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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
- --------------------------------------------------------------------------------
Prime Income Trust
(Name of Registrant(s) Specified in its Charter)
- --------------------------------------------------------------------------------
Barry Fink
(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:
- --------------------------------------------------------------------------------
<PAGE>
PRIME INCOME TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1997
Notice is hereby given that a Special Meeting of Shareholders of Prime
Income Trust (the "Fund") will be held (the "Meeting") in the Career Development
Room, 61st Floor, 2 World Trade Center, New York, New York 10048, on May 20,
1997, at 11:00 a.m., New York City time, for the following purposes:
1. To approve or disapprove a new Investment Advisory Agreement between the
Fund 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;
2. To elect nine (9) Trustees to serve until their successors shall have
been elected and qualified;
3. To ratify or reject the selection of Price Waterhouse LLP as the Fund's
independent accountants for its current fiscal year; and
4. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
Shareholders of record of the Fund 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 Fund's shares present in person or by proxy at the
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of Proposal 1 and will
vote against any such adjournment those proxies to be voted against that
Proposal.
BARRY FINK
SECRETARY
March 19, 1997
New York, New York
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU CAST YOUR VOTE:
- FOR approval of the new Investment Advisory Agreement.
- FOR the election of all of the Trustees nominated for election.
- FOR the ratification of the selection of independent public accountants
for the current fiscal year of the Fund.
YOUR VOTE IS IMPORTANT
<PAGE>
PRIME INCOME TRUST
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
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PROXY STATEMENT
---------------------
SPECIAL 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 Prime Income Trust (the
"Fund") for use at the Special Meeting of Shareholders of the Fund to be held on
May 20, 1997 (the "Meeting"), and at any adjournments thereof. The first mailing
of this Proxy Statement is expected to be made on or about March 19, 1997.
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 1 and 3 set forth in the attached Notice of Special
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 Fund, execution and delivery of a later dated proxy to the Secretary of
the Fund (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.
The holders of shares ("Shareholders") of record 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 (the "Record Date"), are
entitled to one vote for each share held and a fractional vote for a fractional
share. The number of shares outstanding for the Fund as of the Record Date is
114,139,837. No person was known to own as much as 5% of the outstanding shares
of the Fund on that date. The percentage ownership of shares of the Fund changes
from time to time depending on purchases and redemptions by Shareholders and the
total number of shares outstanding.
The cost of soliciting proxies for the Meeting, which consists principally
of printing and mailing expenses and which is expected to be approximately
$66,000, will be allocated as follows: 90% of the cost will be borne by Dean
Witter, Discover and Co., and 10% of the cost will be borne by the Fund.
Therefore, the total cost to the Fund of soliciting proxies is estimated to be
approximately $6,600. The solicitation of proxies will be by mail, which may be
supplemented by solicitation by mail, telephone or otherwise through Trustees
and officers of the Fund and officers and regular employees of certain
affiliates of the Fund, including Dean Witter InterCapital Inc., Dean Witter
Trust Company, Dean Witter Services Company Inc. and/or Dean Witter Reynolds
Inc., without special compensation. In addition, Dean Witter InterCapital Inc.
may employ First Data Corp. as proxy solicitor, the cost of which is estimated
to be approximately $28,000 and will be borne by Dean Witter, Discover & Co.
First Data Corp. and Dean Witter Trust Company 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 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 Fund
has been advised by counsel that these procedures are consistent with the
requirements of applicable law.
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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 First Data Corp., additional expenses are expected to be approximately
$6.00 per telephone vote transacted, which would be borne by Dean Witter,
Discover & Co.
(1) APPROVAL OR DISAPPROVAL OF NEW INVESTMENT
ADVISORY AGREEMENT
BACKGROUND
Dean Witter InterCapital Inc. (the "Investment Adviser" or "InterCapital")
currently serves as investment adviser of the Fund pursuant to an investment
advisory agreement entered into by the Fund and InterCapital (the "Current
Agreement"), and in that capacity provides investment advisory services to the
Fund. InterCapital is a wholly-owned subsidiary of Dean Witter, Discover & Co.
("DWDC"). The approval of a new investment advisory agreement between the Fund
and InterCapital (the "New Agreement") is being 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 thereafter 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 John Mack, who is the current President of
Morgan Stanley.
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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 Fund
after the Merger, the Board of the Fund met in person for the purpose of
considering whether it would be in the best interests of the Fund and its
Shareholders to enter into a New Agreement between the Fund 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 of the
Fund, including all of the Trustees who are not "interested persons," as defined
in the Investment Company Act of 1940, as amended (the "1940 Act"), of the
Investment Manager (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 FUND
THEREUNDER, ARE IDENTICAL, IN ALL MATERIAL RESPECTS, TO THOSE OF THE
CORRESPONDING 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. The New Agreement will be continued in effect from year to year thereafter
if each such continuance is approved by the Board or by a majority of the
outstanding voting securities (as defined below) of the Fund and, in either
event, by the vote cast in person of a majority of the Independent Trustees. In
the event that Shareholders of the Fund 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 Fund 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 Fund 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 Fund. Such a majority means the affirmative vote of the holders of (a) 67%
or more of the shares of the Fund 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 Fund, whichever
is less.
THE BOARD OF THE FUND 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
Fund held on February 20, 1997, at which each of the Independent Trustees of the
Fund 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
Appendix A). 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 Fund 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 Fund of the same scope
and quality as are presently provided. In
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<PAGE>
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 Manager that the Merger would not adversely affect the
Investment Adviser's ability to fulfill its obligations under its respective
agreements with the Fund 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 Fund to engage in certain transactions with Morgan Stanley
and its affiliates. For example, absent exemptive relief, the Fund 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 Fund 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 Fund.
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 of the Fund, including all of the Independent Trustees, determined that
the New Agreement is in the best interests of the Fund and its Shareholders.
ACCORDINGLY, THE BOARD OF THE FUND, INCLUDING ALL OF THE INDEPENDENT TRUSTEES,
APPROVED THE NEW AGREEMENT AND VOTED TO RECOMMEND APPROVAL BY SHAREHOLDERS OF
THE FUND.
THE CURRENT INVESTMENT ADVISORY AGREEMENT
The Current Agreement provides that the Investment Adviser shall obtain and
evaluate such information and advice relating to the economy and securities and
commodities markets as it deems necessary or useful to discharge its duties
under the Current Agreement, and that it shall continuously supervise the
management of the assets of the Fund in a manner consistent with the investment
objectives and policies of the Fund and subject to such other limitations and
directions as the Board may, from time to time, prescribe.
The Investment Adviser pays the compensation of all personnel, including the
officers of the Fund who are employees of the Investment Adviser. In return for
its services and the expenses the Investment Adviser assumes under the Current
Agreement, the Fund pays the Investment Adviser compensation which is accrued
daily and payable monthly. As full compensation for the services furnished to
the Fund, the Fund pays InterCapital pursuant to the Current Agreement, monthly
compensation calculated daily at an annual rate of 0.90% of average daily net
assets on assets of the Fund up to $500 million and at an annual rate of 0.85%
of average daily net assets of the Fund exceeding $500 million. For the fiscal
year ended September 30, 1996, the Fund accrued to InterCapital total
compensation of $6,524,700. The net assets of the Fund as of the fiscal year end
totalled $939,470,545.
Under the Current Agreement, the Fund is obligated to bear all of the costs
and expenses of its operation, except those specifically assumed by the
Investment Adviser, the Fund's Administrator, Dean Witter Services Company Inc.
("DWSC") or Dean Witter Distributors Inc. ("Distributors" or the "Distributor"),
the Fund's Distributor, including, without limitation: charges and expenses of
any registrar, 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 securities
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and corporate fees payable by the Fund
to federal, state or other
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governmental agencies; costs and expenses of engraving or printing of
certificates representing shares of the Fund; all costs and expenses in
connection with registration and maintenance of registration of the Fund 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 Fund 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 Adviser or any corporate affiliate of the Investment Adviser; 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 Fund's shares; charges and expenses of legal
counsel, including counsel to the Independent Trustees of the Fund, and
independent accountants in connection with any matter relating to the Fund (not
including compensation or expenses of attorneys employed by the Investment
Adviser); association dues; interest payable on the Fund's borrowings; postage;
insurance premiums on property or personnel (including officers and Trustees) of
the Fund which inure to its benefit; extraordinary expenses (including, but not
limited to, legal claims and liabilities and litigation costs and any
indemnification related thereto); and all other charges and costs of the Fund's
operations unless otherwise explicitly provided in the Current Agreement.
The Current Agreement was first approved by the Board, including a majority
of Independent Trustees, on December 23, 1992 and at a Special Meeting of
Shareholders on February 25, 1993.
After its initial term, the Current Agreement continues in effect from year
to year thereafter, provided that each such continuance is approved by the vote
of a majority, as defined by the 1940 Act, of the outstanding voting securities
of the Fund or by the Trustees, and, in either event, by the vote cast in person
by a majority of the Independent Trustees at a meeting called for the purpose of
voting on such approval. The Current Agreement, whose initial term expired prior
to the date of this Proxy Statement, has been continued in effect from year to
year by action of the Board, including the Independent Trustees. Prior to the
Board's February 21, 1997 meeting, the most recent approval occurred at a
meeting of the Board held on April 17, 1996.
The Current Agreement also provides that it may be terminated at any time by
the Investment Adviser, the Trustees or by a vote of a majority of the
outstanding voting securities of the Fund, in each instance without the payment
of any penalty, on thirty days' notice, and provides for its automatic
termination in the event of its assignment.
THE INVESTMENT ADVISER
Dean Witter InterCapital Inc. is the Fund'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 Dean Witter Reynolds Inc. ("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 Dean Witter Trust Company
("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 and 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
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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. Appendix B lists the investment companies for which InterCapital
provides investment management or investment advisory services and which have
similar investment objectives to those of the Fund and sets forth the fees
payable to InterCapital by such companies, including the Fund, and their net
assets as of March 12, 1997. DWSC also has its offices at Two World Trade
Center, New York, New York.
Administrative services for the Fund are performed by DWSC, a wholly-owned
subsidiary of InterCapital pursuant to an Administration Agreement between the
Fund and DWSC. DWSC maintains certain of the Fund's books and records and
furnishes, at its own expense, such office space, facilities, equipment,
clerical help, and bookkeeping and certain legal services as the Fund may
reasonably require in the conduct of its business, including the preparation of
proxy statements and reports required to be filed with federal and state
securities commissions (except insofar as the participation on assistance of
independent accountants and attorneys is, in the opinion of DWSC, necessary or
desirable). In addition, DWSC pays the salaries of all personnel, including
officers of the Fund who are employees of the Administrator. DWSC also bears the
cost of telephone service, heat, light, power and other utilities provided to
the Fund. As full compensation for the services and facilities furnished to the
Fund and expenses of the Fund assumed by DWSC, the Fund pays DWSC monthly
compensation calculated daily by applying the annual rate of 0.25% to the Fund's
average daily net assets. During the fiscal year ended September 30, 1996, such
total accrued compensation amounted to $1,845,500.
The Fund continuously offers shares through Distributors, as principal
underwriter of the shares, through certain dealers, including DWR, who have
entered into selected dealer agreements with the Distributor, at a price equal
to the then current net asset value per share. There is no initial sales charge
on purchases of the shares; however, there is an early withdrawal charge,
payable to the Investment Adviser, on shares of the Fund held for four years or
less which are accepted by the Fund for repurchase pursuant to tender offers.
For the fiscal year ended September 30, 1996, InterCapital received
approximately $728,000 in withdrawal fees. The Fund did not pay any brokerage
commissions during the fiscal year ended September 30, 1996. The Investment
Adviser uses its own assets, which may include profits from the advisory fee
payable under its investment advisory agreement with the Fund, as well as
borrowed funds, to compensate dealers participating in the continuous offering.
7
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The Fund paid to DWTC, the Fund's Transfer Agent and an affiliate of
InterCapital, during the fiscal year ended September 30, 1996, transfer agency
fees in the amount of $447,960.
Once the Merger is consummated and the New Agreement is approved, DWSC, the
Distributor and DWTC fully intend to continue to provide, respectively, the same
services to the Fund as are currently being provided.
(2) ELECTION OF TRUSTEES
The number of Trustees of the Fund has been fixed by the Board at nine.
There are presently eight Trustees, all of whom are standing for re-election at
the Meeting for indefinite terms. In addition, the Board has nominated Wayne E.
Hedien for election as Trustee at the Meeting for the first time.
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. Mr. Hedien, who has been nominated for election at the
Meeting, if elected, also will be an Independent Trustee. The other two current
Trustees, Charles A. Fiumefreddo and Philip J. Purcell, are "interested persons"
(as such term is defined under the 1940 Act) of the Fund and InterCapital and,
thus, are not Independent Trustees. 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.
Other than Messrs. Bozic, Purcell and Schroeder, who were elected as Trustees by
the other Trustees of the Fund, all of the members of the Board currently
serving were previously elected at a meeting of Shareholders.
The following information regarding each of the nominees for election as
Trustee includes principal occupations and employment for at least the last five
years, age, shares of the Fund owned, if any, as of March 12, 1997 (shown in
parentheses), positions with the Fund, and directorships (or trusteeships) in
other companies which file periodic reports with the Securities and Exchange
Commission, including the 84 investment companies, including the Fund, 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 the 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 Sears, Roebuck and Co.
("Sears"); 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 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
- ------------------------
*This date is the date the Trustee began serving the Dean Witter Funds complex.
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(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 January 1981*; 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).
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.
DR. 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).
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 President and Chief
Investment Officer of the Home Insurance Company (1991-1995).
The other executive officers of each Fund are: Barry Fink, Vice President,
Secretary and General Counsel; Robert M. Scanlan, Vice President; Robert S.
Giambrone, Vice President; Joseph J. McAlinden, Vice President; Rafael Scolari,
Vice President and Thomas F. Caloia, Treasurer. In addition, Frank Bruttomesso,
Marilyn K. Cranney, Lou Anne D. McInnis, Carsten Otto and Ruth Rossi serve as
Assistant Secretaries of each Fund.
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
- ------------------------
*This date is the date the Trustee began serving the Dean Witter Funds complex.
9
<PAGE>
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. 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. 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
(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. Caloia is 51 years old and is currently First Vice President and Assistant
Treasurer of InterCapital and DWSC. Mr. Scolari is 40 years old and is currently
Vice President of InterCapital and the Fund. Prior to joining InterCapital in
March 1993, he was the portfolio manager of the Fund's portfolio while at
Allstate Investment Management Company (the Fund's former adviser) from January
1990 through February 1993. Other than Messrs. Scanlan, Giambrone, McAlinden,
and Scolari, 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 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 Funds 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 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,
Rule 12b-1 plans, if applicable, 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
10
<PAGE>
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, not
including this Fund, 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 the 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 September 30, 1996, the Board of Trustees held 6
meetings; the Committee of the Independent Trustees held 10 meetings, and the
Audit and Derivatives Committees each held 3 meetings. No Trustee attended fewer
than 75% of the meetings of the Board, 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.
11
<PAGE>
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 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, the aggregate number of shares of the Fund owned by
the Fund's officers and Trustees as a group was less than 1 percent of the
Fund's outstanding shares.
COMPENSATION OF INDEPENDENT TRUSTEES
The Fund 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 attended by the Trustee (the Fund 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 Fund also reimburse such
Trustees for travel and other out-of-pocket expenses incurred by them in
connection with attending such meetings. Trustees and officers of the Fund who
are or have been employed by the Investment Adviser or an affiliated company
receive no compensation or expense reimbursement from the Fund.
As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Fund, 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 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
12
<PAGE>
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. "Eligible Compensation" is one-fifth of the total compensation earned
by such Eligible Trustee for service to the Fund in the five year period prior
to the date of the Eligible Trustee's retirement. 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. Benefits under the retirement program are not secured or
funded by the Fund.
The following table illustrates the compensation paid to the Fund's
Independent Trustees by the Fund for its last fiscal year, the retirement
benefits accrued to the Fund's Independent Trustees by the Fund for its last
fiscal year and the estimated retirement benefits for the Fund's Independent
Trustees, to commence upon their retirement, as of the end of the Fund's last
fiscal year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUND COMPENSATION ESTIMATED RETIREMENT BENEFITS
------------------------------ -------------------------------------------------
RETIREMENT ESTIMATED ESTIMATED
BENEFITS CREDITED YEARS ESTIMATED ANNUAL
AGGREGATE ACCRUED AS OF SERVICE AT PERCENTAGE OF BENEFITS
COMPENSATION FUND RETIREMENT ELIGIBLE UPON
NAME OF INDEPENDENT TRUSTEE FROM THE FUND EXPENSES (MAXIMUM 10) COMPENSATION RETIREMENT(1)
- --------------------------------- ------------- --------------- ----------------- --------------- -------------
Michael Bozic.................... $ 1,750 $ 399 10 50.0% $ 950
Edwin J. Garn.................... 1,850 601 10 50.0 950
John R. Haire.................... 3,850 702 10 50.0 2,339
Dr. Manuel H. Johnson............ 1,800 244 10 50.0 950
Michael E. Nugent................ 1,750 422 10 50.0 950
John L. Schroeder................ 1,800 776 8 41.7 792
</TABLE>
- ------------------------------
(1) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in the discussion of
the retirement program contained in this Proxy Statement.
The following table illustrates the compensation paid to the Independent
Trustees of the Fund 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.
13
<PAGE>
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS FOR SERVICE
CHAIRMAN OF AS CHAIRMAN
COMMITTEES OF OF COMMITTEES TOTAL CASH
INDEPENDENT OF COMPENSATION
FOR SERVICE DIRECTORS/ INDEPENDENT FOR SERVICES
AS DIRECTOR OR FOR SERVICE AS TRUSTEES AND TRUSTEES AND TO 82
TRUSTEE AND TRUSTEE AND AUDIT COMMITTEES AUDIT DEAN WITTER
COMMITTEE MEMBER COMMITTEE MEMBER OF 82 DEAN COMMITTEES OF FUNDS AND 14
OF 82 DEAN WITTER OF 14 TCW/DW WITTER 14 TCW/DW
NAME OF INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS TCW/DW FUNDS FUNDS
- ------------------------------ ------------------ ------------------ ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Michael Bozic................. $ 138,850 -- -- -- $ 138,850
Edwin J. Garn................. 140,900 -- -- -- 140,900
John R. Haire................. 106,400 $ 64,283 $ 195,450 $ 12,187 378,320
Dr. Manuel H. Johnson......... 137,100 66,483 -- -- 203,583
Michael E. Nugent............. 138,850 64,283 -- -- 203,133
John L. Schroeder............. 137,150 69,083 -- -- 206,233
</TABLE>
The following table illustrates the retirement benefits accrued to the
Independent Trustees of the Fund by the 57 Dean Witter Funds (including the
Fund) for the year ended December 31, 1996, and the estimated retirement
benefits for the Independent Trustees, to commence upon their retirement, from
the 57 Dean Witter Funds as of December 31, 1996.
RETIREMENT BENEFITS FROM ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
RETIREMENT
BENEFITS ACCRUED
ESTIMATED CREDITED ESTIMATED AS EXPENSES
YEARS OF PERCENTAGE BY ALL
SERVICE AT RETIREMENT OF ELIGIBLE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS
- ----------------------------------------------------- ----------------------- ---------------- ------------------
<S> <C> <C> <C>
Michael Bozic........................................ 10 50.0% $ 20,147
Edwin J. Garn........................................ 10 50.0 27,772
John R. Haire........................................ 10 50.0 46,952
Dr. Manuel H. Johnson................................ 10 50.0 10,926
Michael E. Nugent.................................... 10 50.0 19,217
John L. Schroeder.................................... 8 41.7 38,700
<CAPTION>
ESTIMATED ANNUAL
BENEFITS UPON
RETIREMENT FROM
ALL ADOPTING
NAME OF INDEPENDENT TRUSTEE FUNDS(2)
- ----------------------------------------------------- ----------------
<S> <C>
Michael Bozic........................................ $ 51,325
Edwin J. Garn........................................ 51,325
John R. Haire........................................ 129,550
Dr. Manuel H. Johnson................................ 51,325
Michael E. Nugent.................................... 51,325
John L. Schroeder.................................... 42,771
</TABLE>
- ------------------------------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in the discussion of
the retirement program contained this Proxy Statement.
The persons named as attorneys-in-fact in the enclosed proxy have advised
the Fund that unless a proxy instructs them to withhold authority to vote for
all listed nominees or for any individual nominee, they will vote all validly
executed proxies for the election of the nominees named above. All of the
nominees have consented to being named in this Proxy Statement and to serve, if
elected, and no circumstances now known will prevent any of
14
<PAGE>
the nominees from serving (if elected, Mr. Hedien's term will commence September
1, 1997). If any nominee should be unable or unwilling to serve, the proxy will
be voted for a substitute nominee proposed by the present Trustees or, in the
case of an Independent Trustee nominee, by the Independent Trustees.
The election of each Trustee requires the approval of a majority of the
shares of the Fund represented and entitled to vote at the Meeting.
THE BOARD OF THE FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE TRUSTEES NOMINATED FOR ELECTION.
(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Trustees have unanimously selected the firm of Price Waterhouse LLP
("Price Waterhouse") as the Fund's independent accountants for the fiscal
year-ending September 30, 1997.
The selection of Price Waterhouse is being submitted for ratification or
rejection by Shareholders at the Meeting. Price Waterhouse has been the
independent accountants for the Fund since its inception, and has no direct or
indirect financial interest in the Fund.
A representative of Price Waterhouse is expected to be present at the
Meeting and will be available to make a statement, and to respond to appropriate
questions of Shareholders.
Ratification of the selection of Price Waterhouse requires the approval of a
majority of the shares of the Fund represented and entitled to vote at the
Meeting.
THE BOARD OF THE FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE FUND
RATIFY THE SELECTION OF PRICE WATERHOUSE AS THE INDEPENDENT ACCOUNTANTS FOR THE
FUND.
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 Fund's shares present in person or by proxy
at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of Proposal 1
and will vote against any such adjournment those proxies 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
The Fund does not hold regular shareholders' meetings. Proposals of
Shareholders of the Fund intended to be presented at the next meeting of
Shareholders must be received a reasonable time prior to the mailing of the
proxy materials sent in connection with the meeting, for inclusion in the proxy
statement for that meeting.
15
<PAGE>
REPORTS TO SHAREHOLDERS
THE FUND'S MOST RECENT ANNUAL REPORT FOR THE FUND'S MOST RECENT FISCAL YEAR
HAS BEEN SENT PREVIOUSLY TO SHAREHOLDERS AND IS AVAILABLE WITHOUT CHARGE UPON
REQUEST FROM ADRIENNE RYAN-PINTO AT DWTC, HARBORSIDE FINANCIAL CENTER, PLAZA
TWO, JERSEY CITY, NEW JERSEY 07311 (TELEPHONE 1-800-869-NEWS (TOLL FREE)).
INTEREST OF CERTAIN PERSONS
DWDC, DWR, the Investment Adviser, DWSC, the Distributor and certain of
their respective Directors, officers, and employees, including persons who are
Trustees or officers of the Fund, 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 Fund, and certain of those individuals are compensated for
performing services relating to the Fund 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 Fund 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
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 A
FORM OF NEW INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1997 by and between Prime Income
Trust, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (hereinafter called the "Fund"), and Dean Witter
InterCapital Inc., a Delaware corporation (hereinafter called the "Investment
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
W I T N E S S E T H:
That in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment 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 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
A-1
<PAGE>
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.
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 expense of engraving or printing
certificates representing shares of the Fund, all costs and expenses in
connection with the registration and maintenance of registration of the Fund and
its shares with the Securities and Exchange Commission and various states and
other jurisdictions (including filing fees and legal fees and disbursements of
counsel 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 Adviser monthly compensation determined by applying
the following annual rates to the Fund's average daily net assets: 0.90% of
daily net assets up to $500 million; and 0.85% of daily net assets over $500
million. Such calculations shall be made by applying 1/365ths of the annual rate
to the Fund's net assets each day determined as of the close of business on that
day or the last previous business day. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for the 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.
In the event the operating expenses of the Fund, including amounts
payable to the Investment Adviser pursuant to paragraph 6 hereof, for any
fiscal year ending on a date on which this Agreement is in effect, exceed the
expense limitations applicable to the Fund imposed by state securities laws or
regulations
A-2
<PAGE>
thereunder, as such limitations may be raised or lowered from time to time, the
Investment Adviser shall reduce its advisory fee to the extent of such excess
and, if required, pursuant to any such laws or regulations, will reimburse the
Fund or annual operating expenses in excess of any expense limitation that may
be applicable; provided, however, there shall be excluded from such expenses the
amount of any interest, taxes brokerage commissions and extraordinary expenses
(including but not limited to legal claims and liabilities and litigations costs
and any indemnification related thereto) paid or payable by the Fund. Such
reduction, if any, shall be computed and accrued weekly, shall be settled on a
monthly basis, and shall be based upon the expense limitation applicable to the
Fund as at the end of the last business day of the month. Should two or more
such expense limitations be applicable as at the end of the last full week of
the month, that expense limitation which results in the largest reduction in the
Investment Adviser's fees shall be applicable.
For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in the Fund's portfolio accrued
to and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall on
or prior to the last day of such fiscal year, but shall not include gains from
the sale of securities.
8.
The Investment 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.
9.
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
(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.
10.
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 postpaid, to the other
party at the principal office of such party.
A-3
<PAGE>
11.
This Agreement may be amended by the parties without the vote or consent
of the shareholders of the Fund to supply any omission, to cure, correct
or supplement any ambiguous, defective or inconsistent provision hereof, or if
they deem it necessary to conform this Agreement to the requirements of
applicable federal laws or regulations, but neither the Fund nor the Investment
Adviser shall be liable for failing to do so.
12.
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent
the applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the Advisers Act or any
rules, regulations or orders of the Securities and Exchange Commission, the
latter shall control.
13.
The Declaration of Trust establishing Prime Income Trust, dated August
17, 1989, 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 Prime Income Trust refers to the Trustees
under the Declaration collectively as Trustees, but not as individuals or
personally; and no Trustee, shareholder, officer, employee or agent of Prime
Income Trust shall be held to any personal liability, nor shall resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise, in connection with the affairs of said Prime Income Trust, but the
Trust Estate only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
<TABLE>
<S> <C>
PRIME INCOME TRUST
By
..............................................
Attest:
.............................................
DEAN WITTER INTERCAPITAL INC.
By
..............................................
Attest:
.............................................
</TABLE>
A-4
<PAGE>
APPENDIX B
InterCapital serves as investment manager to Prime Income Trust and the
other investment companies listed below which have similar investment objectives
to those of the Fund. Set forth below is a chart showing the net assets of each
such investment company as of March 12, 1997 and the investment management fee
rate(s) applicable to such investment company.
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
-------------- -----------------------------
<C> <S> <C> <C>
1. DEAN WITTER HIGH YIELD SECURITIES INC.*.............................. $472,422,555 0.50% on assets up to $500
million, scaled down at
various asset levels to 0.30%
on assets over $3 billion
2. DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST*........................ 6$,138,047,889 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*............................ $258,071,153 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*................................ $664,434,512 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.**................................ $212,194,831 0.50%
6. HIGH INCOME ADVANTAGE TRUST**........................................ $151,432,410 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**..................................... $202,120,811 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**.................................... $ 78,703,844 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*.......................... $183,322,983 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*................................. $106,393,288 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**................................ $425,720,030 0.60%
12. DEAN WITTER GLOBAL SHORT-TERM INCOME FUND INC.*...................... $ 76,976,109 0.55% on assets up to $500
million and 0.50% on assets
over $500 million
13. DEAN WITTER PREMIER INCOME TRUST*.................................... $ 15,604,354 0.50% (of which 40% is paid
to a Sub-Adviser)
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
CURRENT INVESTMENT
MANAGEMENT FEE RATE(S)
NET ASSETS AS A PERCENTAGE
AS OF 03/12/97 OF NET ASSETS
-------------- -----------------------------
<C> <S> <C> <C>
14. DEAN WITTER SHORT-TERM U.S. TREASURY TRUST*.......................... $255,026,002 0.35%
15. DEAN WITTER DIVERSIFIED INCOME TRUST*................................ $825,332,503 0.40%
16. DEAN WITTER SHORT-TERM BOND FUND*.................................... $ 39,265,837 0.70%(1)
17. DEAN WITTER HIGH INCOME SECURITIES*.................................. 1$,105,732,108 0.50% on assets up to $500
million and 0.425% on assets
over $500 million.
18. PRIME INCOME TRUST**................................................. 1$,133,529,314 0.90% on assets up to $500
million and 0.85% on assets
over $500 million
19. DEAN WITTER BALANCED INCOME FUND*.................................... $ 50,991,701 0.60%
20. DEAN WITTER RETIREMENT SERIES:*
(a) U.S. GOVERNMENT SECURITIES SERIES................................ $ 10,596,158 0.65% (2)
(b) INTERMEDIATE INCOME SECURITIES SERIES............................ $ 2,261,816 0.65% (2)
21. DEAN WITTER VARIABLE INVESTMENT SERIES:***
(a) QUALITY INCOME PLUS PORTFOLIO.................................... $459,554,792 0.50% on assets up to $500
million and 0.45% on assets
over $500 million
(b) HIGH YIELD PORTFOLIO............................................. $277,126,804 0.50%
22. DEAN WITTER SELECT DIMENSIONS INVESTMENT SERIES:***
(a) DIVERSIFIED INCOME PORTFOLIO..................................... $ 37,415,339 0.40%
(b)NORTH AMERICAN GOVERNMENT SECURITIES PORTFOLIO.................... $ 4,484,769 0.65% (of which 40% is paid
to a Sub-Adviser)
23. DEAN WITTER INTERMEDIATE TERM U.S. TREASURY TRUST*................... $ 1,962,920 0.35%(3)
</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, 1997 through April 30, 1997, 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.
(2) InterCapital has undertaken, until 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 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 27, 1997, whichever
occurs first.
B-2
<PAGE>
PRIME INCOME TRUST
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 Special
Meeting of Shareholders of Prime Income Trust on May 20, 1997, 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 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>
PLEASE MARK VOTES AS
/X/ IN THE EXAMPLE USING
BLACK OR BLUE INK
1. Approval of New Investment Advisory FOR AGAINST ABSTAIN
Agreement with Dean Witter InterCapital / / / / / /
Inc. in connection with proposed merger.
FOR ALL
2. Election of Trustees: FOR WITHHOLD EXCEPT
Michael Bozic, Charles A. Fiumefreddo, / / / / / /
Edwin J. Garn, John R. Haire,
Wayne E. Hedien, Manuel H. Johnson,
Michael E. Nugent, Philip J. Purcell,
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.
3. Ratification of appointment of Price FOR AGAINST ABSTAIN
Waterhouse LLP as Independent / / / / / /
Accountants.
Please make sure to sign and date
this Proxy using black or blue ink. Date ______________
---------------------------------- ----------------------------------
---------------------------------- ----------------------------------
Shareholder sign in the box above Co-Owner (if any) sign in the box above
PLEASE DETACH AT PERFORATION
PRIME INCOME TRUST
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
