MUNICIPAL INCOME TRUST II, DEF 14A, 1997-03-20

MUNICIPAL INCOME TRUST II
DEF 14A, 1997-03-20

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Schedule 14A Information required in proxy statement.
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
[ ] Preliminary Additional Materials
[ ] 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 Section 240.149-11(c) or
Section 240.14a-12

- --------------------------------------------------------------------------------
Municipal Income Trust II
(Name of Registrant(s) Specified in its Charter)
- --------------------------------------------------------------------------------
Lou Anne McInnis
(Name of Person(s) Filing Proxy Statement)
- --------------------------------------------------------------------------------

Payment of Filing Fee (check the appropriate box):

[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(j)(4) and 0-11.

1) Title of each class of securities to which transaction
applies:
- --------------------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated
and state how it was determined.

4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------

5) Fee previously paid:
- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
- --------------------------------------------------------------------------------

2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------

3) Filing Party:
- --------------------------------------------------------------------------------

4) Date Filed:
- --------------------------------------------------------------------------------

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MUNICIPAL INCOME TRUST II

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 20, 1997

The Annual Meeting of Shareholders (the "Meeting") of MUNICIPAL INCOME TRUST
II (the "Trust"), an unincorporated business trust organized under the laws of
the Commonwealth of Massachusetts, will be held in the Career Development Room,
Sixty-First Floor, 2 World Trade Center, New York, New York 10048, on May 20,
1997, at 10:00 a.m., New York City time, for the following purposes:

1. To elect three (3) Trustees to serve until the 2000 Annual Meeting,
or, in each case, until their successors shall have been elected and
qualified;

2. To approve or disapprove a new Investment Advisory Agreement between
the Trust and Dean Witter InterCapital Inc., a wholly-owned subsidiary of
Dean Witter, Discover & Co. ("DWDC") in connection with the proposed merger
of Morgan Stanley Group Inc. with DWDC;

3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending December 31,
1997; and

4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.

Shareholders of record as of the close of business on March 12, 1997 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that purpose.

In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting, 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 2 and will
vote against any such adjournment those proxies required to be voted against
that proposal.

BARRY FINK
SECRETARY

March 19, 1997

New York, New York

IMPORTANT
YOU CAN HELP THE TRUST 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>

MUNICIPAL INCOME TRUST II

TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048

-----------------------

PROXY STATEMENT
-----------------------

ANNUAL MEETING OF SHAREHOLDERS

MAY 20, 1997

This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board" or "Trustees") of MUNICIPAL INCOME TRUST
II (the "Trust") for use at the Annual Meeting of Shareholders of the Trust to
be held on May 20, 1997 (the "Meeting"), and at any adjournments thereof.

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 for each of the nominees for election as Trustee
and in favor of Proposals 2 and 3 set forth in the attached Notice of Annual
Meeting of Shareholders. A proxy may be revoked at any time prior to its
exercise by any of the following: written notice of revocation to the Secretary
of the Trust, 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 Meeting. Attendance at the Meeting will not in and of itself
revoke a proxy.

Holders of shares of the Trust ("Shareholders") as of the close of business
on March 12, 1997, 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 March 12, 1997
there were 27,214,466 shares of beneficial interest of the Trust outstanding,
all with $0.01 par value. No person was known to own as much as 5% of the
outstanding shares of the Trust 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 first mailing of
this Proxy Statement is expected to be made on or about March 19, 1997.

The cost of soliciting proxies for the Meeting, consisting principally of
printing and mailing expenses, is estimated to be approximately $22,000, of
which approximately $15,400 will be borne by the Trust, the remainder of which
will be borne by Dean Witter, Discover & Co. ("DWDC"). The solicitation of
proxies will be by mail, which may be supplemented by solicitation by mail,
telephone or otherwise through Trustees, officers of the Trust, or officers and
regular employees of Dean Witter InterCapital Inc. ("InterCapital" or the
"Investment Adviser"), Dean Witter Trust Company ("DWTC"), Dean Witter Services
Company Inc. ("DWSC") and/or employees of broker-dealers, including Dean Witter
Reynolds Inc. ("DWR"), without special compensation therefor. In addition, the
Trust may employ William F. Doring & Co. as proxy solicitor, the cost of which
is not expected to exceed $5,000 and will be borne by DWDC.

William F. Doring & Co. and DWTC may call Shareholders to ask if they would
be willing to have their votes recorded by telephone. The telephone voting
procedure is designed to authenticate Shareholders' identities, to

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allow Shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been recorded
properly. No recommendation will be made as to how a Shareholder should vote on
any Proposal other than to refer to the recommendations of the Board. The Trust
has been advised by counsel that these procedures are consistent with the
requirements of applicable law. Shareholders voting by telephone will be asked
for their social security number or other identifying information and will be
given an opportunity to authorize proxies to vote their shares in accordance
with their instructions. To ensure that the Shareholders' instructions have been
recorded correctly they will receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the confirmation is incorrect. Although a Shareholder's vote may be
taken by telephone, each Shareholder will receive a copy of this Proxy Statement
and may vote by mail using the enclosed proxy card. With respect to the
solicitation of a telephonic vote by William F. Doring & Co., additional
expenses would include $7.00 per telephone vote transacted, $3.00 per outbound
telephone contact and costs relating to obtaining Shareholders' telephone
numbers which would be borne by DWDC.

(1) ELECTION OF TRUSTEES

The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, as amended, at nine. There are presently eight
Trustees, two of whom (Manuel H. Johnson and John L. Schroeder) are standing for
election at this Meeting to serve until the 2000 Annual Meeting. Additionally,
one nominee to the Trust's Board of Trustees, Wayne E. Hedien, is standing for
election at the Meeting for the first time, and, if elected, to serve until the
2000 Annual Meeting, all in accordance with the Trust's Declaration of Trust, as
amended.

Six of the current eight Trustees (Michael Bozic, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, 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 Investment Company Act of 1940, as
amended (the "1940 Act"). Mr. Hedien has been nominated for election at the
Meeting, and, if elected, also will be an Independent Trustee. The other two
current Trustees, Charles A. Fiumefreddo and Philip J. Purcell are "interested
persons" (as that term is defined in the 1940 Act) of the Trust and InterCapital
and thus are NOT Independent Trustees. The nominees for election as Independent
Trustees have been proposed by the Independent Trustees now serving. All of the
Trustees currently serving have been elected previously by the Shareholders of
the Trust.

The nominees of the Board for election as Trustees are listed below. It is
the intention of the persons named in the enclosed form of proxy to vote the
shares represented by them for the election of these nominees: Wayne E. Hedien,
Manuel H. Johnson and John L. Schroeder. 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 (if elected, Mr. Hedien's term will
commence September 1, 1997). The Trust knows no reason why any of said nominees
would be unable or unwilling to accept nomination or election. The election of
each Trustee requires the approval of a majority of the shares of the Trust
represented and entitled to vote at the Meeting.

Pursuant to the provisions of the Trust's Declaration of Trust, as amended,
the Trustees are divided into three separate classes, each class having a term
of three years. The term of office of one of the three classes will expire each
year.

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The Board previously determined that any nominee for election as Trustee
shall stand for election as Trustee and serve as Trustee in one of the three
classes of Trustees as follows: Class I -- Messrs. Bozic and Fiumefreddo; Class
II -- Messrs. Hedien, Johnson and Schroeder; and Class III -- Messrs. Garn,
Haire, Nugent and Purcell. Each nominee for Trustee will, if elected, serve a
term of up to approximately three years running for the period assigned to that
class and terminating at the date of the Annual Meeting of Shareholders so
designated by the Board, or any adjournment thereof. In accordance with the
above, the current Trustees in Class II are standing for election at this
Meeting and, if elected, will serve until the 2000 Annual Meeting or until their
successors shall have been elected and qualified. Additionally, the new nominee
is also standing for election as Trustee in Class II, and, if elected at the
Meeting, will serve until the 2000 Annual Meeting, or until his successor shall
have been elected and qualified. As a consequence of this method of election,
the replacement of a majority of the Board of Trustees could be delayed for up
to two years.

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 March 12, 1997 (shown in parentheses), positions
with the Trust, and directorships (or trusteeships) in companies which file
periodic reports with the Securities and Exchange Commission, including the 84
investment companies, including the Trust, for which InterCapital serves as
investment manager or investment adviser (referred to herein as the "Dean Witter
Funds") and the 14 investment companies for which InterCapital's wholly-owned
subsidiary, DWSC, serves as manager and TCW Funds Management, Inc. serves as
investment adviser (referred to herein as the "TCW/DW Funds").

The nominees for Trustee to be elected at this Meeting are:

WAYNE E. HEDIEN, age 63; Retired; Director of The PMI Group, Inc. (private
mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural
History; formerly associated with the Allstate Companies (1966-1994), most
recently as Chairman of The Allstate Corporation (March 1993- December 1994) and
Chairman and Chief Executive Officer of its wholly-owned subsidiary, Allstate
Insurance Company (July 1989-December 1994); director of various other business
and charitable organizations.

MANUEL H. JOHNSON, Trustee since July, 1991; age 48; Senior Partner, Johnson
Smick International, Inc., a consulting firm; 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); Trustee of the Financial Accounting Foundation (oversight
organization for the FASB); formerly Vice Chairman of the Board of Governors of
the Federal Reserve System (1986-1990) and Assistant Secretary of the U.S.
Treasury (1982-1986).

JOHN L. SCHROEDER, Trustee since April, 1994; age 66; 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)
and formerly Chairman and Chief Investment Officer of Axe-Houghton Management
and the Axe-Houghton Funds (1983-1991).

The Trustees who are not standing for re-election at this Meeting are:

MICHAEL BOZIC, Trustee since April, 1994; age 56; 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

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Sears, Roebuck and Co.; Director of Eaglemark Financial Services, Inc., the
United Negro College Fund and 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 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 DWTC; Director and/or officer of various DWDC
subsidiaries; formerly Executive Vice President and Director of DWDC (until
February, 1993).

EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 64; 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 Corporation (since January, 1993);
Director of Franklin Quest (time management systems) and John Alden Financial
Corp. (health insurance); member of the board of various civic and charitable
organizations.

JOHN R. HAIRE, Trustee since April, 1988; age 72; 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; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Trustees and Trustee
of the TCW/DW Funds; formerly President, Council for Aid to Education
(1978-1989) and Chairman and Chief Executive Officer of Anchor Corporation, an
investment adviser (1964-1978); Director of Washington National Corporation
(insurance).

MICHAEL E. NUGENT, Trustee since July, 1991; age 60; 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.

PHILIP J. PURCELL, Trustee since April, 1994; age 53; 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: Barry Fink,
Vice President, Secretary and General Counsel; Robert M. Scanlan, Vice
President; Joseph J. McAlinden, Vice President; Robert S. Giambrone, Vice
President; James F. Willison, Vice President; and Thomas F. Caloia, Treasurer.
In addition, Katherine H. Stromberg, Joseph Arcieri and Gerald J. Lian serve as
Vice Presidents and Marilyn K. Cranney, Lou Anne D. McInnis, Ruth Rossi, Carsten
Otto and Frank Bruttomesso serve as Assistant Secretaries. Mr. Fink is 42 years
old and is currently First Vice President (since June 1993), Secretary and
General Counsel (since February 1997) of InterCapital and DWSC and (since August
1996) Assistant Secretary of DWR; he is also First Vice President, Assistant
Secretary and Assistant General Counsel of Distributors (since February 1997).
He was previously Vice President, Assistant Secretary and Assistant General
Counsel of InterCapital and DWSC. 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 Director of DWTC. He was previously Executive Vice President of
InterCapital (July, 1992-March, 1993) and prior thereto was Chairman of
Harborview Group Inc. Mr. McAlinden is 54 years old and is currently Executive
Vice President of InterCapital (since April, 1996); he is also Chief Investment
Officer of InterCapital and Director of DWTC

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(since April, 1996). He was previously Senior Vice President of InterCapital
(June, 1995-April, 1996) and prior thereto a Managing Director at Dillon Reed.
Mr. Giambrone is 42 years old and is currently Senior Vice President of
InterCapital, DWSC, Distributors and DWTC (since August, 1995) and Director of
DWTC (since April, 1996). He was formerly a partner of KPMG Peat Marwick, LLP.
Mr. Willison is 53 years old and is currently Senior Vice President of
InterCapital. Mr. Caloia is 51 years old and is currently First Vice President
and Assistant Treasurer of InterCapital and DWSC. Ms. Stromberg is 48 years old
and is currently Vice President of InterCapital (since April, 1992). She was
formerly a portfolio manager with InterCapital (October, 1991-April, 1992). Mr.
Arcieri is 48 years old and is currently Vice President of InterCapital. Mr.
Lian is 42 years old and is currently Vice President of InterCapital. Other than
Messrs. Scanlan, Giambrone and McAlinden, each of the above officers has been an
employee of InterCapital or DWR (formerly the corporate parent of InterCapital)
for over five years.

THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES

The Board of Trustees currently consists of eight (8) trustees. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of this
Proxy Statement, there are a total of 84 Dean Witter Funds, comprised of 127
portfolios. As of February 28, 1997, the Dean Witter Funds had total net assets
of approximately $84.2 billion and more than six million shareholders.

Six Trustees and the new nominee (77% of the total number) have no
affiliation or business connection with InterCapital or any of its affiliated
persons. The other two Trustees (the "Management Trustees") are affiliated with
InterCapital. For a period of at least three years after the consummation of the
Merger, at least 75% of the members of the Board of Trustees of the Trust will
not be "interested persons" (as defined in the 1940 Act) of the Investment
Manager. Four of the six Independent Trustees are also Independent Trustees of
the TCW/DW Funds.

Law and regulation establish both general guidelines and specific duties for
the Independent Trustees. The Dean Witter Funds seek as Independent Trustees
individuals of distinction and experience in business and finance, government
service or academia; these are people whose advice and counsel are in demand by
others and for whom there is often competition. To accept a position on the
Funds' Boards, such individuals may reject other attractive assignments because
the Funds make substantial demands on their time. Indeed, by serving on the
Funds' Boards, certain Trustees who would otherwise be qualified and in demand
to serve on bank boards would be prohibited by law from doing so.

All of the current 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. The Funds do not have any nominating
or compensation committees.

The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
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 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
indepen-

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dent accountants and other accounting firms prior to the performance of such
services; reviewing the independence of the independent accountants; considering
the range of audit and non-audit fees; reviewing the adequacy of the Fund's
system of internal controls; and preparing and submitting Committee meeting
minutes to the full Board.

Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect to
derivative investments, if any, made by the Fund.

For the fiscal year ended December 31, 1996, the Board of Trustees of the
Trust held five meetings, and the Audit Committee, the Committee of the
Independent Trustees and the Derivatives Committee of the Trust held three, 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 CHAIRMAN OF COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT COMMITTEE

The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and the
Funds' operations and management. He screens and/or prepares written materials
and identifies critical issues for the Independent Trustees to consider,
develops agendas for Committee meetings, determines the type and amount of
information that the Committees will need to form a judgment on various issues,
and arranges to have that information furnished to Committee members. He also
arranges for the services of independent experts and consults with them in
advance of meetings to help refine reports and to focus on critical issues.
Members of the Committees believe that the person who serves as Chairman of both
Committees and guides their efforts is pivotal to the effective functioning of
the Committees.

The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and with
the Funds' independent auditors. He arranges for a series of special meetings
involving the annual review of investment advisory, management and other
operating contracts of the Funds and, on behalf of the Committees, conducts
negotiations with the Investment Adviser and other service providers. In effect,
the Chairman of the Committees serves as a combination of chief executive and
support staff of the Independent Trustees.

The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since July
1, 1996, as Chairman of the Committee of the Independent Trustees and the Audit
Committee of the TCW/DW Funds. The current Committee Chairman has had more than
35 years experience as a senior executive in the investment company industry.

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS

The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and enhances
their ability to negotiate on behalf of each Fund with the Fund's service
providers. This arrangement also precludes the possibility of separate groups of
Independent Trustees arriving at conflicting decisions regarding operations and
management

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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.

SHARE OWNERSHIP BY TRUSTEES

The Trustees have adopted a policy pursuant to which each Trustee and/or his
or her spouse is required to invest at least $25,000 in any of the Funds in the
Dean Witter Funds complex (and, if applicable, in the TCW/DW Funds complex) on
whose boards the Trustee serves. In addition, the policy contemplates that the
Trustees will, over time, increase their aggregate investment in the Funds above
the $25,000 minimum requirement. The Trustees may allocate their investments
among specific Funds in any manner they determine is appropriate based on their
individual investment objectives. As of the date of this Proxy Statement, each
Trustee is in compliance with the policy. Any future Trustee will be given a one
year period following his or her election within which to comply with the
foregoing. As of December 31, 1996, the total value of the investments by the
Trustees and/or their spouses in shares of the Dean Witter Funds (and, if
applicable, the TCW/DW Funds) was approximately $9.8 million.

As of the record date for this meeting, the aggregate number of shares of
beneficial interest of the Trust owned by the Trust's officers and Trustees as a
group was less than 1 percent of the Trust's shares of beneficial interest
outstanding.

COMPENSATION OF INDEPENDENT TRUSTEES

The Trust pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 for meetings of the Board of Trustees or committees of the
Board of Trustees attended by the Trustee (the Trust pays the Chairman of the
Audit Committee an annual fee of $750 and pays the Chairman of the Committee of
the Independent Trustees an additional annual fee of $1,200). The Trust also
reimburses such Trustees for travel and other out-of-pocket expenses incurred by
them in connection with attending such meetings. Trustees and officers of the
Trust who are or have been employed by the Investment Adviser 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 December 31, 1996.

TRUST COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- -------------------------------------------------------------------------------------------------------- ---------------
<S> <C>
Michael Bozic........................................................................................... $ 1,800
Edwin J. Garn........................................................................................... 1,800
John R. Haire........................................................................................... 3,900
Dr. Manuel H. Johnson................................................................................... 1,750
Michael E. Nugent....................................................................................... 1,800
John L. Schroeder....................................................................................... 1,750
</TABLE>

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The following table illustrates the compensation paid to the Trust's
Independent Trustees for the calendar year ended December 31, 1996 for services
to the 82 Dean Witter Funds and, in the case of Messrs. Haire, Johnson, Nugent
and Schroeder, the 14 TCW/DW Funds that were in operation at December 31, 1996.
With respect to Messrs. Haire, Johnson, Nugent and Schroeder, the TCW/DW Funds
are included solely because of a limited exchange privilege between those Funds
and five Dean Witter Money Market Funds.

CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS

<TABLE>
<CAPTION>
FOR SERVICE AS FOR SERVICE AS
CHAIRMAN OF CHAIRMAN OF
FOR SERVICE AS COMMITTEES OF COMMITTEES OF
DIRECTOR OR INDEPENDENT INDEPENDENT
TRUSTEE AND FOR SERVICE AS DIRECTOR/TRUSTEES TRUSTEES AND
COMMITTEE MEMBER TRUSTEE AND AND AUDIT AUDIT COMMITTEES
OF 82 DEAN WITTER COMMITTEE MEMBER OF COMMITTEES OF 82 OF 14 TCW/DW
NAME OF INDEPENDENT TRUSTEE FUNDS 14 TCW/DW FUNDS DEAN WITTER FUNDS FUNDS
- ------------------------------------ ----------------- -------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Michael Bozic....................... $ 138,850 -- -- --
Edwin J. Garn....................... 140,900 -- -- --
John R. Haire....................... 106,400 $ 64,283 $ 195,450 $ 12,187
Dr. Manuel H. Johnson............... 137,100 66,483 -- --
Michael E. Nugent................... 138,850 64,283 -- --
John L. Schroeder................... 137,150 69,083 -- --

TOTAL CASH
COMPENSATION
FOR SERVICES TO
82 DEAN WITTER
FUNDS AND 14
NAME OF INDEPENDENT TRUSTEE TCW/DW FUNDS
- ------------------------------------ ----------------
<S> <C>
Michael Bozic....................... $ 138,850
Edwin J. Garn....................... 140,900
John R. Haire....................... 378,320
Dr. Manuel H. Johnson............... 203,583
Michael E. Nugent................... 203,133
John L. Schroeder................... 206,233
</TABLE>

As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Trust, have adopted a retirement program under which an
Independent Trustee who retires after serving for at least five years (or such
lesser period as may be determined by the Board) as an Independent Director or
Trustee of any Dean Witter Fund that has adopted the retirement program (each
such Fund referred to as an "Adopting Fund" and each such Trustee referred to as
an "Eligible Trustee") is entitled to retirement payments upon reaching the
eligible retirement age (normally, after attaining age 72). Annual payments are
based upon length of service. Currently, upon retirement, each Eligible Trustee
is entitled to receive from the Adopting Fund, commencing as of his or her
retirement date and continuing for the remainder of his or her life, an annual
retirement benefit (the "Regular Benefit") equal to 25.0% of his or her Eligible
Compensation plus 0.4166666% of such Eligible Compensation for each full month
of service as an Independent Director or Trustee of any Adopting Fund in excess
of five years up to

9
<PAGE>
a maximum of 50.0% after ten years of service. The foregoing percentages may be
changed by the Board.(1) "Eligible Compensation" is one-fifth of the total
compensation earned by such Eligible Trustee for service to the Adopting Fund in
the five year period prior to the date of the Eligible Trustee's retirement.
Benefits under the retirement program are not secured or funded by the Adopting
Funds.

The following table illustrates the retirement benefits accrued to the
Trust's Independent Trustees by the Trust for the fiscal year ended December 31,
1996 and by the 57 Dean Witter Funds (including the Trust) for the year ended
December 31, 1996, and the estimated retirement benefits for the Trust's
Independent Trustees, to commence upon their retirement, from the Trust as of
December 31, 1996 and from the 57 Dean Witter Funds as of December 31, 1996.

RETIREMENT BENEFITS FROM THE TRUST AND ALL DEAN WITTER FUNDS

<TABLE>
<CAPTION>
RETIREMENT ESTIMATED
FOR ALL FUNDS BENEFITS ANNUAL
-------------------------------------- ACCRUED AS BENEFITS
ESTIMATED EXPENSES UPON RETIREMENT(2)
CREDITED YEARS ESTIMATED -------------------- -----------------------
OF SERVICE AT PERCENTAGE OF BY ALL FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING FROM THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION TRUST FUNDS TRUST FUNDS
- --------------------------------------------- ------------------- ----------------- --------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic................................ 10 50.0% $ 338 $ 20,147 $ 850 $ 51,325
Edwin J. Garn................................ 10 50.0 473 27,772 850 51,325
John R. Haire................................ 10 50.0 (365 (3) 46,952 2,296 129,550
Dr. Manuel H. Johnson........................ 10 50.0 202 10,926 850 51,325
Michael E. Nugent............................ 10 50.0 338 19,217 850 51,325
John L. Schroeder............................ 8 41.7 645 38,700 708 42,771
</TABLE>

- ------------------------------
(1) An Eligible Trustee may elect alternate payments of his or her retirement
benefits based upon the combined life expectancy of such Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement. The
amount estimated to be payable under this method, through the remainder of
the later of the lives of such Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit. In addition, the Eligible
Trustee may elect that the surviving spouse's periodic payment of benefits
will be equal to either 50% or 100% of the previous periodic amount, an
election that, respectively, increases or decreases the previous periodic
amount so that the resulting payments will be the actuarial equivalent of
the Regular Benefit.

(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1) above.

(3) This number reflects the effect of the extension of Mr. Haire's term as
Trustee until June 1, 1998.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE TRUSTEES NOMINATED FOR ELECTION.

(2) APPROVAL OR DISAPPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT

BACKGROUND

InterCapital currently serves as investment adviser of the Trust pursuant to
an investment advisory agreement entered into by the Trust and InterCapital (the
"Current Agreement"), and in that capacity provides investment advisory and
certain other services to the Trust. InterCapital is a wholly-owned subsidiary
of DWDC. The approval of a new investment advisory agreement between the Trust
and InterCapital (the "New Agreement") is being

10
<PAGE>
sought in connection with the proposed merger of Morgan Stanley Group Inc.
("Morgan Stanley") and DWDC (the "Merger").

INFORMATION CONCERNING MORGAN STANLEY

Morgan Stanley and various of its directly or indirectly owned subsidiaries,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley & Co."), a
registered broker-dealer and investment adviser, and Morgan Stanley
International, provide a wide range of financial services on a global basis.
Their principal businesses include securities underwriting, distribution and
trading; merger, acquisition, restructuring, real estate, project finance and
other corporate finance advisory activities; merchant banking and other
principal investment activities; stock brokerage and research services; asset
management; the trading of foreign exchange and commodities on a broad range of
asset categories, rates and indices; and global custody, securities clearance
services and securities lending.

THE MERGER

Pursuant to the terms of the Merger, Morgan Stanley will be merged with and
into DWDC with the surviving corporation to be named Morgan Stanley, Dean
Witter, Discover & Co. Following the Merger, InterCapital will be a direct
wholly-owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co.

Under the terms of the Merger, each share of Morgan Stanley common stock
will be converted into the right to receive 1.65 shares of DWDC common stock and
each issued and outstanding share of DWDC common stock will remain outstanding
and will represent one share of Morgan Stanley, Dean Witter, Discover & Co.
common stock. Following the Merger, Morgan Stanley's shareholders will own
approximately 45% and DWDC's shareholders will own approximately 55% of the
outstanding shares of common stock of Morgan Stanley, Dean Witter, Discover &
Co.

The Board of Directors of Morgan Stanley, Dean Witter, Discover & Co. will
consist of fourteen members, two of which will be Morgan Stanley insiders and
two of which will be DWDC insiders. The remaining ten directors will be outside
directors, with Morgan Stanley and DWDC each designating five of the ten. The
Chairman and Chief Executive Officer of Morgan Stanley, Dean Witter, Discover &
Co. will be Philip J. Purcell who is the current Chairman and Chief Executive
Officer of DWDC. The President and Chief Operating Officer of Morgan Stanley,
Dean Witter, Discover & Co. will be the current President of Morgan Stanley,
John Mack.

The Merger is expected to be completed in mid-1997 and is subject to certain
closing conditions, including certain regulatory approvals and the approval of
shareholders of both DWDC and Morgan Stanley.

APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT

In order to assure continuity of investment advisory services to the Trust
after the Merger, the Board met in person for the purpose of considering whether
it would be in the best interests of the Trust and its Shareholders to enter
into a New Agreement between the Trust and the Investment Adviser which would
become effective upon the later of Shareholder approval of the New Agreement or
consummation of the Merger. At its meeting, and for the reasons discussed below
(see "The Board's Consideration"), the Board, including each of the Independent
Trustees, unanimously approved the New Agreement and recommended its approval by
Shareholders.

THE TERMS OF THE NEW AGREEMENT, INCLUDING FEES PAYABLE BY THE TRUST
THEREUNDER, ARE IDENTICAL, IN ALL MATERIAL RESPECTS, TO THOSE OF THE CURRENT
AGREEMENT, EXCEPT FOR THE DATES OF EFFECTIVENESS AND TERMINATION. The terms of
the Current Agreement are fully described under "The Current Investment Advisory
Agreement" below. If approved by Shareholders, the New Agreement will continue
in effect for an initial term expiring April 30, 1999 and will continue in
effect from year to year thereafter if such continuance is approved by the Board
or by a majority of the outstanding voting securities (as defined below) of the
Trust and, in either event, by the vote cast in

11
<PAGE>
person of a majority of the Independent Trustees. In the event that Shareholders
of the Trust do not approve a New Agreement, the Current Agreement will remain
in effect and the Board will take such action, if any, as it deems to be in the
best interests of the Trust and its Shareholders, which may include proposing
that Shareholders approve an agreement in lieu of the New Agreement. In the
event that the Merger is not consummated, the Investment Adviser will continue
to provide services to the Trust in accordance with the terms of the Current
Agreement for such periods as may be approved at least annually by the Board,
including a majority of the Independent Trustees.

REQUIRED VOTE

The New Agreement cannot be implemented unless approved at the Meeting, or
any adjournment thereof, by a majority of the outstanding voting securities of
the Trust. Such a majority means the affirmative vote of the holders of (a) 67%
or more of the shares of the Trust present, in person or by proxy, at the
Meeting, if the holders of more than 50% of the outstanding shares are so
present, or (b) more than 50% of the outstanding shares of the Trust, whichever
is less.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE
NEW INVESTMENT ADVISORY AGREEMENT.

THE BOARD'S CONSIDERATION

At a special meeting of the Committee of the Independent Trustees of the
Trust held on February 20, 1997, at which each of the Independent Trustees of
the Trust was present, and a meeting of the full Board on February 21, 1997, the
Trustees evaluated the New Agreement (the form of which is attached hereto as an
Exhibit). Prior to and during the meeting, the Independent Trustees requested
and received all information they deemed necessary to enable them to determine
whether the New Agreement is in the best interests of the Trust and its
Shareholders. They were assisted in their review and deliberations by
independent legal counsel. In determining whether to approve the New Agreement,
the Trustees assessed the implications of the Merger for the Investment Adviser
and its ability to continue to provide services to the Trust of the same scope
and quality as are presently provided. In particular, the Trustees inquired as
to the impact of the Merger on the Investment Adviser's personnel, management,
facilities and financial capabilities and received assurances in this regard
from senior management of DWDC and the Investment Adviser that the Merger would
not adversely affect the Investment Adviser's ability to fulfill its obligations
under its agreement with the Trust or to operate its business in a manner
consistent with past practices. In addition, the Trustees considered the effects
of the Investment Adviser and Morgan Stanley becoming affiliated persons of each
other. Following the Merger, the 1940 Act will prohibit or impose certain
conditions on the ability of the Trust to engage in certain transactions with
Morgan Stanley and its affiliates. For example, absent exemptive relief, the
Trust will be prohibited from purchasing securities from Morgan Stanley & Co., a
wholly-owned broker-dealer subsidiary of Morgan Stanley, in transactions in
which Morgan Stanley & Co. acts as principal, and the Trust will have to satisfy
certain conditions in order to engage in securities transactions in which Morgan
Stanley & Co. acts as broker or to purchase securities in an underwritten
offering in which Morgan Stanley & Co. acts as an underwriter. In this
connection, senior management of the Investment Adviser represented to the
Trustees that they do not believe these prohibitions or conditions will have a
material effect on the management or performance of the Trust.

The Trustees also considered that the New Agreement is identical, in all
material respects, to the Current Agreement (other than the dates of
effectiveness and termination).

Based upon the Trustees' review and the evaluations of the materials they
received, and after consideration of all factors deemed relevant to them, the
Trustees, including all of the Independent Trustees, determined that the

12
<PAGE>
New Agreement is in the best interests of the Trust and its Shareholders.
ACCORDINGLY, THE BOARD, INCLUDING ALL OF THE INDEPENDENT TRUSTEES, APPROVED THE
NEW AGREEMENT AND VOTED TO RECOMMEND APPROVAL BY SHAREHOLDERS OF THE TRUST.

THE CURRENT INVESTMENT ADVISORY AGREEMENT

The Current Agreement provides that the Investment Adviser shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Adviser obtains and evaluates such
information and advice relating to the economy, securities markets and specific
securities as it considers necessary or useful to continuously manage the assets
of the Trust in a manner consistent with its investment objectives and policies.
In addition, the Investment Adviser pays the compensation of all personnel,
including officers of the Trust, who are its employees. The Investment Adviser
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 return for its
investment services and the expenses which the Investment Adviser assumes under
the Current Agreement, the Trust pays the Investment Adviser compensation which
is computed and accrued weekly and payable monthly and which is determined by
applying the following annual rates to the Trust's weekly net assets: 0.40% of
the portion of the average weekly net assets not exceeding $250 million and
0.30% of the portion of average weekly net assets exceeding $250 million.
Pursuant to the Current Agreement, the Trust accrued to the Investment Adviser
total compensation of $1,091,899 during the fiscal year ended December 31, 1996.
The net assets of the Trust totalled $277,901,395 at December 31, 1996.

Under the Current Agreement, the Trust is obligated to bear all of the costs
and expenses of its operation, except those specifically assumed by the
Investment Adviser, including, without limitation: charges and expenses of any
registrar, 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; costs and expenses 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 Securities and Exchange Commission and various
states and other jurisdictions (including filing fees and legal fees and
disbursements of counsel); the costs and expense of preparing, 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 Trust's administrator or Investment Adviser or any of their corporate
affiliates; all expenses incident to the payment of any dividend or distribution
program; charges and expenses of any outside pricing services; charges and
expenses of legal counsel, including counsel to the Independent Trustees of the
Trust, and independent accountants in connection with any matter relating to the
Trust (not including compensation or expenses of attorneys employed by the
Trust's administrator or Investment Adviser); membership dues of industry
associations; interest payable on Trust 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, liabilities, litigation costs and any indemnification related
thereto); and all other charges and costs of the Trust's operations unless
otherwise explicitly provided in the Current Agreement.

The Current Agreement was initially approved by the Board of Trustees on
December 2, 1992 and by the shareholders of the Trust at a Special Meeting of
Shareholders held on February 25, 1993. The Current Agreement

13
<PAGE>

supersedes an earlier advisory agreement also approved by shareholders on
February 25, 1993 in connection with the assumption by InterCapital of the
investment advisory activities previously performed by another investment
adviser and which took effect on March 1, 1993. The Current Agreement was last
approved by the Shareholders of the Trust as a routine matter at their Annual
Meeting held on June 27, 1996.

The Current 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 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 Agreement's most recent 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 Agreement.

The Current Agreement also provides that it may be terminated at any time by
the Investment Adviser, the Trustees of the Trust 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 will automatically terminate
upon any assignment.

THE INVESTMENT ADVISER

Dean Witter InterCapital Inc. is the Trust's investment adviser.
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.

The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:

Philip 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,
InterCapital, DWSC and DWTC; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and Director
of DWR, Distributors, InterCapital, DWSC and DWTC; 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 Officer is Two
World Trade Center, New York, New York 10048. DWDC has its offices at 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. The Appendix 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 fees
payable by such companies, including the Trust, and their net assets as of March
12, 1997.

14
<PAGE>

InterCapital's wholly-owned subsidiary, DWSC, pursuant to an Administration
Agreement, serves as the Administrator of the Trust and receives from the Trust
compensation which is computed and accrued weekly and payable monthly and which
is determined by applying the annual rate of 0.25% to the portion of the Trust's
average weekly net assets not exceeding $250 million; 0.20% to the portion of
the Trust's average weekly net assets exceeding $250 million but not exceeding
$500 million; 0.167% to the portion to the Trust's average weekly net assets
exceeding $500 million but not exceeding $750 million; and 0.133% to the portion
of the Trust's average weekly net assets exceeding $750 million. For the fiscal
year ended December 31, 1996, the Trust accrued to DWSC, pursuant to the
Administration Agreement, total compensation of $686,036. After the consummation
of the Merger and approval of the New Agreement, DWSC will continue to provide
the same services to the Trust as are being provided currently. DWSC also has
its offices at Two World Trade Center, New York, New York 10048.

During the fiscal year ended December 31, 1996, the Trust accrued to DWTC,
the Trust's Transfer Agent and an affiliate of the Investment Adviser, transfer
agency fees of $117,898. After the consummation of the Merger and approval of
the New Agreement, DWTC will continue to provide the same services to the Trust
as are being provided currently.

AFFILIATED BROKER

Because DWR and InterCapital are under the common control of DWDC, DWR is an
affiliated broker of the Trust. For the fiscal year ended December 31, 1996, the
Trust paid no brokerage commissions to DWR.

(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS

The Trustees have unanimously selected the firm of Price Waterhouse LLP as
the Trust's independent accountants for the fiscal year ending December 31,
1997. Price Waterhouse LLP has been the independent accountants for the Trust
since its inception, and have no direct or indirect financial interest in the
Trust.

A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting of Shareholders and will be available to make a statement and to
respond to appropriate questions of shareholders.

The affirmative vote of the holders of a majority of the shares represented
and entitled to vote at the Annual Meeting is required for ratification of the
selection of Price Waterhouse LLP as the independent accountants for the Trust.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE TRUST.

ADDITIONAL INFORMATION

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

15
<PAGE>
particular proposal to be voted upon has been approved. Broker "non-votes" are
shares held in street name for which the broker indicates that instructions have
not been received from the beneficial owners or other persons entitled to vote
and for which the broker does not have discretionary voting authority.

SHAREHOLDER PROPOSALS

Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than November 25, 1997, for
inclusion in the proxy statement and proxy for 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 MOST RECENT ANNUAL REPORT, FOR THE FISCAL YEAR ENDED DECEMBER
31, 1996, HAS BEEN PREVIOUSLY SENT TO SHAREHOLDERS AND 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).

INTEREST OF CERTAIN PERSONS

DWDC, InterCapital, DWR, DWSC and certain of their respective Directors,
Officers, and employees, including persons who are Trustees or Officers of the
Trust, may be deemed to have an interest in certain of the proposals described
in this Proxy Statement to the extent that certain of such companies and their
affiliates have contractual and other arrangements, described elsewhere in this
Proxy Statement, pursuant to which they are paid fees by the Trust, and certain
of those individuals are compensated for performing services relating to the
Trust and may also own shares of DWDC. Such companies and persons may thus be
deemed to derive benefits from the approvals by Shareholders of such proposals.

OTHER BUSINESS

The management of the Trust 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 attached 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
BARRY FINK
SECRETARY

16
<PAGE>
APPENDIX

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. Set forth below is a chart showing the net
assets of each such investment company as of March 12, 1997 and the investment
management or advisory fee rate(s) applicable to such investment company.

<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
--------------- ------------------------------
<C> <S> <C> <C>
1. DEAN WITTER CALIFORNIA TAX-FREE INCOME
FUND*................................... $ 945,010,134 $0.55% on assets up to $500
million, scaled down at
various asset levels to 0.45%
on assets over $1.25 billion
2. DEAN WITTER LIMITED TERM MUNICIPAL
TRUST*.................................. $ 61,210,093 0.50%
3. DEAN WITTER MULTI-STATE MUNICIPAL SERIES
TRUST*.................................. $ 388,189,887 0.35%
4. DEAN WITTER NATIONAL MUNICIPAL TRUST*... $ 84,362,522 0.35%(1)
5. DEAN WITTER NEW YORK TAX-FREE INCOME
FUND*................................... $ 185,662,118 0.55% on assets up to $500
million and 0.525% on assets
over $500 million
6. DEAN WITTER TAX-EXEMPT SECURITIES
TRUST*.................................. $ 1,158,271,636 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.325%
on assets over $1.25 billion
7. INTERCAPITAL CALIFORNIA INSURED
MUNICIPAL INCOME TRUST**................ $ 240,850,768 0.35%
8. INTERCAPITAL CALIFORNIA QUALITY
MUNICIPAL SECURITIES**.................. $ 201,480,242 0.35%
9. INTERCAPITAL INSURED CALIFORNIA
MUNICIPAL SECURITIES**.................. $ 62,879,708 0.35%
10. INTERCAPITAL INSURED MUNICIPAL BOND
TRUST**................................. $ 108,687,697 0.35%
11. INTERCAPITAL INSURED MUNICIPAL INCOME
TRUST**................................. $ 577,173,893 0.35%
12. INTERCAPITAL INSURED MUNICIPAL
SECURITIES**............................ $ 136,016,212 0.35%
13. INTERCAPITAL INSURED MUNICIPAL
TRUST**................................. $ 481,829,417 0.35%
14. INTERCAPITAL NEW YORK QUALITY MUNICIPAL
SECURITIES**............................ $ 92,491,556 0.35%
15. INTERCAPITAL QUALITY MUNICIPAL INCOME
TRUST**................................. $ 726,527,989 0.35%
16. INTERCAPITAL QUALITY MUNICIPAL
INVESTMENT TRUST**...................... $ 377,428,244 0.35%
17. INTERCAPITAL QUALITY MUNICIPAL
SECURITIES**............................ $ 356,447,008 0.35%
18. MUNICIPAL INCOME TRUST**................ $ 299,197,956 0.35% on assets up to $250
million and 0.25% on assets
over $250 million
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT OR
ADVISORY FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
--------------- ------------------------------
<C> <S> <C> <C>
19. MUNICIPAL INCOME TRUST II**............. $ 273,432,009 0.40% on assets up to $250
million and 0.30% on assets
over $250 million
20. MUNICIPAL INCOME TRUST III**............ $ 61,981,499 $0.40% on assets up to $250
million and 0.30% on assets
over $250 million
21. MUNICIPAL INCOME OPPORTUNITIES
TRUST**................................. $ 176,784,608 0.50%
22. MUNICIPAL INCOME OPPORTUNITIES TRUST
II**.................................... $ 174,666,431 0.50%
23. MUNICIPAL INCOME OPPORTUNITIES TRUST
III**................................... $ 102,809,085 0.50%
24. MUNICIPAL PREMIUM INCOME TRUST**........ $ 350,292,786 0.40%
25. DEAN WITTER SELECT MUNICIPAL
REINVESTMENT FUND***.................... $ 90,885,593 0.50%
26. DEAN WITTER HAWAII MUNICIPAL TRUST*..... $ 3,522,850 0.35%(2)
</TABLE>

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* Open-end investment company

** Closed-end investment company

*** Open-end investment company offered only to the holders of units of
certain unit investment trusts (UITs) in connection with the reinvestment
of UIT distributions

(1) InterCapital has undertaken, until June 30, 1997, to assume all operating
expenses (except for any 12b-1 and brokerage fees) of Dean Witter
National Municipal Trust and to 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 0.50% of the
average daily net assets of that company.

(2) InterCapital has undertaken, until June 30, 1997, to assume all operating
expenses (except for any 12b-1 and brokerage fees) of Dean Witter Hawaii
Municipal Trust and to waive the compensation provided for in its
investment management agreement with that company.
<PAGE>
EXHIBIT

FORM OF NEW INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of the th day of , 1997 by and between
Municipal Income Trust II, 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 Adviser")

WHEREAS, The Fund is engaged in business as a closed-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and

WHEREAS, The Investment Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act"), and engages in the
business of acting as investment adviser; and

WHEREAS, The Fund desires to retain the Investment Adviser to render
investment advisory services in the manner and on the terms and conditions
hereafter set forth; and

WHEREAS, The Investment Adviser desires to be retained to perform services
on said terms and conditions:

Now, Therefore, this Agreement

WITNESSETH:

that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Adviser agree as follows:

1.The Fund hereby retains the Investment Adviser to act as investment
adviser of the Fund and, subject to the supervision of the Trustees of the
Fund (the "Trustees"), to supervise the investment activities of the Fund as
hereinafter set forth. Without limiting the generality of the foregoing, the
Investment Adviser 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 Adviser shall deem necessary or appropriate. The
Investment Adviser 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 Adviser in the discharge of its duties as the Fund
may, from time to time, reasonably request.

2.The Investment Adviser 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 Adviser shall be deemed to
include persons employed or otherwise retained by the Investment Adviser 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 Adviser may
desire. The Investment Adviser shall, as agent for the Fund, maintain the Fund's
records required in connection with the performance of its obligations under
this Agreement and required to be maintained under the Act. All such records so
maintained shall be the property of the Fund and, upon request therefor, the
Investment Adviser shall surrender to the Fund such of the records so requested.

3.The Fund will, from time to time, furnish or otherwise make available to
the Investment Adviser such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Adviser may reasonably require in order to discharge its duties and obligations
hereunder.
<PAGE>
4.The Investment Adviser shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall,
at its own expense, pay the compensation of its officers and employees, if any,
who are also officers of the Fund.

5.The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund, including without limitation: 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 expenses 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 and the costs and expenses of preparing, 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 Adviser or the Fund's administrator or any corporate affiliate of
either of them; all expenses incident to the payment of any dividend or
distribution program; 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 Adviser or the Fund's administrator,
and of independent accountants, in connection with any matter relating to the
Fund; membership dues of industry associations; interest payable on Fund
borrowings; fees and expenses incident to the listing of the Fund's shares on
any stock exchange; 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 by the Investment Adviser, the Fund shall
pay to the Investment Advisor monthly compensation determined by applying
the following annual rates to the Fund's average weekly net assets: 0.40% of the
portion of the average weekly net assets not exceeding $250 million and 0.30% of
the portion of the average weekly net assets exceeding $250 million. Except as
hereinafter set forth, compensation under this Agreement shall be calculated and
accrued weekly and paid monthly by applying the annual rate to the average
weekly net assets of the Fund determined as of the close of the last business
day of each week. At the request of the Investment Adviser, compensation
hereunder shall be calculated and accrued at more frequent intervals in a manner
consistent with the calculation of fees on a weekly basis. If this Agreement
becomes effective 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.

7.The Investment Adviser will use its best efforts in the 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 Adviser 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 Adviser or for any losses sustained by the Fund or
its investors.

8.Nothing contained in this Agreement shall prevent the Investment Adviser
or any affiliated person of the Investment Adviser from acting as
investment adviser or manager for any other person, firm or corporation

EX-2
<PAGE>
(including any other investment company), whether or not the investment
objectives or policies of any such other person, firm or corporation are similar
to those of the Fund, and shall not in any way bind or restrict the Investment
Adviser 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 the Investment Adviser or any such affiliated person may be acting.
Nothing in this Agreement shall limit or restrict the right of any Trustee,
officer or employee of the Investment Adviser 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.

9.This Agreement shall remain in effect until April 30, 1999 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 Act, of the outstanding
voting securities of the Fund or by the Board of 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; 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 Adviser, 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 Adviser 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.

10.
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
Adviser shall be liable for failing to do so.

11.
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 Advisers Act or any
rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.

12.
The Declaration of Trust establishing Municipal Income Trust II, dated
March 15, 1988, 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 Municipal Income Trust II 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
Municipal Income Trust II 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 Municipal Income
Trust II, but the Trust Estate only shall be liable.

EX-3
<PAGE>
IN WITNESS WHEREOF, the parties thereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.

MUNICIPAL INCOME TRUST II

By:

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Attest:
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DEAN WITTER INTERCAPITAL INC.

By:

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Attest:
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EX-4
<PAGE>

MUNICIPAL INCOME TRUST II

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Robert M. Scanlan, Barry Fink, and Joseph J.
McAlinden, or any of them, proxies, each with the power of substitution, to vote
on behalf of the undersigned at the Annual Meeting of Shareholders of Municipal
Income Trust II on May 20, 1997, at 10:00 a.m., New York City time, and at any
adjournment thereof, on the proposals set forth in the Notice of Meeting dated
March 19, 1997 as follows:

(CONTINUED ON REVERSE SIDE)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE TRUSTEES AND THE PROPOSALS SET FORTH ON THE REVERSE HEREOF AND AS
RECOMMENDED BY THE BOARD OF TRUSTEES.

IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.

<PAGE>

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/X/ PLEASE MARK VOTES
AS IN THE EXAMPLE
USING BLACK OR
BLUE INK

FOR ALL
FOR WITHHOLD EXCEPT

1. Election of three (3) Trustees: / / / / / /
Wayne E. Hedien, Manuel H. Johnson,
John L. Schroeder

If you wish to withhold authority for any particular nominee, mark the
"For All Except" Box and strike a line through the nominee's name.

FOR AGAINST ABSTAIN

2. Approval of New Investment Advisory / / / / / /
Agreement with Dean Witter InterCapital
Inc. in connection with proposed merger.

FOR AGAINST ABSTAIN

3. Ratification of appointment of Price / / / / / /
Waterhouse LLP as independent accountants.

Please make sure to sign and date
this Proxy using black or blue ink. Date
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Shareholder sign in the box above Co-Owner (if any) sign in the box above

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^ PLEASE DETACH AT PERFORATION ^

MUNICIPAL INCOME TRUST II

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IMPORTANT

PLEASE SEND IN YOUR PROXY............TODAY!

YOU ARE URGED TO DATE AND SIGN THE ATTACHED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO
SHAREHOLDERS WHO HAVE NOT RESPONDED.

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