<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
DEAN WITTER GOVERNMENT INCOME TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3) and 0-11.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DEAN WITTER GOVERNMENT INCOME TRUST
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 4, 1996
---------------------
The Special Meeting of Shareholders of Dean Witter Government Income Trust
(the "Trust"), an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts, will be held in the Conference Center,
Forty-Fourth Floor, 2 World Trade Center, New York, New York 10048, on September
4, 1996 at 9:00 A.M., New York City time for the following purposes:
1. To approve a proposal to convert the Trust from a closed-end
investment company to an open-end investment company;
2. If Proposal No. 1 is approved, to elect eight Trustees;
3. If Proposal No. 1 is approved, to approve a new Management Agreement
between the Trust and Dean Witter InterCapital Inc.;
4. If Proposal No. 1 is approved, to approve a Plan of Distribution
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended;
and
5. To consider and act upon any other business as may properly come
before the Meeting or any adjournment thereof.
Shareholders of record as of the close of business on May 28, 1996 are
entitled to notice of and to vote at the Meeting or any adjournment thereof. If
you cannot be present in person, your management would greatly appreciate your
filling in, signing and returning the enclosed proxy promptly in the envelope
provided for that purpose.
In the event that the necessary quorum to transact business at the meeting
or the vote required to approve or reject any proposal is not obtained, the
persons named as proxies may propose one or more adjournments of the Meeting for
a total of not more than 60 days in the aggregate to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of the
holders of a majority of the Trust's shares present in person or by proxy at the
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of Proposal 1 and will
vote against any such adjournment those proxies to be voted against that
proposal.
By Order of the Board of
Trustees
SHELDON CURTIS,
SECRETARY
June 10, 1996
New York, New York
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
DEAN WITTER GOVERNMENT INCOME TRUST
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
---------------------
PROXY STATEMENT
---------------------
SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 4, 1996
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or the "Trustees") of DEAN WITTER
GOVERNMENT INCOME TRUST (the "Trust") for use at the Special Meeting of
Shareholders of the Trust to be held September 4, 1996 (the "Meeting"), and at
any adjournments thereof. The purpose of the Meeting and the matters to be acted
upon are set forth in the accompanying Notice of Special Meeting of
Shareholders.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted in favor of Proposals 1, 3 and 4 and for each of
the nominees for election as Trustee. The Board knows of no other business,
other than that set forth in the Notice of Special Meeting, that will be
presented for consideration at the Meeting. However, the proxy confers
discretionary authority upon the persons named therein to vote as they determine
on other business, not currently contemplated, which may come before the
Meeting. A proxy may be revoked at any time prior to its exercise by any of the
following: written notice of revocation, execution and delivery of a later dated
proxy to the Secretary of the Trust (if returned and received in time to be
voted) or attendance and voting at the Special Meeting of Shareholders.
Attendance at the Special Meeting of Shareholders will not in and of itself
revoke a proxy.
Shareholders as of the close of business on May 28, 1996, the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting, are entitled to one vote for each share held and a fractional vote for
a fractional share. On May 28, 1996 there were 49,892,300 shares of beneficial
interest of the Trust outstanding, all with $0.01 par value. No person was known
to own beneficially as much as 5% of the outstanding shares of the Trust on that
date. The Trustees and officers of the Trust, together, owned less than 1% of
the Trust's outstanding shares on that date. The percentage ownership of shares
of the Trust changes from time to time depending on purchases and sales by
shareholders and the total number of shares outstanding.
The cost of soliciting proxies for this Special Meeting of Shareholders,
consisting principally of legal, printing and mailing expenses, which expenses
are not expected to exceed $100,000, will be borne by the Trust. The
solicitation of proxies will be by mail, which may be supplemented by
solicitation by mail, telephone or otherwise through Trustees, officers and
regular employees of the Trust or Dean Witter InterCapital Inc. and employees of
broker-dealers, including Dean Witter Reynolds Inc. ("DWR"), without special
compensation therefor. In addition, the Trust may employ William F. Doring and
Co. as proxy solicitor, the cost of which is not expected to exceed $5,000 and
will be borne by the Trust. The first mailing of this proxy is expected to be
made on or about June 14, 1996.
<PAGE>
(1) CONVERSION OF THE TRUST FROM A CLOSED-END INVESTMENT
COMPANY TO AN OPEN-END INVESTMENT COMPANY
At a meeting held on April 17, 1996 the Board of Trustees, including those
Trustees who are not "interested persons" of the Trust (the "Independent
Trustees") as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), considered and approved the submission to shareholders of the Trust
of a proposal to convert the Trust from a closed-end investment company to an
open-end investment company (the "Conversion"). In connection therewith, the
Trustees, including the Independent Trustees, also considered and approved the
amendment of the Trust's subclassification under the 1940 Act from a closed-end
investment company to an open-end investment company and the amendment and
restatement of the Trust's Declaration of Trust to provide for such Conversion.
If approved, this will permit the continued operation of the Trust in accordance
with its investment objective while providing shareholders with the right to
redeem their shares at a price based on the net asset value of the shares rather
than a price set in the market. Shareholders will also have the ability to
purchase additional shares at a price based on the net asset value of the shares
plus any applicable sales charge. At the meeting on April 17, 1996, the
Trustees, including the Independent Trustees, considered and approved new
contractual arrangements for the management and operation of the Trust as an
open-end investment company. Shareholders of the Trust are now being asked to
consider the conversion of the Trust from a closed-end to an open-end investment
company and to consider related matters approved by the Trustees in connection
with the Conversion. If Proposal No. 1 is not approved by shareholders, the
Trust will remain a closed-end investment company and the Trustees will consider
what other actions should be taken, if any, with respect to the discount from
net asset value at which the Trust's shares trade. Proposals No. 1, No. 3
(pertaining to approval of a proposed new management agreement) and No. 4
(pertaining to approval of a Plan of Distribution pursuant to Rule 12b-1) must
all be approved by shareholders in order for the Conversion to be implemented.
BACKGROUND OF THE PROPOSAL
When the Trust was organized in 1987, a closed-end format was chosen as most
appropriate to the Trust's character and intended method of operation because it
was believed that such a structure, among other things, would permit management
of the Trust's portfolio consistent with its investment objective and policies
without the pressures and constraints to which open-end investment companies are
subject as a result of cash inflows and redemptions.
The Trust's prospectus used in connection with the offering of shares in
1988 stated that the Board of Trustees and the Trust's Investment Manager, Dean
Witter InterCapital Inc. (the "Investment Manager" or "InterCapital") recognized
that shares of closed-end investment companies frequently trade at a discount
from net asset value. Accordingly, the Trustees contemplated that the Trust
might from time to time consider action either to eliminate or reduce the
discount by repurchasing shares of the Trust in the open market or tendering for
its own shares at net asset value. The prospectus also stated that the Board
intended, on an annual basis, to consider the making of a tender offer but that
at no time would the Trustees be required to make such repurchases or tenders.
Since approximately February 1989, the Trust's shares have consistently
traded at a discount from net asset value. The Investment Manager believed that
a share repurchase program, as opposed to isolated tender offers, offered the
best chance of reducing the discount while still retaining the advantages of a
closed end structure. Accordingly, the Board instituted a share repurchase
program in order to attempt to reduce the discount. The Trust repurchased
approximately 22 million shares at a cost of $192,964,228 and at discounts
ranging up to approximately 15% over a period of seven years. The failure of the
repurchase program to substantially reduce the
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<PAGE>
discount has caused the Board and the Investment Manager to give further
consideration to the various alternatives whereby the discount might be reduced
or eliminated and to re-examine the appropriateness of continuing to operate the
Trust as a closed-end investment company.
At various Board meetings held since October, 1995, the Board considered
various alternatives whereby the discount at which the Trust's shares have
traded to net asset value might be reduced or eliminated, including, but not
limited to, the continuation of the share repurchase program, conducting a
tender offer for the Trust's shares, merging the Trust into another Dean Witter
Fund (as defined below) and converting the Trust into an open-end investment
company. After consideration of the available options, the Board concluded that
it would be in the best interests of the Trust and its shareholders for the
Trust to be converted to an open-end company, thereby giving existing
shareholders the right to retain ownership of a Trust with substantially the
same investment objectives and policies, to purchase additional Trust shares at
the current market price (net asset value plus any applicable sales charge
imposed at the time of purchase) and to dispose of Trust shares at such time as
they choose at the then current net asset value of the shares.
In making its determination, the Board noted the immediate substantial
benefit to shareholders associated with the elimination of the market discount
at which the Trust's shares trade. In addition, it considered as significant the
Investment Manager's view that: (i) in light of the objectives of the Trust and
the highly liquid nature of its portfolio it will have no difficulty in
satisfying redemption requests even if the level of redemptions upon conversion
is initially high, or in otherwise managing the Trust as an open-end fund, (ii)
it will be able to continue to pursue on behalf of the Trust substantially
identical investment practices and policies and (iii) conversion to an open-end
fund will not adversely affect investment performance. In addition, the Board
evaluated the likely effect of the Conversion on the Trust's expense ratio. It
noted, in this regard, that while open-end funds are generally more expensive to
operate and administer than closed-end funds, the management fee would be
reduced from the present fee of .60% (of average weekly net assets) to .35% (of
average daily net assets) under the proposed new management agreement (see
Proposal No. 3 below). As a consequence, the Trust's expense ratio subsequent to
conversion is expected to be lower than or comparable to its current expense
ratio. The Board also considered the capability of Dean Witter Distributors Inc.
("Distributors"), an affiliate of the Investment Manager, and the proposed
distributor of the Trust's shares, to engage in an ongoing distribution of the
Trust's shares as an open-end investment company if the Plan of Distribution
pursuant to Rule 12b-1 described in Proposal No. 4 is approved. Finally, the
Board considered that none of the other measures described above to mitigate or
eliminate the discount would act with the degree of certainty that conversion
would, while permitting the Trust to continue operations with its investment
objective and policies substantially intact.
In view of the foregoing, at the meeting held on April 17, 1996, the Board
of Trustees, including the Independent Trustees, authorized the submission of a
proposal to convert the Trust to an open-end investment company to shareholders
of the Trust for their approval. The Board also approved new contractual
arrangements for the management and operation of the Trust as an open-end
investment company and for the distribution of its shares, as described in more
detail below. In addition, the Board approved the proposed amendments to the
Trust's Declaration of Trust and a change in its subclassification under the
1940 Act from a closed-end to an open-end investment company. Implementation of
these proposals is subject to shareholder approval as described herein.
DIFFERENCES BETWEEN TRUST OPERATIONS AS AN OPEN-END AND CLOSED-END INVESTMENT
COMPANY
The Trust is currently registered as a "closed-end" investment company under
the 1940 Act. Closed-end investment companies neither redeem their outstanding
shares nor generally engage in the continuous sale of new
3
<PAGE>
securities, and thus operate with a relatively fixed capitalization. The shares
of closed-end investment companies are normally bought and sold on national
securities exchanges. The Trust's shares are currently traded on the New York
Stock Exchange (the "NYSE"). The Trust's shares will be delisted from the NYSE
upon effectiveness of the registration statement converting the Trust to an
open-end investment company.
In contrast, open-end investment companies, commonly referred to as "mutual
funds," issue redeemable securities. The holders of redeemable securities have
the right to surrender those securities to the mutual fund and obtain in return
their proportionate share of the value of the fund's net assets (less any
redemption fee charged by the fund). Many mutual funds (including the Trust, if
the proposed conversion is effected) also continuously issue new shares to
investors through the fund's distributor at the public offering price at the
time of such issuance.
Some of the legal and practical differences between operations of the Trust
as a closed-end and an open-end investment company are as follows:
(a) ACQUISITION AND DISPOSITION OF SHARES. If the Trust is converted into
an open-end investment company, the Trust's shares will no longer be listed on
the NYSE and investors wishing to acquire shares of the Trust would be able to
purchase them from the Distributor at the public offering price. Shareholders
desiring to realize the value of their shares would be able to do so by
exercising their right to have such shares redeemed by the Trust at the next
determined current net asset value. The Trust's net asset value per share is
calculated by dividing (i) the value of its portfolio securities plus all cash
and other assets (including accrued interest and dividends received but not
collected) less all liabilities (including accrued expenses) by (ii) the number
of outstanding shares of the Trust. The Securities and Exchange Commission (the
"SEC") generally requires open-end investment companies to value their assets on
each business day in order to determine the current net asset value on the basis
of which their shares may be redeemed by shareholders or purchased by investors.
Net asset values of most open-end investment companies are published daily by
leading financial publications.
(b) ELIMINATION OF DISCOUNT. Converting the Trust into an open-end fund
will eliminate immediately any market discount from net asset value. It will
also eliminate any possibility that the Trust's shares will trade at a premium
over net asset value. If the Conversion is approved by the shareholders the
market discount may be reduced prior to the date of any conversion to open-end
status to the extent investors are induced to purchase shares in the open market
in anticipation of a prospective open-ending.
(c) PORTFOLIO MANAGEMENT. Because a closed-end investment company does not
have to redeem its shares, it may keep all of its assets fully invested and make
investment decisions without having to adjust for cash inflows and outflows from
continuing sales and redemptions of its shares. In contrast, open-end funds must
be able to satisfy redemption requests in uncertain amounts. In addition,
open-end funds may be subject to pressure to sell portfolio securities at
disadvantageous times or prices to satisfy such redemption requests. The
Investment Manager believes that due to the highly liquid nature of the Trust's
portfolio it will have no difficulty in satisfying redemption requests or in
otherwise managing the Trust as an open-end fund. In addition, the Investment
Manager expects to continue to pursue substantially identical investment
practices and policies without having to make any substantial changes in the
composition of the Trust's portfolio. For the foregoing reasons, the Investment
Manager does not believe that converting the Trust to an open-end fund will
adversely affect investment performance.
(d) ILLIQUID SECURITIES. An open-end investment company is restricted from
investing more than 15% of its net assets in illiquid securities, including
repurchase agreements which have a maturity of longer than seven days,
securities with legal and contractual restrictions on resale (restricted
securities) and securities that are not readily
4
<PAGE>
marketable. Restricted securities eligible for resale pursuant to Rule 144A
under the Securities Act of 1933, as amended, and privately placed commercial
paper that have a readily available market will not be considered illiquid for
purposes of this limitation. The Trust will comply with applicable state Blue
Sky Laws (as defined below) restricting the Trust's investments in illiquid
securities. Due to the highly liquid nature of the Trust's portfolio, the
Investment Manager does not believe that the 15% restriction will have a
significant effect on the composition of the Trust's portfolio or on investment
performance.
(e) EXPENSES; POTENTIAL NET REDEMPTIONS. Open-end funds are generally more
expensive to operate and administer than closed-end funds. The Trust's expense
ratio subsequent to the Conversion is nevertheless expected by the Investment
Manager to be lower than or comparable to its current expense ratio because the
rate of the management fee under the proposed new management agreement (see
Proposal No. 3 below) would be reduced from .60% to .35%. This reduction in the
fee is expected by the Investment Manager to offset the increase in expenses
associated with operating the Trust as an open-end fund. Expenses of operation
as an open-end fund not currently borne by the Trust include the costs
associated with the distribution of the Trust's shares (see Proposal No. 4
regarding approval of a Plan of Distribution pursuant to Rule 12b-1) and the
cost of registration of the Trust's shares in the various states (see "State
Securities Law Implications" below). In addition, the Trust might be required to
sell portfolio securities in order to meet redemptions, thereby resulting in
realization of gains (or losses). As of September 30, 1995, the Trust had
$7,255,149 of net unrealized appreciation for federal income tax purposes. For
federal income tax purposes, the Trust had a net capital loss carryforward of
approximately $33,685,000 as of September 30, 1995.
The Trust's expense ratio could be adversely affected by significant net
redemptions. In the unlikely event the Trust's asset base is reduced to such a
small size as to render the Trust no longer economically viable, the Board might
consider alternatives to continuing the Trust's operations, including merging
the Trust with another investment company or liquidating the Trust.
(f) STATE SECURITIES LAW IMPLICATIONS. As a closed-end fund listed on the
NYSE, the Trust does not currently bear the expense of registering its shares
with state securities commissions nor is it currently subject to state
securities law expense limitations. However, as a result of open-ending and
making a continuous offering of its shares, the Trust will be required to
register its shares with state securities commissions, will incur the costs
related to such registration and will become subject to certain limitations on
expenses imposed by state securities laws ("Blue Sky Laws"). Currently, the
Trust believes that the most restrictive state expense limitation is 2 1/2% of
the Trust's average daily net assets up to $30 million, 2% of the next $70
million of such assets and 1 1/2% of such assets in excess of $100 million. If
the Trust's expenses (excluding interest, brokerage commissions, distribution
expenses, litigation expenses and certain other items) were to exceed such limit
in any fiscal year, the compensation due to the Investment Manager would be
reduced by the amount of such excess. The Trust did not exceed such limitation
during the fiscal year ended September 30, 1995.
In order for the Trust to register and continuously offer its shares to the
public under the various state Blue Sky Laws as an open-end investment company,
the Trust would have to agree to conform to certain restrictions imposed by laws
and regulations of various states covering mutual fund investments. While the
Trust is not currently subject to these restrictions, the Investment Manager
does not believe that the adoption of the restrictions would require any
amendment of the fundamental investment policies of the Trust, would materially
change the current investment practices of the Trust or would hamper the Trust's
ability to react to changing market conditions.
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<PAGE>
(g) COMPARATIVE EXPENSE INFORMATION. Set forth below is a comparison of the
Trust's shareholder transaction expenses and annual operating expenses as of
September 30, 1995 as a closed-end fund and those expenses that would apply to
current shareholders on a pro forma (estimated) basis as an open-end fund.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLOSED-END OPEN-END
- ------------------------------------------------------------------------------------------------ ------------- -----------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)..................... 5.0%* 4.5%**
Maximum Sales Load Imposed on Reinvested Dividends.............................................. * None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
whichever is lower)............................................................................ None None
Redemption Fees................................................................................. * None
Exchange Fee.................................................................................... N/A None
ANNUAL TRUST OPERATING EXPENSES (as a percentage of average net assets)
Management Fees................................................................................. .60% .35%
12b-1 Fees...................................................................................... None .20****
Other Expenses.................................................................................. .11 .13***
Total Trust Operating Expenses.................................................................. .71 .68***
<FN>
- ------------
* Maximum sales load imposed on purchases made during the initial offering
period was approximately 5%. Purchases and sales made thereafter on the
NYSE are subject to customary brokerage commissions of approximately 1%,
but may be less or more than 1% depending on the size of the transaction.
With respect to shares issued in connection with the Trust's dividend
reinvestment plan, to the extent the plan agent is required to purchase
shares on the NYSE, shareholders may also incur brokerage commissions.
** No sales load will be imposed in connection with the conversion of the
Trust from a closed-end to an open-end investment company. However, to the
extent current shareholders make additional purchases after the Conversion,
it is currently expected that such purchases will be subject to a front-end
sales charge of approximately 4.50%.
*** Estimated based on expenses expected to have been incurred if the Trust
operated as an open-end fund during the entire fiscal year ended September
30, 1995.
**** This assumes shareholder approval of Proposal No. 4.
</TABLE>
Set forth below are examples which show the expenses that an investor in the
Trust would pay on a $1,000 investment if the Trust remained closed-end compared
to those expenses which an investor would incur on a similar investment if
Proposal No. 1 is approved based upon the expense ratios set forth above but
without regard to any applicable sales charges or redemption fees.
<TABLE>
<CAPTION>
EXAMPLES 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 5% annual return:
Closed-End: $ 7 $ 23 $ 40 $ 88
Open-End: $ 7 $ 22 $ 38 $ 85
</TABLE>
The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
(h) VOTING RIGHTS. The voting rights of holders of shares of the Trust will
not change if the Trust converts to open-end status, except that the Board will
have the authority to amend the Trust's Declaration of Trust or By-Laws to
authorize the issuance of additional shares of the Trust without submitting such
amendment to another shareholder vote.
By virtue of the provisions of Massachusetts law, opportunities to vote may
become less frequent if the Trust converts to open-end status, because the Trust
will not hold shareholder meetings unless required to do so by the
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<PAGE>
1940 Act. Massachusetts law provides that, if the Declaration of Trust or
By-Laws so provides, then the fund is not required to hold an annual shareholder
meeting in any year in which the election of Trustees is not required to be
acted upon under the 1940 Act. The current By-Laws of the Trust provide for an
annual meeting of shareholders to be held. However, the Trustees have adopted
amended and restated By-Laws to go into effect if Proposal No. 1 is approved,
which provide that the Trust will not be required to hold an annual meeting in
any year in which it is not required to do so under the 1940 Act. The Trust does
not intend to hold annual meetings in any year in which it is not so required.
By not having to hold annual shareholder meetings, the Trust would save the
costs of preparing proxy materials and soliciting shareholders' votes on the
usual proposals contained therein. Based on the number of outstanding shares and
shareholders as of the record date, such costs would aggregate approximately
$25,000 per year. Under the 1940 Act, the Trust would be required to hold a
shareholder meeting if the number of Trustees elected by the shareholders were
less than a majority of the total number of Trustees, or if a change were sought
in the fundamental investment policies of the Trust or in the Trust's status
(such as, for example, a change from open-end to closed-end status).
(i) DIVIDEND REINVESTMENT PLAN. The Trust intends to continue to provide
the opportunity for shareholders to elect to receive dividends and capital gains
distributions in cash or, at no charge to shareholders, in shares of the Trust.
Whatever option a shareholder elected will remain the same after the Conversion.
Effective upon conversion to an open-end investment company, such reinvestments
in shares would be made at net asset value, rather than at the market value of
the shares on the NYSE as presently provided by the Trust's current dividend
reinvestment plan.
(j) SENIOR SECURITIES AND BORROWINGS. The 1940 Act prohibits mutual funds
from issuing "senior securities" representing indebtedness (i.e., bonds,
debentures, notes and other similar securities), other than indebtedness to
banks where there is an asset coverage of at least 300% for all borrowings.
Closed-end investment companies are permitted to issue "senior securities"
representing indebtedness to any lender if the 300% asset coverage is met and
may issue preferred stock (subject to various limitations), whereas open-end
investment companies generally may not issue preferred stock. This ability to
issue senior securities may give closed-end investment companies more
flexibility in "leveraging" a fund's portfolio. The Trust, however, may only
borrow money from a bank in an amount up to 25% of its total assets. In
addition, the Trust is not permitted to issue any senior securities. These
policies will be unchanged after the Conversion is effected. Accordingly, the
Investment Manager does not believe that the greater limitations on mutual funds
in this respect will have a significant affect on the Trust's operations.
(k) SHAREHOLDER SERVICES. If Proposal No. 1 is approved and the Trust is
converted into an open-end investment company, the same services will be made
available to shareholders of the Trust as are available to shareholders of each
of the open-end Dean Witter Funds (as defined below). Such services include: (1)
an automatic purchasing plan, (2) a systematic withdrawal plan, (3) an Exchange
Privilege which allows shareholders of the Trust to exchange their shares for
shares of certain other Dean Witter Funds (as defined below) and (4) the ability
to effect various transactions by telephone.
(l) DISTRIBUTION PLANS. An open-end investment company, unlike a closed-end
investment company, is permitted to finance the distribution of its shares by
adopting a plan of distribution pursuant to Rule 12b-1 under the 1940 Act. If
the Trust is converted to a mutual fund and if Proposal No. 4 is approved by
shareholders, the Trust will adopt a Plan of Distribution pursuant to Rule 12b-1
in order to compensate the Distributor for services provided and activities
undertaken to distribute the shares of the Trust. See Proposal No. 4 below.
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<PAGE>
(m) MINIMUM INVESTMENT AND INVOLUNTARY REDEMPTIONS. If the Trust is
converted to an open-end fund, it will adopt requirements that an initial
investment in Trust shares and any subsequent investment must be in a specified
minimum amount, in order to reduce the administrative burdens incurred in
monitoring numerous small accounts. The Trust expects that the minimum initial
purchase will be $1,000 ($100 if the account is opened through EasyInvest-SM-,
an automatic purchase plan). The Trust reserves the right to redeem, upon sixty
days' notice and at net asset value, the shares of any shareholder, other than a
shareholder that is an IRA or other tax-deferred retirement plan, whose shares
have a value of less than $100 as a result of redemptions or repurchases, or
such lesser amount as may be fixed by the Board of Trustees. The Trust will
notify such shareholder that the value of its shares is less than the applicable
amount and allow the shareholder to make additional investment in an amount
which will increase the value of the account to at least the applicable amount
or more before the redemption.
(n) QUALIFICATION AS A REGULATED INVESTMENT COMPANY. The Trust intends to
continue to qualify for treatment as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"), after conversion to
open-end status, so that it will continue to be relieved of federal income tax
on that part of its investment company taxable income and net capital gain that
is distributed to its shareholders. To qualify for this treatment the Trust must
currently meet several requirements, one of which is that the Trust must derive
less than 30% of its gross income each taxable year from the sale or other
disposition of securities, options or futures contracts held for less than three
months.
CONVERSION TO AN OPEN-END INVESTMENT COMPANY
If the proposed conversion to open-end status is approved, the Board will
take such other actions as are necessary to effect the Conversion. The
Conversion of the Trust to an open-end investment company will be accomplished
by: (i) the filing of Amended and Restated Declaration of Trust of the Trust
with the Secretary of State of the Commonwealth of Massachusetts and (ii)
changing the Trust's subclassification under the 1940 Act from a closed-end
investment company to an open-end investment company. In addition, since shares
of an open-end investment company are offered to the public on a continuous
basis, on April 17, 1996, the Board approved a contract with the Distributor for
the distribution of the Trust's shares to become effective upon the Trust's
conversion to an open-end investment company. The Amended and Restated
Declaration of Trust will not be filed until shortly before a registration
statement under the Securities Act of 1933, as amended, covering the offering of
the shares of the Trust and appropriate state securities law qualifications and
registrations are anticipated to become effective, which is expected to occur
within two to four months after filing of the registration statement. The
registration statement is not expected to be filed before the Conversion is
approved by shareholders.
Although management will use all practicable measures to keep costs at a
minimum, certain costs will be incurred, many of which will be nonrecurring, in
connection with the Conversion, including costs associated with the seeking of
necessary government clearances, the preparation of a registration statement and
prospectuses as required by federal securities laws (including printing, mailing
and legal costs) and the payment of necessary filing fees under the securities
laws of various states. The Trust estimates that these additional costs, which
will be paid by the Trust, will amount to approximately $210,000. The Board
anticipates that substantially all of these costs will be incurred by the Trust
prior to the effective date of the Conversion.
Neither the Trust nor its shareholders will realize any gain or loss for tax
purposes as a result of the Trust's conversion. However, the shareholders will
recognize a gain or loss if they later redeem their shares to the extent that
the redemption proceeds are greater or less than the respective adjusted tax
bases of their shares. Payment for any such redemption will be made within seven
days after receipt of a proper request for redemption (in accordance with
redemption procedures specified in the prospectus). Such payment may be
postponed or the right of redemption suspended under unusual circumstances that
affect the ability to value the securities in the Trust's
8
<PAGE>
portfolio, e.g., when normal trading is not taking place on the NYSE or when an
emergency makes it not reasonably practicable for the Trust to dispose of
portfolio securities or fairly to determine the value of its net assets.
AMENDMENT OF THE TRUST'S DECLARATION OF TRUST
If the Conversion is approved, the conversion of the Trust to an open-end
investment company will be accomplished by amending and restating the Trust's
Declaration of Trust to, among other things, authorize the issuance of
redeemable securities, provide that the Trust's outstanding shares will be
redeemable at the option of the shareholders and change the Trust's
subclassification under the 1940 Act from a closed-end investment company to an
open-end investment company. In connection with the amendment and restatement of
the Declaration of Trust, the Board of Trustees will also make necessary
conforming changes to the By-Laws of the Trust including those necessary to
provide that the Trust will not be required to hold an annual meeting in any
year in which it is not required to do so under the 1940 Act.
The proposed Amended and Restated Declaration of Trust reflects the changes
necessary for the Trust to operate as an open-end investment company as noted
above. In addition to the substantive changes enumerated in the preceding
paragraph, the proposed Amended and Restated Declaration of Trust no longer
contains provisions requiring supermajority shareholder approval of a merger,
consolidation or sale of all or substantially all the assets of the Trust and
providing that Trustees may only be removed for cause by the remaining trustees
and by an 80% vote of approval by the Trust's outstanding shares. While these
provisions, which generally serve to discourage a change in the control or
structure of a company that is not supported by its board of trustees, are often
part of the governing documents of closed-end investment companies whose shares
are traded on the open market, these provisions are less necessary for an
open-end investment company. Accordingly, the Amended and Restated Declaration
of Trust proposes to delete those provisions previously requiring shareholder
approval of a merger, consolidation or sale of all or substantially all the
assets of the Trust by the affirmative vote of at least 80% of the Trust's
outstanding shares, and provide, instead, that the vote of at least two-thirds
of the Trust's outstanding shares be required to approve such changes; provided,
however, that if such a change is recommended by the Trustees, then a majority
of shares represented and entitled to vote at a meeting at which a quorum is
present shall be sufficient to approve such changes. In addition, the Amended
and Restated Declaration of Trust proposes to delete the provision specifying
that a trustee can only be removed for cause by the remaining trustees and by an
80% vote of approval by the shareholders. Instead, the Amended and Restated
Declaration of Trust will provide that a trustee may be removed for any reason
by the action of two-thirds of the remaining trustees and by the affirmative
vote of not less than two-thirds of the Trust's outstanding shares.
If Proposal No. 1 is approved by shareholders, the proposed Amended and
Restated Declaration of Trust, a copy of which is attached to this Proxy
Statement as Exhibit A, is expected to be filed with the Secretary of the
Commonwealth of Massachusetts to become effective simultaneously with the
Conversion. Such filing will not be made, however, until shortly before a
registration statement under the Securities Act of 1933 covering the offering of
the shares of the Trust and the Trust's state securities registrations are
anticipated to become effective.
VOTE REQUIRED
Under the Trust's Declaration of Trust, amendments to the Trust's
Declaration of Trust must be approved by the holders of a majority of the
Trust's outstanding shares. However, the Trust's Declaration of Trust
specifically provide that the conversion of the Trust from a closed-end
investment company to an open-end investment company requires the approval of
80% of the Trust's outstanding shares. Accordingly, adoption of Proposal No. 1
will require the affirmative vote of 80% or more of the outstanding shares. If
the proposal to open-end the Trust
9
<PAGE>
and to amend the Declaration of Trust is not approved by the shareholders, the
Trust will continue to operate as a closed-end fund, the current provisions of
the Trust's Declaration of Trust will remain in effect, and the Board will
consider what further actions, if any, are desirable to reduce the discount at
which the Trust's shares have traded.
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS APPROVE THE PROPOSAL TO CONVERT THE
TRUST FROM A CLOSED-END INVESTMENT COMPANY TO AN OPEN-END INVESTMENT COMPANY.
(2) ELECTION OF TRUSTEES
As prescribed in the Trust's Declaration of Trust and By-Laws, at the first
meeting of Shareholders of the Trust, the Trustees were divided into four
classes and their initial terms of office were staggered so that one class would
be elected each year thereafter for a four-year term. Pursuant to an amendment
to the Trust's Declaration of Trust, the Trustees are currently divided into
three classes, each class having a term of three years. The number of Trustees
has currently been fixed by the Trustees, pursuant to the Trust's Declaration of
Trust, at nine with their terms of office fixed as follows: Class I: Messrs.
Bozic and Fiumefreddo; Class II: Messrs. Johnson, Kolton and Schroeder; and
Class III: Messrs. Garn, Haire, Nugent and Purcell. Eight of the current nine
Trustees are standing for election at this Meeting to serve until their
successors shall have been elected and qualified. Mr. Paul Kolton, whose term
expires at the 1997 Annual Meeting, will retire as a Trustee on July 1, 1996.
The Trustees have determined that the number of Trustees of the Trust is to be
fixed at eight, effective on the date of Mr. Kolton's retirement.
The classified Board was intended, in part, to make it more difficult and
time-consuming to change majority control of the Board of Trustees without its
consent and thus to reduce the Trust's vulnerability to an unsolicited takeover
proposal or similar action that does not contemplate an acquisition of all
outstanding voting stock of the Trust. However, the conversion of the Trust to
an open-end investment company would reduce, if not eliminate, the need for this
precautionary measure. Therefore, the Board of Trustees has considered and
approved the declassification of the Board in the event that the proposed
conversion of the Trust to open-end status is approved.
Seven of the current Trustees (Michael Bozic, Edwin J. Garn, John R. Haire,
Manuel H. Johnson, Paul Kolton, Michael E. Nugent and John L. Schroeder) are
"Independent Trustees," that is, Trustees who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act. As noted above, Mr. Kolton
will retire as a Trustee on July 1, 1996. The nominees for election as Trustees
have been proposed by the Trustees now serving or, in the case of nominees for
positions as Independent Trustees, by the Independent Trustees now serving. All
of the Trustees have been elected by the shareholders of the Trust.
Accordingly, if Proposal No. 1 to convert the Trust to an open-end
investment company is approved, the Board of Trustees will be declassified and
eight Trustees will be elected to hold office until the next meeting of
shareholders at which Trustees are elected and their successors shall have been
elected and qualified. After the Conversion is effected, the Trust will not be
required to hold annual meetings of shareholders and does not intend to hold
such meetings unless required by law to do so. It is the intention of the
persons named in the accompanying form of Proxy to vote in favor of the election
of Messrs. Bozic, Fiumefreddo, Johnson, Schroeder, Garn, Haire, Nugent and
Purcell, all of whom are currently members of the Board of Trustees. Should any
of the nominees become unable or unwilling to accept nomination or election, the
persons named in the proxy will exercise their voting power in favor of such
person or persons as the Board may recommend. All of the nominees have consented
to being named in this Proxy Statement and to serve if elected. The Trust knows
of no reason why said nominees would be unable or unwilling to accept nomination
or election. The Trustees will be elected by a plurality of the votes cast at
the Meeting.
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<PAGE>
The following information regarding each of the nominees for election as
Trustee and each of the members of the Board includes his principal occupations
and employment for at least the last five years, his age, shares of the Trust
owned, if any, as of May 28, 1996 (shown in parentheses), positions with the
Trust, and directorships or trusteeships in other companies which file periodic
reports with the SEC, including the 81 investment companies, including the
Trust, for which InterCapital serves as investment manager or adviser (referred
to herein as the "Dean Witter Funds") and the 12 investment companies for which
InterCapital's wholly-owned subsidiary, Dean Witter Services Company Inc.
("DWSC"), serves as the manager and TCW Funds Management, Inc. serves as the
investment adviser (referred to herein as the "TCW/DW Funds").
The nominees for Trustees to be elected at this Meeting are:
MICHAEL BOZIC, Trustee since April, 1994; age 55; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director or Trustee of the Dean Witter Funds; formerly President and Chief
Executive Officer of Hills Department Stores (May, 1991-July, 1995); formerly
variously Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck and Co.;
Director of Eaglemark Financial Services, Inc., the United Negro College Fund,
Weirton Steel Corporation.
CHARLES A. FIUMEFREDDO,* Trustee since July, 1991; age 63; Chairman, Chief
Executive Officer and Director of InterCapital, DWSC and Dean Witter
Distributors ("Distributors"); Executive Vice President and Director of Dean
Witter Reynolds Inc. ("DWR"); Chairman, Director or Trustee, President and Chief
Executive Officer of the Dean Witter Funds; Chairman, Chief Executive Officer
and Trustee of the TCW/DW Funds; Chairman and Director of Dean Witter Trust
Company ("DWTC"); Director and/or officer of various Dean Witter, Discover & Co.
("DWDC") subsidiaries; formerly Executive Vice President and Director of DWDC
(until February, 1993).
EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 63; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly Mayor
of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle Discovery
(April 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation (since
January, 1993); Director of Franklin Quest (time management systems) and John
Alden Financial Corp; Member of the board of various civic and charitable
organizations.
JOHN R. HAIRE, Trustee since April, 1988; age 71; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or Trustees
and Director or Trustee of the Dean Witter Funds; 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).
DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 47; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Koch Professor of
International Economics and Director of the Center for Global Market Studies at
George Mason University; Co-Chairman and a founder of the Group of Seven Council
(G7C), an international economic commission; Director or Trustee of the Dean
Witter Funds; Trustee of the TCW/DW Funds; Director of NASDAQ (since June,
1995); Director of Greenwich Capital Markets Inc. (broker-dealer); 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).
11
<PAGE>
MICHAEL E. NUGENT, Trustee since July, 1991; age 59; General Partner,
Triumph Capital, L.P., a private investment partnership; Director or Trustee of
the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly Vice President,
Bankers Trust Company and BT Capital Corporation (1984-1988); Director of
various business organizations.
JOHN L. SCHROEDER, Trustee since April, 1994; age 65; Retired; Director or
Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Citizens Utilities Company; formerly Executive Vice President and Chief
Investment Officer of The Home Insurance Company (August, 1991-September, 1995),
Chairman and Chief Investment Officer of Axe-Houghton Management and the
Axe-Houghton Funds (April, 1983-June, 1991) and President of USF&G Financial
Services, Inc. (June, 1990-June, 1991.)
PHILIP J. PURCELL,* Trustee since April, 1994; age 52; Chairman of the Board
of Directors and Chief Executive Officer of DWDC, DWR, and Novus Credit Services
Inc.; Director of InterCapital, DWSC and Distributors; Director or Trustee of
the Dean Witter Funds; Director and/or officer of various DWDC subsidiaries.
The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; David A. Hughey, Vice
President; Robert M. Scanlan, Vice President; Robert S. Giambrone, Vice
President; Joseph J. McAlinden, Vice President; Rajesh K. Gupta, Vice President;
and Thomas F. Caloia, Treasurer. In addition, Peter M. Avelar, Jonathan R. Page
and James F. Willison are Vice Presidents of the Trust and Marilyn K. Cranney,
Barry Fink, Lou Anne D. McInnis, Carsten Otto and Ruth Rossi serve as Assistant
Secretaries. Mr. Curtis is 64 years old and is currently Senior Vice President,
Secretary and General Counsel of InterCapital and DWSC and Assistant Secretary
of DWR; he is also Senior Vice President, Assistant Secretary and Assistant
General Counsel of Distributors and Senior Vice President and Secretary of DWTC.
Mr. Scanlan is 60 years old and is currently President and Chief Operating
Officer of InterCapital (since March, 1993) and DWSC; he is also Executive Vice
President of Distributors and Executive Vice President and a Director of DWTC.
He was previously Executive Vice President of InterCapital (July, 1992-March,
1993) and prior to thereto was Chairman of Harborview Group Inc. Mr. Hughey is
64 years old and is currently Executive Vice President and Chief Administrative
Officer of InterCapital and DWSC; he is also Executive Vice President and Chief
Administrative Officer of Distributors and DWTC as well as a Director of DWTC.
He was previously President of DWTC (October, 1989-March, 1993). Mr. Giambrone
is 41 years old and is currently Senior Vice President of InterCapital, DWSC,
Distributors and DWTC (since August, 1995) and a Director of DWTC (since April,
1996). He was formerly a partner of KPMG Peat Marwick LLP. Mr. McAlinden is 52
years old and is currently Executive Vice President of InterCapital (since
April, 1996). He was previously a Senior Vice President of InterCapital (June,
1995-April, 1996) and prior thereto was a Managing Director of Dillon Read. Mr.
Gupta is 35 years old and is currently Senior Vice President of InterCapital.
Mr. Caloia is 50 years old and is currently First Vice President of InterCapital
and DWSC. Mr. Avelar is 36 years old and is currently Senior Vice President of
InterCapital. Mr. Page is 49 years old and is currently Senior Vice President of
InterCapital. Mr. Willison is 52 years old and is currently Senior Vice
President of InterCapital. Other than Mr. Scanlan, Mr. Giambrone and Mr.
McAlinden, each of the above officers has been an employee of InterCapital or
DWR (formerly the corporate parent of InterCapital) for over five years.
- ------------
* Messrs. Fiumefreddo and Purcell may be deemed "interested persons" of the
Trust and its Investment Adviser as defined in Section 2(a)(19) of the Act, due
to their affiliation with the Investment Adviser and/or its affiliated
companies.
12
<PAGE>
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees currently consists of nine (9) 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
Proxy Statement, there are a total of 81 Dean Witter Funds, comprised of 121
portfolios. As of April 30, 1996, the Dean Witter Funds had total net assets of
approximately $75.7 billion and more than five million shareholders.
Seven Trustees (78% 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. Five of the seven
independent Trustees are also Independent Trustees of the TCW/DW Funds.
Law and regulation establish both general 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. 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. There are no nominating or
compensation committees of the Trustees.
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.
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 Funds' systems 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 investment, if any, made by the Fund.
13
<PAGE>
For the fiscal year ended September 30, 1995, the Board of Trustees of the Trust
held six meetings, and the Audit Committee, the Committee of the Independent
Trustees and the Derivatives Committee of the Trust held, two, ten and three
meetings, respectively. No Trustee attended fewer than 75% of the meetings of
the Board of Trustees, the Audit Committee, the Committee of the Independent
Trustees or the Derivatives Committee held while he served in such positions.
DUTIES OF THE CHAIRMAN OF THE COMMITTEES
The Chairman of the Committees 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 all three 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 Committees 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 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 ($1,200
prior to September 30, 1995) 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 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 $2,400, in each case inclusive of the
14
<PAGE>
Committee meeting fees). 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 September 30, 1995.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- -------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic................................................. $1,900
Edwin J. Garn................................................. 2,000
John R. Haire................................................. 4,350(1)
Dr. Manuel H. Johnson......................................... 2,000
Paul Kolton................................................... 2,000
Michael E. Nugent............................................. 1,850
John L. Schroeder............................................. 1,850
<FN>
- -------------
(1) Of Mr. Haire's compensation from the Trust, $3,150 is paid to him as
Chairman of the Committee of the Independent Trustees ($2,400) and as
Chairman of the Audit Committee ($750).
</TABLE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1995 for services
to the 79 Dean Witter Funds and, in the case of Messrs. Haire, Johnson, Kolton,
Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at December 31,
1995. With respect to Messrs. Haire, Johnson, Kolton, 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. Mr. Schroeder was elected
as a Trustee of the TCW/DW Funds on April 20, 1995.
COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
TOTAL
FOR SERVICE AS COMPENSATION
FOR SERVICE CHAIRMAN OF PAID
AS DIRECTOR OR COMMITTEES OF FOR SERVICES
TRUSTEE AND FOR SERVICE AS INDEPENDENT TO
COMMITTEE MEMBER TRUSTEE AND DIRECTORS/ 79 DEAN
OF 79 DEAN COMMITTEE MEMBER TRUSTEES AND WITTER
WITTER OF 11 TCW/DW AUDIT FUNDS AND 11
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS COMMITTEES TCW/DW FUNDS
- --------------------------- ---------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C>
Michael Bozic.............. $126,050 -- -- $126,050
Edwin J. Garn.............. 136,450 -- -- 136,450
John R. Haire.............. 98,450 $82,038 $217,350(2) 397,838
Dr. Manuel H. Johnson...... 136,450 82,038 -- 218,488
Paul Kolton................ 136,450 54,788 36,900(3) 228,138
Michael E. Nugent.......... 124,200 75,038 -- 199,238
John L. Schroeder.......... 136,450 46,964 -- 183,414
<FN>
- -------------
(2) For the 79 Dean Witter Funds in operation at December 31, 1995.
(3) For the 11 TCW/DW Funds in operation at December 31, 1995. Mr. Kolton will
retire as a Director or Trustee of each Dean Witter Fund and each TCW/DW
Fund by July 1, 1996. Upon Mr. Kolton's retirement, Mr. Haire will become
Chairman of the Committee of the Independent Trustees and the Audit
Committee of the TCW/DW Funds in addition to serving in such positions for
the Dean Witter Funds.
</TABLE>
15
<PAGE>
As of the date of this Proxy Statement, 57 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 Board.(4) "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 September
30, 1995 and by the 57 Dean Witter Funds (including the Trust) as of December
31, 1995, and the estimated retirement benefits for the Trust's Independent
Trustees from the Trust as of September 30, 1995 and from the 57 Dean Witter
Funds as of December 31, 1995.
RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL FUNDS ESTIMATED ANNUAL
------------------------------------- RETIREMENT BENEFITS BENEFITS
ESTIMATED CREDITED ESTIMATED ACCRUED AS EXPENSES UPON RETIREMENT (5)
YEARS OF SERVICE AT PERCENTAGE OF --------------------- ---------------------
RETIREMENT (MAXIMUM ELIGIBLE BY THE BY ALL FROM THE FROM ALL
NAME OF INDEPENDENT TRUSTEE 10) COMPENSATION TRUST FUNDS TRUST FUNDS
- -------------------------------------------- ------------------- ---------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic............................... 10 50.0% $ 341 $ 26,359 $ 950 $ 51,550
Edwin J. Garn............................... 10 50.0 634 41,901 950 51,550
John R. Haire............................... 10 50.0 3,132 261,763 2,355 130,404
Dr. Manuel H. Johnson....................... 10 50.0 258 16,748 950 51,550
Paul Kolton................................. 10 49.6 1,369 113,186 1,116 58,325
Michael E. Nugent........................... 10 50.0 453 30,370 950 51,550
John L. Schroeder........................... 8 41.7 670 51,812 792 42,958
<FN>
- ------------
(4) 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.
(5) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (4)
above.
</TABLE>
16
<PAGE>
(3) IF PROPOSAL NUMBER 1 IS APPROVED, TO APPROVE A
NEW MANAGEMENT AGREEMENT
On April 17, 1996, a majority of the Board of Trustees, including a majority
of the Independent Trustees, approved a new investment management agreement
between the Trust and InterCapital (the "New Management Agreement"). The terms
of the New Management Agreement are similar to the terms of the management
agreement currently in effect between the Trust and the Investment Manager dated
June 30, 1993 (the "Current Management Agreement"), except as discussed below.
If Proposal No. 1 is approved by shareholders of the Trust, the Current
Management Agreement will be terminated and the New Management Agreement will
become effective upon effectiveness of the Conversion. If for any reason the
Conversion is not effected, the Current Management Agreement will remain in
effect. The form of New Management Agreement is attached to this Proxy Statement
as Exhibit B.
TERMS OF THE CURRENT MANAGEMENT AGREEMENT
The Current Management Agreement provides that the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodity markets and securities and commodities as it deems
necessary or useful to discharge its duties under the Current Management
Agreement, and that it shall continuously supervise the management of the assets
of the Trust in a manner consistent with the investment objectives and policies
of the Trust and subject to such other limitations and directions as the Board
may, from time to time, prescribe.
Under the Current Management Agreement, the Trust is obligated to bear all
of the costs and expenses of its operations, except those specifically assumed
by the Investment Manager, including, without limitation: charges and expenses
of any registrar, any custodian or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities or commodities and other property,
and any stock transfer or dividend agent or agents appointed by the Trust;
brokers' commissions chargeable to the Trust in connection with portfolio
securities transactions to which the Trust is a party; all taxes, including
securities or commodities issuance and transfer taxes, and fees payable by the
Trust to federal, state or other governmental agencies; the cost and expense of
engraving or printing certificates representing shares of the Trust; all costs
and expenses in connection with registration and maintenance of registration of
the Trust and of its shares with the SEC and various states and other
jurisdictions (including filing fees and legal fees and disbursements of counsel
and the costs and expenses of preparation, printing (including typesetting) and
distributing prospectuses for such purposes); all expenses of shareholders' and
Trustees' meetings and of preparing, printing and mailing 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 Investment Manager or
any corporate affiliate of the Investment Manager; all expenses incident to the
payment of any dividend or distribution program; charges and expenses of any
outside service used for the pricing of the Trust's shares; charges and expenses
of legal counsel, including counsel to the Independent Trustees of the Trust or
the Investment Manager, and of independent accountants, in connection with any
matter relating to the Trust; membership dues of industry associations; interest
payable on the Trust's borrowings; fees and expenses incident to the listing of
the Trust's shares on any stock exchange; 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 related
thereto); and all other charges and costs to the Trust's operations unless
otherwise explicitly provided in the Current Management Agreement.
17
<PAGE>
The Current Management Agreement provides that the Investment Manager shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Manager has authority to place
orders for the purchase and sale of portfolio securities on behalf of the Trust
without prior approval of its Trustees. The Trustees review the investment
portfolio at their regular meetings. In addition, the Investment Manager pays
the compensation of the officers of the Trust and provides the Trust with office
space, facilities and equipment, and clerical help and bookkeeping services and
telephone service, heat, light, power and other utilities. In return for its
services and the expenses the Investment Manager assumes under the Current
Management Agreement, the Trust pays the Investment Manager compensation which
is calculated and accrued weekly and payable monthly and which is determined by
applying the annual rate of 0.60% to the Trust's average weekly net assets. For
the fiscal year ended September 30, 1995, the Trust accrued to the Investment
Manager total compensation of $2,865,436. The net assets of the Trusts totalled
$475,471,133 at September 30, 1995.
The Current Management Agreement had an initial term ending April 30, 1994
and provides that, after the initial period of effectiveness, it will continue
in effect from year to year thereafter provided such continuance is approved at
least annually by vote of a majority, as defined in the 1940 Act, of the
outstanding voting securities of the Trust or by the Trustees of the Trust, and,
in either event, by the vote cast in person by a majority of the Trustees who
are not parties to the Current Management Agreement or "interested persons" of
any such party (as defined in the 1940 Act) at a meeting called for the purpose
of voting on such approval. The Current Management Agreement's continuation
until April 30, 1997 was approved by the Trustees, including a majority of the
Independent Trustees, at a Meeting of the Trustees held on April 17, 1996,
called for the purpose of approving the Current Management Agreement.
The Current Management Agreement also provides that it may be terminated at
any time by the Investment Manager, the Trustees or by a vote of a majority of
the outstanding voting securities of the Trust, in each instance without the
payment of any penalty, on thirty days' notice and provides for its automatic
termination in the event of its assignment.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, a wholly-owned subsidiary of InterCapital, 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 such 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 Current Management
Agreement.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. is the Trust's investment manager.
InterCapital maintains its offices at Two World Trade Center, New York, New York
10048. InterCapital, which was incorporated in July, 1992, is a wholly-owned
subsidiary of DWDC, a balanced financial services organization providing a broad
range of nationally marketed credit and investment products. In an internal
reorganization which took place in January, 1993, InterCapital assumed the
investment advisory, management and administrative activities previously
performed by the InterCapital Division of DWR. InterCapital also manages and
advises or administers portfolios of other investment companies and pension
plans and other institutional and individual investors.
18
<PAGE>
The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:
Phillip J. Purcell, Chairman of the Board of Directors and Chief Executive
Officer of DWDC and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Dean Witter
Capital, Executive Vice President of DWDC and Director of DWR, Distributors,
DWSC, DWTC and InterCapital; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and Director
of DWR, Distributors, InterCapital, DWTC and DWSC; Charles A. Fiumefreddo,
Executive Vice President and Director of DWR, Chairman of the Board of
Directors, Chief Executive Officer and Director of InterCapital, DWSC and
Distributors and Chairman of the Board of Directors and Director of DWTC;
Christine A. Edwards, Executive Vice President, Secretary and General Counsel of
DWDC, Executive Vice President, Secretary, General Counsel and Director of DWR,
Executive Vice President, Secretary, Chief Legal Officer and Director of
Distributors and Director of InterCapital and DWSC; and Thomas C. Schneider,
Executive Vice President and Chief Financial Officer of DWDC and Executive Vice
President, Chief Financial Officer and Director of DWR, Distributors,
InterCapital and DWSC.
The business address of the foregoing Directors and Executive Officers is
Two World Trade Center, New York, New York 10048.
InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. Appendix C to this Proxy Statement lists the investment companies for
which InterCapital provides investment management or investment advisory
services and which have similar investment objectives to that of the Trust and
sets forth the net assets and fees payable by such companies, including the
Trust.
DWDC has its offices at Two World Trade Center, New York, New York 10048.
There are various lawsuits pending against DWDC involving material amounts
which, in the opinion of its management, will be resolved with no material
effect on the consolidated financial position of the company.
During the fiscal year ended September 30, 1995, the Trust accrued to Dean
Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $246,147.
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is an
affiliated broker of InterCapital. During the fiscal year ended September 30,
1995, the Trust did not pay any brokerage commissions to DWR.
THE NEW MANAGEMENT AGREEMENT
The New Management Agreement will modify the terms of the Current Management
Agreement to reflect the reduction in the rate of the advisory fee from 0.60% to
0.35% and in certain minor respects to reflect the Trust's operation as an
open-end investment company, including adding a provision relating to state blue
sky limitations described under Proposal No. 1. In addition, because the Trust
will calculate its net asset value daily rather than weekly, the fee payable
under the New Management Agreement will be based on a percentage of the Trust's
average daily net assets. The management fee is currently based on a percentage
of the Trust's average weekly net assets. Specifically, under the New Management
Agreement, the advisory fee payable to InterCapital by the Trust will be at an
annual rate of 0.35 of 1% of the Trust's average daily net assets.
If Proposal No. 1 is not approved, the Current Management Agreement will
remain in effect in accordance with its terms.
19
<PAGE>
VOTE REQUIRED
The favorable vote of a majority of the outstanding voting securities of the
Trust is required for the approval of the Management Agreement. Such a majority
is defined in the 1940 Act as the lesser of: (a) 67% or more of the shares
present at the Meeting, if the holders of more than 50% of the outstanding
shares of the Trust are present or represented by proxy, or (b) more than 50% of
the outstanding shares.
If the shareholders do not approve the New Management Agreement, the Current
Management Agreement will remain in effect.
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS APPROVE THE NEW MANAGEMENT AGREEMENT.
(4) IF PROPOSAL NUMBER 1 IS APPROVED, TO APPROVE A PLAN OF DISTRIBUTION
On April 17, 1996, the Board of Trustees of the Trust, including a majority
of the Independent Trustees who have no direct or indirect financial interest in
the proposed Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act (the
"Plan") or any related agreement (the "Independent 12b-1 Trustees"), approved
the Plan and a distribution agreement for the Trust's existing shares (the
"Distribution Agreement") in connection with the conversion of the Trust from a
closed-end investment company to an open-end investment company. The Board of
Trustees recommends the Plan to the shareholders of the Trust for approval or
disapproval at this Special Meeting of Shareholders. The Distribution Agreement
does not require and, is not being submitted for, shareholder approval.
The purpose of the Plan is to compensate the Distributor for services it or
any selected dealer provides and to reimburse the Distributor and others for
expenses borne in connection with the distribution of the Trust's shares.
If Proposal No. 1 is approved by shareholders and if this Proposal No. 4 is
approved, the Plan will be applicable to the shares of the Trust (the existing
shares of the Trust) and will become effective upon conversion of the Trust to
open-end status. If for any reason the Conversion is not effected, the Plan
would not be appropriate and, therefore, would not become effective.
The Plan authorizes the Trust to compensate the Distributor for all costs
incurred by it in distributing the shares of the Trust at an annual rate not to
exceed .20 of 1% per annum of the average monthly net assets of the Trust. The
Plan specifies categories of compensable expenditures which include: the payment
of commissions for sale of the Trust's shares and incentive compensation to and
expenses of DWR's account executives and others who engage in or support
distribution or shares or who service shareholder accounts, including overhead
and telephone expenses; printing and distribution of prospectuses and reports
used in connection with the offering of the Trust's shares to other than current
shareholders; and preparation, printing and distribution of sales literature and
advertising materials.
Under the Plan, the Trust is obligated to reimburse the Distributor, DWR,
its affiliates and other broker-dealers for distribution expenses incurred by
them specifically on behalf of the Trust. If the Distributor's expenses exceed
the amounts of payments made by the Trust, the Trust will not be obligated to
pay any additional expenses in the year incurred or in later years. If the
Distributor's expenses are less than the amount of payments made by the Trust,
it will make reimbursement to the Trust.
In considering whether or not to approve the Plan, the Board reviewed, among
other things, the nature and scope of the services to be provided by the
Distributor, the Board also considered the potential benefit of the Plan
20
<PAGE>
to shareholders and potential investors. The Trustees took into account the
competitive market environment in which the Trust will operate as an open-end
investment company. More specifically, the Trustees recognized the need to
provide adequate compensation to broker-dealers who serve existing shareholders
or offer the Trust to prospective shareholders. Without such service, the Trust
would incur a substantial risk that it could not maintain or increase its
assets, threatening the viability of the Trust as an investment company. Based
upon their review, the Trustees, including a majority of the Independent 12b-1
Trustees, determined that there is a reasonable likelihood that the Plan will
benefit the Trust and its shareholders.
As required by Rule 12b-1 under the 1940 Act, if approved by the
shareholders, the Plan will continue in effect from year to year, provided such
continuance is approved at least annually by a majority of the Board of Trustees
and a majority of the Independent 12b-1 Trustees by votes cast in person at a
meeting called for the purpose of voting on the continuation of the Plan. The
Plan may not be amended to increase materially the amount to be spent for the
services described therein without approval by a majority of the outstanding
shareholders of the Trust. All material amendments of the Plan must also 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 the vote of a majority of the outstanding
shares of the Trust (as defined in the 1940 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 election and nomination of the Independent Trustees will be committed to the
discretion of the Independent Trustees.
VOTE REQUIRED
The proposed Plan of Distribution requires approval of a majority of the
outstanding voting securities of the Trust (as defined in the 1940 Act and set
forth above in Proposal No. 3).
THE BOARD OF TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS APPROVE THE PLAN OF DISTRIBUTION.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business at the Meeting
or the vote required to approve or reject any proposal is not obtained, the
persons named as proxies may propose one or more adjournments of the meeting for
a total of not more than 60 days in the aggregate to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of the
holders of a majority of the Trust's shares present in person or by proxy at the
meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of Proposal No. 1 and
will vote against any such adjournment those proxies required to be voted
against that proposal.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed to
be present at the Meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares held
in street name for which the broker indicates that instructions have been
received from the beneficial owners or other persons entitled to vote and for
which the broker does not have discretionary authority.
SHAREHOLDER PROPOSALS
If Proposal No. 1 is approved and the Trust is converted to open-end status,
the Trust does not intend to hold annual meetings of shareholders unless
otherwise required by law. Accordingly, if the Conversion is effected,
21
<PAGE>
proposals of shareholders intended to be presented at the next meeting of
shareholders must be received a reasonable time prior to the mailing of the
proxy statement and form of proxy relating to that meeting. The mere submission
of a proposal does not guarantee its inclusion in the proxy materials or its
presentation at the meeting. Certain rules under the federal securities laws
must be met.
REPORTS TO SHAREHOLDERS
The Trust's Annual Report for its fiscal year ended September 30, 1995, and
its Semi-Annual Report succeeding the Annual Report, is available without charge
upon request from Adrienne Ryan-Pinto at Dean Witter Trust Company, Harborside
Financial Center, Plaza Two, Jersey City, New Jersey 07311 (telephone
1-800-869-NEWS)(toll-free).
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the Meeting,
it is the intention of the persons named in the enclosed form of proxy, or their
substitutes, to vote all shares that they are entitled to vote on any such
matter, utilizing such proxy in accordance with their best judgment on such
matters.
By Order of the Board of Trustees
SHELDON CURTIS
SECRETARY
22
<PAGE>
EXHIBIT A
DEAN WITTER GOVERNMENT INCOME TRUST
TWO WORLD TRADE CENTER
NEW YORK, NY 10048
AMENDED AND RESTATED DECLARATION OF TRUST
DATED: SEPTEMBER , 1996
A-1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C> <C>
ARTICLE I -- NAME AND DEFINITIONS............................................................................... A-5
Section 1.1 Name............................................................................................ A-5
Section 1.2 Definitions..................................................................................... A-5
ARTICLE II -- TRUSTEES.......................................................................................... A-6
Section 2.1 Number of Trustees.............................................................................. A-6
Section 2.2 Election and Term............................................................................... A-6
Section 2.3 Resignation and Removal......................................................................... A-6
Section 2.4 Vacancies....................................................................................... A-7
Section 2.5 Delegation of Power to Other Trustees........................................................... A-7
ARTICLE III -- POWERS OF TRUSTEES............................................................................... A-7
Section 3.1 General......................................................................................... A-7
Section 3.2 Investments..................................................................................... A-8
Section 3.3 Legal Title..................................................................................... A-8
Section 3.4 Issuance and Repurchase of Securities........................................................... A-8
Section 3.5 Borrowing Money; Lending Trust Assets........................................................... A-8
Section 3.6 Delegation; Committees.......................................................................... A-9
Section 3.7 Collection and Payment.......................................................................... A-9
Section 3.8 Expenses........................................................................................ A-9
Section 3.9 Manner of Acting; By-Laws....................................................................... A-9
Section 3.10 Miscellaneous Powers............................................................................ A-9
Section 3.11 Principal Transactions.......................................................................... A-9
Section 3.12 Litigation...................................................................................... A-10
ARTICLE IV -- INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN AND TRANSFER AGENT..................................... A-10
Section 4.1 Investment Adviser.............................................................................. A-10
Section 4.2 Administrative Services......................................................................... A-10
Section 4.3 Distributor..................................................................................... A-11
Section 4.4 Transfer Agent.................................................................................. A-11
Section 4.5 Custodian....................................................................................... A-11
Section 4.6 Parties to Contract............................................................................. A-11
ARTICLE V -- LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS...................................... A-11
Section 5.1 No Personal Liability of Shareholders, Trustees, etc............................................ A-11
Section 5.2 Non-Liability of Trustees, etc.................................................................. A-12
Section 5.3 Indemnification................................................................................. A-12
Section 5.4 No Bond Required of Trustees.................................................................... A-12
Section 5.5 No Duty of Investigation; Notice in Trust Instruments, etc...................................... A-12
Section 5.6 Reliance on Experts, etc........................................................................ A-13
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----------
ARTICLE VI -- SHARES OF BENEFICIAL INTEREST..................................................................... A-13
<S> <C> <C>
Section 6.1 Beneficial Interest............................................................................. A-13
Section 6.2 Rights of Shareholders.......................................................................... A-13
Section 6.3 Trust Only...................................................................................... A-13
Section 6.4 Issuance of Shares.............................................................................. A-13
Section 6.5 Register of Shares.............................................................................. A-14
Section 6.6 Transfer of Shares.............................................................................. A-14
Section 6.7 Notices......................................................................................... A-14
Section 6.8 Voting Powers................................................................................... A-14
Section 6.9 Series or Classes of Shares..................................................................... A-15
ARTICLE VII -- REDEMPTIONS...................................................................................... A-17
Section 7.1 Redemptions..................................................................................... A-17
Section 7.2 Redemption at the Option of the Trust........................................................... A-17
Section 7.3 Effect of Suspension of Determination of Net Asset Value........................................ A-18
Section 7.4 Suspension of Right of Redemption............................................................... A-18
ARTICLE VIII -- DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS.................................. A-18
Section 8.1 Net Asset Value................................................................................. A-18
Section 8.2 Distributions to Shareholders................................................................... A-18
Section 8.3 Determination of Net Income..................................................................... A-19
Section 8.4 Power to Modify Foregoing Procedures............................................................ A-19
ARTICLE IX -- DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC........................................... A-19
Section 9.1 Duration........................................................................................ A-19
Section 9.2 Termination of Trust or a Series................................................................ A-19
Section 9.3 Amendment Procedure............................................................................. A-20
Section 9.4 Merger, Consolidation and Sale of Assets........................................................ A-21
Section 9.5 Incorporation................................................................................... A-21
ARTICLE X -- REPORTS TO SHAREHOLDERS............................................................................ A-21
ARTICLE XI -- MISCELLANEOUS..................................................................................... A-22
Section 11.1 Filing.......................................................................................... A-22
Section 11.2 Resident Agent.................................................................................. A-22
Section 11.3 Governing Law................................................................................... A-22
Section 11.4 Counterparts.................................................................................... A-22
Section 11.5 Reliance by Third Parties....................................................................... A-22
Section 11.6 Provisions in Conflict with Law or Regulations.................................................. A-22
Section 11.7 Use of the Name "Dean Witter"................................................................... A-22
Section 11.8 Principal Place of Business..................................................................... A-23
</TABLE>
A-3
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
DEAN WITTER GOVERNMENT INCOME TRUST
DATED AS OF: SEPTEMBER , 1996
RECITALS
Dean Witter Government Income Trust was created under a written declaration
of trust finally executed and delivered in Boston, Massachusetts on November 20,
1987, and amended by a filing made November 13, 1989.
The Trustees desire to amend the Declaration of Trust pursuant to the
authority granted under Section 8.3 thereof.
AGREEMENT
The parties signatory hereto, as trustees, do hereby affirm the existence of
a trust by executing this Amended and Restated Declaration of Trust and by
causing the same to be filed with the Secretary of State of the Commonwealth of
Massachusetts and the City Clerk of Boston, Massachusetts. The original
Declaration of Trust is amended and restated as follows:
THIS AMENDED AND RESTATED DECLARATION OF TRUST of Dean Witter Government
Income Trust is made the th day of September, 1996 by the parties signatory
hereto, as trustees (such persons, so long as they shall continue in office in
accordance with the terms of this Declaration of Trust, and all other persons
who at the time in question have been duly elected or appointed as trustees in
accordance with the provisions of this declaration of trust and are then in
office, being hereinafter called the "Trustees").
A-4
<PAGE>
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. NAME. The name of the trust created hereby is the "Dean
Witter Government Income Trust," and so far as may be practicable the Trustees
shall conduct the Trust's activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" wherever herein used) shall
refer to the Trustees as Trustees, and not as individuals, or personally, and
shall not refer to the officers, agents, employees or Shareholders of the Trust.
Should the Trustees determine that the use of such name is not advisable, they
may use such other name for the Trust as they deem proper and the Trust may hold
its property and conduct its activities under such other name.
Section 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "BY-LAWS" means the By-Laws referred to in Section 3.9 hereof, as
from time to time amended.
(b) the terms "COMMISSION," "AFFILIATED PERSON" and "INTERESTED PERSON,"
have the meanings given them in the 1940 Act.
(c) "DECLARATION" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "DECLARATION," "HEREOF,"
"HEREIN" and "HEREUNDER" shall be deemed to refer to this Declaration rather
than the article or section in which such words appear.
(d) "DISTRIBUTOR" means the party, other than the Trust, to a contract
described in Section 4.3 hereof.
(e) "FUNDAMENTAL POLICIES" shall mean the investment policies and
restrictions set forth in the Prospectus and Statement of Additional
Information and designated as fundamental policies therein.
(f) "INVESTMENT ADVISER" means any party, other than the Trust, to a
contract described in Section 4.1 hereof.
(g) "MAJORITY SHAREHOLDER VOTE" means the vote of the holders of a
majority of Shares, which shall consist of: (i) a majority of Shares
represented in person or by proxy and entitled to vote at a meeting of
Shareholders at which a quorum, as determined in accordance with the
By-Laws, is present; (ii) a majority of Shares issued and outstanding and
entitled to vote when action is taken by written consent of Shareholders;
and (iii) a "majority of the outstanding voting securities," as the phrase
is defined in the 1940 Act, when any action is required by the 1940 Act by
such majority as so defined.
(h) "1940 ACT" means the Investment Company Act of 1940 and the rules
and regulations thereunder as amended from time to time.
(i) "PERSON" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
(j) "PROSPECTUS" means the Prospectus and Statement of Additional
Information constituting parts of the Registration Statement of the Trust
under the Securities Act of 1933 as such Prospectus and Statement of
Additional Information may be amended or supplemented and filed with the
Commission from time to time.
A-5
<PAGE>
(k) "SERIES" means one of the separately managed components of the Trust
(or, if the Trust shall have only one such component, then that one) as set
forth in Section 6.1 hereof or as may be established and designated from
time to time by the Trustees pursuant to that section.
(l) "SHAREHOLDER" means a record owner of outstanding Shares.
(m) "SHARES" means the units of interest into which the beneficial
interest in the Trust shall be divided from time to time, including the
shares of any and all series or classes which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares.
(n) "TRANSFER AGENT" means the party, other than the Trust, to the
contract described in Section 4.4 hereof.
(o) "TRUST" means the Dean Witter Government Income Trust.
(p) "TRUST PROPERTY" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(q) "TRUSTEES" means the persons who have signed the Declaration, so
long as they shall continue in office in accordance with the terms hereof,
and all other persons who may from time to time be duly elected or
appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. NUMBER OF TRUSTEES. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15).
Section 2.2. ELECTION AND TERM. The Trustees shall be elected by a vote of
a majority of the outstanding voting securities, as defined by the 1940 Act,
held by the initial shareholder(s) (i.e., the person(s) that supplied the seed
capital required under Section 14(a) of the 1940 Act). The Trustees shall have
the power to set and alter the terms of office of the Trustees, and they may at
any time lengthen or lessen their own terms or make their terms of unlimited
duration, subject to the resignation and removal provisions of Section 2.3
hereof. Subject to Section 16(a) of the 1940 Act, the Trustees may elect their
own successors and may, pursuant to Section 2.4 hereof, appoint Trustees to fill
vacancies. The Trustees shall adopt By-Laws not inconsistent with this
Declaration or any provision of law to provide for election of Trustees by
Shareholders at such time or times as the Trustees shall determine to be
necessary or advisable.
Section 2.3. RESIGNATION AND REMOVAL. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any of the Trustees may be removed (provided the aggregate number of
Trustees after such removal shall not be less than the number required by
Section 2.1 hereof) by the action of two-thirds of the remaining Trustees or by
the action of the Shareholders of record of not less than two-thirds of the
Shares outstanding (for purposes of determining the circumstances and procedures
under which such removal by the Shareholders may take place, the provisions of
Section 16(c) of the 1940 Act or of the corporate or business statute of any
state in which shares of the Trust are
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sold, shall be applicable to the same extent as if the Trust were subject to the
provisions of that Section). Upon the resignation or removal of a Trustee, or
his otherwise ceasing to be a Trustee, he shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in the name of
the resigning or removed Trustee. Upon the incapacity or death of any Trustee,
his legal representative shall execute and deliver on his behalf such documents
as the remaining Trustees shall require as provided in the preceding sentence.
Section 2.4. VACANCIES. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy existing by reason of an
increase in the number of Trustees, subject to the provisions of Section 16(a)
of the 1940 Act, the remaining Trustees shall fill such vacancy by the
appointment of such other person as they or he, in their or his discretion,
shall see fit, made by a written instrument signed by a majority of the
remaining Trustees. Any such appointment shall not become effective, however,
until the person named in the written instrument of appointment shall have
accepted in writing such appointment and agreed in writing to be bound by the
terms of the Declaration. An appointment of a Trustee may be made in
anticipation of a vacancy to occur at a later date by reason of retirement,
resignation or increase in the number of Trustees, provided that such
appointment shall not become effective prior to such retirement, resignation or
increase in the number of Trustees. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided in this Section 2.4, the
Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees shall be conclusive evidence
of the existence of such vacancy.
Section 2.5. DELEGATION OF POWER TO OTHER TRUSTEES. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under the Declaration except as herein otherwise expressly provided.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. GENERAL. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts.
In any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities wheresoever in the world they may be
located as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
the Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
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Section 3.2. INVESTMENTS. The Trustees shall have the power to:
(a) conduct, operate and carry on the business of an investment company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute, lend or
otherwise deal in or dispose of negotiable or nonnegotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, reverse repurchase
agreements, options, commodities, commodity futures contracts and related
options, currencies, currency futures and forward contracts, and other
securities, investment contracts and other instruments of any kind,
including, without limitation, those issued, guaranteed or sponsored by any
and all Persons including, without limitation, states, territories and
possessions of the United States, the District of Columbia and any of the
political subdivisions, agencies or instrumentalities thereof, and by the
United States Government or its agencies or instrumentalities, foreign or
international instrumentalities, or by any bank or savings institution, or
by any corporation or organization organized under the laws of the United
States or of any state, territory or possession thereof, and of corporations
or organizations organized under foreign laws, or in "when issued" contracts
for any such securities, or retain Trust assets in cash and from time to
time change the investments of the assets of the Trust; and to exercise any
and all rights, powers and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more persons, firms, associations or
corporations to exercise any of said rights, powers and privileges in
respect of any of said instruments; and the Trustees shall be deemed to have
the foregoing powers with respect to any additional securities in which the
Trust may invest should the Fundamental Policies be amended.
The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.
Section 3.3. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine, provided
that the interest of the Trust therein is appropriately protected. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee he shall automatically cease to have
any right, title or interest in any of the Trust Property, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 3.4. ISSUANCE AND REPURCHASE OF SECURITIES. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in Shares and,
subject to the provisions set forth in Articles VII, VIII and IX and Section 6.9
hereof, to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of the Commonwealth of Massachusetts governing business corporations.
Section 3.5. BORROWING MONEY; LENDING TRUST ASSETS. Subject to the
Fundamental Policies, the Trustee shall have power to borrow money or otherwise
obtain credit and to secure the same by mortgaging, pledging or otherwise
subjecting as security the assets of the Trust, to endorse, guarantee, or
undertake the performance of any obligation, contract or engagement of any other
Person and to lend Trust assets.
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Section 3.6. DELEGATION; COMMITTEES. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient.
Section 3.7. COLLECTION AND PAYMENT. Subject to Section 6.9 hereof, the
Trustees shall have power to collect all property due to the Trust; to pay all
claims, including taxes, against the Trust Property; to prosecute, defend,
compromise or abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligations, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 3.8. EXPENSES. Subject to Section 6.9 hereof, the Trustees shall
have the power to incur and pay any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes of the
Declaration, and to pay reasonable compensation from the funds of the Trust to
themselves as Trustees. The Trustees shall fix the compensation of all officers,
employees and Trustees.
Section 3.9. MANNER OF ACTING; BY-LAWS. Except as otherwise provided
herein or in the By-Laws or by any provision of law, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (a quorum being present), including any meeting held by means of a
conference telephone circuit or similar communications equipment by means of
which all persons participating in the meeting can hear each other, or by
written consents of all the Trustees. The Trustees may adopt By-Laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-Laws to the extent such power is not
reserved to the Shareholders.
Section 3.10. MISCELLANEOUS POWERS. The Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may deem desirable for
the transaction of the business of the Trust or any Series thereof; (b) enter
into joint ventures, partnerships and any other combinations or associations;
(c) remove Trustees or fill vacancies in or add to their number, elect and
remove such officers and appoint and terminate such agents or employees as they
consider appropriate, and appoint from their own number, and terminate, any one
or more committees which may exercise some or all of the power and authority of
the Trustees as the Trustees may determine; (d) purchase, and pay for out of
Trust Property or the property of the appropriate Series of the Trust, insurance
policies insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers, distributors, selected dealers or independent contractors
of the Trust against all claims arising by reason of holding any such position
or by reason of any action taken or omitted to be taken by any such Person in
such capacity, whether or not constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, Share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust or any Series thereof has dealings, including any Investment Adviser,
Distributor, Transfer Agent and selected dealers, to such extent as the Trustees
shall determine; (g) guarantee indebtedness or contractual obligations of
others; (h) determine and change the fiscal year of the Trust or any Series
thereof and the method by which its accounts shall be kept; and (i) adopt a seal
for the Trust but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
Section 3.11. PRINCIPAL TRANSACTIONS. Except in transactions permitted by
the 1940 Act or any rule or regulation thereunder, or any order of exemption
issued by the Commission, or effected to implement the provisions of any
agreement to which the Trust is a party, the Trustees shall not, on behalf of
the Trust, buy any
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securities (other than Shares) from or sell any securities (other than Shares)
to, or lend any assets of the Trust or any Series thereof to, any Trustee or
officer of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any Investment
Adviser, Distributor or Transfer Agent or with any Affiliated Person of such
Person; but the Trust or any Series thereof may employ any such Person, or firm
or company in which such Person is an Interested Person, as broker, legal
counsel, registrar, transfer agent, dividend disbursing agent or custodian upon
customary terms.
Section 3.12. LITIGATION. The Trustees shall have the power to engage in
and to prosecute, defend, compromise, abandon, or adjust, by arbitration, or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust, and out of the assets of the Trust or any Series thereof
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, to dismiss any
action, suit, proceeding, dispute, claim, or demand, derivative or otherwise,
brought by any person, including a Shareholder in its own name or the name of
the Trust, whether or not the Trust or any of the Trustees may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Trust.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN AND TRANSFER AGENT
Section 4.1. INVESTMENT ADVISER. Subject to approval by a Majority
Shareholder Vote, the Trustees may in their discretion from time to time enter
into one or more investment advisory or management contracts or, if the Trustees
establish multiple Series, separate investment advisory or management contracts
with respect to one or more Series whereby the other party or parties to any
such contracts shall undertake to furnish the Trust or such Series such
management, investment advisory, administration, accounting, legal, statistical
and research facilities and services, promotional or marketing activities, and
such other facilities and services, if any, as the Trustees shall from time to
time consider desirable and all upon such terms and conditions as the Trustees
may in their discretion determine. The vote of the initial shareholder(s) shall
constitute "majority shareholder vote" if such agreements are entered into prior
to a public offering of Shares of the Trust. Notwithstanding any provisions of
the Declaration, the Trustees may authorize the Investment Advisers, or any of
them, under any such contracts (subject to such general or specific instructions
as the Trustees may from time to time adopt) to effect purchases, sales, loans
or exchanges of portfolio securities and other investments of the Trust on
behalf of the Trustees or may authorize any officer, employee or Trustee to
effect such purchases, sales, loans or exchanges pursuant to recommendations of
such Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees. The Trustees may, in the their sole
discretion, call a meeting of Shareholders in order to submit to a vote of
Shareholders at such meeting the approval or continuance of any such investment
advisory or management contract. If the Shareholders of any one or more of the
Series of the Trust should fail to approve any such investment advisory or
management contract, the Investment Adviser may nonetheless serve as Investment
Adviser with respect to any Series whose Shareholders approve such contract.
Section 4.2. ADMINISTRATIVE SERVICES. The Trustees may in their discretion
from time to time contract for administrative personnel and services whereby the
other party shall agree to provide the Trustees or the Trust administrative
personnel and services to operate the Trust on a daily or other basis, on such
terms and conditions as the Trustees may in their discretion determine. Such
services may be provided by one or more persons or entities.
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Section 4.3. DISTRIBUTOR. The Trustees may in their discretion from time
to time enter into one or more contracts, providing for the sale of Shares to
net the Trust or the applicable Series of the Trust not less than the net asset
value per Share (as described in Article VIII hereof) and pursuant to which the
Trust may either agree to sell the Shares to the other parties to the contracts,
or any of them, or appoint any such other party its sales agent for such Shares.
In either case, any such contract shall be on such terms and conditions as the
Trustees may in their discretion determine not inconsistent with the provisions
of Article IV, including, without limitation, the provision for the repurchase
or sale of shares of the Trust by such other party as principal or as agent of
the Trust.
Section 4.4. TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 4.5. CUSTODIAN. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least five
million dollars ($5,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-Laws of the Trust.
Section 4.6. PARTIES TO CONTRACT. Any contract of the character described
in Sections 4.1, 4.2, 4.3, 4.4 or 4.5 of this Article IV and any other contract
may be entered into with any Person, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such contract shall be
invalidated or rendered voidable by reason of the existence of such
relationship; nor shall any Person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of such contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was not
inconsistent with the provisions of this Article IV. The same Person may be the
other party to any contracts entered into pursuant to Sections 4.1, 4.2, 4.3,
4.4 or 4.5 above or otherwise, and any individual may be financially interested
or otherwise affiliated with Persons who are parties to any or all of the
contracts mentioned in this Section 4.6.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust. No Trustee, officer, employee or agent of the Trust shall be subject to
any personal liability whatsoever to any Person, other than the Trust or its
Shareholders, in connection with the Trust Property or the affairs of the Trust,
save only that arising from bad faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person; and all such Persons shall look
solely to the Trust Property, or to the Property of one or more specific Series
of the Trust if the claim arises from the conduct of such Trustee, officer,
employee or agent with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee or agent, as such, of the Trust is made
to any suit or proceeding to enforce any such liability, he shall not, on
account thereof, be held to any personal liability. The Trust shall indemnify
out of the property of the Trust and hold each Shareholder harmless from and
against all claims and liabilities, to which such Shareholder may become subject
by reason of his being or having been a
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Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability; provided that, in the event the Trust shall consist of more than one
Series, Shareholders of a particular Series who are faced with claims or
liabilities solely by reason of their status as Shareholders of that Series
shall be limited to the assets of that Series for recovery of such loss and
related expenses. The rights accruing to a Shareholder under this Section 5.1
shall not exclude any other right to which such Shareholder may be lawfully
entitled, nor shall anything herein contained restrict the right of the Trust to
indemnify or reimburse a Shareholder in any appropriate situation even though
not specifically provided herein.
Section 5.2. NON-LIABILITY OF TRUSTEES, ETC. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action or
failure to act (including without limitation the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for this own
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties.
Section 5.3. INDEMNIFICATION. (a) The Trustees shall provide for
indemnification by the Trust, or by one or more Series thereof if the claim
arises from his or her conduct with respect to only such Series, of any person
who is, or has been, a Trustee, officer, employee or agent of the Trust against
all liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a
Trustee, officer, employee or agent and against amounts paid or incurred by him
in the settlement thereof, in such manner as the Trustees may provide from time
to time in the By-Laws.
(b) The words "claim," "action," "suit," or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal, or other, including
appeals), actual or threatened; and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
Section 5.4. NO BOND REQUIRED OF TRUSTEES. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 5.5. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS,
ETC. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series thereof
shall be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer, employee or agent or
be liable for the application of money or property paid, loaned or delivered to
or on the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking, and every other act or thing
whatsoever executed in connection with the Trust shall be conclusively presumed
to have been executed or done by the executors thereof only in their capacity as
officers, employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees shall recite that the same
is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders,
individually, but bind only the Trust Estate (or, in the event the Trust shall
consist of more than one Series, in the case of any such obligation which
relates to a specific Series, only the Series which is a party thereto), and may
contain any further recital which they or he may deem appropriate, but the
omission of such recital shall not affect the validity of such obligation,
contract instrument, certificate, Share, security or undertaking and shall not
operate to bind the Trustees or Shareholders individually. The Trustees shall
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at all times maintain insurance for the protection of the Trust Property, its
Shareholders, Trustees, officers, employees and agents in such amount as the
Trustees shall deem adequate to cover possible tort liability, and such other
insurance as the Trustees in their sole judgment shall deem advisable.
Section 5.6. RELIANCE ON EXPERTS, ETC. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by any Investment Adviser, Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. BENEFICIAL INTEREST. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest of
$.01 par value. The number of such shares of beneficial interest authorized
hereunder is unlimited. The Trustee shall have the authority to establish and
designate one or more Series of classes or shares. Each share of any Series
shall represent an equal proportionate share in the assets of that Series with
each other Share in that Series. The Trustees may divide or combine the shares
of any Series into a greater or lesser number of shares in that Series without
thereby changing the proportionate interests in the assets of that Series.
Subject to the provisions of Section 6.9 hereof, the Trustees may also authorize
the creation of additional series of shares (the proceeds of which may be
invested in separate, independently managed portfolios) and additional classes
of shares within any series. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split in
Shares, shall be fully paid and nonassessable.
Section 6.2. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property
of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition of division of
any property, profits, rights or interests of the Trust nor can they be called
upon to assume any losses of the Trust or suffer an assessment of any kind by
virtue of their ownership of Shares. The Shares shall be personal property
giving only the rights in the Declaration specifically set forth. The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights, except as the Trustees may determine with respect to any series
of Shares.
Section 6.3. TRUST ONLY. It is the intention of the Trustees to create
only the relationship of Trustees and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustee to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.4. ISSUANCE OF SHARES. The Trustees, in their discretion may,
from time to time without vote of the Shareholders, issue Shares of any Series,
in addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem best, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of liabilities) and businesses.
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In connection with any issuance of Shares, the Trustees may issue fractional
Shares. The Trustees may from time to time divide or combine the Shares of any
Series into a greater or lesser number without thereby changing the
proportionate beneficial interests in that Series. Contributions to the Trust
may be accepted for, and Shares shall be redeemed as, whole Shares and/or
fractions of a Share as described in the Prospectus.
Section 6.5. REGISTER OF SHARES. A register shall be kept in respect of
each Series at the principal office of the Trust or at an office of the Transfer
Agent which shall contain the names and addresses of the Shareholders and the
number of Shares of each Series held by them respectively and a record of all
transfers thereof. Such register may be in written form or any other form
capable of being converted into written form within a reasonable time for visual
inspection. Such register shall be conclusive as to who are the holders of the
Shares and who shall be entitled to receive dividends or distributions or
otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall
be entitled to receive payment of any dividend or distribution, nor to have
notice given to him as herein or in the By-Laws provided, until he has given his
address to the Transfer Agent or such other officer or agent of the Trustees as
shall keep the said register for entry thereon. It is not contemplated that
certificates will be issued for the Shares; however, the Trustees, in their
discretion, may authorize the issuance of Share certificates and promulgate
appropriate rules and regulations as to their use.
Section 6.6. TRANSFER OF SHARES. Shares shall be transferable on the
records of the Trust only by the record holder or by his agent thereunto duly
authorized in writing, upon delivery to the Trustees or the Transfer Agent of a
duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law, except as may otherwise be provided by the laws of
the Commonwealth of Massachusetts.
Section 6.7. NOTICES. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust. Annual reports and proxy
statements need not be sent to a shareholder if: (i) an annual report and proxy
statement for two consecutive annual meetings, or (ii) all, and at least two,
checks (if sent by first class mail) in payment of dividends or interest and
shares during a twelve month period have been mailed to such shareholder's
address and have been returned undelivered. However, delivery of such annual
reports and proxy statements shall resume once a Shareholder's current address
is determined.
Section 6.8. VOTING POWERS. The Shareholders shall have power to vote only
(i) for the election of Trustees as provided in Section 2.2 hereof, (ii) for the
removal of Trustees as provided in Section 2.3 hereof, (iii) with respect to any
investment advisory or management contract as provided in Section 4.1, (iv) with
respect to termination of the Trust as provided in Section 9.2, (v) with respect
to any amendment of the Declaration to the extent and as provided in Section
9.3, (vi) with respect to any merger, consolidation or sale of assets as
provided in
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Section 9.4, (vii) with respect to incorporation of the Trust to the extent and
as provided in Section 9.5, (viii) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders (provided that
Shareholders of a Series are not entitled to vote in connection with the
bringing of a derivative or class action with respect to any matter which only
affects another Series or its Shareholders), (ix) with respect to any plan
adopted pursuant to Rule 12b-1 (or any successor rule) under the 1940 Act and
(x) with respect to such additional matters relating to the Trust as may be
required by law, the Declaration, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any state, or as and when the
Trustee may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote, except that Shares
held in the treasury of the Trust as of the record date, as determined in
accordance with the By-Laws, shall not be voted. On any matter submitted to a
vote of Shareholders, all Shares shall be voted by individual Series except (1)
when required by the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and (2) when the Trustees have determined that the matter
affects only the interests of one or more Series, then only the Shareholders of
such Series shall be entitled to vote thereon. The Trustees may, in conjunction
with the establishment of any further Series or any classes of Shares, establish
conditions under which the several series or classes of Shares shall have
separate voting rights or no voting rights. There shall be no cumulative voting
in the election of Trustees. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, the
Declaration or the By-Laws to be taken by Shareholders. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters.
Section 6.9. SERIES OR CLASSES OF SHARES. The following provisions are
applicable regarding the Series of Shares of the Trust established in Section
6.1 hereof and shall be applicable if the Trustees shall establish additional
Series or shall divide the shares of any Series into two or more classes, also
as provided in Section 6.1 hereof, and all provisions relating to the Trust
shall apply equally to each Series thereof except as the context requires:
(a) The number of authorized shares and the number of shares of each
Series or of each class that may be issued shall be unlimited. The Trustees
may classify or reclassify any unissued shares or any shares previously
issued and reacquired of any Series or class into one or more Series or one
or more classes that may be established and designated from time to time.
The Trustees may hold as treasury shares (of the same or some other Series
or class), reissue for such consideration and on such terms as they may
determine, or cancel any shares of any Series or any class reacquired by the
Trust at their discretion from time to time.
(b) The power of the Trustees to invest and reinvest the Trust Property
shall be governed by Section 3.2 of this Declaration with respect to any one
or more Series which represents the interests in the assets of the Trust
immediately prior to the establishment of any additional Series and the
power of the Trustees to invest and reinvest assets applicable to any other
Series shall be as set forth in the instrument of the Trustees establishing
such series which is hereinafter described.
(c) All consideration received by the Trust for the issue or sale of
shares of a particular Series or class together with all assets in which
such consideration is invested or reinvested, all income, earnings, profits,
and proceeds thereof, including any proceeds derived from the sale, exchange
or liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series or class for all purposes, subject only to
the rights of creditors, and shall be so recorded upon the books of account
of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payment which are not readily
identifiable as belonging to
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any particular Series or class, the Trustee shall allocate them among any
one or more of the Series or classes established and designated from time to
time in such manner and on such basis as they, in their sole discretion,
deem fair and equitable. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series or classes for
all purposes. No holder of Shares of any Series shall have any claim on or
right to any assets allocated or belonging to any other Series.
(d) The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series and all expenses,
costs, charges and reserves attributable to that Series. All expenses and
liabilities incurred or arising in connection with a particular Series, or
in connection with the management thereof, shall be payable solely out of
the assets of that Series and creditors of a particular Series shall be
entitled to look solely to the property of such Series for satisfaction of
their claims. Any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging to any
particular Series shall be allocated and charged by the Trustees to and
among any one or more of the series established and designated from time to
time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be conclusive
and binding upon the holders of all Series for all purposes. The Trustees
shall have full discretion, to the extent not inconsistent with the 1940
Act, to determine which items shall be treated as income and which items as
capital; and each such determination and allocation shall be conclusive and
binding upon the shareholders.
(e) The power of the Trustees to pay dividends and make distributions
shall be governed by Section 8.2 of this Declaration with respect to any one
or more Series or classes which represents the interests in the assets of
the Trust immediately prior to the establishment of any additional Series or
classes. With respect to any other Series or class, dividends and
distributions on shares of a particular Series or class may be paid with
such frequency as the Trustees may determine, which may be daily or
otherwise, pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustee may determine, to the holders of
shares of that Series or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that Series or class, as
the Trustees may determine, after providing for actual and accrued
liabilities belonging to that Series or class. All dividends and
distributions on shares of a particular Series or class shall be distributed
pro rata to the holders of that Series or class in proportion to the number
of shares of that Series or class held by such holders at the date and time
of record established for the payment of such dividends or distributions.
(f) The Trustees shall have the power to determine the designations,
preferences, privileges, limitations and rights, including voting and
dividend rights, of each class and Series of Shares.
(g) Subject to compliance with the requirements of the 1940 Act, the
Trustees shall have the authority to provide that the holders of Shares of
any Series or class shall have the right to convert or exchange said Shares
into Shares of one or more Series of Shares in accordance with such
requirements and procedures as may be established by the Trustees.
(h) The establishment and designation of any Series or class of shares
in addition to those established in Section 6.1 hereof shall be effective
upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights,
preferences, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of such Series or
class, or as otherwise provided in such instrument. At any time that there
are no shares outstanding of any
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particular Series or class previously established or designated, the
Trustees may by an instrument executed by a majority of their number abolish
that Series or class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an
amendment to this Declaration.
(i) Shareholders of a Series shall not be entitled to participate in a
derivative or class action with respect to any matter which only affects
another Series or its Shareholders.
(j) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income
and capital gains made with respect to such Series. In the event of the
liquidation of a particular Series, the Shareholders of that Series which
has been established and designated and which is being liquidated shall be
entitled to receive, when and as declared by the Trustees, the excess of the
assets belonging to that Series over the liabilities belonging to that
Series. The holders of Shares of any Series shall not be entitled hereby to
any distribution upon liquidation of any other Series. The assets so
distributable to the Shareholders of any Series shall be distributed among
such Shareholders in proportion to the number of Shares of that Series held
by them and recorded on the books of the Trust. The liquidation of any
particular Series in which there are Shares then outstanding may be
authorized by an instrument in writing, without a meeting, signed by a
majority of the Trustees then in office, subject to the approval of a
majority of the outstanding voting securities of that Series, as that phrase
is defined in the 1940 Act.
ARTICLE VII
REDEMPTIONS
Section 7.1. REDEMPTIONS. Each Shareholder of a particular Series shall
have the right at such times as may be permitted by the Trust to require the
Trust to redeem all or any part of his Shares of that Series, upon and subject
to the terms and conditions provided in this Article VII. The Trust shall, upon
application of any Shareholder or pursuant to authorization from any
Shareholder, redeem or repurchase from such Shareholder outstanding shares for
an amount per share determined by the Trustees in accordance with any applicable
laws and regulations; provided that (a) such amount per share shall not exceed
the cash equivalent of the proportionate interest of each share or of any class
or Series of shares in the assets of the Trust at the time of the redemption or
repurchase and (b) if so authorized by the Trustees, the Trust may, at any time
and from time to time charge fees for effecting such redemption or repurchase,
at such rates as the Trustees may establish, as and to the extent permitted
under the 1940 Act and the rules and regulations promulgated thereunder, and
may, at any time and from time to time, pursuant to such Act and such rules and
regulations, suspend such right of redemption. The procedures for effecting and
suspending redemption shall be as set forth in the Prospectus from time to time.
Payment will be made in such manner as described in the Prospectus.
Section 7.2. REDEMPTION AT THE OPTION OF THE TRUST. Each Share of the
Trust or any Series of the Trust shall be subject to redemption at the option of
the Trust at the redemption price which would be applicable if such Shares were
then being redeemed by the Shareholder pursuant to Section 7.1: (i) at any time,
if the Trustees determine in their sole discretion that failure to so redeem may
have materially adverse consequences to the holders of the Shares of the Trust
or of any Series, or (ii) upon such other conditions with respect to maintenance
of Shareholder accounts of a minimum amount as may from time to time be
determined by the Trustees and set forth in the then current Prospectus of the
Trust. Upon such redemption the holders of the Shares so redeemed shall have no
further right with respect thereto other than to receive payment of such
redemption price.
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Section 7.3. EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET VALUE. If,
pursuant to Section 7.4 hereof, the Trustees shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series thereof, the rights of Shareholders (including those who shall have
applied for redemption pursuant to Section 7.1 hereof but who shall not yet have
received payment) to have Shares redeemed and paid for by the Trust or a Series
thereof shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice of revocation at
the office or agency where application was made, revoke any application for
redemption not honored and withdraw any certificates on deposit. The redemption
price of Shares for which redemption applications have not been revoked shall be
the net asset value of such Shares next determined as set forth in Section 8.1
after the termination of such suspension, and payment shall be made within seven
(7) days after the date upon which the application was made plus the period
after such application during which the determination of net asset value was
suspended.
Section 7.4. SUSPENSION OF RIGHT OF REDEMPTION. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Series
thereof of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust or a Series thereof fairly to determine the
value of its net assets, or (iv) during any other period when the Commission may
for the protection of security holders of the Trust by order permit suspension
of the rights of redemption or postponement of the date of payment or
redemption; provided that applicable rules and regulations of the Commission
shall govern as to whether the conditions prescribed in (ii), (iii) or (iv)
exist. Such suspension shall take effect at such time as the Trust shall specify
but not later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 8.1. NET ASSET VALUE. The net asset value of each outstanding
Share of each Series of the Trust shall be determined on such days and at such
time or times as the Trustees may determine. The method of determination of net
asset value shall be determined by the Trustees and shall be as set forth in the
Prospectus. The power and duty to make the daily calculations may be designated
by the Trustees to any Investment Adviser, the Custodian, the Transfer Agent or
such other person as the Trustees by resolution may determine. The Trustees may
suspend the daily determination of net asset value to the extent permitted by
the 1940 Act.
Section 8.2. DISTRIBUTIONS TO SHAREHOLDERS. The Trustees shall from time
to time distribute ratably among the Shareholders of the Trust or of any Series
such proportion of the net income, earnings, profits, gains, surplus (including
paid-in surplus), capital, or assets of the Trust or of such Series held by the
Trustees as they may deem
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proper. Such distribution may be made in cash or property (including without
limitation any type of obligations of the Trust or of such Series or any assets
thereof), and the Trustees may distribute ratably among the Shareholders of the
Trust or of that Series additional Shares issuable hereunder in such manner, at
such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of record (determined in accordance
with the Prospectus) of the Trust or of such Series at the time of declaring a
distribution or among the Shareholders of record of the Trust or of such Series
at such later date as the Trustees shall determine. The Trustees may always
retain from the net income, earnings, profits or gains of the Trust or of such
Series such amount as they may deem necessary to pay the debts or expenses of
the Trust or of such Series or to meet obligations of the Trust or of such
Series, or as they may deem desirable to use in the conduct of its affairs or to
retain for future requirements or extensions of the business. The Trustees may
adopt and offer to Shareholders of the Trust or of any Series such dividend
reinvestment plans, cash dividend payout plans or related plans as the Trustees
deem appropriate.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
Section 8.3. DETERMINATION OF NET INCOME. The Trustees shall have the
power to determine the net income of any Series of the Trust and from time to
time to distribute such net income ratably among the Shareholders as dividends
in cash or additional Shares of such Series issuable hereunder. The
determination of net income and the resultant declaration of dividends shall be
as set forth in the Prospectus. The Trustees shall have full discretion to
determine whether any cash or property received by any Series of the Trust shall
be treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much, if any, of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 8.4. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any of
the foregoing provisions of this Article VIII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the per
Share net asset value of the Shares or net income, or the declaration and
payment of dividends and distributions, as they may deem necessary or desirable
to enable the Trust to comply with any provision of the 1940 Act, or any rule or
regulation thereunder, including any rule or regulation adopted pursuant to
Section 22 of the 1940 Act by the Commission or any securities association
registered under the Securities Exchange Act of 1934, or any order of exemption
issued by said Commission, all as in effect now or hereafter amended or
modified. Without limiting the generality of the foregoing, the Trustees may
establish classes or additional Series of Shares in accordance with Section 6.9.
ARTICLE IX
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 9.1. DURATION. The Trust shall continue without limitation of time
but subject to the provisions of this Article IX.
Section 9.2. TERMINATION OF TRUST. (a) The Trust or any Series may be
terminated (i) by a Majority Shareholder Vote at any meeting of Shareholders of
the Trust or the appropriate Series thereof, (ii) by an
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instrument in writing, without a meeting, signed by a majority of the Trustees
and consented to by a Majority Shareholder Vote of the Trust or the appropriate
Series thereof, or by such other vote as may be established by the Trustees with
respect to any class or Series of Shares, or (iii) with respect to a Series as
provided in Section 6.9(h). Upon the termination of the Trust or the Series:
(i) The Trust or the Series shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustee shall proceed to wind up the affairs of the Trust or
the Series and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust or
the Series, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property or
Trust Property allocated or belonging to such Series to one or more persons
at public or private sale for consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or pay its
liabilities, and to do all other acts appropriate to liquidate its business;
provided that any sale, conveyance, assignment, exchange, transfer or other
disposition of all or substantially all the Trust Property or Trust Property
allocated or belonging to such Series shall require Shareholder approval in
accordance with Section 9.4 hereof.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements, as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or Trust Property allocated or
belonging to such Series, in cash or in kind or partly each, among the
Shareholders of the Trust according to their respective rights.
Section 9.3. AMENDMENT PROCEDURE. (a) This Declaration may be amended by a
Majority Shareholder Vote, at a meeting of Shareholders, or by written consent
without a meeting. The Trustees may also amend this Declaration without the vote
or consent of Shareholders (i) to change the name of the Trust or any Series or
classes of Shares, (ii) to supply any omission, or cure, correct or supplement
any ambiguous, defective or inconsistent provision hereof, (iii) if they deem it
necessary to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code,
or to eliminate or reduce any federal, state or local taxes which are or may by
the Trust or the Shareholders, but the Trustees shall not be liable for failing
to do so, or (iv) for any other purpose which does not adversely affect the
rights of any Shareholder with respect to which the amendment is or purports to
be applicable.
(b) No amendment may be made under this Section 9.3 which would change
any rights with respect to any Shares of the Trust or of any Series of the
Trust by reducing the amount payable thereon upon liquidation of the Trust
or of such Series of the Trust or by diminishing or eliminating any voting
rights pertaining thereto, except with the vote or consent of the holders of
two-thirds of the Shares of the Trust or of such Series outstanding and
entitled to vote, or by such other vote as may be established by the
Trustees with respect to any Series or class of Shares. Nothing contained in
this Declaration shall permit the amendment of this Declaration to impair
the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
(c) A certificate signed by a majority of the Trustees or by the
Secretary or any Assistant Secretary of the Trust, setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees or certified by the Secretary or any
Assistant Secretary of the Trust, shall be conclusive evidence of such
amendment when
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lodged among the records of the Trust. Unless such amendment or such
certificate sets forth some later time for the effectiveness of such
amendment, such amendment shall be effective when lodged among the records
of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
Section 9.4. MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust or any
Series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or Trust Property allocated or belonging to such
Series, including its good will, upon such terms and conditions and for such
consideration when and as authorized, at any meeting of Shareholders called for
the purpose, by the affirmative vote of the holders of not less than two-thirds
of the Shares of the Trust or such Series outstanding and entitled to vote, or
by an instrument or instruments in writing without a meeting, consented to by
the holders of not less than two-thirds of such Shares, or by such other vote as
may be established by the Trustees with respect to any series or class of
Shares; provided, however, that, if such merger, consolidation, sale, lease or
exchange is recommended by the Trustees, a Majority Shareholder Vote shall be
sufficient authorization; and any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished under and
pursuant to the laws of the Commonwealth of Massachusetts.
Section 9.5. INCORPORATION. With approval of a Majority Shareholder Vote,
or by such other vote as may be established by the Trustees with respect to any
Series or class of Shares, the Trustees may cause to be organized or assist in
organizing a corporation or corporations under the laws of any jurisdiction or
any other trust, partnership, association or other organization to take over all
of the Trust Property or the Trust Property allocated or belonging to such
Series or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property or the Trust Property allocated or belonging to such Series to any such
corporation, trust, partnership, association or organization in exchange for the
shares or securities thereof or otherwise, and to lend money to, subscribe for
the shares or securities of, and enter into any contracts with any such
corporation, trust, partnership, association or organization in which the Trust
or such Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership, association or
other organization if and to the extent permitted by law, as provided under the
law then in effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in organizing
one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the Trust
Property to such organization or entities.
ARTICLE X
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit or cause the officers of
the Trust to submit to the Shareholders a written financial report of each
Series of the Trust, including financial statements which shall at least
annually be certified by independent public accountants.
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ARTICLE XI
MISCELLANEOUS
Section 11.1. FILING. This Declaration and any amendment hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and in
such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee or by the Secretary or any Assistant Secretary of the
Trust stating that such action was duly taken in a manner provided herein. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees and shall, upon filing with the
Secretary of the Commonwealth of Massachusetts, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various amendments thereto.
Section 11.2. RESIDENT AGENT. The Prentice-Hall Corporation System, Inc.,
84 State Street, Boston, Massachusetts 02109 is the resident agent of the Trust
in the Commonwealth of Massachusetts.
Section 11.3. GOVERNING LAW. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
laws thereof and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said State.
Section 11.4. COUNTERPARTS. The Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 11.5. RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust, appears to be a Trustee
hereunder, or Secretary or Assistant Secretary of the Trust, certifying to: (a)
the number or identity of Trustees or Shareholders, (b) the due authorization of
the execution of any instrument or writing, (c) the form of any vote passed at a
meeting of Trustees or Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees and their successors.
Section 11.6. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that nay of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provisions shall be deemed superseded by such law or regulation to
the extent necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
pertain only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
Section 11.7. USE OF THE NAME "DEAN WITTER." Dean Witter Reynolds Inc.
("DWR") has consented to the use by the Trust of the identifying name "Dean
Witter," which is a property right of DWR. The Trust will only use the
A-22
<PAGE>
name "Dean Witter" as a component of its name and for no other purpose, and will
not purport to grant to any third party the right to use the name "Dean Witter"
for any purpose. DWR, or any corporate affiliate of the parent of DWR, may use
or grant to others the right to use the name "Dean Witter", or any combination
or abbreviation thereof, as all or a portion of a corporate or business name or
for any commercial purpose, including a grant of such right to any other
investment company. At the request of DWR or its parent, the Trust will take
such action as may be required to provide its consent to the use by DWR or its
parent, or any corporate affiliate of DWR's parent, or by any person to whom DWR
or its parent or an affiliate of DWR's parent shall have granted the right to
the use, of the name "Dean Witter," or any combination or abbreviation thereof.
Upon the termination of any investment advisory or investment management
agreement into which DWR and the Trust may enter, the Trust shall, upon request
by DWR or its parent, cease to use the name "Dean Witter" as a component of its
name, and shall not use the name, or any combination or abbreviation thereof or
for any other commercial purpose, and shall cause its officers, trustees and
shareholders to take any and all actions which DWR or its parent may request to
effect the foregoing and to reconvey to DWR or its parent any and all rights to
such name.
Section 11.8. PRINCIPAL PLACE OF BUSINESS. The principal place of business
of the Trust shall be Two World Trade Center, New York, New York 10048, or such
other location as the Trustees may designate from time to time.
A-23
<PAGE>
EXHIBIT B
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the day of , 1996 by and between Dean Witter
Government Income Trust, an unincorporated business trust organized under the
laws of the Commonwealth of Massachusetts (hereinafter called the "Fund"), and
Dean Witter InterCapital Inc., a Delaware corporation (hereinafter called the
"Investment Manager"):
Whereas, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
Whereas, The Investment Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser; and
Whereas, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
Whereas, The Investment Manager desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously manage
the assets of the Fund in a manner consistent with the investment objectives and
policies of the Fund; shall determine the securities and commodities to be
purchased, sold or otherwise disposed of by the Fund and the timing of such
purchases, sales and dispositions; and shall take such further action, including
the placing of purchase and sale orders on behalf of the Fund, as the Investment
Manager shall deem necessary or appropriate. The Investment Manager shall also
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses and opinions formulated or obtained by the Investment
Manager in the discharge of its duties as the Fund may, from time to time,
reasonably request.
2. The Investment Manager shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it shall
from time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Manager shall be deemed to
include persons employed or otherwise retained by the Investment Manager to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Manager may
desire. The Investment Manager shall, as agent for the Fund, maintain the Fund's
records and books of account (other than those maintained by the Fund's transfer
agent, registrar,
B-1
<PAGE>
custodian and other agencies). All such books and records so maintained shall be
the property of the Fund and, upon request therefor, the Investment Manager
shall surrender to the Fund such of the books and records so requested.
3. The Fund will, from time to time, furnish or otherwise make available to
the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Manager may reasonably require in order to discharge its duties and obligations
hereunder.
4. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement,
and shall, at its own expense, pay the compensation of the officers and
employees, if any, of the Fund, and provide such office space, facilities and
equipment and such clerical help and bookkeeping services as the Fund shall
reasonably require in the conduct of its business. The Investment Manager shall
also bear the cost of telephone service, heat, light, power and other utilities
provided to the Fund.
5. The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund, including without limitation: fees pursuant to any plan of
distribution that the Fund may adopt; the charges and expenses of any registrar,
any custodian or depository appointed by the Fund for the safekeeping of its
cash, portfolio securities or commodities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers' commissions
chargeable to the Fund in connection with portfolio transactions to which the
Fund is a party; all taxes, including securities or commodities issuance and
transfer taxes, and fees payable by the Fund to federal, state or other
governmental agencies; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund and
its shares with the Securities and Exchange Commission and various states and
other jurisdictions (including filing fees and legal fees and disbursements of
counsel); the cost and expense of printing, including typesetting, and
distributing prospectuses and statements of additional information of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
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 Investment Manager or any corporate affiliate of the Investment Manager; all
expenses incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund or the Investment Manager, and of
independent accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund borrowings;
postage; insurance premiums on property or personnel (including officers and
Trustees) of the Fund which inure to its benefit; extraordinary expenses
(including but not limited to, legal claims and liabilities and litigation costs
and any indemnification related thereto); and all other charges and costs of the
Fund's operation unless otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the Investment
Manager monthly compensation determined by applying the annual rate of % to
the Fund's daily net assets. Except as hereinafter set forth, compensation under
this Agreement shall be calculated and accrued daily and the amounts of the
daily accruals shall be paid monthly. Such calculations shall be made by
applying 1/365ths of the annual rates to the Fund's net assets each day
determined as of the close of business on that day or the last previous business
day. If this Agreement becomes effective
B-2
<PAGE>
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above.
Subject to the provisions of paragraph 7 hereof, payment of the Investment
Manager's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by paragraph 7
hereof.
7. In the event the operating expenses of the Fund, including amounts
payable to the Investment Manager pursuant to paragraph 6 hereof, for any fiscal
year ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Manager shall reduce its management fee to the extent of
such excess and, if required, pursuant to any such laws or regulations, will
reimburse the Fund for annual operating expenses in excess of any expense
limitation that may be applicable; provided, however, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Such reduction, if any, shall be computed
and accrued daily, shall be settled on a monthly basis, and shall be based upon
the expense limitation applicable to the Fund as at the end of the last business
day of the month. Should two or more such expense limitations be applicable as
at the end of the last business day of the month, that expense limitation which
results in the largest reduction in the Investment Manager's fee shall be
applicable.
For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in the Fund's portfolio accrued
to and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall on
or prior to the last day of such fiscal year, but shall not include gains from
the sale of securities.
8. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund or
any of its investors for any error of judgment or mistake of law or for any act
or omission by the Investment Manager or for any losses sustained by the Fund or
its investors.
9. Nothing contained in this Agreement shall prevent the Investment Manager
or any affiliated person of the Investment Manager from acting as investment
adviser or manager for any other person, firm or corporation and shall not in
any way bind or restrict the Investment Manager or any such affiliated person
from buying, selling or trading any securities or commodities for their own
accounts or for the account of others for whom they may be acting. Nothing in
this Agreement shall limit or restrict the right of any Trustee, officer or
employee of the Investment Manager to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business whether of a similar or dissimilar nature.
10. This Agreement shall remain in effect until April 30, 1997 and from year
to year thereafter provided such continuance is approved at least annually by
the vote of holders of a majority, as defined in the Investment Company Act of
1940, as amended (the "Act"), of the outstanding voting securities of the Fund
or by the Trustees of the Fund; provided that in either event such continuance
is also approved annually by the vote of a majority of the Trustees of the Fund
who are not parties to this Agreement or "interested persons" (as defined in the
Act) of any such party, which vote must be cast in person at a meeting called
for the purpose of voting on such approval;
B-3
<PAGE>
provided, however, that (a) the Fund may, at any time and without the payment of
any penalty, terminate this Agreement upon thirty days' written notice to the
Investment Manager, either by majority vote of the Trustees of the Fund or by
the vote of a majority of the outstanding voting securities of the Fund; (b)
this Agreement shall immediately terminate in the event of its assignment (to
the extent required by the Act and the rules thereunder) unless such automatic
terminations shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Investment Manager may terminate this Agreement
without payment of penalty on thirty days' written notice to the Fund. Any
notice under this Agreement shall be given in writing, addressed and delivered,
or mailed post-paid, to the other party at the principal office of such party.
11. This Agreement may be amended by the parties without the vote or consent
of the shareholders of the Fund to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, or if they
deem it necessary to conform this Agreement to the requirements of applicable
federal laws or regulations, but neither the Fund nor the Investment Manager
shall be liable for failing to do so.
12. This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
13. The Investment Manager and the Fund each agree that the name "Dean
Witter", which comprises a component of the Fund's name, is a property right of
Dean Witter Reynolds Inc. The Fund agrees and consents that (i) it will only use
the name "Dean Witter" as a component of its name and for no other purpose, (ii)
it will not purport to grant to any third party the right to use the name "Dean
Witter" for any purpose, (iii) the Investment Manager or its parent, Dean
Witter, Discover & Co., or any corporate affiliate of the Investment Manager's
parent, may use or grant to others the right to use the name "Dean Witter", or
any combination or abbreviation thereof, as all or a portion of a corporate or
business name or for any commercial purpose, including a grant of such right to
any other investment company, (iv) at the request of the Investment Manager or
its parent, the Fund will take such action as may be required to provide its
consent to the use of the name "Dean Witter", or any combination or abbreviation
thereof, by the Investment Manager or its parent or any corporate affiliate of
the Investment Manager's parent, or by any person to whom the Investment Manager
or its parent or any corporate affiliate of the Investment Manager's parent
shall have granted the right to such use, and (v) upon the termination of any
investment advisory agreement into which the Investment Manager and the Fund may
enter, or upon termination of affiliation of the Investment Manager with its
parent, the Fund shall, upon request by the Investment Manager or its parent,
cease to use the name "Dean Witter" as a component of its name, and shall not
use the name, or any combination or abbreviation thereof, as a part of its name
or for any other commercial purpose, and shall cause its officers, Trustees and
shareholders to take any and all actions which the Investment Manager or its
parent may request to effect the foregoing and to reconvey to the Investment
Manager or its parent any and all rights to such name.
14. The Declaration of Trust as amended establishing Dean Witter Government
Income Trust, dated November 20, 1987, and as amended and restated on
, 1996, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name Dean Witter Government Income 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 Government Income 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 Government Income Trust, but the Trust Estate only
shall be liable.
B-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
Dean Witter Government Income Trust
By
......................................
Attest:
.....................................
Dean Witter InterCapital Inc.
By
......................................
Attest:
.....................................
B-5
<PAGE>
EXHIBIT C
InterCapital serves as investment manager or investment adviser to the Trust
and the other investment companies listed below which have similar investment
objectives to that of the Trust, with the net assets shown as of May 28, 1996:
<TABLE>
<CAPTION>
CURRENT INVESTMENT
NET ASSETS AS OF MANAGEMENT OR
5/28/96 ADVISORY FEE RATE(S)
---------------- ------------------------------
<C> <S> <C> <C>
1. DEAN WITTER HIGH YIELD SECURITIES INC.*.......................... $ 460,170,778 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.30%
on assets over $3 billion
2. DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST*.................... $ 7,135,414,763 0.50% on assets up to $1
billion, scaled down at
various asset levels to 0.30%
on assets over $12.5 billion
3. DEAN WITTER CONVERTIBLE SECURITIES TRUST*........................ $ 223,926,661 0.60% on assets up to $750
million, scaled down at
various asset levels to 0.425%
on assets over $3 billion
4. DEAN WITTER FEDERAL SECURITIES TRUST*............................ $ 747,351,656 0.55% on assets up to $1
billion, scaled down at
various asset levels to 0.35%
on assets over $12.5 billion
5. INTERCAPITAL INCOME SECURITIES INC.**............................ $ 210,148,399 0.50%
6. HIGH INCOME ADVANTAGE TRUST**.................................... $ 159,294,421 0.75% on assets up to $250
million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
7. HIGH INCOME ADVANTAGE TRUST II**................................. $ 214,843,726 0.75% on assets up to $250
million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
8. HIGH INCOME ADVANTAGE TRUST III**................................ $ 82,293,445 0.75% on assets up to $250
million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
9. DEAN WITTER INTERMEDIATE INCOME SECURITIES*...................... $ 213,325,919 0.60% on assets up to $500
million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
10. DEAN WITTER WORLD WIDE INCOME TRUST*............................. $ 120,758,918 0.75% on assets up to $250
million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
11. DEAN WITTER GOVERNMENT INCOME TRUST**............................ $ 451,657,099 0.60%
12. DEAN WITTER GLOBAL SHORT - TERM INCOME FUND INC.*................ $ 87,210,582 0.55% on assets up to $500
million and 0.50% on assets
over $500 million
</TABLE>
C-1
<PAGE>
<TABLE>
<CAPTION>
CURRENT INVESTMENT
NET ASSETS AS OF MANAGEMENT OR
5/28/96 ADVISORY FEE RATE(S)
---------------- ------------------------------
<C> <S> <C> <C>
13. DEAN WITTER PREMIER INCOME TRUST*................................ $ 27,569,803 0.50% (of which 40% is paid to
a Sub-Adviser)
14. DEAN WITTER SHORT - TERM U.S. TREASURY TRUST*.................... $ 260,495,145 0.35%
15. DEAN WITTER DIVERSIFIED INCOME TRUST*............................ $ 643,450,494 0.40%
16. DEAN WITTER SHORT-TERM BOND FUND*................................ $ 31,219,834 0.70%(1)
17. DEAN WITTER HIGH INCOME SECURITIES*.............................. $ 580,296,545 0.50% on assets up to
$500 million and 0.425% on
assets over $500 million
18. PRIME INCOME TRUST**............................................. $ 837,868,897 0.90% on assets up to $500
million and 0.85% on assets
over $500 million
19. DEAN WITTER BALANCED INCOME FUND*................................ $ 37,343,408 0.60%
20. DEAN WITTER RETIREMENT SERIES:*
(a) U.S. GOVERNMENT SECURITIES SERIES............................ $ 8,248,700 0.65%
(b) INTERMEDIATE INCOME SECURITIES SERIES........................ $ 4,136,096 0.65%
21. DEAN WITTER VARIABLE INVESTMENT SERIES:***
(a) QUALITY INCOME PLUS PORTFOLIO................................ $ 475,545,994 0.50% on assets up to
$500 million and 0.45% on
assets over $500 million
(b) HIGH YIELD PORTFOLIO......................................... $ 192,018,816 0.50%
22. DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES:***
(a) DIVERSIFIED INCOME PORTFOLIO................................. $ 17,428,297 0.40%(2)
(b) NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO............... $ 2,579,844 0.65%(2) (of which 40% is paid
to a Sub-Adviser)
23. DEAN WITTER INTERMEDIATE TERM
U.S. TREASURY TRUST:*............................................ $ 2,916,648 0.35%(3)
<FN>
- -------------
* Open-end investment company.
** Closed-end investment company.
*** Open-end investment company offered only to life insurance companies in
connection with variable annuity and/or variable life insurance contracts.
(1) InterCapital has undertaken, from January 1, 1996 through December 31,
1996, to continue to assume all operating expenses (except for any
brokerage fees) and waive the compensation provided for in its investment
management agreement with that company to the extent that such expenses and
compensation on an annualized basis exceed 1.0% of that company's average
daily net assets.
(2) InterCapital has undertaken, until the earlier of December 31, 1996 or the
attainment by the respective Portfolio of $50 million of net assets, to
continue to assume all operating expenses of the Portfolios of Dean Witter
Select Dimensions Investment Series (except for any brokerage fees and a
portion of organizational expenses) and to waive the compensation provided
for each Portfolio in its investment management agreement with that company
in respect of each Portfolio to the extent that such expenses and
compensation on an annualized basis exceed 0.50% of the average daily net
assets of the pertinent Portfolio.
(3) InterCapital has undertaken to assume all operating expenses of Dean Witter
Intermediate Term U.S. Treasury Trust (except for any 12b-1 fees and
brokerage expenses) and to waive the compensation provided for in its
investment management agreement with that company until such time as that
company has $50 million of net assets or until March 31, 1997, whichever
occurs first.
</TABLE>
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<PAGE>
EXHIBIT D
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
OF
DEAN WITTER GOVERNMENT INCOME TRUST
WHEREAS, Dean Witter Government Income Trust (the "Fund") is engaged in
business as an open-end management investment company and is registered as such
under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS the Fund desires to adopt a Plan of Distribution pursuant to Rule
12b-1 under the Act, and the Trustees have determined that there is a reasonable
likelihood the adoption of this Plan of Distribution will benefit the Fund and
its shareholders; and
WHEREAS, the Fund and Dean Witter Distributors Inc. (the "Distributor") have
entered into a separate Distribution Agreement dated as of this date, pursuant
to which the Fund has employed the Distributor in such capacity during the
continuous offering of shares of the Fund.
NOW, THEREFORE, the Fund hereby adopts and the Distributor hereby agrees to
the terms of this Plan of Distribution (the "Plan") in accordance with Rule
12b-1 under the Act on the following terms and conditions:
1. The Fund is hereby authorized to utilize its assets to finance certain
activities in connection with the distribution of its shares.
2. Subject to the supervision of the Board of Trustees and the terms of the
Distribution Agreement, the Distributor is authorized to promote the
distribution of the Fund's shares and to provide related services through Dean
Witter Reynolds Inc. ("DWR"), its affiliates or other broker-dealers it may
select, and its own Registered Representatives. The Distributor, DWR, its
affiliates and said broker-dealers shall be reimbursed, directly or through the
Distributor, as it may direct, as provided in paragraph 4 hereof for their
services and expenses, which may include one or more of the following: (1)
compensation to, and expenses of, account executives and other employees,
including overhead and telephone expenses; (2) sales incentives and bonuses to
sales representatives of the Distributor, DWR, its affiliates and other
broker-dealers, and to marketing personnel in connection with promoting sales of
shares of the Fund; (3) expenses incurred in connection with promoting sales of
shares of the Fund; (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.
3. The Distributor hereby undertakes to directly bear all costs of
rendering the services to be performed by it under this Plan and under the
Distribution Agreement, except for those specific expenses that the Board of
Trustees determines to reimburse as hereinafter set forth.
4. The Fund is hereby authorized to reimburse the Distributor, DWR, its
affiliates and other broker-dealers for distribution expenses incurred by them
specifically on behalf of the Fund. Reimbursement will be made through payments
at the end of each month in such amounts determined at the beginning of each
calendar year (in the case of reimbursement for expenses representing only a
gross credit to account executives of the Distributor and other broker-dealers,
including DWR) or calendar quarter (in the case of all other expenses) by the
Fund's Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Fund, as defined in the Act. The amount of each
monthly payment may in no event exceed an amount equal to a payment at the
annual rate of 0. of 1% of the average net assets of the Fund during the month.
In the event that the Distributor proposes that monies shall be reimbursed for
other than expenses representing a gross credit to account
execu-
D-1
<PAGE>
tives, then in making quarterly determinations of the amounts that may be
expended by the Fund, the Distributor shall provide, and the Trustees shall
review, a quarterly budget of projected distribution expenses to be incurred by
the Distributor, DWR, its affiliates or other broker-dealers on behalf of the
Fund, together with a report explaining the purposes and anticipated benefits of
incurring such expenses. The Board of Trustees shall determine the particular
expenses that may be borne by the Fund, and in making such determination shall
consider the scope of the Distributor's commitment to promoting the distribution
of the shares of the Fund directly or through DWR, its affiliates or other
broker-dealers.
5. The Distributor may direct that all or any part of the amounts
receivable by it under this Plan be paid directly to DWR, its affiliates or
other broker-dealers.
6. If, as of the end of any fiscal year, the actual expenses incurred by
the Distributor, DWR, its affiliates and other broker-dealers on behalf of the
Fund (including accrued expenses and amounts reserved for incentive compensation
and bonuses) are less than the amount of payments made by the Fund pursuant to
this Plan, the Distributor shall promptly make appropriate reimbursement to the
Fund. If, however, as of the end of any fiscal year, the actual expenses of the
Distributor, DWR, its affiliates and other broker-dealers are greater than the
amount of payments made by the Fund pursuant to this Plan, the Fund will not
reimburse the Distributor, DWR, its affiliates or other broker-dealers for such
expenses through payments accrued pursuant to this Plan in the subsequent fiscal
year.
7. The Distributor shall provide the Fund for review by the Board of
Trustees, and the Board of Trustees shall review, promptly after the end of each
fiscal quarter a written report regarding the distribution expenses incurred by
the Distributor, DWR, its affiliates or other broker-dealers on behalf of the
Fund during such fiscal quarter, which report shall include: (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 Fund.
8. This Plan shall become effective upon approval by a vote of the Board of
Trustees of the Fund, and of the Trustees who are not "interested persons" of
the Fund, as defined in the Act, and who have no direct or indirect financial
interest in the operation of this Plan, cast in person at a meeting called for
the purpose of voting on this Plan.
9. This Plan shall continue in effect until April 30, 1997, and from year
to year thereafter, provided such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 8 hereof.
This Plan may not be amended to increase materially the amount to be spent for
the services described herein unless such amendment is approved by a vote of at
least a majority of the outstanding voting securities of the Fund, as defined in
the Act, and no material amendments to this Plan shall be made unless approved
in the manner provided for approval in paragraph 8 hereof.
10. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Trustees who are not "interested persons"
of the Fund, as defined in the Act, and who have no direct or indirect financial
interest in the operation of this Plan or by a vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act, on not more
than 30 days' written notice to any other party to this Plan.
11. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Fund shall be committed to the discretion
of the Trustees who are not interested persons.
12. The Fund shall preserve copies of this Plan and all reports made
pursuant to paragraph 7 hereof, for a period of not less than six years from the
date of this Plan or any such report, as the case may be, the first two years in
an easily accessible place.
D-2
<PAGE>
13. This Plan shall be construed in accordance with the laws of the State of
New York and the applicable provisions of the Act. To the extent the applicable
law of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the Act, the latter shall control.
14. The Declaration of Trust establishing Dean Witter Government Income
Trust, dated November 20, 1987, and as amended and restated on ,
1996, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name Dean Witter Government Income 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 Government Income 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 Government Income Trust, but the Trust Estate only shall be liable.
IN WITNESS WHEREOF, the Fund and the Distributor have executed this Plan of
Distribution as of the day and year set forth below in New York, New York.
Dated: , 1996
DEAN WITTER GOVERNMENT INCOME TRUST
By: ................................
Attest:
.....................................
DEAN WITTER DISTRIBUTORS INC.
By: ................................
Attest:
.....................................
D-3
<PAGE>
DEAN WITTER GOVERNMENT INCOME TRUST
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 4, 1996
The undersigned shareholder of Dean Witter Government Income Trust (the
"Trust") does hereby appoint ROBERT M. SCANLAN, SHELDON CURTIS and JOSEPH J.
MCALINDEN, and each of them, as attorneys-in-fact and proxies of the
undersigned, each with the full power of substitution, to attend the Special
Meeting of Shareholders of the Trust to be held on September 4, 1996, at the
Conference Center, 44th Floor, Two World Trade Center, New York, New York at
9:00 A.M., New York City time, and at all adjournments thereof and to vote the
shares held in the name of the undersigned on the record date for said meeting
for the Proposals specified on the reverse side hereof. Said attorneys-in-fact
shall vote in accordance with their best judgment as to any other matter.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES. IF NO SPECIFICATION IS
MADE ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 3 AND 4 AND
FOR EACH OF THE NOMINEES FOR TRUSTEE.
IMPORTANT: PLEASE MARK YOUR PROXY, DATE AND SIGN IT ON THE REVERSE SIDE AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE ON ALL MATTERS
WILL BE COUNTED.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES / / OR /X/ IN BLUE OR BLACK INK.
<TABLE>
<S> <C> <C>
1. APPROVAL OF PROPOSAL TO CONVERT THE TRUST TO AN OPEN-END INVESTMENT COMPANY:
/ / FOR / / AGAINST / / ABSTAIN
2. ELECTION OF TRUSTEES: / / FOR ALL NOMINEES / / WITHHOLD AUTHORITY
(except as marked to the (to vote for all nominees
contrary below) listed below)
Michael Bozic, Charles A. Fiumefreddo, Dr. Manuel H. Johnson, John L. Schroeder, Edwin J. Garn,
John R. Haire, Michael E. Nugent, Philip J. Purcell
(INSTRUCTION: To withhold authority to vote for any individual nominee write that nominee's name in
the space provided below).
- ------------------------------------------------------------------------------------------------------
3. APPROVAL OF NEW MANAGEMENT AGREEMENT:
/ / FOR / / AGAINST / / ABSTAIN
4. APPROVAL OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1:
123
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
Dated: _________________________________________, 1996
(Month) (Day)
____________________________________________________
Signature(s)
____________________________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR
HEREON.
When signing as custodian, attorney, executor,
administrator, trustee, etc., please give your full
title as such. All joint owners should sign this
proxy. If the account is registered in the name of a
corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give
his or her title.
