on
March 18, 1983. The Agreement took effect on June 30, 1993 upon the spin-off by
Sears, Roebuck and Co. of its remaining shares of DWDC. The Agreement may be
terminated at any time, without penalty, on thirty days' notice by the Board of
Trustees of the Trust, by the holders of a majority, as defined in the
Investment Company Act of 1940, as amended (the "Act"), of the outstanding
shares of the Trust, or by the Investment Manager. The Agreement will
automatically terminate in the event of its assignment (as defined in the Act).
Under its terms, the Agreement had an initial term ending April 30, 1994 and
will continue in effect from year to year thereafter, provided continuance of
the Agreement is approved at least annually by the vote of the holders of a
majority, as defined in the Act, of the outstanding shares of the Trust, or by
the Board of Trustees of the Trust; provided that in either event such
continuance is approved annually by the vote of a majority of the Trustees of
the Trust who are not parties to the Agreement or "interested persons" (as
defined in the Act) of any such party (the "Independent Trustees"), which vote
must be cast in person at a meeting called for the purpose of voting on such
approval. At their meeting held on April 17, 1996, the Trust's Board of
Trustees, including all of the Independent Trustees, approved continuation of
the Agreement until April 30, 1997.
The Trust has acknowledged that the name "Dean Witter" is a property right
of DWR. The Trust has agreed that DWR or its parent company may use or, at any
time, permit others to use, the name "Dean Witter." The Trust has also agreed
that in the event the Agreement is terminated, or if the affiliation between
Dean Witter and its parent company is terminated, the Trust will eliminate the
name "Dean Witter" from its name if DWR or its parent company shall so request.
5
<PAGE>
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
The Trustees and Executive Officers of the Trust, their principal business
occupations during the last five years and their affiliations, if any, with
InterCapital and with the 84 Dean Witter Funds and the 14 TCW/DW Funds are shown
below.
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH TRUST AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Michael Bozic (56) Chairman and Chief Executive Officer of Levitz Furniture Corporation
Trustee (since November, 1995); Director or Trustee of the Dean Witter Funds;
c/o Levitz Furniture Corporation formerly President and Chief Executive Officer of Hills Department
6111 Broken Sound Parkway, N.W. Stores (May, 1991-July, 1995); formerly variously Chairman, Chief
Boca Raton, Florida Executive Officer, President and Chief Operating Officer (1987-1991)
of the Sears Merchandise Group of Sears, Roebuck and Co.; Director of
Eaglemark Financial Services, Inc., the United Negro College Fund and
Weirton Steel Corporation.
Charles A. Fiumefreddo* (63) Chairman, Chief Executive Officer and Director of InterCapital,
Chairman of the Board, Distributors and DWSC; Executive Vice President and Director of DWR;
President, Chief Executive Chairman, Director or Trustee, President and Chief Executive Officer
Officer and Trustee of the Dean Witter Funds; Chairman, Chief Executive Officer and
Two World Trade Center Trustee of the TCW/DW Funds; Chairman and Director of Dean Witter
New York, New York Trust Company ("DWTC"); Director and/or officer of various DWDC
subsidiaries; formerly Director and Executive Vice President of DWDC
(until February, 1993).
Edwin J. Garn (64) Director or Trustee of the Dean Witter Funds; formerly United States
Trustee Senator (R-Utah) (1974-1992) and Chairman, Senate Banking Committee
c/o Huntsman Corporation (1980-1986); formerly Mayor of Salt Lake City, Utah (1971-1974);
500 Huntsman Way formerly Astronaut, Space Shuttle Discovery (April 12-19, 1985); Vice
Salt Lake City, Utah Chairman, Huntsman Corporation (since January, 1993); Director of
Franklin Quest (time management systems) and John Alden Financial
Corp. (health insurance); member of the board of various civic and
charitable organizations.
John R. Haire (72) Chairman of the Audit Commitee and Chairman of the Committee of the
Trustee Independent Directors or Trustees and Director or Trustee of the Dean
Two World Trade Center Witter Funds; Chairman of the Audit Committee and Chairman of the
New York, New York Committee of the Independent Trustees and Trustee of the TCW/DW
Funds; formerly President, Council for Aid to Education (1978-1989)
and Chairman and Chief Executive Officer of Anchor Corporation, an
Investment Adviser (1964-1978); Director of Washington National
Corporation (insurance).
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH TRUST AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Dr. Manuel H. Johnson (48) Senior Partner, Johnson Smick International, Inc., a consulting firm;
Trustee Co-Chairman and a founder of the Group of Seven Council (G7C), an
c/o Johnson Smick International, Inc. international economic commission; Director or Trustee of the Dean
1133 Connecticut Avenue, N.W. Witter Funds; Trustee of the TCW/DW Funds; Director of NASDAQ (since
Washington, DC June, 1995); Director of Greenwich Capital Markets, Inc.
(broker-dealer); Trustee of the Financial Accounting Foundation
(oversight organization for the FASB); formerly Vice Chairman of the
Board of Governors of the Federal Reserve System (1986-1990) and
Assistant Secretary of the U.S. Treasury (1982-1986).
Michael E. Nugent (60) General Partner, Triumph Capital, L.P., a private investment
Trustee partnership; Director or Trustee of the Dean Witter Funds; Trustee of
c/o Triumph Capital, L.P. the TCW/DW Funds; formerly Vice President, Bankers Trust Company and
237 Park Avenue BT Capital Corporation (1984-1988); Director of various business
New York, New York organizations.
Philip J. Purcell* (53) Chairman of the Board of Directors and Chief Executive Officer of
Trustee DWDC, DWR and Novus Credit Services Inc.; Director of InterCapital,
Two World Trade Center DWSC and Distributors; Director or Trustee of the Dean Witter Funds;
New York, New York Director and/or officer of various DWDC subsidiaries.
John L. Schroeder (66) Retired; Director or Trustee of the Dean Witter Funds; Trustee of the
Trustee TCW/DW Funds; Director of Citizens Utilities Company; formerly
c/o Gordon Altman Butowsky Executive Vice President and Chief Investment Officer of the Home
Weitzen Shalov & Wein Insurance Company (August, 1991-September 1995) and Chairman and
Counsel to the Independent Trustees Chief Investment Officer of Axe- Houghton Management and the
114 West 47th Street Axe-Houghton Funds (1983-1991).
New York, New York
Barry Fink (42) First Vice President (since June, 1993) and Secretary and General
Vice President, Secretary and Counsel (since February, 1997) of InterCapital and DWSC; First Vice
General Counsel President, Assistant Secretary and Assistant General Counsel of
Two World Trade Center Distributors (since February, 1997); Assistant Secretary of DWR
New York, New York (since August, 1996); Vice President, Secretary and General Counsel
of the Dean Witter Funds and the TCW/ DW Funds (since February,
1997); previously Vice President, Assistant Secretary and Assistant
General Counsel of InterCapital and DWSC and Assistant Secretary of
the Dean Witter Funds and the TCW/DW Funds.
Jonathan R. Page (48) Senior Vice President of InterCapital; Vice President of various Dean
Vice President Witter Funds.
Two World Trade Center
New York, New York
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH TRUST AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Thomas F. Caloia (51) First Vice President and Assistant Treasurer of InterCapital and
Treasurer DWSC; Treasurer of the Dean Witter Funds and the TCW/DW Funds.
Two World Trade Center
New York, New York
</TABLE>
- ---------
*Denotes Trustees who are "interested persons" of the Trust, as defined in the
Investment Company Act of 1940, as amended.
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Joseph J. McAlinden, Executive Vice President and Chief
Investment Officer of InterCapital and Director of DWTC, Robert S. Giambrone,
Senior Vice President of InterCapital, DWSC, Distributors and DWTC and Director
of DWTC, Peter M. Avelar, Paul D. Vance and James F. Willison, Senior Vice
Presidents of InterCapital, and Patricia A. Cuddy, Vice President of
InterCapital, are Vice Presidents of the Trust and Marilyn K. Cranney, First
Vice President and Assistant General Counsel of InterCapital and DWSC, LouAnne
D. McInnis and Ruth Rossi, Vice Presidents and Assistant General Counsels of
InterCapital and DWSC, and Frank Bruttomesso and Carsten Otto, Staff Attorneys
with InterCapital, are Assistant Secretaries of the Trust.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of eight (8) trustees. These same individuals
also serve as directors or trustees for all of the Dean Witter Funds, and are
referred to in this section as Trustees. As of the date of this Statement of
Additional Information, there are a total of 84 Dean Witter Funds, comprised of
127 portfolios. As of February 28, 1997, the Dean Witter Funds had total net
assets of approximately $84.2 billion and more than five million shareholders.
Six Trustees (75% of the total number) have no affiliation or business
connection with InterCapital or any of its affiliated persons and do not own any
stock or other securities issued by InterCapital's parent company, DWDC. These
are the "disinterested" or "independent" Trustees. The other two Trustees (the
"management Trustees") are affiliated with InterCapital. Four of the six
independent Trustees are also Independent Trustees of the TCW/DW Funds.
Law and regulation establish both general guidelines and specific duties for
the Independent Trustees. The Dean Witter Funds seek as Independent Trustees
individuals of distinction and experience in business and finance, government
service or academia; these are people whose advice and counsel are in demand by
others and for whom there is often competition. To accept a position on the
Funds' Boards, such individuals may reject other attractive assignments because
the Funds make substantial demands on their time. Indeed, by serving on the
Funds' Boards, certain Trustees who would otherwise be qualified and in demand
to serve on bank boards would be prohibited by law from doing so.
All of the Independent Trustees serve as members of the Audit Committee and
the Committee of the Independent Trustees. Three of them also serve as members
of the Derivatives Committee. During the calendar year ended December 31, 1996,
the three Committees held a combined total of sixteen meetings. The Committees
hold some meetings at InterCapital's offices and some outside InterCapital.
Management Trustees or officers do not attend these meetings unless they are
invited for purposes of furnishing information or making a report.
The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and distribution and underwriting agreements; continually
reviewing Fund performance; checking on the pricing of portfolio securities,
brokerage commissions, transfer agent costs and performance, and trading among
Funds in the same complex; and approving fidelity bond and related insurance
coverage and allocations, as well as other matters that arise from time to time.
The Independent Trustees are required to select and nominate individuals to fill
any Independent Trustee vacancy on the Board of any Fund that has a Rule 12b-1
plan of distribution. Most of the Dean Witter Funds have such a plan.
8
<PAGE>
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of such services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect to
derivative investments, if any, made by the Fund.
DUTIES OF CHAIRMAN OF COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and the
Funds' operations and management. He screens and/or prepares written materials
and identifies critical issues for the Independent Trustees to consider,
develops agendas for Committee meetings, determines the type and amount of
information that the Committees will need to form a judgment on various issues,
and arranges to have that information furnished to Committee members. He also
arranges for the services of independent experts and consults with them in
advance of meetings to help refine reports and to focus on critical issues.
Members of the Committees believe that the person who serves as Chairman of both
Committees and guides their efforts is pivotal to the effective functioning of
the Committees.
The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and with
the Funds' independent auditors. He arranges for a series of special meetings
involving the annual review of investment advisory, management and other
operating contracts of the Funds and, on behalf of the Committees, conducts
negotiations with the Investment Manager and other service providers. In effect,
the Chairman of the Committees serves as a combination of chief executive and
support staff of the Independent Trustees.
The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since July
1, 1996, as Chairman of the Committee of the Independent Trustees and the Audit
Committee of the TCW/DW Funds. The current Committee Chairman has had more than
35 years experience as a senior executive in the investment company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and enhances
their ability to negotiate on behalf of each Fund with the Fund's service
providers. This arrangement also precludes the possibility of separate groups of
Independent Trustees arriving at conflicting decisions regarding operations and
management of the Funds and avoids the cost and confusion that would likely
ensue. Finally, having the same Independent Trustees serve on all Fund Boards
enhances the ability of each Fund to obtain, at modest cost to each separate
Fund, the services of Independent Trustees, and a Chairman of their Committees,
of the caliber, experience and business acumen of the individuals who serve as
Independent Trustees of the Dean Witter Funds.
COMPENSATION OF INDEPENDENT TRUSTEES
The Trust pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 for meetings of the Board of Trustees or committees of the
Board of Trustees attended by the Trustee (the
9
<PAGE>
Trust pays the Chairman of the Audit Committee an annual fee of $750 and pays
the Chairman of the Committee of the Independent Trustees an additional annual
fee of $1,200). The Trust also reimburses such Trustees for travel and other
out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Trust who are or have been employed by
the Investment Manager or an affiliated company receive no compensation or
expense reimbursement from the Trust.
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended January 31,1997.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- -------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic................................................. $1,800
Edwin J. Garn................................................. 1,800
John R. Haire................................................. 3,650
Dr. Manuel H. Johnson......................................... 1,750
Michael E. Nugent............................................. 1,800
John L. Schroeder............................................. 1,750
</TABLE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1996 for services
to the 82 Dean Witter Funds and, in the case of Messrs. Haire, Johnson, Nugent
and Schroeder, the 14 TCW/DW Funds that were in operation at December 31, 1996.
With respect to Messrs. Haire, Johnson, Nugent and Schroeder, the TCW/DW Funds
are included solely because of a limited exchange privilege between those Funds
and five Dean Witter Money Market Funds.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS FOR SERVICE
CHAIRMAN OF AS TOTAL CASH
COMMITTEES OF CHAIRMAN OF COMPENSATION
FOR SERVICE INDEPENDENT COMMITTEES OF FOR SERVICES
AS DIRECTOR OR DIRECTORS/ INDEPENDENT TO
TRUSTEE AND FOR SERVICE AS TRUSTEES AND TRUSTEES AND 82 DEAN
COMMITTEE MEMBER TRUSTEE AND AUDIT AUDIT WITTER
OF 82 DEAN COMMITTEE MEMBER COMMITTEES OF COMMITTEES OF FUNDS AND
NAME OF WITTER OF 14 TCW/DW 82 DEAN WITTER 14 TCW/DW 14 TCW/DW
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS FUNDS FUNDS
- --------------------------- ---------------- ---------------- -------------- ------------- -------------
Michael Bozic.............. $138,850 -- -- -- $138,850
<S> <C> <C> <C> <C> <C>
Edwin J. Garn.............. 140,900 -- -- -- 140,900
John R. Haire.............. 106,400 $64,283 $195,450 $ 12,187 378,320
Dr. Manuel H. Johnson...... 137,100 66,483 -- -- 203,583
Michael E. Nugent.......... 138,850 64,283 -- -- 203,133
John L. Schroeder.......... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Statement of Additional Information, 57 of the Dean
Witter Funds, including the Trust, have adopted a retirement program under which
an Independent Trustee who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent Director
or Trustee of any Dean Witter Fund that has adopted the retirement program (each
such Fund referred to as an "Adopting Fund" and each such Trustee referred to as
an "Eligible Trustee") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72). Annual payments are
based upon length of service. Currently, upon retirement, each Eligible Trustee
is entitled to receive from the Adopting Fund, commencing as of his or her
retirement date and continuing for the remainder of his or her life, an annual
retirement benefit (the "Regular Benefit") equal to 25.0% of his or her Eligible
Compensation plus 0.4166666% of such Eligible Compensation for each full month
of service as an Independent Director or Trustee of any Adopting Fund in excess
of five years up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the
10
<PAGE>
Board.(1) "Eligible Compensation" is one-fifth of the total compensation earned
by such Eligible Trustee for service to the Adopting Fund in the five year
period prior to the date of the Eligible Trustee's retirement. Benefits under
the retirement program are not secured or funded by the Adopting Funds.
The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended January 31,
1997 and by the 57 Dean Witter Funds (including the Trust) for the year ended
December 31, 1996, and the estimated retirement benefits for the Trust's
Independent Trustees, to commence upon their retirement, from the Trust as of
January 31, 1997 and from the 57 Dean Witter Funds as of December 31, 1996.
RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
--------------------------- ESTIMATED ANNUAL
ESTIMATED RETIREMENT BENEFITS BENEFITS
CREDITED ACCRUED AS EXPENSES UPON
YEARS ESTIMATED RETIREMENT(2)
OF SERVICE PERCENTAGE -------------------- ----------------
AT OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION TRUST FUNDS TRUST FUNDS
- ----------------------------------- ------------ ------------ -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic...................... 10 50.0% $ 339 $20,147 $ 875 $ 51,325
Edwin J. Garn...................... 10 50.0 475 27,772 875 51,325
John R. Haire...................... 10 50.0 (404)(3) 46,952 2,211 129,550
Dr. Manuel H. Johnson.............. 10 50.0 203 10,926 875 51,325
Michael E. Nugent.................. 10 50.0 339 19,217 875 51,325
John L. Schroeder.................. 8 41.7 647 38,700 729 42,771
</TABLE>
- ------------------------
(1) An Eligible Trustee may elect alternate payments of his or her retirement
benefits based upon the combined life expectancy of such Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. The
amount estimated to be payable under this method, through the remainder of
the later of the lives of such Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit. In addition, the Eligible
Trustee may elect that the surviving spouse's periodic payment of benefits
will be equal to either 50% or 100% of the previous periodic amount, an
election that, respectively, increases or decreases the previous periodic
amount so that the resulting payments will be the actuarial equivalent of
the Regular Benefit.
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) above.
(3) This number reflects the effect of the extension of Mr. Haire's term as
Trustee until June 1, 1998.
As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Trust owned by the Trust's
officers and Trustees as a group was less than 1 percent of the Trust's shares
of beneficial interest outstanding.
INVESTMENT PRACTICES AND POLICIES
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. As discussed in the Prospectus, the Trust may enter
into repurchase agreements with financial institutions. The Trust follows
certain procedures designed to minimize the risks inherent in such agreements.
These procedures include effecting repurchase transactions only with large,
well-capitalized and well-established financial institutions whose condition
will be continually monitored by the Investment Manager. In addition, the value
of the collateral underlying the repurchase agreement will always be at least
equal to the resale price, which consists of the purchase price paid to the
seller of the securities plus the accrued resale premium which is defined as the
amount specified in the repurchase agreement or the daily amortization of the
difference between the purchase price and the resale price specified in the
repurchase agreement. Such collateral will consist entirely of securities that
are direct obligations of, or that are fully guaranteed as to principal and
interest by, the United States or any agency thereof, and/or certificates of
deposit, bankers' acceptances which are eligible for acceptance by a Federal
Reserve Bank, and, if the seller is a bank, mortgage related securities (as such
term is defined in section 3(a)(41) of the Securities Exchange Act of 1934) that
at the time the repurchase
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<PAGE>
agreement is entered into are rated in the highest rating category by the
"Requisite NRSROs" (see "Purchase of Trust Shares--Determination of Net Asset
Value"). Additionally, the collateral must qualify the repurchase agreement for
preferential treatment under the Federal Deposit Insurance Act of the Federal
Bankruptcy Code. In the event of a default or bankruptcy by a selling financial
institution, the Trust will seek to liquidate such collateral. However, the
exercising of the Trust's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase were less than the repurchase price, the
Trust could suffer a loss. It is the current policy of the Trust not to invest
in repurchase agreements that do not mature within seven days if any such
investment, together with any other illiquid assets held by the Trust, amounts
to more than 10% of its total assets. The Trust's investments in repurchase
agreements may, at times, be substantial when, in the view of the Investment
Manager, liquidity or other considerations so warrant.
REVERSE REPURCHASE AGREEMENTS. As discussed in the Prospectus, the Trust
may also use reverse repurchase agreements as part of its investment strategy.
Reverse repurchase agreements involve sales by the Trust of portfolio assets
concurrently with an agreement by the Trust to repurchase the same assets at a
later date at a fixed price. Generally, the effect of such a transaction is that
the Trust can recover all or most of the cash invested in the portfolio
securities involved during the term of the reverse repurchase agreement, while
it will be able to keep the interest income associated with those portfolio
securities. Such transactions are only advantageous if the interest cost to the
Trust of the reverse repurchase transaction is less than the cost of obtaining
the cash otherwise. Opportunities to achieve this advantage may not always be
available, and the Trust intends to use the reverse repurchase technique only
when it will be to its advantage to do so. The Trust will establish a segregated
account with its custodian bank in which it will maintain cash or cash
equivalents or other portfolio securities equal in value to its obligations in
respect of reverse repurchase agreements. Reverse repurchase agreements are
considered borrowings by the Trust and for purposes other than meeting
redemptions may not exceed 5% of the Trust's total assets.
LENDING OF PORTFOLIO SECURITIES. Subject to investment restriction (11)
below, the Trust may lend portfolio securities to brokers, dealers and financial
institutions, provided that cash equal to at least 100% of the market value of
the securities loaned is deposited by the borrower with the Trust and is
maintained each business day in a segregated account pursuant to applicable
regulations. While such securities are on loan, the borrower will pay the Trust
any income accruing thereon, and the Trust may invest the cash collateral in
portfolio securities, thereby earning additional income. The Trust will not lend
its portfolio securities if such loans are not permitted by the laws or
regulations of any state in which its shares are qualified for sale and will not
lend more than 10% of the value of its total assets. Loans would be subject to
termination by the Trust on four business days' notice, or by the borrower on
one day's notice. Borrowed securities must be returned when the loan is
terminated. Any gain or loss in the market price of the borrowed securities
which occurs during the term of the loan inures to the Trust and its
shareholders. The Trust may pay reasonable finders, borrowers, administrative,
and custodial fees in connection with a loan.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. As discussed in the
Prospectus, from time to time, in the ordinary course of business, the Trust may
purchase securities on a when-issued or delayed delivery basis, i.e., delivery
and payment can take place between a month and 120 days after the date of the
transaction. At the time the Trust makes the commitment to purchase securities
on a when-issued or delayed delivery basis, it will record the transaction and
thereafter reflect the value, each day, of such security in determining its net
asset value. At the time of delivery of the securities, the value may be more or
less than the purchase price. The Trust will also establish a segregated account
with its custodian bank in which it will maintain cash or cash equivalents or
other portfolio securities equal in value to commitments for such when-issued or
delayed delivery securities. The Trust does not believe that its net asset value
or income will be adversely affected by its purchase of securities on a
when-issued or delayed delivery basis.
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<PAGE>
The foregoing strategies, and those discussed in the Prospectus under the
heading "Investment Objectives and Policies," may subject the Trust to the
effects of interest rate fluctuations to a greater extent than would occur if
such strategies were not used. While these strategies may be used by the Trust
if, in the opinion of the Investment Manager, they will be advantageous to the
Trust, the Trust will be free to reduce or eliminate its activity in any of
those areas without changing its fundamental investment policies. Certain
provisions of the Internal Revenue Code, related regulations, and rulings of the
Internal Revenue Service may also have the effect of reducing the extent to
which the previously cited techniques may be used by the Trust, either
individually or in combination. Furthermore, there is no assurance that any of
these strategies or any other strategies and methods of investment available to
the Trust will result in the achievement of its objectives.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
The Trust has adopted certain investment restrictions as fundamental
policies which cannot be changed without the approval of the holders of a
"majority" of the outstanding shares of the Trust, as defined in the Act.
Majority is defined in the Act as the lesser of (a) sixty-seven percent or more
of the shares present at a meeting of shareholders, if the holders of more than
fifty percent of the outstanding shares of the Trust are present or represented
by proxy, or (b) more than fifty percent of the outstanding shares.
These restrictions provide that the Trust may not:
1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds, municipal bonds or industrial revenue bonds;
2. Borrow money, except from banks for temporary or emergency purposes,
including the meeting of redemption requests which might otherwise require
the untimely disposition of securities; or through its transactions in
reverse repurchase agreements. Borrowing in the aggregate, including reverse
repurchase agreements, may not exceed 20%, and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value of the Trust's total
assets (including the amount borrowed), less liabilities (not including the
amount borrowed) at the time the borrowing is made. Borrowings in excess of
5% will be repaid before additional investments are made;
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its net assets, but only to
secure borrowings for temporary or emergency purposes;
4. Sell securities short or purchase securities on margin;
5. Write or purchase put or call options;
6. Underwrite the securities of other issuers or purchase restricted
securities except insofar as the Trust may enter into any repurchase or
reverse repurchase agreements;
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts or oil and gas interests;
8. Make loans to others except through the purchase of qualified debt
obligations, loans of portfolio securities and entry into repurchase
agreements referred to under "Investment Practices and Policies" above and
"Investment Objectives and Policies" in the Prospectus;
9. Issue senior securities as defined in the Act except insofar as the
Trust may be deemed to have issued a senior security by reason of: (a)
entering into any repurchase or reverse repurchase agreement; (b) borrowing
money in accordance with restrictions described above; or (c) lending
portfolio securities;
10. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation, acquisition of assets or
plan of reorganization;
13
<PAGE>
11. Lend its portfolio securities in excess of 10% of its total assets.
Any loans of portfolio securities will be made according to guidelines
established by the Trustees, including maintenance of cash collateral of the
borrower equal at all times to the current market value of the securities
loaned.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not constitute a
violation of any of the foregoing restrictions.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------
Subject to the general supervision by the Trustees of the Trust, the
Investment Manager is responsible for decisions to buy and sell securities for
the Trust, the selection of brokers and dealers to effect the transactions, and
the negotiation of brokerage commissions, if any. Purchases and sales of
portfolio securities are normally transacted through issuers, underwriters or
major dealers in U.S. Government securities acting as principals. Such
transactions are made on a net basis and do not involve payment of brokerage
commissions. The cost of securities purchased from an underwriter usually
includes a commission paid by the issuer to the underwriters; transactions with
dealers normally reflect the spread between bid and asked prices. The Trust has
never paid any brokerage commissions.
The Investment Manager currently serves as investment manager to a number of
clients, including other investment companies, and may in the future act as
investment manager or adviser to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Trust
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Trust and other client accounts, various
factors may be considered, including the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held and the opinions of the persons responsible for managing the
portfolios of the Trust and other client accounts. In the case of certain
initial and secondary public offerings, the Investment Manager may utilize a
pro-rata allocation process based on the size of the Dean Witter Funds involved
and the number of shares available from the public offering.
The policy of the Trust regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Trust's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Trust believes that a requirement always to seek the
lowest possible commission cost could impede effective portfolio management and
preclude the Trust and the Investment Manager from obtaining a high quality of
brokerage and research services. In seeking to determine the reasonableness of
brokerage commissions paid in any transaction, the Investment Manager relies
upon its experience and knowledge regarding commissions generally charged by
various brokers and on its judgment in evaluating the brokerage and research
services received from the broker effecting the transaction. Such determinations
are necessarily subjective and imprecise, as in most cases an exact dollar value
for those services is not ascertainable.
In seeking to implement the Trust's policies, the Investment Manager effects
transactions with those brokers and dealers who the Investment Manager believes
provide the most favorable prices and are capable of providing efficient
executions. If the Investment Manager believes such prices and executions are
obtainable from more than one broker or dealer, it may give consideration to
placing portfolio transactions with those brokers and dealers who also furnish
research and other services to the Trust or the Investment Manager. Such
services may include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investment; wire
services; and appraisals or evaluations of portfolio securities.
14
<PAGE>
The information and services received by the Investment Manager from brokers
and dealers may be of benefit to the Investment Manager in the management of
accounts of some of its other clients and may not in all cases benefit the Trust
directly. While the receipt of such information and services is useful in
varying degrees and would generally reduce the amount of research or services
otherwise performed by the Investment Manager and thereby reduce its expenses,
it is of indeterminable value and the management fee paid to the Investment
Manager is not reduced by any amount that may be attributable to the value of
such services.
Pursuant to an order of the Securities and Exchange Commission, the Trust
may effect principal transactions in certain money market instruments with DWR.
The Trust will limit its transactions with DWR to U.S. Government and Government
Agency Securities. Such transactions will be effected with DWR only when the
price available from DWR is better than that available from other dealers. The
Trust did not effect any such transactions with DWR during its fiscal years
ended January 31, 1995, 1996 and 1997.
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through DWR. In order for DWR to effect any portfolio transactions for
the Trust, the commissions, fees or other remuneration received by DWR must be
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period of
time. This standard would allow DWR to receive no more than the remuneration
which would be expected to be received by an unaffiliated broker in a
commensurate arm's length transaction. Furthermore, the Trustees of the Trust,
including a majority of the Trustees who are not "interested" Trustees, have
adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to DWR are consistent with the
foregoing standard. The Trust has never paid any brokerage commissions to DWR.
Portfolio turnover rate is defined as the lesser of the value of the
securities purchased or securities sold, excluding all securities whose
maturities at time of acquisition were one year or less, divided by the average
monthly value of such securities owned during the year. Based on this
definition, it is anticipated that the Trust's policy of investing in government
securities with remaining maturities of less than one year will not result in a
quantifiable portfolio turnover rate. However, because of the short-term nature
of the Trust's portfolio securities, it is anticipated that the number of
purchases and sales or maturities of such securities will be substantial.
Nevertheless, as brokerage commissions are not normally charged on purchases and
sales of such securities, the large number of these transactions does not have
an adverse effect upon the net yield and net asset value of the shares of the
Trust.
PURCHASE OF TRUST SHARES
- --------------------------------------------------------------------------------
As discussed in the Prospectus, the Trust offers its shares for sale to the
public on a continuous basis, without a sales charge. Pursuant to a Distribution
Agreement between the Trust and Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager and a wholly-owned
subsidiary of DWDC, shares of the Trust are distributed by the Distributor and
through certain selected broker-dealers who have entered into selected dealer
agreements with the Distributor ("Selected Broker-Dealers") at an offering price
equal to the net asset value per share next calculated following receipt of an
effective purchase order (accompanied by Federal Funds). Dealers in the
securities markets in which the Trust will invest usually require immediate
payment in Federal Funds. Since the payment by a Trust shareholder for his or
her other shares cannot be invested until it is converted into and available to
the Trust in Federal Funds, the Trust requires such payments to be so available
before a share purchase order can be considered effective. All checks submitted
for payment are accepted subject to collection at full face value in United
States funds and must be drawn in United States dollars on a United States bank.
The Board of Trustees of the Trust, including a majority of the Trustees who
are not and were not at the time of their vote "interested persons" (as defined
in the Act) of either party to the Distribution Agreement (the "Independent
Trustees"), approved, at its meeting held on October 30, 1992, the current
15
<PAGE>
Distribution Agreement appointing the Distributor as exclusive distributor of
the Trust's shares and providing for the Distributor to bear distribution
expenses not borne by the Trust. The Distribution Agreement took effect on June
30, 1993 upon the spin-off by Sears, Roebuck and Co. of its remaining shares of
DWDC. By its terms, the Distribution Agreement had an initial term ending April
30, 1994, and will remain in effect from year to year thereafter if approved by
the Board. At their meeting held on April 17, 1996, the Trust's Board of
Trustees, including all of the Independent Trustees, approved continuation of
the Distribution Agreement until April 30, 1997.
SHAREHOLDER INVESTMENT ACCOUNT. Upon the purchase of shares of the Trust, a
Shareholder Investment Account is opened for the investor on the books of the
Trust, maintained by the Trust's Transfer Agent, Dean Witter Trust Company (the
"Transfer Agent"). This is an open account in which shares owned by the investor
are credited by the Transfer Agent in lieu of issuance of a share certificate.
Whenever a shareholder-instituted transaction takes place in the Shareholder
Investment Account directly through the Transfer Agent, the shareholder will be
mailed a written confirmation of such transaction.
DIRECT INVESTMENTS THROUGH TRANSFER AGENT. A shareholder may make
additional investments in shares of the Trust at any time through the
Shareholder Investment Account by sending a check, payable to Dean Witter U.S.
Government Money Market Trust, in any amount not less than $50, directly to the
Transfer Agent. The shares so purchased will be credited to the Shareholder
Investment Account.
ACCOUNT STATEMENTS. All purchases of shares of the Trust will be credited
to the shareholder in a Shareholder Investment Account maintained for the
shareholder by the Transfer Agent in full and fractional shares of the Trust
(rounded to the nearest 1/100 of a share, with the exception of purchases made
through reinvestment of dividends, which are rounded to the last 1/100 of a
share). A confirmation will be mailed to the shareholder after each shareholder
instituted purchase or redemption transaction effected through the Transfer
Agent. A quarterly statement of the account is sent to all shareholders.
The Trust reserves the right to reject any order for the purchase of its
shares. In addition, the offering of shares of the Trust may be suspended at any
time and resumed at any time thereafter.
EXCHANGE PRIVILEGE
As discussed in the Prospectus under the caption "Exchange Privilege", an
Exchange Privilege exists whereby investors who have purchased shares of any of
the Dean Witter Funds sold with either a front-end sales charge ("FESC funds")
or a contingent deferred sales charge ("CDSC funds") will be permitted, after
the shares of the fund acquired by purchase (not by exchange or dividend
reinvestment) have been held for 30 days, to redeem all or part of their shares
in that fund, have the proceeds invested in shares of the Trust, Dean Witter
Tax-Free Daily Income Trust, Dean Witter Liquid Asset Fund Inc., Dean Witter
California Tax-Free Daily Income Trust and Dean Witter New York Municipal Money
Market Trust (which five funds are called "money market funds") or Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust, Dean
Witter Short-Term Bond Fund, Dean Witter Balanced Growth Fund, Dean Witter
Balanced Income Fund and Dean Witter Intermediate Term U.S. Treasury Trust
(these eleven funds, including the Trust, are collectively referred to herein as
the "Exchange Funds"). There is no waiting period for exchanges of shares
acquired by exchange or dividend reinvestment. Subsequently, shares of the
Exchange Funds received in an exchange for shares of an FESC fund (regardless of
the type of fund originally purchased) may be redeemed and exchanged for shares
of the other Exchange Funds, FESC funds or CDSC funds (however, shares of CDSC
funds, including shares acquired in exchange for (i) shares of FESC funds or
(ii) shares of the Exchange Funds which were acquired in exchange for shares of
FESC funds, may not be exchanged for shares of FESC funds). Additionally, shares
of the Exchange Funds received in exchange for shares of a CDSC fund (regardless
of the type of fund originally purchased) may be redeemed and exchanged for
shares of the other Exchange Funds or CDSC funds. Ultimately, any applicable
contingent deferred sales charge ("CDSC") will have to be paid upon redemption
of shares originally purchased from a CDSC fund. An exchange will be treated for
federal income tax purposes the same as a repurchase or redemption of shares, on
which the shareholder may realize a capital gain or loss.
16
<PAGE>
Any new account established through the Exchange Privilege will have the
same registration and cash dividend or dividend reinvestment plan as the present
account, unless the Transfer Agent receives written notification to the
contrary. For telephone exchanges, the exact registration of the existing
account and the account number must be provided.
When shares of any CDSC fund are exchanged for shares of the Trust or any
other Exchange Funds, the exchange is executed at no charge to the shareholder,
without the imposition of the CDSC at the time of the exchange. During the
period of time the shareholder remains in the Exchange Funds (calculated from
the last day of the month in which the Exchange Fund shares were acquired), the
holding period or "year since purchase payment made" is frozen. When shares are
redeemed out of the Exchange Funds, they will be subject to a CDSC which would
be based upon the period of time the shareholder held shares in a CDSC fund.
However, in the case of shares of a CDSC fund exchanged into an Exchange Fund on
or after April 23, 1990, upon redemption of shares which results in a CDSC being
imposed, a credit (not to exceed the amount of the CDSC) will be given in an
amount equal to the Exchange Fund 12b-1 distribution fees incurred on or after
that date which are attributable to those shares. Shareholders acquiring shares
of an Exchange Fund pursuant to this exchange privilege may exchange those
shares back into a CDSC fund from the Exchange Fund, with no CDSC being imposed
on such exchange. The holding period previously frozen when shares were first
exchanged for shares of an Exchange Fund resumes on the last day of the month in
which shares of a CDSC fund are reacquired. A CDSC is imposed only upon an
ultimate redemption, based upon the time (calculated as described above) the
shareholder was invested in a CDSC fund. Shares of a CDSC fund acquired in
exchange for shares of an FESC fund (or in exchange for shares of other Dean
Witter Funds for which shares of a FESC fund have been exchanged) are not
subject to any CDSC upon their redemption.
When shares initially purchased in a CDSC fund are exchanged for shares of
another CDSC fund or for shares of an Exchange Fund, the date of purchase of the
shares of the fund exchanged into, for purposes of the CDSC upon redemption,
will be the last day of the month in which the shares being exchanged were
originally purchased. In allocating the purchase payments between funds for
purposes of the CDSC, the amount which represents the current net asset value of
shares at the time of the exchange which were (i) purchased more than three or
six years (depending on the CDSC schedule applicable to the shares) prior to the
exchange, (ii) originally acquired through reinvestment of dividends or
distributions and (iii) acquired in exchange for shares of FESC funds, or for
shares of other Dean Witter Funds for which shares of FESC funds have been
exchanged (all such shares called "Free Shares"), will be exchanged first.
Shares of Dean Witter American Value Fund acquired prior to April 30, 1984,
shares of Dean Witter Dividend Growth Securities Inc. and Dean Witter Natural
Resource Development Securities Inc. acquired prior to July 2, 1984, and shares
of Dean Witter Strategist Fund acquired prior to November 8, 1989 are also
considered Free Shares and will be the first Free Shares to be exchanged. After
an exchange, all dividends earned on shares in the Exchange Funds will be
considered Free Shares. If the exchanged amount exceeds the value of such Free
Shares, an exchange is made, on a block-by-block basis, of non-Free Shares held
for the longest period of time (except that if shares held for identical periods
of time but subject to different CDSC schedules are held in the same Exchange
Privilege account, the shares of that block that are subject to a lower CDSC
rate will be exchanged prior to the shares of that block that are subject to a
higher CDSC rate). Shares equal to any appreciation in the value of non-Free
Shares exchanged will be treated as Free Shares, and the amount of the purchase
payments for the non-Free Shares of the fund exchanged into will be equal to the
lesser of (a) the purchase payments for, or (b) the current net asset value of,
the exchanged non-Free Shares. If an exchange between funds would result in
exchange of only part of a particular block of non-Free Shares, then shares
equal to any appreciation in the value of the block (up to the amount of the
exchange) will be treated as Free Shares and exchanged first, and the purchase
payment for that block will be allocated on a pro rata basis between the
non-Free Shares of that block to be retained and the non-Free Shares to be
exchanged. The prorated amount of such purchase payment attributable to the
retained non-Free Shares will remain as the purchase payment for such shares,
and the amount of purchase payment for the exchanged non-Free Shares will be
equal to the lesser of (a) the prorated amount of the purchase payment for, or
(b) the current net asset value of, those exchanged non-Free
17
<PAGE>
Shares. Based upon the exchange procedures described in the CDSC fund Prospectus
under the caption "Contingent Deferred Sales Charge," any applicable CDSC will
be imposed upon the ultimate redemption of shares of any fund, regardless of the
number of exchanges since those shares were originally purchased.
With respect to the redemption or repurchase of shares of the Trust, the
application of proceeds to the purchase of new shares in the Trust or any other
of the funds and the general administration of the Exchange Privilege, the
Transfer Agent acts as agent for the Distributor and for the shareholder's
Selected Broker-Dealer, if any, in the performance of such functions. With
respect to exchanges, redemptions or repurchases, the Transfer Agent shall be
liable for its own negligence and not for the default or negligence of its
correspondents or for losses in transit. The Trust shall not be liable for any
default or negligence of the Transfer Agent, the Distributor or any Selected
Broker-Dealer.
Exchange Privilege accounts may also be maintained for shareholders of the
money market funds who acquired their shares in exchange for shares of various
TCW/DW Funds, a group of funds distributed by the Distributor for which TCW
Funds Management, Inc. serves as Adviser, under the terms and conditions
described in the Prospectus and Statement of Additional Information of each
TCW/DW Fund.
The Distributor and any Selected Broker-Dealer have authorized and appointed
the Transfer Agent to act as their agent in connection with the application of
proceeds of any redemption of Trust shares to the purchase of the shares of any
other fund and the general administration of the Exchange Privilege. No
commission or discounts will be paid to the Distributor or any Selected
Broker-Dealer for any transactions pursuant to this Exchange Privilege.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. An exchange will be treated for federal income tax purposes
the same as a repurchase or redemption of shares, on which the shareholder may
realize a capital gain or loss. However, the ability to deduct capital losses on
an exchange may be limited in situations where there is an exchange of shares
within ninety days after the shares are purchased. The Exchange Privilege is
only available in states where an exchange may legally be made.
Shares of the Trust acquired pursuant to the Exchange Privilege will be held
by the Trust's Transfer Agent in an Exchange Privilege Account distinct from any
account of the same shareholder who may have acquired shares of the Trust
directly. A shareholder of the Trust will not be permitted to make additional
investments in such Exchange Privilege Account, except through the exchange of
additional shares of the fund in which the shareholder had initially invested,
and the proceeds of any shares redeemed from such Account may not thereafter be
placed back into that Account. If such a shareholder desires to make any
additional investments in the Trust, a separate account will be maintained for
receipt of such investments. The Trust will have additional costs for account
maintenance if a shareholder has more than one account with the Trust.
The Trust also maintains Exchange Privilege Accounts for shareholders who
acquired their shares of the Trust pursuant to exchange privileges offered by
other investment companies with which the Investment Manager is not affiliated.
The Trust also expects to make available such exchange privilege accounts to
other investment companies that may hereafter be managed by the Investment
Manager.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment is $10,000 for
Dean Witter Short-Term U.S. Treasury Trust and $5,000 for Dean Witter Tax-Free
Daily Income Trust, Dean Witter Liquid Asset Fund Inc., Dean Witter California
Tax-Free Income Trust and Dean Witter New York Municipal Money Market Trust,
although those funds may, at their discretion, accept initial investments of as
low as $1,000. The minimum initial investment is $5,000 for Dean Witter Special
Value Fund. The minimum initial investment for the Trust and all other Dean
Witter Funds for which the Exchange Privilege is available is $1,000.) Upon
exchange into an Exchange Fund, the shares of that fund will be held in a
special Exchange Privilege Account
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separately from accounts of those shareholders who have acquired their shares
directly from that fund. As a result, certain services normally available to
shareholders of money market funds, including the check writing feature, will
not be available for funds held in that account.
The Trust and each of the other Dean Witter Funds may limit the number of
times this Exchange Privilege may be exercised by any investor within a
specified period of time. Also, the Exchange Privilege may be terminated or
revised at any time by any of the Dean Witter Funds, upon such notice as may be
required by applicable regulatory agencies (presently sixty days' prior written
notice for termination or material revision), provided that six months' prior
written notice of termination will be given to the shareholders who hold shares
of Exchange Funds, TCW/DW North American Government Income Trust, TCW/DW Income
and Growth Fund and TCW/DW Balanced Fund pursuant to this Exchange Privilege,
and provided further that the Exchange Privilege may be terminated or materially
revised at times (a) when the New York Stock Exchange is closed for other than
customary weekends and holidays, (b) when trading on the Exchange is restricted,
(c) when an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, (d)
during any other period when the Securities and Exchange Commission by order so
permits (provided that applicable rules and regulations of the Securities and
Exchange Commission shall govern as to whether the conditions prescribed in (b)
or (c) exist), or (e) if the Trust would be unable to invest amounts effectively
in accordance with its objective, policies and restrictions.
For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other Selected Broker-Dealer account executive or
the Transfer Agent.
PLAN OF DISTRIBUTION
In accordance with a Plan of Distribution pursuant to Rule 12b-1 under the
Act between the Trust and the Distributor, the Distributor provides certain
services and finances certain activities in connection with the distribution of
Trust shares (the "Plan" refers to the Plan and Agreement of Distribution prior
to the reorganization described above and to the Plan of Distribution after the
reorganization). A Plan was adopted by the Board of Trustees on March 3, 1982
and an amendment to the Plan was adopted on March 21, 1983. The first amended
Plan was initially approved by the Trustees on January 18, 1983 and by the
Trust's shareholders on March 17, 1983. The vote of which in each case was cast
in person at a meeting called for the purpose of voting on such Plan, included a
majority of the Trustees who are not and were not at the time of their voting
interested persons of the Trust (as defined in the Act) and who have and had at
the time of their votes no direct or indirect financial interest in the
operation of the Plan (the "Independent 12b-1 Trustees").
The Plan will continue from year to year, provided such continuance is
approved annually by a vote of the Trustees, including a majority of the
Independent 12b-1 Trustees. Any amendment to increase materially the maximum
amount authorized to be spent under the Plan must be approved by the
shareholders of the Trust, and all material amendments to the Plan must be
approved by the Trustees in the manner described above. The Plan may be
terminated at any time, without payment of any penalty, by vote of a majority of
the Independent 12b-1 Trustees or by a vote of a majority of the outstanding
voting securities of the Trust (as defined in the Act) on not more than 30 days'
written notice to any other party to the Plan. So long as the Plan is in effect,
the selection or nomination of the Independent Trustees is committed to the
discretion of the Independent 12b-1 Trustees.
At their meeting held on October 30, 1992, the Trustees of the Trust,
including all of the Independent 12b-1 Trustees, approved certain amendments to
the Plan which took effect in January, 1993 and were designed to reflect the
fact that upon the reorganization described above, the share distribution
activities theretofore performed by the Trust or for the Trust by DWR were
assumed by the Distributor and DWR's sales activities are now being performed
pursuant to the terms of a selected dealer agreement between the Distributor and
DWR. The amendments provide that payments under the Plan will be made to the
Distributor rather than to the Investment Manager as before the amendment, and
that the Distributor in
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turn is authorized to make payments to DWR, its affiliates or other Selected
Broker-Dealers (or direct that the Trust pay such entities directly). The
Distributor is also authorized to retain part of such fee as compensation for
its own distribution-related expenses.
Pursuant to the Plan the Trustees were provided, at their meeting held on
April 17, 1996, with all the information the Trustees deemed necessary to make
an informed determination on whether the Plan should be continued. In making
their determination to continue the Plan until April 30, 1997, the Trustees,
including all of the Independent 12b-1 Trustees, unanimously arrived at the
conclusion that the Plan had benefitted the Trust and also unanimously concluded
that, in their judgment, there is a reasonable likelihood that the Plan will
continue to benefit the Trust and its shareholders.
The Plan provides that the Distributor bears the expense of all promotional
and distribution related activities on behalf of the Trust, except for expenses
that the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor under the Plan: (1)
compensation to and expenses of DWR's and other Selected Broker-Dealers' account
executives and other employees, including overhead and telephone expenses; (2)
sales incentives and bonuses to sales representatives and to marketing personnel
in connection with promoting sales of the Trust's shares; (3) expenses incurred
in connection with promoting sales of the Trust's shares; (4) preparing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio, newspaper,
magazine and other media advertisements.
DWR account executives are paid an annual residual commission, currently a
gross residual of up to 0.10% of the current value of the respective accounts
for which they are the account executives of record. The "gross residual" is a
charge which reflects residual commissions paid by DWR to its account executives
and DWR's expenses associated with the servicing of shareholder accounts,
including the expenses of operating DWR's branch offices in connection with the
servicing of shareholder accounts, which expenses include lease costs, the
salaries and employee benefits of operations and sales support personnel,
utility costs, communications costs and the costs of stationery and supplies and
other expenses relating to branch office servicing of shareholder accounts.
The Trust is authorized to reimburse the Distributor for specific expenses
incurred or to be incurred in promoting the distribution of the Trust's shares.
Reimbursement is made through monthly payments in amounts determined in advance
of each fiscal quarter by the Trustees, including a majority of the Independent
Trustees. The amount of each monthly payment may in no event exceed an amount
equal to a payment at the annual rate of 0.15 of 1% of the Trust's average daily
net assets during the month. No interest or other financing charges will be
incurred for which reimbursements under the Plan will be made. In addition, no
interest charges, if any, incurred on any distribution expense incurred pursuant
to the Plan will be reimbursable under the Plan. In making quarterly
determinations of the amounts that may be expended by the Trust, the Distributor
provides and the Trustees review a quarterly budget of projected incremental
distribution expenses to be incurred on behalf of the Trust, together with a
report explaining the purposes and anticipated benefits of incurring such
expenses. The Trustees determine which particular expenses, and the portions
thereof, that may be borne by the Trust, and in making such a determination
shall consider the scope of the Distributor's commitment to promoting the
distribution of the Trust's shares.
The Trust accrued $879,924 to the Distributor pursuant to the Plan for its
fiscal year ended January 31, 1997. This is 0.10 of 1% of the Trust's average
daily net assets for its fiscal year ended January 31, 1997. Based upon the
total amounts spent by the Distributor during the period, it is estimated that
the amount paid by the Trust for distribution was spent in approximately the
following ways: (i) advertising -- $-0-; (ii) printing and mailing prospectuses
to other than current shareholders -- $-0-; (iii) compensation to underwriters
- -- $-0-; (iv) compensation to dealers -- $-0-; (v) compensation to sales
personnel -- $-0-; and (vi) other, which includes payments to DWR for expenses
substantially all of which relate to compensation of sales personnel --
$879,924.
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Under the Plan, the Distributor uses its best efforts in rendering services
to the Trust, but in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations, the Distributor is not
liable to the Trust or any of its shareholders for any error of judgment or
mistake of law or for any act or omission or for any losses sustained by the
Trust or its shareholders.
Under the Plan, the Distributor provides the Trust, for review by the
Trustees, and the Trustees review, promptly after the end of each calendar
quarter, a written report regarding the incremental distribution expenses
incurred by the Distributor on behalf of the Trust during such fiscal quarter,
which report includes (1) an itemization of the types of expenses and the
purposes therefor; (2) the amounts of such expenses; and (3) a description of
the benefits derived by the Trust. In the Trustees' quarterly review of the Plan
they consider its continued appropriateness and the level of compensation
provided therein.
No interested person of the Trust nor any Trustee of the Trust who is not an
interested person of the Trust, as defined in the Act, had any direct or
indirect financial interest in the operation of the Plan and Agreement except to
the extent that the Distributor, DWR, DWSC or the Investment Manager, or certain
of their employees, may be deemed to have such an interest as a result of
benefits derived from the successful operation of the Plan or as a result of
receiving a portion of the amounts expended thereunder by the Trust.
DETERMINATION OF NET ASSET VALUE
As discussed in the Prospectus, the net asset value of the Trust is
determined once daily at 4:00 p.m., New York time (or, on days when the New York
Stock Exchange closes prior to 4:00 p.m., at such earlier time), on each day
that the New York Stock Exchange is open. The New York Stock Exchange currently
observes the following holidays: New Year's Day; Presidents' Day; Good Friday;
Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.
The Trust utilizes the amortized cost method in valuing its portfolio
securities for purposes of determining the net asset value of the shares of the
Trust. The Trust utilizes the amortized cost method in valuing its portfolio
securities even though the portfolio securities may increase or decrease in
market value, generally, in connection with changes in interest rates. The
amortized cost method of valuation involves valuing a security at its cost
adjusted by a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Trust would receive if it sold the instrument. During
such periods, the yield to investors in the Trust may differ somewhat from that
obtained in a similar company which uses mark to market values for all its
portfolio securities. For example, if the use of amortized cost resulted in a
lower (higher) aggregate portfolio value on a particular day, a prospective
investor in the Trust would be able to obtain a somewhat higher (lower) yield
than would result from investment in such a similar company and existing
investors would receive less (more) investment income. The purpose of this
method of calculation is to facilitate the maintenance of a constant net asset
value per share of $1.00.
The Trust's use of the amortized cost method to value its portfolio
securities and the maintenance of the per share net asset value of $1.00 is
permitted pursuant to Rule 2a-7 of the Act (the "Rule"), and is conditioned on
its compliance with various conditions including: (a) the Trustees are
obligated, as a particular responsibility within the overall duty of care owed
to the Trust's shareholders, to establish procedures reasonably designed, taking
into account current market conditions and the Trust's investment objectives, to
stabilize the net asset value per share as computed for the purpose of
distribution and redemption at $1.00 per share; (b) the procedures include (i)
calculation, at such intervals as the Trustees determine are appropriate and as
are reasonable in light of current market conditions, of the deviation, if any,
between net asset value per share using amortized cost to value portfolio
securities and net asset value per share based upon available market quotations
with respect to such portfolio securities; (ii) periodic review by the Trustees
of the amount of deviation as well as methods used to calculate it; and (iii)
maintenance of written records of the procedures, the Trustees' considerations
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made pursuant to them and any actions taken upon such considerations; (c) the
Trustees should consider what steps should be taken, if any, in the event of a
difference of more than 1/2 of 1% between the two methods of valuation; and (d)
the Trustees should take such action as they deem appropriate (such as
shortening the average portfolio maturity, realizing gains or losses or, as
provided by the Declaration of Trust, reducing the number of the outstanding
shares of the Trust) to eliminate or reduce to the extent reasonably practicable
material dilution or other unfair results to investors or existing shareholders.
Any reduction of outstanding shares will be effected by having each shareholder
proportionately contribute to the Trust's capital the necessary shares that
represent the amount of excess upon such determination. Each shareholder will be
deemed to have agreed to such contribution in these circumstances by investment
in the Trust.
The Rule further requires that the Trust limit its investments to U.S.
dollar-denominated instruments which the Trustees determine present minimal
credit risks and which are Eligible Securities (as defined below). The Rule also
requires the Trust to maintain a dollar-weighted average portfolio maturity (not
more than 90 days) appropriate to its objective of maintaining a stable net
asset value of $1.00 per share and precludes the purchase of any instrument with
a remaining maturity of more than thirteen months. Should the disposition of a
portfolio security result in a dollar-weighted average portfolio maturity of
more than 90 days, the Trust would be required to invest its available cash in
such a manner as to reduce such maturity to 90 days or less as soon as
reasonably practicable.
Generally, for purposes of the procedures adopted under the Rule, the
maturity of a portfolio instrument is deemed to be the period remaining
(calculated from the trade date or such other date on which the Trust's interest
in the instrument is subject to market action) until the date noted on the face
of the instrument as the date on which the principal amount must be paid, or in
the case of an instrument called for redemption, the date on which the
redemption payment must be made.
A variable rate obligation that is subject to a demand feature is deemed to
have a maturity equal to the longer of the period remaining until the next
readjustment of the interest rate or the period remaining until the principal
amount can be recovered through demand. A floating rate instrument that is
subject to a demand feature is deemed to have a maturity equal to the period
remaining until the principal amount can be recovered through demand.
A "NRSRO" is a nationally recognized statistical rating organization. The
term "Requisite NRSROs" means (i) any two NRSROs that have issued a rating with
respect to a security or class of debt obligations of an issuer, or (ii) if only
one NRSRO has issued a rating with respect to such security or issuer at the
time a fund purchases or rolls over the security, that NRSRO.
An Eligible Security is generally defined in the Rule to mean (i) a security
with a remaining maturity of 397 calendar days or less that has received a
short-term rating (or that has been issued by an issuer that has received a
short-term rating with respect to a class of debt obligations, or any debt
obligation within that class, that is comparable in priority and security with
the security) by the Requisite NRSROs in one of the two highest short-term
rating categories (within which there may be sub-categories or gradations
indicating relative standing); or (ii) a security: (A) that at the time of
issuance had a remaining maturity of more than 397 calendar days but that has a
remaining maturity of 397 calendar days or less; and (B) whose issuer has
received from the Requisite NRSROs a rating with respect to a class of debt
obligations (or any debt obligation within that class) that is now comparable in
priority and security with the security, in one of the two highest short-term
rating categories (within which there may be sub-categories or gradations
indicating relative standing); or (iii) an unrated security that is of
comparable quality to a security meeting the requirements of (i) or (ii) above,
as determined by the money market fund's board of directors.
As permitted by the Rule, the Trustees have delegated to the Trust's
Investment Manager, subject to the Trustees' oversight pursuant to guidelines
and procedures adopted by the Trustees, the authority to determine which
securities present minimal credit risks and which unrated securities are
comparable in quality to rated securities.
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If the Trustees determine that it is no longer in the best interests of the
Trust and its shareholders to maintain a stable price of $1.00 per share, or if
the Trustees believe that maintaining such price no longer reflects a
market-based net asset value per share, the Trustees have the right to change
from an amortized cost basis of valuation to valuation based on market
quotations. The Trust will notify shareholders of any such change.
The Trust will manage its portfolio in an effort to maintain a constant
$1.00 per share price, but it cannot assure that the value of its shares will
never deviate from this price. Since dividends from net investment income (and
net short-term capital gains, if any) are declared and reinvested on a daily
basis, the net asset value per share, under ordinary circumstances, is likely to
remain constant. Otherwise, realized and unrealized gains and losses will not be
distributed on a daily basis but will be reflected in the Trust's net asset
value. The amounts of such gains and losses will be considered by the Trustees
in determining the action to be taken to maintain the Trust's $1.00 per share
net asset value. Such action may include distribution at any time of part or all
of the then accumulated undistributed net realized capital gains, or reduction
or elimination of daily dividends by an amount equal to part or all of the then
accumulated net realized capital losses. However, if realized losses should
exceed the sum of net investment income plus realized gains on any day, the net
asset value per share on that day might decline below $1.00 per share. In such
circumstances, the Trust may reduce or eliminate the payment of daily dividends
for a period of time in an effort to restore the Trust's $1.00 per share net
asset value. A decline in prices of securities could result in significant
unrealized depreciation on a mark to market basis. Under these circumstances the
Trust may reduce or eliminate the payment of dividends and utilize a net asset
value per share as determined by using available market quotations or reduce the
number of its shares outstanding.
REDEMPTION OF TRUST SHARES
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As discussed in the Prospectus, shares of the Trust may be redeemed at net
asset value at any time. When a redemption is made by check and a check is
presented to the Transfer Agent for payment, the Transfer Agent will redeem a
sufficient number of full and fractional shares in the shareholder's account to
cover the amount of the check. This enables the shareholder to continue earning
daily income dividends until the check has cleared.
A check drawn by a shareholder against his or her account in the Trust
constitutes a request for redemption of a number of shares sufficient to provide
proceeds equal to the amount of the check. Payment of the proceeds will normally
be made on the next business day after receipt by the Transfer Agent of the
check in proper form. If a check is presented for payment to the Transfer Agent
by a shareholder or payee in person, the Transfer Agent will make payment by
means of a check drawn on the Trust's account or, in the case of a shareholder
payee, to the shareholder's predesignated bank account, but will not make
payment in cash.
The Trust reserves the right to suspend redemptions or postpone the date of
payment (1) for any periods during which the New York Stock Exchange is closed
(other than for customary weekend and holiday closings), (2) when trading on
that Exchange is restricted or an emergency exists, as determined by the
Securities and Exchange Commission, so that disposal of the Trust's investments
or determination of the Trust's net asset value is not reasonably practicable,
or (3) for such other periods as the Commission by order may permit for the
protection of the Trust's investors.
As discussed in the Prospectus, due to the relatively high cost of handling
small investments, the Trust reserves the right to redeem, at net asset value,
the shares of any shareholder (other than shares held in an Individual
Retirement Account or custodial account under Section 403(b)(7) of the Internal
Revenue Code) whose shares due to redemptions by the shareholder have a value of
less than $500 or such lesser amounts as may be fixed by the Trustees. However,
before the Trust redeems such shares
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and sends the proceeds to the shareholder, it will notify the shareholder that
the value of his or her shares is less than $500 and allow him or her sixty days
to make an additional investment in an amount which will increase the value of
his or her account to $500 or more before the redemption is processed.
SYSTEMATIC WITHDRAWAL PLAN. As discussed in the Prospectus, a systematic
withdrawal plan is available for shareholders who own or purchase shares of the
Trust having a minimum value of at least $5,000, which provides for monthly or
quarterly checks in any dollar amount not less than $25 or in any whole
percentage of the account balance, on an annualized basis. The Transfer Agent
acts as agent for the shareholder in tendering to the Trust for redemption
sufficient full and fractional shares to provide the amount of the periodic
withdrawal payment designated in the application. The shares will be redeemed at
their net asset value determined, at the shareholder's option, on the tenth or
twenty-fifth day (or next business day) of the relevant month or quarter and
normally a check for the proceeds will be mailed by the Transfer Agent within
five days after the date of redemption. The withdrawal plan may be terminated at
any time by the Trust.
Any shareholder who wishes to have payments under the withdrawal plan made
to a third party, or sent to an address other than the one listed on the
account, must send complete written instructions to the Transfer Agent to enroll
in the withdrawal plan. The shareholder's signature on such instructions must be
guaranteed by an eligible guarantor acceptable to the Transfer Agent
(shareholders should contact the Transfer Agent for a determination as to
whether a particular institution is such an eligible guarantor). A shareholder
may, at any time, change the amount and interval of withdrawal payments through
his or her Account Executive or by written notification to the Transfer Agent.
In addition, the party and/or the address to which checks are mailed may be
changed by written notification to the Transfer Agent, with signature guarantees
required in the manner described above. The shareholder may also terminate the
withdrawal plan at any time by written notice to the Transfer Agent. In the
event of such termination, the account will be continued as a regular
shareholder investment account. The shareholder may also redeem all or part of
the shares held in the withdrawal plan account (see "Redemption of Trust Shares"
in the Prospectus) at any time. If the number of shares redeemed is greater than
the number of shares paid as dividends, such redemptions may, of course,
eventually result in liquidation of all the shares in the account. The
systematic withdrawal plan is not available for shares held in an Exchange
Privilege Account.
DIVIDENDS, DISTRIBUTIONS AND TAXES
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DIVIDENDS AND DISTRIBUTIONS. As discussed in the Prospectus, the Trust
intends to distribute all of its daily net investment income (and net short-term
capital gains, if any) to shareholders of record as of the close of business the
preceding business day. Net income, for dividend purposes, includes accrued
interest and amortization of original issue and market discount, plus or minus
any short-term gains or losses realized on sales of portfolio securities, less
the amortization of market premium and the estimated expenses of the Trust. Net
income will be calculated immediately prior to the determination of net asset
value per share of the Trust.
The Trustees of the Trust may revise the dividend policy, or postpone the
payment of dividends, if the Trust should have or anticipate any large
unexpected expense, loss or fluctuation in net assets which, in the opinion of
the Trustees, might have a significant adverse effect on shareholders. On
occasion, in order to maintain a constant $1.00 per share net asset value, the
Trustees may direct that the number of outstanding shares be reduced in each
shareholder's account. Such reduction may result in taxable income to a
shareholder in excess of the net increase (i.e., dividends, less such
reductions), if any, in the shareholder's account for a period of time.
Furthermore, such reduction may be realized as a capital loss when the shares
are liquidated.
TAXES. The Trust has qualified and intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code. If
so qualified, the Trust will not be subject to federal income taxes, provided
that it distributes all of its taxable net investment income and all of its net
realized gains.
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Shareholders will be subject to federal income tax on dividends paid from
interest income derived from taxable securities and on distributions of realized
net short-term capital gains. Interest and realized net short-term capital gains
distributions are taxable to the shareholder as ordinary dividend income
regardless of whether the shareholder receives such distributions in additional
shares or in cash. Since the Trust's income is expected to be derived entirely
from interest rather than dividends, none of such distributions will be eligible
for the federal dividends received deduction available to corporations.
Under present Massachusetts law, the Trust is not subject to any
Massachusetts income tax during any fiscal year in which the Trust qualifies as
a regulated investment company. The Trust might be subject to Massachusetts
income taxes for any taxable year in which it does not so qualify as a regulated
investment company.
The Trust may be subject to tax or taxes in certain states where it does
business. Furthermore, in those states which have income tax laws, the tax
treatment of the Trust and of shareholders with respect to distributions by the
Trust may differ from federal tax treatment.
Shareholders are urged to consult their own tax advisers regarding specific
questions as to federal, state or local taxes.
INFORMATION ON COMPUTATION OF YIELD
The Trust's current yield for the seven days ending January 31, 1997 was
3.93%. The effective annual yield on 3.93% is 4.01%, assuming daily compounding.
The Trust's annualized current yield, as may be quoted from time to time in
advertisements and other communications to shareholders and potential investors,
is computed by determining, for a stated seven-day period, the net change,
exclusive of capital changes and including the value of additional shares
purchased with dividends and any dividends declared therefrom (which reflect
deductions of all expenses of the Trust such as management fees), in the value
of a hypothetical pre-existing account having a balance of one share at the
beginning of the period, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7).
The Trust's annualized effective yield, as may be quoted from time to time
in advertisements and other communications to shareholders and potential
investors, is computed by determining (for the same stated seven-day period as
the current yield), the net change, exclusive of capital changes and including
the value of additional shares purchased with dividends and any dividends
declared therefrom (which reflect deductions of all expenses of the Trust such
as management fees), in the value of a hypothetical pre-existing account having
a balance of one share at the beginning of the period, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result.
The yields quoted in any advertisement or other communication should not be
considered a representation of the yields of the Trust in the future since the
yield is not fixed. Actual yields will depend not only on the type, quality and
maturities of the investments held by Trust and changes in interest rates on
such investments, but also on changes in the Trust's expenses during the period.
Yield information may be useful in reviewing the performance of the Trust
and for providing a basis for comparison with other investment alternatives.
However, unlike bank deposits or other investments which typically pay a fixed
yield for a stated period of time, the Trust's yield fluctuates.
The Trust may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in shares of the Trust by adding the sum of all
distributions on 10,000, 50,000 or 100,000 shares of the Trust since inception
to $10,000, $50,000 and $100,000, as the case may be. Investments of $10,000,
$50,000 and $100,000 in the Trust at inception (February 17, 1982) would have
grown to $24,588, $122,940 and $245,880, respectively, at January 31, 1997.
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SHARES OF THE TRUST
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The shareholders of the Trust are entitled to a full vote for each full
share held. All of the Trustees, except for Messrs. Bozic, Purcell and
Schroeder, have been elected by the shareholders of the Trust, most recently at
a Special Meeting of Shareholders held on January 12, 1993. Messrs. Bozic,
Purcell and Schroeder were elected by the other Trustees of the Trust on April
8, 1994. The Trustees themselves have the power to alter the number and the
terms of office of the Trustees (as provided for in the Declaration of Trust),
and they may at any time lengthen or shorten their own terms or make their terms
of unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
Trust. Under certain circumstances, the Trustees may be removed by action of the
Trustees. The shareholders also have the right, under certain circumstances, to
remove the Trustees. The voting rights of shareholders are not cumulative, so
that holders of more than fifty percent of the shares voting can, if they
choose, elect all Trustees being selected, while the holders of the remaining
shares would be unable to elect any Trustees.
The Declaration of Trust permits the Trustees to authorize the creation of
additional series of shares (the proceeds of which would be invested in
separate, independently managed portfolios) and additional classes of shares
within any series (which would be used to distinguish among the rights of
different categories of shareholders, as might be required by future regulations
or other unforeseen circumstances). The Trustees have not presently authorized
any such additional series or classes of shares.
The Declaration of Trust further provides that no Trustee, officer, employee
or agent of the Trust is liable to the Trust or to a shareholder, nor is any
Trustee, officer, employee or agent liable to any third persons in connection
with the affairs of the Trust, except as such liability may arise from his, her
or its own bad faith, willful misfeasance, gross negligence, or reckless
disregard of his, her or its duties. It also provides that all third persons
shall look solely to the Trust property for satisfaction of claims arising in
connection with the affairs of the Trust. With the exceptions stated, the
Declaration of Trust provides that a Trustee, officer, employee or agent is
entitled to be indemnified against all liability in connection with the affairs
of the Trust.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest. The Trust shall be of unlimited duration subject to the provisions in
the Declaration of Trust concerning termination by action of the shareholders.
CUSTODIAN AND TRANSFER AGENT
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The Bank of New York, 90 Washington Street, New York, New York 10286 is the
Custodian of the Trust's assets. Any of the Trust's cash balances with the
Custodian in excess of $100,000 are unprotected by Federal deposit insurance.
Such balances may, at times, be substantial.
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 is the Transfer Agent of the Trust's shares and Dividend
Disbursing Agent for payment of dividends and distributions on Trust shares and
Agent for shareholders under various investment plans described herein. Dean
Witter Trust Company is an affiliate of Dean Witter InterCapital Inc., the
Trust's Investment Manager, and Dean Witter Distributors Inc., the Trust's
Distributor. As Transfer Agent and Dividend Disbursing Agent, Dean Witter Trust
Company's responsibilities include maintaining shareholder accounts, disbursing
cash dividends and reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, mailing prospectuses and
reports, mailing and tabulating proxies, processing share certificate
transactions, and maintaining shareholder records and lists. For these services
Dean Witter Trust Company receives a per shareholder account fee from the Trust.
26
<PAGE>
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036
serves as the independent accountants of the Trust. The independent accountants
are responsible for auditing the annual financial statements of the Trust.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Trust will send to shareholders, at least semi-annually, reports showing
the Trust's portfolio and other information. An annual report, containing
financial statements audited by independent accountants, will be sent to
shareholders each year.
The Trust's fiscal year ends on January 31. The financial statements of the
Trust must be audited at least once a year by independent accountants whose
selection is made annually by the Trust's Board of Trustees.
LEGAL COUNSEL
- --------------------------------------------------------------------------------
Barry Fink, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Trust.
EXPERTS
- --------------------------------------------------------------------------------
The financial statements of the Trust included in the Prospectus and
incorporated by reference in this Statement of Additional Information have been
so included and incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
This Statement of Additional Information and the Prospectus do not contain
all of the information set forth in the Registration Statement the Trust has
filed with the Securities and Exchange Commission. The complete Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the rules and regulations of the Commission.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Trust for the fiscal year ended
January 31, 1997, and the report of the independent accountants thereon, are set
forth in the Trust's Prospectus, and are incorporated herein by reference.
27
<PAGE>
DEAN WITTER U. S. GOVERNMENT MONEY MARKET TRUST
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS
(1) Financial statements and schedules, included in
Prospectus (Part A): Page in
Prospectus
Financial highlights for the years ended January 31,
1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995,
1996 and 1997 ......................................... 4
Portfolio of Investments at January 31, 1997........... 17
Statement of Assets and Liabilities at January 31,
1997................................................... 18
Statement of Operations for the year ended January
31, 1997............................................... 19
Statement of Changes in Net Assets for the years
ended January 31, 1996 and January 31, 1997 ........... 20
Notes to Financial Statements.......................... 21
(2) Financial statements included in the Statement of
Additional Information (Part B):
None
(3) Financial statements included in Part C:
None
(b) EXHIBITS:
2. - Amended and Restated By-Laws of the Registrant dated as
of October 25, 1996.
8. - Amendment to Custody Agreement between the Registrant
and The Bank of New York
11. - Consent of Independent Accountants
16. - Schedules for Computation of Performance
Quotations
27. - Financial Data Schedule
------------------------------
<PAGE>
All other exhibits were previously filed and are hereby
incorporated by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None
Item 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
Number of Record Holders
Title of Class at February 28, 1997
-------------- ------------------------
Shares of Beneficial Interest 275,359
Item 27. INDEMNIFICATION.
Pursuant to Section 5.3 of the Registrant's Declaration of
Trust and under Section 4.8 of the Registrant's By-Laws, the indemnification of
the Registrant's trustees, officers, employees and agents is permitted if it is
determined that they acted under the belief that their actions were in or not
opposed to the best interest of the Registrant, and, with respect to any
criminal proceeding, they had reasonable cause to believe their conduct was not
unlawful. In addition, indemnification is permitted only if it is determined
that the actions in question did not render them liable by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties or
by reason of reckless disregard of their obligations and duties to the
Registrant. Trustees, officers, employees and agents will be indemnified for
the expense of litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation. The
Registrant may also advance money for these expenses provided that they give
their undertakings to repay the Registrant unless their conduct is later
determined to permit indemnification.
Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the Registrant
shall be liable for any action or failure to act, except in the case of bad
faith, willful misfeasance, gross negligence or reckless disregard of duties to
the Registrant.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such
2
<PAGE>
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer, or controlling person of the Registrant in
connection with the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such trustee, officer or controlling person
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act, and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes that it will apply the indemnification
provision of its by-laws in a manner consistent with Release 11330 of the
Securities and Exchange Commission under the Investment Company Act of 1940, so
long as the interpretation of Sections 17(h) and 17(i) of such Act remains in
effect.
Registrant, in conjunction with the Investment Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Investment Manager, maintains insurance on behalf of any person who is or was a
Trustee, officer, employee, or agent of Registrant, or who is or was serving at
the request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for which
Registrant itself is not permitted to indemnify him.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "The Fund and Its Management" in the Prospectus regarding the
business of the investment adviser. The following information is given
regarding officers of Dean Witter InterCapital Inc. InterCapital is a wholly-
owned subsidiary of Dean Witter, Discover & Co. The principal address of the
Dean Witter Funds is Two World Trade Center, New York, New York 10048.
The term "Dean Witter Funds" used below refers to the following registered
investment companies:
CLOSED-END INVESTMENT COMPANIES
(1) InterCapital Income Securities Inc.
(2) High Income Advantage Trust
(3) High Income Advantage Trust II
(4) High Income Advantage Trust III
(5) Municipal Income Trust
(6) Municipal Income Trust II
(7) Municipal Income Trust III
3
<PAGE>
(8) Dean Witter Government Income Trust
(9) Municipal Premium Income Trust
(10) Municipal Income Opportunities Trust
(11) Municipal Income Opportunities Trust II
(12) Municipal Income Opportunities Trust III
(13) Prime Income Trust
(14) InterCapital Insured Municipal Bond Trust
(15) InterCapital Quality Municipal Income Trust
(16) InterCapital Quality Municipal Investment Trust
(17) InterCapital Insured Municipal Income Trust
(18) InterCapital California Insured Municipal Income Trust
(19) InterCapital Insured Municipal Trust
(20) InterCapital Quality Municipal Securities
(21) InterCapital New York Quality Municipal Securities
(22) InterCapital California Quality Municipal Securities
(23) InterCapital Insured California Municipal Securities
(24) InterCapital Insured Municipal Securities
OPEN-END INVESTMENT COMPANIES:
(1) Dean Witter Short-Term Bond Fund
(2) Dean Witter Tax-Exempt Securities Trust
(3) Dean Witter Tax-Free Daily Income Trust
(4) Dean Witter Dividend Growth Securities Inc.
(5) Dean Witter Convertible Securities Trust
(6) Dean Witter Liquid Asset Fund Inc.
(7) Dean Witter Developing Growth Securities Trust
(8) Dean Witter Retirement Series
(9) Dean Witter Federal Securities Trust
(10) Dean Witter World Wide Investment Trust
(11) Dean Witter U.S. Government Securities Trust
(12) Dean Witter Select Municipal Reinvestment Fund
(13) Dean Witter High Yield Securities Inc.
(14) Dean Witter Intermediate Income Securities
(15) Dean Witter New York Tax-Free Income Fund
(16) Dean Witter California Tax-Free Income Fund
(17) Dean Witter Health Sciences Trust
(18) Dean Witter California Tax-Free Daily Income Trust
(19) Dean Witter Global Asset Allocation Fund
(20) Dean Witter American Value Fund
(21) Dean Witter Strategist Fund
(22) Dean Witter Utilities Fund
(23) Dean Witter World Wide Income Trust
(24) Dean Witter New York Municipal Money Market Trust
(25) Dean Witter Capital Growth Securities
(26) Dean Witter Precious Metals and Minerals Trust
(27) Dean Witter European Growth Fund Inc.
(28) Dean Witter Global Short-Term Income Fund Inc.
(29) Dean Witter Pacific Growth Fund Inc.
(30) Dean Witter Multi-State Municipal Series Trust
(31) Dean Witter Premier Income Trust
(32) Dean Witter Short-Term U.S. Treasury Trust
(33) Dean Witter Diversified Income Trust
(34) Dean Witter U.S. Government Money Market Trust
(35) Dean Witter Global Dividend Growth Securities
4
<PAGE>
(36) Active Assets California Tax-Free Trust
(37) Dean Witter Natural Resource Development Securities Inc.
(38) Active Assets Government Securities Trust
(39) Active Assets Money Trust
(40) Active Assets Tax-Free Trust
(41) Dean Witter Limited Term Municipal Trust
(42) Dean Witter Variable Investment Series
(43) Dean Witter Value-Added Market Series
(44) Dean Witter Global Utilities Fund
(45) Dean Witter High Income Securities
(46) Dean Witter National Municipal Trust
(47) Dean Witter International SmallCap Fund
(48) Dean Witter Mid-Cap Growth Fund
(49) Dean Witter Select Dimensions Investment Series
(50) Dean Witter Balanced Growth Fund
(51) Dean Witter Balanced Income Fund
(52) Dean Witter Hawaii Municipal Trust
(53) Dean Witter Capital Appreciation Fund
(54) Dean Witter Intermediate Term U.S. Treasury Trust
(55) Dean Witter Information Fund
(56) Dean Witter Japan Fund
(57) Dean Witter Income Builder Fund
(58) Dean Witter Special Value Fund
(59) Dean Witter Financial Services Trust
(60) Dean Witter Market Leader Trust
The term "TCW/DW Funds" refers to the following registered investment companies:
OPEN-END INVESTMENT COMPANIES
(1) TCW/DW Core Equity Trust
(2) TCW/DW North American Government Income Trust
(3) TCW/DW Latin American Growth Fund
(4) TCW/DW Income and Growth Fund
(5) TCW/DW Small Cap Growth Fund
(6) TCW/DW Balanced Fund
(7) TCW/DW Total Return Trust
(8) TCW/DW Mid-Cap Equity Trust
(9) TCW/DW Global Telecom Trust
(10)TCW/DW Strategic Income Trust
CLOSED-END INVESTMENT COMPANIES
(1) TCW/DW Term Trust 2000
(2) TCW/DW Term Trust 2002
(3) TCW/DW Term Trust 2003
(4) TCW/DW Emerging Markets Opportunities Trust
5
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Charles A. Fiumefreddo Executive Vice President and Director of Dean
Chairman, Chief Witter Reynolds Inc. ("DWR"); Chairman, Chief
Executive Officer and Executive Officer and Director of Dean Witter
Director Distributors Inc. ("Distributors") and Dean
Witter Services Company Inc. ("DWSC"); Chairman
and Director of Dean Witter Trust Company
("DWTC"); Chairman, Director or Trustee, President
and Chief Executive Officer of the Dean Witter
Funds and Chairman, Chief Executive Officer and
Trustee of the TCW/DW Funds; Formerly Executive
Vice President and Director of Dean Witter,
Discover & Co. ("DWDC"); Director and/or officer
of various DWDC subsidiaries.
Philip J. Purcell Chairman, Chief Executive Officer and Director of
Director of DWDC and DWR; Director of DWSC and
Distributors; Director or Trustee of the Dean
Witter Funds; Director and/or officer of various
DWDC subsidiaries.
Richard M. DeMartini Executive Vice President of DWDC; President and
Director Chief Operating Officer of Dean Witter Capital;
Director of DWR, DWSC, Distributors and DWTC;
Trustee of the TCW/DW Funds; Member (since
January, 1993) and Chairman (since January,
1995) of the Board of Directors of NASDAQ.
James F. Higgins Executive Vice President of DWDC; President and
Director Chief Operating Officer of Dean Witter Financial;
Director of DWR, DWSC, Distributors and DWTC.
Thomas C. Schneider Executive Vice President and Chief Financial
Executive Vice Officer of DWDC, DWR, DWSC and Distributors;
President, Chief Director of DWR, DWSC and Distributors.
Financial Officer and
Director
Christine A. Edwards Executive Vice President, Secretary and General
Director Counsel of DWDC and DWR; Executive Vice President,
Secretary and Chief Legal Officer of Distributors;
Director of DWR, DWSC and Distributors.
Robert M. Scanlan President and Chief Operating Officer of DWSC,
President and Chief Executive Vice President of Distributors;
Operating Officer Executive Vice President and Director of DWTC;
Vice President of the Dean Witter Funds and the
TCW/DW Funds.
6
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
John Van Heuvelen President, Chief Operating Officer and Director
Executive Vice of DWTC.
President
Joseph J. McAlinden Vice President of the Dean Witter Funds and
Executive Vice President Director of DWTC.
and Chief Investment
Officer
Peter M. Avelar
Senior Vice President Vice President of various Dean Witter Funds.
Mark Bavoso
Senior Vice President Vice President of various Dean Witter Funds.
Richard Felegy
Senior Vice President
Edward Gaylor
Senior Vice President Vice President of various Dean Witter Funds.
Robert S. Giambrone Senior Vice President of DWSC, Distributors
Senior Vice President and DWTC and Director of DWTC; Vice President
of the Dean Witter Funds and the TCW/DW Funds.
Rajesh K. Gupta
Senior Vice President Vice President of various Dean Witter Funds.
Kenton J. Hinchcliffe
Senior Vice President Vice President of various Dean Witter Funds.
Kevin Hurley
Senior Vice President Vice President of various Dean Witter Funds.
Jenny Beth Jones
Senior Vice President Vice President of Dean Witter Special Value Fund.
John B. Kemp, III Director of the Provident Savings Bank, Jersey
Senior Vice President City, New Jersey.
Anita Kolleeny
Senior Vice President Vice President of various Dean Witter Funds.
Jonathan R. Page
Senior Vice President Vice President of various Dean Witter Funds.
Ira N. Ross
Senior Vice President Vice President of various Dean Witter Funds.
7
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Guy G. Rutherfurd, Jr. Vice President of Dean Witter Market Leader
Senior Vice President Trust.
Rochelle G. Siegel
Senior Vice President Vice President of various Dean Witter Funds.
Paul D. Vance
Senior Vice President Vice President of various Dean Witter Funds.
Elizabeth A. Vetell
Senior Vice President
James F. Willison
Senior Vice President Vice President of various Dean Witter Funds.
Ronald J. Worobel
Senior Vice President Vice President of various Dean Witter Funds.
Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President DWSC, Assistant Treasurer of Distributors;
and Assistant Treasurer and Chief Financial Officer of the
Treasurer Dean Witter Funds and the TCW/DW Funds.
Marilyn K. Cranney Assistant Secretary of DWR; First Vice President
First Vice President and Assistant Secretary of DWSC; Assistant
and Assistant Secretary Secretary of the Dean Witter Funds and the TCW/DW
Funds.
Barry Fink Assistant Secretary of DWR;First Vice
First Vice President, President,Secretary and General Counsel of
Secretary and General DWSC;First Vice President,Assistant
Counsel Secretary and Assistant General Counsel
of Distributors;Vice President,Secretary
and General Counsel of the Dean Witter
Funds and the TCW/DW Funds.
Funds.
Michael Interrante First Vice President and Controller of DWSC;
First Vice President Assistant Treasurer of Distributors;First Vice
and Controller President and Treasurer of DWTC.
Robert Zimmerman
First Vice President
Joan Allman
Vice President
Joseph Arcieri
Vice President Vice President of various Dean Witter Funds.
8
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Kirk Balzer
Vice President Vice President of various Dean Witter Funds.
Douglas Brown
Vice President
Philip Casparius
Vice President
Thomas Chronert
Vice President
Rosalie Clough
Vice President
Patricia A. Cuddy
Vice President Vice President of various Dean Witter Funds.
B. Catherine Connelly
Vice President
Salvatore DeSteno
Vice President Vice President of DWSC.
Frank J. DeVito
Vice President Vice President of DWSC.
Bruce Dunn
Vice President
Jeffrey D. Geffen
Vice President
Deborah Genovese
Vice President
Peter W. Gurman
Vice President
John Hechtlinger
Vice President
Peter Hermann
Vice President Vice President of various Dean Witter Funds.
Elizabeth Hinchman
Vice President
David Hoffman
Vice President
9
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
David Johnson
Vice President
Christopher Jones
Vice President
James Kastberg
Vice President
Stanley Kapica
Vice President
Michael Knox
Vice President Vice President of various Dean Witter Funds.
Konrad J. Krill
Vice President Vice President of various Dean Witter Funds.
Paula LaCosta
Vice President Vice President of various Dean Witter Funds.
Thomas Lawlor
Vice President
Gerard Lian
Vice President Vice President of various Dean Witter Funds.
LouAnne D. McInnis Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
Sharon K. Milligan
Vice President
Julie Morrone
Vice President
David Myers
Vice President
James Nash
Vice President
Richard Norris
Vice President
Anne Pickrell
Vice President Vice President of Dean Witter Global Short-
Term Income Fund Inc.
10
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Hugh Rose
Vice President
Robert Rossetti Vice President of Dean Witter Precious Metals
Vice President Trust.
Ruth Rossi Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
Carl F. Sadler
Vice President
Rafael Scolari
Vice President Vice President of Prime Income Trust.
Peter Seeley Vice President of Dean Witter World
Vice President Wide Income Trust.
Jayne M. Stevlingson
Vice President Vice President of various Dean Witter Funds.
Kathleen Stromberg
Vice President Vice President of various Dean Witter Funds.
Vinh Q. Tran
Vice President Vice President of various Dean Witter Funds.
Alice Weiss
Vice President Vice President of various Dean Witter Funds.
Katherine Wickham
Vice President
Item 29. PRINCIPAL UNDERWRITERS
(a) Dean Witter Distributors Inc. ("Distributors"), a Delaware
corporation, is the principal underwriter of the Registrant.
Distributors is also the principal underwriter of the following
investment companies:
(1) Dean Witter Liquid Asset Fund Inc.
(2) Dean Witter Tax-Free Daily Income Trust
(3) Dean Witter California Tax-Free Daily Income Trust
(4) Dean Witter Retirement Series
(5) Dean Witter Dividend Growth Securities Inc.
(6) Dean Witter Global Asset Allocation
(7) Dean Witter World Wide Investment Trust
(8) Dean Witter Capital Growth Securities
(9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
11
<PAGE>
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Short-Term Bond Fund
(15) Dean Witter Mid-Cap Growth Fund
(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Limited Term Municipal Trust
(22) Dean Witter Natural Resource Development Securities Inc.
(23) Dean Witter World Wide Income Trust
(24) Dean Witter Utilities Fund
(25) Dean Witter Strategist Fund
(26) Dean Witter New York Municipal Money Market Trust
(27) Dean Witter Intermediate Income Securities
(28) Prime Income Trust
(29) Dean Witter European Growth Fund Inc.
(30) Dean Witter Developing Growth Securities Trust
(31) Dean Witter Precious Metals and Minerals Trust
(32) Dean Witter Pacific Growth Fund Inc.
(33) Dean Witter Multi-State Municipal Series Trust
(34) Dean Witter Federal Securities Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
(38) Dean Witter Global Dividend Growth Securities
(39) Dean Witter American Value Fund
(40) Dean Witter U.S. Government Money Market Trust
(41) Dean Witter Global Short-Term Income Fund Inc.
(42) Dean Witter Premier Income Trust
(43) Dean Witter Value-Added Market Series
(44) Dean Witter Global Utilities Fund
(45) Dean Witter High Income Securities
(46) Dean Witter National Municipal Trust
(47) Dean Witter International SmallCap Fund
(48) Dean Witter Balanced Growth Fund
(49) Dean Witter Balanced Income Fund
(50) Dean Witter Hawaii Municipal Trust
(51) Dean Witter Variable Investment Series
(52) Dean Witter Capital Appreciation Fund
(53) Dean Witter Intermediate Term U.S. Treasury Trust
(54) Dean Witter Information Fund
(55) Dean Witter Japan Fund
(56) Dean Witter Income Builder Fund
(57) Dean Witter Special Value Fund
(58) Dean Witter Financial Services Trust
(59) Dean Witter Market Leader Trust
(1) TCW/DW Core Equity Trust
(2) TCW/DW North American Government Income Trust
(3) TCW/DW Latin American Growth Fund
(4) TCW/DW Income and Growth Fund
(5) TCW/DW Small Cap Growth Fund
12
<PAGE>
(6) TCW/DW Balanced Fund
(7) TCW/DW Total Return Trust
(8) TCW/DW Mid-Cap Equity Trust
(9) TCW/DW Global Telecom Trust
(10) TCW/DW Strategic Income Trust
(b) The following information is given regarding directors and officers of
Distributors not listed in Item 28 above. The principal address of
Distributors is Two World Trade Center, New York, New York 10048. None of
the following persons has any position or office with the Registrant.
Positions and
Office with
Name Distributors
- ---- ------------
Fredrick K. Kubler Senior Vice President, Assistant
Secretary and Chief Compliance
Officer.
Michael T. Gregg Vice President and Assistant
Secretary.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Investment Manager at its offices, except records relating to
holders of shares issued by the Registrant, which are maintained by the
Registrant's Transfer Agent, at its place of business as shown in the
prospectus.
Item 31. MANAGEMENT SERVICES
Registrant is not a party to any such management-related service
contract.
Item 32. UNDERTAKINGS
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York and State of
New York on the 17th day of March, 1997.
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
By /s/ Barry Fink
---------------------------------
Barry Fink
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 17 has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
(1) Principal Executive Officer President, Chief
Executive Officer,
Trustee and Chairman
By /s/ Charles A. Fiumefreddo 03/17/97
--------------------------
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By /s/ Thomas F. Caloia 03/17/97
--------------------------
Thomas F. Caloia
(3) Majority of the Trustees
Charles A. Fiumefreddo (Chairman)
Philip J. Purcell
By /s/ Barry Fink 03/17/97
--------------------------
Barry Fink
Attorney-in-Fact
Michael Bozic
Edwin J. Garn
John R. Haire
Manuel H. Johnson
Michael E. Nugent
John L. Schroeder
By /s/ David M. Butowsky 03/17/97
--------------------------
David M. Butowsky
Attorney-in-Fact
<PAGE>
DEAN WITTER U. S. GOVERNMENT MONEY MARKET TRUST
EXHIBIT INDEX
2. -- Amended and Restated By-Laws of the Registrant
dated as of October 25, 1996
8. -- Amendment to the Custody Agreement between the
Registrant and the Bank of New York
11. -- Consent of Independent Accountants
16. -- Schedules for Computation of Performance Quotations
27. -- Financial Data Schedule
<PAGE>
BY-LAWS
OF
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
AMENDED AND RESTATED AS OF OCTOBER 25, 1996
ARTICLE I
DEFINITIONS
The terms "COMMISSION", "DECLARATION", "DISTRIBUTOR", "INVESTMENT
ADVISER", "MAJORITY SHAREHOLDER VOTE", "1940 ACT", "SHAREHOLDER", "SHARES",
"TRANSFER AGENT", "TRUST", "TRUST PROPERTY", and "TRUSTEES" have the
respective meanings given them in the Declaration of Trust of Dean Witter
U.S. Government Money Market Trust (formerly known as Dean Witter/Sears U.S.
Government Money Market Trust) dated November 18, 1981, as amended from time
to time.
ARTICLE II
OFFICES
SECTION 2.1. PRINCIPAL OFFICE. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.
SECTION 2.2. OTHER OFFICES. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 3.1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.
SECTION 3.2. MEETINGS. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote not less than twenty-five percent
(25%) of all the votes entitled to be cast at such meeting. Such request
shall state the purpose or purposes of such meeting and the matters proposed
to be acted on thereat. The Secretary shall inform such Shareholders of the
reasonable estimated cost of preparing and mailing such notice of the
meeting, and upon payment to the Trust of such costs, the Secretary shall
give notice stating the purpose or purposes of the meeting to all entitled to
vote at such meeting. No meeting need be called upon the request of the
holders of Shares entitled to cast less than a majority of all votes entitled
to be cast at such meeting, to consider any matter which is substantially the
same as a matter voted upon at any meeting of Shareholders held during the
preceding twelve months.
SECTION 3.3. NOTICE OF MEETINGS. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.
SECTION 3.4. QUORUM AND ADJOURNMENT OF MEETINGS. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders the holders of a majority of the Shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be
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requisite and shall constitute a quorum for the transaction of business. In
the absence of a quorum, the Shareholders present or represented by proxy and
entitled to vote thereat shall have power to adjourn the meeting from time to
time. Any adjourned meeting may be held as adjourned without further notice.
At any adjourned meeting at which a quorum shall be present, any business may
be transacted as if the meeting had been held as originally called.
SECTION 3.5. VOTING RIGHTS, PROXIES. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, executed in writing by the Shareholder or his
duly authorized attorney-in-fact, for each Share of beneficial interest of
the Trust and for the fractional portion of one vote for each fractional
Share entitled to vote so registered in his name on the records of the Trust
on the date fixed as the record date for the determination of Shareholders
entitled to vote at such meeting. No proxy shall be valid after eleven months
from its date, unless otherwise provided in the proxy. At all meetings of
Shareholders, unless the voting is conducted by inspectors, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman of the
meeting. Pursuant to a resolution of a majority of the Trustees, proxies may
be solicited in the name of one or more Trustees or Officers of the Trust.
SECTION 3.6. VOTE REQUIRED. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.
SECTION 3.7. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.
SECTION 3.8. INSPECTION OF BOOKS AND RECORDS. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under the Corporations and Associations Law of
the State of Maryland.
SECTION 3.9. ACTION BY SHAREHOLDERS WITHOUT MEETING. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.
SECTION 3.10. PRESENCE AT MEETINGS. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.
ARTICLE IV
TRUSTEES
SECTION 4.1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as
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shall be determined from time to time by the Trustees without further notice.
Special meetings of the Trustees may be called at any time by the President
and shall be called by the President or the Secretary upon the written
request of any two (2) Trustees.
SECTION 4.2. NOTICE OF SPECIAL MEETINGS. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.
SECTION 4.3. TELEPHONE MEETINGS. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
SECTION 4.4. QUORUM, VOTING AND ADJOURNMENT OF MEETINGS. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.
SECTION 4.5. ACTION BY TRUSTEES WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.
SECTION 4.6. EXPENSES AND FEES. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.
SECTION 4.7. EXECUTION OF INSTRUMENTS AND DOCUMENTS AND SIGNING OF CHECKS
AND OTHER OBLIGATIONS AND TRANSFERS. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.
SECTION 4.8. INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
AGENTS. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action
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or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.
(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).
(2) The determination shall be made:
(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or
(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or
(iii) By the Shareholders.
(3) Notwithstanding any provision of this Section 4.8, no person shall
be entitled to indemnification for any liability, whether or not there is
an adjudication of liability, arising by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties as described
in Section 17(h) and (i) of the Investment Company Act of 1940
("disabling conduct"). A person shall be deemed not liable by reason of
disabling conduct if, either:
(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or
(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--
(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
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(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:
(1) authorized in the specific case by the Trustees; and
(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and
(3) either, (i) such person provides a security for his undertaking,
or
(ii) the Trust is insured against losses by reason of any lawful
advances, or
(iii) a determination, based on a review of readily available
facts, that there is reason to believe that such person ultimately
will be found entitled to indemnification, is made by either--
(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.
(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.
(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE V
COMMITTEES
SECTION 5.1. EXECUTIVE AND OTHER COMMITTEES. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.
The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.
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All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.
SECTION 5.2. ADVISORY COMMITTEE. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.
SECTION 5.3. COMMITTEE ACTION WITHOUT MEETING. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.
ARTICLE VI
OFFICERS
SECTION 6.1. EXECUTIVE OFFICERS. The executive officers of the Trust shall
be a Chairman of the Board , a President, one or more Vice Presidents, a
Secretary and a Treasurer. The Chairman of the Board shall be selected from
among the Trustees but none of the other executive officers need be a member
of the Board of Trustees. Two or more offices, except those of President and
any Vice President, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more than one capacity. The
executive officers of the Trust shall be elected annually by the Board of
Trustees and each executive officer so elected shall hold office until his
successor is elected and has qualified.
SECTION 6.2. OTHER OFFICERS AND AGENTS. The Board of Trustees may also
elect one or more Assistant Vice Presidents, Assistant Secretaries and
Assistant Treasurers and may elect, or may delegate to the President the
power to appoint, such other officers and agents as the Board of Trustees
shall at any time or from time to time deem advisable.
SECTION 6.3. TERM AND REMOVAL AND VACANCIES. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in its
judgment, the best interests of the Trust will be served thereby, but such
removal shall be without prejudice to the contractual rights, if any, of the
person so removed.
SECTION 6.4. COMPENSATION OF OFFICERS. The compensation of officers and
agents of the Trust shall be fixed by the Board of Trustees, or by the
President to the extent provided by the Board of Trustees with respect to
officers appointed by the President.
SECTION 6.5. POWER AND DUTIES. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Board of Trustees; provided, that no rights of any third party shall be
affected or impaired by any such By-Law or resolution of the Trustees unless
he has knowledge thereof.
SECTION 6.6. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the shareholders and of the Board of Trustees,
shall be a signatory on all Annual and Semi-Annual Reports as may be sent to
shareholders, and he shall perform such other duties as the Board of Trustees
may from time to time prescribe.
SECTION 6.7. THE PRESIDENT. (a) The President shall be the chief
executive officer of the Trust; he shall have general and active management
of the business of the Trust, shall see that all orders and resolutions of
the Board of Trustees are carried into effect, and, in connection therewith,
shall be authorized to delegate to one or more Vice Presidents such of his
powers and duties at such times and in such manner as he may deem advisable.
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(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees may from time to time prescribe.
SECTION 6.8. THE VICE PRESIDENTS. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Board of Trustees. The Vice President, or, if there be more than one, the
Vice Presidents in the order of their seniority as may be determined from
time to time by the Trustees or the President, shall, in the absence or
disability of the President, exercise the powers and perform the duties of
the President, and he or they shall perform such other duties as the Board of
Trustees or the President may from time to time prescribe.
SECTION 6.9. THE ASSISTANT VICE PRESIDENTS. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Board of Trustees or the President.
SECTION 6.10. THE SECRETARY. The Secretary shall attend all meetings of
the Board of Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Board of Trustees
in a book to be kept for that purpose, and shall perform like duties for the
standing committees when required. He shall give, or cause to be given,
notice of all meetings of the Shareholders and special meetings of the Board
of Trustees, and shall perform such other duties and have such powers as the
Board of Trustees, or the President, may from time to time prescribe. He
shall keep in safe custody the seal of the Trust and affix or cause the same
to be affixed to any instrument requiring it, and, when so affixed, it shall
be attested by his signature or by the signature of an Assistant Secretary.
SECTION 6.11. THE ASSISTANT SECRETARIES. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Board of Trustees or the President, shall, in the absence or disability
of the Secretary, perform the duties and exercise the powers of the Secretary
and shall perform such duties and have such other powers as the Board of
Trustees or the President may from time to time prescribe.
SECTION 6.12. THE TREASURER. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Board of Trustees and the President, whenever any of
them require it, an account of his transactions as Treasurer and of the
financial condition of the Trust; and he shall perform such other duties as
the Board of Trustees, or the President, may from time to time prescribe.
SECTION 6.13. THE ASSISTANT TREASURERS. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Board of Trustees or the President, shall, in the absence
or disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the President, may from time to time prescribe.
SECTION 6.14. DELEGATION OF DUTIES. Whenever an officer is absent or
disabled, or whenever for any reason the Board of Trustees may deem it
desirable, the Board may delegate the powers and duties of an officer or
officer to any other officer or officers or to any Trustee or Trustees.
ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS
Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.
Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.
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ARTICLE VIII
CERTIFICATES OF SHARES
SECTION 8.1. CERTIFICATES OF SHARES. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the President, or a Vice President, and countersigned by the
Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.
No certificate shall be issued for any share until such share is fully
paid.
SECTION 8.2. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.
ARTICLE IX
CUSTODIAN
SECTION 9.1. APPOINTMENT AND DUTIES. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:
(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;
(3) to disburse such funds upon orders or vouchers;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees
provided that in every case such sub-custodian shall be a bank or trust
company organized under the laws of the United States or one of the states
thereof and having capital, surplus and undivided profits of at least five
million dollars ($5,000,000).
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SECTION 9.2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. LOCATION OF BOOKS AND RECORDS. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.
SECTION 11.2. RECORD DATE. The Trustees may fix in advance a date as the
record date for the purpose of determining Shareholders entitled to notice
of, or to vote at, any meeting of Shareholders, or Shareholders entitled to
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. Such
date, in any case, shall be not more than ninety (90) days, and in case of a
meeting of Shareholders not less than ten (10) days, prior to the date on
which particular action requiring such determination of Shareholders is to be
taken. In lieu of fixing a record date the Trustees may provide that the
transfer books shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the transfer books are closed for the purpose of
determining Shareholders entitled to notice of a vote at a meeting of
Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
SECTION 11.3. SEAL. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.
SECTION 11.4. FISCAL YEAR. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.
SECTION 11.5. ORDERS FOR PAYMENT OF MONEY. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.
9
<PAGE>
ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS
The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.
ARTICLE XIII
AMENDMENTS
These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.
ARTICLE XIV
DECLARATION OF TRUST
The Declaration of Trust establishing Dean Witter U.S. Government Money
Market Trust, dated November 18, 1981, together with all amendments thereto,
a copy of which is on file in the office of the Secretary of the Commonwealth
of Massachusetts, provides that the name Dean Witter U.S. Government Money
Market Trust refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, Shareholder,
officer, employee or agent of Dean Witter U.S. Government Money Market Trust
shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of said Dean Witter U.S. Government
Money Market Trust, but the Trust Estate only shall be liable.
10
<PAGE>
AMENDMENT TO CUSTODY AGREEMENT
Amendment made as of this 17th day of April, 1996 by and between Dean
Witter U.S. Government Money Market Trust (the "Fund") and The Bank of New York
(the "Custodian") to the Custody Agreement between the Fund and the Custodian
dated September 20, 1991 (the "Custody Agreement") The Custody Agreement is
hereby amended as follows:
Article XV Section 8 of the Custody Agreement shall be deleted and be
replaced by Sections 8.(a), 8.(b) and 8.(c) as set forth below:
"8. (a) The Custodian will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Securities and moneys
owned by the Fund. The Custodian shall indemnify the Fund against and save the
Fund harmless from all liability, claims, losses and demands whatsoever,
including attorneys' fees, howsoever arising or incurred as the result of the
failure of a subcustodian which is a banking institution located in a foreign
country and identified on Schedule A attached hereto and as amended from time to
time upon mutual agreement of the parties (each, a "Subcustodian") to exercise
reasonable care with respect to the safekeeping of such Securities and moneys
to the same extent that the Custodian would be liable to the Fund if the
Custodian were holding such securities and moneys in New York. In the event of
any loss to the Fund by reason of the failure of the Custodian or a Subcustodian
to utilize reasonable care, the Custodian shall be liable to the Fund only to
the extent of the Fund's direct damages, to be determined based on the market
value of the Securities and moneys which are the subject of the loss at the date
of discovery of such loss and without reference to any special conditions or
circumstances.
8. (b) The Custodian shall not be liable for any loss which results from
(i) the general risk of investing, or (ii) investing or holding Securities and
moneys in a particular country including, but not limited to, losses resulting
from nationalization, expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions, devaluations or
fluctuations; or market conditions which prevent the orderly execution of
securities transactions or affect the value of Securities or moneys.
8. (c) Neither party shall be liable to the other for any loss due to
forces beyond its control including, but not limited to, strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion,
fission or radiation, or acts of God."
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective Officers, thereunto duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
[SEAL] By
---------------------------------
Attest:
- -------------------------------
THE BANK OF NEW YORK
[SEAL] By
---------------------------------
Attest:
- -------------------------------
<PAGE>
SCHEDULE A
COUNTRY/MARKET SUBCUSTODIAN
-------------- ------------
Argentina The Bank of Boston
Australia ANZ Banking Group Limited
Austria Girocredit Bank AG
Bangladesh* Standard Chartered Bank
Belgium Banque Bruxelles Lambert
Botswana* Stanbic Bank Botswana Ltd.
Brazil The Bank of Boston
Canada Royal Trust/Royal Bank of Canada
Chile The Bank of Boston/Banco de Chile
China Standard Chartered Bank
Colombia Citibank, N.A.
Denmark Den Danske Bank
Euromarket CEDEL
Euroclear
First Chicago Clearing Centre
Finland Union Bank of Finland
France Banque Paribas/Credit Commercial de
France
Germany Dresdner Bank A.G.
Ghana* Merchant Bank Ghana Ltd.
Greece Alpha Credit Bank
Hong Kong Hong Kong and Shanghai Banking
Corp.
Indonesia Hong Kong and Shanghai Banking
Corp.
Ireland Allied Irish Bank
Israel Israel Discount Bank
Italy Banca Commerciale Italiana
Japan Yasuda Trust & Banking Co., Lt.
Korea Bank of Seoul
Luxembourg Kredietbank S.A.
Malaysia Hong Kong Bank Malaysia Berhad
Mexico Banco Nacional de Mexico (Banamex)
Netherlands Mees Pierson
New Zealand ANZ Banking Group Limited
Norway Den Norske Bank
Pakistan Standard Chartered Bank
Peru Citibank N.A.
Phillipines Hong Kong and Shanghai Banking
Corp.
Poland Bank Handlowy W Warsawie
Portugal Banco Comercial Portugues
Singapore United Overseas Bank
South Africa Standard Bank of South Africa
Limited
Spain Banco Bilbao Vizcaya
Sri Lanka Standard Chartered Bank
<PAGE>
SCHEDULE A
COUNTRY/MARKET SUBCUSTODIAN
-------------- ------------
Sweden Skandinaviska Enskilda Banken
Switzerland Union Bank of Switzerland
Taiwan Hong Kong and Shanghai Banking
Corp.
Thailand Siam Commercial Bank
Turkey Citibank, N.A.
United Kingdom The Bank of New York
United States The Bank of New York
Uruguay The Bank of Boston
Venezuela Citibank N.A.
Zimbabwe* Stanbic Bank Zimbabwe Ltd.
*Not yet 17 (f) 5 compliant
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this Post-
Effective Amendment No. 17 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated March 6, 1997, relating to the
financial statements and financial highlights of Dean Witter U.S. Government
Money Market Trust, which are included in such Prospectus. We also consent to
the references to us under the heading "Financial Highlights" in such Prospectus
and under the headings "Independent Accountants" and "Experts" in the Statement
of Additional Information constituting part of this Registration Statement.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
March 13, 1997
<PAGE>
DEAN WITTER US GOVERNMENT MONEY MARKET TRUST
Exhibit 16: Schedule for computation of each performance
quotation provided in the Statement of Additional Information.
(18) The Trust's current yield for the seven days ending
January 31, 1997
(A-B) x 365/N
(1.000754 -1) x 365/7 = 3.93%
The Trust's effective annualized yield for the seven days ending
January 31, 1997
365/N
A - 1
365/7
1.000754 - 1 = 4.01%
A = Value of a share of the Trust at end of period.
B = Value of a share of the Trust at beginning of period.
N = Number of days in the period.
<PAGE>
SCHEDULE FOR COMPUTATIONS OF PERFORMANCE QUOTATIONS
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
(A) GROWTH OF $10,000
(B) GROWTH OF $50,000
(C) GROWTH OF $100,000
FORMULA: G= (TR+1)*P
G= GROWTH OF INITIAL INVESTMENT
P= INITIAL INVESTMENT
TR= TOTAL RETURN SINCE INCEPTION
<TABLE>
<CAPTION>
INVESTED - P TOTAL
$10,000, $50,000 & RETURN - TR (A) GROWTH OF (B) GROWTH OF (C) GROWTH OF
$100,000 31-Jan-97 $10,000 INVESTMENT- G $50,000 INVESTMENT- G $100,000 INVESTMENT- G
- ----------- ----------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
17-Feb-82 145.88 $24,588 $122,940 $245,880
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 932,610,878
<INVESTMENTS-AT-VALUE> 932,610,878
<RECEIVABLES> 349,862
<ASSETS-OTHER> 179,293
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 933,140,033
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,055,412
<TOTAL-LIABILITIES> 6,055,412
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 927,082,675
<SHARES-COMMON-STOCK> 927,082,675
<SHARES-COMMON-PRIOR> 902,717,815
<ACCUMULATED-NII-CURRENT> 1,946
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 927,084,621
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 49,586,539
<OTHER-INCOME> 0
<EXPENSES-NET> 10,194,077
<NET-INVESTMENT-INCOME> 39,392,462
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 39,392,462
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (39,391,745)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,937,077,890
<NUMBER-OF-SHARES-REDEEMED> (1,951,959,247)
<SHARES-REINVESTED> 39,246,217
<NET-CHANGE-IN-ASSETS> 24,365,577
<ACCUMULATED-NII-PRIOR> 1,229
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,190,754
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 10,194,077
<AVERAGE-NET-ASSETS> 917,534,044
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .043
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.043)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
