<PAGE>
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
....HIGH INCOME ADVANTAGE TRUST II. . . . . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
....Marilyn K. Cranney. . . . . . . . . . . . . . . . . . . . .
(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.
<PAGE>
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:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
HIGH INCOME ADVANTAGE TRUST II
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 27, 1996
The Annual Meeting of Shareholders of HIGH INCOME ADVANTAGE TRUST II (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
December 27, 1996, at 11:00 a.m., New York City time, for the following
purposes:
1. To elect two (2) Trustees to serve until the 1999 Annual Meeting, or
until their successors shall have been elected and qualified;
2. To approve or disapprove the continuance of the Trust's currently
effective Investment Management Agreement with Dean Witter InterCapital
Inc.;
3. To ratify or reject the selection of Price Waterhouse LLP as the
Trust's independent accountants for the fiscal year ending July 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 October 25, 1996 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 the proposal to approve continuance of the Investment Management
Agreement and will vote against any such adjournment those proxies required
to be voted against that proposal.
SHELDON CURTIS,
Secretary
October 30, 1996
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>
HIGH INCOME ADVANTAGE TRUST II
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 27, 1996
This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of HIGH INCOME ADVANTAGE TRUST II (the
"Trust"), for use at the Annual Meeting of Shareholders of the Trust to be
held on December 27, 1996 (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. 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 Meeting. Attendance at the Meeting will not in and of itself revoke a
proxy.
Shareholders of record as of the close of business on October 25, 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 October 25, 1996, there were
outstanding 35,611,307 shares of beneficial interest of the Trust, all with
$.01 par value. No person was known to own 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 the Meeting, consisting principally of
mailing and printing expenses, 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. ("InterCapital" or the
"Investment Manager"), 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 $3,000 and will be borne by the Trust. The
first mailing of this proxy statement is expected to be made on or about
November 4, 1996.
(1) ELECTION OF TRUSTEES
The number of Trustees has been currently fixed by the Trustees, pursuant
to the Trust's Declaration of Trust, at eight. At the Meeting, two nominees
are to be elected to the Trust's Board of Trustees. There are currently eight
Trustees, two of whom (Michael Bozic and Charles A. Fiumefreddo) are standing
for election at the Meeting to serve until the 1999 Annual Meeting, in
accordance with the Trust's Declaration of Trust.
2
<PAGE>
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 "Act"). The nominees for election as Trustees have been proposed
by the Trustees now serving or, in the case of the 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.
The nominees of the Board of Trustees 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:
Michael Bozic and Charles A. Fiumefreddo. 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 no reason
why any of said nominees would be unable or unwilling to accept nomination or
election. Trustees will be elected by a plurality of the votes cast at the
Meeting. Trustees will be elected by a plurality of the votes cast at the
Meeting.
Pursuant to the provisions of the Trust's Declaration of Trust, as
amended, the nominees for election as Trustees are divided into three
separate classes, each class having a term of three years. The term of office
of one of each of the three classes will expire each year.
The Board has determined that the nominees for election as Trustee shall
be standing for election as Trustee in each of the three classes of Trustee
as follows: Class I--Messrs. Bozic and Fiumefreddo; Class II--Messrs. Johnson
and Schroeder; and Class III--Messrs. Garn, Haire, Nugent and Purcell. Each
Nominee 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. As a consequence of this method of election, the
replacement of a majority of the Board could be delayed for up to two years.
In accordance with the above, the Trustees in Class I are standing for
election at the Meeting and, if elected, will serve until the 1999 Annual
Meeting, or until their successors shall have been elected and qualified.
The following information regarding each of the nominees for election as
Trustee, and each of the other 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 October 25, 1996 (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 82 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, Dean Witter Services Company Inc.
("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:
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
and Weirton Steel Corporation.
3
<PAGE>
CHARLES A. FIUMEFREDDO,* Trustee since July, 1991; age 63; Chairman, Chief
Executive Officer and Director of Dean Witter InterCapital Inc.
("InterCapital"), Dean Witter Services Company Inc. ("DWSC"), and Dean Witter
Distributors Inc. ("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).
The Trustees who are not standing for re-election at this Meeting are:
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 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 August, 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; 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).
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).
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.
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
- ------------
* Messrs. Fiumefreddo and Purcell may be deemed "interested persons," as
defined in Section 2(a)(19) of the Act, of the Trust and its Investment
Manager due to their affiliation with the Investment Manager and/or its
affiliated companies.
4
<PAGE>
President and Chief Investment Officer of the Home Insurance Company (August,
1991-September, 1995) and Chairman and Chief Investment Officer of
Axe-Houghton Management and the Axe-Houghton Funds (1983-1991).
The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; Robert M. Scanlan,
Vice President; Joseph J. McAlinden, Vice President; Robert S. Giambrone,
Vice President; Peter M. Avelar, Vice President; and Thomas F. Caloia,
Treasurer. In addition, Jonathan R. Page and James F. Willison serve as Vice
Presidents and Marilyn K. Cranney, Barry Fink, Lou Anne D. McInnis, Ruth
Rossi and Carsten Otto 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 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 53 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 (since April, 1996). He was previously Senior Vice President of
InterCapital (June, 1995-April, 1996) and prior thereto was a Managing
Director of 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. Avelar is 38 years old and is
currently Senior Vice President of InterCapital. Mr. Caloia is 50 years old
and is currently First Vice President and Assistant Treasurer of InterCapital
and DWSC. Mr. Page is 50 years old and is currently Senior Vice President of
InterCapital. Mr. Willison is 53 years old and is currently Senior 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 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 82 Dean Witter Funds, comprised of
122 portfolios. As of September 30, 1996, the Dean Witter Funds had total net
assets of approximately $78.0 billion and more than five million
shareholders.
Six Trustees (75% of the total number) have no affiliation or business
connection with InterCapital or any of its affiliated persons and do not own
any stock or other securities issued by InterCapital's parent company, DWDC.
These are the "disinterested" or "independent" Trustees. The other two
Trustees (the "management Trustees") are affiliated with InterCapital. Four
of the six independent Trustees are also Independent Trustees of the TCW/DW
Funds.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The Dean Witter Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Funds' Boards, such individuals may reject other attractive
assignments because the Funds make substantial demands on their time. Indeed,
by serving on the Funds' Boards, certain Trustees who would otherwise be
qualified and in demand to serve on bank boards would be prohibited by law
from doing so.
5
<PAGE>
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 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 July 31, 1996, 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 three,
ten and four 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 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.
6
<PAGE>
The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and
the Audit Committee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of Independent
Trustees, and a Chairman of their Committees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Dean Witter Funds.
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 September 30,
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 $8.5 million.
As of October 25, 1996, 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 Manager
or an affiliated company receive no compensation or expense reimbursement
from the Trust.
7
<PAGE>
The following table illustrates the compensation paid to the Trust's
Independent Trustees by the Trust for the fiscal year ended July 31, 1996.
TRUST COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE TRUST
- --------------------------- --------------
<S> <C>
Michael Bozic .............. $1,750
Edwin J. Garn .............. 1,850
John R. Haire .............. 3,963
Dr. Manuel H. Johnson ..... 1,800
Michael E. Nugent .......... 1,700
John L. Schroeder .......... 1,800
</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, Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at
December 31, 1995. 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. 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>
FOR SERVICE AS TOTAL
FOR SERVICE AS CHAIRMAN OF COMPENSATION
DIRECTOR OR FOR SERVICE AS COMMITTEE OF PAID FOR
TRUSTEE AND TRUSTEE AND INDEPENDENT SERVICES TO 79
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ DEAN WITTER
OF 79 DEAN WITTER OF 11 TCW/DW TRUSTEES AND FUNDS AND 11
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS AUDIT COMMITTEE 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(1) 397,838
Dr. Manuel H. Johnson ..... 136,450 82,038 -- 218,488
Michael E. Nugent .......... 124,200 75,038 -- 199,238
John L. Schroeder .......... 136,450 46,964 -- 183,414
</TABLE>
- ------------
(1) For the 79 Dean Witter Funds in operation at December 31, 1995. As
noted above, on July 1, 1996, Mr. Haire became Chairman of the
Committee of the Independent Trustees and the Audit Committee of the
TCW/DW Funds in addition to continuing to serve in such positions for
the Dean Witter Funds.
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
8
<PAGE>
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.(2) "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 July 31,
1996 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 July 31, 1996 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 RETIREMENT ESTIMATED ANNUAL
------------------------------- BENEFITS BENEFITS UPON
ESTIMATED ACCRUED AS RETIREMENT(3)
CREDITED YEARS ESTIMATED EXPENSES ----------------------
OF SERVICE AT PERCENTAGE OF ------------------------------ FROM
RETIREMENT ELIGIBLE BY THE BY ALL THE FROM ALL
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION TRUST ADOPTING FUNDS TRUST ADOPTING FUNDS
- --------------------------- ------------- -------------- --------- -------------- ----- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 50.0% $ 412 $ 26,359 $ 950 $ 51,550
Edwin J. Garn ............. 10 50.0 612 41,901 950 51,550
John R. Haire ............. 10 50.0 1,360 261,763 2,335 130,404
Dr. Manuel H. Johnson .... 10 50.0 252 16,748 950 51,550
Michael E. Nugent ......... 10 50.0 438 30,370 950 51,550
John L. Schroeder ......... 8 41.7 802 51,812 792 42,958
</TABLE>
- ------------
(2) 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.
(3) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (2)
above.
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT MANAGEMENT AGREEMENT
The Trust's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Manager" or "InterCapital"), pursuant
to an Investment Management Agreement dated June 30, 1993 (referred to herein
as the "Management Agreement") which took effect upon the distribution by
Sears, Roebuck and Co. ("Sears") to its shareholders of all the common shares
of DWDC (the parent company of InterCapital and DWR) then owned by Sears.
The Management Agreement was approved by the Board of Trustees on October
30, 1992, and by the shareholders of the Trust at the Annual Meeting of
Shareholders held on January 13, 1993. The present
9
<PAGE>
Management Agreement supersedes an earlier management agreement originally
entered into by the Trust with DWR, through its InterCapital Division, and
initially approved by the Board, including a majority of the Independent
Trustees, on August 8, 1988. In an internal reorganization which took place
in January, 1993, InterCapital assumed the investment management activities
previously performed by the InterCapital Division of DWR. The assumption by
InterCapital of DWR's rights and obligations under this earlier management
agreement in connection with the reorganization was approved by the Trustees
at a meeting held on October 30, 1992 and also by the shareholders of the
Trust at the Annual Meeting of Shareholders on January 13, 1993.
The terms of the Management Agreement, including fees payable by the Trust
thereunder, are substantially identical in all respects to those of the
earlier management agreement except for the dates of effectiveness and
expiration and the name of the Investment Manager. The terms of the
Management Agreement are described below. The Management Agreement was last
approved by the shareholders of the Trust as a routine matter at their Annual
Meeting held on December 20, 1995. The 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 Board held on April 17, 1996.
In the event shareholders do not approve continuance of the Management
Agreement by the required majority vote at the forthcoming meeting or any
adjournment thereof, the Board of Trustees of the Trust will take such action
as it deems to be in the best interest of the Trust and its shareholders,
which may include calling a special meeting of shareholders to vote on a new
investment management agreement.
In considering whether or not to approve the Management Agreement, the
Board of Trustees reviewed the terms of the agreement and considered all
materials and information deemed relevant to its determination. Among other
things, the Board considered the nature and scope of services to be rendered,
the quality of the Investment Manager's services and personnel, and the
appropriateness of the fees that are paid under the Management Agreement.
Based upon its review, the Board of Trustees, including all of the
Independent Trustees, determined that the approval of the Management
Agreement was in the best interests of the Trust and its shareholders.
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 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.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
RECOMMENDS THAT THE SHAREHOLDERS APPROVE THE MANAGEMENT AGREEMENT.
THE MANAGEMENT AGREEMENT
The 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 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.
The 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
10
<PAGE>
and equipment, and clerical and bookkeeping services and telephone service,
heat, light, power and other utilities. The Investment Manager also pays for
the services of personnel in connection with the pricing of the Trust's
shares and the preparation of prospectuses, proxy statements and reports
required to be filed with federal and state securities commissions (except
insofar as the participation or assistance of independent accountants and
attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In return for its services and the expenses the Investment
Manager assumes under the Management Agreement, the Trust pays the Investment
Manager compensation which is accrued weekly and payable monthly and which is
determined by applying the annual rate of 0.75% to the Trust's average weekly
net assets not exceeding $250 million; 0.60% to the portion of average weekly
net assets exceeding $250 million and not exceeding $500 million; 0.50% to
the portion of average weekly net assets exceeding $500 million and not
exceeding $750 million; 0.40% to the portion of average weekly net assets
exceeding $750 million and not exceeding $1 billion; 0.30% to the portion of
average weekly net assets exceeding $1 billion. This fee is higher than that
paid by most investment companies. For the fiscal year ended July 31, 1996,
the Trust accrued to the Investment Manager total compensation of $1,600,337.
The net assets of the Trust totalled $212,758,862 at July 31, 1996.
Under the Management Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Manager, 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
corporate fees payable by the Trust to federal, state or other governmental
agencies; costs and expenses of engraving or printing of 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 cost and expense of printing, including typesetting, and
distributing prospectuses of the Trust to its 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 the pricing of the Trust's shares; 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 Investment Manager); association dues; interest payable on
the Fund'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 Fund which inure to its
benefit; and 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 operations unless
otherwise explicitly provided in the Management Agreement.
The 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 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 Management Agreement or "interested
persons" of any such party (as defined in the Act) at a meeting called for
the purpose of voting on such approval. The 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 Management Agreement.
11
<PAGE>
The Management Agreement also provides that it may be terminated at any
time by the Investment Manager, 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.
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 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 Dean Witter, Discover & Co. ("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,
DWSC, InterCapital 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 Executive Officer and Directors 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. 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 to InterCapital by such companies, including the Trust, and their net
assets as of October 25, 1996.
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.
12
<PAGE>
During the fiscal year ended July 31, 1996, the Fund accrued to Dean
Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $110,590.
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is
an affiliated broker of InterCapital. For the fiscal year ended July 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 July 31, 1997.
Its selection is being submitted for ratification or rejection by
shareholders at the Meeting. Price Waterhouse LLP has been the independent
accountants for the Trust since its inception, and has no direct or indirect
financial interest in the Trust.
A representative of Price Waterhouse LLP is expected to be present at the
Meeting and will be available to make a statement, if he or she so desires,
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
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.
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 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 July 3, 1997 for
inclusion in the proxy statement 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.
13
<PAGE>
REPORTS TO SHAREHOLDERS
The Trust's most recent Annual Report, for the fiscal year ended July 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).
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
14
<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, with the net assets shown as of
October 25, 1996:
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 10/25/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
1.DEAN WITTER HIGH YIELD SECURITIES INC.* ........... $ 465,764,761 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* ..... $6,664,625,132 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* ......... $ 229,837,408 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* ............. $ 711,126,845 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.** ............. $ 212,949,709 0.50%
6.HIGH INCOME ADVANTAGE TRUST** ..................... $ 155,717,609 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** .................. $ 209,426,981 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** ................. $ 80,426,260 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* ....... $ 201,255,950 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* ............. $ 114,261,616 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** ............ $ 440,715,195 0.60%
12.DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.* .. $ 87,913,510 0.55% on assets up to
$500 million and 0.50% on
assets over $500 million
13.DEAN WITTER PREMIER INCOME TRUST* ................ $ 25,526,254 0.50% (of which 40% is paid to
a Sub-Adviser)
14.DEAN WITTER SHORT-TERM U.S. TREASURY TRUST* ...... $ 274,058,379 0.35%
A-1
<PAGE>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 10/25/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
15.DEAN WITTER DIVERSIFIED INCOME TRUST* ............ $ 740,759,639 0.40%
16.DEAN WITTER SHORT-TERM BOND FUND* ................ $ 39,960,083 0.70%(1)
17.DEAN WITTER HIGH INCOME SECURITIES* .............. $ 807,663,293 0.50% on assets up to
$500 million and 0.425% on
assets over $500 million.
18.PRIME INCOME TRUST** ............................. $ 967,109,601 0.90% on assets up to
$500 million and 0.85% on
assets over $500 million
19.DEAN WITTER BALANCED INCOME FUND* ................ $ 42,349,531 0.60%
20.DEAN WITTER RETIREMENT SERIES:*
(a) U.S. GOVERNMENT SECURITIES SERIES ............. $ 10,777,095 0.65% (2)
(b) INTERMEDIATE INCOME SECURITIES SERIES ......... $ 6,287,271 0.65% (2)
21.DEAN WITTER VARIABLE INVESTMENT SERIES:***
(a) QUALITY INCOME PLUS PORTFOLIO ................ $ 471,930,082 0.50% on assets up to
$500 million and 0.45% on
assets over $500 million
(b) HIGH YIELD PORTFOLIO ......................... $ 235,450,410 0.50%
22.DEAN WITTER SELECT DIMENSIONS INVESTMENT
SERIES:***
(a) DIVERSIFIED INCOME PORTFOLIO ................. $ 25,653,777 0.40%(3)
(b) NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO .................................... $ 3,559,912 0.65%(3) (of which 40% is paid
to a Sub-Adviser)
23.DEAN WITTER INTERMEDIATE TERM
U.S. TREASURY TRUST* ............................. $ 2,297,864 0.35%(4)
</TABLE>
- ------------
* 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 of Dean Witter
Short-Term Bond Fund (except for any brokerage fees) 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 1.0% of that company's average daily net
assets.
(2) InterCapital has undertaken, from January 1, 1996 through July 31,
1997, to continue to assume all operating expenses of the Series of
Dean Witter Retirement Series (except for brokerage fees and a portion
of organizational expenses) and to waive the compensation provided for
each Series in its investment management agreement with that company in
respect of each Series to the extent that such expenses and
compensation on an annualized basis exceed 1.0% of the average daily
net assets of the pertinent Series.
(3) 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.
(4) 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.
A-2
<PAGE>
HIGH INCOME ADVANTAGE TRUST II
ANNUAL MEETING OF SHAREHOLDERS--DECEMBER 27, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, ROBERT M. SCANLAN, BARRY
FINK, 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 HIGH
INCOME ADVANTAGE TRUST II on December 27, 1996 at 11:00 a.m., New York City
time, and at any adjournment thereof, on the proposals set forth in the
Notice of Meeting dated October 30, 1996 as follows:
THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEES AND
FOR THE PROPOSALS.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE SO THAT YOUR VOTE ON ALL MATTERS MAY BE COUNTED.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [X] OR [X] IN BLUE OR BLACK INK.
1. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees)
Michael Bozic, Charles A. Fiumefreddo
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -----------------------------------------------------------------------------
2. APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
116
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the shares are
registered in more than one name, each
joint owner or each fiduciary should sign
personally. Only authorized officers
should sign for corporations.
Dated ___________________________________
-----------------------------------------
Signature
-----------------------------------------
Signature
