<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1994
REGISTRATION NO.: 33--32763
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-1A
REGISTRATION STATEMENT /X/
UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 5 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/
AMENDMENT NO. 6 /X/
----------------
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
SHELDON CURTIS, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
-------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Post-Effective Amendment becomes effective.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
immediately upon filing pursuant to paragraph (b)
X on February 18, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485.
-------------------
THE REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF ITS SHARES UNDER THE
SECURITIES ACT OF 1933 PURSUANT TO SECTION (A)(1) OF RULE 24F-2 UNDER THE
INVESTMENT COMPANY ACT OF 1940. PURSUANT TO SECTION (B)(2) OF RULE 24F-2, THE
REGISTRANT FILED A RULE 24F-2 NOTICE FOR ITS FISCAL YEAR ENDING DECEMBER 31,
1993 WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 2, 1994.
AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
-------------------------------------------------------
-------------------------------------------------------
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
CROSS-REFERENCE SHEET
<TABLE>
<S> <C>
FORM N--1A CAPTION PROSPECTUS
PART A
ITEM
1. .................................................... Cover Page
2. .................................................... Prospectus Summary; Summary of Fund Expenses
3. .................................................... Financial Highlights; Report of Independent Accountants;
Financial Statements; Performance Information
4. .................................................... Investment Objective and Policies; The Fund and its
Management; Cover Page; Investment Restrictions;
Prospectus Summary; Financial Highlights
5. .................................................... The Fund and Its Management; Back Cover; Investment
Objective and Policies
6. .................................................... Dividends, Distributions and Taxes; Additional
Information
7. .................................................... Purchase of Fund Shares; Shareholder Services; Prospectus
Summary
8. .................................................... Redemption of Fund Shares; Shareholder Services;
Prospectus Summary
9. .................................................... Not Applicable
PART B
ITEM STATEMENT OF ADDITIONAL INFORMATION
10. .................................................... Cover Page
11. .................................................... Table of Contents
12. .................................................... The Fund and Its Management
13. .................................................... Investment Practices and Policies; Investment
Restrictions; Portfolio Transactions and Brokerage
14. .................................................... The Fund and its Management; Trustees and Officers
15. .................................................... The Fund and its Management; Trustees and Officers
16. .................................................... The Fund and Its Management; Purchase of Fund Shares;
Custodian and Transfer Agent; Independent Accountants
17. .................................................... Portfolio Transactions and Brokerage
18. .................................................... Shares of the Fund
19. .................................................... Purchase of Fund Shares; Redemptions of Fund Shares;
Financial Statements; How Net Asset Value is Determined;
Shareholder Services
20. .................................................... Dividends, Distributions and Taxes
21. .................................................... Purchase of Fund Shares
22. .................................................... Performance
23. .................................................... Experts; Financial Statements; Reports to Shareholders
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
PROSPECTUS FEBRUARY 18, 1994
Dean Witter New York Municipal Money Market Trust (the "Fund") is
a no-load, open-end non-diversified management investment company whose
investment objective is to provide as high a level of daily income exempt from
federal and New York income tax as is consistent with stability of principal and
liquidity. The Fund has a Rule 12b-1 Plan of Distribution (see below). The Fund
seeks to achieve its objective by investing primarily in high quality New York
tax-exempt securities with short-term maturities, including Municipal Bonds,
Municipal Notes and Municipal Commercial Paper. (See "Investment Objective and
Policies.")
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
In accordance with a Plan of Distribution with Dean Witter
Distributors Inc. pursuant to Rule 12b-1 under the Investment Company Act of
1940, the Fund is authorized to reimburse specific expenses incurred in
promoting the distribution of the Fund's shares. Reimbursement may in no event
exceed an amount equal to payments at the annual rate of 0.15% of the average
daily net assets of the Fund.
This Prospectus sets forth concisely the information you should
know before investing in the Fund. It should be read and retained for future
reference. Additional information about the Fund is contained in the Statement
of Additional Information, dated February 18, 1994, which has been filed with
the Securities and Exchange Commission, and which is available at no charge upon
request of the Fund at its address or at one of its telephone numbers listed on
this page. The Statement of Additional Information is incorporated herein by
reference.
<TABLE>
<S> <C>
Minimum initial investment......... $5,000
Minimum additional investment...... $ 100
</TABLE>
For information on opening an account, registration of shares, and other
information relating to a specific account, call Dean Witter Trust Company at
800-526-3143 (toll free).
Table Of Contents
Prospectus Summary/2
Summary of Fund Expenses/3
Financial Highlights/4
The Fund and its Management/4
Investment Objective and Policies/5
Investment Restrictions/9
Purchase of Fund Shares/10
Shareholder Services/11
Redemption and Repurchase of Fund Shares/14
Dividends, Distributions and Taxes/16
Additional Information/18
Report of Independent Accountants/19
Financial Statements--December 31, 1993/20
DEAN WITTER
NEW YORK MUNICIPAL MONEY MARKET TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
For information about the Fund, call:
- - 800-869-FUND (toll free)
- - In New York State at 212-392-2550
- - For dividend information only
(when calling from outside New
York State) 800-869-RATE (toll free)
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DEAN WITTER DISTRIBUTORS INC.
DISTRIBUTOR
<PAGE>
<TABLE>
<S> <C>
PROSPECTUS SUMMARY
The Fund The Fund is organized as a Trust, commonly known as a Massachusetts business trust,
and is an open-end non-diversified management investment company investing
principally in short-term securities which are exempt from federal and New York
income tax.
Shares Shares of beneficial interest with $0.01 par value. (see p. 18).
Offered
Purchase of Investments may be made:
Shares - By wire
- By mail
- Through Dean Witter Reynolds Inc. Account Executives or other Selected
Broker-Dealers
Purchases are at net asset value, without a sales charge. Minimum initial
investment: $5,000. Subsequent investments: $100 or more through the Transfer
Agent; $1,000 or more through the account executive.
Orders for purchase of shares are effective on day of receipt of payment in Federal
funds if payment is received by the Fund's transfer agent before 12:00 noon New
York time (see p. 9).
Investment To provide as high a level of daily income exempt from federal and New York income
Objective tax as is consistent with stability of principal and liquidity (see p. 5).
Investment A portfolio of New York tax-exempt fixed-income securities with short-term
Policy maturities (see p. 5).
Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of the Fund
Manager and its wholly-owned subsidiary, Dean Witter Services Company Inc., serve in
various investment management, advisory, management and administrative capacities
to eighty-one investment companies and other portfolios with assets of
approximately $71.2 billion at December 31, 1993 (see page 4). The monthly fee is
at an annual rate of 1/2 of 1% of average daily net assets, scaled down on assets
over $500 million (see p. 4-5).
Distributor Dean Witter Distributors Inc. (the "Distributor") is the Fund's Distributor. The
and Plan of Fund is authorized to reimburse specific expenses incurred in promoting the
Distribution distribution of the Fund's shares pursuant to a Plan of Distribution pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Reimbursement may in no event
exceed an amount equal to payments at the annual rate of .15 of 1% of average daily
net assets of the Fund (see p. 10).
Management The monthly fee is at an annual rate of 1/2 of 1% of average daily net assets,
Fee scaled down on assets over $500 million (see p. 4).
Dividends Declared and automatically reinvested daily in additional shares; cash payments of
dividends available monthly (see p. 16).
Reports Individual periodic account statements; annual and semi-annual Fund financial
statements.
Redemption of Shares are redeemable by the shareholder at net asset value without any charge (see
Shares p. 14):
- By check
- By telephone or wire instructions, with proceeds wired or mailed to a
predesignated bank account
- By mail
- Via an automatic redemption procedure (see p. 15)
A shareholder's account is subject to possible involuntary redemption if its value
falls below $1,000 (see p. 15).
Risks The Fund invests principally in short-term fixed income securities issued or
guaranteed by the State of New York and its local governments which are subject to
minimal risk of loss of income and principal. However, the investor is directed to
the discussions concerning "variable rate obligations" and "when-issued and delayed
delivery securities" on page 8 of the Prospectus and on page 11 of the Statement of
Additional Information and the discussions concerning "repurchase agreements" and
"puts" on pages 12-13 of the Statement of Additional Information, concerning any
risks associated with such portfolio securities and management techniques. Since
the Fund concentrates its investments in New York tax-exempt securities, the Fund
is affected by any political, economic or regulatory developments affecting the
ability of New York issuers to pay interest or repay principal (see pages 16-21 of
the Statement of Additional Information).
</TABLE>
THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
ELSEWHERE IN THE PROSPECTUS
AND IN THE STATEMENT OF ADDITIONAL INFORMATION.
2
<PAGE>
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
The following table illustrates all expenses and fees that a shareholder of
the Fund will incur. Expenses and fees set forth in the table are for the year
ended December 31, 1993.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases.............................................. None
Maximum Sales Charge Imposed on Reinvested Dividends................................... None
Deferred Sales Charge.................................................................. None
Redemption Fees........................................................................ None
Exchange Fee........................................................................... None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees........................................................................ 0.50%
12b-1 Fees*............................................................................ 0.10%
Other Expenses......................................................................... 0.43%
Total Fund Operating Expenses.......................................................... 1.03%
<FN>
- ---------------
* THE 12B-1 FEE IS CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., ("NASD") GUIDELINES.
</TABLE>
<TABLE>
<CAPTION>
1 3 5 10
EXAMPLE YEAR YEARS YEARS YEARS
- -------------------------------------------------- --- --- --- ----
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time
period:......................................... $11 $33 $57 $126
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Fund and Its Management," "Purchase of Fund Shares--Plan of Distribution"
in this Prospectus.
3
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following ratios and per share data for a share of beneficial interest
outstanding throughout each period have been audited by Price Waterhouse,
independent accountants. The financial highlights should be read in conjunction
with the financial statements, notes thereto and the unqualified report of
independent accountants which are contained in this Prospectus commencing on
page 19.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD
DECEMBER 31, MARCH 20, 1990*
------------------------------- THROUGH
1993 1992 1991 DECEMBER 31, 1990
--------- --------- --------- ------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------
Net investment income....................................... 0.014 0.019 0.035 0.045
Less dividends from net investment income................... (0.014) (0.019) (0.035) (0.045)
--------- --------- --------- ----------
Net asset value, end of period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------
--------- --------- --------- ----------
TOTAL INVESTMENT RETURN....................................... 1.36% 1.86% 3.57% 4.69 %(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands).................... $ 41,112 $ 45,126 $ 66,196 $ 101,294
Ratio of expenses to average net assets..................... 1.03% 0.97% 0.87% 0.12 %(1)(3)
Ratio of net investment income to average net assets........ 1.34% 1.86% 3.53% 5.66 %(1)(3)
<FN>
- ---------------
* DATE OF COMMENCEMENT OF OPERATIONS.
(1) ANNUALIZED.
(2) NOT ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL EXPENSES THAT WERE ASSUMED OR WAIVED BY THE
INVESTMENT MANAGER DURING THE PERIOD ENDED DECEMBER 31, 1990, THE ABOVE
ANNUALIZED EXPENSE RATIO WOULD HAVE BEEN .80% ($.007 PER SHARE) AND THE
ANNUALIZED NET INVESTMENT INCOME RATIO WOULD HAVE BEEN 4.98% ($.041 PER
SHARE).
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
Dean Witter New York Municipal Money Market Trust (the "Fund") is an
open-end non-diversified management investment company. The Fund was organized
as a trust of the type commonly known as a "Massachusetts business trust" on
December 28, 1989. Prior to February 19, 1993, the Fund's name was Dean
Witter/Sears New York Municipal Money Market Trust.
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the Fund's
Investment Manager. The Investment Manager, which was incorporated in July,
1992, is a wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a
balanced financial services organization providing a broad range of nationally
marketed credit and investment products.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to a total of eighty-one investment companies,
twenty-nine of which are listed on the New York Stock Exchange, with combined
total assets including this Fund of approximately $69.2 billion as of December
31, 1993. The Investment Manager also manages portfolios of pension plans, other
institutions and individuals which aggregated approximately $2.0 billion at such
date.
4
<PAGE>
The Fund has retained the Investment Manager to provide administrative
services, manage its business affairs and manage the investment of the Fund's
assets, including the placing of orders for the purchase and sale of portfolio
securities. InterCapital has retained Dean Witter Services Company Inc. to
perform the aforementioned administrative services for the Fund. The Fund's
Board of Trustees reviews the various services provided by or under the
direction of the Investment Manager to ensure that the Fund's general investment
policies and programs are being properly carried out and that administrative
services are being provided to the Fund in a satisfactory manner.
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily at an annual rate of
0.50% of the daily net assets of the Fund up to $500 million, scaled down at
various asset levels to 0.25% on assets over $3 billion. For the fiscal year
ended December 31, 1993, the Fund accrued total compensation to the Investment
Manager amounting to 0.50% of the Fund's average daily net assets and the Fund's
total expenses amounted to 1.03% of the Fund's average daily net assets.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is to provide as high a level of daily
income exempt from federal and New York income tax as is consistent with
stability of principal and liquidity. It is a fundamental policy of the Fund
that at least 80% of its total assets will be invested in tax-exempt Municipal
Obligations and at least 65% of the Fund's total assets will be invested in New
York Municipal Obligations. The interest on New York Municipal Obligations is
exempt from Federal, New York State and New York City income taxes. Municipal
Obligations other than New York Municipal Obligations are exempt from Federal
tax but not from New York State and New York City taxes. However, certain
Municipal Obligations in which the Fund may invest without limit may subject
certain investors to the alternative minimum tax and, therefore, a substantial
portion of the income produced by the Fund may be taxable for such investors
under the alternative minimum tax. The Fund, therefore, may not ordinarily be a
suitable investment for investors who are subject to the alternative minimum
tax. The suitability of the Fund for these investors will depend upon a
comparison of the after-tax yield likely to be provided from the Fund to
comparable tax-exempt investments not subject to such tax and also to comparable
fully taxable investments in light of each such investor's tax position. See
"Taxation." This policy and the Fund's investment objective may not be changed
without a vote of a majority of the Fund's outstanding voting securities, as
defined in the Investment Company Act of 1940, as amended (the "Act"). There is
no assurance that the objective will be achieved.
The Fund seeks to achieve its investment objective by investing in high
quality tax-exempt securities with short-term maturities (remaining maturities
of thirteen months or less) as follows. Such securities will include (i) New
York Municipal Bonds, New York Municipal Notes and New York Municipal Commercial
Paper, which are rated at the time of purchase in one of the two highest rating
categories for debt obligations by at least two nationally recognized
statistical rating organizations ("NRSROS"), primarily Moody's Investors
Service, Inc. ("Moody's") or Standard and Poor's Corporation ("S&P"), or one
NRSRO if the obligation is rated by only one NRSRO. Unrated obligations may be
purchased if they are determined to be of comparable quality by the Fund's
Trustees.
Up to 35% of the Fund's total assets may be invested in securities exempt
from federal income tax but not from New York State and New York City income
taxes ("non-New York tax-exempt
5
<PAGE>
securities") and up to 20% of the Fund's total assets may be invested in taxable
securities. In addition, the Fund may temporarily invest more than 20% of its
total assets in taxable securities and more than 35% of its total assets in
non-New York tax-exempt securities to maintain a "defensive" posture when, in
the opinion of the Investment Manager, prevailing market or financial conditions
so warrant. The types of taxable securities in which the Fund may temporarily
invest are limited to the following short-term fixed-income securities (maturing
in one year or less from the time of purchase); (i) obligations of the United
States Government or its agencies, instrumentalities or authorities; (ii)
commercial paper rated P-1 by Moody's or A-1 by S&P; (iii) certificates of
deposit of domestic banks with assets of $1 billion or more; and (iv) repurchase
agreements with respect to any of the foregoing portfolio securities.
Municipal Bonds and Municipal Notes are debt obligations of a state, its
cities, municipalities and municipal agencies which generally have maturities,
at the time of their issuance, of either one year or more (Bonds) or from six
months to three years (Notes). Municipal Commercial Paper refers to short-term
obligations of municipalities which may be issued at a discount and are
sometimes referred to as Short-Term Discount Notes. Any Municipal Bond or
Municipal Note which depends directly or indirectly on the credit of the Federal
Government, its agencies or instrumentalities shall be considered to have a
Moody's rating of Aaa or S&P rating of AAA. An obligation shall be considered a
New York Municipal Bond, New York Municipal Note or New York Municipal
Commercial Paper only if, in the opinion of bond counsel, the interest payable
therefrom is exempt from both federal income tax and New York personal income
tax.
The foregoing percentage and rating limitations apply at the time of
acquisition of a security based on the last previous determination of the Fund's
net asset value. Any subsequent change in any rating by a rating service or
change in percentages resulting from market fluctuations or other changes in
total assets will not require elimination of any security from the Fund's
portfolio. However, in accordance with procedures adopted by the Fund's Trustees
pursuant to federal securities regulations governing money market funds, if the
Investment Manager becomes aware that a portfolio security has received a new
rating from an NRSRO that is below the second highest rating, then, unless the
security is disposed of within five days, the Investment Manager will perform a
creditworthiness analysis of any such downgraded securities, which analysis will
be reported to the Trustees who will, in turn, determine whether the securities
continue to present minimal credit risks to the Fund.
The ratings assigned by NRSROs represent their opinions as to the quality of
the securities which they undertake to rate (see the Appendix to the Statement
of Additional Information). It should be emphasized, however, that the ratings
are general and not absolute standards of quality.
The two principal classifications of Municipal Bonds, Notes and Commercial
Paper are "general obligation" and "revenue" bonds, notes or commercial paper.
General obligation bonds, notes or commercial paper are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. Issuers of general obligation bonds, notes or commercial paper include
a state, its counties, cities, towns and other governmental units. Revenue
bonds, notes or commercial paper are payable from the revenues derived from a
particular facility or class of facilities or, in some cases, from specific
revenue sources. Revenue bonds, notes or commercial paper are issued for a wide
variety of purposes, including the financing of electric, gas, water and sewer
systems and other public utilities; industrial development and pollution control
facilities; single and multi-family housing units; public buildings and
facilities; air and marine ports, transportation facilities such as toll roads,
bridges and tunnels; and health and educational facilities such as hospitals and
dormitories. They rely primarily on user fees to pay debt service, although the
principal revenue source is often supplemented by additional security features
which are intended to enhance the
6
<PAGE>
creditworthiness of the issuer's obligations. In some cases, particularly
revenue bonds issued to finance housing and public buildings, a direct or
implied "moral obligation" of a governmental unit may be pledged to the payment
of debt service. In other cases, a special tax or other charge may augment user
fees.
Included within the revenue bonds category are participations in lease
obligations or installment purchase contracts (hereinafter collectively called
"lease obligations") of municipalities. State and local governments issue lease
obligations to acquire equipment and facilities.
Lease obligations may have risks not normally associated with general
obligation or other revenue bonds. Leases and installment purchase or
conditional sale contracts (which may provide for title to the leased asset to
pass eventually to the issuer) have developed as a means for governmental
issuers to acquire property and equipment without the necessity of complying
with the constitutional and statutory requirements generally applicable for the
issuance of debt. Certain lease obligations contain "non-appropriation" clauses
that provide that the governmental issuer has no obligation to make future
payments under the lease or contract unless money is appropriated for such
purpose by the appropriate legislative body on an annual or other periodic
basis. Consequently, continued lease payments on those lease obligations
containing "non-appropriation" clauses are dependent on future legislative
actions. If such legislative actions do not occur, the holders of the lease
obligation may experience difficulty in exercising their rights, including
disposition of the property.
Lease obligations represent a relatively new type of financing that has not
yet developed the depth of marketability associated with more conventional
municipal obligations, and, as a result, certain of such lease obligations may
be considered illiquid securities. To determine whether or not the Fund will
consider such securities to be illiquid (the Fund may not invest more than ten
percent of its net assets in illiquid securities), the Trustees of the Fund have
established guidelines to be utilized by the Fund in determining the liquidity
of a lease obligation. The factors to be considered in making the determination
include: (1) the frequency of trades and quoted prices for the obligation; (2)
the number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (3) the willingness of dealers to undertake to make
a market in the security; and (4) the nature of the marketplace trades,
including the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of the transfer.
The Fund is classified as a non-diversified investment company under the Act
and as such is not limited by the Act in the proportion of its assets that it
may invest in the obligations of a single issuer. However, the Fund intends to
conduct its operations so as to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code (the "Code"). See "Taxation." In
order to qualify, among other requirements, the Fund will limit its investments
so that at the close of each quarter of the taxable year, (i) not more than 25%
of the market value of the Fund's total assets will be invested in the
securities of a single issuer, and (ii) with respect to 50% of the market value
of its total assets not more than 5% will be invested in the securities of a
single issuer and the Fund will not own more than 10% of the outstanding voting
securities of a single issuer. To the extent that a relatively high percentage
of the Fund's assets may be invested in the obligations of a limited number of
issuers, the Fund's portfolio securities will be more susceptible to any single
economic, political or regulatory occurrence than the portfolio securities of a
diversified investment company. Additionally, the Fund's yield will fluctuate to
a greater extent than that of a diversified investment company as a result of
changes in the financial condition or in the market's assessment of the various
issuers. The limitations described in this paragraph are not fundamental
policies and may be revised to the extent applicable Federal income tax
requirements are revised.
7
<PAGE>
The Fund may invest more than 25% of its total assets in industrial
development and pollution control bonds (two kinds of tax-exempt Municipal
Bonds) whether or not the users of facilities financed by such bonds are in the
same industry. In cases where such users are in the same industry, there may be
additional risk to the Fund in the event of an economic downturn in such
industry, which may result generally in a lowered need for such facilities and a
lowered ability of such users to pay for the use of such facilities.
The high quality, short-term fixed income securities in which the Fund
principally invests are guaranteed by state and local governments and are
subject to minimal risk of loss of income and principal.
PORTFOLIO MANAGEMENT
Although the Fund will generally acquire securities for investment with the
intent of holding them to maturity and will not seek profits through short-term
trading, the Fund may dispose of any security prior to its maturity to meet
redemption requests. Securities may also be sold when the Fund's Investment
Manager believes such disposition to be advisable on the basis of a revised
evaluation of the issuer or based upon relevant market considerations. There may
be occasions when, as a result of maturities of portfolio securities or sale of
Fund shares, or in order to meet anticipated redemption requests, the Fund may
hold cash which is not earning income.
The Fund anticipates that the average weighted maturity of the portfolio
will be 90 days or less. The relatively short-term nature of the Fund's
portfolio is expected to result in a lower yield than portfolios comprised of
longer-term tax-exempt securities.
VARIABLE RATE AND FLOATING RATE OBLIGATIONS. The interest rates payable on
certain Municipal Bonds and Municipal Notes are not fixed and may fluctuate
based upon changes in market rates. Municipal obligations of this type are
called "variable rate" or "floating rate" obligations. The interest rate payable
on a variable rate obligation is adjusted either at predesignated periodic
intervals or whenever there is a change in the market rate of interest on which
the interest rate payable is based.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase
tax-exempt securities on a when-issued or delayed delivery basis; i.e., delivery
and payment can take place a month or more after the date of the transaction.
These securities are subject to market fluctuation and no interest accrues to
the purchaser prior to settlement. At the time the Fund makes the commitment to
purchase such securities, it will record the transaction and thereafter reflect
the value, each day, of such securities in determining its net asset value.
BROKERAGE ALLOCATION. Brokerage commissions are not normally charged on
purchases and sales of short-term municipal obligations, but such transactions
may involve transaction costs in the form of spreads between bid and asked
prices. Pursuant to an order of the Securities and Exchange Commission, the Fund
may effect principal transactions in certain money market instruments with DWR.
In addition, the Fund may incur brokerage commissions on transactions conducted
through DWR.
SPECIAL CONSIDERATIONS RELATING TO NEW YORK TAX-EXEMPT SECURITIES
Since the Fund concentrates its investments in New York tax-exempt
securities, the Fund is affected by any political, economic or regulatory
developments affecting the ability of New York tax-exempt issuers to pay
interest or repay principal. Investors should be aware that certain issuers of
New York tax-exempt securities have experienced serious financial difficulties
in recent years. A reoccurrence of these difficulties may impair the ability of
certain New York issuers to maintain debt service on their obligations.
The fiscal stability of New York State is related to the fiscal stability of
the State's municipalities, its Agencies and Authorities (which generally
finance, construct and operate revenue-producing public benefit facilities).
This is due in part to the fact that Agencies, Authorities and local governments
in financial trouble often seek State financial assistance. The experience has
been that if New
8
<PAGE>
York City or any of the Agencies or Authorities suffers serious financial
difficulty, both the ability of the State, New York City, the State's political
subdivisions, the Agencies and the Authorities to obtain financing in the public
credit markets and the market price of outstanding New York tax-exempt
securities are adversely affected.
For a more detailed discussion of the risks of investing in New York
tax-exempt securities, see the Statement of Additional Information.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
The investment restrictions listed below are among the restrictions which
have been adopted by the Fund as fundamental policies. Under the Act, a
fundamental policy may not be changed without the vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act.
For purposes of the following restrictions: (a) an "issuer" of a security is
the entity whose assets and revenues are committed to the payment of interest
and principal on that particular security, provided that the guarantee of a
security will be considered a separate security and provided further that a
guarantee of a security shall not be deemed a security issued by the guarantor
if the value of all securities issued or guaranteed by the guarantor and owned
by the Fund does not exceed 10% of the value of the total assets of the Fund;
(b) a "taxable security" is any security the interest on which is subject to
federal income tax; and (c) all percentage limitations apply immediately after a
purchase or initial investment, and any subsequent change in any applicable
percentage resulting from market fluctuations or other changes in total assets
does not require elimination of any security from the portfolio.
The Fund may not:
1. Make loans of money or securities, except: (a) by the purchase of
debt obligations in which the Fund may invest consistent with its investment
objective and policies; and (b) by investment in repurchase agreements.
2. Invest 25% or more of the value of its total assets in taxable
securities of issuers in any one industry (industrial development and
pollution control bonds are grouped into industries based upon the business
in which the issuers of such obligations are engaged). This restriction does
not apply to obligations issued or guaranteed by the United States
Government, its agencies or instrumentalities or to Municipal Obligations,
including those issued by the State of New York or its political
subdivisions, or to domestic bank obligations.
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
The Fund offers its own shares for sale to the public on a continuous basis,
without a sales charge. Pursuant to a Distribution Agreement between the Fund
and Dean Witter Distributors Inc., (the "Distributor"), an affiliate of the
Investment Manager, shares of the Fund are distributed by the Distributor and
offered by DWR and other dealers who have entered into agreements with the
Distributor ("Selected Broker-Dealers"). The principal executive office of the
Distributor is located at Two World Trade Center, New York, New York 10048. The
offering price of the shares will be at their net asset value next determined
(see "Determination of Net Asset Value" below) after receipt of a purchase order
and acceptance by Dean Witter Trust Company (the "Transfer Agent") in proper
form and accompanied by payment in Federal Funds (i.e., monies of member banks
within the Federal Reserve System held on deposit at a Federal Reserve Bank)
available to the Fund for investment. Shares commence earning income on the day
following the date of purchase. Share
9
<PAGE>
certificates will not be issued unless requested in writing by the shareholder.
To initiate purchase by mail or wire, a completed Investment Application
(contained in the Prospectus) must be sent directly to Dean Witter Trust
Company, at P.O. Box 1040, Jersey City, N.J. 07303. Checks should be made
payable to the Dean Witter New York Municipal Money Market Trust and sent to
Dean Witter Trust Company at the above address. Purchases by wire must be
preceded by a call to the Transfer Agent advising it of the purchase (see
Investment Application or the front cover of this Prospectus for the telephone
number) and must be wired to The Bank of New York, for credit to the Account of
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey City,
New Jersey, Account No. 8900188413. Wire purchase instructions must include the
name of the Fund and the shareholder's account number. Purchases made by check
are normally effective within two business days for checks drawn on Federal
Reserve System member banks, and longer for most other checks. Wire purchases
received by the Transfer Agent prior to 12 noon New York time are normally
effective that day and wire purchases received after 12 noon New York time are
normally effective the next business day. Initial investments must be at least
$5,000, although the Fund, at its discretion, may accept initial investments of
smaller amounts, not less than $1,000. Subsequent investments must be $100 or
more and may be made through the Transfer Agent. The Fund will waive the minimum
initial investment for the automatic reinvestment of distributions from certain
unit investment trusts. The Fund reserves the right to reject any purchase
order.
Orders for the purchase of Fund shares placed by customers through DWR or
other Selected Broker-Dealers with payment in clearing house funds will be
transmitted to the Fund with payment in Federal Funds on the business day
following the day the order is placed by the customer with DWR or other Selected
Broker-Dealers. Investors desiring same day effectiveness should wire Federal
Funds directly to the Transfer Agent. An order procedure pursuant to which
customers can, upon request; (a) have the proceeds from the sale of listed
securities invested in shares of the Fund on the day following the day the
customer receives such proceeds in his or her DWR or other Selected
Broker-Dealer brokerage account; and (b) pay for the purchase of certain listed
securities by automatic liquidation of Fund shares owned by the customer. In
addition, there is an automatic purchase procedure whereby consenting DWR or
other Selected Broker-Dealer customers who are shareholders of the Fund will
have free cash credit balances in their DWR or other Selected Broker-Dealer
brokerage accounts as of the close of business (4:00 P.M., New York time) on the
last business day of each week (where such balances do not exceed $5,000)
automatically invested in shares of the Fund the next following business day.
Investors with free cash credit balances (i.e., immediately available funds) in
brokerage accounts at DWR or other Selected Broker-Dealer's will not have any of
such funds invested in the Fund until the business day after the customer places
an order with DWR or other Selected Broker-Dealers to purchase shares of the
Fund and will not receive the daily dividend which would have been received had
such funds been invested in the Fund on the day the order was placed with DWR or
other Selected Broker-Dealers. Accordingly, DWR or other Selected Broker-Dealers
may have the use of such free credit balances during such period.
PLAN OF DISTRIBUTION
The Fund has entered into a Plan of Distribution with the Distributor,
pursuant to Rule 12b-1 under the Act, whereby the expenses of certain activities
in connection with the distribution of the Fund's shares are reimbursed. The
principal activities and services which may be provided by DWR, its affiliates
or any other Selected Broker-Dealers under the Plan include: (1) compensation
to, and expenses of, DWR's and other Selected Broker-Dealers' account executives
and other employees, including overhead and telephone expenses; (2) sales
incentives and bonuses to sales representatives and to marketing personnel in
connection with promoting sales of the Fund's shares; (3) expenses incurred in
connection with promoting sales of the
10
<PAGE>
Fund's shares; (4) preparing and distributing sales literature; and (5)
providing advertising and promotional activities, including direct mail
solicitation and television, radio, newspaper, magazine and other media
advertisements. Reimbursements for these services will be made in monthly
payments by the Fund which will in no event exceed an amount equal to a payment
at the annual rate of 0.15 of 1% of the Fund's average daily net assets. For the
fiscal year ended December 31, 1993, the fee accrued was equal to payment at an
annual rate of 0.10 of 1% of the Fund's average daily net assets. Expenses
incurred pursuant to the Plan in any fiscal year will not be reimbursed by the
Fund through payments accrued in any subsequent fiscal year.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined as of 4:00 p.m. New
York time on each day that the New York Stock Exchange is open by taking the
value of all assets of the Fund, subtracting its liabilities and dividing by the
number of shares outstanding. The net asset value per share will not be
determined on Good Friday and on such other federal and non-federal holidays as
are observed by the New York Stock Exchange.
The Fund utilizes the amortized cost method in valuing its portfolio
securities, which method involves valuing a security at its cost adjusted by a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. The
purpose of this method of calculation is to facilitate the maintenance of a
constant net asset value per share of $1.00. However, there can be no assurance
that the $1.00 net asset value will be maintained.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan is available for
shareholders who own or purchase shares of the Fund having a minimum value of at
least $5,000. The plan provides for monthly or quarterly (March, June,
September, December) checks in any dollar amount not less than $25 or in any
whole percentage of the account balance on an annualized basis. The shares will
be redeemed at their net asset value determined, at the shareholder's option, on
the tenth or twenty-fifth day (or next business day) of the relevant month or
quarter and normally a check for the proceeds will be mailed by the Transfer
Agent within five days after the date of redemption. A shareholder wishing to
make this election should do so on the Investment Application. The withdrawal
plan may be terminated at any time by the Fund.
EASYINVEST-TM-. Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a semi-monthly,
monthly or quarterly basis, to the Transfer Agent for investment in shares of
the Fund. Shares purchased through EasyInvest will be added to the shareholder's
existing account at the net asset value calculated the next business day after
the transfer of funds is effected.
EXCHANGE PRIVILEGE. An "Exchange Privilege", that is, the privilege of
exchanging shares of certain Dean Witter Funds for shares of the Fund, exists
whereby shares of various Dean Witter Funds which are open-end investment
companies sold with either a front-end (at time of purchase) sales charge ("FESC
funds") or a contingent deferred sales charge ("CDSC funds"), may be redeemed at
their next calculated net asset value and the proceeds of the redemption are
used to purchase shares of five money market funds and Dean Witter Short-Term
U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust and Dean Witter
Short-Term Bond Fund (the foregoing eight non-FESC or CDSC funds are hereinafter
collectively referred to in this section as the "Exchange Funds"). When
exchanging into a money market fund from an FESC fund or a CDSC fund, shares of
the FESC fund or the CDSC fund are redeemed at their next calculated net asset
value and exchanged for shares of the money market
11
<PAGE>
fund at their net asset value determined the following business day. An exchange
from an FESC fund or a CDSC fund to an Exchange Fund that is not a money market
fund is on the basis of the next calculated net asset value per share of each
fund after the exchange order is received. Subsequently, shares of these
Exchange Funds received in an exchange for shares of an FESC fund (regardless of
the type of fund originally purchased) may be redeemed and exchanged for shares
of the Exchange Funds, FESC funds or CDSC funds (however, shares of CDSC funds,
including shares acquired in exchange for (i) shares of FESC funds or (ii)
shares of the Exchange Funds which were acquired in exchange for shares of FESC
funds, may not be exchanged for shares of FESC funds). Additionally, shares of
the money market funds received in an exchange for shares of a CDSC fund
(regardless of the type of fund originally purchased) may be redeemed and
exchanged for shares of the Exchange Funds or CDSC funds. Ultimately, any
applicable contingent deferred sales charge ("CDSC") will have to be paid upon
redemption of shares originally purchased from a CDSC fund. (If shares of the
Exchange Funds received in exchange for shares originally purchased from a CDSC
fund are exchanged for shares of another CDSC fund having a different CDSC
schedule than that of the CDSC fund from which the Exchange Funds were acquired,
the shares will be subject to the higher CDSC schedule.) During the period of
time the shares originally purchased from a CDSC fund remain in the Exchange
Funds, the holding period (for the purpose of determining the rate of the CDSC)
is frozen so that the charge is based upon the period of time the shareholder
actually held shares of a CDSC fund. However, in the case of shares exchanged
into an Exchange Fund on or after April 23, 1990, upon a redemption of shares
which results in a CDSC being imposed, a credit (not to exceed the amount of the
CDSC) will be given in an amount equal to the Exchange Fund 12b-1 distribution
fees incurred on or after that date which are attributable to those shares (see
"Plan of Distribution"). Exchanges involving FESC funds or CDSC funds may be
made after the shares of the FESC fund or CDSC fund acquired by purchase (not by
exchange or dividend reinvestment) have been held for thirty days. There is no
waiting period for exchanges of shares acquired by exchange or dividend
reinvestment.
Exchange Privilege accounts may also be maintained for shareholders of the
money market funds who acquired their shares in exchange for shares of various
TCW/DW Funds, a group of funds distributed by the Distributor for which TCW
Funds Management, Inc. serves as Adviser, under the terms and conditions
described in the Prospectus and Statement of Additional Information of each
TCW/DW Fund.
Purchases and exchanges should be made for investment purposes only. A
pattern of frequent exchanges may be deemed by the Investment Manager to be
abusive and contrary to the best interests of the Fund's other shareholders and,
at the Investment Manager's discretion, may be limited by the Fund's refusal to
accept additional purchases and/or exchanges from the investor. Although the
Fund does not have any specific definition of what constitutes a pattern of
frequent exchanges, and will consider all relevant factors in determining
whether a particular situation is abusive and contrary to the best interests of
the Fund and its other shareholders, investors should be aware that the Fund and
each of the other Dean Witter Funds may in their discretion limit or otherwise
restrict the number of times this Exchange Privilege may be exercised by any
investor. Any such restriction will be made by the Fund on a prospective basis
only, upon notice to the shareholder not later than ten days following such
shareholder's most recent exchange.
The Exchange Privilege may be terminated or revised at any time by the Fund
and/or any of such Dean Witter Funds for which shares of the Fund may be
exchanged, upon such notice as may be required by applicable regulatory
agencies. Shareholders maintaining margin accounts with DWR or other Selected
Broker-Dealers are referred to their account executive regarding restrictions on
exchange of shares of the Fund pledged in the margin account.
12
<PAGE>
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain one and read it carefully before
investing. Exchanges are subject to the minimum investment requirement and any
other conditions imposed by each fund. An exchange will be treated for federal
income tax purposes the same as a repurchase or redemption of shares on which
the shareholder has realized a capital gain or loss. However, the ability to
deduct capital losses on an exchange may be limited in situations where there is
an exchange of shares within ninety days after the shares are purchased. The
Exchange Privilege is only available in states where an exchange may legally be
made.
If DWR or another Selected Broker-Dealer is the current dealer of record and
its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Fund for shares of any of the Dean Witter
Funds (for which the Exchange Privilege is available) pursuant to this Exchange
Privilege by contacting their DWR or other Selected Broker-Dealer account
executive (no Exchange Privilege Authorization Form is required). Other
shareholders (and those shareholders who are DWR or other Selected Broker-Dealer
clients but who wish to make exchanges directly by writing or telephoning the
Transfer Agent) must complete and forward to the Transfer Agent an Exchange
Privilege Authorization Form, copies of which may be obtained from the Transfer
Agent, to initiate an exchange. If the Authorization Form is used, exchanges may
be made in writing or by contacting the Transfer Agent at (800) 526-3143 (toll
free). The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures may
include requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number and DWR or other
Selected Broker-Dealer account number (if any). Telephone instructions may also
be recorded. If such procedures are not employed, the Fund may be liable for any
losses due to unauthorized or fraudulent instructions. Telephone exchange
instructions will be accepted if received by the Transfer Agent between 9:00
a.m. and 4:00 p.m. New York time, on any day the New York Stock Exchange is
open. Any shareholder wishing to make an exchange who has previously filed an
Exchange Privilege Authorization Form and who is unable to reach the Fund by
telephone should contact his or her DWR or other Selected Broker-Dealer account
executive, if appropriate, or make a written exchange request. Shareholders are
advised that during periods of drastic economic or market changes, it is
possible that the telephone exchange procedures may be difficult to implement,
although this has not been the experience of the Dean Witter Funds in the past.
For further information regarding the Exchange Privilege shareholders should
contact their DWR or other Selected Broker-Dealer account executive or the
Transfer Agent.
13
<PAGE>
REDEMPTION AND REPURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
A shareholder may withdraw all or any of his or her investments at any time,
without penalty or charge, by redeeming shares through the Fund's transfer
agent, Dean Witter Trust Company (the "Transfer Agent"), at the net asset value
per share next determined (see "Purchase of Fund Shares -- Determination of Net
Asset Value") after the receipt of a redemption request meeting the applicable
requirements as follows (all of which are subject to the General Redemption
Requirements set forth below).
1. BY CHECK
The Transfer Agent will supply blank checks to any shareholder who has
requested them on an Investment Application. The shareholder may make checks
payable to the order of anyone in any amount not less than $500 (checks written
in amounts under $500 will not be honored by the Transfer Agent). Shareholders
must sign checks exactly as their shares are registered. If the account is a
joint account, the check may contain one signature unless the joint owners have
specifically specified on an Investment Application that all owners are required
to sign checks. Only shareholders having accounts in which no share certificates
have been issued will be permitted to redeem shares by check.
Shares will be redeemed at their net asset value next determined (see
"Purchase of Fund Shares -- Determination of Net Asset Value") after receipt by
the Transfer Agent of a check which does not exceed the value of the account.
Payment of the proceeds of a check will normally be made on the next business
day after receipt by the Transfer Agent of the check in proper form. Shares
purchased by check (including a government, certified or bank cashier's check)
are not normally available to cover redemption checks until fifteen days after
receipt of the check used for investment by the Transfer Agent. The Transfer
Agent will not honor a check in an amount exceeding the value of the account at
the time the check is presented for payment.
2. BY TELEPHONE OR WIRE INSTRUCTIONS WITH PAYMENT TO PREDESIGNATED BANK ACCOUNT
A shareholder may redeem shares by telephoning or sending wire instructions
to the Transfer Agent. Payment will be made by the Transfer Agent to the
shareholder's bank account at any commercial bank designated by the shareholder
in an Investment Application, by wire if the amount is $1,000 or more and the
shareholder so requests, and otherwise by mail. Normally, the Transfer Agent
will transmit payment the next business day following receipt of a request for
redemption in proper form. Only shareholders having accounts in which no share
certificates have been issued will be permitted to redeem shares by telephone or
wire instructions.
DWR and other participating Selected Broker-Dealers have informed the
Distributor and the Fund that, on behalf of and as agent for their customers who
are shareholders of the Fund, they will transmit to the Fund requests for
redemption of shares owned by their customers. In such cases, the Transfer Agent
will wire proceeds of redemptions to DWR's or another Selected Broker-Dealer's
bank account for credit to the shareholders' accounts the following business
day. DWR and other participating Selected Broker-Dealers have also informed the
Distributor and the Fund that they do not charge for this service.
Redemption instructions must include the shareholder's name and account
number and be wired or called to the Transfer Agent:
-- 800-526-3143 (Toll Free)
-- Telex No. 125076
3. BY MAIL
A shareholder may redeem shares by sending a letter to Dean Witter Trust
Company, P.O. Box 983, Jersey City, NJ 07303, requesting redemption and
surrendering share certificates if any have been issued.
14
<PAGE>
<TABLE>
<CAPTION>
APPLICATION
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
Send to: Dean Witter Trust Company (the ""Transfer Agent''), P.O. Box 1040, Jersey City, NJ 07303
<C> <S>
- -----------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS | For assistance in completing this application, telephone Dean Witter Trust Company at (800) 526-3143 (Toll
| Free.
- -----------------------------------------------------------------------------------------------------------------------------------
|
TO REGISTER |
SHARES | 1.| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(please print) | ___________________________________________________________________________________________________________
First Name Last Name
|
- -As joint tenants, |
use line 1 & 2 | 2.| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ___________________________________________________________________________________________________________
| First Name Last Name
|
| (Joint tenants with rights of survivorship unless otherwise specified)
| | | | | | | | |
| ----------------------
| Social Security Number
- - As custodian | 3.| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
use lines 1 & 3 | __________________________________________________________________________________________________________
| Minor's Name
| | | | | | | | | | | |
| ______________________________
| Under the_____________________________Uniform Gifts to Minors Act Minor's Social Security Number
| State of Residence of Minor
|
- -In the name of a |
corporation, |
trust, |
partnership | 4.| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| __________________________________________________________________________________________________________
or other | Name of Corporation, Trust (including trustee name(s)) or Other Organization
institutional |
investors, use |
line 4 | | | | | | | | | | | | | |
| _________________________
| If Trust, Date of Trust Instrument:__________________________________ Tax Identification Number
|
- -------------------|--------------------------------------------------------------------------------------------------------------
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ___________________________________________________________________________________________________________
ADDRESS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ____________________________________________________________________________________________________________
| City State Zip Code
|
- -------------------|---------------------------------------------------------------------------------------------------------------
|
TO PURCHASE |
SHARES: |
|
Minimum Initial | / / CHECK (enclosed) $_________ (Make Payable to Dean Witter New York Municipal Money Market Trust)
Investment |
$5,000 | / / WIRE* On____________ MF*____________________________________
| (Date) (Control number, this transaction)
|
| _________________________________________________________________________________________________________
| Name of Bank Branch
|
| __________________________________________________________________________________________________________
| Address
|
| _________________________________________________________________________________________________________
| Telephone Number
|
| *For an initial investment made by wiring funds, obtain a control number by calling: (800) 526-3143
| (Toll Free).
| Your bank should wire to:
|
| Bank of New York for credit to account of Dean Witter Trust Company
|
| Account Number:8900188413
|
| Re: Dean Witter New York Municipal Money Market Trust
|
| Account Of:________________________________________________________
| (Investor's Account as Registered at the Transfer Agent)
|
| Control or Account Number:_________________________________________
| (Assigned by Telephone)
|
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONAL SERVICES
- ------------------------------------------------------------------------------------------------------------------------------------
|
| NOTE: If you are a current shareholder of Dean Witter New York Municipal Market Trust, please indicate your
| fund account number here.
|
| [5] [5] [0] - | | | | | | | | |
| -------------------------
___________________|________________________________________________________________________________________________________________
|
DIVIDENDS |All dividends will be reinvested daily in additional shares, unless the following option is selected:
|
| / / Pay income dividends by check at the end of each month.
___________________|_______________________________________________________________________________________________________________
|
WRITE YOUR |Send an initial supply of checks.
OWN |FOR JOINT ACCOUNTS:
CHECK |/ / CHECK THIS BOX IF ALL OWNERS ARE REQUIRED TO SIGN CHECKS.
|
___________________|_______________________________________________________________________________________________________________
|
SYSTEMATIC |/ / Systematic Withdrawal Plan ($25 minimum) / / Percentage of balance (annualized basis)
WITHDRAWAL | $ / / Monthly or / / Quarterly _______% / /Monthly or / / Quarterly
PLAN | / / 10th or / / 25th of Month/Quarter / / 10th or / / 25th of Month/Quarter
Minimum Account |/ / Pay shareholder(s) at address of record.
Value: $5,000 |/ /Pay to the following: (If this payment option is selected a signature guarantee is required)
|
|_______________________________________________________________________________________________________________
|Name
|
|_______________________________________________________________________________________________________________
|Address
|
|_______________________________________________________________________________________________________________
City State Zip Code
</TABLE>
<PAGE>
<TABLE>
<C> <S>
___________________________________________________________________________________________________________________________________
PAYMENT TO |
PREDESIGNATED |
BANK ACCOUNT |
| Dean Witter Trust Company is hereby authorized to honor telephonic or other instructions,
| without signature guarantee, from any person for the redemption of any or all shares of
| Dean Witter New York Municipal Money Market Trust held in my (our) account provided that
| proceeds are transmitted only to the following bank account. (Absent its own negligence,
| neither Dean Witter New York Municipal Money Market Trust nor Dean Witter Trust Company
| (the "Transfer Agent") shall be liable for any redemption caused by unauthorized
| instruction(s)):
|
Bank Account |
must be in same |
name as shares |
are registered | _____________________________________________________________ ____________________________
| NAME & BANK ACCOUNT NUMBER BANK'S ROUTING TRANSMIT CODE
| (ASK YOUR BANK)
|
Minimum Amount: | _____________________________________________________________________________________________________________
$1,000 | NAME OF BANK
|
| ____________________________________________________________________________________________________________
| ADDRESS OF BANK
|
| _(___)________________________________________________________________________________________________________
| TELEPHONE NUMBER OF BANK
- -------------------|--------------------------------------------------------------------------------------------------------------
| SIGNATURE AUTHORIZATION
- -------------------|--------------------------------------------------------------------------------------------------------------
FOR ALL ACCOUNTS | NOTE: RETAIN A COPY OF THIS DOCUMENT FOR YOUR RECORDS. ANY MODIFICATION OF THE INFORMATION BELOW WILL REQUIRE
| AN AMENDMENT TO THIS FORM. THIS DOCUMENT IS IN FULL FORCE AND EFFECT UNTIL ANOTHER DULY EXECUTED FORM IS
| RECEIVED BY THE TRANSFER AGENT.
|
| The "Transfer Agent" is hereby authorized to act as agent for the registered owner of shares of Dean Witter
| New York Municipal Money Market Trust (the "Fund") in effecting redemptions of shares and is authorized to
| recognize the signature(s) below in payment of funds resulting from such redemptions on behalf of the
| registered owners of such shares. The Transfer Agent shall be liable only for its own negligence and not for
| default or negligence of its correspondents, or for losses in transit. The Fund shall not be liable for any
| default or negligence of the Transfer Agent.
|
| I (we) certify to my (our) legal capacity, or the capacity of the investor named above, to invest in and
| redeem shares of, and I (we) acknowledge receipt of a current prospectus of, Dean Witter New York Municipal
| Money Market Trust and (we) further certify my (our) authority to sign and act for and on behalf of the
| investor.
|
| Under penalties of perjury, I certify (1) that the number shown on this form is my correct taxpayer
| identification number and (2) that I am not subject to backup withholding either because I have not been
| notified that I am subject to backup withholding as a result of a failure to report all interest or dividends
| or the Internal Revenue Service has notified me that I am no longer subject to backup withholding. (Note: You
| must cross out item (2) above if you have been notified by IRS that you are currently subject to backup
| withholding because of underreporting interest or dividends on your tax return.)
|
| For Individual, Joint and Custodial Accounts for Minors, Check Applicable Box:
|
| / / I am a United States Citizen. / / I am not a United States Citizen.
|
|
| SIGNATURE(S) (IF JOINT TENANTS, ALL MUST SIGN)
|
Name(s) must be | ______________________________________________________________________________________________________________
signed exactly the | | | |
same as shown on | | | |
lines 1 to 4 on | | | |
the reverse side | | | |
of this | | | |
application | |________________________________________________________|____________________________________________________|
| | | |
| | | |
| | | |
| | | |
| | | |
| |_____________________________________________________________________________________________________________|
|
|
|
| SIGNED THIS________________________DAY OF_________________________, 19__.
|
|
| FOR CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER ORGANIZATIONS
| The following named persons are currently officers/trustees/general partners/other authorized signatories
| of the Registered Owner, and any __* of them ( "Authorized Person(s)") is/are currently authorized
| under the applicable governing document to act with full power to sell, assign or transfer securities of the
| the Fund for the Registered Owner and to execute and deliver any instrument necessary to effectuate the
| authority hereby conferred:
|
| NAME/TITLE SIGNATURE
In addition, | ______________________________________________________________________________________________________________
complete Section | | | |
A or B below. | | | |
| | | |
| | | |
| | | |
| |________________________________________________________|____________________________________________________|
| | | |
| | | |
| | | |
| | | |
| | | |
| |________________________________________________________|____________________________________________________|
| | | |
| | | |
| | | |
| | | |
| | | |
| |_____________________________________________________________________________________________________________|
|
| SIGNED THIS______________________DAY OF________________________, 19___.
|
| The Transfer Agent may, without inquiry, act only upon the instruction of ANY PERSON(S) purporting to be (an)
| Authorized Person(s) as named in the Certification Form last received by the Transfer Agent. The Transfer
| Agent and the Fund shall not be liable for any claims, expenses (including legal fees) or losses resulting
| from the Transfer Agent having acted upon any instruction reasonably believed genuine.
|
|
| ______________________________________________________________________________________________________________
| *INSERT A NUMBER. UNLESS OTHERWISE INDICATED, THE TRANSFER AGENT MAY HONOR INSTRUCTIONS OF ANY ONE OF THE
| PERSONS NAMED ABOVE.
___________________________________________________________________________________________________________________________________
SECTION (A) | NOTE: EITHER A SIGNATURE GUARANTEE OR CORPORATE SEAL IS REQUIRED.
CORPORATIONS AND |
INCORPORATED |
ASSOCIATIONS ONLY. |I, ________________________________, Secretary of the Registered Owner, do hereby certify that at a meeting
|on ___________________________ at which a quorum was present throughout, the Board of Directors of the
|corporation/the officers of the association duly adopted a resolution, which is in full force and effect
SIGN ABOVE AND |and in accordance with the Registered Owner's charter and by-laws, which resolution did the following:
COMPLETE THIS |(1) empowered the above-named Authorized Person(s) to effect securities transactions for the Registered
SECTION |Owner on the terms described above; (2) authorized the Secretary to certify, from time to time, the names
|and titles of the officers of the Registered Owner and to notify the Transfer Agent when changes
|in office occur; and (3) authorized the Secretary to certify that such a resolution has been duly adopted
|and will remain in full force and effect until the Transfer Agent receives a duly executed amendment to the
|Certification Form.
|
SIGNATURE |
GUARANTEE** |
(or Corporate Seal)|Witness my hand on behalf of the corporation/association this ________________ day of ______________, 19__.
|
|
| _______________________________________________
| Secretary**
|The undersigned officer (other than the Secretary) hereby certifies that the foregoing instrument has been
|signed by the Secretary of the corporation/association.
SIGNATURE |
GUARANTEE** |
(or Corporate Seal)| _____________________________________________________________________
| Certifying Officer of the Corporation or Incorporated Association**
|
___________________|____________________________________________________________________________________________________________
|
SECTION (B) ALL |NOTE: A SIGNATURE GUARANTEE IS REQUIRED.
OTHER |
INSTITUTIONAL | _______________ _________________________________________________________
INVESTORS | Certifying
| Trustee(s)/General Partner(s)/Other(s)**
|
SIGNATURE |
GUARANTEE** |
|
SIGN ABOVE AND | ----------------------------------------------------------
COMPLETE THIS | Certifying
SECTION | Trustee(s)/General Partner(s)/Other(s)**
|
|_______________________________________________________________________________________________________________
|** SIGNATURE(S) MUST BE GUARANTEED BY AN ELIBIGLE GUARANTOR
- -------------------|----------------------------------------------------------------------------------------------------------------
|
DEALER |Above signature(s) guaranteed. Prospectus has been delivered by undersigned to above-named applicant(s).
(if any) |
Completion by |
dealer only |
|________________________________________ __________________________________________________________
|Firm Name Office Number Account Number at Dealer-A/E Number
|
|________________________________________ __________________________________________________________
|Address Account Executive's Last Name
|
|________________________________________ __________________________________________________________
|City, State, Zip Code Branch Office
1994 Dean Witter Distributors Inc.
</TABLE>
<PAGE>
Redemption proceeds will be mailed to the shareholder at his or her
registered address or mailed or wired to his or her predesignated bank account,
as he or she may request. Proceeds of redemption may also be sent to some other
person, as requested by the shareholder.
GENERAL REDEMPTION REQUIREMENTS
Written requests for redemption must be signed by the registered
shareholder[s]. If the proceeds are to be paid to anyone other than the
registered shareholder[s] or sent to any address other than the shareholder's
registered address or predesignated bank account, signatures must be guaranteed
by an eligible guarantor acceptable to the Transfer Agent (shareholders should
contact the Transfer Agent for a determination as to whether a particular
institution is an eligible guarantor), except in the case of redemption by
check. Additional documentation may be required where shares are held by a
corporation, partnership, trustee or executor. With regard to shares of the Fund
acquired pursuant to the Exchange Privilege, any applicable contingent deferred
sales charge will be imposed upon the redemption of such shares (see "Purchase
of Fund Shares--Exchange Privilege").
If shares to be redeemed are represented by a share certificate, the request
for redemption must be accompanied by the share certificate and a share
assignment form signed by the registered shareholder[s] exactly as the account
is registered. Shareholders are advised, for their own protection, to send the
share certificate and assignment form in separate envelopes (if they are being
mailed and not hand delivered) to the Fund's Transfer Agent. Signatures must be
guaranteed by an eligible guarantor. Additional documentation may be required
where shares are held by a corporation, partnership, trustee or executor.
All requests for redemption, all share certificates and all share
assignments should be sent to Dean Witter Trust Company, P.O. Box 983, Jersey
City, NJ 07303.
Generally, the Fund will attempt to make payment for all redemptions and
repurchases within one business day, but in no event later than seven days after
receipt of such redemption request in proper form. However, if the shares being
redeemed or repurchased were purchased by check (including a certified or bank
cashier's check), payment may be delayed for the minimum time needed to verify
that the check used for investment has been honored (not more than fifteen days
from the time of receipt of the check by the Transfer Agent). In addition, the
Fund may postpone redemptions or repurchases at certain times when normal
trading is not taking place on the New York Stock Exchange.
The Fund reserves the right, on 60 days' notice, to redeem at their net
asset value the shares of any shareholder (other than shares held in an
Individual Retirement Account or custodial account under Section 403(b)(7) of
the Internal Revenue Code) whose shares due to redemptions by the shareholder
have a value of less than $1,000, or such lesser amount as may be fixed by the
Board of Trustees.
AUTOMATIC REDEMPTION PROCEDURE
The Distributor has instituted an automatic redemption procedure which it
may utilize to satisfy amounts due it by a shareholder maintaining a brokerage
account with DWR or another Selected Broker-Dealer, as a result of purchases of
securities or other transactions in the shareholder's brokerage account. Under
this procedure, if the shareholder elects to participate by so notifying DWR or
another Selected Broker-Dealer, the shareholder's DWR or other Selected
Broker-Dealer brokerage account will be scanned each business day prior to the
close of business (4:00 P.M., New York time). After application of any cash
balances in the account, a sufficient number of Fund shares may be redeemed at
the close of business to satisfy any amounts for which the shareholder is
obligated to make payment to DWR or other Selected Broker-Dealer. Redemptions
will be effected on the business day preceding the date the shareholder is
obligated to make such payment, and DWR or other Selected
15
<PAGE>
Broker-Dealer will receive the redemption proceeds on the day following the
redemption date. Shareholders will receive all dividends declared and reinvested
through the date of redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Fund declares dividends, payable on each
day the New York Stock Exchange is open for business, of all of its daily net
investment income to shareholders of record as of the close of business the
preceding business day. Dividends from net short-term capital gains, if any,
will be paid periodically. The amount of dividend may fluctuate from day to day
and may be omitted on some days if net realized losses on portfolio securities
exceed the Fund's net investment income. Dividends are declared and
automatically reinvested daily in additional full and fractional shares of the
Fund (rounded to the last 1/100 of a share) at the net asset value per share at
the close of business on that day. Any dividends declared in the last quarter of
any calendar year which are paid in the following calendar year prior to
February 1 will be deemed received by the shareholder in the prior year.
Shareholders may instruct the Transfer Agent (in writing) to have their
dividends paid out monthly in cash. For such shareholders, the shares reinvested
and credited to their account during the month will be redeemed as of the close
of business on the monthly payment date (which will be no later than the last
business day of the month) and the proceeds will be paid to them by check.
Processing of dividend checks begins immediately following the monthly payment
date. Shareholders who have requested to receive dividends in cash will normally
receive their monthly dividend check during the first ten days of the following
month.
Share certificates for dividends or distributions will not be issued unless
a shareholder requests in writing that a certificate be issued for a specific
number of shares.
TAXES. Because the Fund intends to distribute substantially all of its net
investment income and net capital gains, if any, to shareholders, and intends to
otherwise comply with all the provisions of Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), to qualify as a regulated investment
company, it is not expected that the Fund will be required to pay any federal
income tax.
The Fund intends to qualify to pay "exempt-interest dividends" to its
shareholders by maintaining, as of the close of each quarter of its taxable
year, at least 50% of the value of its total assets in tax-exempt securities. If
the Fund satisfies such requirement, dividends from net investment income to
shareholders, whether taken in cash or reinvested in additional Fund shares,
will be excludable from gross income for federal income tax purposes to the
extent net interest income is represented by interest on tax-exempt securities.
Exempt-interest dividends are included, however, in determining what portion, if
any, of a person's Social Security benefits are subject to federal income tax.
The Code subjects interest received on certain otherwise tax-exempt
securities to an alternative minimum tax. This alternative minimum tax applies
to interest received on "private activity bonds" (in general, bonds that benefit
non-government entities) issued after August 7, 1986 which, although tax-exempt,
are used for purposes other than those generally performed by governmental units
(e.g., bonds used for commercial or housing purposes). Income received on such
bonds is classified as a "tax preference item", under the alternative minimum
tax, for both individual and corporate investors. The Fund may invest without
limit in such "private activity bonds," with the result that a substantial
portion of the exempt-interest dividends paid by the Fund may be an item of tax
preference to shareholders subject to the alternative minimum tax. In addition,
certain corporations which are subject to the alternative minimum tax may have
to include a portion of exempt-interest dividends in calculating their
alternative minimum taxable income in
situa-
16
<PAGE>
tions where the "adjusted current earnings of the corporation exceeds its
alternative minimum taxable income.
After the end of its calendar year, the shareholders will be sent a
statement indicating the percentage of the dividend distributions for such
taxable year which constitutes exempt-interest dividends and the percentage, if
any, that is taxable, and the percentage, if any, of the exempt-interest
dividends which constitutes an item of tax preference. (Unlike federal law, no
portion of the exempt-interest dividends will constitute an item of tax
preference for New York personal income tax purposes.) This percentage should be
applied uniformly to any distributions made during the taxable year to determine
the proportion of dividends that is tax-exempt. The percentage may differ from
the percentage of tax-exempt dividend distributions for any particular month.
To the extent that dividends are derived from interest on New York
tax-exempt securities, such dividends will also be exempt from New York State
and New York City personal income taxes. Shareholders will normally be subject
to federal and New York State and New York City personal income tax on dividends
paid from interest income derived from taxable securities and on distributions
of net capital gains. For federal and New York State or New York City income tax
purposes, distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains, regardless of how long the shareholder
has held the Fund shares and regardless of whether the distribution is received
in additional shares or in cash. To avoid being subject to a 31% backup
withholding tax on taxable dividends and capital gains distributions and the
proceeds of redemptions and repurchases, shareholders' taxpayer identification
numbers must be furnished and certified as to accuracy.
Interest on indebtedness incurred by shareholders or related parties to
purchase or carry shares of an investment company paying exempt-interest
dividends, such as the Fund, will not be deductible by the investor for federal
or New York State or New York City personal income tax purposes.
The foregoing relates to federal income taxation and to New York State and
New York City personal income taxation as in effect as of the date of this
Prospectus.
Shareholders should consult their tax advisers as to the applicability of
the above to their own tax situation.
CURRENT AND EFFECTIVE YIELD
From time to time the Fund advertises its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Fund refers to the income
generated by an investment in the Fund over a given seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that seven-day
period is assumed to be generated each seven-day period within a 365-day period
and is shown as a percentage of the investment. The "effective yield" for a
seven-day period is calculated similarly but, when annualized, the income earned
by an investment in the Fund is assumed to be reinvested each week within a
365-day period. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The Fund may
also quote tax-equivalent yield which is calculated by determining the pre-tax
yield which, after being taxed at a stated rate, would be equivalent to the
yield determined as described above. The Fund may also advertise the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in shares of the Fund.
17
<PAGE>
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS. All shares of beneficial interest of the Fund are of $0.01
par value and are equal as to earnings, assets and voting privileges.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. Under certain
circumstances, the Trustees may be removed by action of the Trustees or by the
Shareholders.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for obligations of the
Fund. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund, requires that notice
of such disclaimer be given in each instrument entered into or executed by the
Fund and provides for indemnification and reimbursement of expenses out of the
Fund's property for any shareholder held personally liable for the obligations
of the Fund. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations. Given the above limitations on
shareholder personal liability and the nature of the Fund's assets and
operations, the possibility of the Fund being unable to meet its obligations is
remote and, in the opinion of Massachusetts counsel to the Fund, the risk to
Fund shareholders of personal liability is remote.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed
to the Fund or the Transfer Agent at one of its telephone numbers or at its
address, as are set forth on the front cover of this Prospectus.
18
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter New York Municipal Money Market
Trust
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights (appearing in the "Financial
Highlights" table on page 4 of this Prospectus) present fairly, in all material
respects, the financial position of Dean Witter New York Municipal Money Market
Trust (the "Fund") at December 31, 1993, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the three years in
the period then ended and for the period March 20, 1990 (commencement of
operations) through December 31, 1990, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities owned at December 31, 1993 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
1177 Avenue of the Americas
New York, New York 10036
February 8, 1994
1993 FEDERAL TAX NOTICE (UNAUDITED)
For the year ended December 31, 1993 the Fund paid to shareholders $0.013518 per
share from net investment income. All of the Fund's dividends were exempt
interest dividends, excludable from gross income for Federal and New York income
tax purposes.
19
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (amortized
cost $41,090,332) (Note 1).................. $ 41,090,332
Cash.......................................... 28,333
Interest receivable........................... 218,975
Deferred organizational expenses (Note 1)..... 12,986
Prepaid expenses.............................. 6,010
------------
TOTAL ASSETS.......................... 41,356,636
------------
LIABILITIES:
Payable for shares of beneficial interest
repurchased................................. 139,505
Investment management fee payable (Note 2).... 18,047
Plan of distribution fee payable (Note 3)..... 3,609
Accrued expenses (Note 4)..................... 83,369
------------
TOTAL LIABILITIES..................... 244,530
------------
NET ASSETS:
Paid in capital............................... 41,112,484
Accumulated realized loss on investments -
net......................................... (421)
Accumulated undistributed investment
income - net................................ 43
------------
NET ASSETS............................ $ 41,112,106
------------
------------
NET ASSET VALUE PER SHARE, 41,112,484 shares
outstanding (unlimited shares authorized of
$.01 par value).............................
$1.00
------------
------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME.............................. $ 1,067,570
-----------
EXPENSES
Investment management fee (Note 2)......... 225,305
Professional fees.......................... 49,724
Transfer agent fees and expenses (Note
4)....................................... 46,839
Plan of distribution fee (Note 3).......... 43,843
Shareholders reports and notices (Note
4)....................................... 35,473
Trustees' fees and expenses (Note 4)....... 33,631
Organizational expenses (Note 1)........... 10,720
Registration fees.......................... 8,298
Custodian fees............................. 5,522
Other...................................... 3,004
-----------
TOTAL EXPENSES......................... 462,359
-----------
INVESTMENT INCOME - NET.............. 605,211
-----------
NET REALIZED LOSS ON INVESTMENTS
(Note 1)..................................... (1,000)
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.......................... $ 604,211
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income - net..................................................... $ 605,211 $ 1,015,801
Realized loss on investments - net.......................................... (1,000) -0-
------------------ ------------------
Net increase in net assets resulting from operations.................... 604,211 1,015,801
Dividends to shareholders from investment income - net...................... (605,204) (1,015,808)
Transactions in shares of beneficial interest - net decrease (Note 5)....... (4,013,139) (21,069,526)
------------------ ------------------
Total decrease.......................................................... (4,014,132) (21,069,533)
NET ASSETS:
Beginning of period........................................................... 45,126,238 66,195,771
------------------ ------------------
END OF PERIOD (including undistributed net investment income of $43 and $36,
respectively)................................................................ $ 41,112,106 $ 45,126,238
------------------ ------------------
------------------ ------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter New York Municipal Money
Market Trust (the "Fund") is registered under the Investment Company Act of
1940, as amended (the "Act"), as a non-diversified, open-end management
investment company. It was organized on December 28, 1989 as a Massachusetts
business trust and the Fund commenced operations on March 20, 1990. On February
19, 1993, the Fund changed its name from Dean Witter/Sears New York Municipal
Money Market Trust to Dean Witter New York Municipal Money Market Trust.
The following is a summary of the significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). In computing net
investment income, the Fund amortizes any premiums and original issue
discounts and accrues interest income daily on securities owned. Realized
gains and losses on security transactions are determined on the identified
cost method.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and non-taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and
distributions to shareholders are recorded by the Fund as of the close of
the Fund's business day.
E. ORGANIZATIONAL EXPENSES -- The Fund's Investment Manager paid
organizational expenses of the Fund in the amount of approximately $58,000.
The Fund reimbursed the Investment Manager for these costs. These expenses
are being amortized by the Fund on a straight line basis over a period not
to exceed five years from the commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc. (the "Investment
Manager"), the Fund pays its Investment Manager a management fee calculated
daily and payable monthly by applying the following annual rates to the net
assets of the Fund determined as of the close of each business day: 0.50% of the
portion of the daily net assets not exceeding $500 million; 0.425% of the
portion of the daily net assets exceeding $500 million but not exceeding $750
million; 0.375% of the portion of the daily net assets exceeding $750 million
but not exceeding $1 billion; 0.35% of the portion of the daily net assets
exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of
the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30%
of the portion of the daily net assets exceeding $2 billion but not exceeding
$2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5
billion but not exceeding $3 billion; and 0.25% of the portion of the daily net
assets exceeding $3 billion. Under the terms of the Agreement, in addition to
managing the Fund's investments, the Investment Manager maintains certain of the
Fund's books and records and furnishes office space and facilities, equipment,
clerical, bookkeeping and certain legal services, and pays the salaries of all
personnel, including officers of the Fund who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Fund.
3. PLAN OF DISTRIBUTION -- Shares of beneficial interest of the Fund are
distributed by Dean Witter Distributors Inc. (the "Distributor"), an affiliate
of the Investment Manager. The Fund has entered into a Plan of Distribution
21
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
(the "Plan"), pursuant to Rule 12b-1 under the Act, with the Distributor whereby
the Distributor finances certain activities in connection with the distribution
of shares of the Fund.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses that
the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor under the Plan: (1)
compensation to sales representatives of the Distributor and other
broker-dealers; (2) sales incentives and bonuses to sales representatives and to
marketing personnel in connection with promoting sales of the Fund's shares; (3)
expenses incurred in connection with promoting sales of the Fund's shares; (4)
preparing and distributing sales literature; and (5) providing advertising and
promotional activities, including direct mail solicitation and television,
radio, newspaper, magazine and other media advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of .15 of 1% of the
Fund's average daily net assets during the month. For the year ended December
31, 1993, the distribution fee established by the Trustees and accrued was at
the annual rate of .10 of 1%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales/maturities of portfolio securities for the
year ended December 31, 1993 aggregated $98,787,370 and $104,575,000,
respectively.
On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all independent Trustees of the Fund who will have
served as an independent Trustee for at least five years at the time of
retirement. Benefits under this plan are based on years of service and
compensation during the last five years of service. Aggregate pension cost for
the year ended December 31, 1993, included in Trustees' fees and expenses in the
Statement of Operations, amounted to $12,232. At December 31, 1993 the Fund had
an accrued pension liability of $39,299 which is included in accrued expenses in
the Statement of Assets and Liabilities.
Dean Witter Trust Company ("DWTC"), an affiliate of the Investment Manager
and the Distributor, is the Fund's transfer agent. During the year ended
December 31, 1993, the Fund incurred transfer agent fees of $46,839 with DWTC,
of which $4,569 was payable at December 31, 1993.
Bowne & Co., Inc. is an affiliate of the Fund by virtue of common Fund
Trustee and Director of Bowne & Co., Inc. During the year ended December 31,
1993 the fund paid Bowne & Co., Inc. $2,305 for printing of shareholder reports.
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
<S> <C> <C>
Shares sold............................................................... 122,306,064 123,872,644
Shares issued in reinvestment of dividends................................ 605,204 1,015,808
------------------ ------------------
122,911,268 124,888,452
Shares repurchased........................................................ (126,924,407) (145,957,978)
------------------ ------------------
Net decrease in shares outstanding........................................ (4,013,139) (21,069,526)
------------------ ------------------
------------------ ------------------
</TABLE>
6. SELECTED PER SHARE DATA AND RATIOS -- See the "Financial Highlights" table
on page 4 of this Prospectus.
22
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) CURRENT YIELD VALUE
- ----------- ------------- -------------
<C> <S> <C> <C>
NEW YORK EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS* (76.6%)
NEW YORK
$ 2,000 Franklin County Industrial Development Agency, KES Chateaugay Ser 1991 A (AMT),
3.00% due 1/5/94................................................................ 3.00% $ 2,000,000
1,400 Metropolitan Transportation Authority, Commuter Facilities Ser 1991,
2.75% due 1/5/94................................................................ 2.75 1,400,000
1,900 New York City Cultural Resources Trust Jewish Museum Series 1992,
3.05% due 1/5/94................................................................ 3.05 1,900,000
New York City Industrial Development Agency,
2,000 The Berkeley Carroll School Project Ser 1993, 2.70% due 1/5/94.................. 2.70 2,000,000
1,000 The Calhoun School Inc 1990, 2.80% due 1/6/94................................... 2.80 1,000,000
750 Composite Offrg I (AMT), 2.80% due 1/5/94....................................... 2.80 750,000
950 Composite Offrg XXV 1990 Ser E (AMT), 2.80% due 1/5/94.......................... 2.80 950,000
New York State Dormitory Authority,
1,300 Cornell University Ser 1990 B, 4.50% due 1/3/94................................. 4.50 1,300,000
1,000 Metropolitan Museum of Art Ser A, 2.85% due 1/5/94.............................. 2.85 1,000,000
New York State Energy Research & Development Authority,
2,100 Central Hudson Gas & Electric Corp Ser 1987 A (AMT), 3.10% due 1/6/94........... 3.10 2,100,000
1,000 Long Island Lighting Co Ser 1985 B, 2.50% due 3/1/94............................ 2.50 1,000,000
1,000 Long Island Lighting Co Ser 1993 B (AMT), 2.85% due 11/1/94..................... 2.85 1,000,000
1,000 New York State Gas & Electric Corp Ser 1985 A, 2.75% due 3/1/94................. 2.75 1,000,000
1,000 New York State Environmental Facilities Corporation, OFS Equity Huntington Inc
Ser 1989 (AMT), 3.80% due 1/3/94................................................ 3.80 1,000,000
1,000 New York State Job Development Authority, Ser 1989 A-1 thru A-42 (AMT),
4.30% due 1/3/94................................................................ 4.30 1,000,000
1,100 New York State Medical Care Facilities Financing Agency, The Children's Hospital
of Buffalo 1991 Ser A, 3.00% due 1/5/94......................................... 3.00 1,100,000
1,000 New York State Mortgage Agency, Homeowner Ser 32-B (AMT), 2.75% due 3/1/94....... 2.75 1,000,000
5,000 New York State Power Authority, Tender Notes, 2.70% due 3/1/94................... 2.70 5,000,000
Port Authority of New York and New Jersey,
1,000 Consolidated 86th Ser, 2.40% due 7/1/94......................................... 2.40 1,000,000
1,000 KIAK Partners Special Proj Ser 3 (AMT), 2.90% due 1/5/94........................ 2.90 1,000,000
PUERTO RICO
1,000 Puerto Rico Government Development Bank, Refg Ser 1985, 3.00% due 1/5/94......... 3.00 1,000,000
2,000 Puerto Rico Highway and Transportation Authority, Ser W, 2.90% due 1/5/94........ 2.90 2,000,000
-------------
TOTAL NEW YORK EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL
OBLIGATIONS (AMORTIZED COST $31,500,000)................................... 31,500,000
-------------
</TABLE>
<TABLE>
<CAPTION>
YIELD TO
MATURITY ON
DATE OF
PURCHASE
-------------
<C> <S> <C> <C>
NEW YORK EXEMPT SHORT-TERM MUNICIPAL NOTES (14.6%)
1,500 Erie County, 1993 RANs, dtd 8/5/93 3.30% due 8/5/94............................. 3.10% 1,501,714
1,500 Three Village Central School District, 1993-94 TANs, dtd 7/7/93 2.55% due
6/30/94........................................................................ 2.45 1,500,716
2,000 New York City Municipal Water Finance Authority, Fiscal 1993 Ser A BANs
2.75% due 4/15/94.............................................................. 2.40 2,001,951
1,000 West Islip Union Free School District, TANs, dtd 7/29/93 3.00% due 6/29/94...... 2.80 1,000,951
-------------
TOTAL NEW YORK EXEMPT SHORT-TERM MUNICIPAL NOTES
(AMORTIZED COST $6,005,332)............................................... 6,005,332
-------------
</TABLE>
23
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT (IN DATE OF
THOUSANDS) PURCHASE VALUE
- ----------- ------------- -------------
NEW YORK EXEMPT COMMERCIAL PAPER (8.7%)
<C> <S> <C> <C>
$ 1,000 New York State Ser N BANs, 2.55% due 2/16/94.................................... 2.55% $ 1,000,000
1,500 New York State Dormitory Authority, Memorial Sloan-Kettering Cancer Center
Ser 1989 A, 2.55% due 1/21/94.................................................. 2.55 1,500,000
1,085 Port Authority of New York and New Jersey, Ser B, 2.50% due 3/8/94.............. 2.50 1,085,000
-------------
TOTAL NEW YORK EXEMPT COMMERCIAL PAPER
(AMORTIZED COST $3,585,000)............................................... 3,585,000
-------------
TOTAL INVESTMENTS (AMORTIZED COST $41,090,332)(A)........................ 99.9% 41,090,332
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........................... 0.1 21,774
---------- -------------
NET ASSETS............................................................... 100.0% $ 41,112,106
---------- -------------
---------- -------------
<FN>
- ---------------
* DUE DATE REFLECTS NEXT RATE CHANGE.
(A) COST IS THE SAME FOR FEDERAL INCOME TAX PURPOSES.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
THE DEAN WITTER FAMILY OF FUNDS
MONEY MARKET FUNDS
Dean Witter Liquid Asset Fund Inc.
Dean Witter Tax-Free Daily Income Trust
Dean Witter New York Municipal
Money Market Trust
Dean Witter California Tax-Free
Daily Income Trust
Dean Witter U.S. Government
Money Market Trust
EQUITY FUNDS
Dean Witter American Value Fund
Dean Witter Natural Resource Development Securities Inc.
Dean Witter Dividend Growth Securities Inc.
Dean Witter Developing Growth Securities Trust
Dean Witter World Wide Investment Trust
Dean Witter Equity Income Trust
Dean Witter Value-Added Market Series
Dean Witter Utilities Fund
Dean Witter Capital Growth Securities
Dean Witter European Growth Fund Inc.
Dean Witter Precious Metals and Minerals Trust
Dean Witter Pacific Growth Fund Inc.
Dean Witter Health Sciences Trust
Dean Witter Global Dividend Growth Securities
FIXED-INCOME FUNDS
Dean Witter High Yield Securities Inc.
Dean Witter Tax-Exempt Securities Trust
Dean Witter U.S. Government Securities Trust
Dean Witter California Tax-Free Income Fund
Dean Witter New York Tax-Free Income Fund
Dean Witter Convertible Securities Trust
Dean Witter Federal Securities Trust
Dean Witter World Wide Income Trust
Dean Witter Intermediate Income Securities
Dean Witter Global Short-Term Income Fund Inc.
Dean Witter Multi-State Municipal Series Trust
Dean Witter Premier Income Trust
Dean Witter Short-Term U.S. Treasury Trust
Dean Witter Diversified Income Trust
Dean Witter Limited Term Municipal Trust
Dean Witter Short-Term Bond Fund
DEAN WITTER RETIREMENT SERIES
Liquid Asset Series
U.S. Government Money Market Series
U.S. Government Securities Series
Intermediate Income Securities Series
American Value Series
Capital Growth Series
Dividend Growth Series
Strategist Series
Utilities Series
Value-Added Market Series
Global Equity Series
ASSET ALLOCATION FUNDS
Dean Witter Managed Assets Trust
Dean Witter Strategist Fund
ACTIVE ASSETS ACCOUNT PROGRAM
Active Assets Money Trust
Active Assets Tax-Free Trust
Active Assets California Tax-Free Trust
Active Assets Government Securities Trust
<PAGE>
Dean Witter New York
Municipal Money Market Trust
Two World Trade Center
New York, New York 10048
BOARD OF TRUSTEES
Jack F. Bennett
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manual H. Johnson
Paul Kolton
Michael E. Nugent
Albert T. Sommers
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and
General Counsel
Katherine H. Stromberg
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Bank of New York
110 Washington Street
New York, New York 10286
TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center, Plaza Two,
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
DEAN WITTER
NEW YORK MUNICIPAL
MONEY MARKET
TRUST
Prospectus
February 18, 1994
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 18, 1994 [LOGO]
- --------------------------------------------------------------------------------
Dean Witter New York Municipal Money Market Trust (the "Fund") is an
open-end non-diversified management investment company whose investment
objective is to provide as high a level of daily income exempt from federal and
New York income tax as is consistent with stability of principal and liquidity.
The Fund seeks to achieve its objective by investing primarily in high quality
tax-exempt securities with short-term maturities, including Municipal Bonds,
Municipal Notes and Municipal Commercial Paper. (See "Investment Practices and
Policies".)
The Fund is authorized to reimburse specific expenses incurred in promoting
the distribution of the Fund's shares pursuant to a Plan of Distribution
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Reimbursement
may in no event exceed an amount equal to payments at the annual rate of 0.15%
of the average daily net assets of the Fund.
A Prospectus for the Fund, dated February 18, 1994, which provides the basic
information you should know before investing in the Fund, may be obtained
without charge by request of the Fund at its address or at the telephone number
listed below. This Statement of Additional Information contains information in
addition to and more detailed than that set forth in the Prospectus. It is
intended to provide additional information regarding the activities and
operations of the Fund, and should be read in conjunction with the Prospectus.
Dean Witter New York Municipal Money Market Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The Fund and its Management................................................. 3
Trustees and Officers....................................................... 6
Investment Practices and Policies........................................... 9
Investment Restrictions..................................................... 13
Portfolio Transactions and Brokerage........................................ 14
Purchase of Fund Shares..................................................... 21
How Net Asset Value Is Determined........................................... 27
Redemption of Fund Shares................................................... 29
Dividends, Distributions and Taxes.......................................... 30
Description of Shares....................................................... 34
Custodian and Transfer Agent................................................ 34
Independent Accountants..................................................... 34
Reports to Shareholders..................................................... 34
Legal Counsel............................................................... 34
Experts..................................................................... 35
Registration Statement...................................................... 35
Financial Statements........................................................ 35
Appendix.................................................................... 36
</TABLE>
2
<PAGE>
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
THE FUND
The Fund is a Trust of the type commonly known as a "Massachusetts business
trust" and was organized under the laws of the Commonwealth of Massachusetts on
December 28, 1989. On February 19, 1993, the Fund's name was changed to its
current name Dean Witter New York Money Market Trust. The Trust was formerly
known as Dean Witter/Sears New York Municipal Money Market Trust.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment Manager"),
a Delaware corporation, whose address is Two World Trade Center, New York, New
York 10048, is the Fund's Investment Manager. InterCapital is a wholly-owned
subsidiary of Dean Witter Discover & Co. ("DWDC"), a Delaware corporation. In an
internal reorganization which took place in January, 1993, InterCapital assumed
the investment advisory, administrative and management activities previously
performed by the InterCapital Division of Dean Witter Reynolds Inc. ("DWR"), a
broker-dealer affiliate of InterCapital. (As hereinafter used in this Statement
of Additional Information, the terms "InterCapital" and "Investment Manager"
refer to DWR's InterCapital Division prior to the internal reorganization and to
Dean Witter InterCapital Inc. thereafter.) The daily management of the Fund is
conducted by or under the direction of officers of the Fund and of the
Investment Manager, subject to review of investments by the Fund's Board of
Trustees. In addition, Trustees of the Fund provide guidance on economic factors
and interest rate trends. Information as to these Trustees and Officers is
contained under the caption "Trustees and Officers".
The Investment Manager is also the investment manager or investment adviser
of the following investment companies: Dean Witter Liquid Asset Fund Inc.,
InterCapital Income Securities Inc., Dean Witter High Yield Securities Inc.,
Dean Witter Tax-Free Daily Income Trust, Dean Witter Developing Growth
Securities Trust, Dean Witter Tax-Exempt Securities Trust, Dean Witter Natural
Resource Development Securities Inc., Dean Witter Dividend Growth Securities
Inc., Dean Witter American Value Fund, Dean Witter U.S. Government Money Market
Trust, Dean Witter Variable Investment Series, Dean Witter World Wide Investment
Trust, Dean Witter Select Municipal Reinvestment Fund, Dean Witter U.S.
Government Securities Trust, Dean Witter California Tax-Free Income Fund, Dean
Witter Equity Income Trust, Dean Witter New York Tax-Free Income Fund, Dean
Witter Convertible Securities Trust, Dean Witter Federal Securities Trust, Dean
Witter California Tax-Free Daily Income Trust, Dean Witter Value-Added Market
Series, High Income Advantage Trust, High Income Advantage Trust II, High Income
Advantage Trust III, Dean Witter Government Income Trust, InterCapital Insured
Municipal Bond Trust, InterCapital Quality Municipal Investment Trust,
InterCapital Insured Municipal Trust, InterCapital Quality Municipal Income
Trust, InterCapital Insured Municipal Income Trust, InterCapital California
Insured Municipal Income Trust, Dean Witter Utilities Fund, Dean Witter Managed
Assets Trust, Dean Witter Strategist Fund, Dean Witter Intermediate Income
Securities, Dean Witter World Wide Income Trust, Dean Witter Capital Growth
Securities, Dean Witter European Growth Fund Inc., Dean Witter Precious Metals
and Minerals Trust, Dean Witter Pacific Growth Fund Inc., Dean Witter Global
Short-Term Income Fund Inc., Dean Witter Multi-State Municipal Series Trust,
Dean Witter Premier Income Trust, Dean Witter Short-Term U.S. Treasury Trust,
Dean Witter Diversified Income Trust, Dean Witter Health Sciences Trust, Dean
Witter Retirement Series, InterCapital Quality Municipal Securities,
InterCapital California Quality Municipal Securities, InterCapital New York
Quality Municipal Securities, Dean Witter Global Dividend Growth Securities,
Dean Witter Limited Term Municipal Trust, Dean Witter Short-Term Bond Fund,
InterCapital Quality Municipal Investment Trust, InterCapital Insured Municipal
Securities, InterCapital Insured California Municipal Securities, Active Assets
Money Trust, Active Assets Tax-Free Trust, Active Assets California Tax-Free
Trust and Active Assets Government Securities Trust. The Investment Manager also
serves as administrator to Municipal Income Trust, Municipal Income Trust II,
Municipal Income Trust III, Municipal Income Opportunities Trust, Municipal
Income Opportunities Trust II, Municipal Income Opportunities Trust III,
Municipal Premium Income Trust and Prime Income Trust. The foregoing investment
companies, together with the Fund, are collectively referred to as the Dean
Witter Funds. In addition, Dean Witter Services Company, Inc. ("DWSC"), a
wholly-owned subsidiary of InterCapital, serves as manager for the following
companies for which TCW Funds Management, Inc. is the
invest-
3
<PAGE>
ment adviser: TCW/DW Core Equity Trust, TCW/DW North American Government Income
Trust, TCW/DW Latin American Growth Fund, TCW/DW Income and Growth Fund, TCW/DW
Small Cap Growth Fund, TCW/DW Balanced Fund, TCW/DW Term Trust 2000, TCW/DW Term
Trust 2002 and
TCW/DW Term Trust 2003 (the "TCW/DW Funds"). InterCapital also serves as: (i)
sub-adviser to Templeton Global Opportunities Trust, an open-end investment
company; (ii) administrator of The BlackRock Strategic Term Trust Inc., a
closed-end investment company; and (iii) sub-administrator of MassMutual
Participation Investors and Templeton Global Governments Income Trust,
closed-end Investment companies.
The Investment Manager also serves as an investment adviser for Dean Witter
World Wide Investment Fund, an investment company organized under the laws of
Luxembourg, shares of which are not available for purchase in the United States
or by American citizens outside the United States.
Pursuant to an Investment Management Agreement (the "Agreement") with the
Investment Manager, the Fund has retained the Investment Manager to manage the
investment of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Investment Manager obtains and
evaluates such information and advice relating to the economy, securities
markets, and specific securities as it considers necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help, bookkeeping and certain legal services as the Fund may
reasonably require in the conduct of its business, including the preparation of
prospectuses, statements of additional information, proxy statements and reports
required to be filed with federal and state securities commissions (except
insofar as the participation or assistance of independent accountants and
attorneys is, in the opinion of the Investment Manager, necessary or desirable).
In addition, the Investment Manager pays the salaries of all personnel,
including officers of the Fund, who are employees of the Investment Manager. The
Investment Manager also bears the cost of telephone service, heat, light, power
and other utilities provided to the Fund.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, DWSC began to provide the administrative services to the
Fund which were previously performed directly by InterCapital. The foregoing
internal reorganization did not result in any change in the nature or scope of
the administrative services being provided to the Fund or any of the fees being
paid by the Fund for the overall services being performed under the terms of the
existing Management Agreement.
Expenses not expressly assumed by the Investment Manager under the Agreement
will be paid by the Fund. The expenses borne by the Fund include, but are not
limited to: the distribution fee under the Plan pursuant to Rule 12b-1 (See
"Purchase of Fund Shares"); charges and expenses of any registrar, custodian,
stock transfer and dividend disbursing agent; brokerage commissions; taxes;
engraving and printing of share certificates; registration costs of the Fund and
its shares under federal and state securities laws; the cost and expense of
printing, including typesetting, and distributing Prospectuses and Statements of
Additional Information of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Trustees or members of any advisory board or
committee who are not employees of the Investment Manager or any corporate
affiliate of the Investment Manager; all expenses incident to any dividend,
withdrawal or redemption options; charges and expenses of any outside service
used for pricing of the Fund's shares; fees and expenses of legal counsel,
including counsel to the Trustees who are not interested persons of the Fund or
of the Investment Manager (not including compensation or expenses of attorneys
who are employees of the Investment Manager) and independent accountants;
membership dues of industry associations; interest on Fund borrowings; postage;
insurance premiums on property or personnel (including officers and Trustees) of
the Fund which inure to its benefit; extraordinary expenses (including, but not
limited to, legal claims and liabilities and litigation costs and any
indemnification relating thereto); and all other costs of the Fund's operation.
4
<PAGE>
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily by applying the
following annual rates to the net assets of the Fund, determined as of the close
of business on every business day: 0.50% of the portion of the daily net assets
not exceeding $500 million; 0.425% of the portion of the daily net assets
exceeding $500 million but not exceeding $750 million; 0.375% of the portion of
the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35%
of the portion of the daily net assets exceeding $1 billion but not exceeding
$1.5 billion; .325% of the portion of the daily net assets exceeding $1.5
billion but not exceeding $2 billion; 0.30% of the portion of the daily net
assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the
portion of the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.25% of the portion of the daily net assets exceeding $3 billion.
The Investment Manager assumed all expenses (except for brokerage and 12b-1
fees) and waived the compensation provided for in the Agreement for the period
March 20, 1990 (commencement of operations through December 31, 1990). For the
fiscal years ended December 31, 1991, December 31, 1992 and December 31, 1993,
the Fund accrued to the Investment Manager total compensation of $444,111,
$272,459 and $225,305, respectively.
Pursuant to the Agreement, total operating expenses of the Fund are subject
to applicable limitations under rules and regulations of states where the Fund
is authorized to sell its shares. Therefore, operating expenses are effectively
subject to the most restrictive of such limitations as the same may be amended
from time to time. Presently, the most restrictive limitation is as follows: if,
in any fiscal year, the Fund's total operating expenses, including the
investment management fee and the compensation paid to the Investment Manager
pursuant to the Plan and Agreement of Distribution described below, and
exclusive of taxes, interest, brokerage fees and extraordinary expenses (to the
extent permitted by applicable state securities laws and regulations), exceed
2 1/2% of the first $30,000,000 of average daily net assets, 2% of the next
$70,000,000 and 1 1/2% of any excess over $100,000,000, the Investment Manager
will reimburse the Fund for the amount of such excess. Such amount, if any, will
be calculated daily and credited on a monthly basis. During the fiscal years
ended December 31, 1991, December 31, 1992 and December 31, 1993, the Fund's
expenses did not exceed such limitation.
The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder, the
Investment Manager is not liable to the Fund or any of its investors for any act
or omission by the Investment Manager or for any losses sustained by the Fund or
its investors. The Agreement in no way restricts the Investment Manager from
acting as investment manager or adviser to others.
The Investment Manager has paid the organizational expenses of the Fund
incurred prior to the offering of the Fund's shares. The Fund has reimbursed the
Investment Manager in an amount of approximately $58,000 for such expenses. The
Fund has deferred and is amortizing the reimbursed expenses on the straight line
method over a period not to exceed five years from the date of commencement of
the Fund's operations.
The Agreement was initially approved by the Trustees on October 22, 1992 and
by the shareholders on January 12, 1993. The Agreement is substantially
identical to a prior investment management agreement which was initially
approved by the Trustees on February 15, 1990, by DWR as the then sole
shareholder on February 16, 1990 and by the Shareholders at a Special Meeting of
Shareholders held on June 20, 1991.
The Agreement took effect on June 30, 1993, upon the spin-off by Sears,
Roebuck and Co. of its remaining shares of DWDC. The Agreement may be terminated
at any time, without penalty, on thirty days' notice, by the Board of Trustees
of the Fund, by the holders of a majority, as defined in the Investment Company
Act of 1940, as amended (the "Act"), of the outstanding shares of the Fund, or
by the Investment Manager. The Agreement will automatically terminate in the
event of its assignment (as defined in the Act).
Under its terms, the Agreement continues in effect until April 30, 1994, and
will continue from year to year thereafter, provided continuance of the
Agreement is approved at least annually by the vote of the
5
<PAGE>
holders of a majority (as defined in the Act) of the outstanding shares of the
Fund, or by the Board of Trustees of the Fund; provided that in either event
such continuance is approved annually by the vote of a majority of the Trustees
of the Fund who are not parties to the Agreement as "interested persons" (as
defined in the Act) of any such party (the "Independent Trustees"), which vote
must be cast in person at a meeting called for the purpose of voting on such
approval. The terms of the new Agreement are substantially identical in all
material respects to those of the present Agreement, except for the date of
effectiveness and initial termination.
The Fund has acknowledged that the name "Dean Witter" is a property right of
DWR. The Fund has agreed that DWR or its parent company may use, or at any time,
permit others to use, the name "Dean Witter". The Fund has also agreed that in
the event the investment management contract between InterCapital and the Fund
is terminated, or if the affiliation between InterCapital and its parent company
is terminated, the Fund will eliminate the name "Dean Witter" from its name if
DWR or its parent company shall so request.
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
The Trustees and Executive Officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with
InterCapital, and with the Dean Witter Funds and the TCW/DW Funds are shown
below.
<TABLE>
<CAPTION>
NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
Jack F. Bennett Retired; Director or Trustee of the Dean Witter Funds;
Trustee formerly Senior Vice President and Director of Exxon
141 Taconic Road Corporation (1975-January, 1989) and Under Secretary of
Greenwich, Connecticut the U.S. Treasury for Monetary Affairs (1974-1975);
Director of Philips Electronics N.V., Tandem Computers,
Inc. and Massachusetts Mutual Life Insurance Co.; director
or trustee of various not-for-profit and business
organizations.
Charles A. Fiumefreddo* Chairman, Chief Executive Officer and Director of
Chairman of the Board, InterCapital, Distributors and DWSC; Executive Vice
President, Chief Executive Officer President and Director of DWR; Chairman of the Board,
and Trustee Director or Trustee, President and Chief Executive Officer
Two World Trade Center of the Dean Witter Funds; Chairman, Chief Executive
New York, New York Officer and Trustee of the TCW/DW Funds; Chairman and
Director of Dean Witter Trust Company; Director and/or
officer of various DWDC subsidiaries; formerly Executive
Vice President and Director of DWDC (until February,
1993).
Edwin J. Garn Director or Trustee of the Dean Witter Funds; formerly
Trustee United States Senator (R-Utah) (1974-1992) and Chairman,
2000 Eagle Gate Tower Senate Banking Committee (1980-1986); formerly Mayor of
Salt Lake City, Utah Salt Lake City, Utah (1971-1974); formerly Astronaut,
Space Shuttle Discovery (April 12-19, 1985); Vice
Chairman, Huntsman Chemical Corporation (since January,
1993); Member of the board of various civic and charitable
organizations.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
John R. Haire Chairman of the Audit Committee and Chairman of the
Trustee Committee of the Independent Directors or Trustees and
439 East 51st Street Director or Trustee of the Dean Witter Funds; Trustee of
New York, New York the TCW/DW Funds; formerly President, Council for Aid to
Education (1978-October, 1989) and Chairman and Chief
Executive Officer of Anchor Corporation, an Investment
Adviser (1964-1978); Director of Washington National Cor-
poration (insurance) and Bowne & Co., Inc. (printing).
Dr. John E. Jeuck Retired; Director or Trustee of the Dean Witter Funds;
Trustee formerly Robert Law Professor of Business Administration,
70 East Cedar Street Graduate School of Business, University of Chicago (until
Chicago, Illinois July ,1989); Business consultant.
Dr. Manuel H. Johnson Senior Partner, Johnson Smick International, Inc., a
Trustee consulting firm; Koch Professor of International Eco-
7521 Old Dominion Drive nomics and Director of the Center for Global Market
McLean, Virginia Studies at George Mason University (since September,
1990); Director of Trustee of the Dean Witter Funds;
Trustee of the TCW/DW Funds; Co-Chairman and a founder of
the Group of Seven Council (G7C), an international
economic commission (since September, 1990); Director of
Greenwich Capital Markets Inc. (broker-dealer); formerly
Vice Chairman of the Board of Governors of the Federal
Reserve System (February, 1986-August, 1990) and Assistant
Secretary of the U.S. Treasury (1982-1986).
Paul Kolton Director or Trustee of the Dean Witter Funds, Chairman of
Trustee the Audit Committee and Chairman of the Committee of the
9 Hunting Ridge Road Independent Trustees and Trustee of the TCW/DW Funds;
Stamford, Connecticut formerly Chairman of the Financial Accounting Standards
Advisory Council and Chairman and Chief Executive Officer
of the American Stock Exchange; Director of UCC Investors
Holding Inc. (Uniroyal Chemical Company, Inc.); director
or trustee of various not-for-profit organizations.
Michael E. Nugent General Partner, Triumph Capital, L.P., a private
Trustee investment partnership (since April, 1988); Director or
237 Park Avenue Trustee of the Dean Witter Funds; Trustee of the TCW/DW
New York, New York Funds; formerly Vice President, Bankers Trust Company and
BT Capital Corporation (September, 1984-March, 1988);
Director of various business organizations.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- ------------------------------------------------------ ----------------------------------------------------------
<S> <C>
Albert T. Sommers Senior Fellow and Economic Counselor (formerly Senior Vice
Trustee President and Chief Economist) of The Conference Board, a
845 Third Avenue not-for-profit business research organization; President,
New York, New York Albert T. Sommers, Inc., an economic consulting firm;
Director or Trustee of the Dean Witter Funds; formerly
Chairman, Price Advisory Committee of the Council on Wage
and Price Stability (December, 1979-December, 1980); Eco-
nomic Adviser, The Ford Foundation; Director of Grow
Group, Inc. (chemicals), MSI Inc. (medical services) and
Westbridge Capital, Inc. (insurance); director or trustee
of various business organizations.
Edward R. Telling* Retired; Director or Trustee of the Dean Witter Funds;
Trustee formerly Chairman of the Board of Directors and Chief
Sears Tower Executive Officer (until December 31, 1985) and President
Chicago, Illinois (from January, 1981-March, 1982 and from February,
1984-August, 1984) of Sears, Roebuck and Co.; formerly
Director of Sears, Roebuck and Co.
Sheldon Curtis Senior Vice President, Secretary and General Counsel of
Vice President, Secretary and General Counsel InterCapital and DWSC; Senior Vice President, Assistant
Two World Trade Center Secretary and Assistant General Counsel of Distributors;
New York, New York Assistant Secretary of DWR and Vice President, Secretary
and General Counsel of the Dean Witter Funds and the
TCW/DW Funds; Senior Vice President and Secretary of Dean
Witter Trust Company.
Katherine H. Stromberg Vice President of InterCapital; Vice President of various
Vice President Dean Witter Funds, formerly, Vice President of Kidder
Two World Trade Center Peabody Asset Management (from September, 1985-October,
New York, New York 1991).
Thomas F. Caloia First Vice President (since May, 1991) and Assistant
Treasurer Treasurer (since January, 1993) of InterCapital; First
Two World Trade Center Vice President and Assistant Treasurer of DWSC; and
New York, New York Treasurer of the Dean Witter Funds and the TCW/DW Funds;
previously Vice President of InterCapital.
<FN>
- ------------------------
*Denotes Trustees who are "Interested persons" of the Fund, as defined in the
Act.
</TABLE>
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital, David A. Hughey, Executive Vice President of InterCapital, and
Peter M. Avelar, Joseph Arcieri and Jonathan R. Page, Senior Vice Presidents of
InterCapital, are Vice Presidents of the Fund and Barry Fink, First Vice
President and Assistant General Counsel of InterCapital and Marilyn K. Cranney,
Lawrence S. Lafer, Lou Anne D. McInnis and Ruth Rossi, Vice Presidents and
Assistant General Counsels of InterCapital, are Assistant Secretaries of the
Fund.
8
<PAGE>
The Fund pays each Trustee who is not an employee, or retired employee, of
the Investment Manager or an affiliated company an annual fee of $1,200 ($1,600
prior to December 31, 1993) plus $50 for each meeting of the Board of Trustees,
the Audit Committee or the Committee of the Independent Trustees attended by the
Trustee in person (the Fund pays the Chairman of the Audit Committee an
additional annual fee of $1,000 ($1,200 prior to December 31, 1993) and pays the
Chairman of the Committee of the Independent Trustees an additional annual fee
of $2,400, in each case inclusive of the Committee meeting fees). The Fund 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
Fund who are employed by the Investment Manager or an affiliated company thereof
receive no compensation or expense reimbursement from the Fund. The Fund has
adopted a retirement program under which an Independent Trustee who retires
after a minimum required period of service would be entitled to retirement
payments upon reaching the eligible retirement date (normally, after attaining
age 72) based upon length of service and computed as a percentage of one-fifth
of the total compensation earned by such Trustee for service to the Fund in the
five-year period prior to the date of the Trustee's retirement. No Independent
Trustee has retired since the adoption of the program and no payments by the
Fund have been made under it. For the fiscal year ended December 31, 1993, the
Fund accrued a total of $33,631 for Trustees fees and expenses and benefits
under the retirement program. As of the date of this Statement of Additional
Information, the aggregate shares of the Fund owned by the Fund's officers and
Trustees as a group was less than 1 percent of the Fund's shares outstanding.
INVESTMENT PRACTICES AND POLICIES
- --------------------------------------------------------------------------------
PORTFOLIO SECURITIES
TAXABLE SECURITIES. As discussed in the Prospectus, the Fund may invest up
to 20% of its total assets in taxable money market instruments and repurchase
agreements. Investments in taxable money market instruments would generally be
made under any one of the following circumstances: (a) pending investment
proceeds of sale of Fund shares or of portfolio securities; (b) pending
settlement of purchases of portfolio securities; and (c) to maintain liquidity
for the purpose of meeting anticipated redemptions. Only those non-New York
tax-exempt securities which satisfy the standards established for New York
tax-exempt securities may be purchased by the Fund. The types of taxable money
market instruments in which the Fund may invest are limited to the following
short-term fixed-income securities (maturing in one year or less from the time
of purchase): (i) obligations of the United States Government, its agencies,
instrumentalities or authorities; (ii) commercial paper rated P-1 by Moody's
Investors Services, Inc. ("Moody's") or A-1 by Standard & Poor's Corporation
("S&P"); (iii) certificates of deposit of domestic banks with assets of $1
billion or more; and (iv) repurchase agreements with respect to portfolio
securities. In addition, the Fund may temporarily invest more than 20% of its
total assets in taxable money market instruments to maintain a "defensive"
posture when, in the opinion of the Investment Manager, it is advisable to do so
because of market conditions.
TAX-EXEMPT SECURITIES. As discussed in the Prospectus, at least 80% of the
Fund's total assets will be invested in Municipal Obligations and at least 65%
of the Fund's total assets will be invested in New York Municipal Obligations.
(New York Municipal Bonds, New York Municipal Notes and New York Municipal
Commercial Paper). Such New York Municipal Obligations are exempt from Federal,
New York State and New York City income tax except to those investors who are
subject to the alternative minimum tax. Up to 35% of the Trust's total assets
may be invested in Municipal Obligations other than New York Municipal
Obligations. Such Municipal Obligations are exempt from Federal income tax (but
not New York State and New York City income taxes) except to those investors who
are subject to the alternative minimum tax. The Trust may temporarily invest
more than 35% of its total assets in non-New York Municipal Obligations in order
to maintain a defensive posture when, in the opinion of the Investment Manager,
prevailing market or financial conditions so warrant. In regard to the Moody's
and S&P ratings discussed in the Prospectus, it should be noted that the ratings
represent the organizations' opinions as to the quality of the securities which
they undertake to rate and the ratings are general and not absolute standards of
quality. For a description of Municipal Bond, Municipal Note and Municipal
Commercial Paper ratings by Moody's and S&P, see the Appendix to this Statement
of Additional Information.
9
<PAGE>
The percentage and rating limitations discussed above and in the Prospectus
apply at the time of acquisition of a security based upon the last previous
determination of the Fund's net asset value; any subsequent change in any
ratings by a rating service or change in percentages resulting from market
fluctuations or other changes in total assets will not require elimination of
any security from the Fund's portfolio.
The payment of principal and interest by issuers of certain Municipal
Obligations purchased by the Fund may be guaranteed by letters of credit or
other credit facilities offered by banks or other financial institutions. Such
guarantees will be considered in determining whether a Municipal Obligation
meets the Fund's investment quality requirements. In addition, some issues may
contain provisions which permit the Fund to demand from the issuer repayment of
principal at some specified period(s) prior to maturity.
MUNICIPAL BONDS. Municipal Bonds, as referred to in the Prospectus, are
debt obligations of a state, its cities, municipalities and municipal agencies
(all of which are generally referred to as "municipalities") which generally
have a maturity at the time of issue of one year or more, and the interest from
which is, in the opinion of bond counsel, exempt from federal income tax. In
addition to these requirements, the interest from New York Municipal Bonds must
be, in the opinion of bond counsel, exempt from New York personal income tax.
They are issued to raise funds for various public purposes, such as construction
of a wide range of public facilities, to refund outstanding obligations and to
obtain funds for general operating expenses or to loan to other public
institutions and facilities. In addition, certain types of industrial
development bonds and pollution control bonds are issued by or on behalf of
public authorities to provide funding for various privately operated facilities.
MUNICIPAL NOTES. Municipal Notes are short-term obligations of
municipalities, generally with a maturity at the time of issuance ranging from
six months to three years, the interest from which is, in the opinion of bond
counsel, exempt from federal income tax. In addition to those requirements, the
interest from New York Municipal Notes must be, in the opinion of bond counsel,
exempt from New York personal income tax. The principal types of Municipal Notes
include tax anticipation notes, bond anticipation notes, revenue anticipation
notes and project notes, although there are other types of Municipal Notes in
which the Fund may invest. Notes sold in anticipation of collection of taxes, a
bond sale or receipt of other revenues are usually general obligations of the
issuing municipality or agency. Project Notes are issued by local agencies and
are guaranteed by the United States Department of Housing and Urban Development.
Such notes are secured by the full faith and credit of the United States
Government.
MUNICIPAL COMMERCIAL PAPER. Municipal Commercial Paper refers to short-term
obligations of municipalities the interest from which is, in the opinion of bond
counsel, exempt from federal income tax. In addition to those requirements, the
interest from New York Commercial Paper must be, in the opinion of bond counsel,
exempt from New York personal income tax. It may be issued at a discount and is
sometimes referred to as Short-Term Discount Notes. Municipal Commercial Paper
is likely to be used to meet seasonal working capital needs of a municipality or
interim construction financing and general revenues of the municipality or
refinanced with long-term debt. In most cases Municipal Commercial Paper is
backed by letters of credit, lending agreements, note repurchase agreements or
other credit facility agreements offered by banks or other institutions.
The two principal classifications of Municipal Bonds, Notes and Commercial
Paper are "general obligation" and "revenue" bonds, notes or commercial paper.
General obligation bonds, notes or commercial paper are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. Issuers of general obligation bonds, notes or commercial paper include
a state, its counties, cities, towns and other governmental units. Revenue
bonds, notes or commercial paper are payable from the revenues derived from a
particular facility or class of facilities or, in some cases, from specific
revenue sources. Revenue bonds, notes or commercial paper are issued for a wide
variety of purposes, including the financing of electric, gas, water and sewer
systems and other public utilities; industrial development and pollution control
facilities; single and multi-family housing units; public buildings and
facilities; air and marine ports; transportation facilities such as toll roads,
bridges and
10
<PAGE>
tunnels; and health and educational facilities such as hospitals and
dormitories. They rely primarily on user fees to pay debt service, although the
principal revenue source is often supplemented by additional security features
which are intended to enhance the creditworthiness of the issuer's obligations.
In some cases, particularly with respect to revenue bonds issued to finance
housing and public buildings, a direct or implied "moral obligation" of a
governmental unit may be pledged to the payment of debt service. In other cases,
a special tax or other charge may augment user fees.
Issuers of these obligations are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Act, and laws, if any, which may be enacted by
Congress or any state extending the time for payment of principal or interest,
or both, or imposing other constraints upon enforcement of such obligations or
upon municipalities to levy taxes. There is also the possibility that as a
result of litigation or other conditions the power or ability of any one or more
issuers to pay, when due, principal of and interest on its, or their, Municipal
Bonds, Municipal Notes and Municipal Commercial Paper may be materially
affected.
PORTFOLIO MANAGEMENT
VARIABLE RATE AND FLOATING RATE OBLIGATIONS. As stated in the Prospectus,
the Fund may invest in Municipal Bonds and Municipal Notes ("Municipal
Obligations") of the type called variable rate and floating rate obligations.
The interest rate payable on a variable rate obligation is adjusted either at
predesignated periodic intervals and, on a floating rate obligation, whenever
there is a change in the market rate of interest on which the interest rate
payable is based. Other features may include the right whereby the Fund may
demand prepayment of the principal amount of the obligation prior to its stated
maturity (a "demand feature") and the right of the issuer to prepay the
principal amount prior to maturity. The principal benefit of a variable rate
obligation is that the interest rate adjustment minimizes changes in the market
value of the obligation. As a result, the purchase of variable rate and floating
rate obligations should enhance the ability of the Fund to maintain a stable net
asset value per share (see "How Net Asset Value is Determined") and to sell
obligations prior to maturity at a price approximately the full principal amount
of the obligations. The principal benefit to the Fund of purchasing obligations
with a demand feature is that liquidity, and the ability of the Fund to obtain
repayment of the full principal amount of an obligation prior to maturity, is
enhanced. The payment of principal and interest by issuers of certain
obligations purchased by the Fund may be guaranteed by letters of credit or
other credit facilities offered by banks or other financial institutions. Such
guarantees will be considered in determining whether an obligation meets the
Fund's investment quality requirements.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. As stated in the Prospectus,
the Fund may purchase tax-exempt securities on a when-issued or delayed delivery
basis. When such transactions are negotiated, the price is fixed at the time of
commitment, but delivery and payment can take place a month or more after the
date of the commitment. While the Fund will only purchase securities on a when-
issued or delayed delivery basis with the intention of acquiring the securities,
the Fund may sell the securities before the settlement date, if it is deemed
advisable. The securities so purchased or sold are subject to market fluctuation
and no interest accrues to the purchaser during this period. At the time the
Fund makes the commitment to purchase a Municipal Obligation on a when-issued or
delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of the Municipal Obligation in determining its net asset
value. The Fund will also establish a segregated account with its custodian bank
in which it will maintain liquid assets such as cash, U.S. government securities
or other appropriate high grade debt obligations equal in value to commitments
for such when-issued or delayed delivery securities. The Fund does not believe
that its net asset value or income will be adversely affected by its purchase of
Municipal Obligations on a when-issued or delayed delivery basis.
REPURCHASE AGREEMENTS. When cash may be available for only a few days, it
may be invested by the Fund in repurchase agreements until such time as it may
otherwise be invested or used for payments of obligations of the Fund. These
agreements, which may be viewed as a type of secured lending by the Fund,
typically involve the acquisition by the Fund of debt securities from a selling
financial institution such as a bank, savings and loan association or
broker-dealer. The agreement provides that the Fund
11
<PAGE>
will sell back to the institution, and that the institution will repurchase, the
underlying security ("collateral"), which is held by the Fund's Custodian, at a
specified price and at a fixed time in the future, which is usually not more
than seven days from the date of purchase. The Fund will accrue interest from
the institution until the time when the repurchase is to occur. Although such
date is deemed by the Fund to be the maturity date of a repurchase agreement,
the maturities of securities subject to repurchase agreements are not subject to
any limits and may exceed one year.
While repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Fund follows procedures designed to minimize
such risks. These procedures include effecting repurchase transactions only with
large, well capitalized and well established financial institutions, whose
financial condition will be continually monitored. In addition, the value of the
collateral underlying the repurchase agreement will always be at least equal to
the repurchase price, including any accrued interest earned on the repurchase
agreement. Such collateral will consist of Government Securities or "Eligible
Securities" (as described below under the caption "How Net Asset Value is
Determined") rated in the highest grade by a nationally recognized statistical
rating organization (an "NRSRO") whose ratings qualify the collateral security
as an Eligible Security. In the event of a default or bankruptcy by a selling
financial institution, the Fund will seek to liquidate such collateral. However,
the exercise of the Fund's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase were less than the repurchase price, the
Fund could suffer a loss. It is the current policy of the Fund not to invest in
repurchase agreements that do not mature within seven days if any such
investment, together with any other illiquid asset held by the Fund, amount to
more than 10% of its total assets. The Fund's investments in repurchase
agreements may, at times, be substantial when, in the view of the Investment
Manager, liquidity or other considerations warrant. During the fiscal year ended
December 31, 1993, the Fund did not enter into any repurchase agreements and
does not intend to enter into any repurchase agreements during the foreseeable
future.
PUT OPTIONS. The Fund may purchase securities together with the right to
resell them to the seller at an agreed upon price or yield within a specified
period prior to the maturity date of such securities. Such a right to resell is
commonly known as a "put," and the aggregate price which the Fund pays for
securities with puts may be higher than the price which otherwise would be paid
for the securities. Consistent with the Fund's investment objectives and subject
to the supervision of the Board of Trustees, the primary purpose of this
practice is to permit the Fund to be fully invested in securities the interest
on which is exempt from Federal and New York personal income tax, while
preserving the necessary flexibility and liquidity to purchase securities on a
when-issued basis, to meet unusually large redemptions and to purchase at a
later date securities other than those subject to the put. The Fund's policy is,
generally, to exercise the puts on their expiration date, when the exercise
price is higher than the current market price for the related securities. Puts
may be exercised prior to the expiration date in order to fund obligations to
purchase other securities or to meet redemption requests. These obligations may
arise during periods in which proceeds from sales of Fund shares and from recent
sales of portfolio securities are insufficient to meet such obligations or when
the funds available are otherwise allocated for investment. In addition, puts
may be exercised prior to their expiration date in the event the Investment
Manager revises its evaluation of the creditworthiness of the issuer of the
underlying security. In determining whether to exercise puts prior to their
expiration date and in selecting which puts to exercise in such circumstances,
the Investment Manager considers, among other things, the amount of cash
available to the Fund, the expiration dates of the available puts, any future
commitments for securities purchases, the yield, quality and maturity dates of
the underlying securities, alternative investment opportunities and the
desirability of retaining the underlying securities in the Fund's portfolio.
The Fund values securities which are subject to puts at their amortized cost
and values the put, apart from the security, at zero. Thus, the cost of the put
will be carried on the Fund's books as an unrealized loss from the date of
acquisition and will be reflected in realized gain or loss when the put is
exercised or expires. Since the value of the put is dependent on the ability of
the put writer to meet its obligation to repurchase, the Fund's policy is to
enter into put transactions only with municipal securities
12
<PAGE>
dealers who are approved by the Fund's Board of Trustees. Each dealer will be
approved on its own merits and it is the Fund's general policy to enter into put
transactions only with those dealers which are determined to present minimal
credit risks. In connection with such determination, the Board of Trustees will
review, among other things, the ratings, if available, of equity and debt
securities of such municipal securities dealers, their reputations in the
municipal securities markets, the net worth of such dealers and their efficiency
in consummating transactions. Bank dealers normally will be members of the
Federal Reserve System, and other dealers will be members of the National
Association of Securities Dealers, Inc. or members of a national securities
exchange. The Board has directed the Investment Manager not to enter into put
transactions with, and to exercise outstanding puts of, any municipal securities
dealer which, in the judgment of the Investment Manager, ceases at any time to
present a minimal credit risk. In the event that a dealer should default on its
obligation to repurchase an underlying security, the Fund is unable to predict
whether all or any portion of any loss sustained could be subsequently recovered
from such dealer. The Fund may not invest more than 10% of its total assets in
puts at any given time. During the fiscal year ended December 31, 1993, the Fund
did not purchase any put options and the Fund does not intend to purchase put
options in the foreseeable future.
It is the position of the staff of the Securities and Exchange Commission
that certain provisions of the Act may be deemed to prohibit the Fund from
purchasing puts from broker-dealers without an exemptive order. Until such an
order is obtained, the Fund will purchase puts only from commercial banks. There
is no assurance that such an order, if applied for, will be obtained. The
duration of puts, which will not exceed 60 days, will not be a factor in
determining the weighted average maturity of the Fund's portfolio securities.
In Revenue Ruling 82-144, the Internal Revenue Service stated that, under
certain circumstances, a purchaser of tax-exempt obligations which are subject
to puts will be considered the owner of the obligations for Federal income tax
purposes. In connection therewith, the Fund has received an opinion of counsel
to the effect that interest on Municipal Obligations subject to puts will be
tax-exempt to the Fund.
INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------
In addition to the investment restrictions enumerated in the Prospectus, the
investment restrictions listed below have been adopted by the Fund as
fundamental policies, except as otherwise indicated. Under the Act, a
fundamental policy may not be changed without the vote of the holders of a
majority of the outstanding voting securities of the Fund, as defined in the
Act. Such a majority is defined in the Act as the lesser of (a) 67% or more of
the shares present at a Meeting of Shareholders of the Fund, if the holders of
more than 50% of the outstanding shares of the Fund are present or represented
by proxy at the meeting, or (b) more than 50% of the outstanding shares of the
Fund. For purposes of the following restrictions and those recited in the
Prospectus: (a) an "issuer" of a security is the entity whose assets and
revenues are committed to the payment of interest and principal on that
particular security, provided that the guarantee of a security will be
considered a separate security and provided further that a guarantee of a
security shall not be deemed a security issued by the guarantor if the value of
all securities guaranteed by the guarantor and owned by the Fund does not exceed
10% of the value of the total assets of the Fund; (b) a "taxable security" is
any security the interest on which is subject to federal income tax; and (c) all
percentage limitations apply immediately after a purchase or initial investment,
and any subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio.
The term "bank obligations" as referred to in Investment Restriction 3 in
the Prospectus refers to short-term obligations (including certificates of
deposit and bankers' acceptances) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or more, and instruments
secured by such obligations, not including obligations of foreign branches of
domestic banks.
13
<PAGE>
The Fund may not:
1. Invest in common stock.
2. Invest in securities of any issuer if, to the knowledge of the Fund,
any officer or trustee of the Fund or any officer or director of the
Investment Manager owns more than 1/2 of 1% of the outstanding securities of
such issuer, and such officers, trustees and directors who own more than 1/2
of 1% own in the aggregate more than 5% of the outstanding securities of
such issuer.
3. Purchase or sell real estate or interests therein, although it may
purchase securities secured by real estate or interests therein.
4. Purchase or sell commodities or commodity futures contracts.
5. Purchase oil, gas or other mineral leases, rights or royalty
contracts, or exploration or development programs.
6. Write, purchase or sell puts, calls, or combinations thereof, except
that it may acquire rights to resell Municipal Obligations at an agreed upon
price and at or within an agreed upon time.
7. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets.
8. Borrow money, except that the Fund may borrow from a bank or the
Investment Manager for temporary or emergency purposes in amounts not
exceeding 5% (taken at the lower of cost or current value) of the value of
its total assets (not including the amount borrowed).
9. Pledge its assets or assign or otherwise encumber them except to
secure borrowings effected within the limitations set forth in restriction
(8). To meet the requirements of regulations in certain states, the Fund, as
a matter of operating policy but not as a fundamental policy, will limit any
pledge of its assets to 10% of its net assets so long as shares of the Fund
are being sold in those states.
10. Issue senior securities as defined in the Act except insofar as the
Fund may be deemed to have issued a senior security by reason of: (a)
purchasing any securities on a when-issued or delayed delivery basis; or (b)
borrowing money in accordance with restrictions described above.
11. Make short sales of securities.
12. Purchase securities on margin, except for such short-term loans as
are necessary for the clearance of purchases of portfolio securities.
13. Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933 in disposing
of a portfolio security.
14. Invest for the purpose of exercising control or management of any
other issuer.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- --------------------------------------------------------------------------------
Subject to the general supervision of the Board of Trustees, the Investment
Manager is responsible for decisions to buy and sell securities for the Fund,
the selection of brokers and dealers to effect the transactions, and the
negotiation of brokerage commissions, if any. The Fund expects that the primary
market for the securities in which it intends to invest will generally be the
over-the-counter market. Securities are generally traded in the over-the-counter
market on a "net" basis with dealers acting as principal for their own accounts
without a stated commission, although the price of the security usually includes
a profit to the dealer. The Fund also expects that securities will be purchased
at times in underwritten offerings where the price includes a fixed amount of
compensation, generally referred to as the underwriter's concession or discount.
On occasion the Fund may also purchase certain money
14
<PAGE>
market instruments directly from an issuer, in which case no commissions or
discounts are paid. During the fiscal years ended December 31, 1991, December
31, 1992 and December 31, 1993, the Fund paid no such brokerage commissions or
concessions.
The Investment Manager currently serves as investment manager to a number of
clients, including other investment companies, and may in the future act as
investment manager or adviser to others. It is the practice of the Investment
Manager to cause purchase and sale transactions to be allocated among the Fund
and others whose assets it manages in such manner as it deems equitable. In
making such allocations among the Fund and other client accounts, the main
factors considered are the respective investment objectives, the relative size
of portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and the
opinions of the persons responsible for managing the portfolios of the Fund and
other client accounts.
The policy of the Fund, regarding purchases and sales of securities for its
portfolio, is that primary consideration be given to obtaining the most
favorable prices and efficient execution of transactions. In seeking to
implement the Fund's policies, the Investment Manager effects transactions with
those brokers and dealers who the Investment Manager believes provide the most
favorable prices and are capable of providing efficient executions. If the
Investment Manager believes such price and executions are obtainable from more
than one broker or dealer, it may give consideration to placing portfolio
transactions with those brokers and dealers who also furnish research and other
services to the Fund or the Investment Manager. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investment; wire services; and appraisals
or evaluations of portfolio securities.
The information and services received by the Investment Manager from brokers
and dealers may be of benefit to the Investment Manager in the management of
accounts of some of its other clients and may not in all cases benefit the Fund
directly. While the receipt of such information and services is useful in
varying degrees and would generally reduce the amount of research or services
otherwise performed by the Investment Manager and thereby reduce its expenses,
it is of indeterminable value and the Fund does not reduce the management fee it
pays to the Investment Manager by any amount that may be attributable to the
value of such services.
Pursuant to an order of the Securities and Exchange Commission, the Fund may
effect principal transactions in certain money market instruments with DWR. The
Fund will limit its transactions with DWR to U.S. Government and Government
Agency Securities, Bank Money Instruments (i.e. Certificates of Deposit and
Bankers' Acceptances) and Commercial Paper (not including Tax-Exempt Municipal
Paper). Such transactions will be effected with DWR only when the price
available from DWR is better than that available from other dealers. During the
fiscal years ended December 31, 1991, 1992 and 1993, the Fund did not effect any
principal transactions with DWR.
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may be
effected through DWR. In order for DWR to effect portfolio transactions for the
Fund, the commissions, fees or other remuneration received by DWR must be
reasonable and fair compared to the commissions, fees or other remuneration paid
to other brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period of
time. This standard would allow DWR to receive no more than the remuneration
which would be expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction. Furthermore, the Trustees of the Fund,
including a majority of the Trustees who are not "interested" Trustees (as
defined in the Act), have adopted procedures which are reasonably designed to
provide that any commissions, fees or other remuneration paid to DWR are
consistent with the foregoing standard. During the fiscal years ended December
31, 1991, 1992, and 1993, the Fund paid no brokerage commissions to DWR.
Subject to the principle of obtaining best price and execution, the
Investment Manager may consider a broker-dealer's sales of shares of the Fund as
a factor in selecting from among those broker-
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dealers qualified to provide comparable prices and execution on the Fund's
portfolio transactions. The Fund does not, however, require a broker-dealer to
sell shares of the Fund in order for it to be considered to execute portfolio
transactions, and will not enter into any arrangement whereby a specific amount
or percentage of the Fund's transactions will be directed to a broker which
sells shares of the Fund to customers. The Board of Trustees reviews,
periodically, the allocation of brokerage orders to monitor the operation of
these policies.
Portfolio turnover rate is defined as the lesser of the value of the
securities purchased or securities sold, excluding all securities whose
maturities at time of acquisition were one year or less, divided by the average
monthly value of such securities owned during the year. Because the Fund's
portfolio consists of municipal obligations maturing within one year, the Fund
is unable to calculate its turnover rate as so defined. However, because of the
short-term nature of the Fund's portfolio securities, it is anticipated that the
number of purchases and sales of maturities of such securities will be
substantial. Brokerage commissions are not normally charged on purchases and
sales of short-term municipal obligations, but such transactions may involve
transaction costs in the form of spreads between bid and asked prices.
SPECIAL CONSIDERATIONS RELATING TO NEW YORK TAX-EXEMPT SECURITIES
During the mid-1970's, New York State (the "State"), some of its agencies,
instrumentalities and public benefit corporations (the "Authorities"), and
certain of its municipalities faced serious financial difficulties. To address
many of these financial problems, the State developed various programs, many of
which were successful in ameliorating the financial crisis. Any further
financial problems experienced by these Authorities or municipalities could have
a direct adverse effect on the New York Municipal Obligations in which the Fund
invests.
NEW YORK CITY
GENERAL. More than any other municipality, the fiscal health of New York
City (the "City") has a significant effect on the fiscal health of the State.
Over the past three years, the rate of economic growth in the City has slowed
substantially. During the 1990 and 1991 fiscal years, the City experienced
significant shortfalls in almost all of its major tax sources and increases in
services costs. Beginning in 1992, the improvement in the national economy
helped stabilize conditions in the City. The City now projects, and its current
four-year financial plan assumes, that the City's economy will continue to
improve during calendar year 1993 and that a modest employment recovery will
begin during the second half of the 1993 calendar year.
For each of the 1981 through 1992 fiscal years, the City achieved balanced
operating results as reported in accordance with generally accepted accounting
principles ("GAAP") and the City's 1993 fiscal year results are projected to be
balanced in accordance with GAAP. The City was required to close substantial
budget gaps in its 1990, 1991 and 1992 fiscal years in order to maintain
balanced operating results. In order to achieve a balanced budget for the 1992
fiscal year, the City implemented various actions, including tax increases,
proposed service reductions and proposed productivity savings.
1994-1997 NEW YORK CITY FINANCIAL PLAN. The Mayor is responsible for
preparing the City's four-year financial plan. The City Council adopted a budget
for the City's 1994 fiscal year on June 14, 1993. On July 2, 1993 the Mayor
announced additional expenditure reductions in the amount of approximately $131
million for the City's 1994 fiscal year beyond those incorporated in the adopted
budget. Based on the adopted budget and the additional reductions, the City has
prepared a proposed financial plan for the 1994 through 1997 fiscal years (the
"1994-1997 Financial Plan", "Financial Plan" or "City Plan"), and is in the
process of preparing a more detailed financial plan, which will conform to the
Financial Plan and which the City expects to submit to the Control Board during
the first week of August, 1993. The 1994-1997 Financial Plan projects revenues
and expenditures for the 1994 fiscal year balanced in accordance with GAAP.
The City Plan sets forth actions to close a projected gap of approximately
$2.0 billion in the 1994 fiscal year. The gap-closing actions for the 1994
fiscal year include agency actions, including productivity savings and savings
from restructuring the delivery of City services; service reductions; the sale
of
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delinquent real property tax receivables; discretionary transfers from the 1993
fiscal year; reduced debt service costs, resulting from refinancings and other
actions; proposed increased Federal assistance; a proposed continuation of the
personal income tax surcharge; proposed increased State aid; and various revenue
actions.
The City Plan also sets forth projections for the 1995 through 1997 fiscal
years and outlines a proposed gap-closing program to close projected budget gaps
of $1.3 billion, $1.8 billion and $2.0 billion for the 1995 through 1997 years,
respectively. These projections take into account expected increases in Federal
and State assistance. Various actions proposed in the City Plan, including the
proposed continuation of the personal income tax surcharge and the proposed
increase in State aid, are subject to approval by the Governor and the State
Legislature, and the proposed increase in Federal aid is subject to approval by
Congress and the President. The State Legislature has failed to approve the
similar proposals for State assistance in previous sessions, thereby increasing
the uncertainty as to the receipt of the State assistance included in the City
Plan. If these actions cannot be implemented, the City will be required to take
other actions to decrease expenditures or increase revenues to maintain a
balanced financial plan.
The City Plan reflects certain cost and expenditure increases including
increases in salaries and benefits paid to City employees pursuant to certain
collective bargaining agreements and the costs associated with various lawsuits
in which the City has been named as a defendant. While the ultimate outcome and
fiscal impact, if any, of the proceedings and claims are not currently
predictable, adverse determination in certain of them might have a material
adverse effect upon the City's ability to carry out the City Plan.
RATINGS
As of August 12, 1993, Moody's rated the City's general obligation bonds
Baa1 and S&P rated such bonds A-. Such ratings reflect only the views of Moody's
and S&P, from which an explanation of the significance of such ratings may be
obtained. There is no assurance that such ratings will continue for any given
period of time or that they will be revised downward or withdrawn entirely. Any
such downward revision or withdrawal could have an adverse effect on the market
prices of bonds.
OUTSTANDING INDEBTEDNESS
As of June 30, 1993, the City and the Municipal Assistance Corporation for
the City of New York had, respectively, $19.624 billion and $4.470 billion of
outstanding net long-term debt.
The City depends on the State for State aid both to enable the City to
balance its budget and to meet its cash requirements. If the State experiences
revenue shortfalls or spending increases beyond its projections during its 1994
fiscal year or subsequent years, such developments could result in reductions in
anticipated State aid to the City. In addition, there can be no assurance that
State budgets in future fiscal years will be adopted by the April 1 statutory
deadline and that there will not be adverse effects on the City's cash flow and
additional City expenditures as a result of such delays.
The City's projections set forth in the City Plan are based on various
assumptions and contingencies which are uncertain and which may not materialize.
Changes in major assumptions could significantly affect the City's ability to
balance its budget as required by State law and to meet its annual cash flow and
financing requirements. Such assumptions and contingencies include the timing of
any regional and local economic recovery, the impact on real estate tax revenues
of the current downturn in the real estate market, the absence of wage increases
for City employees in excess of the increases assumed in the City Plan,
employment growth, provision of State and Federal aid and mandate relief, State
legislative approval of future State budgets, adoption of City budgets by the
New York City Council, and approval by the Governor or the State Legislature of
various other actions proposed in the City Plan.
Implementation of the City Plan is also dependent upon the City's ability to
market its securities successfully in the public credit markets. The City's
financing program for fiscal years 1994 through 1997 contemplates the issuance
of $10.8 billion of general obligation bonds primarily to reconstruct and
rehabilitate the City's infrastructure and physical assets and to make capital
investments. In addition, the
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City issues revenue and tax anticipation notes to finance its seasonal working
capital requirements. The success of projected public sales of City bonds and
notes will be subject to prevailing market conditions, and no assurance can be
given that such sales will be completed. If the City were unable to sell its
general obligation bonds and notes, it would be prevented from meeting its
planned operating and capital expenditures.
The City Comptroller and other agencies and public officials have issued
reports and made public statements which, among other things, state that
projected revenues may be less and future expenditures may be greater than
forecast in the City Plan. In addition, the Control Board staff and others have
questioned whether the City has the capacity to generate sufficient revenues in
the future to meet the costs of its expenditure increases and to provide
necessary services. It is reasonable to expect that such reports and statements
will continue to be issued and to engender public comment.
LITIGATION. The City is a defendant in a significant number of lawsuits.
Such litigation includes, but is not limited to, routine litigation incidental
to the performance of its governmental and other functions, actions commenced
and claims asserted against the City arising out of alleged constitutional
violations, alleged torts, alleged breaches of contracts and other violations of
law and condemnation proceedings and other tax and miscellaneous actions. While
the ultimate outcome and fiscal impact, if any, on the proceedings and claims
are not currently predictable, adverse determination in certain of them might
have a material adverse effect upon the City's ability to carry out the City
Plan. As of June 30, 1992, the City estimated its potential future liability on
account of all outstanding claims to be approximately $2.3 billion.
NEW YORK STATE
RECENT DEVELOPMENTS. The State has faced serious financial difficulties in
recent years. The effect of the national recession has been more severe in the
State than in other parts of the nation, and the 1993-94 New York State
Financial Plan (the "State Plan") is based on an economic projection that the
State will perform more poorly than the nation as a whole. Although real gross
domestic product grew modestly during calendar year 1992 and is expected to show
increased growth in calendar year 1993, preliminary data indicate that the
State's economy, as measured by employment, began to grow during the first part
of calendar year 1993. Many uncertainties exist in forecasts of both the
national and State economies, including consumer attitudes toward spending,
Federal financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the State.
There can be no assurance that the State economy will not experience
worse-than-predicted results in the 1993-94 fiscal year, with corresponding
material and adverse effects on the State's projections of receipts and
disbursements.
1993-94 FISCAL YEAR. The State completed its 1993 fiscal year with a
cash-basis positive balance of $67.1 million in the State's General Fund (the
major operating fund of the State). The State's 1994 fiscal year budget, as
enacted, projects a balanced General Fund.
The State Plan projects General Fund receipts and transfers from other funds
at $32.367 billion and disbursements and transfers to other funds at $32.300
billion. Excess receipts of $67 million will be used for a required repayment to
the State's Tax Stabilization Reserve Fund. In comparison to the recommended
1993-94 Executive Budget, released by the Governor in early 1993, the 1993-94
State budget, as enacted, reflects increases in both receipts and disbursements
in the General Fund of $811 million. The $811 million increase in projected
receipts reflects many factors and assumptions, including (i) improving economic
conditions and higher-than-expected tax collections, (ii) improved 1992-93
results, (iii) additional payments from the Federal government to reimburse the
State for the cost of providing indigent medical care, (iv) the payment of
additional personal income tax refunds in the 1992-93 fiscal year which would
otherwise have been paid in fiscal year 1993-94; offset by revenue-raising
recommendations in the Executive Budget that were not enacted and thus are not
included in the State Plan. The $811 million increase in projected disbursements
reflects (i) an increase in projected school-aid payments, (ii) an increase in
projected payments for Medicaid assistance and other social
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service programs, (iii) additional spending on the judiciary and criminal
justice, (iv) a net increase in projected disbursements for all other programs
and purposes, and (v) establishment of a new contingency reserve.
There can be no assurance that the State will not face substantial potential
budget gaps resulting from a significant disparity between tax revenues
projected from a lower recurring receipts base and the spending required to
maintain State programs at current levels. To address any potential budgetary
imbalance, the State may need to take significant actions to align recurring
receipts and disbursements in future fiscal years.
NEW YORK LOCAL GOVERNMENT ASSISTANCE CORPORATION. In 1990, as part of a
state fiscal reform program, legislation was enacted creating the New York Loan
Government Assistance Corporation ("LGAC"), a public benefit corporation
empowered to issue long-term obligations to fund certain payments to local
governments traditionally funded through the State's annual seasonal borrowing.
The legislation empowered LGAC to issue bonds and notes in an amount not in
excess of $4.7 billion (exclusive of certain refunding bonds) plus certain other
amounts. Over a period of years, the issuance of those long-term obligations,
which will be amortized over no more than 30 years, is expected to result in
eliminating the need for continuing short-term seasonal borrowing for those
purposes. The legislation also imposed a cap on the annual seasonal borrowing of
the State at $4.7 billion, less net proceeds of bonds issued by LGAC, except in
cases where the Governor and the legislative leaders have certified both the
need for additional borrowing and provided a schedule for reducing it to the
cap. If borrowing above the cap is thus permitted in any fiscal year, it is
required by law to be reduced to the cap by the fourth fiscal year after the
limit was first exceeded. As of July 1, 1993, LGAC has issued its bonds to
provide net proceeds of approximately $3.680 billion. LGAC has been authorized
to issue its bonds to provide net proceeds of up to an additional $703 million
during the State's 1993-94 fiscal year.
COMPOSITION OF STATE CASH RECEIPTS AND DISBURSEMENTS. Substantially all
State non-pension financial operations are accounted for in the State's
governmental funds group, Governmental funds include the General Fund, which
receives all income not required by law to be deposited in another fund and
which for the State's 1993-94 fiscal year comprises approximately 52% of the
total projected governmental fund receipts; Special Revenue Funds, which receive
the preponderance of moneys received by the State from the Federal government
and other income the use of which is legally restricted to certain purposes and
which comprised approximately 39% of total projected governmental funds receipts
in the 1993-94 fiscal year; Capital Projects Funds, used to finance the
acquisition and construction of major capital facilities by the State and to aid
in certain of such projects conducted by local governments or public
authorities; and Debt Service Funds, which are used for the accumulation of
moneys for the payment of principal of and interest on long-term debt and to
meet lease-purchase and other contractual-obligation commitments. Receipts in
Capital Projects and Debt Service Funds comprise an aggregate of approximately
9% of total projected governmental funds receipts in the 1993-94 fiscal year.
A legislative change implemented in August 1990 affects the way in which a
portion of the State's sales and use tax collections are recorded as receipts in
the General Fund. Pursuant to the legislation creating LGAC, the Comptroller is
required to credit the equivalent of one percentage point of the four percent
sales and use tax collections to the Local Government Assistance Tax Fund (the
"Tax Fund"), which is a Debt Service Fund, for purposes of making payments to
LGAC to provide for the payment of debt service on its bonds and notes. To the
extent that these moneys are not necessary for payment to LGAC, they are
transferred from the Tax Fund to the General Fund and are reported to the
General Fund as a transfer from other funds, rather than as sales and use tax
receipts. During the State's 1991-92 and 1992-93 fiscal years $1.435 billion and
$1.504 billion, respectively, in sales and use tax receipts were credited to the
Tax Fund, and $1.527 billion is estimated to be credited to the Tax Fund during
the State's 1993-94 fiscal year. For the 1991-92 fiscal year, the amount
transferred to the General Fund from the Tax Fund was $1.316 billion, after
providing for the payment of $119 million to LGAC for the purpose of meeting
debt service on its bonds and its other cash requirements. For the 1992-93
fiscal year, $1.280 billion was transferred to the General Fund from the Tax
Fund after providing for payment of $224
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million to LGAC for debt service and other cash requirements, while $1.260
billion is estimated to be transferred in 1993-94, after payment of $267 million
to LGAC for debt service and other cash requirements.
The enacted 1993-94 Executive Budget includes several changes in the manner
in which General Fund tax receipts are recorded. Receipts from user taxes and
fees are reduced by approximately $377 million to reflect receipts that are
dedicated for highway and bridge capital purposes, which are to be deposited in
the Capital Projects Funds. Also, business taxes are reduced by approximately
$180 million to reflect tax receipts that are dedicated for transportation
purposes and which will be deposited in the Special Revenue and Capital Project
Funds.
AUTHORITIES. The fiscal stability of the State is related to the fiscal
stability of its Authorities, which generally have responsibility for financing,
constructing and operating revenue-producing public benefit facilities.
Authorities are not subject to the constitutional restrictions on the incurrence
of debt which apply to the State itself, and may issue bonds and notes within
the amounts of, and as otherwise restricted by, their legislative authorization.
As of September 30, 1992, the latest data available, there were 18 Authorities
that had outstanding debt of $100 million or more. The aggregate outstanding
debt, including refunding bonds, of these 18 Authorities was $62.2 billion as of
September 30, 1992, of which approximately $8.2 billion was moral obligation
debt and approximately $17.1 billion was financed under lease-purchase or
contractual-obligation financing arrangements.
Authorities are generally supported by revenues generated by the projects
financed or operated, such as fares, user fees on bridges, highway tolls and
rentals for dormitory rooms and housing. In recent years, however, the State has
provided financial assistance through appropriations, in some cases of a
recurring nature, to certain of the 18 Authorities for operating and other
expenses and, in fulfillment of its commitments on moral obligation indebtedness
or otherwise, for debt service. This operating assistance is expected to
continue to be required in future years.
The State's experience has been that if an Authority suffers serious
financial difficulties, both the ability of the State and the Authorities to
obtain financing in the public credit markets and the market price of the
State's outstanding bonds and notes may be adversely affected. The New York
State Housing Finance Agency ("HFA") and the New York State Urban Development
Corporation ("UDC") have in the past required substantial amounts of assistance
from the State to meet debt service costs or to pay operating expenses. Further
assistance, possibly in increasing amounts, may be required for these, or other,
Authorities in the future. In addition, certain statutory arrangements provide
for State local assistance payments otherwise payable to localities to be made
under certain circumstances to certain Authorities. The State has no obligation
to provide additional assistance to localities whose local assistance payments
have been paid to Authorities under these arrangements. However, in the event
that such local assistance payments are so diverted, the affected localities
could seek additional State funds.
RATINGS. On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990, Standard &
Poor's changed its ratings of all of the State's outstanding general obligation
bonds from AA- to A. On January 13, 1992, Standard & Poor's changed its ratings
of all of the State's outstanding general obligation bonds from A to A-. Ratings
reflect only the respective views of such organizations, and an explanation of
the significance of such ratings must be obtained from the rating agency
furnishing the same. There is no assurance that a particular rating will
continue for any given period of time or that any such rating will not be
revised downward or withdrawn entirely if, in the judgment of the agency
originally establishing the rating, circumstances so warrant. A downward
revision or withdrawal of such ratings, or either of them, may have an effect on
the market price of the State Municipal Securities in which the New York Fund
invests.
GENERAL OBLIGATION DEBT. As of March 31, 1993, the State had approximately
$5.132 billion in general obligation bonds, excluding refunding bonds, and $294
million in bond anticipation notes outstanding. On May 4, 1993, the State issued
$850 million in tax and revenue anticipation notes which will mature on December
31, 1993. Principal and interest due on general obligation bonds and interest
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due on bond anticipation notes and on tax and revenue anticipation notes were
$890.0 million and $818.8 million for the 1991-92 and 1992-93 fiscal years,
respectively, and are estimated to be $789.1 million for the State's 1993-94
fiscal year, not including interest on refunding bonds, issued in July 1992, to
the extent that such interest is to be paid from escrowed funds.
LITIGATION. The State is a defendant in numerous legal proceedings
pertaining to matters incidental to the performance of routine governmental
operations. Such litigation includes, but is not limited to, claims asserted
against the State arising from alleged torts, alleged breaches of contracts,
condemnation proceedings and other alleged violations of State and Federal laws.
Included in the State's outstanding litigation are a number of cases
challenging the constitutionality or the adequacy and effectiveness of a variety
of significant social welfare programs primarily involving the State's mental
hygiene programs. Adverse judgments in these matters generally could result in
injunctive relief coupled with prospective changes in patient care which could
require substantial increased financing of the litigated programs in the future.
Because of the prospective nature of these matters, no provision for this
potential exposure has been made in the State's audited financial statements for
the 1991-92 fiscal year.
As a result of the United States Supreme Court decision in the case of STATE
OF DELAWARE v. STATE OF NEW YORK, the State may be required to make certain
significant payments during the 1993-94 fiscal year or thereafter.
Adverse developments in any of these proceedings or the initiation of new
proceedings could affect the ability of the State to maintain a balanced State
Plan. In its audited financial statements for the 1991-92 fiscal year, the State
reported its estimated liability for awarded and anticipated unfavorable
judgments as $489 million.
OTHER LOCALITIES. Certain localities in addition to the City could have
financial problems leading to requests for additional State assistance during
the State's 1993-94 fiscal year and thereafter. The potential impact on the
State of such actions by localities is not included in the projections of the
State receipts and disbursements in the State's 1993-94 fiscal year.
Fiscal difficulties experienced by the City of Yonkers ("Yonkers") resulted
in the creation of the Financial Control Board for the City of Yonkers (the
"Yonkers Board") by the State of 1984. The Yonkers Board is charged with
oversight of the fiscal affairs of Yonkers. Future actions taken by the Governor
or the State Legislature to assist Yonkers could result in allocation of State
resources in amounts that cannot yet be determined.
PURCHASE OF FUND SHARES
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As discussed in the Prospectus, the Fund offers its shares for sale to the
public on a continuous basis, without a sales charge. Pursuant to a Distribution
Agreement between the Fund and Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager and a wholly-owned
subsidiary of DWDC, shares of the Fund are distributed by the Distributor and
through certain selected dealers who have entered into agreements with the
Distributor ("Selected Broker-Dealer") at an offering price equal to the net
asset value per share next determined following receipt of an effective purchase
order (accompanied by Federal Funds). Dealers in the securities markets in which
the Fund will invest usually require immediate payment in federal funds. Since
the payment by a Fund shareholder for his or her other shares cannot be invested
until it is converted into and available to the Fund in federal funds, the Fund
requires such payments to be so available before a share purchase order can be
considered effective.
The Board of Trustees of the Fund, including a majority of the Trustees who
are not and were not at the time of their vote "Interested persons" (as defined
in the Act) of either party to the Distribution Agreement (the "Independent
Trustees"), approved, at its meeting held on October 30, 1992, the current
Distribution Agreement appointing the Distributor exclusive distributor of the
Fund's shares and
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providing for the Distributor to bear distribution expenses not borne by the
Fund. The Distribution Agreement took effect on June 30, 1993 upon the spin-off
by Sears Roebuck and Co. of its remaining shares of DWDC. By its terms, the
Distribution Agreement has an initial term ending April 30, 1994, and provides
that it will remain in effect from year to year thereafter if approved by the
Board.
SHAREHOLDER INVESTMENT ACCOUNT
Upon the purchase of shares of the Fund, a Shareholder Investment Account is
opened for the investor on the books of the Fund, maintained by the Fund's
Transfer Agent, Dean Witter Trust Company (the "Transfer Agent"). This is an
open account in which shares owned by the investor are credited by the Transfer
Agent in lieu of issuance of a share certificate. If a share certificate is
desired, it must be requested in writing for each transaction. Certificates are
issued only for full shares and may be redeposited in the account at any time.
There is no charge to the investor for issuance of a certificate. Whenever a
shareholder-instituted transaction takes place in the Shareholder Investment
Account directly through the Transfer Agent, the shareholder will be mailed a
written confirmation of such transaction.
DIRECT INVESTMENTS THROUGH TRANSFER AGENT. A shareholder may make
additional investments in Fund shares at any time through the Shareholder
Investment Account by sending a check payable to Dean Witter New York Municipal
Money Market Trust in any amount, not less than $100, directly to the Transfer
Agent. The shares so purchased will be credited to the Shareholder Investment
Account.
ACCOUNT STATEMENTS. All purchases of Fund shares will be credited to the
shareholder in a Shareholder Investment Account maintained for the shareholder
by the Transfer Agent in full and fractional shares of the Fund (rounded to the
nearest 1/100 of a share with the exception of purchases made through
reinvestment of dividends, which are rounded to the last 1/100 of a share). A
statement of the account will be mailed to the shareholder after each purchase
or redemption transaction effected through the Transfer Agent. A quarterly
statement of the account is sent to all shareholders. Share certificates will
not be issued unless requested in writing by the shareholder. No certificates
will be issued for fractional shares or to shareholders who have elected the
checking account or predesignated bank account methods of withdrawing cash from
their accounts.
The Fund reserves the right to reject any order for the purchase of its
shares. In addition, the offering of Fund shares may be suspended at any time
and resumed at any time thereafter.
EXCHANGE PRIVILEGE
As discussed in the Prospectus under the caption "Exchange Privilege", an
Exchange Privilege exists whereby investors who have purchased shares of any of
the Dean Witter Funds sold with either a front-end sales charge ("FESC funds")
or a contingent deferred sales charge ("CDSC funds") will be permitted, after
the shares of the Fund acquired by purchase (not by exchange or dividend
reinvestment) have been held for thirty days, to redeem all or part of their
shares in that Fund, have the proceeds invested in shares of the Fund, Dean
Witter Liquid Asset Fund Inc., Dean Witter Tax-Free Daily Income Trust, Dean
Witter California Tax-Free Daily Income Trust, or Dean Witter U.S. Government
Money Market Trust (these five funds are hereinafter called "money market
funds") or Dean Witter Short-Term U.S. Treasury Trust, Dean Witter Limited Term
Municipal Trust or Dean Witter Short-Term Bond Fund the foregoing eight non-FESC
or CDSC funds (these eight funds are collectively referred to herein as the
"Exchange Funds.") There is no waiting period for shares acquired by exchange or
dividend reinvestment. Subsequently, shares of the Exchange Funds received in an
exchange for shares of an FESC fund (regardless of the type of fund originally
purchased) may be redeemed and exchanged for shares of the Exchange Funds, FESC
funds or CDSC funds (however, shares of CDSC funds, including shares acquired in
exchange for (i) shares of FESC funds or (ii) shares of the Exchange Funds which
were acquired in exchange for shares of FESC funds, may not be exchanged for
shares of FESC funds).
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Additionally, shares of the Exchange Funds received in an exchange for shares of
a CDSC fund (regardless of the type of fund originally purchased) may be
redeemed and exchanged for shares of the Exchange Funds or CDSC funds.
Ultimately, any applicable contingent deferred sales charge will have to be paid
upon redemption of shares originally purchased from a CDSC fund. An exchange
will be treated for federal income tax purposes the same as a repurchase or
redemption of shares, on which the shareholder may realize a capital gain or
loss.
Any new account established through the Exchange Privilege will have the
same registration and cash dividend or dividend reinvestment plan as the present
account, unless the Transfer Agent receives written notification to the
contrary. For telephone exchanges, the exact registration of the existing
account and the account number must be provided.
Any shares held in certificate form cannot be exchanged but must be
forwarded to the Transfer Agent and deposited into the shareholder's account
before being eligible for exchange. (Certificates mailed in for deposit should
not be endorsed.)
When shares of any CDSC fund are exchanged for shares of the Fund or any
other Exchange Fund, the exchange is executed at no charge to the shareholder,
without the imposition of the contingent deferred sales charge ("CDSC") at the
time of the exchange. During the period of time the shareholder remains in the
Exchange Funds (calculated from the last day of the month in which the Exchange
Fund shares were reacquired), the holding period or "year since purchase payment
made" is frozen. When shares are redeemed out of the Exchange Funds, they will
be subject to a CDSC which would be based upon the period of time the
shareholder held shares in a CDSC fund. However, in the case of shares of a CDSC
fund exchanged into an Exchange Fund on or after April 23, 1990, upon redemption
of shares which results in a CDSC being imposed, a credit (not to exceed the
amount of the CDSC) will be given in an amount equal to the Exchange Fund 12b-1
distribution fees incurred on or after that date which are attributable to those
shares. Shareholders acquiring shares of an Exchange Fund pursuant to this
exchange privilege may exchange those shares back into a CDSC fund from the
Exchange Funds with no CDSC being imposed on such exchange. The holding period
previously frozen when shares were first exchanged for shares of an Exchange
Fund resumes on the last day of the month in which shares of a CDSC fund are
reacquired. A CDSC is imposed only upon an ultimate redemption, based upon the
time (calculated as described above) the shareholder was invested in a CDSC
fund. Shares of a CDSC fund acquired in exchange for shares of an FESC fund (or
in exchange for shares of other Dean Witter Funds for which shares of an FESC
fund have been exchanged) are not subject to any CDSC upon their redemption.
When shares initially purchased in a CDSC fund are exchanged for shares of
another CDSC fund or for shares of an Exchange Fund, the date of purchase of the
shares of the fund exchanged into, for purposes of the CDSC upon redemption,
will be the last day of the month in which the shares being exchanged were
originally purchased. In allocating the purchase payments between funds for
purposes of the CDSC, the amount which represents the current net asset value of
shares at the time of the exchange which were (i) purchased more than three or
six years (depending on the CDSC schedule applicable to the shares) prior to the
exchange, (ii) originally acquired through reinvestment of dividends or
distributions and (iii) acquired in exchange for shares of FESC funds, or for
shares of other Dean Witter Funds for which shares of FESC funds have been
exchanged (all such shares called "Free Shares"), will be exchanged first.
Shares of Dean Witter American Value Fund acquired prior to April 30, 1984,
shares of Dean Witter Dividend Growth Securities Inc. and Dean Witter Natural
Resource Development Securities Inc. acquired prior to July 2, 1984, and shares
of Dean Witter Strategist Fund acquired prior to November 8, 1989, are also
considered Free Shares and will be the first Free Shares to be exchanged. After
an exchange, all dividends earned on shares in an Exchange Fund will be
considered Free Shares. If the exchanged amount exceeds the value of such Free
Shares, an exchange is made, on a block-by-block basis, of non-Free Shares held
for the longest period of time (except that if shares held for identical periods
of time but subject to different CDSC schedules are held in the same Exchange
Privilege account, the shares of that block that are subject to a lower CDSC
rate will be exchanged prior to the shares of that block that are subject to a
higher CDSC rate). Shares equal to any appreciation in
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<PAGE>
the value of non-Free Shares exchanged will be treated as Free Shares, and the
amount of the purchase payments for the non-Free Shares of the fund exchanged
into will be equal to the lesser of (a) the purchase payments for, or (b) the
current net asset value of, the exchanged non-Free Shares. If an exchange
between funds would result in exchange of only part of a particular block of
non-Free Shares, then shares equal to any appreciation in the value of the block
(up to the amount of the exchange) will be treated as Free Shares and exchanged
first, and the purchase payment for that block will be allocated on a pro rata
basis between the non-Free Shares of that block to be retained and the non-Free
Shares to be exchanged. The prorated amount of such purchase payment
attributable to the retained non-Free Shares will remain as the purchase payment
for such shares, and the amount of purchase payment for the exchanged non-Free
Shares will be equal to the lesser of (a) the prorated amount of the purchase
payment for, or (b) the current net asset value of, those exchanged non-Free
Shares. Based upon the exchange procedures described in the CDSC fund Prospectus
under the caption "Contingent Deferred Sales Charge", any applicable CDSC will
be imposed upon the ultimate redemption of shares of any fund, regardless of the
number of exchanges since those shares were originally purchased.
The Transfer Agent acts as agent for shareholders of the Fund in effecting
redemptions of Fund shares and in applying the proceeds to the purchase of other
fund shares. In the absence of negligence on its part, neither the Transfer
Agent nor the Fund shall be liable for any redemption of Fund shares caused by
unauthorized telephone instructions. Accordingly, in such event, the investor
shall bear the risk of loss. The staff of the Securities and Exchange Commission
is currently considering the propriety of such a policy.
With respect to the redemption or repurchase of shares of the Fund, the
application of proceeds to the purchase of new shares in the Fund or any other
of the funds and the general administration of the Exchange Privilege, the
Transfer Agent acts as agent for DWR and for the shareholder's Selected Broker-
Dealer, if any, in the performance of such functions. With respect to exchanges,
redemptions or repurchases, the Transfer Agent shall be liable for its own
negligence and not for the default or negligence of its correspondents or for
losses in transit. The Fund shall not be liable for any default or negligence of
the Transfer Agent, DWR or any Selected Broker-Dealer.
Exchange Privilege accounts may also be maintained for shareholders of the
money market funds who acquired their shares in exchange for shares of various
TCW/DW Funds, a group of funds distributed by the Distributor for which TCW
Funds Management, Inc. serves as Adviser, under the terms and conditions
described in the Prospectus and Statement of Additional Information of each
TCW/DW Fund.
DWR and any Selected Broker-Dealer have authorized and appointed the
Transfer Agent to act as their agent in connection with the application of
proceeds of any redemption of Fund shares to the purchase of the shares of any
other fund and the general administration of the Exchange Privilege. No
commission or discounts will be paid to DWR or any Selected Broker-Dealer for
any transactions pursuant to this Exchange Privilege.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. An exchange will be treated for federal income tax purposes
the same as a repurchase or redemption of shares, on which the shareholder may
realize a capital gain or loss. However, the ability to deduct capital losses on
an exchange may be limited in situations where there is an exchange of shares
within ninety days after the shares are purchased. The Exchange Privilege is
only available in states where an exchange may legally be made.
Shares of the Fund acquired pursuant to the Exchange Privilege will be held
by the Fund's transfer agent in an Exchange Privilege Account distinct from any
account of the same shareholder who may have acquired shares of the Fund
directly. A shareholder of the Fund will not be permitted to make additional
investments in such Exchange Privilege Account, except through the exchange of
additional shares of the fund in which the shareholder had initially invested,
and the proceeds of any shares redeemed from such Account may not thereafter be
placed back into that Account. If such a shareholder
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desires to make any additional investments in the Fund, a separate account will
be maintained for receipt of such investments. The Fund will have additional
costs for account maintenance if a shareholder has more than one account with
the Fund.
The Fund also maintains Exchange Privilege Accounts for shareholders who
acquired their shares of the Fund pursuant to exchange privileges offered by
other investment companies with which the Investment Manager is not affiliated.
The Fund also expects to make available such exchange privilege accounts to
other investment companies that may hereafter be managed by the Investment
Manager.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. The minimum initial investment is $10,000 for
Dean Witter Short-Term U.S. Treasury Trust (although that fund may, in its
discretion, accept initial purchases as low as $5,000) and $5,000 for the Fund,
Dean Witter Liquid Asset Fund Inc., Dean Witter Tax-Free Daily Income Trust, and
Dean Witter California Tax-Free Daily Income Trust, although those funds may, at
their discretion, accept initial investments of as low as $1,000. The minimum
initial investment for all other Dean Witter Funds for which the Exchange
Privilege is available is $1,000. Upon exchange into an Exchange Fund, the
shares of that fund will be held in a special Exchange Privilege Account
separately from accounts of those shareholders who have acquired their shares
directly from that fund. As a result, certain services normally available to
shareholders of money market funds, including the check writing feature, will
not be available for funds held in that account.
The Fund and each of the other Dean Witter Funds may limit the number of
times this Exchange Privilege may be exercised by any investor within a
specified period of time. Also, the Exchange Privilege may be terminated or
revised at any time by any of the Dean Witter Funds, upon such notice as may be
required by applicable regulatory agencies (presently sixty days' prior written
notice for termination or material revision), provided that six months' prior
written notice of termination will be given to the shareholders who hold shares
of an Exchange Fund, pursuant to the Exchange Privilege, and provided further
that the Exchange Privilege may be terminated or materially revised at times (a)
when the New York Stock Exchange is closed for other than customary weekends and
holidays, (b) when trading on that Exchange is restricted, (c) when an emergency
exists as a result of which disposal by the Fund of securities owned by it is
not reasonably practicable or it is not reasonably practicable for the Fund
fairly to determine the value of its net assets, (d) during any other period
when the Securities and Exchange Commission by order so permits (provided that
applicable rules and regulations of the Securities and Exchange Commission shall
govern as to whether the conditions prescribed in (b) or (c) exist), or (e) if
the Fund would be unable to invest amounts effectively in accordance with its
investment objective(s), policies and restrictions.
For further information regarding the Exchange Privilege, shareholders
should contact DWR or other selected broker-dealer account executive or the
Transfer Agent.
PLAN OF DISTRIBUTION
In accordance with a Plan of Distribution pursuant to Rule 12b-1 under the
Act between the Fund and Dean Witter Distributors Inc. (the "Distributor"), the
Distributor provides certain services in connection with the promotion of sales
of Fund shares (the "Plan" refers to the Plan and Agreement of Distribution
prior to the reorganization and to the Plan of Distribution after the
reorganization). The Plan was approved by the Board of Trustees on February 15,
1990 and by DWR as the Fund's sole shareholder on February 16, 1990, whereupon
the Plan went into effect. The vote of the Trustees, which was cast in person at
a meeting called for the purpose of voting on such Plan, included a majority of
the Trustees who are not and were not at the time of their voting interested
persons of the Fund and who have and had at the time of their votes no direct or
indirect financial interest in the operation of the Plan (the "Independent
Trustees"). The Shareholders of the Fund subsequently approved the Plan at a
Special Meeting of Shareholders held on June 20, 1991.
The Plan provides that the Distributor bear the expense of all promotional
and distribution related activities on behalf of the Fund, except for expenses
that the Trustees determine to reimburse, as
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described below. The following activities and services may be provided by the
Distributor under the Plan: (1) compensation to and expenses of DWR's and other
selected dealer's account executives and other employees, including overhead and
telephone expenses; (2) sales incentives and bonuses to sales representatives
and to marketing personnel in connection with promoting sales of the Fund's
shares; (3) expenses incurred in connection with promoting sales of the Fund's
shares; (4) preparing and distributing sales literature; and (5) providing
advertising and promotional activities, including direct mail solicitation and
television, radio, newspaper, magazine and other media advertisements.
DWR account executives are paid an annual residual commission, currently a
gross residual of up to 0.10% of the current value of the respective accounts
for which they are the account executives of record. The "gross residual" is a
charge which reflects residual commissions paid by DWR to its account executives
and DWR's expenses associated with the servicing of shareholder's accounts,
including the expenses of operating DWR's branch offices in connection with the
servicing of shareholder's accounts, which expenses include lease costs, the
salaries and employee benefits of operations and sales support personnel,
utility costs, communications costs and the costs of stationery and supplies and
other expenses relating to branch office serving of shareholder accounts.
The Fund is authorized to reimburse specific expenses incurred or to be
incurred in promoting the distribution of the Fund's shares. Reimbursement is
made through monthly payments in amounts determined in advance of each fiscal
quarter by the Trustees, including a majority of the Independent Trustees. The
amount of each monthly payment may in no event exceed an amount equal to a
payment at the annual rate of 0.15 of 1% of the Fund's average daily net assets
during the month. No interest or other financing charges will be incurred for
which reimbursement payments under the Plan will be made. In addition, no
interest charges, if any, incurred on any distribution expense incurred by the
Distributor or other selected dealers pursuant to the Plan, will be reimbursable
under the Plan. In making quarterly determinations of the amounts that may be
expended by the Fund, the Investment Manager provides and the Trustees review a
quarterly budget of projected incremental distribution expenses to be incurred
on behalf of the Fund, together with a report explaining the purposes and
anticipated benefits of incurring such expenses. The Trustees determine which
particular expenses, and the portions thereof, that may be borne by the Fund,
and in making such a determination shall consider the scope of the Distributor's
commitment to promoting the distribution of the Fund's shares. The Fund
reimbursed $43,843 to the Distributor pursuant to the Plan which amounted to
0.10 of 1% of the Fund's average daily net assets for the year ended December
31, 1993. Based upon the total amounts spent by the Distributor during the
period, it is estimated that the amount paid by the Fund to the Distributor for
distribution was spent in approximately the following ways: (i)
advertising--$-0-; (ii) printing and mailing prospectuses to other than current
shareholders--$-0-; (iii) compensation to underwriters--$-0-; (iv) compensation
to dealers--$-0-; (v) compensation to sales personnel--$-0-; and (vi) other,
which accrued for expenses relating to compensation of sales personnel and other
miscellaneous expenses--$43,843. No payments under the Plan were made for
overhead, interest, carrying or other financing charges.
Under the Plan, the Distributor uses its best efforts in rendering services
to the Fund, but in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations, the Distributor is not
liable to the Fund or any of its shareholders for any error of judgment or
mistake of law or for any act or omission or for any losses sustained by the
Fund or its shareholders.
Continuance of the Plan until April 30, 1994 was approved by the Trustees,
including a majority of the Independent 12b-1 Trustees, at their meeting held on
April 28, 1993. In making their determination to continue the Plan until April
30, 1994, the Board of Trustees, including all of the Independent Trustees,
arrived at the conclusion that the Plan the Directors were provided at the April
28, 1993 meeting had benefitted the Fund. This conclusion was based upon the
Investment Manager's belief that the expenditures made pursuant to the Plan had
tended to arrest the decline of Fund assets by meeting the competitive efforts
of other, similar financial products, and had encouraged the account executives
employed by DWR and other selected dealers to increase their efforts in selling
shares of the Fund. The Board of Trustees, including the Independent Trustees,
also concluded that, in their judgment, there is a
26
<PAGE>
reasonable likelihood that the Plan will continue to benefit the Fund and its
shareholders. An amendment to increase materially the maximum amount authorized
to be spent under the Plan must be approved by the shareholders of the Fund, and
all material amendments to the Plan must be approved by the Trustees in the
manner described above. The Plan may be terminated at any time, without payment
of any penalty, by vote of the holders of a majority of the Independent Trustees
or by a vote of a majority of the outstanding voting securities of the Fund (as
defined in the Act) on not more than 30 days written notice to any other party
to the Plan. So long as the Plan is in effect, the selection or nomination of
the Independent Trustees is committed to the discretion of the Independent
Trustees.
At their meeting held on October 30, 1992, the Trustees of the Fund,
including all of the independent 12b-1 Trustees, approved certain amendments to
the Plan which took effect in January, 1993 and were designed to reflect the
fact that upon the reorganization described above, the share distribution
activities, theretofore performed by the Fund or for the Fund by DWR were
assumed by the Distributor and DWR's, sales activities are now being performed
pursuant to the terms of a selected dealer agreement between the Distributor and
DWR. The amendments provide that payments under the Plan will be made to the
Distributor rather than to the Investment Manager as before the amendment, and
that the Distributor in turn is authorized to make payments to DWR, its
affiliates or other Selected Broker-Dealers (or direct that the Fund pay such
entities directly). The Distibutor is also authorized to retain part of such fee
as compensation for its own distribution-related expenses.
Under the Plan, the Distributor provides the Fund, for review by the
Trustees, and the Trustees review, promptly after the end of each calendar
quarter, a written report regarding the incremental distribution expenses
incurred on behalf of the Fund during such calendar quarter, which report
includes (1) an itemization of the types of expenses and the purposes therefore;
(2) the amounts of such expenses; and (3) a description of the benefits derived
by the Fund. In the Trustees' quarterly review of the Plan they consider its
continued appropriateness and the level of compensation provided therein.
No interested person of the Fund nor any Trustee of the Fund who is not an
interested person of the Fund, as defined in the Act, had any direct or indirect
financial interest in the operation of the Plan and Agreement except to the
extent that the Distributor, DWR or the Investment Manager or certain of its
employees may be deemed to have such an interest as a result of benefits derived
from the successful operation of the Plan or as a result of receiving a portion
of the amounts expended thereunder by the Fund.
HOW NET ASSET VALUE IS DETERMINED
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As discussed in the Prospectus, the net asset value of the Fund is
determined as of the close of trading on each day that the New York Stock
Exchange is open. The New York Stock Exchange currently observes the following
holidays: New Year's Day; Presidents' Day; Good Friday; Memorial Day;
Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.
The Fund utilizes the amortized cost method in valuing its portfolio
securities for purposes of determining the net asset value of shares of the
Fund. The Fund utilizes the amortized cost method in valuing its portfolio
securities even though the portfolio securities may increase or decrease in
market value, generally, in connection with changes in interest rates. The
amortized cost method of valuation involves valuing a security at its cost
adjusted by a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund would receive if it sold the instrument. During
such periods, the yield to investors in the Fund may differ somewhat from that
obtained in a similar company which uses mark to market values for all its
portfolio securities. For example, if the use of amortized cost resulted in a
lower (higher) aggregate portfolio value on a particular day, a prospective
investor in the Fund would be able to obtain a somewhat higher (lower) yield
than
27
<PAGE>
would result from investment in such a similar company and existing investors
would receive less (more) investment income. The purpose of this method of
calculation is to facilitate the maintenance of a constant net asset value per
share of $1.00.
The Fund's use of the amortized cost method to value its portfolio
securities and the maintenance of the per share net asset value of $1.00 is
permitted pursuant to Rule 2a-7 of the Act (the "Rule"), and is conditioned on
its compliance with various conditions contained in the Rule including: (a) the
Trust's Trustees are obligated, as a particular responsibility within the
overall duty of care owed to the Trust's shareholders, to establish procedures
reasonably designed, taking into account current market conditions and the
Fund's investment objective to stabilize the net asset value per share as
computed for the purpose of distribution and redemption at $1.00 per share; (b)
(i) the procedures include calculation, at such intervals as are reasonable in
light of current market conditions, of the deviation, if any between net asset
value per share using amortized cost to value portfolio securities and net asset
value per share based upon available market quotations with respect to such
portfolio securities (for the purpose of determining market value, securities as
to which the Trust has a "put" will be valued at the higher of market value or
exercise price); (ii) periodic review by the Trustees of the amount of deviation
as well as methods used to calculate it, and (iii) maintenance of written
records of the procedures, the Trustees considerations made pursuant to them and
any actions taken upon such consideration; the Trustees will consider what steps
should be taken, if any, in the event of a difference of more than 1/2 of 1%
between the two methods of valuation; and (c) the Trustees should take such
action as they deem appropriate to eliminate or reduce, to the extent reasonably
practicable, material dilution or other unfair results to investors or existing
shareholders. Such action may include: selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten the average portfolio
maturity of the Trust; withholding dividends; utilizing a net asset value per
share as determined by using available market quotations or reducing the number
of its outstanding shares. Any reduction of outstanding shares will be effected
by having each shareholder proportionately contribute to the Trust's capital a
number of shares which represent the difference between the amortized cost
valuation and market valuation of the portfolio. Each shareholder will be deemed
to have agreed to such contribution by his or her investment in the Trust.
The Rule further requires that the Fund limit its investments to U.S.
dollar-denominated instruments which the Board of Trustees determines present
minimal credit risks and which are Eligible Securities (as defined below). The
Rule also requires the Fund to maintain a dollar weighted average portfolio
maturity (not more than 90 days) appropriate to its objective of maintaining a
stable net asset value of $1.00 per share and precludes the purchase of any
instrument with a remaining maturity of more than thirteen months. Should the
disposition of a portfolio security result in a dollar weighted average
portfolio maturity of more than 90 days, the Fund would be required to invest
its available cash in such a manner as to reduce such maturity to 90 days or
less as soon as is reasonably practicable.
At the time the Fund makes the commitment to purchase a Municipal Obligation
on a when-issued or delayed delivery basis, it will record the transaction and
thereafter reflect the value, each day, of the Municipal Obligation in
determining its net asset value. Repurchase agreements are valued at the face
value of the repurchase agreement plus any accrued interest thereon to date.
Generally, for purposes of the procedures adopted under the Rule, the
maturity of a portfolio instrument is deemed to be the period remaining
(calculated from the trade date or such other date on which the Trust's interest
in the instrument is subject to market action) until the date noted on the face
of the instrument as the date on which the principal amount must be paid, or in
the case of an instrument called for redemption, the date on which the
redemption payment must be made.
A variable rate obligation that is subject to a demand feature is deemed to
have a maturity equal to the longer of the period remaining until the next
readjustment of the interest rate or the period remaining until the principal
amount can be recovered through demand. A floating rate instrument that is
subject to a demand feature is deemed to have a maturity equal to the period
remaining until the principal amount can be recovered through demand.
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<PAGE>
An Eligible Security is defined in the Rule to mean a security which: (a)
has a remaining maturity of thirteen months or less: (b)(i) is rated in the two
highest short-term rating categories by any two NRSRO's that have issued a
short-term rating with respect to the security or class of debt obligations of
the issuer, or (ii) if only one NRSRO has issued a short-term rating with
respect to the security, then by that NRSRO; (c) was a long-term security at the
time of issuance whose issuer has outstanding a short-term debt obligation which
is comparable in priority and security and has a rating as specified in clause
(b) above; or (d) if no rating is assigned by any NRSRO as provided in clauses
(b) and (c) above, the unrated security is determined by the Board to be of
comparable quality to any such rated security.
As permitted by the Rule, the Board has delegated to the Trust's Investment
Manager, subject to the Board's oversight pursuant to guidelines and procedures
adopted by the Board, the authority to determine which securities present
minimal credit risks and which unrated securities are comparable in quality to
rated securities.
If the Board determines that it is no longer in the best interests of the
Trust and its shareholders to maintain a stable price of $1 per share or if the
Board believes that maintaining such price no longer reflects a market-based net
asset value per share, the Board has the right to change from an amortized cost
basis of valuation to valuation based on market quotations. The Trust will
notify shareholders of any such changes.
The Fund will manage its portfolio in an effort to maintain a constant $1.00
per share price, but it cannot assure that the value of its shares will never
deviate from this price. Since dividends from net investment income are declared
and reinvested on a daily basis, the net asset value per share, under ordinary
circumstances, is likely to remain constant. Realized and unrealized gains and
losses will not be distributed on a daily basis but will be reflected in the
Fund's net asset value. The amounts of such gains and losses will be considered
by the Board of Trustees in determining the action to be taken to maintain the
Fund's $1.00 per share net asset value. Such action may include distribution at
any time of part or all of the then accumulated undistributed net realized
capital gains, or reduction or elimination of daily dividends by an amount equal
to part or all of the then accumulated net realized capital losses. However, if
realized losses should exceed the sum of net investment income plus realized
gains on any day, the net asset value per share on that day might decline below
$1.00 per share. In such circumstances, the Fund may reduce or eliminate the
payment of daily dividends for a period of time in an effort to restore the
Fund's $1.00 per share net asset value. A decline in prices of securities could
result in significant unrealized depreciation on a mark-to-market basis. Under
these circumstances the Fund may reduce or eliminate the payment of dividends
and utilize a net asset value per share as determined by using available market
quotations or reduce the number of its shares outstanding.
REDEMPTION OF FUND SHARES
- --------------------------------------------------------------------------------
As discussed in the Prospectus, shares of the Fund may be redeemed or
repurchased at net asset value at any time. When a redemption is made by check
and a check is presented to the Transfer Agent for payment, the Transfer Agent
will redeem a sufficient number of full and fractional shares in the
shareholder's account to cover the amount of the check. This enables the
shareholder to continue earning daily income dividends until the check has
cleared.
A check drawn by a shareholder against his or her account in the Fund
constitutes a request for redemption of a number of shares sufficient to provide
proceeds equal to the amount of the check. Payment of the proceeds of a check
will normally be made on the next business day after receipt by the Transfer
Agent of the check in proper form. Subject to the foregoing, if a check is
presented for payment to the Transfer Agent by a shareholder or payee in person,
the Transfer Agent will make payment by means of a check drawn on the Fund's
account or, in the case of a shareholder payee, to the shareholder's
predesignated bank account, but will not make payment in cash.
The Fund reserves the right to suspend redemptions or repurchases or
postpone the date of payment (1) for any periods during which the New York Stock
Exchange is closed (other than for
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<PAGE>
customary weekend and holiday closings), (2) when trading on that Exchange is
restricted or an emergency exists, as determined by the Securities and Exchange
Commission, so that disposal of the Fund's investments or determination of the
Fund's net asset value is not reasonably practicable, or (3) for such other
periods as the Commission by order may permit for the protection of the Fund's
investors.
As discussed in the Prospectus, due to the relatively high cost of handling
small investments, the Fund reserves the right to redeem, at net asset value,
the shares of any shareholder (other than shares held in an Individual
Retirement Account or custodial account under Section 403(b)(7) of the Internal
Revenue Code) whose shares due to redemptions by the shareholders have a value
of less than $1,000 or such lesser amounts as may be fixed by the Board of
Trustees. However, before the Fund redeems such shares and sends the proceeds to
the shareholder, it will notify the shareholder that the value of his or her
shares is less than $1,000 and allow him or her 60 days to make an additional
investment in an amount which will increase the value of his or her account to
$1,000 or more before the redemption is processed.
SYSTEMATIC WITHDRAWAL PLAN. As discussed in the Prospectus, a systematic
withdrawal plan is available for shareholders who own or purchase shares of the
Fund having a minimum value of $5,000, which provides for monthly or quarterly
checks in any dollar amount not less than $25 or in any whole percentage of the
account balance on an annualized basis. The Transfer Agent acts as agent for the
shareholder in tendering to the Fund for redemption sufficient full and
fractional shares to provide the amount of the periodic withdrawal payment
designated in the application. The shares will be redeemed at their net asset
value determined, at the shareholder's option, on the tenth or twenty-fifth day
(or next business day) of the relevant month or quarter and normally a check for
the proceeds will be mailed by the Transfer Agent within five days after the
date of redemption. The withdrawal plan may be terminated at any time by the
Fund.
Any shareholder who wishes to have payments under the withdrawal plan made
to a third party or sent to an address other than the one listed on the account
must send complete written instructions to the Transfer Agent to enroll in the
withdrawal plan. The shareholder's signature on such instructions must be
guaranteed by an eligible guarantor. A shareholder may, at any time, change the
amount and interval of withdrawal payments through his or her Account Executive
or by written notification to the Transfer Agent. In addition, the party and/or
the address to which checks are mailed may be changed by written notification to
the Transfer Agent, with signature guarantees required in the manner described
above. The shareholder may also terminate the withdrawal plan at any time by
written notice to the Transfer Agent. In the event of such termination, the
account will be continued as a regular shareholder investment account. The
shareholder may also redeem all or part of the shares held in the withdrawal
plan account (see "Redemption of Fund Shares" in the Prospectus) at any time. If
the number of shares redeemed is greater than the number of shares paid as
dividends, such redemptions may, of course, eventually result in liquidation of
all the shares in the account. The automatic cash withdrawal method of
redemption is not available for shares held in an Exchange Privilege Account.
DIVIDENDS, DISTRIBUTIONS AND TAXES
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As discussed in the Prospectus, the Fund intends to declare dividends on
each day the New York Stock Exchange is open for business, of all of its daily
net investment income to shareholders of record as of the close of business the
preceding business day.
In computing net investment income, the Fund will amortize any premiums and
original issue discounts on securities owned, if applicable. Capital gains or
losses realized upon sale or maturity of such securities will be based on their
amortized cost.
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The Fund has qualified and intends to remain qualified as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). If so qualified, the Fund will not be subject to federal
income tax on its net investment income and capital gains, if any, realized
during any fiscal year in which it distributes such income and capital gains to
its shareholders.
As discussed in the Prospectus, the Fund intends to qualify to pay
"exempt-interest dividends" to its shareholders by maintaining, as of the close
of each quarter of its taxable year, at least 50% of the value of its total
assets in tax-exempt securities. An exempt-interest dividend is that part of a
dividend distribution made by the Fund which consists of interest received by
the Fund on tax-exempt securities upon which the shareholder incurs no federal
income taxes. Exempt-interest dividends are included, however, in determining
what portion, if any, of a person's Social Security benefits are subject to
federal income tax.
The Trustees may revise the dividend policy, or postpone the payment of
dividends, if the Fund should have or anticipate any large unexpected expense,
loss or fluctuation in net assets which, in the opinion of the Trustees, might
have a significant adverse effect on shareholders. On occasion, in order to
maintain a constant $1.00 per share net asset value, the Trustees may direct
that the number of outstanding shares be reduced in each shareholder's account.
Such reduction may result in taxable income, if any, to a shareholder in excess
of the net increase (i.e., dividends, less such reductions), if any, in the
shareholder's account for a period. Furthermore, such reduction may be realized
as a capital loss when the shares are liquidated.
A number of provisions included in the Code by the Tax Reform Act of 1986
may affect the federal income tax liability of the Fund's shareholders, by
reducing the individual and corporate income tax rates and expanding the
alternative minimum tax provisions. In general, lower rates of taxation could
make tax-exempt bonds less attractive to investors and could decrease the value
of the tax-exempt securities held by the Fund and the net asset value of the
Fund's shares. Furthermore, some of the changes may reduce the extent to which
issuers may issue tax-exempt bonds. The Code now subjects interest received on
certain otherwise tax-exempt securities to alternative minimum tax. This
alternative minimum tax would apply to interest received on "private activity
bonds" (in general, bonds that benefit non-governmental entities) issued after
August 7, 1986 which, although tax-exempt, are used for purposes other than
those generally performed by governmental units (E.G., bonds used for commercial
or housing purposes). Income received on such bonds is classified as a "tax
preference item", under the alternative minimum tax, for both individual and
corporate investors. A substantial portion of the Fund's investments may be in
such "private activity bonds", with the result that a substantial portion of the
exempt-interest dividends paid by the Fund may be an item of tax preference to
shareholders subject to the alternative minimum tax. The Fund will report to
shareholders the portion of its dividends declared during the year which are a
tax preference item for alternative minimum tax purposes, as well as the overall
percentage of dividend distributions which constitutes exempt-interest
dividends. Individual taxpayers are generally subject to the alternative minimum
tax if their "regular tax" liability is less than 24% of their "alternative
minimum taxable income" reduced by an exemption amount ranging from $0 to
$40,000 depending upon the taxpayer's income and filing status. Alternative
minimum taxable income is generally equal to taxable income with certain
adjustments and increased by certain "tax preference items" which may include a
portion of the Fund's dividends as described above. In addition, the Code
further provides that corporations are subject to an alternative minimum tax
based, in part, on 75% of any excess of "adjusted current earnings" over taxable
income as adjusted for other tax preferences. Because an exempt-interest
dividend paid by the Fund will be included in computing adjusted current
earnings, a corporate shareholder may therefore be required to pay an increased
alternative minimum tax as the result of receiving exempt-interest dividends
paid by the Fund.
The Code provides that every person required to file a tax return must
include on such return the amount of exempt-interest dividends received from the
Fund during the taxable year.
The I Amendments and Reauthorization Act of 1986 (the "I Act") imposes a
deductible tax on a corporation's alternative minimum taxable income (computed
without regard to the alternative tax net
31
<PAGE>
operating loss deduction) at a rate of $12 per $10,000 (0.12%) of alternative
minimum taxable income in excess of $2,000,000. The tax will be imposed for
taxable years beginning after December 31, 1986 and before January 1, 1996. The
tax will be imposed even if the corporation is not required to pay an
alternative minimum tax because the corporation's regular income tax liability
exceeds its minimum tax liability. Exempt-interest dividends paid by the Fund
that create alternative minimum tax preferences for corporate shareholders under
the Code (as described above) may be subject to the tax.
Within 60 days after the end of its fiscal year, the Fund will mail to
shareholders a statement indicating the percentage of the dividend distributions
for such fiscal year which constitutes exempt-interest dividends and the
percentage, if any, that is taxable, and to what extent the taxable portion is
short-term capital gains or ordinary income. This percentage should be applied
uniformly to all monthly distributions made during the fiscal year to determine
what proportion of the dividends paid is tax-exempt. The percentage may differ
from the percentage of tax-exempt dividend distributions for any particular
month.
Shareholders will be subject to federal income tax on dividends paid from
interest income derived from taxable securities and on distributions of net
short-term capital gains. Such interest and realized net short-term capital
gains dividends and distributions are taxable to the shareholder as ordinary
dividend income regardless of whether the shareholder receives such
distributions in additional shares or in cash. Distributions of long-term
capital gains, if any, are taxable as long-term capital gains, regardless of how
long the shareholder has held the Fund shares and regardless of whether the
distribution is received in additional shares or cash. Since the Fund's income
is expected to be derived entirely from interest rather than dividends, it is
anticipated that none of such dividend distributions will be eligible for the
federal dividends received deduction available to corporations.
Any loss on the sale or exchange of shares of the Fund which are held for 6
months or less is disallowed to the extent of the amount of any exempt-interest
dividend paid with respect to such shares. Treasury Regulations may provide for
a reduction in such required holding periods.
The Code requires each regulated investment company to pay a nondeductible
4% excise tax to the extent the company does not distribute, during each
calendar year, 98% of its ordinary income, determined on a calendar year basis,
and 98% of its capital gains, determined in general on an October 31 year end,
plus certain undistributed amounts from previous years. The required
distributions, however, are based only on the taxable income of a regulated
investment company. The excise tax, therefore, will generally not apply to the
tax-exempt income of a regulated investment company such as the Trust that pays
exempt-interest dividends. The Fund anticipates that it will make sufficient
timely distributions to avoid imposition of the excise tax.
Interest on indebtedness incurred or continued by a shareholder to purchase
or carry shares of the Fund is not deductible. Furthermore, entities or persons
who are "substantial users" (or related persons) of facilities financed by
industrial development bonds should consult their tax advisers before purchasing
shares of the Fund. "Substantial user" is defined generally by Income Tax
Regulation 1.103-11(b) as including a "non-exempt person" who regularly uses in
trade or business a part of a facility financed from the proceeds of industrial
development bonds.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal securities. Similar proposals may be introduced in the
future. If such a proposal were enacted, the availability of municipal
securities for investment by the Fund could be affected. In that event, the Fund
would re-evaluate its investment objective and policies.
To the extent that dividends are derived from interest on New York
tax-exempt securities, such dividends will also be exempt from New York State
and City personal income taxes. Interest on indebtedness incurred or continued
to purchase or carry shares of an investment company paying exempt-interest
dividends, such as the Fund, may not be deductible by the investor for State or
City personal income tax purposes.
32
<PAGE>
The foregoing relates to federal income taxation and to New York State and
City personal income taxation as in effect as of the date of the Prospectus.
Distributions from investment income and capital gains, including
exempt-interest dividends, may be subject to New York franchise taxes if
received by a corporation doing business in New York, to state taxes in states
other than New York and to local taxes.
Shareholders are urged to consult their attorneys or tax advisers regarding
specific questions as to federal, state or local taxes.
INFORMATION ON COMPUTATION OF YIELD
The Fund's current yield for the seven days ending December 31, 1993 was
1.66%. The effective annual yield on 1.66% is 1.68% assuming daily compounding.
The Fund's annualized current yield, as may be quoted from time to time in
advertisements and other communications to shareholders and potential investors,
is computed by determining, for a stated seven-day period, the net change,
exclusive of capital changes and including the value of additional shares
purchased with dividends and any dividends declared therefrom (which reflect
deductions of all expenses of the Fund such as management fees), in the value of
a hypothetical pre-existing account having a balance of one share at the
beginning of the period, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7).
The Fund's annualized effective yield, as may be quoted from time to time in
advertisements and other communications to shareholders and potential investors,
is computed by determining (for the same stated seven-day period as for the
current yield), the net change, exclusive of capital changes and including the
value of additional shares purchased with dividends and any dividends declared
therefrom (which reflect deductions of all expenses of the Fund such as
management fees), in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, and dividing the difference
by the value of the account at the beginning of the base period to obtain the
base period return, and then compounding the base period return by adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result.
The yields quoted in any advertisement or other communication should not be
considered a representation of the yields of the Fund in the future since the
yield is not fixed. Actual yields will depend not only on the type, quality and
maturities of the investments held by the Fund and changes in interest rates on
such investments, but also on changes in the Fund's expenses during the period.
Yield information may be useful in reviewing the performance of the Fund and
for providing a basis for comparison with other investment alternatives.
However, unlike bank deposits or other investments which typically pay a fixed
yield for a stated period of time, the Fund's yield fluctuates.
Based upon a combined Federal and New York personal income tax bracket of
41.96%, the Fund's tax-equivalent yield for the seven days ending December 31,
1993 was 2.86%.
Tax-equivalent yield is computed by dividing that portion of the current
yield (calculated as described above) which is tax-exempt by 1 minus a stated
tax rate and adding the quotient to that portion, if any, of the yield of the
Fund that is not tax-exempt. The Fund may also advertise the growth of
hypothetical investments of $10,000, $50,000 and $100,000 in shares of the Fund
by adding the sum of all distributions on 10,000, 50,000 or 100,000 shares of
the Fund since inception to $10,000, $50,000 and $100,000, as the case may be.
Investments of $10,000, $50,000 and $100,000 in the Fund at inception would have
grown to $11,194, $55,970 and $111,940, respectively, at December 31, 1993.
33
<PAGE>
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full share
of beneficial interest held. The Fund is authorized to issue an unlimited number
of shares of beneficial interest. The Trust shall be of unlimited duration
subject to the provisions in the Declaration of Trust concerning termination by
action of the shareholders or the Trustees.
The Declaration of Trust provides that no Trustee, officer, employee or
agent of the Fund is liable to the Fund or to a shareholder, nor is any Trustee,
officer, employee or agent liable to any third persons in connection with the
affairs of the Fund, except as such liability may arise from his own bad faith,
willful misfeasance, gross negligence, or reckless disregard of his duties. It
also provides that all third persons shall look solely to the Fund's property
for satisfaction of claims arising in connection with the affairs of the Fund.
With the exceptions stated, the Declaration of Trust provides that a Trustee,
officer, employee or agent is entitled to be indemnified against all liabilities
in connection with the affairs of the Fund.
CUSTODIAN AND TRANSFER AGENT
- --------------------------------------------------------------------------------
The Bank of New York, 110 Washington Street, New York, New York, 10286 is
the Custodian of the Fund's assets. Any of the Fund's cash balances in excess of
$100,000 are unprotected by federal deposit insurance. Such balances may, at
times, be substantial.
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 is the Transfer Agent of the Fund's shares and Dividend
Disbursing Agent for payment of dividends and distributions on Fund shares and
Agent for shareholders under various investment plans described herein. Dean
Witter Trust Company is an affiliate of Dean Witter InterCapital Inc., the
Fund's Investment Manager, and Dean Witter Distributors Inc., the Fund's
Distributor. As Transfer Agent and Dividend Disbursing Agent, Dean Witter Trust
Company's responsibilities include maintaining shareholder accounts; disbursing
cash dividends and reinvesting dividends; processing account registration
changes; handling purchase and redemption transactions; mailing prospectuses and
reports; mailing and tabulating proxies; processing share certificate
transactions; and maintaining shareholder records and lists. For these services
Dean Witter Trust Company receives a per shareholder account fee from the Fund.
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
Price Waterhouse serves as the independent accountants of the Fund. The
independent accountants are responsible for auditing the annual financial
statements of the Fund.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
The Fund will send to shareholders, at least semi-annually, reports showing
the Fund's portfolio and other information. An annual report containing
financial statements audited by independent accountants will be sent to
shareholders each year.
The Fund's fiscal year ends on December 31. The financial statements of the
Fund must be audited at least once a year by independent accountants whose
selection is made annually by the Fund's Board of Trustees.
LEGAL COUNSEL
- --------------------------------------------------------------------------------
Sheldon Curtis, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.
34
<PAGE>
EXPERTS
- --------------------------------------------------------------------------------
The financial statements of the Fund included in the Prospectus and
incorporated by reference in the Statement of Additional Information have been
so included and incorporated in reliance on the report of Price Waterhouse,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
REGISTRATION STATEMENT
- --------------------------------------------------------------------------------
This Statement of Additional Information and the Prospectus do not contain
all of the information set forth in the Registration Statement the Fund has
filed with the Securities and Exchange Commission. The complete Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the rules and regulations of the Commission.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Fund for the year ended December 31,
1993, and the report of the independent accountants thereon, are set forth in
the Fund's Prospectus, and are incorporated herein by reference.
35
<PAGE>
APPENDIX
- --------------------------------------------------------------------------------
RATINGS OF INVESTMENTS
MOODY'S INVESTORS SERVICE INC. ("MOODY'S")
MUNICIPAL BOND RATINGS
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa Bonds which are Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger
than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in
the future.
Baa Bonds which are rated Baa are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Bonds rated Aaa, Aa, A and Baa are considered investment grade bonds.
Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times in the future. Uncertainty
of position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca Bonds which are rated Ca present obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
CONDITIONAL RATING: Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals which begin when facilities are completed or (d) payments to which some
other limiting condition attaches. Parenthetical rating denotes probable credit
stature upon completion of construction or elimination of basis of condition.
36
<PAGE>
RATING REFINEMENTS: Moody's may apply numerical modifiers, 1, 2, and 3 in
each generic rating classification from Aa through B in its municipal bond
rating system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and a modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
MUNICIPAL NOTE RATINGS
Moody's ratings for state and municipal note and other short-term loans are
designated Moody's Investment Grade (MIG). MIG 1 denotes best quality and means
there is present strong protection from established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing. MIG 2 denotes high quality and means that margins of protection are
ample although not as large as in MIG 1. MIG 3 denotes favorable quality and
means that all security elements are accounted for but that the undeniable
strength of the previous grades, MIG 1 and MIG 2, is lacking. MIG 4 denotes
adequate quality and means that the protection commonly regarded as required of
an investment security is present and that while the notes are not distinctly or
predominantly speculative, there is specific risk.
VARIABLE RATE DEMAND OBLIGATIONS
A short-term rating, in addition to the Bond or MIG ratings, designated VMIG
may also be assigned to an issue having a demand feature. The assignment of the
VMIG symbol reflects such characteristics as payment upon periodic demand rather
than fixed maturity dates and payment relying on external liquidity. The VMIG
rating criteria are identical to the MIG Criteria discussed above.
COMMERCIAL PAPER RATINGS
Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess of
nine months. These ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations, all
judged to be investment grade, to indicate the relative repayment capacity of
rated issuers: Prime-1, Prime-2, Prime-3.
Issuers rated Prime-1 have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated Prime-3 have
an acceptable capacity for repayment of short-term promissory obligations.
Issuers rated Not Prime do not fall within any of the Prime rating categories.
STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")
MUNICIPAL BOND RATINGS
A Standard & Poor's municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the timely
payment of interest and repayment of principal in accordance with the terms of
the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.
Standard & Poor's does not perform an audit in connection with any rating
and may, on occasion, rely on unaudited financial information. The ratings may
be changed, suspended or withdrawn as a result of changes in, or unavailability
of, such information, or for other reasons.
37
<PAGE>
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-rated
categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than for debt in
higher-rated categories.
Bonds rated AAA, AA, A and BBB are considered investment grade bonds.
BB Debt rated "BB" has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which would
lead to inadequate capacity or willingness to pay interest and repay
principal.
B Debt rated "B" has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC Debt rated "CCC" has a current identifiable vulnerability to default, and
is dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayments of principal. In the event
of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal.
CC The rating "CC" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC" rating.
C The rating "C" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating.
CI The rating "CI" is reserved for income bonds on which no interest is being
paid.
NR Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that Standard & Poor's does not
rate a particular type of obligation as a matter of policy.
Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. "BB" indicates the least degree of
speculation and "C" the highest degree of speculation. While such debt
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing with the
major ratings categories.
The foregoing ratings are sometimes followed by a "p" which indicates that
the rating is provisional. A provisional rating assumes the successful
completion of the project being financed by the bonds being rated and
indicates that payment of debt service requirements is largely or entirely
dependent upon the successful and timely completion of the project. This
rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood or risk of default upon
failure of such completion.
38
<PAGE>
MUNICIPAL NOTE RATINGS
Commencing on July 27, 1984, Standard & Poor's instituted a new rating
category with respect to certain municipal note issues with a maturity of less
than three years. The new note ratings denote the following:
SP-1 denotes a very strong or strong capacity to pay principal and interest.
Issues determined to possess overwhelming safety characteristics are given
a plus (+) designation (SP-1+).
SP-2 denotes a satisfactory capacity to pay principal and interest.
SP-3 denotes a speculative capacity to pay principal and interest.
COMMERCIAL PAPER RATINGS
Standard and Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. The commercial paper rating is not a recommendation to purchase or
sell a security. The ratings are based upon current information furnished by the
issuer or obtained by S&P from other sources it considers reliable. The ratings
may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information. Ratings are graded into group categories,
ranging from "A" for the highest quality obligations to "D" for the lowest.
Ratings are applicable to both taxable and tax-exempt commercial paper. The
categories are as follows:
Issuers assigned A ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the designation
1, 2 and 3 to indicate the relative degree of safety.
A-1 indicates that the degree of safety regarding timely payment is very
strong.
A-2 indicates capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1".
A-3 indicates a satisfactory capacity for timely payment. Obligations carrying
this designation are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.
39
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS
(1) Financial statements and schedules, included
in Prospectus (Part A): Page in
Prospectus
----------
Financial highlights from the period March
20, 1990 through December 31, 1990 and for the
years ended December 31, 1991, 1992 and 1993......... 4
Statement of assets and liabilities at
December 31, 1993.................................... 20
Statement of operations for the year
ended December 31, 1993.............................. 20
Statement of changes in net assets for the years
ended December 31, 1992 and 1993..................... 20
Notes to Financial Statements ....................... 21
Portfolio of Investments at December 31, 1993........ 23
(2) Financial statements included in the Statement of
Additional Information (Part B):
None
(3) Financial statements included in Part C:
None
(b) EXHIBITS:
5. - Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
6.(a) - Form of Distribution Agreement between
Registrant and Dean Witter Distributors Inc.
(b) - Form of Selected Dealer Agreement
1
<PAGE>
8. - Form of Amended and Restated Transfer Agency and
Service Agreement
9. - Form of Services Agreement between Dean Witter
InterCapital Inc. and Dean Witter Services
Company Inc.
11. - Consent of Independent Accountants
15. - Form of Amended and Restated Plan of Distribution
pursuant to Rule 12b-1.
16. - Schedules for Computation of Performance
Quotations
All other exhibits previously filed and incorporated
by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None
Item 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<CAPTION>
(1) (2)
Number of Record Holders
Title of Class At January 12, 1994
-------------- ------------------------
<S> <C>
Shares of Beneficial Interest 2,709
</TABLE>
Item 27. INDEMNIFICATION
Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the Registrant's
trustees, officers, employees and agents is permitted if it is determined that
they acted under the belief that their actions were in or not opposed to the
best interest of the Registrant, and, with respect to any criminal proceeding,
they had reasonable cause to believe their conduct was not unlawful. In
addition, indemnification is permitted only if it is determined that the actions
in question did not render them liable by reason of willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
reckless disregard of their obligations and duties to the Registrant. Trustees,
officers, employees and agents will be indemnified for the expense of litigation
if it is determined that they are entitled to indemnification against any
liability established in such litigation. The Registrant may also advance money
for these expenses provided that they give their undertakings to repay the
Registrant unless their conduct is later determined to permit indemnification.
2
<PAGE>
Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the Registrant
shall be liable for any action or failure to act, except in the case of bad
faith, willful misfeasance, gross negligence or reckless disregard of duties to
the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer, or controlling person of the Registrant
in connection with the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such trustee, officer or controlling person
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act, and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes that it will apply the indemnification
provision of its by-laws in a manner consistent with Release 11330 of the
Securities and Exchange Commission under the Investment Company Act of 1940, so
long as the interpretation of Sections 17(h) and 17(i) of such Act remains in
effect.
Registrant, in conjunction with the Investment Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Investment Manager, maintains insurance on behalf of any person who is or was a
Trustee, officer, employee, or agent of Registrant, or who is or was serving at
the request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for which
Registrant itself is not permitted to indemnify him.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "The Fund and Its Management" in the Prospectus regarding the
3
<PAGE>
business of the investment adviser. The following information is given
regarding officers of Dean Witter InterCapital Inc. Information regarding the
other officers of InterCapital is included in Item 29(b) below. The term "Dean
Witter Funds" used below refers to the following Funds: (1) InterCapital Income
Securities Inc., (2) High Income Advantage Trust, (3) High Income Advantage
Trust II, (4) High Income Advantage Trust III, (5) Municipal Income Trust, (6)
Municipal Income Trust II, (7) Municipal Income Trust III, (8) Dean Witter
Government Income Trust, (9) Municipal Premium Income Trust, (10) Municipal
Income Opportunities Trust, (11) Municipal Income Opportunities Trust II, (12)
Municipal Income Opportunities Trust III, (13) Prime Income Trust, (14)
InterCapital Insured Municipal Bond Trust, (15) InterCapital Quality Municipal
Income Trust, (16) InterCapital Quality Municipal Investment Trust, (17)
InterCapital Insured Municipal Income Trust, (18) InterCapital California
Insured Municipal Income Trust, (19) InterCapital Insured Municipal Trust, (20)
InterCapital Quality Municipal Securities (21) InterCapital New York Quality
Municipal Securities, and (22) InterCapital California Municipal Securities,
registered closed-end investment companies, and (1) Dean Witter Equity Income
Trust, (2) Dean Witter Tax-Exempt Securities Trust, (3) Dean Witter Tax-Free
Daily Income Trust, (4) Dean Witter Dividend Growth Securities Inc., (5) Dean
Witter Convertible Securities Trust, (6) Dean Witter Liquid Asset Fund Inc., (7)
Dean Witter Developing Growth Securities Trust, (8) Dean Witter Retirement
Series, (9) Dean Witter Federal Securities Trust, (10) Dean Witter World Wide
Investment Trust, (11) Dean Witter U.S. Government Securities Trust, (12) Dean
Witter Select Municipal Reinvestment Fund, (13) Dean Witter High Yield
Securities Inc., (14) Dean Witter Intermediate Income Securities, (15) Dean
Witter New York Tax-Free Income Fund, (16) Dean Witter California Tax-Free
Income Fund, (17) Dean Witter Health Sciences Trust, (18) Dean Witter California
Tax-Free Daily Income Trust, (19) Dean Witter Managed Assets Trust, (20) Dean
Witter American Value Fund, (21) Dean Witter Strategist Fund, (22) Dean Witter
Utilities Fund, (23) Dean Witter World Wide Income Trust, (24) Dean Witter New
York Municipal Money Market Trust, (25) Dean Witter Capital Growth Securities,
(26) Dean Witter Precious Metals and Minerals Trust, (27) Dean Witter European
Growth Fund Inc., (28) Dean Witter Global Short-Term Income Fund Inc., (29) Dean
Witter Pacific Growth Fund Inc., (30) Dean Witter Multi-State Municipal Series
Trust, (31) Dean Witter Premier Income Trust, (32) Dean Witter Short-Term U.S.
Treasury Trust, (33) Dean Witter Diversified Income Trust, (34) Dean Witter U.S.
Government Money Market Trust, (35) Dean Witter Global Dividend Growth
Securities, (36) Active Assets California Tax-Free Trust, (37) Dean Witter
Natural Resource Development Securities Inc., (38) Active Assets Government
Securities Trust, (39) Active Assets Money Trust, (40) Active Assets Tax-Free
Trust, (41) Dean Witter Limited Term Municipal Trust, (42) Dean Witter Variable
Investment Series, (43) Dean Witter Value-Added Market Series and
4
<PAGE>
(44) Dean Witter Short-Term Bond Fund, registered open-end investment companies.
InterCapital is a wholly-owned subsidiary of Dean Witter, Discover & Co. The
principal address of the Dean Witter Funds is Two World Trade Center, New York,
New York 10048. The term "TCW/DW Funds" refers to the following Funds: (1)
TCW/DW Core Equity Trust, (2) TCW/DW North American Government Income Trust, (3)
TCW/DW Latin American Growth Fund, (4) TCW/DW Income and Growth Fund, (5) TCW/DW
Small Cap Growth Fund, (6) TCW/DW Balanced Fund, registered open-end investment
companies and (7) TCW/DW Term Trust 2000, (8) TCW/DW Term Trust 2002 and (9)
TCW/DW Term Trust 2003, registered closed-end investment companies.
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Charles A. Chairman, Chief Executive Vice
Fiumefreddo Executive Officer President and Director
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");
Chairman, Chief Executive Officer
and Director of Dean Witter
Distributors Inc. ("Distributors")
and Dean Witter Services
Company Inc. ("DWSC");
Formerly Executive Vice President
and Director of Dean Witter,
Discover & Co. ("DWDC"); Director
and/or officer of DWDC
subsidiaries.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Philip J. Director Chairman, Chief
Purcell Executive Officer and
Director of DWDC and
DWR; Director of
DWSC and Distributors.
Richard M. Director President and Chief
DeMartini Operating Officer of
Dean Witter Capital
and Director of DWDC,
DWR, DWSC and
Distributors.
James F. Director President and Chief
Higgins Operating Officer of
Dean Witter Financial;
Director of DWDC, DWR,
DWSC and Distributors.
Thomas C. Executive Vice Executive Vice
Schneider President, Chief President, Chief
Financial Officer Financial Officer
and Director and Director of
DWDC, DWR, DWSC
and Distributors.
Christine A. Director Executive Vice
Edwards President, Secretary,
General Counsel and
Director of DWDC, DWR,
DWSC and Distributors.
Robert M. Scanlan President and Vice President of
Chief Operating the Dean Witter Funds
Officer and the TCW/DW Funds;
President of DWSC;
Executive Vice
President of
Distributors;
Executive Vice
President and
Director of DWTC.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
David A. Hughey Executive Vice Vice President of the
President and Dean Witter Funds and
Chief Administrative the TCW/DW Funds;
Officer Executive Vice
President, Chief
Administrative Officer
and Director of DWTC;
Executive Vice
President and Chief
Administrative Officer
of DWSC and
Distributors.
Edmund C. Executive Vice Vice President of the
Puckhaber President Dean Witter Funds.
John Van Heuvelen Executive Vice President and Chief
President Executive Officer of
DWTC.
Sheldon Curtis Senior Vice Vice President,
President, Secretary and
General Counsel General Counsel of the
and Secretary Dean Witter Funds and the TCW/DW
Funds; Senior Vice President
and Secretary of
DWTC; Assistant
Secretary of DWR and
DWDC; Senior Vice
President, General
Counsel and Secretary
of DWSC; Senior Vice
President, Assistant
General Counsel and
Assistant Secretary of
Distributors.
Peter M. Avelar Senior Vice Vice President of
President various Dean Witter
Funds.
Mark Bavoso Senior Vice Vice President of
President Various Dean Witter
Funds
Thomas H. Connelly Senior Vice Vice President of
President various Dean Witter
Funds.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Edward Gaylor Senior Vice Vice President of
President various Dean Witter Funds.
Rajesh K. Gupta Senior Vice Vice President of
President various Dean Witter
Funds.
Kenton J. Senior Vice Vice President of
Hinchliffe President various Dean Witter
Funds.
John B. Kemp, III Senior Vice Director of the
President Provident Savings
Bank, Jersey City,
New Jersey.
Anita Kolleeny Senior Vice Vice President of
President various Dean Witter
Funds.
Jonathan R. Page Senior Vice Vice President of
President various Dean Witter
Funds.
Ira Ross Senior Vice Vice President of
President various Dean Witter
Funds.
Rochelle G. Siegel Senior Vice Vice President of
President various Dean Witter
Funds.
Paul D. Vance Senior Vice Vice President of
President various Dean Witter
Funds.
Elizabeth A. Senior Vice
Vetell President
James F. Willison Senior Vice Vice President of
President various Dean Witter
Funds.
Ronald Worobel Senior Vice Vice President of
President various Dean Witter
Funds.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Thomas F. Caloia First Vice Treasurer of the
President and Dean Witter Funds
Assistant Treasurer and the TCW/DW Funds;
First Vice President
and Assistant Treasury
of DWSC; Assistant
Treasurer of
Distributors.
Barry Fink First Vice Assistant Secretary
President of the Dean Witter
Funds and TCW/DW
Funds; First Vice
President and
Assistant Secretary of
DWSC.
Michael First Vice First Vice President
Interrante President and and Controller of
Controller DWSC; Assistant
Treasurer of
Distributors.
Robert Zimmerman First Vice
President
Joseph Arcieri Vice President
Douglas Brown Vice President
Rosalie Clough Vice President
B. Catherine Vice President
Connelly
Marilyn K. Cranney Vice President Assistant Secretary
and Assistant of the Dean Witter
Secretary Funds and the TCW/DW
Funds; Vice President
and Assistant
Secretary of DWSC;
Assistant
Secretary of DWR and
DWDC.
Salvatore DeSteno Vice President Vice President of DWSC.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Dwight Doolan Vice President
Bruce Dunn Vice President
Geoffrey D. Flynn Vice President Vice President of
DWSC.
Bette Freedman Vice President
Deborah Genovese Vice President
Peter W. Gurman Vice President
Shant Harootunian Vice President
John Hechtlinger Vice President
David Johnson Vice President
Christopher Jones Vice President
Stanley Kapica Vice President
Paula LaCosta Vice President Vice President of
various Dean Witter
Funds.
Lawrence S. Lafer Vice President Assistant Secretary
and Assistant of the Dean Witter
Secretary Funds and the TCW/DW
Funds; Vice President
and Assistant
Secretary of DWSC.
Thomas Lawlor Vice President
Lou Anne D. McInnis Vice President Assistant Secretary
and Assistant of the Dean Witter
Secretary Funds and the TCW/DW
Funds; Vice President
and Assistant
Secretary of DWSC.
James Mulcahy Vice President
James Nash Vice President
Hugh Rose Vice President
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- -----------------------
<S> <C> <C>
Ruth Rossi Vice President Assistant Secretary
and Assistant of the Dean Witter
Secretary Funds and the TCW/DW
Funds; Vice President
and Assistant
Secretary of DWSC.
Howard A. Schloss Vice President
Rose Simpson Vice President
Diane Lisa Sobin Vice President Vice President of
various Dean Witter
Funds.
Kathleen Stromberg Vice President Vice President of
various Dean Witter
Funds.
Vinh Q. Tran Vice President Vice President of
various Dean Witter
Funds.
Alice Weiss Vice President Vice President of
Various Dean Witter
Funds
Marianne Zalys Vice President
</TABLE>
Item 29. PRINCIPAL UNDERWRITERS
(a) Dean Witter Distributors Inc. ("Distributors"), a Delaware corporation, is
the principal underwriter of the Registrant. Distributors is also the principal
underwriter of the following investment companies:
(1) Dean Witter Liquid Asset Fund Inc.
(2) Dean Witter Tax-Free Daily Income Trust
(3) Dean Witter California Tax-Free Daily Income Trust
(4) Dean Witter Retirement Series
(5) Dean Witter Dividend Growth Securities Inc.
(6) Dean Witter Natural Resource Development Securities Inc.
(7) Dean Witter World Wide Investment Trust
(8) Dean Witter Capital Growth Securities
(9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
11
<PAGE>
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Equity Income Trust
(15) Dean Witter Federal Securities Trust
(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Managed Assets Trust
(22) Dean Witter Limited Term Municipal Trust
(23) Dean Witter World Wide Income Trust
(24) Dean Witter Utilities Fund
(25) Dean Witter Strategist Fund
(26) Dean Witter New York Municipal Money Market Trust
(27) Dean Witter Intermediate Income Securities
(28) Prime Income Trust
(29) Dean Witter European Growth Fund Inc.
(30) Dean Witter Developing Growth Securities Trust
(31) Dean Witter Precious Metals and Minerals Trust
(32) Dean Witter Pacific Growth Fund Inc.
(33) Dean Witter Multi-State Municipal Series Trust
(34) Dean Witter Premier Income Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
(38) Dean Witter Global Dividend Growth Securities
(39) Dean Witter American Value Fund
40) Dean Witter U.S. Government Money Market Trust
(41) Dean Witter Global Short-Term Income Fund Inc.
(42) Dean Witter Variable Investment Series
(43) Dean Witter Value-Added Market Series
(44) Dean Witter Short-Term Bond Fund
(1) TCW/DW Core Equity Trust
(2) TCW/DW North American Government Income Trust
(3) TCW/DW Latin American Growth Fund
(4) TCW/DW Income and Growth Fund
(5) TCW/DW Small Cap Growth Fund
(6) TCW/DW Balanced Fund
(b) The following information is given regarding directors and officers of
Distributors not listed in Item 28 above. The principal address of Distributors
is Two World Trade Center, New York, New York 10048. None of the following
persons has any position or office with the Registrant.
<TABLE>
<CAPTION>
Positions and
Office with
Name Distributors
- ---- -------------
<S> <C>
Fredrick K. Kubler Senior Vice President, Assistant
Secretary and Chief Compliance
Officer.
Michael T. Gregg Vice President and Assistant
Secretary.
Edward C. Oelsner III Vice President of Distributors.
Samuel Wolcott III Vice President of Distributors.
</TABLE>
12
<PAGE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained by the Investment Manager at its offices, except records relating to
holders of shares issued by the Registrant, which are maintained by the
Registrant's Transfer Agent, at its place of business as shown in the
prospectus.
Item 31. MANAGEMENT SERVICES
Registrant is not a party to any such management-related service
contract.
Item
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York and State of
New York on the 16th day of February, 1994.
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
By /s/ Sheldon Curtis
__________________________________
Sheldon Curtis
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 5 has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
(1) Principal Executive Officer President, Chief
Executive Officer,
Trustee and Chairman
By /s/ Charles A. Fiumefreddo 02/16/94
----------------------------
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By /s/ Thomas F. Caloia 02/16/94
----------------------------
Thomas F. Caloia
(3) Majority of the Trustees
Charles A. Fiumefreddo (Chairman)
Edward R. Telling
By /s/ Sheldon Curtis 02/16/94
----------------------------
Sheldon Curtis
Attorney-in-Fact
Jack F. Bennett Paul Kolton
John R. Haire Michael E. Nugent
John E. Jeuck Albert T. Sommers
Manuel H. Johnson Edwin J. Garn
By /s/ David M. Butowsky 02/16/94
----------------------------
David M. Butowsky
Attorney-in-Fact
</TABLE>
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ---------- -----------
<S> <C>
5. - Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
6.(a) - Form of Distribution Agreement between Registrant and
Dean Witter Distributors Inc.
(b) - Form of Selected Dealer Agreement
8. - Form of Amended and Restated Transfer Agency and
Service Agreement
9. - Form of Services Agreement between Dean Witter
InterCapital Inc. and Dean Witter Services
Company Inc.
11. - Consent of Independent Accountants
15. - Form of Amended and Restated Plan of Distribution
pursuant to Rule 12b-1.
16. - Schedules for Computation of Performance
Quotations
</TABLE>
<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 30th day of June, 1993 by and between Dean Witter
New York Municipal Money Market Trust, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
called the "Fund"), and Dean Witter InterCapital Inc., a Delaware corporation
(hereinafter called the "Investment Manager"):
WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser; and
WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, The Investment Manager desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities markets and securities 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 to be purchased, sold or otherwise disposed of by the
Fund and the timing of such purchases, sales and dispositions; and shall take
such further action, including the placing of purchase and sale orders on behalf
of the Fund, as the Investment Manager shall deem necessary or appropriate. The
Investment Manager shall also furnish to or place at the disposal of the Fund
such of the information, evaluations, analyses and opinions formulated or
obtained by the Investment Manager in the discharge of its duties as the Fund
may, from time to time, reasonably request.
2. The Investment Manager shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Manager shall be deemed to
include persons employed or otherwise retained by the Investment Manager to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Manager may
desire. The Investment Manager shall, as agent for the Fund, maintain the Fund's
records and books of account (other than those maintained by the Fund's transfer
agent, registrar, custodian and other agents). All such books and records so
maintained shall be the property of the Fund and, upon request therefor, the
Investment Manager shall surrender to the Fund such of the books and records so
requested.
3. The Fund will, from time to time, furnish or otherwise make available to
the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Manager may reasonably require in order to discharge its duties and obligations
hereunder.
4. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement,
and shall, at its own expense, pay the compensation of the officers and
employees, if any, of the Fund, and provide such office space and equipment and
such clerical and bookkeeping services as the Fund shall reasonably require in
the conduct of its business, including the pricing of Fund shares, and
preparation of prospectuses, proxy statements and reports required
<PAGE>
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). The Investment
Manager shall also bear the cost of telephone service, heat, light, power and
other utilities provided to the Fund, and the cost of printing (in excess of
costs borne by the Fund) and distributing prospectuses and supplements thereto
of the Fund used for sales purposes.
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 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 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 share certificates representing
shares of the Fund; all costs and expenses in connection with the registration
and maintenance of registration of the Fund and its shares with the Securities
and Exchange Commission and various states and other jurisdictions (including
filing fees and legal fees and disbursements of counsel); the cost and expense
of printing (including typesetting) and distributing prospectuses of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders and prospective 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 legal counsel and independent accountants in connection with any
matter relating to the Fund (not including compensation or expenses of attorneys
employed by the Investment Manager); membership dues of the Investment Company
Institute; interest payable on Fund borrowings; postage; insurance premiums on
property or personnel (including officers and Trustees) of the Fund which inure
to its benefit; extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the Investment
Manager monthly compensation determined by applying the following annual rates
to the Fund's daily net assets: 0.50% of the portion of the daily net assets not
exceeding $500 million; 0.425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.375% of the portion of the daily
net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the
portion of the daily net assets exceeding $1 billion but not exceeding $1.5
billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion
but not exceeding $2 billion; 0.30% of the portion of the daily net assets
exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and
0.25% of the portion of the daily net assets exceeding $3 billion. Except as
hereinafter set forth, compensation under this Agreement shall be calculated and
accrued daily and the amounts of the daily accruals shall be paid monthly. Such
calculations shall be made by applying 1/365ths of the annual rates to the
Fund's net assets each day determined as of the close of business on that day or
the last previous business day. If this Agreement becomes effective subsequent
to the first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Subject to the provisions of paragraph 7 hereof, payment of the
Investment Manager's compensation for the preceding month shall be made as
promptly as possible after completion of the computation contemplated by
paragraph 7 hereof.
7. In the event the operating expenses of the Fund, including amounts
payable to the Investment Manager pursuant to paragraph 6 hereof, for any fiscal
year ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Manager shall reduce its management fee to the extent of
such excess and, if required, pursuant to any such laws or regulations, will
reimburse the Fund for annual operating expenses in excess of any expense
limitation that
2
<PAGE>
may be applicable; provided, however, there shall be excluded from such expenses
the amount of any interest, taxes, brokerage commissions and extraordinary
expenses (to the extent permitted by state securities laws or regulations
thereunder) paid or payable by the Fund. Such reduction, if any, shall be
computed and accrued daily, shall be settled on a monthly basis, and shall be
based upon the expense limitation applicable to the Fund as at the end of the
last business day of the month. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Investment Manager's
fee shall be applicable.
For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt of fixed income securities in the Fund's
portfolio accrued to and including the last day of the Fund's fiscal year, and
dividends declared but not paid on any 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 sales of securities.
8. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund or
any of its investors for any error of judgment or mistake of law or for any act
or omission by the Investment Manager or for any losses sustained by the Fund or
its investors.
9. Nothing contained in this Agreement shall prevent the Investment Manager
or any affiliated person of the Investment Manager from acting as investment
adviser or manager for any other person, firm or corporation and shall not in
any way bind or restrict the Investment Manager or any such affiliated person
from buying, selling or trading any securities or commodities for their own
accounts or for the account of others for whom they may be acting. Nothing in
this Agreement shall limit or restrict the right of any director, officer or
employee of the Investment Manager to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business whether of a similar or dissimilar nature.
10. This Agreement shall remain in effect until April 30, 1994 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 Manager, either by majority vote of the Board of
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 (within the meaning of the Act) unless such automatic
termination shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Investment Manager may terminate this Agreement
without payment of penalty on thirty days' written notice to the Fund. Any
notice under this Agreement shall be given in writing, addressed and delivered,
or mailed post-paid, to the other party at the principal office of such party.
11. This Agreement may be amended by the parties without the vote or consent
of shareholders of the Fund to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, or if they
deem it necessary to conform this Agreement to the requirements of applicable
federal laws or regulations, but neither the Fund nor the Investment Manager
shall be liable for failing to do so.
12. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
13. The Investment Manager and the Fund each agree that the name "Dean
Witter," which comprises a component of the Fund's name, is a property right of
Dean Witter Reynolds Inc. The Fund agrees and consents that (i) it will only use
the name "Dean Witter" as a component of its name and for no other purpose, (ii)
it will
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<PAGE>
not purport to grant to any third party the right to use the name "Dean Witter"
for any purpose, (iii) the Investment Manager or its parent, Dean Witter
Reynolds Inc., or any corporate affiliate of the Investment Manager's parent,
may use or grant to others the right to use the name "Dean Witter," or any
combination or abbreviation thereof, as all or a portion of a corporate or
business name or for any commercial purpose, including a grant of such right to
any other investment company, (iv) at the request of the Investment Manager or
its parent, the Fund will take such action as may be required to provide its
consent to the use of the name "Dean Witter," or any combination or abbreviation
thereof, by the Investment Manager or its parent or any corporate affiliate of
the Investment Manager's parent, or by any person to whom the Investment Manager
or its parent or any corporate affiliate of the Investment Manager's parent
shall have granted the right to such use, and (v) upon the termination of any
investment advisory agreement into which the Investment Manager and the Fund may
enter, or upon termination of affiliation of the Investment Manager with its
parent, the Fund shall, upon request by the Investment Manager or its parent,
cease to use the name "Dean Witter" as a component of its name, and shall not
use the name, or any combination or abbreviation thereof, as a part of its name
or for any other commercial purpose, and shall cause its officers, Trustees and
shareholders to take any and all actions which the Investment Manager or its
parent may request to effect the foregoing and to reconvey to the Investment
Manager or its parent any and all rights to such name.
14. The Declaration of Trust establishing Dean Witter New York Municipal
Money Market Trust, dated December 28, 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 Dean
Witter New York Municipal Money Market Trust refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of Dean Witter New York
Municipal Money Market Trust shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim or otherwise, in connection with the affairs of said Dean Witter New
York Municipal Money Market Trust, but the Trust Estate only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in New York, New York.
<TABLE>
<S> <C>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET
TRUST
By
.................................................................
Attest:
...............................................................
DEAN WITTER INTERCAPITAL INC.
By
.................................................................
Attest:
...............................................................
</TABLE>
4
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 30th day of June, 1993 between Dean Witter New
York Municipal Money Market Trust, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (the "Fund"), and Dean
Witter Distributors Inc., a Delaware corporation (the "Distributor");
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a non-diversified open-end investment company
and it is in the interest of the Fund to offer its shares for sale
continuously, and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Fund's transferable
shares of beneficial interest, of $.01 par value (the "Shares"), in order to
promote the growth of the Fund and facilitate the distribution of its Shares.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. APPOINTMENT OF THE DISTRIBUTOR. (a) The Fund hereby appoints the
Distributor as the principal underwriter of the Fund to sell Shares to the
public on the terms set forth in this Agreement and the Fund's Prospectus
(defined below) and the Distributor hereby accepts such appointment and agrees
to act hereunder. The Fund, during the term of this Agreement, shall sell Shares
to the Distributor upon the terms and conditions set forth herein.
(b) The Distributor agrees to purchase Shares, as principal for its own
account, from the Fund and to sell Shares as principal to investors and
securities dealers, including Dean Witter Reynolds Inc. ("DWR"), an affiliate of
the Distributor, upon the terms described herein and in the Fund's prospectus
(the "Prospectus") and statement of additional information included in the
Fund's registration statement (the "Registration Statement") most recently filed
from time to time with the Securities and Exchange Commission (the "SEC") and
effective under the Securities Act of 1933, as amended (the "1933 Act") and 1940
Act or as said Prospectus may be otherwise amended or supplemented and filed
with the SEC pursuant to Rule 497 under the 1933 Act.
SECTION 2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the
exclusive principal underwriter and distributor of the Fund, except that the
exclusive rights granted to the Distributor to sell the Shares shall not apply
to Shares issued by the Fund: (i) in connection with the merger or consolidation
of any other investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all) the assets or
the outstanding shares of any such company by the Fund; or (ii) pursuant to
reinvestment of dividends or capital gains distributions; or (iii) pursuant to
the reinstatement privilege afforded redeeming shareholders.
SECTION 3. PURCHASE OF SHARES FROM THE FUND. (a) The Distributor shall have
the right to buy from the Fund the Shares needed, but not more than the Shares
needed (except for clerical errors in transmission), to fill unconditional
orders for Shares placed with the Distributor by investors and securities
dealers. The price which the Distributor shall pay for the Shares so purchased
from the Fund shall be the net asset value, determined as set forth in the
Prospectus.
(b) The Shares are to be resold by the Distributor at the net asset value
per share, as set forth in the Prospectus, to investors or to securities
dealers, including DWR, having selected dealer agreements with the Distributor
pursuant to Section 7 ("Selected Dealers").
(c) The Fund shall have the right to suspend the sale of the Shares at
times when redemption is suspended pursuant to the conditions set forth in
Section 4(d) hereof. The Fund shall also have the right to suspend the sale of
the Shares if trading on the New York Stock Exchange shall have been suspended,
if a banking moratorium shall have been declared by federal or New York
authorities, or if there shall have been some other extraordinary event which,
in the judgment of the Fund, makes it impracticable to sell the Shares.
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<PAGE>
(d) The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Shares received by the
Distributor. Any order may be rejected by the Fund; provided, however, that the
Fund will not arbitrarily or without reasonable cause refuse to accept orders
for the purchase of Shares. The Distributor will confirm orders upon their
receipt, and the Fund (or its agent) upon receipt of payment therefor and
instructions will deliver share certificates for such Shares or a statement
confirming the issuance of Shares. Payment shall be made to the Fund in New York
Clearing House funds. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).
With respect to Shares sold by any Selected Dealer, the Distributor is
authorized to direct the Fund's transfer agent to receive instructions directly
from the Selected Dealer on behalf of the Distributor as to registration of
Shares in the names of investors and to confirm issuance of the Shares to such
investors. The Distributor is also authorized to instruct the transfer agent to
receive payment directly from the Selected Dealer on behalf of the Distributor,
for prompt transmittal to the Fund's custodian, of the purchase price of the
Shares. In such event the Distributor shall obtain from the Selected Dealer and
maintain a record of such registration instructions and payments.
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES. (a) Any of the outstanding
Shares may be tendered for redemption at any time, and the Fund agrees to redeem
the Shares so tendered in accordance with the applicable provisions set forth in
the Prospectus. The price to be paid to redeem the Shares shall be equal to the
net asset value determined as set forth in the Prospectus. All payments by the
Fund hereunder shall be made in the manner set forth below.
The proceeds of any redemption of Shares shall be paid by the Fund to the
redeeming shareholders, in each case in accordance with applicable provisions of
the Prospectus in New York Clearing House funds.
(b) The Distributor is authorized, as agent for the Fund, to repurchase
Shares, represented by a share certificate which is delivered to any office of
the Distributor in accordance with applicable provisions set forth in the
Prospectus. The Distributor shall promptly transmit to the transfer agent of the
Fund for redemption all Shares so delivered. The Distributor shall be
responsible for the accuracy of instructions transmitted to the Fund's transfer
agent in connection with all such repurchases.
(c) The Distributor is authorized, as agent for the Fund, to repurchase
Shares held in a shareholder's account with the Fund for which no share
certificate has been issued, upon the telephonic or telegraphic request of the
shareholder, or at the discretion of the Distributor. The Distributor shall
promptly transmit to the transfer agent of the Fund, for redemption, all such
orders for repurchase of Shares. Payment for Shares repurchased may be made by
the Fund to the Distributor for the account of the shareholder. The Distributor
shall be responsible for the accuracy of instructions transmitted to the Fund's
transfer agent in connection with all such repurchases.
With respect to Shares tendered for redemption or repurchase by any
Selected Dealer on behalf of its customers, the Distributor is authorized to
instruct the transfer agent of the Fund to accept orders for redemption or
repurchase directly from the Selected Dealer on behalf of the Distributor and to
instruct the Fund to transmit payments for such redemptions and repurchases
directly to the Selected Dealer on behalf of the Distributor for the account of
the shareholder. The Distributor shall obtain from the Selected Dealer and
maintain a record of such orders. The Distributor is further authorized to
obtain from the Fund and shall maintain, a record of payments made directly to
the Selected Dealer on behalf of the Distributor.
(d) Redemption of Shares or payment by the Fund may be suspended at times
when the New York Stock Exchange is closed, when trading on said Exchange is
restricted, when an emergency exists as a result of which disposal by the Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or
during any other period when the SEC, by order, so permits.
2
<PAGE>
SECTION 5. DUTIES OF THE FUND. (a) The Fund shall furnish to the
Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of the Shares, including one certified copy, upon request by the
Distributor, of all financial statements prepared by the Fund and examined by
independent accountants. The Fund shall, at the expense of the Distributor, make
available to the Distributor such number of copies of the prospectus as the
Distributor shall reasonably request.
(b) The Fund shall take, from time to time, but subject to the necessary
approval of its shareholders, all necessary action to register Shares under the
1933 Act, to the end that there will be available for sale such number of Shares
as investors may reasonably be expected to purchase.
(c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 8(c) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund. The
Distributor shall furnish such information and other material relating to its
affairs and activities as may be required by the Fund in connection with such
qualification.
(d) The Fund shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Fund.
SECTION 6. DUTIES OF THE DISTRIBUTOR. (a) The Distributor shall sell Shares
of the Fund through DWR and may sell Shares through other securities dealers and
its own Account Executives and shall devote reasonable time and effort to
promote sales of Shares, but shall not be obligated to sell any specific number
of Shares. The services of the Distributor hereunder are not exclusive and it is
understood that the Distributor acts as principal underwriter for other
registered investment companies and intends to do so in the future. It is also
understood that Selected Dealers, including DWR, may also sell shares for other
registered investment companies.
(b) The Distributor and any Selected Dealers and any Selected Dealers shall
not give any information or make any representations, other than those contained
in the Registration Statement or related Prospectus and any sales literature
specifically approved by the Fund.
(c) The Distributor agrees that it will comply with the terms and
limitations of the Rules of Fair Practice of the National Association of
Security Dealers, Inc. (NASD).
SECTION 7. SELECTED DEALERS AGREEMENTS. (a) The Distributor shall have the
right to enter into selected dealers agreements with Selected Dealers for the
sale of Shares. In making agreements with Selected Dealers, the Distributor
shall act only as principal and not as agent for the Fund. Shares sold to
Selected Dealers shall be for resale by such dealers only at the public offering
price set forth in the Prospectus.
(b) Within the United States, the Distributor shall offer and sell Shares
only to Selected Dealers that are members in good standing of the NASD.
(c) The Distributor shall adopt and follow procedures, as approved by the
Fund, for the confirmation of sales of Shares to investors and Selected Dealers,
the collection of amounts payable by investors and Selected Dealers on such
sales, and the cancellation of unsettled transactions, as may be necessary to
comply with the requirements of the NASD, as such requirements may from time to
time exist.
SECTION 8. PAYMENT OF EXPENSES. (a) The Distributor shall bear all expenses
incurred by it in connection with its duties and activities under this Agreement
(except such expenses as are specifically undertaken herein by the Fund). It is
understood and agreed that, so long as the Fund's Plan of Distribution pursuant
to Rule 12b-1 (the "Rule 12b-1 Plan") continues in effect, any expenses incurred
by the Distributor and DWR in connection with the sale of Shares may be paid
from amounts the Distributor and DWR are entitled to receive from the Fund under
such Plan.
(b) The Fund shall bear all costs and expenses of the Fund, including fees
and disbursements of legal counsel including counsel to the Trustees of the Fund
who are not interested persons (as defined in the 1940 Act) of the Fund or the
Distributor, and independent accountants, in connection with the
3
<PAGE>
preparation and filing of any required Registration Statements and Prospectuses
and all amendments and supplements thereto, and the expenses of preparing,
printing, mailing and otherwise distributing prospectuses and statements of
additional information, annual or interim reports or proxy materials to
shareholders.
(c) The Fund shall bear the cost and expenses of qualification of the
Shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United States
or other jurisdictions as shall be selected by the Fund and the Distributor
pursuant to Section 5(c) hereof and the cost and expenses payable to each such
state for continuing qualification therein until the Fund decides to discontinue
such qualification pursuant to Section 5(c) hereof.
SECTION 9. INDEMNIFICATION. (a) The Fund shall indemnify and hold harmless
the Distributor and each person, if any, who controls the Distributor against
any loss, liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith), arising by reason
of any person acquiring any Shares, which may be based upon the 1933 Act, or on
any other statute or at common law, on the ground that the Registration
Statement or related Prospectus as from time to time may be amended and
supplemented, or the annual or interim reports to shareholders of the Fund,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Fund in connection
therewith by or on behalf of the Distributor; provided, however, that in no case
(i) is the indemnity of the Fund in favor of the Distributor and any such
controlling persons to be deemed to protect the Distributor or any such
controlling persons thereof against any liability to the Fund or its security
holders to which the Distributor or any such controlling persons would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement; or (ii) is the Fund to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Distributor or any such controlling persons, unless the
Distributor or such controlling persons, as the case may be, shall have notified
the Fund in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Distributor or such controlling persons (or after the
Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Fund of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Fund will be entitled to participate
at its own expense in the defense or if it so elects, to assume the defense, of
any suit brought to enforce any such liability, but if the Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor or such controlling person or persons, defendant
or defendants in the suit. In the event the Fund elects to assume the defense of
any such suit and retain such counsel, the Distributor or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Fund does
not elect to assume the defense of any such suit, it will reimburse the
Distributor or such controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by them.
The Fund shall promptly notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or trustees in
connection with the issuance or sale of the Shares.
(b) (i) The Distributor shall indemnify and hold harmless the Fund and each
of its trustees and officers and each person, if any, who controls the Fund
against any loss, liability, claim, damage or expense described in the foregoing
indemnity contained in subsection (a) of this Section, but only with respect to
statements or omissions made in reliance upon, and in conformity with,
information furnished to the Fund in writing by or on behalf of the Distributor
for use in connection with the Registration Statement or related Prospectus, as
from time to time may be amended, or the annual or interim reports to
shareholders.
4
<PAGE>
(ii) The Distributor shall idemnify and hold harmless the Fund and Fund's
transfer agent, individually and in its capacity as the Fund's transfer agent,
from and against any claims, damages and liabilities which arise as a result of
actions taken pursuant to instructions from, or on behalf of the Distributor to:
(1) redeem all or a part of shareholder accounts in the Fund pursuant to
subsection 4(c) hereof and pay the proceeds to the Distributor for the account
of each shareholder whose Shares are so redeemed; and (2) register Shares in the
names of investors, confirm the issuance thereof and receive payment therefor
pursuant to subsection 3(e).
(iii) In case any action shall be brought against the Fund or any person so
indemnified by this subsection 9(b) in respect of which indemnity may be sought
against the Distributor, the Distributor shall have the rights and duties given
to the Fund, and the Fund and each person so indemnified shall have the rights
and duties given to the Distributor by the provisions of subsection (a) of this
Section 9.
(c) If the indemnification provided for in this Section 9 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Fund on the one hand and the Distributor on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Fund on the one hand and
the Distributor on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Fund on the one hand and
the Distributor on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Fund bear to the total compensation received by the Distributor, in each case as
set forth in the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Fund or the Distributor and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Fund and the Distributor agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim.
Notwithstanding the provisions of this subsection (c), the Distributor shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Shares distributed by it to the public were offered to the
public exceeds the amount of any damages which it has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
SECTION 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall become effective as of the date first above written and shall remain in
force until April 30, 1994 and thereafter, but only so long as such continuance
is specifically approved at least annually by (i) the Trustees of the Fund, or
by the vote of a majority of the outstanding voting securities of the Fund, cast
in person or by proxy, and (ii) a majority of those Trustees who are not parties
to this Agreement or interested persons of any such party and who have no direct
or indirect financial interest in this Agreement or in the operation of the
Fund's Rule 12b-1 Plan or in any agreement related thereto, cast in person at a
meeting called for the purpose of voting upon such approval.
5
<PAGE>
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Fund, by a majority of the Trustees of the Fund
who are not interested persons of the Fund and who have no direct or indirect
financial interest in this Agreement or in any agreement related to the Fund's
Rule 12b-1 Plan, or by vote of a majority of the outstanding voting securities
of the Fund, or by the Distributor, on sixty days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interest person", when used in this Agreement, shall have the
respective meanings specified in the 1940 Act.
SECTION 11. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Trustees
of the Fund, or by the vote of a majority of outstanding voting securities of
the Fund, and (ii) a majority of those Trustees of the Fund who are not parties
to this Agreement or interested persons of any such party and who have no direct
or indirect financial interest in this Agreement or in any Agreement related to
the Fund's Rule 12b-1 Plan, cast in person at a meeting called for the purpose
of voting on such approval.
SECTION 12. GOVERNING LAW. This Agreement shall be construed in accordance
with the law of the State of New York and the applicable provisions of the 1940
Act. To the extent that the applicable law of the State of New York, or any of
the provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
SECTION 13. PERSONAL LIABILITY. The Declaration of Trust establishing Dean
Witter New York Municipal Money Market Trust, dated December 28, 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 Dean Witter New York Municipal Money Market Trust, refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of Dean
Witter New York Municipal Money Market Trust shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise, in connection with the
affairs of said Dean Witter New York Municipal Money Market Trust but the Trust
Estate only shall be liable.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year above written in New York, New York.
DEAN WITTER NEW YORK
MUNICIPAL MONEY MARKET TRUST
By:
-----------------------------------
Dean Witter Distributors Inc.
By:
-----------------------------------
6
<PAGE>
DEAN WITTER DISTRIBUTORS INC.
Gentlemen:
Dean Witter Distributors Inc. (the "Distributor") has a distribution
agreement (the "Distribution Agreement") with Dean Witter New York Municipal
Money Market Trust, a Massachusetts business trust (the "Fund"), pursuant to
which it acts as the Distributor for the sale of the Fund's shares of beneficial
interest, par value $0.01 per share (the "Shares"). Under the Distribution
Agreement, the Distributor has the right to distribute Shares for resale.
The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and the Shares being offered to the
public are registered under the Securities Act of 1933, as amended. You have
received a copy of the Distribution Agreement between us and the Fund and
reference is made herein to certain provisions of such Distribution Agreement.
The terms used herein, including "Prospectus" and "Registration Statement" of
the Fund and "Selected Dealer" shall have the same meaning in this Agreement as
in the Distribution Agreement. As principal, we offer to sell shares to your
customers, upon the following terms and conditions:
1. In all sales of Shares to the public you shall act on behalf of your
customers, and in no transaction shall you have any authority to act as agent
for the Fund, for us or for any Selected Dealer.
2. Orders received from you will be accepted through us or on our behalf
only at the net asset value applicable to each order, as set forth in the
current Prospectus. The procedure relating to the handling of orders shall be
subject to instructions which we or the Fund shall forward from time to time to
you. All orders are subject to acceptance or rejection by the Distributor or the
Fund in the sole discretion of either.
3. You shall not place orders for any Shares unless you have already
received purchase orders for such Shares at the applicable net asset values and
subject to the terms hereof and of the Distribution Agreement and the
Prospectus. You agree that you will not offer or sell any of the Shares except
under circumstances that will result in compliance with the applicable Federal
and state securities laws and that in connection with sales and offers to sell
Shares you will furnish to each person to whom any such sale or offer is made a
copy of the Prospectus (as then amended or supplemented) and will not furnish to
any person any information relating to the Shares, which is inconsistent in any
respect with the information contained in the Prospectus (as then amended or
supplemented) or cause any advertisement to be published by radio or television
or in any newspaper or posted in any public place or use any sales promotional
material without our consent and the consent of the Fund.
4. The Distributor will compensate you for sales of shares of the Fund and
personal services to Fund shareholders by paying you a sales charge and/or other
commission (which may be in the form of a gross sales credit and/or an annual
residual commission) and/or a service fee, under the terms as are set forth in
the Fund's Prospectus.
5. If any Shares sold to your customers under the terms of this Agreement
are repurchased by us for the account of the Fund or are tendered for redemption
within seven business days after the date of the confirmation of the original
purchase by you, it is agreed that you shall forfeit your right to, and refund
to us, any commission received by you with respect to such Shares.
6. No person is authorized to make any representations concerning the Shares
or the Fund except those contained in the current Prospectus and in such printed
information subsequently issued by us or the Fund as information supplemental to
such Prospectus. In selling Shares, you shall rely solely on the representations
contained in the Prospectus and supplemental information mentioned above. Any
printed information which we furnish you other than the Prospectus and the
Fund's periodic reports and proxy solicitation material are our sole
responsibility and not the responsibility of the Fund, and you agree that the
Fund shall have no liability or responsibility to you in these respects unless
expressly assumed in connection therewith.
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<PAGE>
7. You agree to deliver to each of the purchasers making purchases a copy of
the then current Prospectus at or prior to the time of offering or sale, and you
agree thereafter to deliver to such purchasers copies of the annual and interim
reports and proxy solicitation materials of the Fund. You further agree to
endeavor to obtain proxies from such purchasers. Additional copies of the
Prospectus, annual or interim reports and proxy solicitation materials of the
Fund will be supplied to you in reasonable quantities upon request.
8. You are hereby authorized (i) to place orders directly with the Fund or
its agent for shares of the Fund to be sold by us subject to the applicable
terms and conditions governing the placement of orders for the purchase of Fund
shares, as set forth in the Distribution Agreement, and (ii) to tender shares
directly to the Fund or its agent for redemption subject to the applicable terms
and conditions set forth in the Distribution Agreement.
9. We reserve the right in our discretion, without notice, to suspend sales
or withdraw the offering of Shares entirely. Each party hereto has the right to
cancel this agreement upon notice to the other party.
10. I. You shall indemnify and hold harmless the Distributor, from and
against any claims, damages and liabilities which arise as a result of action
taken pursuant to instructions from you, or on your behalf to: a)(i) place
orders for Shares of the Fund with the Fund's transfer agent or direct the
transfer agent to receive instructions for the order of Shares, and (ii) accept
monies or direct that the transfer agent accept monies as payment for the order
of such Shares, all as contemplated by and in accordance with Section 3 of the
Distribution Agreement; b)(i) place orders for the redemption of Shares of the
Fund with the Fund's transfer agent or direct the transfer agent to receive
instruction for the redemption of Shares and (ii) to pay redemption proceeds or
to direct that the transfer agent pay redemption proceeds in connection with
orders for the redemption of Shares, all as contemplated by and in accordance
with Section 4 of the Distribution Agreement; provided, however, that in no
case, (i) is this indemnity in favor of the Distributor and any such controlling
persons to be deemed to protect the Distributor or any such controlling persons
thereof against any liability to which the Distributor or any such controlling
persons would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement or the Distribution
Agreement; or (ii) are you to be liable under the indemnity agreement contained
in this paragraph with respect to any claim made against the Distributor or any
such controlling persons, unless the Distributor or any such controlling
persons, as the case may be, shall have notified you in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Distributor or such controlling persons (or after the Distributor or such
controlling persons shall have received notice of such service on any designated
agent), but failure to notify you of any such claim shall not relieve you from
any liability which you may have to the person against whom such action is
brought otherwise than on account of the indemnity agreement contained in this
paragraph. You will be entitled to participate at your own expense in the
defense, or, if you so elect, to assume the defense, of any suit brought to
enforce any such liability, but if you elect to assume the defense, such defense
shall be conducted by counsel chosen by you and satisfactory to the Distributor
or such controlling person or persons, defendant or defendants in the suit. In
the event you elect to assume the defense of any such suit and retain such
counsel, the Distributor or such controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case you do not elect to assume the defense of
any such suit, you will reimburse the Distributor or such controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. You shall promptly notify the
Distributor of the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the issuance or sale of the
Shares.
II. If the indemnification provided for in this Section 10 is unavailable or
insufficient to hold harmless the Distributor, as provided above in respect of
any losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to herein, then you shall contribute to the amount paid or
payable by the Distributor as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by you on the one hand and
the
2
<PAGE>
Distributor on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then you shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also your relative fault on the one hand and the relative
fault of the Distributor on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. You and the Distributor agree that it would not be
just and equitable if contribution were determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to above. The amount paid or payable by the Distributor
as a result of the losses, claims, damages, liabilities or expenses (or actions
in respect thereof) referred to above shall be deemed to include any legal or
other expenses reasonably incurred by the Distributor in connection with
investigating or defending any such claim. Notwithstanding the provisions of
this subsection (II), you shall not be required to contribute any amount in
excess of the amount by which the total price at which the Shares distributed by
it to the public were offered to the public exceeds the amount of any damages
which it has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of
1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
11. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the distribution and
redemption of Fund shares. We shall be under no liability to you except for lack
of good faith and for obligations expressly assumed by us herein. Nothing
contained in this paragraph is intended to operate as, and the provisions of
this paragraph shall not in any way whatsoever constitute, a waiver by you of
compliance with any provision of the Securities Act of 1933, as amended, or of
the rules and regulations of the Securities and Exchange Commission issued
thereunder.
12. You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States, we
both hereby agree to abide by the Rules of Fair Practice of such Association.
13. Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states, but we assume no
responsibility or obligation as to your right to sell Shares in any
jurisdiction.
14. All communications to us should be sent to the address shown below. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
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<PAGE>
15. This Agreement shall become effective as of the date of your acceptance
hereof, provided that you return to us promptly a signed and dated copy.
DEAN WITTER DISTRIBUTORS INC.
By ...................................
(Authorized Signature)
Please return one signed copy
of this agreement to:
Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048
Accepted:
Firm Name: ...........................
By: ..................................
Address: .............................
.....................................
Date: ................................
4
<PAGE>
AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
with
DEAN WITTER TRUST COMPANY
DWR
[open-end]
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1 Terms of Appointment; Duties of DWTC. . . . . . . . . . . . 2
Article 2 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 6
Article 3 Representations and Warranties of DWTC. . . . . . . . . . . 7
Article 4 Representations and Warranties of the Fund. . . . . . . . . 8
Article 5 Duty of Care and Indemnification. . . . . . . . . . . . . . 9
Article 6 Documents and Covenants of the Fund and DWTC. . . . . . . . 12
Article 7 Duration and Termination of Agreement . . . . . . . . . . . 16
Article 8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . 16
Article 9 Affiliations. . . . . . . . . . . . . . . . . . . . . . . . 17
Article 10 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 18
Article 11 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . 18
Article 12 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 18
Article 13 Merger of Agreement . . . . . . . . . . . . . . . . . . . . 20
Article 14 Personal Liability. . . . . . . . . . . . . . . . . . . . . 21
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AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the 1st day of August, 1993
by and between each of the Dean Witter Funds listed on the signature pages
hereof, each of such Funds acting severally on its own behalf and not jointly
with any of such other Funds (each such Fund hereinafter referred to as the
"Fund"), each such Fund having its principal office and place of business at Two
World Trade Center, New York, New York, 10048, and DEAN WITTER TRUST COMPANY, a
trust company organized under the laws of New Jersey, having its principal
office and place of business at Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 ("DWTC").
WHEREAS, the Fund desires to appoint DWTC as its transfer agent,
dividend disbursing agent and shareholder servicing agent and DWTC desires to
accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
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<PAGE>
Article 1 TERMS OF APPOINTMENT; DUTIES OF DWTC
1.1 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby employs and appoints DWTC to act as, and DWTC agrees
to act as, the transfer agent for each series and class of shares of the Fund,
whether now or hereafter authorized or issued ("Shares"), dividend disbursing
agent and shareholder servicing agent in connection with any accumulation, open-
account or similar plans provided to the holders of such Shares ("Shareholders")
and set out in the currently effective prospectus and statement of additional
information ("prospectus") of the Fund, including without limitation any
periodic investment plan or periodic withdrawal program.
1.2 DWTC agrees that it will perform the following services:
(a) In accordance with procedures established from time to time
by agreement between the Fund and DWTC, DWTC shall:
(i) Receive for acceptance, orders for the purchase of Shares,
and promptly deliver payment and appropriate documentation therefor to the
custodian of the assets of the Fund (the "Custodian");
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<PAGE>
(ii) Pursuant to purchase orders, issue the appropriate number
of Shares and issue certificates therefor or hold such Shares in book form in
the appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies paid
to it by the Custodian with respect to any redemption, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Calculate any sales charges payable by a Shareholder on
purchases and/or redemptions of Shares of the Fund as such charges may be
reflected in the prospectus;
(viii) Maintain records of account for and advise the Fund and
its Shareholders as to the foregoing; and
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<PAGE>
(ix) Record the issuance of Shares of the Fund and maintain
pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934 ("1934
Act") a record of the total number of Shares of the Fund which are authorized,
based upon data provided to it by the Fund, and issued and outstanding. DWTC
shall also provide to the Fund on a regular basis the total number of Shares
which are authorized, issued and outstanding and shall notify the Fund in case
any proposed issue of Shares by the Fund would result in an overissue. In case
any issue of Shares would result in an overissue, DWTC shall refuse to issue
such Shares and shall not countersign and issue any certificates requested for
such Shares. When recording the issuance of Shares, DWTC shall have no
obligation to take cognizance of any Blue Sky laws relating to the issue of sale
of such Shares, which functions shall be the sole responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in
the above paragraph (a), DWTC shall: (i) perform all of the customary services
of a transfer agent, dividend disbursing agent and, as relevant, shareholder
servicing agent in connection with dividend reinvestment, accumulation, open-
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program), including but not limited to, maintaining
all Shareholder accounts, preparing Shareholder meeting lists,
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<PAGE>
mailing proxies, receiving and tabulating proxies, mailing shareholder reports
and prospectuses to current Shareholders, withholding taxes on U.S. resident and
non-resident alien accounts, preparing and filing appropriate forms required
with respect to dividends and distributions by federal tax authorities for all
Shareholders, preparing and mailing confirmation forms and statements of account
to Shareholders for all purchases and redemptions of Shares and other confirm-
able transactions in Shareholder accounts, preparing and mailing activity
statements for Shareholders and providing Shareholder account information; (ii)
open any and all bank accounts which may be necessary or appropriate in order to
provide the foregoing services; and (iii) provide a system which will enable the
Fund to monitor the total number of Shares sold in each State or other
jurisdiction.
(c) In addition, the Fund shall (i) identify to DWTC in writing
those transactions and assets to be treated as exempt from Blue Sky reporting
for each State and (ii) verify the establishment of transactions for each State
on the system prior to activation and thereafter monitor the daily activity for
each State. The responsibility of DWTC for the Fund's registration status under
the Blue Sky or securities laws of any State or other jurisdiction is solely
limited to the initial establishment of transactions subject to Blue Sky
compliance by the Fund and the reporting of such transactions
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<PAGE>
to the Fund as provided above and as agreed from time to time by the Fund and
DWTC.
(d) DWTC shall provide such additional services and functions
not specifically described herein as may be mutually agreed between DWTC and
the Fund. Procedures applicable to such services may be established from time
to time by agreement between the Fund and DWTC.
Article 2 FEES AND EXPENSES
2.1 For performance by DWTC pursuant to this Agreement, each
Fund agrees to pay DWTC an annual maintenance fee for each Shareholder account
and certain transactional fees, if applicable, as set out in the respective fee
schedule attached hereto as Schedule A. Such fees and out-of-pocket expenses
and advances identified under Section 2.2 below may be changed from time to time
subject to mutual written agreement between the Fund and DWTC.
2.2 In addition to the fees paid under Section 2.1 above, the
Fund agrees to reimburse DWTC in connection with the services rendered by DWTC
hereunder. In addition, any other expenses incurred by DWTC at the request or
with the consent of the Fund will be reimbursed by the Fund.
2.3 The Fund agrees to pay all fees and reimbursable expenses
within a reasonable period of time
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<PAGE>
following the mailing of the respective billing notice. Postage for mailing of
dividends, proxies, Fund reports and other mailings to all Shareholder accounts
shall be advanced to DWTC by the Fund upon request prior to the mailing date of
such materials.
Article 3 REPRESENTATIONS AND WARRANTIES OF DWTC
DWTC represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in
good standing under the laws of New Jersey and it is duly qualified to carry on
its business in New Jersey.
3.2 It is and will remain registered with the U.S. Securities
and Exchange Commission ("SEC") as a Transfer Agent pursuant to the requirements
of Section 17A of the 1934 Act.
3.3 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
-7-
<PAGE>
Article 4 REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to DWTC that:
4.1 It is a corporation duly organized and existing and in good
standing under the laws of Delaware or Maryland or a trust duly organized and
existing and in good standing under the laws of Massachusetts, as the case may
be.
4.2 It is empowered under applicable laws and by its Articles of
Incorporation or Declaration of Trust, as the case may be, and under its By-Laws
to enter into and perform this Agreement.
4.3 All corporate proceedings necessary to authorize it to
enter into and perform this Agreement have been taken.
4.4 It is an investment company registered with the SEC under
the Investment Company Act of 1940, as amended (the "1940 Act").
4.5 A registration statement under the Securities Act of 1933
(the "1933 Act") is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale.
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<PAGE>
Article 5 DUTY OF CARE AND INDEMNIFICATION
5.1 DWTC shall not be responsible for, and the Fund shall
indemnify and hold DWTC harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of DWTC or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by DWTC or its agents or subcontractors of
information, records and documents which (i) are received by DWTC or its agents
or subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund.
(d) The reliance on, or the carrying out by DWTC or its agents or
subcontractors of, any instructions or requests
-9-
<PAGE>
of the Fund.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities or Blue Sky laws of
any State or other jurisdiction that such Shares be registered in such State or
other jurisdiction or in violation of any stop order or other determination or
ruling by any federal agency or any State or other jurisdiction with respect to
the offer or sale of such Shares in such State or other jurisdiction.
5.2 DWTC shall indemnify and hold the Fund harmless from or
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or failure
or omission to act by DWTC as a result of the lack of good faith, negligence or
willful misconduct of DWTC, its officers, employees or agents.
5.3 At any time, DWTC may apply to any officer of the Fund for
instructions, and may consult with legal counsel to the Fund, with respect to
any matter arising in connection with the services to be performed by DWTC under
this Agreement, and DWTC and its agents or subcontractors shall not be liable
and shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. DWTC, its
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<PAGE>
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided to DWTC or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have notice
of any change of authority of any person, until receipt of written notice
thereof from the Fund. DWTC, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signature of the officers of the
Fund, and the proper countersignature of any former transfer agent or registrar,
or of a co-transfer agent or co-registrar.
5.4 In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform or
otherwise from such causes.
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<PAGE>
5.5 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
5.6 In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which either party
may be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
Article 6 DOCUMENTS AND COVENANTS OF THE FUND AND DWTC
6.1 The Fund shall promptly furnish to DWTC the following:
(a) If a corporation:
(i) A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of DWTC and the execution and delivery of
this Agreement;
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<PAGE>
(ii) A certified copy of the Articles of Incorporation and By-Laws of
the Fund and all amendments thereto;
(iii) Certified copies of each vote of the Board of Directors
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;
(iv) A specimen of the certificate for Shares of the Fund in the form
approved by the Board of Directors, with a certificate of the Secretary of the
Fund as to such approval;
(b) If a business trust:
(i) A certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of DWTC and the execution and delivery of
this Agreement;
(ii) A certified copy of the Declaration of Trust and By-laws of the
Fund and all amendments thereto;
(iii) Certified copies of each vote of the Board of Trustees
designating persons authorized to give instructions on behalf of the Fund and
signature cards bearing the signature of any officer of the Fund or any other
person authorized to sign written instructions on behalf of the Fund;
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<PAGE>
(iv) A specimen of the certificate for Shares of the Fund in the form
approved by the Board of Trustees, with a certificate of the Secretary of the
Fund as to such approval;
(c) The current registration statements and any amendments and
supplements thereto filed with the SEC pursuant to the requirements of the 1933
Act or the 1940 Act;
(d) All account application forms or other documents relating to
Shareholder accounts and/or relating to any plan, program or service offered or
to be offered by the Fund; and
(e) Such other certificates, documents or opinions as DWTC deems to
be appropriate or necessary for the proper performance of its duties.
6.2 DWTC hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of Share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.3 DWTC shall prepare and keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable and
as required by applicable laws and regulations. To the extent required by
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<PAGE>
Section 31 of the 1940 Act, and the rules and regulations thereunder, DWTC
agrees that all such records prepared or maintained by DWTC relating to the
services performed by DWTC hereunder are the property of the Fund and will be
preserved, maintained and made available in accordance with such Section 31 of
the 1940 Act, and the rules and regulations thereunder, and will be surrendered
promptly to the Fund on and in accordance with its request.
6.4 DWTC and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person
except as may be required by law or with the prior consent of DWTC and the Fund.
6.5 In case of any request or demands for the inspection of the
Shareholder records of the Fund, DWTC will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. DWTC reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
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<PAGE>
Article 7 DURATION AND TERMINATION OF AGREEMENT
7.1 This Agreement shall remain in full force and effect until
July 31, 1996 and from year-to-year thereafter unless terminated by either party
as provided in Section 7.2 hereof.
7.2 This Agreement may be terminated by the Fund on 60 days
written notice, and by DWTC on 90 days written notice, to the other party
without payment of any penalty.
7.3 Should the Fund exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and other materials will
be borne by the Fund. Additionally, DWTC reserves the right to charge for any
other reasonable fees and expenses associated with such termination.
Article 8 ASSIGNMENT
8.1 Except as provided in Section 8.3 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
8.2 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
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<PAGE>
8.3 DWTC may, in its sole discretion and without further consent
by the Fund, subcontract, in whole or in part, for the performance of its
obligations and duties hereunder with any person or entity including but not
limited to companies which are affiliated with DWTC; PROVIDED, HOWEVER, that
such person or entity has and maintains the qualifications, if any, required to
perform such obligations and duties, and that DWTC shall be as fully responsible
to the Fund for the acts and omissions of any agent or subcontractor as it is
for its own acts or omissions under this Agreement.
Article 9 AFFILIATIONS
9.1 DWTC may now or hereafter, without the consent of or notice
to the Fund, function as transfer agent and/or shareholder servicing agent for
any other investment company registered with the SEC under the 1940 Act and for
any other issuer, including without limitation any investment company whose
adviser, administrator, sponsor or principal underwriter is or may become
affiliated with Dean Witter, Discover & Co. or any of its direct or indirect
subsidiaries or affiliates.
9.2 It is understood and agreed that the Directors or Trustees
(as the case may be), officers, employees, agents and shareholders of the Fund,
and the directors, officers, employees, agents and shareholders of the
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Fund's investment adviser and/or distributor, are or may be interested in DWTC
as directors, officers, employees, agents and shareholders or otherwise, and
that the directors, officers, employees, agents and shareholders of DWTC may be
interested in the Fund as Directors or Trustees (as the case may be), officers,
employees, agents and shareholders or otherwise, or in the investment adviser
and/or distributor as directors, officers, employees, agents, shareholders or
otherwise.
Article 10 AMENDMENT
10.1 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Directors or the Board of Trustees (as the case may be) of the
Fund.
Article 11 APPLICABLE LAW
11.1 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of New
York.
Article 12 MISCELLANEOUS
12.1 In the event that one or more additional investment
companies managed or administered by Dean Witter InterCapital Inc. or any of its
affiliates ("Additional Funds") desires to retain DWTC to act as transfer agent,
dividend disbursing agent and/or shareholder servicing agent,
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<PAGE>
and DWTC desires to render such services, such services shall be provided
pursuant to a letter agreement, substantially in the form of Exhibit A hereto,
between DWTC and each Additional Fund.
12.2 In the event of an alleged loss or destruction of any Share
certificate, no new certificate shall be issued in lieu thereof, unless there
shall first be furnished to DWTC an affidavit of loss or non-receipt by the
holder of Shares with respect to which a certificate has been lost or destroyed,
supported by an appropriate bond satisfactory to DWTC and the Fund issued by a
surety company satisfactory to DWTC, except that DWTC may accept an affidavit of
loss and indemnity agreement executed by the registered holder (or legal
representative) without surety in such form as DWTC deems appropriate
indemnifying DWTC and the Fund for the issuance of a replacement certificate, in
cases where the alleged loss is in the amount of $1000 or less.
12.3 In the event that any check or other order for payment of
money on the account of any Shareholder or new investor is returned unpaid for
any reason, DWTC will (a) give prompt notification to the Fund's distributor
("Distributor") (or to the Fund if the Fund acts as its own distributor) of such
non-payment; and (b) take such other action, including imposition of a
reasonable processing or handling fee, as DWTC
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may, in its sole discretion, deem appropriate or as the Fund and, if applicable,
the Distributor may instruct DWTC.
12.4 Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or to DWTC shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Fund:
[Name of Fund]
Two World Trade Center
New York, New York 10048
Attention: General Counsel
To DWTC:
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
Attention: President
Article 13 MERGER OF AGREEMENT
13.1 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
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<PAGE>
Article 14 PERSONAL LIABILITY
14.1 In the case of a Fund organized as a Massachusetts business
trust, a copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund; provided, however, that
the Declaration of Trust of the Fund provides that the assets of a particular
Series of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against, a particular Series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.
-21-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Agreement to be executed in their names and on their behalf by and
through their duly authorized officers, as of the day and year first above
written.
(1) Dean Witter Liquid Asset Fund Inc.
(2) Dean Witter Tax-Free Daily Income Trust
(3) Dean Witter California Tax-Free Daily Income Trust
(4) Dean Witter Retirement Series
(5) Dean Witter Dividend Growth Securities Inc.
(6) Dean Witter Natural Resource Development Securities Inc.
(7) Dean Witter World Wide Investment Trust
(8) Dean Witter Capital Growth Securities
(9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Equity Income Trust
(15) Dean Witter Federal Securities Trust
(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Managed Assets Trust
(22) Dean Witter Limited Term Municipal Trust
(23) Dean Witter World Wide Income Trust
(24) Dean Witter Utilities Fund
(25) Dean Witter Strategist Fund
(26) Dean Witter New York Municipal Money Market Trust
(27) Dean Witter Intermediate Income Securities
(28) Prime Income Trust
(29) Dean Witter European Growth Fund Inc.
(30) Dean Witter Developing Growth Securities Trust
(31) Dean Witter Precious Metals and Minerals Trust
(32) Dean Witter Pacific Growth Fund Inc.
(33) Dean Witter Multi-State Municipal Series Trust
(34) Dean Witter Premier Income Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
(38) Dean Witter Global Dividend Growth Securities
(39) Dean Witter American Value Fund
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<PAGE>
(40) Dean Witter U.S. Government Money Market Trust
(41) Dean Witter Global Short-Term Income Fund Inc.
(42) Dean Witter Value-Added Market Series
(43) Dean Witter Select Municipal Reinvestment Fund
(44) Dean Witter Variable Investment Series
By:/s/ Sheldon Curtis
---------------------------------------
Sheldon Curtis
Vice President and General Counsel
ATTEST:
/s/ Barry Fink
- -------------------------------------
Barry Fink
Assistant Secretary
DEAN WITTER TRUST COMPANY
By:/s/ Charles A. Fiumefreddo
---------------------------------------
Charles A. Fiumefreddo
Chairman
ATTEST:
/s/ David A. Hughey
- -------------------------------------
David A. Hughey
Executive Vice President
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<PAGE>
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311
Gentlemen:
The undersigned, (THE FUND NAME) a (Massachusetts business
trust/Maryland corporation) (the "Fund"), desires to employ and appoint Dean
Witter Trust Company ("DWTC") to act as transfer agent for each series and class
of shares of the Fund, whether now or hereafter authorized or issued ("Shares"),
dividend disbursing agent and shareholder servicing agent, registrar and agent
in connection with any accumulation, open-account or similar plan provided to
the holders of Shares, including without limitation any periodic investment plan
or periodic withdrawal plan.
The Fund hereby agrees that, in consideration for the payment by the
Fund to DWTC of fees as set out in the fee schedule attached hereto as Schedule
A, DWTC shall provide such services to the Fund pursuant to the terms and
conditions set forth in the Transfer Agency and Service Agreement annexed
hereto, as if the Fund was a signatory thereto.
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<PAGE>
Please indicate DWTC's acceptance of employment and appointment by the
Fund in the capacities set forth above by so indicating in the space provided
below.
Very truly yours,
(NAME OF THE FUND)
By:__________________________________
Sheldon Curtis
Vice President and General Counsel
ACCEPTED AND AGREED TO:
DEAN WITTER TRUST COMPANY
By:_______________________
Its:______________________
Date:_____________________
-25-
<PAGE>
SCHEDULE A
Fund: Dean Witter New York Municipal Money Market Trust
Fees: (1) Annual maintenance fee of $14.65 per shareholder account,
payable monthly.
(2) A fee equal to 1/12 of the fee set forth in (1) above, for
providing Forms 1099 for accounts closed during the year, payable
following the end of the calendar year.
(3) Out-of-pocket expenses in accordance with Section 2.2 of the
Agreement.
(4) Fees for additional services not set forth in this Agreement
shall be as negotiated between the parties.
-26-
<PAGE>
SERVICES AGREEMENT
AGREEMENT made as of the 31st day of December, 1993 by and between Dean
Witter InterCapital Inc., a Delaware corporation (herein referred to as
"InterCapital"), and Dean Witter Services Company Inc., a New Jersey corporation
(herein referred to as "DWS").
WHEREAS, InterCapital has entered into separate agreements (each such
agreement being herein referred to as an "Investment Management Agreement") with
certain investment companies as set forth on Schedule A (each such investment
company being herein referred to as a "Fund" and, collectively, as the "Funds")
pursuant to which InterCapital is to perform, or supervise the performance of,
among other services, administrative services for the Funds (and, in the case of
Funds with multiple portfolios, the Series or Portfolios of the Funds (such
Series and Portfolio being herein individually referred to as "a Series" and,
collectively, as "the Series"));
WHEREAS, InterCapital desires to retain DWS to perform the administrative
services as described below; and
WHEREAS, DWS desires to be retained by InterCapital to perform such
administrative services:
Now, therefore, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DWS agrees to provide administrative services to each Fund as
hereinafter set forth. Without limiting the generality of the foregoing, DWS
shall (i) administer the Fund's business affairs and supervise the overall day-
to-day operations of the Fund (other than rendering investment advice); (ii)
provide the Fund with full administrative services, including the maintenance of
certain books and records, such as journals, ledger accounts and other records
required under the Investment Company Act of 1940, as amended (the"Act"), the
notification to the Fund and InterCapital of available funds for investment, the
reconciliation of account information and balances among the Fund's custodian,
transfer agent and dividend disbursing agent and InterCapital, and the
calculation of the net asset value of the Fund's shares; (iii) provide the Fund
with the services of persons competent to perform such supervisory,
administrative and clerical functions as are necessary to provide effective
operation of the Fund; (iv) oversee the performance of administrative and
professional services rendered to the Fund by others, including its custodian,
transfer agent and dividend disbursing agent, as well as accounting, auditing
and other services; (v) provide the Fund with adequate general office space and
facilities; (vi) assist in the preparation and the printing of the periodic
updating of the Fund's registration statement and prospectus (and, in the case
of an open-end Fund, the statement of additional information), tax returns,
proxy statements, and reports to its shareholders and the Securities and
Exchange Commission; and (vii) monitor the compliance of the Fund's investment
policies and restrictions.
In the event that InterCapital enters into an Investment Management
Agreement with another investment company, and wishes to retain DWS to perform
administrative services hereunder, it shall notify DWS in writing. If DWS is
willing to render such services, it shall notify InterCapital in writing,
whereupon such other Fund shall become a Fund as defined herein.
2. DWS 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 DWS shall be deemed to include officers of DWS and persons employed
or otherwise retained by DWS (including officers and employees of InterCapital,
with the consent of InterCapital) to furnish services, statistical and other
factual data, information with respect to technical and scientific developments,
and such other information, advice and assistance as DWS may desire. DWS shall
maintain each Fund's records and books of account (other than those maintained
by the Fund's transfer agent, registrar, custodian and other agencies). All such
books and records so maintained shall be the property of the Fund and, upon
request therefor, DWS shall surrender to InterCapital or to the Fund such of the
books and records so requested.
3. InterCapital will, from time to time, furnish or otherwise make
available to DWS such financial reports, proxy statements and other information
relating to the business and affairs of the Fund as DWS may
1
<PAGE>
reasonably require in order to discharge its duties and obligations to the Fund
under this Agreement or to comply with any applicable law and regulation or
request of the Board of Directors/Trustees of the Fund.
4. For the services to be rendered, the facilities furnished, and the
expenses assumed by DWS, InterCapital shall pay to DWS monthly compensation
calculated daily (in the case of an open-end Fund) or weekly (in the case of a
closed-end Fund) by applying the annual rate or rates set forth on Schedule B to
the net assets of each Fund. Except as hereinafter set forth, (i) in the case of
an open-end Fund, compensation under this Agreement shall be calculated by
applying 1/365th of the annual rate or rates to the Fund's or the Series' daily
net assets determined as of the close of business on that day or the last
previous business day and (ii) in the case of a closed-end Fund, compensation
under this Agreement shall be calculated by applying the annual rate or rates to
the Fund's average weekly net assets determined as of the close of the last
business day of each week. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth on
Schedule B. Subject to the provisions of paragraph 5 hereof, payment of DWS'
compensation for the preceding month shall be made as promptly as possible after
completion of the computations contemplated by paragraph 5 hereof.
5. In the event the operating expenses of any open-end Fund and/or any
Series thereof, or of InterCapital Income Securities Inc., including amounts
payable to InterCapital pursuant to the Investment Management Agreement, for any
fiscal year ending on a date on which this Agreement is in effect, exceed the
expense limitations applicable to the Fund and/or any Series thereof imposed by
state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, or, in the case of InterCapital Income
Securities Inc. or Dean Witter Variable Investment Series or any Series thereof,
the expense limitation specified in the Fund's Investment Management Agreement,
the fee payable hereunder shall be reduced on a pro rata basis in the same
proportion as the fee payable by the Fund under the Investment Management
Agreement is reduced.
6. DWS shall bear the cost of rendering the administrative services to be
performed by it under this Agreement, and shall, at its own expense, pay the
compensation of the officers and employees, if any, of the Fund employed by DWS,
and such clerical help and bookkeeping services as DWS shall reasonably require
in performing its duties hereunder.
7. DWS will use its best efforts in the performance of administrative
activities on behalf of each Fund, but in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations hereunder,
DWS 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 DWS or for any losses
sustained by the Fund or its investors. It is understood that, subject to the
terms and conditions of the Investment Management Agreement between each Fund
and InterCapital, InterCapital shall retain ultimate responsibility for all
services to be performed hereunder by DWS. DWS shall indemnify InterCapital and
hold it harmless from any liability that InterCapital may incur arising out of
any act or failure to act by DWS in carrying out its responsibilities hereunder.
8. It is understood that any of the shareholders, Directors/Trustees,
officers and employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, DWS, and in any person controlling,
controlled by or under common control with DWS, and that DWS and any person
controlling, controlled by or under common control with DWS may have an interest
in the Fund. It is also understood that DWS and any affiliated persons thereof
or any persons controlling, controlled by or under common control with DWS have
and may have advisory, management, administration service or other contracts
with other organizations and persons, and may have other interests and
businesses, and further may purchase, sell or trade any securities or
commodities for their own accounts or for the account of others for whom they
may be acting.
9. This Agreement shall continue until April 30, 1994, and thereafter shall
continue automatically for successive periods of one year unless terminated by
either party by written notice delivered to the other party within 30 days of
the expiration of the then-existing period. Notwithstanding the foregoing, this
Agreement may be terminated at any time, by either party on 30 days' written
notice delivered to the other party. In the
2
<PAGE>
event that the Investment Management Agreement between any Fund and InterCapital
is terminated, this Agreement will automatically terminate with respect to such
Fund.
10. This Agreement may be amended or modified by the parties in any manner
by mutual written agreement executed by each of the parties hereto.
11. This Agreement shall be construed and interpreted in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in New York, New York.
DEAN WITTER INTERCAPITAL INC.
By: /s/
.....................................
Attest:
/s/
........................................
DEAN WITTER SERVICES COMPANY INC.
By: /s/
.....................................
Attest:
/s/
........................................
3
<PAGE>
SCHEDULE A
DEAN WITTER FUNDS
at December 31, 1993
OPEN-END FUNDS
1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Dean Witter American Value Fund
6. Dean Witter California Tax-Free Daily Income Trust
7. Dean Witter California Tax-Free Income Fund
8. Dean Witter Capital Growth Securities
9. Dean Witter Convertible Securities Trust
10. Dean Witter Developing Growth Securities Trust
11. Dean Witter Diversified Income Trust
12. Dean Witter Dividend Growth Securities Inc.
13. Dean Witter Equity Income Trust
14. Dean Witter European Growth Fund Inc.
15. Dean Witter Federal Securities Trust
16. Dean Witter Global Dividend Growth Securities
17. Dean Witter Global Short-Term Income Fund Inc.
18. Dean Witter Health Sciences Trust
19. Dean Witter High Yield Securities Inc.
20. Dean Witter Intermediate Income Securities
21. Dean Witter Limited Term Municipal Trust
22. Dean Witter Liquid Asset Fund Inc.
23. Dean Witter Managed Assets Trust
24. Dean Witter Multi-State Municipal Series Trust
25. Dean Witter Natural Resource Development Securities Inc.
26. Dean Witter New York Municipal Money Market Trust
27. Dean Witter New York Tax-Free Income Fund
28. Dean Witter Pacific Growth Fund Inc.
29. Dean Witter Precious Metals and Minerals Trust
30. Dean Witter Premier Income Trust
31. Dean Witter Retirement Series
32. Dean Witter Select Municipal Reinvestment Fund
33. Dean Witter Short-Term U.S. Treasury Trust
34. Dean Witter Strategist Fund
35. Dean Witter Tax-Exempt Securities Trust
36. Dean Witter Tax-Free Daily Income Trust
37. Dean Witter U.S. Government Money Market Trust
38. Dean Witter U.S. Government Securities Trust
39. Dean Witter Utilities Fund
40. Dean Witter Value-Added Market Series
41. Dean Witter Variable Investment Series
42. Dean Witter World Wide Income Trust
43. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS
44. High Income Advantage Trust
45. High Income Advantage Trust II
46. High Income Advantage Trust III
47. InterCapital Income Securities Inc.
48. Dean Witter Government Income Trust
49. InterCapital Insured Municipal Bond Trust
50. InterCapital Insured Municipal Trust
51. InterCapital Insured Municipal Income Trust
52. InterCapital California Insured Municipal Income Trust
53. InterCapital Quality Municipal Investment Trust
54. InterCapital Quality Municipal Income Trust
55. InterCapital Quality Municipal Securities
56. InterCapital California Quality Municipal Securities
57. InterCapital New York Quality Municipal Securities
4
<PAGE>
DEAN WITTER SERVICES COMPANY
SCHEDULE OF ADMINISTRATIVE FEES - JANUARY 1, 1994
MONTHLY COMPENSATION CALCULATED DAILY BY APPLYING THE FOLLOWING ANNUAL RATES TO
THE FUND'S NET ASSETS.
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Dean Witter New York 0.050% of the portion of the daily net assets not
Municipal Money Market exceeding $500 million; 0.0425% of the portion of
Trust the daily net assets exceeding $500 million but
not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but
not exceeding $1 billion; 0.035% of the portion of
the daily net assets exceeding $1 billion but not
exceeding $1.5 billion; 0.0325% of the portion of
the daily net assets exceeding $1.5 billion but not
exceeding $2 billion; 0.030% of the portion of the
daily net assets exceeding $2 billion but not
exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not
exceeding $3 billion; and 0.025% of the portion of
the daily net assets exceeding $3 billion.
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this Post-
Effective Amendment No. 5 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated February 8, 1994, relating to the
financial statements and financial highlights of Dean Witter New York Municipal
Money Market Trust, which appears in such Prospectus, and to the incorporation
by reference of such report into the Statement of Additional Information which
constitutes part of this Registration Statement. We also consent to the
references to us under the heading "Financial Highlights" in the Prospectus and
under the headings "Independent Accountants" and "Experts" in the Statement of
Additional Information.
PRICE WATERHOUSE
1177 Avenue of the Americas
New York, New York
February 15, 1994
<PAGE>
AMENDED AND RESTATED PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
OF
DEAN WITTER/SEARS NEW YORK MUNICIPAL MONEY MARKET TRUST
WHEREAS, Dean Witter/Sears New York Municipal Money Market Trust (the
"Fund") is engaged in business as an open-end management investment company and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, on March 5, 1990, the Fund adopted a Plan and Agreement of
Distribution pursuant to Rule 12b-1 under the Act, and the Trustees then
determined that there was a reasonable likelihood that the Plan of Distribution
would benefit the Fund and its shareholders; and
WHEREAS, the Trustees believe that continuation of said Plan of
Distribution, as amended and restated herein, is reasonably likely to continue
to benefit the Fund and its shareholders; and
WHEREAS, the Agreement incorporated in said Plan and Agreement of
Distribution was entered into by the Fund with Dean Witter Reynolds Inc.
("DWR"); and
WHEREAS, the Fund and DWR desire to substitute DW Distributors Inc. (the
"Distributor") in the place of DWR as distributor of the Fund's shares; and
WHEREAS, the Fund, DWR and the Distributor intend that DWR will continue to
promote the sale of Fund shares and provide personal services to Fund
shareholders with respect to their holdings of Fund shares; and
WHEREAS, the Fund and the Distributor have entered into a separate
Distribution Agreement dated as of this date, pursuant to which the Fund has
employed the Distributor in such capacity during the continuous offering of
shares of the Fund.
NOW, THEREFORE, the Fund hereby amends and restates the Plan of Distribution
previously adopted, and the Distributor hereby agrees to the terms of said Plan
of Distribution (the "Plan"), as amended and restated herein, in accordance with
Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund is hereby authorized to utilize its assets to finance certain
activities in connection with the distribution of its shares.
2. Subject to the supervision of the Board of Trustees and the terms of the
Distribution Agreement, the Distributor is authorized to promote the
distribution of the Fund's shares and to provide related services through DWR,
its affiliates or other broker-dealers it may select, and its own Registered
Representatives. The Distributor, DWR, its affiliates and said broker-dealers
shall be reimbursed, directly or through the Distributor, as it may direct, as
provided in paragraph 4 hereof for their services and expenses, which may
include one or more of the following: (1) compensation to, and expenses of,
account executives and other employees, including overhead and telephone
expenses; (2) sales incentives and bonuses to sales representatives of the
Distributor, DWR, its affiliates and other broker-dealers, and to marketing
personnel in connection with promoting sales of shares of the Fund; (3) expenses
incurred in connection with promoting sales of shares of the Fund; (4) preparing
and distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio, newspaper,
magazine and other media advertisements.
3. The Distributor hereby undertakes to directly bear all costs of
rendering the services to be performed by it under this Plan and under the
Distribution Agreement, except for those specific expenses that the Board of
Trustees determines to reimburse as hereinafter set forth.
4. The Fund is hereby authorized to reimburse the Distributor, DWR, its
affiliates and other broker-dealers for incremental distribution expenses
incurred by them specifically on behalf of the Fund. Reimbursement will be made
through payments at the end of each month in such amounts determined in advance
of each fiscal quarter by the Fund's Board of Trustees, including a majority of
the Trustees who are not "interested persons" of the Fund, as defined in the
Act. The amount of each monthly payment may in no event exceed an amount equal
to a payment at the annual rate of 0.15 of 1% of the Fund's average net assets
during the month. In making quarterly determinations of the amounts that may be
expended by the Fund, the Distributor shall provide, and the Trustees shall
1
<PAGE>
review, a quarterly budget of projected incremental distribution expenses to be
incurred by the Distributor, DWR, its affiliates and other broker-dealers on
behalf of the Fund, together with a report explaining the purposes and
anticipated benefits of incurring such expenses. The Board of Trustees shall
determine the particular expenses, and the portion thereof, that may be borne by
the Fund, and in making such determination shall consider the scope of the
Distributor's commitment to promoting the distribution of the shares of the Fund
directly or through DWR, its affiliates or other broker-dealers.
5. The Distributor may direct that all or any part of the amounts
receivable by it under this Plan be paid directly to DWR, its affiliates or
other broker-dealers.
6. If, as of the end of any fiscal year, the actual expenses incurred by
the Distributor, DWR, its affiliates and other broker-dealers on behalf of the
Fund (including accrued expenses and amounts reserved for incentive compensation
and bonuses) are less than the amount of payments made by the Fund pursuant to
this Plan, the Distributor shall promptly make appropriate reimbursement to the
Fund. If, however, as of the end of any fiscal year, the actual expenses of the
Distributor, DWR, its affiliates and other broker-dealers are greater than the
amount of payments made by the Fund pursuant to this Plan, the Fund will not
reimburse the Distributor, DWR, its affiliates or other broker-dealers for such
expenses through payments accrued pursuant to this Plan in the subsequent fiscal
year.
7. The Distributor shall provide the Fund for review by the Board of
Trustees, and the Board of Trustees shall review, promptly after the end of each
fiscal quarter a written report regarding the incremental distribution expenses
incurred by the Distributor, DWR, its affiliates or other broker-dealers on
behalf of the Fund during such fiscal quarter, which report shall include: (1)
an itemization of the types of expenses and the purposes therefor; (2) the
amounts of such expenses; and (3) a description of the benefits derived by the
Fund.
8. This Plan, as amended and restated, shall become effective upon approval
by a vote of the Board of Trustees of the Fund, and of the Trustees who are not
"interested persons" of the Fund, as defined in the Act, and who have no direct
or indirect financial interest in the operation of this Plan, cast in person at
a meeting called for the purpose of voting on this Plan.
9. This Plan shall continue in effect until April 30, 1993, and from year
to year thereafter, provided such continuance is specifically approved at least
annually in the manner provided for approval of this Plan in paragraph 8 hereof.
This Plan may not be amended to increase materially the amount to be spent for
the services described herein unless such amendment is approved by a vote of at
least a majority of the outstanding voting securities of the Fund, as defined in
the Act, and no material amendment to this Plan shall be made unless approved in
the manner provided for approval in paragraph 8 hereof.
10. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Trustees who are not "interested persons"
of the Fund, as defined in the Act, and who have no direct or indirect financial
interest in the operation of this Plan or by a vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act, on no more
than 30 days' written notice to any other party to this Plan.
11. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Fund shall be committed to the discretion
of the Trustees who are not interested persons.
12. The Fund shall preserve copies of this Plan and all reports made
pursuant to paragraph 7 hereof, for a period of not less than six years from the
date of this Plan, as amended and restated herein, or any such report, as the
case may be, the first two years in an easily accessible place.
13. This Plan shall be construed in accordance with the laws of the State of
New York and the applicable provisions of the Act. To the extent the applicable
law of the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the Act, the latter shall control.
14. The Declaration of Trust establishing Dean Witter/Sears New York
Municipal Money Market Trust, dated December 28, 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 Dean
Witter/Sears New York Municipal Money Market Trust refers to the Trustees under
the Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, shareholder, officer, employee or agent of Dean Witter/Sears New
2
<PAGE>
York Municipal Money Market Trust shall be held to any personal liability, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said Dean
Witter/Sears New York Municipal Money Market Trust, but the Trust Estate only
shall be liable.
IN WITNESS WHEREOF, the Fund, the Distributor and DWR have executed this
Plan of Distribution, as amended and restated, as of the day and year set forth
below in New York, New York.
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Date: March 5, 1990 DEAN WITTER/SEARS NEW YORK MUNICIPAL MONEY MARKET
As amended on January 4, 1993 TRUST
By: ..............................................
Attest:
............................................
DW DISTRIBUTORS INC.
By: ..............................................
Attest:
............................................
DEAN WITTER REYNOLDS INC.
By: ..............................................
Attest:
............................................
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3
<PAGE>
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
Exhibit 16: Schedule for computation of each performance
quotation provided in the Statement of Additional Information.
(16) The Trust's current yield for the seven days ending
December 31, 1993
(A-B) x 365/N
(1.000319 -1) x 365/7 = 1.66%
The Trust's effective annualized yield for the seven days ending
December 31, 1993
365/N
A - 1
365/7
1.000319 - 1 = 1.68%
A = Value of a share of the Trust at end of period.
B = Value of a share of the Trust at beginning of period.
N = Number of days in the period.
CALCULATION Tax equivalent Yield = 2.86% Based on a tax
= bracket of 41.96%
(1.000319 -1) x 365/7
= 1.66%
((1.000319) x 52.1428714-1)
= 1.68%
TAX BRACKET : 41.96%
FORMULA (CURRENT 7 DAY YIELD / 1-41.96)
CURRENT 7 DAY YIELD : 1.66
1.66/0.5804
= 2.86%
<PAGE>
SCHEDULE FOR COMPUTATIONS OF PERFORMANCE QUOTATIONS
DEAN WITTER NEW YORK MUNICIPAL MONEY MARKET TRUST
(A) GROWTH OF $10,000
(B) GROWTH OF $50,000
(C) GROWTH OF $100,000
FORMULA: G = (TR+1)*p
G = GROWTH OF INITIAL INVESTMENT
P = INITIAL INVESTMENT
TR = TOTAL RETURN SINCE INCEPTION
<TABLE>
<CAPTION>
INVESTED - P TOTAL
$10,000, $50,000 & RETURN - TR (A) GROWTH OF (B) GROWTH OF (C) GROWTH OF
$100,000 31-Dec-93 $10,000 INVESTMENT-G $50,000 INVESTMENT-G $100,000 INVESTMENT-G
- ------------------ -------------- --------------------------------------------- --------------------------------
<S> <C> <C> <C> <C>
31-Mar-90 11.94 $11,194 $55,970 $111,940
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