<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1997
REGISTRATION NOS.: 33-41187
811-6330
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 7 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 8 [X]
---------
DEAN WITTER SHORT-TERM U.S. TREASURY 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
BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------
COPY TO:
DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWKSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
---------
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 August 1, 1997 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 ENDED MAY 31, 1997
WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1997.
AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS
===============================================================================
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
CROSS-REFERENCE SHEET
FORM N-1A
<TABLE>
<CAPTION>
ITEM CAPTION
-------- ----------
PART A PROSPECTUS
<S> <C>
1. ........... Cover Page
2. ........... Prospectus Summary; Summary of Fund Expenses
3. ........... Financial Highlights
4. ........... Investment Objective and Policies; The Fund and its
Management; Cover Page; Investment Restrictions; 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
8. ........... Redemptions and Repurchases; Shareholder Services
9. ........... Not applicable
PART B 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; The Distributor; Shareholder
Services; Custodian and Transfer Agent; Independent
Accountants
17. ........... Portfolio Transactions and Brokerage
18. ........... Description of Shares
19. ........... The Distributor; Redemptions and Repurchasers; Financial
Statements; Determination of Net Asset Value; Shareholder
Services
20. ........... Dividends, Distributions and Taxes
21. ........... Not applicable
22. ........... Performance Information
23. ........... Experts; Financial Statements
</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
AUGUST 1, 1997
Dean Witter Short-Term U.S. Treasury Trust (the "Fund") is an
open-end, diversified management investment company whose investment
objective is current income, preservation of principal and liquidity. The
Fund seeks to achieve its objective by investing all of its assets in U.S.
Treasury securities backed by the full faith and credit of the U.S.
Government. (See "Investment Objective and Policies.") Shares of the Fund are
not issued, insured or guaranteed, as to value or yield, by the U.S.
Government or its agencies or instrumentalities.
Shares of the Fund are sold and redeemed at net asset value
without the imposition of a sales charge. The Fund is authorized to reimburse
specific expenses incurred in promoting the distribution of the Fund's
shares, including personal services to shareholders and maintenance of
shareholder accounts, in accordance with 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 0.35% 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 August 1, 1997, which has
been filed with the Securities and Exchange Commission, and which is
available at no charge upon request of the Fund at the address or telephone
numbers listed below. The Statement of Additional Information is incorporated
herein by reference.
Dean Witter
Short-Term U.S. Treasury Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)
TABLE OF CONTENTS
Prospectus Summary/ 2
Summary of Fund Expenses/ 3
Financial Highlights/ 4
The Fund and its Management/ 5
Investment Objective and Policies/ 5
Purchase of Fund Shares/ 7
Shareholder Services/ 9
Redemptions and Repurchases/ 12
Dividends, Distributions and Taxes/ 15
Performance Information/ 16
Additional Information/ 17
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, the 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>
PROSPECTUS SUMMARY
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
The The Fund is organized as a Trust, commonly known as a Massachusetts business trust, and is an open-end,
Fund diversified management investment company investing in U.S. Treasury securities backed by the full faith
and credit of the U.S. Government.
- ----------------- ---------------------------------------------------------------------------------------------------------
Shares Shares of beneficial interest with $0.01 par value (see page 17).
Offered
- ----------------- ---------------------------------------------------------------------------------------------------------
Offering The price of the shares offered by this Prospectus is determined once daily as of 4:00 p.m., New York
Price time, on each day that the New York Stock Exchange is open, and is equal to the net asset value per share
without a sales charge (see page 7).
- ----------------- ---------------------------------------------------------------------------------------------------------
Minimum Minimum initial purchase through Distributor, $10,000 ($1,000 if the account is opened through EasyInvest
Purchase (Service Mark) ) although the Fund and Distributor may, from time to time, accept initial purchases of
$5,000; minimum subsequent investment, $100 (see page 7).
- ----------------- ---------------------------------------------------------------------------------------------------------
Investment The investment objective of the Fund is to provide investors with current income, preservation of
Objective principal and liquidity.
- ----------------- ---------------------------------------------------------------------------------------------------------
Investment In order to maximize the amount of the Fund's dividends which are exempt from state and local income
Policies taxation, the Fund will invest all of its assets in U.S. Treasury securities which are direct obligations
of the U.S. Government (see page 5).
- ----------------- ---------------------------------------------------------------------------------------------------------
Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of the Fund, and its wholly-owned
Manager subsidiary, Dean Witter Services Company Inc. serve in various investment management, advisory,
management and administrative capacities to 100 investment companies and other portfolios with assets of
approximately $96.6 billion at June 30, 1997 (see page 5).
- ----------------- ---------------------------------------------------------------------------------------------------------
Management The Investment Manager receives a monthly fee at the annual rate of 0.35% of daily net assets (see page
Fee 5).
- ----------------- ---------------------------------------------------------------------------------------------------------
Dividends and Dividends are declared daily and paid monthly. Capital gains distributions, if any, are paid at least
Capital Gains once a year or are retained for reinvestment by the Fund. Dividends and capital gains distributions are
Distributions automatically invested in additional shares at net asset value unless the shareholder elects to receive
cash (see page 15).
- ----------------- ---------------------------------------------------------------------------------------------------------
Distributor Dean Witter Distributors Inc. (the "Distributor")(see page 7). The Fund is authorized to reimburse
and Plan of specific expenses incurred in promoting the distribution of the Fund's shares, including personal
Distribution services to shareholders and maintenance of shareholders accounts, in accordance with a Plan of
Distribution with the Distributor pursuant to Rule 12b-1 under the Investment Company Act of 1940.
Reimbursement may in no event exceed an amount equal to payments at an annual rate of 0.35% of average
daily net assets of the Fund (see page 8).
- ----------------- ---------------------------------------------------------------------------------------------------------
Redemption At net asset value; account may be involuntarily redeemed if total value of the account is less than
$1,000 or, if the account was opened through EasyInvest (Service Mark), if after twelve months the
shareholder has invested less than $10,000 in the account (see pages 12-15).
- ----------------- ---------------------------------------------------------------------------------------------------------
Risks The Fund invests only in U.S. Treasury securities which are subject to minimal risk of loss of income and
principal. It may engage in the purchase of such securities on a when-issued basis. The value of the
Fund's portfolio securities, and therefore the Fund's net asset value per share, may increase or decrease
due to various factors, principally changes in prevailing interest rates. Generally, a rise in interest
rates will result in a decrease in the Fund's net asset value per share, while a drop in interest rates
will result in an increase in the Fund's net asset value per share. A portion of the U.S. Treasury
securities in which the Fund invests may be zero coupon Treasury securities. Such securities are subject
to greater market price fluctuations during periods of changing prevailing interest rates (see pages
5-7).
- ----------------- ---------------------------------------------------------------------------------------------------------
</TABLE>
The above is qualified in its entirety by the detailed information appearing
elsewhere in this 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. The expenses and fees set forth in the table are for the
fiscal year ended May 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
- --------------------------------
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
Annual Fund Operating Expenses (as a Percentage of Average Net Assets)
- ----------------------------------------------------------------------
Management Fees........................................................... 0.35%
12b-1 Fees* .............................................................. 0.35%
Other Expenses ........................................................... 0.13%
Total Fund Operating Expenses ............................................ 0.83%
</TABLE>
- ---------
* A portion of the 12b-1 fee, which may not exceed 0.25% of the Fund's
average daily net assets, is characterized as a service fee within the
meaning of National Association of Securities Dealers Inc. ("NASD")
guidelines.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- -------- --------- --------- ----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period: ......................................... $8 $26 $46 $103
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE FUND MAY BE MORE 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" and "Purchase of Fund Shares--Plan of
Distribution" in this Prospectus.
Long-term shareholders of the Fund may pay more in distribution fees than
the economic equivalent of the maximum front-end sales charges permitted by
the NASD.
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 LLP,
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 the Statement of
Additional Information. Further unaudited information about the performance
of the Fund is contained in the Fund's Annual Report to Shareholders, which
may be obtained without charge upon request to the Fund.
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED MAY 31 AUGUST 13, 1991*
------------------------------------------------------ THROUGH
1997 1996 1995 1994 1993 MAY 31, 1992
---------- ---------- ---------- ---------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $9.84 $9.98 $9.88 $10.34 $10.21 $10.00
---------- ---------- ---------- ---------- ---------- ----------------
Net investment income .................. 0.54 0.54 0.49 0.49 0.54 0.44
Net realized and unrealized gain
(loss)................................. -- (0.14) 0.10 (0.45) 0.13 0.20
---------- ---------- ---------- ---------- ---------- ----------------
Total from investment operations ...... 0.54 0.40 0.59 0.04 0.67 0.64
---------- ---------- ---------- ---------- ---------- ----------------
Less dividends and distributions from:
Net investment income ................. (0.53) (0.54) (0.49) (0.50) (0.53) (0.43)
Net realized gain ..................... -- -- -- -- (0.01) --
---------- ---------- ---------- ---------- ---------- ----------------
Total dividends and distributions ..... (0.53) (0.54) (0.49) (0.50) (0.54) (0.43)
---------- ---------- ---------- ---------- ---------- ----------------
Net asset value, end of period ......... $9.85 $9.84 $9.98 $9.88 $10.34 $10.21
========== ========== ========== ========== ========== ================
TOTAL INVESTMENT RETURN+ ............... 5.63% 4.09% 6.22% 0.25% 6.75% 6.55%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................... 0.83% 0.84% 0.84% 0.79% 0.80% 0.79%(2)(3)
Net investment income .................. 5.42% 5.33% 4.93% 4.74% 5.18% 5.49%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands..............................$230,267 $258,637 $273,184 $516,017 $584,206 $523,555
Portfolio turnover rate ................ 149% 63% 30% 49% 21% 12%(1)
</TABLE>
- ------------
* Commencement of operations.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all expenses that were assumed or waived by the
Investment Manager, the above annualized expense and net investment
income ratios would have been 0.81% and 5.47%, respectively.
4
<PAGE>
THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------
Dean Witter Short-Term U.S. Treasury Trust (the "Fund") is an open-end
diversified management investment company. 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 June 4, 1991.
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 Morgan Stanley,
Dean Witter, Discover & Co., a preeminent global financial services firm that
maintains leading market positions in each of its three primary
businesses--securities, asset management and credit services.
InterCapital and its wholly-owned subsidiary, Dean Witter Services
Company, serve in various investment management, advisory, management and
administrative capacities to a total of 100 investment companies, thirty of
which are listed on the New York Stock Exchange, with combined total assets
of approximately $93.1 billion as of June 30, 1997. The Investment Manager
also manages portfolios of pension plans, other institutions and individuals
which aggregated approximately $3.5 billion at such date.
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 for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily by applying an
annual rate of 0.35% to the Fund's net assets determined as of the close of
each business day. For the fiscal year ended May 31, 1997, the Fund accrued
total compensation to the Investment Manager amounting to 0.35% of the Fund's
average daily net assets and the Fund's total expenses amounted to 0.83% of
the Fund's average daily net assets.
INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------
The investment objective of the Fund is current income, preservation of
principal and liquidity. The Fund will seek to achieve its investment
objective by investing all of its net assets in U.S. Treasury securities.
U.S. Treasury securities, which presently consist of U.S. Treasury bills,
U.S. Treasury notes and U.S. Treasury bonds, are direct obligations of the
U.S. Treasury and are backed by the "full faith and credit" of the U.S.
Government. The investment objective is a fundamental policy of the Fund and
may not be changed without the approval of the holders of a majority of the
Fund's shares. There is no assurance that the Fund's investment objective
will be achieved.
Neither the value nor the yield of the U.S. Treasury securities in which
the Fund invests (or the value or yield of shares of the Fund) are guaranteed
by the U.S. Government. The value of the Fund's portfolio securities and
therefore the net asset value of the Fund's shares may increase or decrease
due to changes in prevailing interest rates and other factors. Generally, as
prevailing interest rates rise, the value of the securities held by the Fund,
and concomitantly, the net asset value of the Fund's shares, will fall. Debt
securities with shorter maturities are generally subject to a lesser degree
of market fluctuation as a result of changes in interest rates than debt
securities with longer maturities. In an effort to minimize fluctuations in
market value of its portfolio securities the Fund is expected to maintain a
portfolio with a dollar-weighted average maturity of less than 3 years.
Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund
5
<PAGE>
may be "zero coupon" Treasury securities. These are U.S. Treasury notes and
bonds which have been stripped of their unmatured interest coupons and
receipts or which are certificates representing interests in such stripped
debt obligations and coupons. Such securities are purchased at a discount
from their face amount, giving the purchaser the right to receive their full
value at maturity. A zero coupon security pays no interest to its holder
during its life. Its value to an investor consists of the difference between
its face value at the time of maturity and the price for which it was
acquired, which is generally an amount significantly less than its face value
(sometimes referred to as a "deep discount" price).
The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant
rate eliminates the risk of receiving lower yields upon reinvestment of
interest if prevailing interest rates decline, the owner of a zero coupon
security will be unable to participate in higher yields upon reinvestment of
interest received if prevailing interest rates rise. For this reason, zero
coupon securities are subject to substantially greater market price
fluctuations during periods of changing prevailing interest rates than are
comparable debt securities which make current distributions of interest.
Current federal tax law requires that a holder (such as the Fund) of a zero
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. See "Dividends,
Distributions and Taxes."
Certain banks and brokerage firms have separated ("stripped") the
principal portions ("corpus") from the coupon portions of the U.S. Treasury
bonds and notes and sell them separately in the form of receipts or
certificates representing undivided interests in these instruments (which
instruments are generally held by a bank in a custodial or trust account).
The Fund will not purchase any such receipts or certificates representing
stripped corpus or coupon interests in U.S. Treasury securities sold by banks
and brokerage firms. The Fund will only purchase zero coupon Treasury
securities which have been stripped by the Federal Reserve Bank.
When-Issued and Delayed Delivery Securities and Firm Commitments. From
time to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may
purchase or sell U.S. Treasury securities on a firm commitment basis. For
example, the Fund may wish to purchase U.S. Treasury notes and bonds sold at
periodic U.S. Treasury auctions prior to a month or more of their issuance
("when-issued"). When such transactions are negotiated, the price is fixed at
the time of the 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, delayed delivery or firm commitment 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 or sell securities on a when-issued, delayed delivery
or firm commitment basis, it will record the transaction and thereafter
reflect the value, each day, of such security purchased or, if a sale, the
proceeds to be received, in determining its net asset value. At the time of
delivery of the securities, their value may be more or less than the purchase
or sale price. The Fund will also establish a segregated account with its
custodian bank in which it will continually maintain cash or cash equivalents
or other portfolio (U.S. Treasury) securities equal in value to commitments
to purchase securities on a when-issued, delayed delivery or firm commitment
basis.
PORTFOLIO MANAGEMENT
The Fund's portfolio is actively managed by its Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, including Dean
Witter Reynolds Inc. ("DWR") and other broker-dealer affiliates of Inter
6
<PAGE>
Capital, and others regarding economic developments and interest rate trends,
and the Investment Manager's own analysis of factors it deems relevant. The
Fund's portfolio is managed within InterCapital's Taxable Fixed Income Group,
which manages 24 funds and fund portfolios, with approximately $12.8 billion
in assets as of June 30, 1997. Rajesh K. Gupta, Senior Vice President of
InterCapital and Manager of InterCapital's Government Fixed-Income Group, has
been the primary portfolio manager of the Fund since its inception and has
been a portfolio manager at InterCapital for over five years.
Brokerage commissions are not normally charged on the purchase or sale of
U.S. Government obligations, but such transactions may involve 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
and other brokers and dealers that are affiliates of InterCapital. Although
the Fund does not intend to engage in short-term trading of portfolio
securities as a means of achieving its investment objective, it may sell
portfolio securities without regard to the length of time they have been held
whenever such sale will, in the opinion of the Investment Manager, strengthen
the Fund's position and contribute to its investment objective. It is not
anticipated that the portfolio trading engaged in by the Fund will result in
its portfolio turnover rate exceeding 200% in any one year. The Fund will
incur costs commensurate with its portfolio turnover rate. Short term gains
and losses may result from such transactions. See "Dividends, Distributions
and Taxes" for a full discussion of the tax implications of the Fund's
trading policy.
PURCHASE OF FUND SHARES
- -----------------------------------------------------------------------------
The Fund offers its shares for sale to the public on a continuous basis.
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 others who have entered into Selected Dealer 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 minimum initial purchase is $10,000 (the Fund and the Distributor may,
from time to time accept initial purchases of $5,000). The minimum initial
purchase in the case of investments through EasyInvest (Service Mark), an
automatic purchase plan (see "Shareholder Services"), is $1,000, provided
that the schedule of automatic investments will result in investments
totalling at least $10,000 within the first twelve months. In the case of
investments pursuant to systematic payroll deduction plans (including
Individual Retirement Plans), the Fund, in its discretion, may accept
investments without regard to any minimum amounts which would otherwise be re
quired if the Fund has reason to believe that additional investments will
increase the investment in all accounts under such plans to at least $1,000.
Minimum subsequent purchases of $100 or more may be made by sending a check,
payable to Dean Witter Short-Term U.S. Treasury Trust, directly to Dean
Witter Trust FSB (the "Transfer Agent") at P.O. Box 1040, Jersey City, NJ
07303 or by contacting an account executive of DWR or another Selected
Broker-Dealer. The offering price will be the net asset value per share next
determined (see "Determination of Net Asset Value" below) following receipt
and acceptance by the Transfer Agent of an order 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. Orders for the purchase of Fund shares
placed by investors through DWR or another Selected Broker-Dealer will be
transmitted to the Transfer Agent for purchase on that date, with payment in
Federal funds transmitted to the Transfer Agent on the business day following
the day the order is placed. Shares commence earning income on the
7
<PAGE>
date following the date of purchase. Certificates for shares purchased will
not be issued unless requested by the shareholder in writing to the Transfer
Agent.
Sales personnel of a Selected Broker-Dealer are compensated for shares of
the Fund sold by them by the Distributor or any of its affiliates and/or by a
Selected Broker-Dealer. In addition, some sales personnel of the Selected
Broker-Dealer will receive various types of non-cash compensation as special
sales incentives, including trips to educational and/or business seminars and
merchandise. The Fund and the Distributor reserve the right to reject any
purchase orders.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined by taking the
value of all the assets of the Fund, subtracting all liabilities, dividing by
the number of shares outstanding and adjusting the result to the nearest
cent. The net asset value per share is determined by the Investment Manager
as of 4:00 p.m. New York time on each day that the New York Stock Exchange is
open (or, on days when the New York Stock Exchange closes prior to 4:00 p.m.,
at such earlier time). 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.
In the calculation of the Fund's net asset value: (1) all portfolio
securities for which over-the-counter market quotations are readily available
are valued at the bid price; (2) when market quotations are not readily
available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Fund's Board of Trustees (valuation of securities
for which market quotations are not readily available may be based upon
current market prices of securities which are comparable in coupon, rating
and maturity or an appropriate matrix utilizing similar factors); and (3)
short-term debt instruments having a maturity date of more than 60 days are
valued on a "mark-to-market" basis, that is, at prices based on market
quotations for securities of similar type, yield, quality and maturity, until
60 days prior to maturity and thereafter at amortized cost. Short-term
instruments having a maturity date of 60 days or less at the time of purchase
are val-ued at amortized cost unless the Board of Trustees determines this
does not represent the securities' market value, in which case these
securities will be valued at their fair value as determined by the Trustees.
Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may
utilize a matrix system incorporating security quality, maturity and coupon
as the evaluation model parameters, and/or research and evaluations by its
staff, including review of broker-dealer market price quotations, in
determining what it believes is the fair valuation of the portfolio
securities valued by such pricing service.
PLAN OF DISTRIBUTION
The Fund has entered into a Plan of Distribution pursuant to Rule 12b-1
under the Investment Com-pany Act of 1940, as amended (the "Act"), with the
Distributor whereby the expenses of certain activities and services,
including personal services to shareholders and maintenance of shareholder
accounts, in connection with the distribution of the Fund's shares are
reimbursed. The principal activities and services which may be provided by
the Distributor and its affiliates, or any other Selected Broker-Dealer under
the Plan include: (1) compensation to, and expenses of, DWR account
executives and others, 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. Reimbursements for these
services will be made in monthly payments by the Fund, which will in no event
8
<PAGE>
exceed an amount equal to a payment at the annual rate of 0.35% of the Fund's
average daily net assets. A portion of the amount payable pursuant to the
Plan, which may not exceed 0.25% of the Fund's average daily net assets, is
characterized as a service fee within the meaning of the NASD guidelines. The
services fee is a payment made for personal services and/or the maintenance
of shareholder accounts. 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. The Fund accrued $890,492 to the Distributor pursuant
to the Plan for the fiscal year ended May 31, 1997. This is an accrual at the
annual rate of 0.35% of the Fund's average daily net assets.
SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------
Automatic Investment of Dividends and Distribu-tions. All income dividends
and capital gains distributions are automatically paid in full and fractional
shares of the Fund, unless the shareholder requests that they be paid in
cash. Such dividends and distributions will be paid in shares of the Fund at
net asset value per share. At any time an investor may request the Transfer
Agent in writing to have subsequent dividends and/or capital gains
distributions paid to the investor in cash rather than shares. To assure
sufficient time to process the change, such request should be received by the
Transfer Agent at least five business days prior to the payment date for
which it commences to take effect. In the case of recently purchased shares
for which registration instructions have not been received on the record
date, cash payments will be made to DWR or other Selected Broker-Dealer
through whom shares were purchased.
Investment of Distributions Received in Cash. Any shareholder who
receives a cash payment representing a dividend or capital gains distribution
may invest such dividend or distribution at the net asset value next
determined after receipt by the Transfer Agent by returning the check or the
proceeds to the Transfer Agent within 30 days after the payment date.
Targeted Dividends (Service Mark). In states where it is legally
permissible, shareholders may also have all income dividends and capital
gains distributions automatically invested in shares of an open-end
investment company for which InterCapital serves as investment manager
(collectively, the "Dean Witter Funds"), other than Dean Witter Short-Term
U.S. Treasury Trust. Such investment will be made as described above for
automatic investment in shares of the Fund, at the net asset value per share
of the selected Dean Witter Fund as of the close of business on the payment
date and will begin to earn dividends, if any, in the selected Dean Witter
Fund the next business day. To participate in the Targeted Dividends program,
shareholders should contact their DWR or other Selected Broker-Dealer account
executive or the Transfer Agent. Shareholders of the Fund must be
shareholders of the selected Class of the Dean Witter Fund targeted to
receive investments from dividends at the time they enter the Targeted
Dividends program. Investors should review the prospectus of the targeted
Dean Witter Fund before entering theprogram.
EasyInvest (Service Mark). 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 Fund's Transfer Agent for
investment in shares of the Fund (see "Purchase of Fund Shares" and
"Redemptions and Repurchases--Involuntary Redemption"). Shares purchased
through EasyInvest will be added to the shareholder's existing account at the
net asset value calculated the same business day the transfer of funds is
effected. For further information or to subscribe to EasyInvest, shareholders
should contact their DWR or other Selected Broker-Dealer account executive or
the Transfer Agent.
Systematic Withdrawal Plan. A systematic withdrawal plan (the "Withdrawal
Plan") is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current offering price.
The Withdrawal Plan provides for monthly or quarterly (March, June, September
and 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
9
<PAGE>
determined, at the shareholder's option, on the tenth or twenty-fifth day (or
next following business day) of the relevant month or quarter and normally a
check for the proceeds will be mailed by the Transfer Agent, or amounts
credited to a shareholder's DWR or other Selected Broker-Dealer brokerage
account, within five business days after the date of redemption. Only
shareholders having accounts in which no share certificates have been issued
will be permitted to enroll in the Withdrawal Plan.
Withdrawal Plan payments should not be considered as dividends, yields or
income. If periodic withdrawal plan payments continuously exceed net
investment income and net capital gains, the shareholder's original
investment will be correspondingly reduced and ultimately exhausted.
Each withdrawal constitutes a redemption of shares and any gain or loss
realized must be recognized for federal income, and generally, state and
local tax purposes.
Shareholders wishing to enroll in the Withdrawal Plan should make this
election on the Investment Application or contact their DWR or other Selected
Broker-Dealer account executive or the Transfer Agent.
Tax Sheltered Retirement Plans. Retirement plans are available through the
Investment Manager for use by the self-employed, eligible Individual
Retirement Accounts and Custodial Accounts under Section 403(b)(7) of the
Internal Revenue Code. Adoption of such plans should be on advice of legal
counsel or tax adviser.
For further information regarding plan administration, custodial fees and
other details, investors should contact their account executive or the
Transfer Agent.
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
Dean Witter Funds that are multiple class funds ("Dean Witter Multi-Class
Funds") and Dean Witter Funds that are not multiple class funds but which are
sold with either a front-end (at time of purchase) sales charge ("FSC funds")
or a contingent deferred (at time of redemption) sales charge ("CDSC funds"),
may be exchanged for shares of the Fund, Dean Witter Intermediate Term U.S.
Treasury Trust, Dean Witter Limited Term Municipal Trust and Dean Witter
Short-Term Bond Fund, and for shares of five Dean Witter Funds which are
money market funds: Dean Witter Liquid Asset Fund Inc., Dean Witter U.S.
Government Money Market Trust, Dean Witter Tax-Free Daily Income Trust, Dean
Witter California Tax Free Daily Income Trust and Dean Witter New York
Municipal Money Market Trust (which nine funds, including the Fund, are
hereinafter collectively referred to as "Exchange Funds"). Shares of the
Exchange Funds received in an exchange for shares of a Dean Witter
Multi-Class Fund may be redeemed and exchanged only for shares of the
corresponding Class of a Dean Witter Multi-Class Fund or for shares of one of
the other Exchange Funds, provided that shares of the Exchange Funds received
in an exchange for Class A shares of a Dean Witter Multi-Class Fund may also
be redeemed and exchanged for shares of a FSC fund, and shares of the
Exchange Funds received in an exchange for Class B shares of a Dean Witter
Multi-Class Fund may also be redeemed and exchanged for shares of a CDSC
fund. In addition, shares of the Exchange Funds received in an exchange for
shares of a FSC fund may be redeemed and exchanged for Class A shares of a
Dean Witter Multi-Class Fund or for shares of one of the other Exchange
Funds, and shares of the Exchange Funds received in an exchange for shares of
a CDSC fund may be redeemed and exchanged for Class B shares of a Dean Witter
Multi-Class Fund or for shares of one of the other Exchange Funds.
An exchange 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. When exchanging into a money market fund, shares
of the Multi-Class Fund, the FSC fund, the CDSC fund or the Exchange Fund are
redeemed at their next calculated net asset value and exchanged for shares of
10
<PAGE>
the money market fund at their net asset value determined the following
business day. Ultimately, any applicable contingent deferred sales charge
("CDSC") will have to be paid upon redemption of shares originally purchased
from a CDSC fund or a Class of a Dean Witter Multi-Class Fund that imposes a
CDSC. (If shares of an Exchange Fund received in exchange for shares
originally purchased from a CDSC fund or Class B of a Dean Witter Multi-Class
Fund are exchanged for shares of another CDSC fund or a Dean Witter
Multi-Class Fund having a different CDSC schedule than that of the CDSC fund
or the Dean Witter Multi-Class Fund from which the Exchange Fund shares 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 or from a
Class of a Dean Witter Multi-Class Fund that imposes a CDSC remain in the
Exchange Fund, the holding period (for the purpose of determining the rate of
CDSC) is frozen. If those shares are subsequently re-exchanged for shares of
a CDSC fund or a Dean Witter Multi-Class Fund, the holding period previously
frozen when the first exchange was made resumes on the last day of the month
in which shares of a CDSC fund or shares of a Dean Witter Multi-Class Fund
are reacquired. Thus, the CDSC is based upon the time (calculated as
described above) the shareholder was invested in shares of a CDSC fund or in
shares of a Dean Witter Multi-Class Fund. In the case of exchanges of Class A
shares of a Dean Witter Multi-Class Fund which are subject to a CDSC, the
holding period also includes the time (calculated as described above) the
shareholder was invested in shares of a FSC fund. 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 fees, if any, incurred on or after that date which are attributable to
those shares (see "Purchase of Fund Shares--Plan of Distribution" in the
respective Exchange Fund Prospectus for a description of Exchange Fund
distribution fees). Exchanges may be made after the shares of the 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.
Additional Information Regarding Exchanges. Purchases and exchanges should
be made for investment purposes only. A pattern of frequent exchanges may be
deemed by the Distributor to be abusive and contrary to the best interests of
the Fund's other shareholders and, at the Distributor'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 (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 the Exchange
Funds pursuant to this Exchange Privilege, and provided further that the
Exchange Privilege may be terminated or materially revised without notice
under certain unusual circumstances. Shareholders maintaining margin accounts
with DWR or another Selected Broker-Dealer are referred to their account
executive regarding restrictions on exchange of shares of the Fund pledged in
their margin account.
The current prospectus for each fund describes its investment objective(s)
and policies, and share-
11
<PAGE>
holders should obtain one and read it carefully before investing. Exchanges
are subject to the minimum investment requirement of each Class of shares and
any other conditions imposed by each fund. In the case of any shareholder
holding a share certificate or certificates, no exchanges may be made until
all applicable share certificates have been received by the Transfer Agent
and deposited in the shareholder's account. 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.
If DWR or another Selected Broker-Dealer is the current broker-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 above Dean Witter Funds 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 clients of DWR or another Selected Broker-Dealer
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 by contacting the Transfer Agent at (800) 869-NEWS
(toll-free).
The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures
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 will 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.
REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------
REDEMPTIONS. Shares of the Fund may be redeemed through the Transfer Agent
(without redemption or other charge) on any day that the New York Stock
Exchange is open (see "Purchase of Fund Shares--Determination of Net Asset
Value"). Redemptions will be effected at the net asset value per share next
determined after the receipt of a redemption request meeting the applicable
requirements described 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
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<PAGE>
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 or enroll in the Systematic Withdrawal Plan.
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 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. Since the dollar value of an
account is constantly changing, it is not possible for a shareholder to
determine in advance the total value of its account so as to write a check
for the redemption of the entire account. For the same reason, a shareholder
should not write a check for substantially all of the current value of the
shares in its account with the Fund.
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 wire instructions.
DWR and any 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 other 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 at 800-869-NEWS
(toll-free).
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.
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 in accordance with the
general redemption requirements listed below.
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 such an eligible guarantor), except in
the case of redemption by check. Additional documentation may
13
<PAGE>
be required where shares are held by a corporation, partnership, trust or
other organization. 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
stock assignment form signed by the registered shareholder(s) exactly as the
account is registered. Signatures must be guaranteed by a commercial bank or
member firm of a domestic stock exchange. Additional documentation may be
required where shares are held by a corporation, partnership, trust or other
organization.
All requests for redemption should be sent to Dean Witter Trust FSB, P.O.
Box 983, Jersey City, NJ 07303.
Generally, the Fund will attempt to make payment for all redemptions
within one business day, and in no event later than seven days after receipt
of such redemption request in proper form. However, if the shares being
redeemed 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 at certain times when normal trading is not
taking place on the New York Stock Exchange.
Whether certificates are held by the shareholder or shares are held in a
shareholder's account, if the proceeds are to be paid to any person other
than the record owner, or if the proceeds are to be paid to a corporation
(other than DWR or any other Selected Broker-Dealer for the account of the
shareholder), partnership, trust or fiduciary, or sent to the shareholder at
an address other than the registered address, signature(s) 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 such an eligible guarantor). A stock power may be
obtained from any dealer or commercial bank.
Repurchase. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to
any of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic request of the shareholder. The repurchase price is the
net asset value next determined (see "Purchase of Fund Shares--Determination
of Net Asset Value") after such repurchase order is received. Payment for
shares repurchased may be made by the Fund to DWR and other Selected
Broker-Dealers for the account of the shareholder. The offers by DWR and
other Selected Broker-Dealers to repurchase shares from shareholders may be
suspended by them at any time. In that event, shareholders may redeem their
shares through the Fund's Transfer Agent as set forth above under
"Redemption."
Payment for Shares Redeemed or Repurchased. Payment for shares presented
for repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in
good order. Such payment may be postponed or the right of redemption
suspended under unusual circumstances. If the shares to be redeemed have
recently been purchased by check, payment of the redemption proceeds 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). Shareholders maintaining margin
accounts with DWR or other Selected Broker-Dealers are referred to their
account executive regarding restrictions on redemption of shares of the Fund
pledged in the margin account.
Reinstatement Privilege. A shareholder who has had his or her shares
redeemed or repurchased and has not previously exercised this reinstatement
14
<PAGE>
privilege may, within 35 days after the date of the redemption or repurchase,
reinstate any portion or all of the proceeds of such redemption or repurchase
in shares of the Fund at net asset value next determined after a
reinstatement request, together with the proceeds, is received by the
Transfer Agent.
Involuntary Redemption. The Fund reserves the right to redeem, on 60 days'
notice and at net asset value, the shares of any shareholder whose shares
have a value of less than $1,000 as a result of redemptions or repurchases,
or such lesser amount as may be fixed by the Trustees or, in the case of an
account opened through EasyInvest (Service Mark), if after twelve months the
shareholder has invested less than $10,000 in the account. However, before
the Fund redeems such shares and sends the proceeds to the shareholder, it
will notify the shareholder that the value of the shares is less than the
applicable amount 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 at least the applicable amount or more before the redemption is processed.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------
Dividends and Distributions. The Fund declares dividends from net
investment income on each day the New York Stock Exchange is open for
business. Such dividends are payable monthly. The Fund intends to distribute
net capital gains, if any, at least once each year. The Fund may, however,
elect to retain all or a portion of any such net long-term capital gains in
any year.
All dividends and any capital gains distributions will be paid in
additional Fund shares and automatically credited to the shareholder's
account without issuance of a share certificate unless the shareholder
requests in writing that all dividends or all dividends and distributions be
paid in cash. (See "Shareholder Services--Automatic Investment of Dividends
and Distributions".)
TAXATION
Federal Taxes. Because the Fund intends to distribute substantially all of
its net investment income and net short-term capital gains to shareholders
and otherwise remain qualified as a regulated investment company under
Subchapter M of the Internal Revenue Code, it is not expected that the Fund
will be required to pay any federal income tax on such income and capital
gains. Shareholders will normally have to pay federal income taxes on the
dividends and capital gains distributions they receive from the Fund.
Distributions of net investment income and net short-term capital gains are
taxable to the shareholder as ordinary dividend income regardless of whether
the shareholder receives such distributions in additional shares or in cash.
Any dividends declared in the last quarter of any calendar year which are
paid in the following year prior to February 1 will be deemed received by the
shareholder in the prior year.
Long-term and short-term capital gains may be generated by the sale of
portfolio securities by the Fund. Distributions of long-term capital gains,
if any, are taxable to shareholders as long-term capital gains regardless of
how long a shareholder has held the Fund's shares and regardless of whether
the distribution is received in additional shares or in cash.
No portion of such distributions will be eligible for the dividends
received deduction for corporations. To avoid being subject to a 31% federal
backup withholding tax on taxable dividends, capital gains distributions and
the proceeds of redemptions and repurchases, shareholders' taxpayer
identification numbers must be furnished and certified as to accuracy.
Current federal law requires that a holder (such as the Fund) of a zero
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. Accordingly, the Fund may
15
<PAGE>
be required to pay out as an income distribution each year an amount which is
greater than the total amount of cash receipts of interest the Fund actually
received. Such distributions will be made from the available cash of the Fund
or by liquidation of portfolio securities, if necessary.
The Fund may at times make payments from sources other than income or net
capital gains. Payments from such sources will, in effect, represent a return
of a portion of each shareholder's investment. All, or a portion, of such
payments will not be taxable to shareholders.
After the end of the year, shareholders will receive full information on
their dividends and capital gains distributions for tax purposes, including
information as to the Federal tax status of dividends and distributions paid
or retained by the Fund.
The foregoing discussion relates solely to the Federal income tax
consequences of an investment in the Fund and dividends (where applicable)
and distributions may also be subject to state and local taxes (see "State
and Local Taxes" below); therefore, each shareholder is advised to consult
his or her own tax adviser.
State and Local Taxes. The Fund intends to invest only in U.S. Treasury
obligations that provide interest income exempt from state and local taxes.
Because all States presently allow the pass-through of federal obligation
interest derived from specific federal obligations, it is anticipated that
substantially all of the interest income generated by the Fund and paid out
to shareholders as net investment income will be exempt from state and local
taxation. Such investment income, however, will not be exempt from federal
tax. Furthermore, any capital gains realized by the Fund will not be exempt
from federal, and generally, state and local taxes. It should be noted that
although the Fund intends to invest only in securities the pass-through
income from which is believed exempt from state and local income taxes, it is
possible that a state or local taxing authority may seek to tax an investor
on a portion of the interest income of a particular government obligation
held by the Fund. Shareholders are urged to consult their tax advisers with
respect to specific questions regarding federal, state and local taxes.
PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------
From time to time the Fund may quote its "yield" and/or its "total return"
in advertisements and sales literature. Both the yield and the total return
of the Fund are based on historical earnings and are not intended to indicate
future performance. The yield of the Fund is computed by dividing the net
investment income of the Fund over a 30-day period by an average value (using
the average number of shares entitled to receive dividends and the net asset
value per share at the end of the period), all in accordance with applicable
regulatory requirements. Such amount is compounded for six months and then
annualized for a twelve-month period to derive the yield of the Fund. The
Fund may also quote its 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 "average annual total return" of the Fund refers to a figure
reflecting the average annualized percentage increase (or decrease) in the
value of an initial investment in the Fund of $1,000 over periods of one,
five and ten years or over the life of the Fund, if less than any of the
foregoing. Average annual total return reflects all income earned by the
Fund, any appreciation or depreciation of the assets of the Fund, and all
expenses incurred by the Fund, for the stated periods. It also assumes
reinvestment of all dividends and distributions paid by the Fund.
In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, year-by-year
16
<PAGE>
or other types of total return figures. The Fund may also advertise the
growth of hypothetical investments of $10,000, $50,000 and $100,000 in shares
of the Fund.
The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations (such as Lipper Analytical Services Inc.).
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. There
are no conversion, pre-emptive or other subscription rights. In the event of
liquidation, each share of beneficial interest of the Fund is entitled to its
portion of all of the Fund's assets after all debts and expenses have been
paid. The shares do not have cumulative voting rights.
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. The Trustees
themselves have the power to alter the number and the terms of office of the
Trustees and they may at any time lengthen their own terms or make their
terms of unlimited duration and appoint their own successors, provided that
always at least a majority of the Trustees has been elected by the
shareholders of the Fund. Under certain circumstances the Trustees may be
removed by action of the Trustees. The shareholders also have the right under
certain circumstances to remove the Trustees.
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the
obligations of the Fund. The Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
requires that notice of such disclaimer be given in each instrument entered
into or executed by the Fund. Under the Declaration of Trust, indemnification
shall be made 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 thus, in the opinion
of Massachusetts counsel to the Fund, the risk to Fund shareholders is
remote.
Code of Ethics. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code
of Ethics adopted by those companies. The Code of Ethics is intended to
ensure that the interests of shareholders and other clients are placed ahead
of any personal interest, that no undue personal benefit is obtained from a
person's employment activities and that actual and potential conflicts of
interest are avoided. To achieve these goals and comply with regulatory
requirements, the Code of Ethics requires, among other things, that personal
securities transactions by employees of the companies be subject to an
advance clearance process to monitor that no Dean Witter Fund is engaged at
the same time in a purchase or sale of the same security. The Code of Ethics
bans the purchase of securities in an initial public offering, and also
prohibits engaging in futures and options transactions and profiting on
short-term trading (that is, a purchase within sixty days of a sale or a sale
within sixty days of a purchase) of a security. In addition, investment
personnel may not purchase or sell a security for their personal account
within thirty days before or after any transaction in any Dean Witter Fund
managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and
17
<PAGE>
the recommendations in the 1994 report by the Investment Company Institute
Advisory Group on Personal Investing.
Master/Feeder Conversion. The Fund reserves the right to seek to achieve
its investment objective by investing all of its investable assets in a
diversified, open-end management investment company having the same
investment objective and policies and substantially the same investment
restrictions as those applicable to the Fund.
Shareholder Inquiries. All inquiries regarding the Fund should be
directed to the Fund at the telephone numbers or address set forth on the
front cover of this Prospectus.
18
<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 U.S. Government Money Market Trust
Dean Witter California Tax-Free Daily Income Trust
Dean Witter New York Municipal 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 Value-Added Market Series
Dean Witter Utilities Fund
Dean Witter Capital Growth Securities
Dean Witter European Growth Fund Inc.
Dean Witter Pacific Growth Fund Inc.
Dean Witter Precious Metals and Minerals Trust
Dean Witter Health Sciences Trust
Dean Witter Global Dividend Growth Securities
Dean Witter Global Utilities Fund
Dean Witter International SmallCap Fund
Dean Witter Mid-Cap Growth Fund
Dean Witter Balanced Growth Fund
Dean Witter Capital Appreciation Fund
Dean Witter Information Fund
Dean Witter Japan Fund
Dean Witter Income Builder Fund
Dean Witter Special Value Fund
Dean Witter Financial Services Trust
Dean Witter Market Leader Trust
ASSET ALLOCATION FUNDS
Dean Witter Strategist Fund
Dean Witter Global Asset Allocation 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
FIXED-INCOME FUNDS
Dean Witter High Yield Securities Inc.
Dean Witter Tax-Exempt Securities Trust
Dean Witter U.S. Government Securities Trust
Dean Witter Federal Securities Trust
Dean Witter Convertible Securities Trust
Dean Witter California Tax-Free Income Fund
Dean Witter New York Tax-Free Income Fund
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 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 National Municipal Trust
Dean Witter High Income Securities
Dean Witter Balanced Income Fund
Dean Witter Hawaii Municipal Trust
Dean Witter Intermediate Term U.S. Treasury Trust
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
Stategist Series
Utilities Series
Value-Added Market Series
Global Equity Series
<PAGE>
Dean Witter DEAN WITTER
Short-Term U.S. Treasury Trust SHORT-TERM
Two World Trade Center U.S. TREASURY
New York, New York 10048 TRUST
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
PROSPECTUS--AUGUST 1, 1997
<PAGE>
DEAN WITTER
STATEMENT OF ADDITIONAL INFORMATION SHORT-TERM
U.S. TREASURY
AUGUST 1, 1997 TRUST
- -----------------------------------------------------------------------------
Dean Witter Short-Term U.S. Treasury Trust (the "Fund") is an open-end,
diversified management investment company whose investment objective is
current income, preservation of principal and liquidity. The Fund seeks to
achieve its investment objective by investing in U.S. Treasury securities
backed by the full faith and credit of the U.S. Government.
Shares of the Fund are sold and redeemed at net asset value without the
imposition of a sales charge. The Fund is authorized to reimburse specific
expenses incurred in promoting the distribution of the Fund's shares,
including personal services to shareholders and maintenance of shareholder
accounts, in accordance with 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 0.35% of the average
daily net assets of the Fund.
A Prospectus for the Fund dated August 1, 1997, which provides the basic
information you should know before investing in the Fund, may be obtained
without charge from the Fund at the address or telephone numbers listed below
or from the Fund's Distributor, Dean Witter Distributors Inc., or from Dean
Witter Reynolds Inc., at any of its branch offices. This Statement of
Additional Information is not a Prospectus. It 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
Short-Term U.S. Treasury Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)
<PAGE>
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
The Fund and its Management.......... 3
Trustees and Officers................ 6
Investment Practices and Policies ... 12
Investment Restrictions.............. 13
Portfolio Transactions and
Brokerage........................... 14
The Distributor...................... 15
Shareholder Services ................ 18
Redemptions and Repurchases.......... 22
Dividends, Distributions and Taxes .. 23
Performance Information ............. 24
Description of Shares of the Fund .. 25
Custodian and Transfer Agent ....... 25
Independent Accountants.............. 25
Reports to Shareholders.............. 26
Legal Counsel........................ 26
Experts.............................. 26
Registration Statement .............. 26
Financial Statements--May 31, 1997 . 27
Report of Independent Accountants ... 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 June 4, 1991.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. (the "Investment Manager" or
"InterCapital"), 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 Morgan Stanley, Dean Witter,
Discover & Co. ("MSDWD"), a Delaware corporation. The daily management of the
Fund and research relating to the Fund's portfolio is conducted by or under
the direction of officers of the Fund and of the Investment Manager, subject
to review by the Fund's Board of Trustees. Information as to these Trustees
and officers is contained under the caption "Trustees and Officers."
The Investment Manager is the investment manager or investment adviser of
the following investment companies:
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 Balanced Growth Fund
7. Dean Witter Balanced Income Fund
8. Dean Witter California Tax-Free Daily
Income Trust
9. Dean Witter California Tax-Free Income Fund
10. Dean Witter Capital Appreciation Fund
11. Dean Witter Capital Growth Securities
12. Dean Witter Convertible Securities Trust
13. Dean Witter Developing Growth Securities Trust
14. Dean Witter Diversified Income Trust
15. Dean Witter Dividend Growth Securities Inc.
16. Dean Witter Dean Witter European Growth Fund Inc.
17. Dean Witter Federal Securities Trust
18. Dean Witter Financial Services Trust
19. Dean Witter Global Asset Allocation Fund
20. Dean Witter Global Dividend Growth
Securities
21. Dean Witter Global Short-Term Income Fund Inc.
22. Dean Witter Global Utilities Fund
23. Dean Witter Hawaii Municipal Trust
24. Dean Witter Health Sciences Trust
25. Dean Witter High Income Securities
26. Dean Witter High Yield Securities Inc.
27. Dean Witter Income Builder Fund
28. Dean Witter Information Fund
29. Dean Witter Intermediate Income Securities
30. Dean Witter Intermediate Term U.S.
Treasury Trust
31. Dean Witter International Small Cap Fund
32. Dean Witter Japan Fund
33. Dean Witter Limited Term Municipal Trust
34. Dean Witter Liquid Asset Fund Inc.
35. Dean Witter Market Leader Trust
36. Dean Witter Mid-Cap Growth Fund
37. Dean Witter Multi-State Municipal Series
Trust
38. Dean Witter National Municipal Trust
39. Dean Witter Natural Resource
Development Securities Inc.
40. Dean Witter New York Municipal Money
Market Trust
41. Dean Witter New York Tax-Free Income
Fund
42. Dean Witter Pacific Growth Fund Inc.
43. Dean Witter Precious Metals and Minerals
Trust
44. Dean Witter Retirement Series
45. Dean Witter Select Dimensions Investment Fund
46. Dean Witter Select Municipal Reinvestment Fund
47. Dean Witter Short-Term Bond Fund
48. Dean Witter Short-Term U.S. Treasury Trust
49. Dean Witter Special Value Fund
50. Dean Witter Strategist Fund
51. Dean Witter Tax-Exempt Securities Trust
52. Dean Witter Tax-Free Daily Income Trust
3
<PAGE>
OPEN-END FUNDS (CONT)
53. Dean Witter U.S. Government Money
Market Trust
54. Dean Witter U.S. Government Securities Trust
55. Dean Witter Utilities Fund
56. Dean Witter Value-Added Market Series
57. Dean Witter Variable Investment Series
58. Dean Witter World Wide Income Trust
59. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS
1. High Income Advantage Trust
2. High Income Advantage Trust II
3. High Income Advantage Trust III
4. InterCapital Income Securities Inc.
5. Dean Witter Government Income Trust
6. InterCapital Insured Municipal Bond Trust
7. InterCapital Insured Municipal Trust
8. InterCapital Insured Municipal Income Trust
9. InterCapital California Insured Municipal
Income Trust
10. InterCapital Insured Municipal Securities
11. InterCapital Insured California Municipal Securities
12. InterCapital Quality Municipal Investment Trust
13. InterCapital Quality Municipal Income Trust
14. InterCapital Quality Municipal Securities
15. InterCapital California Quality Municipal Securities
16. InterCapital New York Quality Municipal Securities
17. Municipal Income Trust
18. Municipal Income Trust II
19. Municipal Income Trust III
20. Municipal Income Opportunities Trust
21. Municipal Income Opportunities II
22. Municipal Income Opportunities III
23. Prime Income Trust
24. Municipal Premium Income Trust
The foregoing investment companies, together with the Fund, are
collectively referred to as the Dean Witter Funds.
In addition, Dean Witter Service Company Inc. ("DWSC"), a wholly-owned
subsidiary of InterCapital, serves as manager for the following companies for
which TCW Funds Management, Inc. is the investment adviser (the "TCW/DW
Funds"):
OPEN-END 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
7. TCW/DW Mid-Cap Equity Trust
8. TCW/DW Global Telecom Trust
9. TCW/DW Strategic Income Trust
CLOSED-END FUNDS
10. TCW/DW Term Trust 2000
11. TCW/DW Term Trust 2002
12. TCW/DW Term Trust 2003
13. TCW/DW Total Return Trust
14. TCW/DW Emerging Markets Opportunities
Trust
InterCapital also serves as: (i) administrator of The BlackRock Strategic
Term Trust Inc., a closed-end investment company; and (ii) sub-administrator
of MassMutual Participation Investors and Templeton Global Governments Income
Trust, closed-end investment companies.
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
4
<PAGE>
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, 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. On April
17, 1995, DWSC was reorganized in the State of Delaware necessitating the
entry into a new Services Agreement by InterCapital and DWSC on such date.
The foregoing internal reorganizations did not result in any change in the
nature or scope of the administrative services being provided to the 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 or by Dean Witter Distributors Inc. ("Distributors" or the
"Distributor"), the Distributor of the Fund's shares (see "The Distributor"),
will be paid by the Fund. The expenses borne by the Fund include, but are not
limited to: fees pursuant to the Fund's Plan of Distribution; charges and
expenses of any registrar, custodian, stock transfer and dividend disbursing
agent; brokerage commissions; taxes; engraving and printing 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.
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
annual rate of 0.35% to the net assets of the Fund, determined as of the
close of each business day. For the fiscal years ended May 31, 1995, May 31,
1996 and May 31, 1997, the Fund accrued to the Investment Manager total
compensation under the Agreement in the amounts of $1,303,748, $970,394, and
$902,158, respectively.
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 paid the organizational expenses of the Fund in the
amount of approximately $135,000 incurred prior to the offering of the Fund's
shares. The Fund has reimbursed the Investment Manager for such expenses.
The Agreement was initially approved by the Trustees on February 21, 1997
and by the shareholders of the Fund at a Special Meeting of Shareholders held
on May 21, 1997. The Agreement
5
<PAGE>
is substantially identical to a prior investment management agreement which
was initially approved by the Trustees on October 30, 1992 and by the
shareholders of the Fund at a Special Meeting of Shareholders held on January
12, 1993. The Agreement took effect on May 31, 1997 upon the consummation of
the merger of Dean Witter, Discover & Co. with Morgan Stanely Group Inc. 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 (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 has an initial term ending April 30,
1999 and will continue from year to year thereafter, provided such
continuance of the Agreement is approved at least annually by the vote of the
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 or "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 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 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
the 83 Dean Witter Funds and the 14 TCW/DW Funds are shown below:
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
<S> <C>
Michael Bozic (56) Chairman and Chief Executive Officer of Levitz Furniture
Trustee Corporation (since November, 1995); Director or Trustee of
c/o Levitz Furniture Corporation the Dean Witter Funds; formerly President and Chief Executive
6111 Broken Sound Parkway, N.W. Officer of Hills Department Stores (May, 1991-July, 1995);
Boca Raton, Florida formerly variously Chairman and Chief Executive Officer,
President and Chief Operating Officer (1987-1991) of the Sears
Merchandise Group of Sears, Roebuck and Co.; Director of
Eaglemark Financial Services, Inc., the United Negro College
Fund and Weirton Steel Corporation.
Charles A. Fiumefreddo* (64) Chairman, Chief Executive Officer and Director of InterCapital,
Chairman, Trustee, Distributors and DWSC; Executive Vice President and Director
President and Chief of DWR; Chairman, Trustee or Director, President and Chief
Executive Officer Executive Officer of the Dean Witter Funds; Chairman, Chief
Two World Trade Center Executive Officer and Trustee of the TCW/DW Funds; Chairman
New York, New York and Director of Dean Witter Trust Company FSB ("DWT"); formerly
Executive Vice President and Director of Dean Witter, Discover
& Co. (until February, 1993); Director of various MSDWD
subsidiaries and affiliates.
6
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
Edwin J. Garn (64) Director or Trustee of the Dean Witter Funds; formerly United
Trustee States Senator (R-Utah)(1974-1992) and Chairman, Senate
c/o Huntsman Corporation Banking Committee (1980-1986); formerly Mayor of Salt Lake
500 Huntsman Way City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Salt Lake City, Utah Discovery (April 12-19, 1985); Vice Chairman, Huntsman
Corporation (since January, 1993); Director of Franklin Quest
(time management systems) and John Alden Financial Corp. (health
insurance); member of the board of various civic and charitable
organizations.
John R. Haire (72) Chairman of the Audit Committee and Chairman of the Committee
Trustee of the Independent Directors or Trustees and Director or Trustee
Two World Trade Center of each of the Dean Witter Funds; Chairman of the Audit Committee
New York, New York and Chairman of the Committee of the Independent Trustees
and Trustee of the TCW/DW Funds; formerly President, Council
for Aid to Education (1978-1989), and Chairman and Chief
Executive Officer of Anchor Corporation, an Investment Adviser
(1964-1978); Director of Washington National Corporation
(insurance).
Wayne E. Hedien** (63) Retired; Director or Trustee of the Dean Witter Funds (commencing
Trustee on September 1, 1997); Director of the PMI Group, Inc. (private
c/o Gordon Altman Butowsky mortgage insurance); Trustee and Vice Chairman of The Field
Weitzen Shalov & Wein Museum of Natural History; formerly associated with the Allstate
Counsel to the Independent Trustees Companies (1966- 1994), most recently as Chairman of The Allstate
114 West 47th Street Corporation (March, 1993-December, 1994) and Chairman and
New York, New York Chief Executive Officer of its wholly-owned subsidiary,
Allstate Insurance Company (July, 1989-December, 1994);
director of various other business and charitable
organizations.
Dr. Manuel H. Johnson (48) Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm; Co-Chairman and a founder of the Group of Seven Council
c/o Johnson Smick International, Inc. (G7C), an international economic commission; Director or
1133 Connecticut Avenue, N.W. Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds;
Washington, D.C. Director of NASDAQ (since June, 1995); Director of Greenwich
Capital Markets Inc. (broker-dealer); Trustee of the Financial
Accounting Foundation (oversight organization for the
Financial Accounting Standards Board); formerly Vice Chairman
of the Board of Governors of the Federal Reserve System
(1986-1990) and Assistant Secretary of the U.S. Treasury
(1982-1986).
7
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
Michael E. Nugent (61) General Partner, Triumph Capital, L.P., a private partnership;
Trustee Director or Trustee of the Dean Witter Funds; Trustee of the
c/o Triumph Capital, L.P. TCW/DW Funds; formerly Vice President, Bankers Trust Company
237 Park Avenue and BT Capital Corporation (1984-1988); director of various
New York, New York business organizations.
Philip J. Purcell* (53) Chairman of the Board of Directors and Chief Executive Officer
Trustee of MSDWD, DWR and Novus Credit Services Inc.; Director of
1585 Broadway InterCapital, DWSC and Distributors; Director or Trustee of
New York, New York the Dean Witter Funds; Director and/or officer of various
MSDWD subsidiaries.
John L. Schroeder (66) Retired; Director or Trustee of the Dean Witter Funds; Trustee
Trustee of the TCW/DW Funds; Director of Citizens Utilities Company;
c/o Gordon Altman Butowsky formerly Executive Vice President and Chief Investment Officer
Weitzen Shalov & Wein of the Home Insurance Company (August, 1991-September, 1995).
Counsel to the Independent Trustees
114 West 47th Street
New York, New York
Barry Fink (42) Senior Vice President (since March, 1997) and Secretary and
Vice President, General Counsel (since February, 1997) of InterCapital and
Secretary and General Counsel DWSC; Senior Vice President (since March, 1997) and Assistant
Two World Trade Center Secretary and Assistant General Counsel (since February, 1997)
New York, New York of Distributors; Assistant Secretary of DWR (since August,
1996); Vice President, Secretary and General Counsel of the
Dean Witter Funds and the TCW/DW Funds (since February, 1997);
previously First Vice President (June, 1993-February, 1997),
Vice President (until June, 1993) and Assistant Secretary
and Assistant General Counsel of InterCapital and DWSC and
Assistant Secretary of the Dean Witter Funds and TCW/DW Funds.
Rajesh K. Gupta (37) Senior Vice President of InterCapital; Vice President of various
Vice President Dean Witter Funds.
Two World Trade Center
New York, New York
Thomas F. Caloia (51) First Vice President and Assistant Treasurer of InterCapital
Treasurer and DWSC; Treasurer of the Dean Witter Funds and the TCW/DW
Two World Trade Center Funds.
New York, New York
</TABLE>
- ------------
* Denotes Trustees who are "interested persons" of the Fund, as defined in
the Act.
** Mr. Hedien's term as Trustee will commence on September 1, 1997.
8
<PAGE>
In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, Mitchell M. Merin, President and Chief Strategic Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWT and
Director of DWT, Executive Vice President , Chief Administrative Officer and
Director of DWR, and Director of SPS Transaction Services, Inc. and various
other MSDWD subsidiaries, Joseph J. McAlinden, Executive Vice President and
Chief Investment Officer of InterCapital and Director of DWT, Robert S.
Giambrone, Senior Vice President of InterCapital, DWSC, Distributors and DWT
and a Director of DWT, and Peter M. Avelar and Jonathan R. Page, Senior Vice
Presidents of InterCapital, are Vice Presidents of the Fund. Marilyn K.
Cranney, First Vice President and Assistant General Counsel of InterCapital
and DWSC, and Lou Anne D. McInnis, Ruth Rossi and Carsten Otto, Vice
Presidents and Assistant General Counsels of InterCapital and DWSC, and Frank
Bruttomesso, a Staff Attorney with InterCapital, are Assistant Secretaries of
the Fund.
THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES
The Board of Trustees consists of eight (8) trustees. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of
this Statement of Additional Information, there are a total of 83 Dean Witter
Funds, comprised of 126 portfolios. As of June 30, 1997, the Dean Witter
Funds had total net assets of approximately $87.9 billion and more than five
million shareholders.
Six Trustees and Mr. Hedien (77% of the total number) have no affiliation
or business connection with InterCapital or any of its affiliated persons and
do not own any stock or other securities issued by InterCapital's parent
company, MSDWD. These are the "disinterested" or "independent" Trustees. The
other two Trustees (the "management Trustees") are affiliated with
InterCapital. Four of the six independent Trustees are also Independent
Trustees of the TCW/DW Funds.
Law and regulation establish both general guidelines and specific duties
for the Independent Trustees. The Dean Witter Funds seek as Independent
Trustees individuals of distinction and experience in business and finance,
government service or academia; these are people whose advice and counsel are
in demand by others and for whom there is often competition. To accept a
position on the Funds' Boards, such individuals may reject other attractive
assignments because the Funds make substantial demands on their time. Indeed,
by serving on the Funds' Boards, certain Trustees who would otherwise be
qualified and in demand to serve on bank boards would be prohibited by law
from doing so.
All of the Independent Trustees serve as members of the Audit Committee
and the Committee of the Independent Trustees. Three of them also serve as
members of the Derivatives Committee. During the calendar year ended December
31, 1996, the three Committees held a combined total of sixteen meetings. The
Committees hold some meetings at InterCapital's offices and some outside
InterCapital. Management Trustees or officers do not attend these meetings
unless they are invited for purposes of furnishing information or making a
report.
The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and distribution and underwriting agreements; continually
reviewing Fund performance; checking on the pricing of portfolio securities,
brokerage commissions, transfer agent costs and performance, and trading
among Funds in the same complex; and approving fidelity bond and related
insurance coverage and allocations, as well as other matters that arise from
time to time. The Independent Trustees are required to select and nominate
individuals to fill any Independent Trustee vacancy on the Board of any Fund
that has a Rule 12b-1 plan of distribution. Most of the Dean Witter Funds
have such a plan.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing
engagement; approving professional services provided by the independent
accountants and other accounting firms prior to the performance of such
services; reviewing the independence of the independent accountants;
considering the range of
9
<PAGE>
audit and non-audit fees; reviewing the adequacy of the Fund's system of
internal controls; and preparing and submitting Committee meeting minutes to
the full Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect
to derivative investments, if any, made by the Fund.
DUTIES OF CHAIRMAN OF COMMITTEE OF THE INDEPENDENT TRUSTEES AND AUDIT
COMMITTEE
The Chairman of the Committee of the Independent Trustees and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and
the Funds' operations and management. He screens and/or prepares written
materials and identifies critical issues for the Independent Trustees to
consider, develops agendas for Committee meetings, determines the type and
amount of information that the Committees will need to form a judgment on
various issues, and arranges to have that information furnished to Committee
members. He also arranges for the services of independent experts and
consults with them in advance of meetings to help refine reports and to focus
on critical issues. Members of the Committees believe that the person who
serves as Chairman of both Committees and guides their efforts is pivotal to
the effective functioning of the Committees.
The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment advisory, management and
other operating contracts of the Funds and, on behalf of the Committees,
conducts negotiations with the Investment Manager and other service
providers. In effect, the Chairman of the Committees serves as a combination
of chief executive and support staff of the Independent Trustees.
The Chairman of the Committee of the Independent Trustees and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Trustee of the Dean Witter Funds and as an Independent Trustee and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and
the Audit Committee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN
WITTER FUNDS
The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of
separate groups of Independent Trustees arriving at conflicting decisions
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of Independent
Trustees, and a Chairman of their Committees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Dean Witter Funds.
COMPENSATION OF INDEPENDENT TRUSTEES
The Fund pays each Independent Trustee an annual fee of $1,000 plus a per
meeting fee of $50 for meetings of the Board of Trustees or committees of the
Board of Trustees attended by the Trustee (the Fund pays the Chairman of the
Audit Committee an annual fee of $750 and pays the Chairman of the Committee
of the Independent Trustees an additional annual fee of $1,200). The Fund
also 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 or have been employed by the Investment Manager
or an affiliated company receive no compensation or expense reimbursement
from the Fund.
10
<PAGE>
The following table illustrates the compensation paid to the Fund's
Independent Trustees by the Fund for the fiscal year ended May 31, 1997.
FUND COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- --------------------------- ---------------
<S> <C>
Michael Bozic ............. $1,700
Edwin J. Garn ............. 1,800
John R. Haire ............. 3,650
Dr. Manuel H. Johnson .... 1,750
Michael E. Nugent ......... 1,800
John L. Schroeder.......... 1,800
</TABLE>
The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1996 for
services to the 82 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 14 TCW/DW Funds that were in operation at
December 31, 1996. With respect to Messrs. Haire, Johnson, Nugent and
Schroeder, the TCW/DW Funds are included solely because of a limited exchange
privilege between those Funds and five Dean Witter Money Market Funds.
CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF
COMMITTEES OF FOR SERVICE AS
INDEPENDENT CHAIRMAN OF TOTAL CASH
FOR SERVICE DIRECTORS/ COMMITTEES OF COMPENSATION
AS DIRECTOR OR FOR SERVICE AS TRUSTEES AND INDEPENDENT PAID
TRUSTEE AND TRUSTEE AND AUDIT TRUSTEES FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER COMMITTEES OF 82 AND AUDIT 82 DEAN WITTER
NAME OF OF 82 DEAN WITTER OF 14 TCW/DW DEAN WITTER COMMITTEES OF 14 FUNDS AND 14
INDEPENDENT TRUSTEE FUNDS FUNDS FUNDS TCW/DW FUNDS TCW/DW FUNDS
- ------------------- ----------------- ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Michael Bozic ......... $138,850 -- -- -- $138,850
Edwin J. Garn ......... 140,900 -- -- -- 140,900
John R. Haire ......... 106,400 $64,283 $195,450 $12,187 378,320
Dr. Manuel H. Johnson 137,100 66,483 -- -- 203,583
Michael E. Nugent .... 138,850 64,283 -- -- 203,133
John L. Schroeder...... 137,150 69,083 -- -- 206,233
</TABLE>
As of the date of this Statement of Additional Information, 57 of the Dean
Witter Funds, including the Fund, have adopted a retirement program under
which an Independent Trustee who retires after serving for at least five
years (or such lesser period as may be determined by the Board) as an
Independent Director or Trustee of any Dean Witter Fund that has adopted the
retirement program (each such Fund referred to as an "Adopting Fund" and each
such Trustee referred to as an "Eligible Trustee") is entitled to retirement
payments upon reaching the eligible retirement age (normally, after attaining
age 72). Annual payments are based upon length of service. Currently, upon
retirement, each Eligible Trustee is entitled to receive from the Adopting
Fund, commencing as of his or her retirement date and continuing for the
remainder of his or her life, an annual retirement benefit (the "Regular
Benefit") equal to 25.0% of his or her Eligible Compensation plus 0.4166666%
of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years
up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(1) "Eligible Compensation" is
one-fifth of the total compensation earned by such Eligible Trustee
- ---------
(1) An Eligible Trustee may elect alternate payments of his or her
retirement benefits based upon the combined life expectancy of such
Eligible Trustee and his or her spouse on the date of such Eligible
Trustee's retirement. The amount estimated to be payable under this
method, through the remainder of the later of the lives of such
Eligible Trustee and spouse, will be the actuarial equivalent of the
Regular Benefit. In addition, the Eligible Trustee may elect that the
surviving spouse's periodic payment of benefits will be equal to either
50% or 100% of the previous periodic amount, an election that,
respectively, increases or decreases the previous periodic amount so
that the resulting payments will be the actuarial equivalent of the
Regular Benefit.
11
<PAGE>
for service to the Adopting Fund in the five year period prior to the date of
the Eligible Trustee's retirement. Benefits under the retirement program are
not secured or funded by the Adopting Funds.
The following table illustrates the retirement benefits accrued to the
Fund's Independent Trustees by the Fund for the fiscal year ended May 31,
1997 and by the 57 Dean Witter Funds (including the Fund) for the year ended
December 31, 1996, and the estimated retirement benefits for the Fund's
Independent Trustees, to commence upon their retirement, from the Fund as of
May 31, 1997 and from the 57 Dean Witter Funds as of December 31, 1996.
RETIREMENT BENEFITS FROM THE FUND AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
-----------------------------
ESTIMATED ANNUAL
ESTIMATED RETIREMENT BENEFITS BENEFITS
CREDITED ACCRUED AS EXPENSES UPON RETIREMENT(2)
YEARS ESTIMATED ------------------- ------------------
OF SERVICE AT PERCENTAGE OF BY ALL FROM FROM ALL
NAME OF INDEPENDENT RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- ---------------------------- ------------- ------------- ------ -------- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 50.0% $ 376 $20,147 $ 925 $ 51,325
Edwin J. Garn ............. 10 50.0 629 27,772 925 51,325
John R. Haire ............. 10 50.0 1,912 46,952 2,246 129,550
Dr. Manuel H. Johnson .... 10 50.0 253 10,926 925 51,325
Michael E. Nugent ......... 10 50.0 475 19,217 925 51,325
John L. Schroeder.......... 8 41.7 725 38,700 771 42,771
</TABLE>
- ---------
(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
above.
As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's
officers and Trustees as a group was less than 1 percent of the Fund's shares
of beneficial interest outstanding.
INVESTMENT PRACTICES AND POLICIES
- -----------------------------------------------------------------------------
As stated in the Prospectus, the Fund will invest all of its assets in
U.S. Treasury securities backed by the full faith and credit of the U.S.
Government.
U.S. Treasury securities presently consist of U.S. Treasury bills
(maturities of one year or less), U.S. Treasury notes (maturities of one to
ten years) and U.S. Treasury bonds (generally maturities of greater than ten
years), all of which are direct obligations of the U.S. Government and, as
such, are backed by the "full faith and credit" of the United States.
Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are
U.S. Treasury notes and bonds which have been stripped of their unmatured
interest coupons and receipts or which are certificates representing
interests in such stripped debt obligations and coupons. Such securities are
purchased at a discount from their face amount, giving the purchaser the
right to receive their full value at maturity. A zero coupon security pays no
interest to its holder during its life. Its value to an investor consists of
the difference between its face value at the time of maturity and the price
for which it was acquired, which is generally an amount significantly less
than its face value (sometimes referred to as a "deep discount" price).
The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant
rate eliminates the risk of receiving lower yields upon reinvestment of
interest if prevailing interest rates decline, the owner of a zero coupon
security will be unable to participate in higher yields upon reinvestment of
interest received if prevailing interest rates rise. For this reason, zero
coupon securities are subject to substantially greater market price
fluctuations during periods of changing prevailing interest rates than are
comparable debt securities which make current distributions of interest.
Current federal tax law requires that a holder (such as the Fund) of a zero
12
<PAGE>
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. For a discussion of the tax
treatment of zero coupon Treasury securities. See "Dividends, Distributions
and Taxes."
In the last few years a number of banks and brokerage firms have separated
("stripped") the principal portions ("corpus") from the coupon portions of
the U.S. Treasury bonds and notes and sold them separately in the form of
receipts or certificates representing undivided interests in these
instruments (which instruments are generally held by a bank in a custodial or
trust account). The Fund will not purchase any such receipts or certificates
representing stripped corpus interests in U.S. Treasury securities sold by
banks and brokerage firms. The Fund will only purchase zero coupon Treasury
Securities which have been stripped by the Federal Reserve Bank.
When-Issued and Delayed Delivery Securities and Firm Commitments. From
time to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may
purchase or sell U.S. Treasury securities on a firm commitment basis. For
example, the Fund may wish to purchase U.S. Treasury notes and bonds sold at
periodic U.S. Treasury auctions prior to their issuance ("when-issued"). When
such transactions are negotiated, the price is fixed at the time of the
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, delayed delivery or firm commitment 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 or sell securities on a when-issued, delayed delivery or firm
commitment basis, it will record the transaction and thereafter reflect the
value, each day, of such security purchased or, if a sale, the proceeds to be
received, in determining its net asset value. At the time of delivery of the
securities, their value may be more or less than the purchase or sale price.
The Fund will also establish a segregated account with its custodian bank in
which it will continually maintain cash or cash equivalents or other
portfolio (U.S. Treasury) securities equal in value to commitments to
purchase securities on a when-issued, delayed delivery or firm commitment
basis.
INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------
The Fund has adopted certain investment restrictions as fundamental
policies which cannot be changed without the approval of the holders of a
"majority" of the outstanding shares of the Fund, as defined in the Act.
Majority is defined in the Act as the lesser of (a) 67% or more of the shares
present at a meeting of shareholders, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (b)
more than 50% of the outstanding shares.
These restrictions provide that the Fund may not:
1. Invest more than 5% of the value of its total assets in the
securities of any one issuer (other than obligations issued or guaranteed
by the United States Government, its agencies or instrumentalities).
2. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds, municipal bonds or industrial revenue bonds;
3. Borrow money, except from banks for temporary or emergency purposes,
including the meeting of redemption requests which might otherwise
require the untimely disposition of securities. Borrowing in the
aggregate may not exceed 20%, and borrowing for purposes other than
meeting redemptions may not exceed 5% of the value of the Fund's total
assets (including the amount borrowed), less liabilities (not including
the amount borrowed) at the time the borrowing is made. Borrowings in
excess of 5% will be repaid before additional investments are made;
4. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its net assets, but only to
secure borrowings for temporary or emergency purposes;
13
<PAGE>
5. Sell securities short or purchase securities on margin;
6. Write or purchase put or call options;
7. Underwrite the securities of other issuers or purchase restricted
securities;
8. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts or oil and gas interests;
9. Make loans to others except through the purchase of qualified debt
obligations in accordance with the Fund's investment objectives and
policies;
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)
borrowing money in accordance with restrictions described above or (b) by
purchasing securities on a when-issued or delayed delivery basis or
purchasing or selling securities on a forward commitment basis;
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation, acquisition of assets
or plan of reorganization.
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially
all of its assets in another investment company having substantially the same
investment objective and policies as the Fund.
If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not constitute a
violation of any of the foregoing restrictions.
PORTFOLIO TRANSACTIONS AND BROKERAGE
- -----------------------------------------------------------------------------
Subject to the general supervision by the Trustees of the Fund, 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. Purchases
and sales of portfolio securities are normally transacted through issuers,
underwriters or major dealers in U.S. Government securities acting as
principals. Such transactions are made on a net basis and do not involve
payment of brokerage commissions. The cost of securities purchased from an
underwriter usually includes a commission paid by the issuer to the
underwriters; transactions with dealers normally reflect the spread between
bid and asked prices. During the fiscal years ended May 31, 1995, May 31,
1996 and May 31, 1997, the Fund did not pay any brokerage commissions.
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 a manner as it
deems equitable. In making such allocations among the Fund and other client
accounts, various factors may be considered including 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. In the case of certain initial and secondary offerings, the
Investment Manager may utilize a pro rata allocation process based on the
size of the Dean Witter Funds involved and the number of shares available
from the public offering.
The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions 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 prices 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
14
<PAGE>
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.
During the fiscal year ended May 31, 1997, the Fund paid no brokerage
commissions in connection with transactions to brokers because of research
services provided.
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 management
fee paid to the Investment Manager is not reduced 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. Treasury
securities. Such transactions will be effected with DWR only when the price
available from DWR is better than that available from other dealers.
Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may
be effected through DWR and other brokers and dealers that are affiliates of
the Investment Manager. In order for an affiliated broker or dealer to effect
any portfolio transactions for the Fund, the commissions, fees or other
remuneration received by the affiliated broker or dealer 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 the affiliated broker or dealer 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, have adopted procedures which are reasonably designed
to provide that any commissions, fees or other remuneration paid to an
affiliated broker or dealer are consistent with the foregoing standard.
During the fiscal years ended May 31, 1995, May 31, 1996 and May 31, 1997,
the Fund did not pay any brokerage commissions to DWR.
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. However,
because of the short-term nature of the Fund's portfolio securities, it is
anticipated that the number of purchases and sales or maturities of such
securities will be substantial. Nevertheless, as brokerage commissions are
not normally charged on purchases and sales of such securities, the large
number of these transactions does not have an adverse effect upon the net
yield and net asset value of the shares of the Fund. For the fiscal years
ended May 31, 1995, 1996 and 1997, the Fund's portfolio turnover rates were
30%, 63% and 149%, respectively. The higher portfolio turnover rate for the
fiscal year ended May 31, 1997 was the result of unusually large flows into
and out of the Fund.
THE DISTRIBUTOR
- -----------------------------------------------------------------------------
As discussed in the Prospectus, shares of the Fund are distributed by Dean
Witter Distributors Inc. (the "Distributor") and are offered for sale to the
public on a continuous basis at an offering price equal to the net asset
value per share next determined following a receipt of an order. The
Distributor has entered into a Selected Dealer Agreement with DWR, which
through its own sales organization sells shares of the Fund, and may enter
into selected dealer agreements with others. The Distributor is a
wholly-owned subsidiary of MSDWD. As part of an internal reorganization that
took place in December, 1992, the Distributor assumed the investment company
share distribution activities previously performed by DWR. The current
Distribution Agreement appointing the Distributor exclusive distributor of
the Fund's
15
<PAGE>
shares and providing for the Distributor to bear distribution expenses not
borne by the Fund was approved by the Board of Trustees, including all of the
Independent Trustees, on April 24, 1997. By its terms, the current
Distribution Agreement has an initial term ending April 30, 1998, and will
remain in effect from year to year thereafter if approved by the Trustees.
The current Distribution Agreement took effect on May 31, 1997 upon the
consummation of the merger of Dean Witter, Discover & Co. with Morgan Stanley
Group Inc. and is substantially identical to the Fund's prior Distribution
Agreement except for its dates of effectiveness and termination.
The Distributor has agreed to pay certain expenses of the offering of the
Fund's shares, including the costs of printing and distributing prospectuses
and supplements thereto used in connection with the offering and sale of the
Fund's shares. The Fund will bear the costs of initial typesetting, printing
and distribution to shareholders. The Fund and the Distributor have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
PLAN OF DISTRIBUTION
As discussed in the Prospectus, the Fund has entered into a Plan of
Distribution pursuant to Rule 12b-1 under the Act with the Distributor
whereby the expenses of certain activities in connection with the
distribution of shares of the Fund are reimbursed. The Plan was initially
approved by the Trustees of the Fund on July 18, 1991, by DWR, the then sole
shareholder of the Fund on July 19, 1991, and by the Fund's shareholders at a
Special Meeting of Shareholders on October 14, 1992. The vote of the Trustees
included a majority of the Trustees who are not and were not at the time of
their votes 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"), cast in person at a meeting called for
the purpose of voting on such Plan. In determining to approve the Plan, the
Trustees, including the Independent Trustees, concluded that, in their
judgment, there is a reasonable likelihood that the Plan will benefit the
Fund and its shareholders.
The Plan provides that the Distributor will bear the expense of all
promotional and distribution related activities on behalf of the Fund,
including personal services to shareholders and maintenance of shareholder
accounts, except for expenses that the Trustees determine to reimburse, as
described below. The Distributor, DWR, its affiliates and any other selected
broker-dealer may be reimbursed for the following expenses and services under
the Plan: (1) compensation to and expenses of account executives and other
employees of DWR, its affiliates and other selected broker-dealers, 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.
The Fund is authorized to reimburse specific expenses incurred or to be
incurred in promoting the distribution of the Fund's shares and in servicing
shareholder accounts. Reimbursement is made through payments at the end of
each month. The amount of each monthly payment may in no event exceed an
amount equal to a payment at the annual rate of 0.35 of 1% of the Fund's
average daily net assets during the month. No interest or other financing
charges, if any, incurred on any distribution expenses will be reimbursable
under the Plan. In the case of all expenses other than expenses representing
a residual to account executives, such amounts shall be determined at the
beginning of each calendar quarter by the Trustees, including a majority of
the Independent 12b-1 Trustees. Expenses representing a residual to account
executives may be reimbursed without prior determination. In the event that
the Distributor proposes that monies shall be reimbursed for other than such
expenses, then in making quarterly determinations of the amounts that may be
expended by the Fund, the Distributor will provide and the Trustees will
review a quarterly budget of projected 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 will 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.
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<PAGE>
The Distributor has informed the Fund that a portion of the fees payable
by the Fund each year pursuant to the Plan equal to 0.25% of the Fund's
average daily net assets is characterized as a "service fee" under the Rules
of the Association of the National Association of Securities Dealers (of
which the Distributor is a member). Such portion of the fee is a payment made
for personal service and/or maintenance of shareholder accounts. The
remaining portion of the Plan fees payable by the Fund is characterized as an
"asset-based sales charge" as defined by the aforementioned Rules of the
Association.
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 an internal reorganization, the share distribution and
shareholder service activities theretofore performed 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 DWR 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 Distributor is also authorized to retain part of such fee as
compensation for its own distribution-related expenses, including personal
services to shareholders and maintenance of shareholder accounts. At their
meeting held on April 28, 1993, the Trustees of the Fund, including all of
the Independent 12b-1 Trustees, approved certain technical amendments to the
Plan in connection with recent amendments adopted by the National Association
of Securities Dealers, Inc. to its Rules of the Association. At their meeting
held on July 23, 1997, the Trustees of the Fund, including all of the
Independent 12b-1 Trustees, approved amendments to the Plan to change the
provisions regarding quarterly budgets.
DWR's account executives are credited with an annual residual commission,
currently a residual of up to 0.35% of the current value of the respective
accounts for which they are the account executives of record. The residual is
a charge which reflects residual commissions paid by DWR to its account
executives and expenses of DWR associated with the sale and promotion of Fund
shares and the servicing of shareholders' accounts, including the expenses of
operating branch offices in connection with the servicing of shareholders'
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 servicing of shareholder accounts. The
portion of the annual residual commission allocated to servicing of
shareholders' accounts does not exceed 0.25% of the average annual net asset
value of shares sold by the account executive.
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.
The Fund accrued $890,492 to the Distributor pursuant to the Plan for the
fiscal year ended May 31, 1997, amounting to an annual rate of 0.35 of 1% of
the Fund's average daily net assets for the fiscal year. Based upon the total
amounts spent by the Distributor during the period, it is estimated that the
amount paid by the Fund to the Distributor for distribution was spent in
approximately the following ways: (i) advertising--$-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 includes
payments to DWR for expenses substantially all of which relate to
compensation of sales personnel (including compensation for servicing
shareholder accounts) and associated overhead expenses--$890,492.
The Plan had an initial term ending April 30, 1993 and will continue from
year to year thereafter, provided such continuance is approved annually by a
vote of the Trustees, including a majority of the Independent 12b-1 Trustees.
The most recent continuance of the Plan for one year, until April 30, 1998,
was approved by the Board of Trustees, including a majority of the
Independent 12b-1 Trustees, at their meeting held on April 24, 1997. Any
amendment to increase materially the maximum amount authorized
17
<PAGE>
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 a majority of the Independent Trustees or
by a vote of the holders of a majority of the outstanding voting securities
of the Trust (as defined in the Act) on not more than thirty 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.
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 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 therefor; (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, has any direct or
indirect financial interest in the operation of the Plan except to the extent
that the Distributor, InterCapital, DWSC, DWR 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.
DETERMINATION OF NET ASSET VALUE
As discussed in the Prospectus, the net asset value per share of the Fund
is determined at 4:00 p.m., New York time, on each day the New York Stock
Exchange is open (or, on days when the New York Stock Exchange closes prior
to 4:00 p.m., at such earlier time), by taking the value of all the assets of
the Fund, subtracting all liabilities, dividing by the number of shares
outstanding and adjusting the result to the nearest cent. The New York Stock
Exchange currently observes the following holidays: New Year's Day; Reverend
Dr. Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial Day;
Independence Day; Labor Day; Thanksgiving Day and Christmas Day.
SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------
Shareholder Investment Account. Upon purchase of shares of the Fund, a
Shareholder Investment Account is opened for the investor on the books of the
Fund, maintained by Dean Witter Trust Company (the "Transfer Agent"), in full
and fractional shares of the Fund (rounded to the nearest 1/100 of a share).
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. No certificates will be issued for fractional shares or to
shareholders who have elected the pre-designated bank account method,
Systematic Withdrawal Plan or check writing privilege of withdrawing cash
from their accounts. Whenever a shareholder instituted transaction takes
place in the Shareholder Investment Account, the shareholder will be mailed a
written confirmation of the transaction from the Fund or from DWR or other
selected broker-dealer.
Automatic Investment of Dividends and Distributions. All dividends and
capital gains distributions are automatically paid in full and fractional
shares of the Fund, unless the shareholder requests that they be paid in
cash. Each purchase of shares of the Fund is made upon the condition that the
Transfer Agent is thereby automatically appointed as agent of the investor to
receive all dividends and capital gains distributions on shares owned by the
investor. Such dividends and distributions will be paid in shares of the Fund
at the net asset value per share as of the close of business on the record
date. An investor may terminate such agency at any time and may request the
Transfer Agent in writing to have subsequent dividends and/or capital gains
distributions paid in cash rather than shares. Such request must be received
by the Transfer Agent at least five (5) business days prior to the record
date for which it commences to take effect. In case of recently purchased
shares for which registration instructions have not been received on the
record date, cash payments will be made to DWR or other selected
broker-dealer.
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<PAGE>
Investment of Distributions Received in Cash. As discussed in the
Prospectus, any shareholder who receives a cash payment representing a
dividend or capital gains distribution may invest such dividend or
distribution at net asset value (without sales charge) by returning the check
or the proceeds to the Transfer Agent within 30 days after the payment date.
If the shareholder returns the proceeds of a dividend or distribution, such
funds must be accompanied by a signed statement indicating that the proceeds
constitute a dividend or distribution to be invested. Such investment will be
made at the net asset value per share next determined after receipt of the
check or the proceeds by the Transfer Agent.
Direct Investments through Transfer Agent. As discussed in the Prospectus,
a shareholder may make additional investments in Fund shares at any time by
sending a check in any amount, not less than $100, payable to Dean Witter
Short-Term U.S. Treasury Trust, directly to the Transfer Agent. Such amounts
will be applied to the purchase of Fund shares at the net asset value per
share next computed after receipt of the check or purchase payment by the
Transfer Agent. The shares so purchased will be credited to the investor's
account.
Systematic Withdrawal Plan. As discussed in the Prospectus, a withdrawal
plan is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current offering price.
The plan provides for monthly or quarterly (March, June, September and
December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis.
Dividends and capital gains distributions on shares held under the
Systematic Withdrawal Plan will be invested in additional full and fractional
shares at net asset value (without a sales charge). Shares will be credited
to an open account for the investor by the Transfer Agent; no share
certificates will be issued. A shareholder is entitled to a share certificate
upon written request to the Transfer Agent, although in that event the
shareholder's Systematic Withdrawal Plan will be terminated.
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 following
business day) of the relevant month or quarter and normally a check for the
proceeds will be mailed by the Transfer Agent within five business 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 acceptable to the
Transfer Agent (shareholders should contact the Transfer Agent for a
determination as to whether a particular institution is such an eligible
guarantor). A shareholder may, at any time, change the amount and interval of
withdrawal payments and the address to which checks are mailed by written
notification to the Transfer Agent. The shareholder's signature on such
notification must be guaranteed in the manner described above. The
shareholder may also terminate the Systematic 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 Shareholder Investment Account. The
shareholder may also redeem all or part of the shares held in the Systematic
Withdrawal Plan account (see "Redemptions and Repurchases" in the Prospectus)
at any time. The Systematic Withdrawal Plan is not available for shares held
in an Exchange Privilege Account.
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 that are multiple class funds ("Dean Witter
Multi-Class Funds") and Dean Witter Funds sold with either a front-end sales
charge ("FSC 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 Intermediate Term U.S. Treasury Trust, Dean
Witter Limited Term Municipal Trust and
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<PAGE>
Dean Witter Short-Term Bond Fund, and in shares of five money market funds:
Dean Witter Liquid Asset Fund Inc., Dean Witter Tax-Free Daily Income Trust,
Dean Witter California Tax-Free Daily Income Trust, Dean Witter New York
Municipal Money Market Trust, or Dean Witter U.S. Government Money Market
Trust (these nine funds, including the Fund, are hereinafter collectively
referred to as "Exchange Funds"). There is no waiting period for exchanges of
shares acquired by exchange or dividend reinvestment. Shares of the Exchange
Funds received in an exchange for shares of a Dean Witter Multi-Class Fund
may be redeemed and exchanged only for shares of the corresponding Class of a
Dean Witter Multi-Class Fund or for shares of one of the other Exchange
Funds, provided that shares of the Exchange Funds received in an exchange for
Class A shares of a Dean Witter Multi-Class Fund may also be redeemed and
exchanged for shares of a FSC fund, and shares of the Exchange Funds received
in an exchange for Class B shares of a Dean Witter Multi-Class Fund may also
be redeemed and exchanged for shares of a CDSC fund. In addition, shares of
the Exchange Funds received in an exchange for shares of a FSC fund may be
redeemed and exchanged for Class A shares of a Dean Witter Multi-Class Fund
or for shares of one of the other Exchange Funds, and shares of the Exchange
Funds received in an exchange for shares of a CDSC fund may be redeemed and
exchanged for Class B shares of a Dean Witter Multi-Class Fund or for shares
of one of the other Exchange Funds. Ultimately, any applicable contingent
deferred sales charge ("CDSC") will have to be paid upon redemption of shares
originally purchased from a CDSC fund or a Class of a Dean Witter Multi-Class
Fund that imposes a CDSC. 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 a Dean Witter Multi-Class Fund or any CDSC fund are
exchanged for shares of any Exchange Fund, the exchange is executed at no
charge to the shareholder, without the imposition of the CDSC at the time of
the exchange. During the period of time the shareholder remains in the
Exchange Fund (calculated from the last day of the month in which the
Exchange Fund shares were acquired), the holding period or "year since
purchase payment made" is frozen. When shares are redeemed out of the
Exchange Fund, they will be subject to a CDSC which would be based upon the
period of time the shareholder held shares in a Dean Witter Multi-Class Fund
or in a CDSC fund. However, in the case of shares exchanged into the 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, if
any, 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 Dean Witter Multi-Class Fund
or a CDSC fund from the Exchange Fund, with no CDSC being imposed on such
exchange. The holding period previously frozen when shares were first
exchanged for shares of the Exchange Fund resumes on the last day of the
month in which shares of a Dean Witter Multi-Class Fund or of a CDSC fund are
reacquired. Thus, a CDSC is imposed only upon an ultimate redemption, based
upon the time (calculated as described above) the shareholder was invested in
a Dean Witter Multi-Class Fund or in a CDSC fund. In the case of exchanges of
Class A shares of a Dean Witter Multi-Class Fund which are subject to a CDSC,
the holding period also includes the time (calculated as described above) the
shareholder was invested in a FSC fund.
When shares initially purchased in a Dean Witter Multi-Class Fund or in a
CDSC fund are exchanged for shares of a Dean Witter Multi-Class Fund, shares
of a CDSC Fund, shares of a FSC Fund, or 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
20
<PAGE>
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 one,
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 FSC
funds, or for shares of other Dean Witter Funds for which shares of FSC funds
have been exchanged (all such shares called "Free Shares"), will be exchanged
first. After an exchange, all dividends earned on shares in the 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 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
procedures described in the Dean Witter Multi-Class Fund Prospectus under the
caption "Purchase of Fund Shares" and 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.
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 the Distributor 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, the
Distributor or any selected broker-dealer.
The Distributor 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 the Distributor or any
selected broker-dealer for any transactions pursuant to this Exchange
Privilege.
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
Exchange Privilege account may not thereafter be placed back into that
Exchange Privilege account, except by utilizing the Reinstatement Privilege
(see "Redemptions and Repurchases--Reinstatement Privilege"). If such a
shareholder 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.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment for the
Exchange Privilege account of each Class is $10,000 for the Fund (although
the Fund, in its discretion, may accept initial investments of as low as
$5,000) and $5,000 for Dean Witter Liquid Asset Fund Inc., Dean Witter
Tax-Free Daily Income Trust,
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Dean Witter California Tax-Free Daily Income Trust, and Dean Witter New York
Municipal Money Market Trust, although those funds may, at their discretion,
accept initial investments of as low as $1,000. The minimum initial
investment for the Exchange Privilege account of each Class is $5,000 for
Dean Witter Special Value Fund. The minimum initial investment for the
Exchange Privilege account of each Class of 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 the Fund or 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 Exchange Funds pursuant to this 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 their DWR or other selected broker-dealer account executive or
the Transfer Agent.
REDEMPTIONS AND REPURCHASES
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As discussed in the Prospectus, shares of the Fund may be redeemed at net
asset value on any day the New York Stock Exchange is open (see
"Determination of Net Asset Value"). Redemptions will be effected at the net
asset value per share next determined after the receipt of a redemption
request meeting the applicable requirements discussed in the Prospectus. 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 other 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. 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 Prospectus describes redemption procedures by check, telephone or wire
instructions with payment to a predesignated bank account, or by mail.
Payment for Shares Redeemed or Repurchased. As discussed in the
Prospectus, payment for shares presented for repurchase or redemption will be
ordinarily made by check within seven days after receipt by the Transfer
Agent of the certificate and/or written request in good order. Such payment
may be postponed or the right of redemption suspended 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 to fairly determine the value of its
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<PAGE>
net assets, or (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. If the shares to be
redeemed have recently been purchased by check (including a certified or bank
cashier's check), payment of redemption proceeds 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).
Involuntary Redemption. 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 shareholders whose
shares have a value of less than $1,000 or such lesser amounts as may be
fixed by the Trustees. However, before the Trust redeems such shares and
sends the proceeds to the shareholder, it will notify the shareholder that
the value of its shares is less than $1,000 and allow the shareholder 60 days
to make an additional investment in an amount which will increase the value
of the account to $1,000 or more before the redemption is processed.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------
Because the Fund intends to distribute all of its net investment income
and capital gains to shareholders and intends to otherwise comply with all
the provisions of Subchapter M of the Internal Revenue Code of 1986, it is
not expected that the Fund will be required to pay any federal income tax on
such income and capital gains. If however, any such capital gains are
retained, the Fund will pay federal income tax thereon. In such a case,
shareholders will have to include such retained gains in their income but
will be able to claim their share of the tax paid by the Fund as a credit
against their individual federal income tax.
Shareholders will normally have to pay federal income taxes on the
dividends and capital gains distributions they receive from the Fund. Such
dividends and distributions derived from net investment income or short-term
capital gains are taxable to the shareholder as ordinary dividend income
regardless of how long a shareholder has held the Fund's shares and whether
the shareholder receives such dividends or distributions in additional shares
or in cash. Distributions of long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash.
Any dividend or capital gains distribution received by a shareholder from
any investment company will have the effect of reducing the net asset value
of the shareholder's stock in that company by the exact amount of the
dividend or capital gains distribution. Furthermore, capital gains
distributions and dividends are subject to federal income taxes. If the net
asset value of the shares should be reduced below a shareholder's cost as a
result of the payment of dividends or the distribution of realized long-term
capital gains, such payment or distribution would be in part a return of the
shareholder's investment to the extent of such reduction below the
shareholder's cost, but nonetheless would be fully taxable at either ordinary
or capital gain rates. Therefore, an investor should consider the tax
implications of purchasing Fund shares immediately prior to a dividend or
distribution record date.
Under current federal tax law, the Fund will receive net investment income
in the form of interest by virtue of holding Treasury bills, notes and bonds,
and will recognize income attributable to it from holding zero coupon
Treasury securities. Current federal tax law requires that a holder (such as
the Fund) of a zero coupon security accrue a portion of the discount at which
the security was purchased as income each year even though the Fund receives
no interest payment in cash on the security during the year. As an investment
company, the Fund must pay out substantially all of its net investment income
each year. Accordingly, the Fund may be required to pay out as an income
distribution each year an amount which is greater than the total amount of
cash receipts of interest the Fund actually received. Such distributions will
be made from the available cash of the Fund or by liquidation of portfolio
securities, if necessary. If a distribution of cash necessitates the
liquidation of portfolio securities, the Investment Manager will select which
securities to sell. The Fund may realize a gain or loss from such sales. In
the event the Trust realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution, if any, than
they would in the absence of such transactions.
23
<PAGE>
State and Local Taxes. The Fund intends to invest only in the obligations
of the U.S. Government that provide interest income exempt from most state
and local taxes. Because all States presently allow the pass-through of
federal obligation interest derived from specific federal obligations, it is
anticipated that substantially all of the interest income generated by the
Fund and paid out to shareholders as net investment income will be exempt
from the taxation of most state and local jurisdictions. Such investment
income, however, will not be exempt from federal tax. Furthermore, any
capital gains realized by the Fund will not be exempt from federal, and
generally, state and local taxes. It should be noted that although the Fund
intends to invest only in securities the pass-through income from which is
believed exempt from state and local income taxes, except as noted above, it
is possible that a state or local taxing authority may seek to tax an
investor on a portion of the interest income of a particular government
obligation held by the Fund.
Shareholders are urged to consult their own tax advisers regarding
specific questions as to federal, state or local taxes.
PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------
As discussed in the Prospectus, from time to time the Fund may quote its
"yield" and/or its "total return" in advertisements and sales literature.
Yield is calculated for any 30-day period as follows: the amount of interest
and/or dividend income for each security in the Fund's portfolio is
determined in accordance with regulatory requirements; the total for the
entire portfolio constitutes the Fund's gross income for the period. Expenses
accrued during the period are subtracted to arrive at "net investment
income". The resulting amount is divided by the product of the net asset
value per share on the last day of the period multiplied by the average
number of Fund shares outstanding during the period that were entitled to
dividends. This amount is added to 1 and raised to the sixth power. 1 is then
subtracted from the result and the difference is multiplied by 2 to arrive at
the annualized yield. The Fund's yield for the 30-day period ended May 31,
1997 was 5.44%.
The Fund's "average annual total return" represents an annualization of
the Fund's total return over a particular period and is computed by finding
the annual percentage rate which will result in the ending redeemable value
of a hypothetical $1,000 investment made at the beginning of a one, five or
ten year period, or for the period from the date of commencement of the
Fund's operations, if shorter than any of the foregoing. For the purpose of
this calculation, it is assumed that all dividends and distributions are
reinvested. The formula for computing the average annual total return
involves a percentage obtained by dividing the ending redeemable value by the
amount of the initial investment, taking a root of the quotient (where the
root is equivalent to the number of years in the period) and subtracting 1
from the result. The average annual total returns for the Fund for the fiscal
year ended May 31, 1997, for the five year period ended May 31, 1997, and for
the period August 13, 1991 (commencement of operations) through May 31, 1997
were 5.63%, 4.56% and 5.06%, respectively.
In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, year-by-year or
other types of total return figures. The Fund may compute its aggregate total
return for specified periods by determining the aggregate percentage rate
which will result in the ending value of a hypothetical $1,000 investment
made at the beginning of the period. For the purpose of this calculation, it
is assumed that all dividends and distributions are reinvested. The formula
for computing aggregate total return involves a percentage obtained by
dividing the ending value by the initial $1,000 investment and subtracting 1
from the result. The Fund's total returns for the year ended May 31, 1997,
for the five year period ended May 31, 1997, and for the period August 13,
1991 (commencement of operations) through May 31, 1997 were 5.63%, 24.97% and
33.15% respectively.
The Fund may also advertise the growth of a hypothetical investment of
$10,000, $50,000 or $100,000 in shares of the Fund by adding 1 to the Fund's
aggregate total return and multiplying by $10,000, $50,000 or $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 $13,315, $66,575 and $133,150, respectively, at
May 31, 1997.
The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations.
24
<PAGE>
DESCRIPTION OF SHARES OF THE FUND
- -----------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full
share held. All of the Trustees have been elected by the shareholders of the
Fund, most recently at a Special Meeting of shareholders held on May 21,
1997. On that date, Wayne E. Hedien was also elected as a Trustee of the
Fund, with his term to commence on September 1, 1997. The Trustees themselves
have the power to alter the number and the terms of office of the Trustees,
and they may at any time lengthen their own terms or make their terms of
unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
Fund. Under certain circumstances the Trustees may be removed by action of
the Trustees. The shareholders also have the right under certain
circumstances to remove the Trustees. The voting rights of shareholders are
not cumulative, so that holders of more than 50 percent of the shares voting
can, if they choose, elect all Trustees being selected, while the holders of
the remaining shares would be unable to elect any Trustees.
The Declaration of Trust permits the Trustees to authorize the creation of
additional series of shares (the proceeds of which would be invested in
separate, independently managed portfolios) and additional classes of shares
within any series (which would be used to distinguish among the rights of
different categories of shareholders, as might be required by future
regulations or other unforeseen circumstances). The Trustees have not
presently authorized any such additional series or classes of shares.
The Declaration of Trust further 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 or its 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 liability in connection with the
affairs of the Fund.
The Fund is authorized to issue an unlimited number of shares of
beneficial interest. The Fund shall be of unlimited duration, subject to the
provisions in the Declaration of Trust concerning termination by action of
the shareholders.
CUSTODIAN AND TRANSFER AGENT
- -----------------------------------------------------------------------------
The Bank of New York, 90 Washington Street, New York, New York 10286 is
the Custodian of the Fund's assets. Any Fund cash balances with the Custodian
in excess of $100,000 are unprotected by Federal deposit insurance. Such
amounts may, at times, be substantial.
Dean Witter Trust FSB, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 is the Transfer Agent of the Trust's shares and
Dividend Disbursing Agent for payment of dividends and distributions on Trust
shares and Agent for shareholders under various investment plans described
herein. Dean Witter Trust FSB is an affiliate of Dean Witter InterCapital
Inc., the Fund's Investment Manager, and of Dean Witter Distributors Inc.,
the Fund's Distributor. As Transfer Agent and Dividend Disbursing Agent, Dean
Witter Trust FSB'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 FSB receives a per shareholder account fee
from the Fund.
INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
Price Waterhouse LLP serves as the independent accountants of the Fund.
The independent accountants are responsible for auditing the annual financial
statements of the Fund.
25
<PAGE>
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 account-ants, will be
sent to shareholders each year.
The Fund's fiscal year ends on May 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
- -----------------------------------------------------------------------------
Barry Fink, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.
EXPERTS
- -----------------------------------------------------------------------------
The financial statements of the Fund included in this Statement of
Additional Information and incorporated by reference in the Prospectus have
been so included and incorporated in reliance on the report of Price
Waterhouse LLP, 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.
26
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
PORTFOLIO OF INVESTMENTS May 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (92.1%)
U.S. Treasury Notes (80.8%)
$1,100 02/28/98 ........................................................ 5.125% $ 1,094,522
7,000 01/31/98 ........................................................ 5.625 6,993,000
6,800 10/31/98 ........................................................ 5.875 6,783,816
26,200 05/31/98 ........................................................ 6.00 26,228,820
26,600 09/30/98 ........................................................ 6.00 26,599,202
3,000 05/15/98 ........................................................ 6.125 3,007,230
100 07/31/00 ........................................................ 6.125 99,299
15,000 09/30/00 ........................................................ 6.125 14,874,600
10,900 12/31/01 ........................................................ 6.125 10,739,334
1,750 07/31/98 ........................................................ 6.25 1,755,898
13,500 04/30/01 ........................................................ 6.25 13,402,530
18,000 10/31/01 ........................................................ 6.25 17,829,720
1,500 02/28/02 ........................................................ 6.25 1,484,220
10,000 06/30/97 ........................................................ 6.375 10,012,300
10,000 05/15/99 ........................................................ 6.375 10,030,800
1,600 01/15/00 ........................................................ 6.375 1,604,032
8,000 04/30/00 ........................................................ 6.75 8,081,760
20,000 02/29/00 ........................................................ 7.125 20,383,600
5,000 02/15/98 ........................................................ 7.25 5,048,450
-------------
186,053,133
-------------
U.S. Treasury Strips (11.3%)
18,300 05/15/99 (Coupon) .............................................. 0.00 16,246,008
12,000 08/15/00 (Principal) ........................................... 0.00 9,801,600
-------------
26,047,608
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Identified Cost $212,892,601)(a) .............................. 92.1% 212,100,741
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ................. 7.9 18,166,448
-------- -------------
NET ASSETS ..................................................... 100.0% $230,267,189
======== =============
</TABLE>
- ------------
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$626,770 and the aggregate gross unrealized depreciation is $1,418,630,
resulting in net unrealized depreciation of $791,860.
SEE NOTES TO FINANCIAL STATEMENTS
27
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $212,892,601) ...................................... $212,100,741
Cash ................................................................. 45,086
Receivable for:
Investments sold ................................................... 39,244,137
Interest ........................................................... 2,947,538
Shares of beneficial interest sold ................................. 300,488
Prepaid expenses and other assets .................................... 42,017
--------------
TOTAL ASSETS ....................................................... 254,680,007
--------------
LIABILITIES:
Payable for:
Investments purchased .............................................. 23,235,744
Shares of beneficial interest repurchased .......................... 873,078
Plan of distribution fee ........................................... 68,956
Investment management fee .......................................... 68,956
Dividends to shareholders .......................................... 68,035
Accrued expenses and other payables .................................. 98,049
--------------
TOTAL LIABILITIES .................................................. 24,412,818
--------------
NET ASSETS:
Paid-in-capital ...................................................... 248,878,557
Net unrealized depreciation .......................................... (791,860)
Accumulated undistributed net investment income ...................... 394,587
Accumulated net realized loss ........................................ (18,214,095)
--------------
NET ASSETS ......................................................... $230,267,189
==============
NET ASSET VALUE PER SHARE,
23,379,838 shares outstanding (unlimited shares authorized of $.01
par value) .......................................................... $9.85
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the year ended May 31, 1997
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ........................ $16,113,858
-------------
EXPENSES
Investment management fee .............. 902,158
Plan of distribution fee ............... 890,492
Transfer agent fees and expenses ...... 129,498
Registration fees ...................... 70,096
Professional fees ...................... 45,122
Shareholder reports and notices ....... 39,730
Trustees' fees and expenses ............ 18,229
Custodian fees ......................... 16,777
Organizational expenses ................ 6,642
Other .................................. 16,814
-------------
TOTAL EXPENSES ....................... 2,135,558
-------------
NET INVESTMENT INCOME ................ 13,978,300
-------------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized loss ...................... (293,887)
Net change in unrealized depreciation . 112,927
-------------
NET LOSS ............................. (180,960)
-------------
NET INCREASE ........................... $13,797,340
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MAY 31, 1997 MAY 31, 1996
- -------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 13,978,300 $ 14,778,861
Net realized loss ..................................... (293,887) (87,549)
Net change in unrealized appreciation/depreciation ... 112,927 (3,742,190)
-------------- --------------
NET INCREASE ........................................ 13,797,340 10,949,122
Dividends from net investment income .................. (13,860,110) (14,943,028)
Net decrease from transactions in shares of beneficial
interest ............................................. (28,307,309) (10,553,025)
-------------- --------------
NET DECREASE ........................................ (28,370,079) (14,546,931)
NET ASSETS:
Beginning of period ................................... 258,637,268 273,184,199
-------------- --------------
END OF PERIOD
(Including undistributed net investment income of
$394,587 and $276,397, respectively) ................ $230,267,189 $258,637,268
============== ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Short-Term U.S. Treasury Trust (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Fund's investment objective is
current income, preservation of principal and liquidity. The Fund seeks to
achieve its objective by investing its assets in U.S. Treasury securities
backed by the full faith and credit of the U.S. Government. The Fund was
organized as a Massachusetts business trust on June 4, 1991 and commenced
operations on August 13, 1991.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- (1) portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (2) when market
quotations are not readily available, including circumstances under which it
is determined by Dean Witter InterCapital Inc. (the "Investment Manager")
that sale or bid prices are not reflective of a security's market value,
portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of
the Trustees (valuation of debt securities for which market quotations are
not readily available may be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate matrix
utilizing similar factors); and (3) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt
securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Discounts are accreted over the life of the respective securities.
Interest income is accrued daily.
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 income to its shareholders.
Accordingly, no federal income tax provision is required.
31
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997, continued
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
E. ORGANIZATIONAL EXPENSES -- The Investment Manager paid the organizational
expenses of the Fund in the amount of approximately $135,000 which have been
reimbursed for the full amount thereof. Such expenses have been deferred and
were fully amortized using the straight-line method from the commencement of
operations through August 12, 1996.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with the Investment Manager,
the Fund pays the Investment Manager a management fee, accrued daily and
payable monthly, by applying the annual rate of 0.35% to the net assets of
the Fund determined as of the close of each business day.
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, office space, 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 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
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Fund's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, finances certain expenses 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
32
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997, continued
following activities and services may be provided by the Distributor under
the Plan: (1) compensation to, and expenses of, account executives of Dean
Witter Reynolds Inc., an affiliate of the Investment Manager and Distributor,
other employees and selected 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 0.35% of the
Fund's average daily net assets during the month. For the year ended May 31,
1997, the distribtion fee was accrued at the annual rate of 0.35%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio
securities excluding short-term investments for the year ended May 31, 1997
aggregated $348,884,792 and $403,901,066, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At May 31, 1997, the Fund had
transfer agent fees and expenses payable of approximately $13,540.
The Fund has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees 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 costs for the year
ended May 31, 1997 included in Trustees' fees and expenses in the Statement
of Operations amounted to $5,176. At May 31, 1997, the Fund had an accrued
pension liability of $37,638 which is included in accrued expenses in the
Statement of Assets and Liabilities.
33
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1997, continued
5. FEDERAL INCOME TAX STATUS
At May 31, 1997, the Fund had a net capital loss carryover of approximately
$18,110,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through
May 31 of the following years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- -------------------------
2003 2004 2005
- --------- ------ ----
<S> <C> <C>
$11,507 $6,271 $332
</TABLE>
Capital losses incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $103,000 during fiscal 1997.
As of May 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses.
6. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MAY 31, 1997 MAY 31, 1996
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Shares sold ............................... 25,650,127 $ 253,738,691 34,443,060 $ 344,385,684
Shares issued in reinvestment of
dividends................................. 1,132,124 11,170,571 1,214,559 12,124,758
-------------- --------------- -------------- ---------------
26,782,251 264,909,262 35,657,619 356,510,442
Shares repurchased ........................ (29,680,876) (293,216,571) (36,751,484) (367,063,467)
-------------- --------------- -------------- ---------------
Net decrease............................... (2,898,625) $ (28,307,309) (1,093,865) $ (10,553,025)
============== =============== ============== ===============
</TABLE>
34
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED MAY 31 AUGUST 13, 1991*
------------------------------------------------------ THROUGH
1997 1996 1995 1994 1993 MAY 31, 1992
---------- ---------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .... $9.84 $9.98 $9.88 $10.34 $10.21 $10.00
---------- ---------- ---------- ---------- ---------- ----------------
Net investment income ................... 0.54 0.54 0.49 0.49 0.54 0.44
Net realized and unrealized gain (loss) -- (0.14) 0.10 (0.45) 0.13 0.20
---------- ---------- ---------- ---------- ---------- ----------------
Total from investment operations ....... 0.54 0.40 0.59 0.04 0.67 0.64
---------- ---------- ---------- ---------- ---------- ----------------
Less dividends and distributions from:
Net investment income .................. (0.53) (0.54) (0.49) (0.50) (0.53) (0.43)
Net realized gain ...................... -- -- -- -- (0.01) --
---------- ---------- ---------- ---------- ---------- ----------------
Total dividends and distributions ...... (0.53) (0.54) (0.49) (0.50) (0.54) (0.43)
---------- ---------- ---------- ---------- ---------- ----------------
Net asset value, end of period .......... $9.85 $9.84 $9.98 $9.88 $10.34 $10.21
========== ========== ========== ========== ========== ================
TOTAL INVESTMENT RETURN+ ................ 5.63% 4.09% 6.22% 0.25% 6.75% 6.55%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 0.83% 0.84% 0.84% 0.79% 0.80% 0.79%(2)(3)
Net investment income ................... 5.42% 5.33% 4.93% 4.74% 5.18% 5.49%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands . $230,267 $258,637 $273,184 $516,017 $584,206 $523,555
Portfolio turnover rate ................. 149% 63% 30% 49% 21% 12%(1)
</TABLE>
- ------------
* Commencement of operations.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all expenses that were assumed or waived by the
Investment Manager, the above annualized expense and net investment
income ratios would have been 0.81% and 5.47%, respectively.
SEE NOTES TO FINANCIAL STATEMENTS
35
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER SHORT-TERM U.S. TREASURY 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 present
fairly, in all material respects, the financial position of Dean Witter
Short-Term U.S. Treasury Trust (the "Fund") at May 31, 1997, 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 five years in the period then ended and for the period August
13, 1991 (commencement of operations) through May 31, 1992, 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 at May 31,
1997 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
July 10, 1997
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY 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 for the period August 13, 1991
through May 31, 1992 and for the fiscal years ended
May 31, 1993, 1994, 1995, 1996 and 1997..................... 4
(2) Financial statements included in the Statement of
Additional Information (Part B): Page in
SAI
---
Portfolio of Investments at May 31, 1997.................... 27
Statement of Assets and Liabilities at
May 31, 1997................................................ 28
Statement of Operations for the year ended
May 31, 1997................................................ 29
Statement of Changes in Net Assets for the fiscal
years ended May 31, 1996 and 1997........................... 30
Notes to Financial Statements............................... 31
Financial Highlights for the period August 13, 1991 through
May 31, 1992 and for the fiscal years ended May 31, 1993,
1994, 1995, 1996 and 1997...............
(3) Financial statements included in Part C:
None
<PAGE>
(b) Exhibits:
2. -- By-Laws of the Registrant, Amended and Restated as of October 25,
1996.
5. -- Form of Investment Management Agreement between Registrant
and Dean Witter InterCapital Inc.
6. -- Form of Distribution Agreement between Registrant and
Dean Witter Distributors Inc.
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 between
Registrant and Dean Witter Distributors Inc.
16. -- Schedule for Computations of Performance Quotations.
27. -- Financial Data Schedule.
- --------------
All other exhibits were previously filed and are hereby incorporated by
reference.
Item 25. Persons Controlled by or Under Common Control With Registrant.
None
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record Holders
Title of Class at June 30, 1997
-------------- ----------------
Shares of Beneficial Interest 7,220
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.
<PAGE>
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.
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.
3
<PAGE>
Item 28. Business and Other Connections of Investment Adviser.
See "The Fund and Its Management" in the Prospectus regarding the business of
the investment adviser. The following information is given regarding officers
of Dean Witter InterCapital Inc. InterCapital is a wholly-owned subsidiary of
Morgan Stanley, Dean Witter, Discover & Co. The principal address of the Dean
Witter Funds is Two World Trade Center, New York, New York 10048.
The term "Dean Witter Funds" used below refers to the following registered
investment companies:
Closed-End Investment Companies
- -------------------------------
(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
(22) InterCapital California Quality Municipal Securities
(23) InterCapital Insured California Municipal Securities
(24) InterCapital Insured Municipal Securities
Open-end Investment Companies:
- ------------------------------
(1) Dean Witter Short-Term Bond Fund
(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.
4
<PAGE>
(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 Global Asset Allocation Fund
(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 Short-Term U.S. Treasury Trust
(32) Dean Witter Diversified Income Trust
(33) Dean Witter U.S. Government Money Market Trust
(34) Dean Witter Global Dividend Growth Securities
(35) Active Assets California Tax-Free Trust
(36) Dean Witter Natural Resource Development Securities Inc.
(37) Active Assets Government Securities Trust
(38) Active Assets Money Trust
(39) Active Assets Tax-Free Trust
(40) Dean Witter Limited Term Municipal Trust
(41) Dean Witter Variable Investment Series
(42) Dean Witter Value-Added Market Series
(43) Dean Witter Global Utilities Fund
(44) Dean Witter High Income Securities
(45) Dean Witter National Municipal Trust
(46) Dean Witter International SmallCap Fund
(47) Dean Witter Mid-Cap Growth Fund
(48) Dean Witter Select Dimensions Investment Series
(49) Dean Witter Balanced Growth Fund
(50) Dean Witter Balanced Income Fund
(51) Dean Witter Hawaii Municipal Trust
(52) Dean Witter Capital Appreciation Fund
(53) Dean Witter Intermediate Term U.S. Treasury Trust
(54) Dean Witter Information Fund
(55) Dean Witter Japan Fund
(56) Dean Witter Income Builder Fund
(57) Dean Witter Special Value Fund
(58) Dean Witter Financial Services Trust
(59) Dean Witter Market Leader Trust
5
<PAGE>
The term "TCW/DW Funds" refers to the following registered investment
companies:
Open-End Investment Companies
- -----------------------------
(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
(7) TCW/DW Total Return Trust
(8) TCW/DW Mid-Cap Equity Trust
(9) TCW/DW Global Telecom Trust
(10)TCW/DW Strategic Income Trust
Closed-End Investment Companies
- -------------------------------
(1) TCW/DW Term Trust 2000
(2) TCW/DW Term Trust 2002
(3) TCW/DW Term Trust 2003
(4) TCW/DW Emerging Markets Opportunities Trust
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Charles A. Fiumefreddo Executive Vice President and Director of Dean
Chairman, Chief Witter Reynolds Inc. ("DWR"); Chairman, Chief
Executive Officer and Executive Officer and Director of Dean Witter
Director Distributors Inc. ("Distributors") and Dean
Witter Services Company Inc. ("DWSC"); Chairman
and Director of Dean Witter Trust Company
("DWTC"); Chairman, Director or Trustee,
President and Chief Executive Officer of the
Dean Witter Funds and Chairman, Chief Executive
Officer and Trustee of the TCW/DW Funds;
Director and/or officer of various Morgan
Stanley, Dean Witter, Discover & Co. ("MSDWD")
subsidiaries; Formerly Executive Vice President
and Director of Dean Witter, Discover & Co.
Philip J. Purcell Chairman, Chief Executive Officer and Director
Director of of MSDWD and DWR; Director of DWSC and
Distributors; Director or Trustee of the Dean
Witter Funds; Director and/or officer of various
MSDWD subsidiaries.
Richard M. DeMartini President and Chief Operating Officer of Dean
Director Witter Capital, a division of DWR; Director of
DWR, DWSC, Distributors and DWTC; Trustee of the
TCW/DW Funds.
James F. Higgins President and Chief Operating Officer of Dean
Director Witter Financial; Director of DWR, DWSC,
Distributors and DWTC.
6
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Thomas C. Schneider Executive Vice President and Chief Strategic
Executive Vice and Administrative Officer of MSDWD; Executive
President, Chief Vice President and Chief Financial Officer of
Financial Officer and DWSC and Distributors; Director of DWR,
Director DWSC and Distributors.
Christine A. Edwards Executive Vice President, Chief Legal Officer
Director and Secretary of MSDWD; Executive Vice
President, Secretary and Chief Legal Officer
of Distributors; Director of DWR, DWSC and
Distributors.
Robert M. Scanlan President and Chief Operating Officer of DWSC,
President and Chief Executive Vice President of Distributors;
Operating Officer Executive Vice President and Director of DWTC;
Vice President of the Dean Witter Funds and the
TCW/DW Funds.
Mitchell M. Merin President and Chief Strategic Officer of DWSC,
President and Chief Executive Vice President of Distributors;
Strategic Officer Executive Vice President and Director of DWTC;
Executive Vice President and Director of DWR;
Director of SPS Transaction Services, Inc. and
various other MSDWD subsidiaries.
John B. Van Heuvelen President, Chief Operating Officer and Director
Executive Vice of DWTC.
President
Joseph J. McAlinden
Executive Vice President
and Chief Investment Vice President of the Dean Witter Funds and
Officer Director of DWTC.
Barry Fink Assistant Secretary of DWR; Senior Vice
Senior Vice President, President, Secretary and General Counsel of
Secretary and General DWSC; Senior Vice President, Assistant Secretary
Counsel and Assistant General Counsel of Distributors;
Vice President, Secretary and General Counsel of
the Dean Witter Funds and the TCW/DW Funds.
Peter M. Avelar
Senior Vice President Vice President of various Dean Witter Funds.
Mark Bavoso
Senior Vice President Vice President of various Dean Witter Funds.
Richard Felegy
Senior Vice President
7
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Edward F. Gaylor
Senior Vice President Vice President of various Dean Witter Funds.
Robert S. Giambrone Senior Vice President of DWSC, Distributors
Senior Vice President and DWTC and Director of DWTC; Vice President
of the Dean Witter Funds and the TCW/DW Funds.
Rajesh K. Gupta
Senior Vice President Vice President of various Dean Witter Funds.
Kenton J. Hinchcliffe
Senior Vice President Vice President of various Dean Witter Funds.
Kevin Hurley
Senior Vice President Vice President of various Dean Witter Funds.
Jenny Beth Jones Vice President of Dean Witter Special Value Fund.
Senior Vice President
John B. Kemp, III Director of the Provident Savings Bank, Jersey
Senior Vice President City, New Jersey.
Anita H. Kolleeny
Senior Vice President Vice President of various Dean Witter Funds.
Jonathan R. Page
Senior Vice President Vice President of various Dean Witter Funds.
Ira N. Ross
Senior Vice President Vice President of various Dean Witter Funds.
Guy G. Rutherfurd, Jr. Vice President of Dean Witter Market Leader
Senior Vice President Trust.
Rafael Scolari Vice President of Prime Income Trust.
Senior Vice President
Rochelle G. Siegel
Senior Vice President Vice President of various Dean Witter Funds.
Jayne M. Stevlingston Vice President of various Dean Witter Funds.
Senior Vice President
Paul D. Vance
Senior Vice President Vice President of various Dean Witter Funds.
Elizabeth A. Vetell
Senior Vice President
8
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
James F. Willison
Senior Vice President Vice President of various Dean Witter Funds.
Ronald J. Worobel
Senior Vice President Vice President of various Dean Witter Funds.
Douglas Brown
First Vice President
Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President DWSC, Assistant Treasurer of Distributors;
and Assistant Treasurer and Chief Financial Officer of the
Treasurer Dean Witter Funds and the TCW/DW Funds.
Thomas Chronert
First Vice President
Rosalie Clough
First Vice President
Marilyn K. Cranney Assistant Secretary of DWR; First Vice President
First Vice President and Assistant Secretary of DWSC; Assistant
and Assistant Secretary Secretary of the Dean Witter Funds and the TCW/DW
Funds.
Michael Interrante First Vice President and Controller of DWSC;
First Vice President Assistant Treasurer of Distributors;First Vice
and Controller President and Treasurer of DWTC.
David Johnson
First Vice President
Stanley Kapica
First Vice President
Robert Zimmerman
First Vice President
Dale Albright
Vice President
Joan G. Allman
Vice President
Andrew Arbenz
Vice President
Joseph Arcieri
Vice President Vice President of various Dean Witter Funds.
9
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Kirk Balzer
Vice President Vice President of Various Dean Witter Funds.
Nancy Belza
Vice President
Dale Boettcher
Vice President
Joseph Cardwell
Vice President
Philip Casparius
Vice President
B. Catherine Connelly
Vice President
Salvatore DeSteno
Vice President Vice President of DWSC.
Frank J. DeVito
Vice President Vice President of DWSC.
Bruce Dunn
Vice President
Jeffrey D. Geffen
Vice President
Deborah Genovese
Vice President
Michael Geringer
Vice President
Stephen Greenhut
Vice President
Peter W. Gurman
Vice President
Matthew Haynes Vice President of Dean Witter
Vice President Variable Investment Series
Peter Hermann
Vice President Vice President of various Dean Witter Funds
Elizabeth Hinchman
Vice President
10
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
David Hoffman
Vice President
Christopher Jones
Vice President
James P. Kastberg
Vice President
Michelle Kaufman
Vice President Vice President of various Dean Witter Funds
Michael Knox
Vice President Vice President of various Dean Witter Funds
Paula LaCosta
Vice President Vice President of various Dean Witter Funds.
Thomas Lawlor
Vice President
Gerard J. Lian
Vice President Vice President of various Dean Witter Funds.
Catherine Maniscalco Vice President of Dean Witter Natural
Vice President Resource Development Securities Inc.
Albert McGarity
Vice President
LouAnne D. McInnis Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
Sharon K. Milligan
Vice President
Julie Morrone
Vice President
Mary Beth Mueller
Vice President
David Myers Vice President of Dean Witter Natural
Vice President Resource Development Securities Inc.
11
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
James Nash
Vice President
Richard Norris
Vice President
Carsten Otto Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
George Paoletti
Vice President
Anne Pickrell Vice President of Dean Witter Global Short-
Vice President Term Income Fund Inc.
Michael Roan
Vice President
Hugh Rose
Vice President
Robert Rossetti Vice President of Dean Witter Precious Metal and
Vice President Minerals Trust.
Ruth Rossi Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
Carl F. Sadler
Vice President
Peter Seeley Vice President of Dean Witter World
Vice President Wide Income Trust
Naomi Stein
Vice President
Kathleen H. Stromberg
Vice President Vice President of various Dean Witter Funds.
Marybeth Swisher
Vice President
Vinh Q. Tran
Vice President Vice President of various Dean Witter Funds.
Robert Vanden Assem
Vice President
12
<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION
WITH DEAN WITTER OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
INTERCAPITAL INC. AND NATURE OF CONNECTION
- ----------------- ------------------------------------------------
Alice Weiss
Vice President Vice President of various Dean Witter Funds.
Katherine Wickham
Vice President
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 Global Asset Allocation
(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 Short-Term Bond Fund
(15) Dean Witter Mid-Cap Growth Fund
(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 Limited Term Municipal Trust
(22) Dean Witter Natural Resource Development Securities Inc.
(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 Federal Securities Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
13
<PAGE>
(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 Value-Added Market Series
(43) Dean Witter Global Utilities Fund
(44) Dean Witter High Income Securities
(45) Dean Witter National Municipal Trust
(46) Dean Witter International SmallCap Fund
(47) Dean Witter Balanced Growth Fund
(48) Dean Witter Balanced Income Fund
(49) Dean Witter Hawaii Municipal Trust
(50) Dean Witter Variable Investment Series
(51) Dean Witter Capital Appreciation Fund
(52) Dean Witter Intermediate Term U.S. Treasury Trust
(53) Dean Witter Information Fund
(54) Dean Witter Japan Fund
(55) Dean Witter Income Builder Fund
(56) Dean Witter Special Value Fund
(57) Dean Witter Financial Services Trust
(58) Dean Witter Market Leader Trust
(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
(7) TCW/DW Total Return Trust
(8) TCW/DW Mid-Cap Equity Trust
(9) TCW/DW Global Telecom Trust
(10) TCW/DW Strategic Income Trust
(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.
Positions and
Office with
Name Distributors
- ---- ------------
Fredrick K. Kubler Senior Vice President, Assistant
Secretary and Chief Compliance
Officer.
Michael T. Gregg Vice President and Assistant
Secretary.
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
14
<PAGE>
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 32. Undertakings
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
15
<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 31st day of July, 1997.
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
By /s/ Barry Fink
----------------------------
Barry Fink
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 7 has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
(1) Principal Executive Officer President, Chief
Executive Officer,
Trustee and Chairman
By /s/ Charles A. Fiumefreddo 07/31/97
--------------------------
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By /s/ Thomas F. Caloia 07/31/97
--------------------------
Thomas F. Caloia
(3) Majority of the Trustees
Charles A. Fiumefreddo (Chairman)
Philip J. Purcell
By /s/ Barry Fink 07/31/97
--------------------------
Barry Fink
Attorney-in-Fact
Michael Bozic Manuel H. Johnson
Edwin J. Garn Michael E. Nugent
John R. Haire John L. Schroeder
By /s/ David M. Butowsky 07/31/97
--------------------------
David M. Butowsky
Attorney-in-Fact
<PAGE>
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
EXHIBIT INDEX
-------------
2. -- By-Laws of the Registrant, Amended and Restated as of October
25, 1996.
5. -- Form of Investment Management Agreement between Registrant and
Dean Witter InterCapital Inc.
6. -- Form of Distribution Agreement between Registrant and
Dean Witter Distributors Inc.
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. -- Schedule for Computations of Performance Quotations.
27. -- Financial Data Schedule.
- --------------
All other exhibits were previously filed and are hereby incorporated by
reference.
<PAGE>
Exhibit 2
BY-LAWS
OF
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
AMENDED AND RESTATED AS OF OCTOBER 25, 1996
ARTICLE I
DEFINITIONS
The terms "Commission", "Declaration", "Distributor", "Investment
Adviser", "Majority Shareholder Vote", "1940 Act", "Shareholder", "Shares",
"Transfer Agent", "Trust", "Trust Property", and "Trustees" have the
respective meanings given them in the Declaration of Trust of Dean Witter
Short-Term U.S. Treasury Trust dated June 4, 1991.
ARTICLE II
OFFICES
SECTION 2.1. Principal Office. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.
SECTION 2.2. Other Offices. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.
ARTICLE III
SHAREHOLDERS' MEETINGS
SECTION 3.1. Place of Meetings. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.
SECTION 3.2. Meetings. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote not less than twenty-five percent
(25%) of all the votes entitled to be cast at such meeting, except to the
extent otherwise required by Section 16(c) of the 1940 Act, as made
applicable to the Trust by the provisions of Section 2.3 of the Declaration.
Such request shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. Except to the extent otherwise
required by Section 16(c) of the 1940 Act, as made applicable to the Trust by
the provisions of Section 2.3 of the Declaration, the Secretary shall inform
such Shareholders of the reasonable estimated cost of preparing and mailing
such notice of the meeting, and upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No meeting need be called upon the
request of the holders of Shares entitled to cast less than a majority of all
votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of Shareholders
held during the preceding twelve months.
SECTION 3.3. Notice of Meetings. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.
SECTION 3.4. Quorum and Adjournment of Meetings. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders the holders of a majority of the Shares
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issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum for
the transaction of business. In the absence of a quorum, the Shareholders
present or represented by proxy and entitled to vote thereat shall have power
to adjourn the meeting from time to time. Any adjourned meeting may be held
as adjourned without further notice. At any adjourned meeting at which a
quorum shall be present, any business may be transacted as if the meeting had
been held as originally called.
SECTION 3.5. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, executed in writing by the Shareholder or his
duly authorized attorney-in-fact, for each Share of beneficial interest of
the Trust and for the fractional portion of one vote for each fractional
Share entitled to vote so registered in his name on the records of the Trust
on the date fixed as the record date for the determination of Shareholders
entitled to vote at such meeting. No proxy shall be valid after eleven months
from its date, unless otherwise provided in the proxy. At all meetings of
Shareholders, unless the voting is conducted by inspectors, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman of the
meeting. Pursuant to a resolution of a majority of the Trustees, proxies may
be solicited in the name of one or more Trustees or Officers of the Trust.
SECTION 3.6. Vote Required. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.
SECTION 3.7. Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.
SECTION 3.8. Inspection of Books and Records. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under the Corporations and Associations Law of
the State of Maryland.
SECTION 3.9. Action by Shareholders Without Meeting. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.
SECTION 3.10. Presence at Meetings. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.
ARTICLE IV
TRUSTEES
SECTION 4.1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as
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shall be determined from time to time by the Trustees without further notice.
Special meetings of the Trustees may be called at any time by the President
and shall be called by the President or the Secretary upon the written
request of any two (2) Trustees.
SECTION 4.2. Notice of Special Meetings. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.
SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.
SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.
SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.
SECTION 4.6. Expenses and Fees. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.
SECTION 4.7. Execution of Instruments and Documents and Signing of Checks
and Other Obligations and Transfers. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.
SECTION 4.8. Indemnification of Trustees, Officers, Employees and
Agents. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action
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or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.
(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.
(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).
(2) The determination shall be made:
(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or
(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or
(iii) By the Shareholders.
(3) Notwithstanding any provision of this Section 4.8, no person shall
be entitled to indemnification for any liability, whether or not there is
an adjudication of liability, arising by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties as described
in Section 17(h) and (i) of the Investment Company Act of 1940
("disabling conduct"). A person shall be deemed not liable by reason of
disabling conduct if, either:
(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or
(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--
(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
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(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:
(1) authorized in the specific case by the Trustees; and
(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and
(3) either, (i) such person provides a security for his undertaking,
or
(ii) the Trust is insured against losses by reason of any lawful
advances, or
(iii) a determination, based on a review of readily available
facts, that there is reason to believe that such person ultimately
will be found entitled to indemnification, is made by either--
(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or
(B) an independent legal counsel in a written opinion.
(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.
(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.
(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE V
COMMITTEES
SECTION 5.1. Executive and Other Committees. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.
The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.
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All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.
SECTION 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.
SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.
ARTICLE VI
OFFICERS
SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more
than one capacity. The executive officers of the Trust shall be elected
annually by the Trustees and each executive officer so elected shall hold
office until his successor is elected and has qualified.
SECTION 6.2. Other Officers and Agents. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the President the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.
SECTION 6.3. Term and Removal and Vacancies. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.
SECTION 6.4. Compensation of Officers. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the President to
the extent provided by the Trustees with respect to officers appointed by the
President.
SECTION 6.5. Power and Duties. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Trustees; provided, that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless he has
knowledge thereof.
SECTION 6.6. The Chairman. The Chairman shall preside at all meetings of
the Shareholders and of the Trustees, shall be a signatory on all Annual and
Semi-Annual Reports as may be sent to shareholders, and he shall perform such
other duties as the Trustees may from time to time prescribe.
SECTION 6.7. The President. (a) The President shall be the chief executive
officer of the Trust; he shall have general and active management of the
business of the Trust, shall see that all orders and resolutions of the Board
of Trustees are carried into effect, and, in connection therewith, shall be
authorized to delegate to one or more Vice Presidents such of his powers and
duties at such times and in such manner as he may deem advisable.
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(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees may from time to time prescribe.
SECTION 6.8. The Vice Presidents. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there be more than one, the Vice
Presidents in the order of their seniority as may be determined from time to
time by the Trustees or the President, shall, in the absence or disability of
the President, exercise the powers and perform the duties of the President,
and he or they shall perform such other duties as the Trustees or the
President may from time to time prescribe.
SECTION 6.9. The Assistant Vice Presidents. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Trustees or the President.
SECTION 6.10. The Secretary. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or the
President, may from time to time prescribe. He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any instrument
requiring it, and, when so affixed, it shall be attested by his signature or
by the signature of an Assistant Secretary.
SECTION 6.11. The Assistant Secretaries. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Trustees or the President, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such duties and have such other powers as the Trustees or the
President may from time to time prescribe.
SECTION 6.12. The Treasurer. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Trustees and the President, whenever any of them
require it, an account of his transactions as Treasurer and of the financial
condition of the Trust; and he shall perform such other duties as the
Trustees, or the President, may from time to time prescribe.
SECTION 6.13. The Assistant Treasurers. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Trustees or the President, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the President, may from time to time prescribe.
SECTION 6.14. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.
ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS
Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.
Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.
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ARTICLE VIII
CERTIFICATES OF SHARES
SECTION 8.1. Certificates of Shares. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the President, or a Vice President, and countersigned by the
Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.
No certificate shall be issued for any share until such share is fully
paid.
SECTION 8.2. Lost, Stolen, Destroyed and Mutilated Certificates. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.
ARTICLE IX
CUSTODIAN
SECTION 9.1. Appointment and Duties. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:
(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;
(3) to disburse such funds upon orders or vouchers;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.
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SECTION 9.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.
SECTION 11.2. Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining Shareholders entitled to notice
of, or to vote at, any meeting of Shareholders, or Shareholders entitled to
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. Such
date, in any case, shall be not more than ninety (90) days, and in case of a
meeting of Shareholders not less than ten (10) days, prior to the date on
which particular action requiring such determination of Shareholders is to be
taken. In lieu of fixing a record date the Trustees may provide that the
transfer books shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the transfer books are closed for the purpose of
determining Shareholders entitled to notice of a vote at a meeting of
Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.
SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.
SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.
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ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS
The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.
ARTICLE XIII
AMENDMENTS
These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.
ARTICLE XIV
DECLARATION OF TRUST
The Declaration of Trust establishing Dean Witter Short-Term U.S. Treasury
Trust, dated June 4, 1991, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Short-Term U.S. Treasury 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
Short-Term U.S. Treasury 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 Short-Term U.S. Treasury Trust, but the Trust Estate only shall be
liable.
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Exhibit 5
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the 31st day of May, 1997 by and between Dean Witter
Short-Term U.S. Treasury Trust, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Fund"),
and Dean Witter InterCapital Inc., a Delaware corporation (hereinafter called
the "Investment Manager"):
WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, The Investment Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser; and
WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, The Investment Manager desires to be retained to perform services
on said terms and conditions:
Now, Therefore, this Agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:
1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously manage
the assets of the Fund in a manner consistent with the investment objectives and
policies of the Fund; shall determine the securities and commodities to be
purchased, sold or otherwise disposed of by the Fund and the timing of such
purchases, sales and dispositions; and shall take such further action, including
the placing of purchase and sale orders on behalf of the Fund, as the Investment
Manager shall deem necessary or appropriate. The Investment Manager shall also
furnish to or place at the disposal of the Fund such of the information,
evaluations, analyses and opinions formulated or obtained by the Investment
Manager in the discharge of its duties as the Fund may, from time to time,
reasonably request.
2. The Investment Manager shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Manager shall be deemed to
include persons employed or otherwise retained by the Investment Manager to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Manager may
desire. The Investment Manager shall, as agent for the Fund, maintain the Fund's
records and books of account (other than those maintained by the Fund's transfer
agent, registrar, custodian and other agencies). All such books and records so
maintained shall be the property of the Fund and, upon request therefor, the
Investment Manager shall surrender to the Fund such of the books and records so
requested.
3. The Fund will, from time to time, furnish or otherwise make available to
the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Manager may reasonably require in order to discharge its duties and obligations
hereunder.
4. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement,
and shall, at its own expense, pay the compensation of the officers and
employees, if any, of the Fund, and provide such office space, facilities and
equipment
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and such clerical help and bookkeeping services as the Fund shall reasonably
require in the conduct of its business. The Investment Manager shall also bear
the cost of telephone service, heat, light, power and other utilities provided
to the Fund.
5. The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund, including without limitation: fees pursuant to any plan of
distribution that the Fund may adopt; the charges and expenses of any registrar,
any custodian or depository appointed by the Fund for the safekeeping of its
cash, portfolio securities or commodities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers' commissions
chargeable to the Fund in connection with portfolio transactions to which the
Fund is a party; all taxes, including securities or commodities issuance and
transfer taxes, and fees payable by the Fund to federal, state or other
governmental agencies; the cost and expense of engraving or printing
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the Fund and
its shares with the Securities and Exchange Commission and various states and
other jurisdictions (including filing fees and legal fees and disbursements of
counsel); the cost and expense of printing, including typesetting, and
distributing prospectuses and statements of additional information of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees of
the Investment Manager or any corporate affiliate of the Investment Manager; all
expenses incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Fund's shares; charges and expenses of legal
counsel, including counsel to the Trustees of the Fund who are not interested
persons (as defined in the Act) of the Fund or the Investment Manager, and of
independent accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund borrowings;
postage; insurance premiums on property or personnel (including officers and
Trustees) of the Fund which inure to its benefit; extraordinary expenses
(including but not limited to legal claims and liabilities and litigation costs
and any indemnification related thereto); and all other charges and costs of the
Fund's operation unless otherwise explicitly provided herein.
6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the Investment
Manager monthly compensation determined by applying the annual rate of 0.35% to
the Fund's daily net assets. Except as hereinafter set forth, compensation under
this Agreement shall be calculated and accrued daily and the amounts of the
daily accruals shall be paid monthly. Such calculations shall be made by
applying 1/365ths of the annual rates to the Fund's net assets each day
determined as of the close of business on that day or the last previous business
day. If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fees as set forth above.
Subject to the provisions of paragraph 7 hereof, payment of the Investment
Manager's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by paragraph 7
hereof.
7. In the event the operating expenses of the Fund, including amounts
payable to the Investment Manager pursuant to paragraph 6 hereof, for any fiscal
year ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Manager shall reduce its management fee to the extent of
such excess and, if required, pursuant to any such laws or regulations, will
reimburse the Fund for annual operating expenses in excess of any expense
limitation that may be applicable; provided, however, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Fund. Such reduction, if any, shall be computed
and accrued daily, shall be settled on a monthly basis, and shall be based upon
the expense limitation applicable to the Fund as at the end of the last
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<PAGE>
business day of the month. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Investment Manager's
fee shall be applicable.
For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in the Fund's portfolio accrued
to and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall on
or prior to the last day of such fiscal year, but shall not include gains from
the sale of securities.
8. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund or
any of its investors for any error of judgment or mistake of law or for any act
or omission by the Investment Manager or for any losses sustained by the Fund or
its investors.
9. Nothing contained in this Agreement shall prevent the Investment Manager
or any affiliated person of the Investment Manager from acting as investment
adviser or manager for any other person, firm or corporation and shall not in
any way bind or restrict the Investment Manager or any such affiliated person
from buying, selling or trading any securities or commodities for their own
accounts or for the account of others for whom they may be acting. Nothing in
this Agreement shall limit or restrict the right of any Trustee, officer or
employee of the Investment Manager to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business whether of a similar or dissimilar nature.
10. This Agreement shall remain in effect until April 30, 1999 and from year
to year thereafter provided such continuance is approved at least annually by
the vote of holders of a majority, as defined in the Investment Company Act of
1940, as amended (the "Act"), of the outstanding voting securities of the Fund
or by the Trustees of the Fund; provided that in either event such continuance
is also approved annually by the vote of a majority of the Trustees of the Fund
who are not parties to this Agreement or "interested persons" (as defined in the
Act) of any such party, which vote must be cast in person at a meeting called
for the purpose of voting on such approval; provided, however, that (a) the Fund
may, at any time and without the payment of any penalty, terminate this
Agreement upon thirty days' written notice to the Investment Manager, either by
majority vote of the Trustees of the Fund or by the vote of a majority of the
outstanding voting securities of the Fund; (b) this Agreement shall immediately
terminate in the event of its assignment (to the extent required by the Act and
the rules thereunder) unless such automatic terminations shall be prevented by
an exemptive order of the Securities and Exchange Commission; and (c) the
Investment Manager may terminate this Agreement without payment of penalty on
thirty days' written notice to the Fund. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.
11. This Agreement may be amended by the parties without the vote or consent
of the shareholders of the Fund to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, or if they
deem it necessary to conform this Agreement to the requirements of applicable
federal laws or regulations, but neither the Fund nor the Investment Manager
shall be liable for failing to do so.
12. This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.
13. The Investment Manager and the Fund each agree that the name "Dean
Witter," which comprises a component of the Fund's name, is a property right of
Dean Witter Reynolds Inc. The Fund agrees and consents that (i) it will only use
the name "Dean Witter" as a component of its name and for no other purpose, (ii)
it will not purport to grant to any third party the right to use the name "Dean
Witter" for any purpose, (iii) the Investment Manager or its parent, Morgan
Stanley, Dean Witter, Discover & Co., or any corporate affiliate of the
Investment Manager's parent, may use or grant to others the right to use the
name
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"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 Short-Term U.S.
Treasury Trust, dated June 4, 1991, 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 Short-Term U.S. Treasury 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 Short-Term
U.S. Treasury 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 Short-Term U.S.
Treasury Trust, but the Trust Estate only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written in New York, New York.
DEAN WITTER SHORT-TERM
U.S. TREASURY TRUST
By:
.....................................
Attest:
..................................
DEAN WITTER INTERCAPITAL INC.
By:
.....................................
Attest:
..................................
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Exhibit 6
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 31st day of May, 1997, between Dean Witter
Short-Term U.S. Treasury Trust, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (the "Trust"), and Dean
Witter Distributors Inc., a Delaware corporation (the "Distributor");
W I T N E S S E T H:
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a diversified open-end investment company and
it is in the interest of the Trust to offer its shares for sale continuously,
and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the Trust's
transferable shares of beneficial interest, of $.01 par value ("Shares"), in
order to promote the growth of the Trust and facilitate the distribution of
its shares.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Appointment of the Distributor. (a) The Trust hereby appoints
the Distributor as the principal underwriter of the Trust to sell Shares to
the public on the terms set forth in this Agreement and the Trust's
prospectus and the Distributor hereby accepts such appointment and agrees to
act hereunder. The Trust, 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 Trust 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 Trust's
prospectus (the "Prospectus") and statement of additional information
included in the Trust'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 Trust, except that the
exclusive rights granted to the Distributor to sell the Shares shall not
apply to Shares issued by the Trust: (i) in connection with the merger or
consolidation of any other investment company or personal holding company
with the Trust or the acquisition by purchase or otherwise of all (or
substantially all) the assets or the outstanding shares of any such company
by the Trust; 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 Trust. (a) The Distributor shall
have the right to buy from the Trust 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 Trust shall be the net asset value, determined as set
forth in the Prospectus, used in determining the public offering price on
which such orders were based.
(b) The shares are to be resold by the Distributor at the public offering
price, as set forth in the Prospectus to investors or to securities dealers
including DWR, who have entered into selected dealer agreements with the
Distributor pursuant to Section 7 ("Selected Dealers").
(c) The Trust 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(e) hereof. The Trust 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
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have been some other extraordinary event which, in the judgment of the Trust,
makes it impracticable to sell the Shares.
(d) The Trust, or any agent of the Trust designated in writing by the
Trust, shall be promptly advised of all purchase orders for Shares received
by the Distributor. Any order may be rejected by the Trust; provided,
however, that the Trust 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 Trust (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 Trust in New York Clearing House funds. The Distributor agrees to
cause such payment and such instructions to be delivered promptly to the
Trust (or its agent).
(e) With respect to Shares sold by any Selected Dealer, the Distributor is
authorized to direct the Trust'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 Trust'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 Trust 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.
Upon any redemption of Shares the Trust shall pay the total amount of the
redemption price in accordance with applicable provisions of the Prospectus
in New York Clearing House funds.
(b) The Distributor is authorized, as agent for the Trust, 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 Trust for redemption all Shares so delivered. The Distributor shall be
responsible for the accuracy of instructions transmitted to the Trust's
transfer agent in connection with all such repurchases.
(c) The Distributor is authorized, as agent for the Trust, to repurchase
Shares held in a shareholder's account with the Trust 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 Trust, for redemption,
all such orders for repurchase of shares. Payment for shares repurchased may
be made by the Trust to the Distributor for the account of the shareholder.
The Distributor shall be responsible for the accuracy of instructions
transmitted to the Trust's transfer agent in connection with all such
repurchases.
(d) 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 Trust to accept orders for redemption or
repurchase directly from the Selected Dealer on behalf of the Distributor and
to instruct the Trust 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 shall maintain, a record of such orders. The Distributor
is further authorized to obtain from the Trust, and shall maintain, a record
of payments made directly to the Selected Dealer on behalf of the
Distributor.
(e) Redemption of Shares or payment by the Trust 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
Trust of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust fairly to determine the value of its net
assets, or during any other period when the Securities and Exchange
Commission, by order, so permits.
SECTION 5. Duties of the Trust. (a) The Trust shall furnish to the
Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use
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in connection with the distribution of the Shares, including one certified
copy, upon request by the Distributor, of all financial statements prepared
by the Trust and examined by independent accountants. The Trust 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 Trust shall take, from time to time, but subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized Shares and 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 Trust shall use its best efforts to pay the filing fees for an
appropriate number of the Shares for sale under the securities laws of such
states as the Distributor and the Trust may approve. Any qualification to
sell its Shares in a state may be withheld, terminated or withdrawn by the
Trust at any time in its discretion. As provided in Section 8(c) hereof, such
filing fees shall be borne by the Trust. The Distributor shall furnish any
information and other material relating to its affairs and activities as may
be required by the Trust in connection with the sale of its Shares in any
state.
(d) The Trust shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Trust.
SECTION 6. Duties of the Distributor. (a) The Distributor shall sell
Shares of the Trust through DWR and may sell Shares through other securities
dealers and its own Account Executives, if any, and shall devote reasonable
time and effort to promote sales of the 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 may act as
principal underwriter for other registered investment companies so long as
the performance of its obligations hereunder is not impaired hereby. It is
also understood that Selected Dealers, including DWR, may also sell shares
for other registered investment companies.
(b) Neither the Distributor nor any Selected Dealer shall 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 Trust.
(c) The Distributor agrees that it will comply with the applicable terms
and limitations of the Rules of the Association of the National Association
of Securities 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 Trust. 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
Trust, 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 including the payment to Selected Dealers of any service fees
and other expenses for sales of the Trust's Shares (except such expenses as
are specifically undertaken herein by the Trust) incurred or paid by Selected
Dealers, including DWR. The Distributor shall bear the costs and expenses of
preparing, printing and distributing any supplementary sales literature used
by the Distributor or furnished by it for use by Selected Dealers in
connection with the offering of the Shares for sale. Any expenses of
advertising incurred in connection with such offering will also be the
obligation of the Distributor. 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
hereunder may be paid in accordance with the terms of such Rule 12b-1 Plan.
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(b) The Trust shall bear all costs and expenses of the Trust, including
fees and disbursements of legal counsel including counsel to the Trustees of
the Trust who are not interested persons (as defined in the 1940 Act) of the
Trust or the Distributor, and independent accountants, in connection with the
preparation and filing of any required Registration Statements and
Prospectuses and all amendments and supplements thereto, and the expense of
preparing, printing, mailing and otherwise distributing prospectuses and
statements of additional information, annual or interim reports or proxy
materials to shareholders.
(c) The Trust shall pay the filing fees, and, if necessary or advisable in
connection therewith, bear the cost and expense of qualifying the Trust as a
broker or dealer, in such states of the United States or other jurisdictions
as shall be selected by the Trust and the Distributor pursuant to Section
5(c) hereof and the cost and expenses payable to each such state for
continuing to offer Shares therein until the Trust decides to discontinue
selling Shares pursuant to Section 5(c) hereof.
SECTION 9. Indemnification. (a) The Trust 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 and
Statements of Additional Information, as from time to time amended and
supplemented, or the annual or interim reports to shareholders of the Trust,
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 Trust
in connection therewith by or on behalf of the Distributor; provided,
however, that in no case (i) is the indemnity of the Trust 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 Trust 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 Trust 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 any
such controlling persons, as the case may be, shall have notified the Trust
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 Trust 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 Trust 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
Trust 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
Trust 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 Trust 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 Trust 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 Trust and
each of its trustees and officers and each person, if any, who controls the
Trust 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 Trust in writing by or on
behalf of the Distributor for use in connection with the Registration
Statement or
4
<PAGE>
related Prospectus and Statement of Additional Information, as from time to
time amended, or the annual or interim reports to shareholders. In case any
action shall be brought against the Trust or any person so indemnified, in
respect of which indemnity may be sought against the Distributor, the
Distributor shall have the rights and duties given to the Trust and the Trust
and each person so indemnified shall have the same rights and duties given to
the Distributor by the provisions of subsection (a) of this Section 9.
(ii) The Distributor shall indemnify and hold harmless the Trust and the
Trust's transfer agent, individually and in its capacity as the Trust'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 Trust pursuant to Section 4(d) hereof and pay the proceeds
to, or as directed by, 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 Section 3(e).
(iii) In case any action shall be brought against the Trust 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 Trust, and the Trust 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, 1998, and thereafter, but only so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Trust, or by the vote of a majority of the outstanding voting
securities of the Trust, cast in person or by proxy, and (ii) a majority of
those Trustees who are not parties to this Agreement or interested persons
5
<PAGE>
of any such party and who have no direct or indirect financial interest in
this Agreement or in the operation of the Trust'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.
This Agreement may be terminated at any time without the payment of any
penalty, by the Trustees of the Trust, by a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no direct or
indirect interest in this Agreement, or by vote of a majority of the
outstanding voting securities of the Trust, 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 "interested 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 Trust, or by the vote of a majority of outstanding voting
securities of the Trust, and (ii) a majority of those Trustees of the Trust
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 Trust'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 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 the Trust establishing
Dean Witter Short-Term U.S. Treasury Trust, dated June 4, 1991, 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 Short-Term U.S. Treasury 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 Short-Term U.S. Treasury 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 Short-Term U.S. Treasury 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 written in New York, New York.
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
By:
.......................................
DEAN WITTER DISTRIBUTORS INC.
By:
.......................................
6
<PAGE>
Exhibit 9
SERVICES AGREEMENT
AGREEMENT made as of the 17th day of April, 1995 by and between Dean
Witter InterCapital Inc., a Delaware corporation (herein referred to as
"InterCapital"), and Dean Witter Services Company Inc., a Delaware
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
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.
1
<PAGE>
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
activitives 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, 1995, 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 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 written agreement executed by each of the parties hereto.
2
<PAGE>
11. This Agreement may be assigned by either party with the written
consent of the other party.
12. 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:
.....................................
Attest:
..................................
DEAN WITTER SERVICES COMPANY INC.
By:
.....................................
Attest:
..................................
3
<PAGE>
SCHEDULE A
DEAN WITTER FUNDS
AS AMENDED AS OF OCTOBER 25, 1996
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 Balanced Growth Fund
7. Dean Witter Balanced Income Fund
8. Dean Witter California Tax-Free Daily Income Trust
9. Dean Witter California Tax-Free Income Fund
10. Dean Witter Capital Appreciation Fund
11. Dean Witter Capital Growth Securities
12. Dean Witter Convertible Securities Trust
13. Dean Witter Developing Growth Securities Trust
14. Dean Witter Diversified Income Trust
15. Dean Witter Dividend Growth Securities Inc.
16. Dean Witter European Growth Fund Inc.
17. Dean Witter Federal Securities Trust
18. Dean Witter Global Asset Allocation Fund
19. Dean Witter Global Dividend Growth Securities
20. Dean Witter Global Short-Term Income Fund Inc.
21. Dean Witter Global Utilities Fund
22. Dean Witter Hawaii Municipal Trust
23. Dean Witter Health Sciences Trust
24. Dean Witter High Income Securities
25. Dean Witter High Yield Securities Inc.
26. Dean Witter Income Builder Fund
27. Dean Witter Information Fund
28. Dean Witter Intermediate Income Securities
29. Dean Witter Intermediate Term U.S. Treasury Trust
30. Dean Witter International SmallCap Fund
31. Dean Witter Japan Fund
32. Dean Witter Limited Term Municipal Trust
33. Dean Witter Liquid Asset Fund Inc.
34. Dean Witter Mid-Cap Growth Fund
35. Dean Witter Multi-State Municipal Series Trust
36. Dean Witter National Municipal Trust
37. Dean Witter Natural Resource Development Securities Inc.
38. Dean Witter New York Municipal Money Market Trust
39. Dean Witter New York Tax-Free Income Fund
40. Dean Witter Pacific Growth Fund Inc.
41. Dean Witter Precious Metals and Minerals Trust
42. Dean Witter Premier Income Trust
43. Dean Witter Retirement Series
44. Dean Witter Select Dimensions Investment Series
(i) American Value Portfolio
(ii) Balanced Portfolio
(iii) Core Equity Portfolio
(iv) Developing Growth Portfolio
(v) Diversified Income Portfolio
(vi) Dividend Growth Portfolio
(vii) Emerging Markets Portfolio
(viii) Global Equity Portfolio
(ix) Mid-Cap Growth Portfolio
(x) Money Market Portfolio
(xi) North American Government Securities Portfolio
(xii) Utilities Portfolio
(xiii) Value-Added Market Portfolio
45. Dean Witter Select Municipal Reinvestment Fund
46. Dean Witter Short-Term Bond Fund
47. Dean Witter Short-Term U.S. Treasury Trust
48. Dean Witter Special Value Fund
49. Dean Witter Strategist Fund
50. Dean Witter Tax-Exempt Securities Trust
51. Dean Witter Tax-Free Daily Income Trust
52. Dean Witter U.S. Government Money Market Trust
A-1
<PAGE>
53. Dean Witter U.S. Government Securities Trust
54. Dean Witter Utilities Fund
55. Dean Witter Value-Added Market Series
56. Dean Witter Variable Investment Series
(i) Capital Appreciation Portfolio
(ii) Capital Growth Portfolio
(iii) Dividend Growth Portfolio
(iv) Equity Portfolio
(v) European Growth Portfolio
(vi) Global Dividend Growth Portfolio
(vii) High Yield Portfolio
(viii) Income Builder Portfolio
(ix) Money Market Portfolio
(x) Quality Income Plus Portfolio
(xi) Pacific Growth Portfolio
(xii) Strategist Portfolio
(xiii) Utilities Portfolio
57. Dean Witter World Wide Income Trust
58. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS
59. High Income Advantage Trust
60. High Income Advantage Trust II
61. High Income Advantage Trust III
62. InterCapital Income Securities Inc.
63. Dean Witter Government Income Trust
64. InterCapital Insured Municipal Bond Trust
65. InterCapital Insured Municipal Trust
66. InterCapital Insured Municipal Income Trust
67. InterCapital California Insured Municipal Income Trust
68. InterCapital Insured Municipal Securities
69. InterCapital Insured California Municipal Securities
70. InterCapital Quality Municipal Investment Trust
71. InterCapital Quality Municipal Income Trust
72. InterCapital Quality Municipal Securities
73. InterCapital California Quality Municipal Securities
74. InterCapital New York Quality Municipal Securities
A-2
<PAGE>
SCHEDULE B
DEAN WITTER SERVICES COMPANY INC.
SCHEDULE OF ADMINISTRATIVE FEES
AS AMENDED AS OF MAY 1, 1997
Monthly compensation calculated daily by applying the following annual
rates to a fund's net assets:
FIXED INCOME FUNDS
Dean Witter Balanced Income Fund 0.060% to the net assets.
Dean Witter California Tax-Free 0.055% of the portion of the daily net
Income Fund assets not exceeding $500 million;
0.0525% of the portion of the daily net
assets exceeding $500 million but not
exceeding $750 million; 0.050% of the
portion of the daily net assets
exceeding $750 million but not exceeding
$1 billion; 0.0475% of the portion of
the daily net assets exceeding $1
billion but not exceeding $1.25 billion;
and 0.045% of the portion of the daily
net assets exceeding $1.25 billion.
Dean Witter Convertible Securities 0.060% of the portion of the daily net
Securities Trust assets not exceeding $750 million; .055%
of the portion of the daily net assets
exceeding $750 million but not exceeding
$1 billion; 0.050% of the portion of the
daily net assets of the exceeding $1
billion but not exceeding $1.5 billion;
0.0475% of the portion of the daily net
assets exceeding $1.5 billion but not
exceeding $2 billion; 0.045% of the
portion of the daily net assets
exceeding $2 billion but not exceeding
$3 billion; and 0.0425% of the portion
of the daily net assets exceeding $3
billion.
Dean Witter Diversified 0.040% of the net assets.
Income Trust
Dean Witter Federal Securities Trust 0.055% of the portion of the daily net
assets not exceeding $1 billion; 0.0525%
of the portion of the daily net assets
exceeding $1 billion but not exceeding
$1.5 billion; 0.050% of the portion of
the daily net assets exceeding $1.5
billion but not exceeding $2 billion;
0.0475% of the portion of the daily net
assets exceeding $2 billion but not
exceeding $2.5 billion; 0.045% of the
portion of the daily net assets
exceeding $2.5 billion but not exceeding
$5 billion; 0.0425% of the portion of
the daily net assets exceeding $5
billion but not exceeding $7.5 billion;
0.040% of the portion of the daily net
assets exceeding $7.5 billion but not
exceeding $10 billion; 0.0375% of the
portion of the daily net assets
exceeding $10 billion but not exceeding
$12.5 billion; and 0.035% of the portion
of the daily net assets exceeding $12.5
billion.
Dean Witter Global Short-Term 0.055% of the portion of the daily net
Income Fund Inc. assets not exceeding $500 million; and
0.050% of the portion of the daily net
assets exceeding $500 million.
Dean Witter Hawaii Municipal 0.035% to the net assets.
Trust
Dean Witter High Income 0.050% of the portion of the daily net
Securities assets not exceeding $500 million; and
0.0425% of the portion of the daily net
assets exceeding $500 million.
B-1
<PAGE>
Dean Witter High Yield 0.050% of the portion of the daily net
Securities Inc. assets not exceeding $500 million;
0.0425% of the portion of 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 $2 billion; 0.0325% of
the portion of the daily net assets
exceeding $2 billion but not exceeding
$3 billion; and 0.030% of the portion of
daily net assets exceeding $3 billion.
Dean Witter Intermediate 0.060% of the portion of the daily net
Income Securities assets not exceeding $500 million;
0.050% of the portion of the daily net
assets exceeding $500 million but not
exceeding $750 million; 0.040% of the
portion of the daily net assets
exceeding $750 million but not exceeding
$1 billion; and 0.030% of the portion of
the daily net assets exceeding $1
billion.
Dean Witter Intermediate Term 0.035% to the net assets.
U.S. Treasury Trust
Dean Witter Limited Term 0.050% to the net assets.
Municipal Trust
Dean Witter Multi-State Municipal 0.035% to the net assets.
Series Trust (10 Series)
Dean Witter National 0.035% to the net assets.
Municipal Trust
Dean Witter New York Tax-Free 0.055% of the portion of the daily net
Income Fund assets not exceeding $500 million; and
0.0525% of the portion of the daily net
assets exceeding $500 million.
Dean Witter Premier 0.050% to the net assets.
Income Trust
Dean Witter Retirement Series- 0.065% to the net assets.
Intermediate Income Securities Series
Dean Witter Retirement Series- 0.065% to the net assets.
U.S. Government Securities Series
Dean Witter Select Dimensions 0.039% to the net assets.
Investment Series-North American
Government Securities Portfolio
Dean Witter Short-Term 0.070% to the net assets.
Bond Fund
Dean Witter Short-Term U.S. 0.035% to the net assets.
Treasury Trust
Dean Witter Tax-Exempt 0.050% of the portion of the daily net
Securities Trust assets not exceeding $500 million;
0.0425% of the portion of 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; and 0.035% of the portion of
the daily net assets exceeding $1
billion but not exceeding $1.25 billion;
.0325% of the portion of the daily net
assets exceeding $1.25 billion.
B-2
<PAGE>
Dean Witter U.S. Government 0.050% of the portion of the daily net
Securities Trust assets not exceeding $1 billion; 0.0475%
of the portion of the daily net assets
exceeding $1 billion but not exceeding
$1.5 billion; 0.045% of the portion of
the daily net assets exceeding $1.5
billion but not exceeding $2 billion;
0.0425% of the portion of the daily net
assets exceeding $2 billion but not
exceeding $2.5 billion; 0.040% of the
portion of the daily net assets
exceeding $2.5 billion but not exceeding
$5 billion; 0.0375% of the portion of
the daily net assets exceeding $5
billion but not exceeding $7.5 billion;
0.035% of the portion of the daily net
assets exceeding $7.5 billion but not
exceeding $10 billion; 0.0325% of the
portion of the daily net assets
exceeding $10 billion but not exceeding
$12.5 billion; and 0.030% of the portion
of the daily net assets exceeding $12.5
billion.
Dean Witter Variable Investment 0.050% to the net assets.
Series-High Yield Portfolio
Dean Witter Variable Investment 0.050% to the net assets.
Series-Quality Income Plus Portfolio
Dean Witter World Wide Income 0.075% of the portion of the daily net
Trust assets up to $250 million; 0.060% of the
portion of the daily net assets
exceeding $250 million but not exceeding
$500 million; 0.050% of the portion of
the daily net assets of the exceeding
$500 million but not exceeding $750
milliion; 0.040% of the portion of the
daily net assets exceeding $750 million
but not exceeding $1 billion; and 0.030%
of the portion of the daily net assets
exceeding $1 billion.
Dean Witter Select Municipal 0.050% to the net assets.
Reinvestment Fund
EQUITY FUNDS
Dean Witter American Value 0.0625% of the portion of the daily net
Fund assets not exceeding $250 million;
0.050% of the portion of the daily net
assets exceeding $250 million but not
exceeding $2.25 billion; 0.0475% of the
portion of the daily net assets
exceeding $2.25 billion but not
exceeding $3.5 billion; and 0.0450% of
the portion of the daily net assets
exceeding $3.5 billion.
Dean Witter Balanced Growth Fund 0.060% to the net assets.
Dean Witter Capital Appreciation 0.075% of the portion of the daily net
Fund assets not exceeding $500 million; and
0.0725% of the portion of the daily net
assets exceeding $500 million.
Dean Witter Capital Growth 0.065% to the portion of the daily net
Securities assets not exceeding $500 million;
0.055% of the portion exceeding $500
million but not exceeding $1 billion;
0.050% of the portion of the daily net
assets exceeding $1 billion but not
exceeding $1.5 billion; and 0.0475% of
the portion of the daily net assets
exceeding $1.5 billion.
Dean Witter Developing Growth 0.050% of the portion of the daily net
Securities Trust assets not exceeding $500 million; and
0.0475% of the portion of the daily net
assets exceeding $500 million.
B-3
<PAGE>
Dean Witter Dividend Growth 0.0625% of the portion of the daily net
Securities Inc. assets not exceeding $250 million;
0.050% of the portion of the daily net
assets exceeding $250 million but not
exceeding $1 billion; 0.0475% of the
portion of the daily net assets
exceeding $1 billion but not exceeding
$2 billion; 0.045% of the portion of the
daily net assets exceeding $2 billion
but not exceeding $3 billion; 0.0425% of
the portion of the daily net assets
exceeding $3 billion but not exceeding
$4 billion; 0.040% of the portion of the
daily net assets exceeding $4 billion
but not exceeding $5 billion; 0.0375% of
the portion of the daily net assets
exceeding $5 billion but not exceeding
$6 billion; 0.035% of the portion of the
daily net assets exceeding $6 billion
but not exceeding $8 billion; 0.0325% of
the portion of the daily net assets
exceeding $8 billion but not exceeding
$10 billion; 0.030% of the portion of
the daily net assets exceeding $10
billion but not exceeding $15 billion;
and 0.0275% of the portion of the daily
net assets exceeding $15 billion.
Dean Witter European Growth 0.10% of the portion of the daily net
Fund Inc. assets not exceeding $500 million;
0.095% of the portion of the daily net
assets exceeding $500 million but not
exceeding $2 billion; and 0.090% of the
portion of the daily net assets
exceeding $2 billion.
Dean Witter Global Asset 0.040% to the net assets.
Allocation Fund
Dean Witter Global Dividend 0.075% of the portion of the daily net
Growth Securities assets not exceeding $1 billion; 0.0725%
of the portion of the daily net assets
exceeding $1 billion but not exceeding
$1.5 billion; 0.070% of the portion of
the daily net assets exceeding $1.5
billion but not exceeding $2.5 billion;
0.0675% of the portion of the daily net
assets exceeding $2.5 billion but not
exceeding $3.5 billion; and 0.0650% of
the portion of the daily net assets
exceeding $3.5 billion.
Dean Witter Global Utilities Fund 0.065% of the portion of the daily net
assets not exceeding $500 million; and
0.0625% of the portion of the daily net
assets exceeding $500 million.
Dean Witter Health Sciences Trust 0.10% of the portion of daily net assets
not exceeding $500 million; and 0.095%
of the portion of daily net assets
exceeding $500 million.
Dean Witter Income 0.075% to the net assets.
Builder Fund
Dean Witter Information Fund 0.075% of the portion of the daily net
assets not exceeding $500 million; and
0.0725% of the portion of the daily net
assets exceeding $500 million.
Dean Witter International 0.075% to the net assets.
SmallCap Fund
Dean Witter Japan Fund 0.060% to the net assets.
Dean Witter Mid-Cap Growth Fund 0.075% of the portion of the daily net
assets not exceeding $500 million; and
0.0725% of the portion of the daily net
assets exceeding $500 million.
B-4
<PAGE>
Dean Witter Natural Resource 0.0625% of the portion of the daily net
Development Securities Inc. assets not exceeding $250 million and
0.050% of the portion of the daily net
assets exceeding $250 million.
Dean Witter Pacific Growth 0.10% of the portion of the daily net
Fund Inc. assets not exceeding $1 billion; 0.095%
of the portion of the daily net assets
exceeding $1 billion but not exceeding
$2 billion; and 0.090% of the portion of
the daily net assets exceeding $2
billion.
Dean Witter Precious Metals 0.080% to the net assets.
and Minerals Trust
Dean Witter Retirement Series- 0.085% to the net assets.
American Value Series
Dean Witter Retirement Series- 0.085% to the net assets.
Capital Growth Series
Dean Witter Retirement Series- 0.075% to the net assets.
Dividend Growth Series
Dean Witter Retirement Series- 0.10% to the net assets.
Global Equity Series
Dean Witter Retirement Series- 0.085% to the net assets.
Strategist Series
Dean Witter Retirement Series- 0.075% to the net assets.
Utilities Series
Dean Witter Retirement Series- 0.050% to the net assets.
Value Added Market Series
Dean Witter Select Dimensions
Investment Series-
American Value Portfolio 0.0625% to the net assets.
Balanced Portfolio 0.045% to the net assets.
Core Equity Portfolio 0.051% to the net assets.
Developing Growth Portfolio 0.050% to the net assets.
Diversified Income Portfolio 0.040% to the net assets.
Dividend Growth Portfolio 0.0625% to the net assets.
Emerging Markets Portfolio 0.075% to the net assets.
Global Equity Portfolio 0.10% to the net assets.
Mid-Cap Growth Portfolio 0.075% to the net assets
Utilities Portfolio 0.065% to the net assets.
Value-Added Market Portfolio 0.050% to the net assets.
Dean Witter Special Value Fund 0.075% to the net assets.
Dean Witter Strategist Fund 0.060% of the portion of the daily net
assets not exceeding $500 million;
0.055% of the portion of the daily net
assets exceeding $500 million but not
exceeding $1 billion; 0.050% of the
portion of the daily net assets
exceeding $1 billion but not exceeding
$1.5 billion; and 0.0475% of the portion
of the daily net assets exceeding $1.5
billion.
Dean Witter Utilities Fund 0.065% of the portion of the daily net
assets not exceeding $500 million;
0.055% of the portion of the daily net
assets exceeding $500 million but not
exceeding $1 billion; 0.0525% of the
portion of the daily net assets
exceeding $1 billion but not exceeding
$1.5 billion; 0.050% of the portion of
the daily net
B-5
<PAGE>
assets exceeding $1.5 billion but not
exceeding $2.5 billion; 0.0475% of the
portion of the daily net assets
exceeding $2.5 billion but not exceeding
$3.5 billion; 0.045% of the portion of
the daily net assets exceeding $3.5 but
not exceeding $5 billion; and 0.0425% of
the daily net assets exceeding $5
billion.
Dean Witter Value-Added Market 0.050% of the portion of the daily net
Series assets not exceeding $500 million; 0.45%
of the portion of the daily net assets
exceeding $500 million but not exceeding
$1 billion; and 0.0425% of the portion
of the daily net assets exceeding $1
billion.
Dean Witter Variable Investment 0.075% to the net assets.
Series-Capital Appreciation Portfolio
Dean Witter Variable Investment 0.065% to the net assets.
Series-Capital Growth Portfolio
Dean Witter Variable Investment 0.0625% of the portion of the daily net
Series-Dividend Growth Portfolio assets not exceeding $500 million; and
0.050% of the portion of the daily net
assets exceeding $500 million but not
exceeding $1 billion; and 0.0475% of the
portion of the daily net assets
exceeding $1 billion.
Dean Witter Variable Investment 0.050% to the net assets of the portion
Series-Equity Portfolio of the daily net assets not exceeding $1
billion; and 0.0475% of the portion of
the daily net assets exceeding $1
billion.
Dean Witter Variable Investment 0.060% to the net assets.
Series-European Growth Portfolio
Dean Witter Variable Investment 0.075% to the net assets.
Series-Income Builder Portfolio
Dean Witter Variable Investment 0.050% to the net assets.
Series-Strategist Portfolio
Dean Witter Variable Investment 0.065% of the portion of the daily net
Series-Utilities Portfolio assets exceeding $500 million and 0.055%
of the portion of the daily net assets
exceeding $500 million.
Dean Witter World Wide 0.055% of the portion of the daily net
Investment Trust assets not exceeding $500 million; and
0.05225% of the portion of the daily net
assets exceeding $500 million.
MONEY MARKET FUNDS
Active Assets Trusts: 0.050% of the portion of the daily net
(1) Active Assets Money Trust assets not exceeding $500 million;
(2) Active Assets Tax-Free Trust 0.0425% of the portion of the daily net
(3) Active Assets California assets exceeding $500 million but not
Tax-Free Trust exceeding $750 million; 0.0375% of the
(4) Active Assets Government portion of the daily net assets
Securities Trust 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
B-6
<PAGE>
$3 billion; and 0.025% of the portion of
the daily net assets exceeding $3
billion.
Dean Witter California Tax-Free 0.050% of the portion of the daily net
Daily Income Trust assets not exceeding $500 million;
0.0425% of the portion of 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.
Dean Witter Liquid Asset 0.050% of the portion of the daily net
Fund Inc. assets not exceeding $500 million;
0.0425% of the portion of 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 $1.35 billion; 0.0325%
of the portion of the daily net assets
exceeding $1.35 billion but not
exceeding $1.75 billion; 0.030% of the
portion of the daily net assets
exceeding $1.75 billion but not
exceeding $2.15 billion; 0.0275% of the
portion of the daily net assets
exceeding $2.15 billion but not
exceeding $2.5 billion; 0.025% of the
portion of the daily net assets
exceeding $2.5 billion but not exceeding
$15 billion; 0.0249% of the portion of
the daily net assets exceeding $15
billion but not exceeding $17.5 billion;
and 0.0248% of the portion of the daily
net assets exceeding $17.5 billion.
Dean Witter New York Municipal 0.050% of the portion of the daily net
Money Market Trust assets not exceeding $500 million;
0.0425% of the portion of 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.
Dean Witter Retirement Series- 0.050% of the net assets.
Liquid Asset Series
Dean Witter Retirement Series- 0.050% of the net assets.
U.S. Government Money
Market Series
Dean Witter Select Dimensions 0.050% to the net assets.
Investment Series-
Money Market Portfolio
B-7
<PAGE>
Dean Witter Tax-Free Daily 0.050% of the portion of the daily net
Income Trust assets not exceeding $500 million;
0.0425% of the portion of 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.
Dean Witter U.S. Government 0.050% of the portion of the daily net
Money Market Trust assets not exceeding $500 million;
0.0425% of the portion of 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.
Dean Witter Variable Investment 0.050% to the net assets.
Series-Money Market Portfolio
Monthly compensation calculated weekly by applying the following annual
rates to the weekly net assets.
CLOSED-END FUNDS
Dean Witter Government Income 0.060% to the average weekly net assets.
Trust
High Income Advantage Trust 0.075% of the portion of the average
weekly net assets not exceeding $250
million; 0.060% of the portion of
average weekly net assets exceeding $250
million and not exceeding $500 million;
0.050% of the portion of average weekly
net assets exceeding $500 million and
not exceeding $750 million; 0.040% of
the portion of average weekly net assets
exceeding $750 million and not exceeding
$1 billion; and 0.030% of the portion of
average weekly net assets exceeding $1
billion.
High Income Advantage Trust II 0.075% of the portion of the average
weekly net assets not exceeding $250
million; 0.060% of the portion of
average weekly net assets exceeding $250
million and not exceeding $500 million;
0.050% of the portion of average weekly
net assets exceeding $500 million and
not exceeding $750 million; 0.040% of
the portion of average weekly net assets
exceeding $750 million and not exceeding
$1 billion; and 0.030% of the portion of
average weekly net assets exceeding $1
billion.
B-8
<PAGE>
High Income Advantage Trust III 0.075% of the portion of the average
weekly net assets not exceeding $250
million; 0.060% of the portion of
average weekly net assets exceeding $250
million and not exceeding $500 million;
0.050% of the portion of average weekly
net assets exceeding $500 million and
not exceeding $750 million; 0.040% of
the portion of the average weekly net
assets exceeding $750 million and not
exceeding $1 billion; and 0.030% of the
portion of average weekly net assets
exceeding $1 billion.
InterCapital Income Securities Inc. 0.050% to the average weekly net assets.
InterCapital Insured Municipal 0.035% to the average weekly net assets.
Bond Trust
InterCapital Insured Municipal 0.035% to the average weekly net assets.
Trust
InterCapital Insured Municipal 0.035% to the average weekly net assets.
Income Trust
InterCapital California Insured 0.035% to the average weekly net assets.
Municipal Income Trust
InterCapital Quality Municipal 0.035% to the average weekly net assets.
Investment Trust
InterCapital New York Quality 0.035% to the average weekly net assets.
Municipal Securities
InterCapital Quality Municipal 0.035% to the average weekly net assets.
Income Trust
InterCapital Quality Municipal 0.035% to the average weekly net assets.
Securities
InterCapital California Quality 0.035% to the average weekly net assets.
Municipal Securities
InterCapital Insured Municipal 0.035% to the average weekly net assets.
Securities
InterCapital Insured California 0.035% to the average weekly net assets.
Municipal Securities
B-9
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A (the "Registration Statement") of our report dated
July 10, 1997, relating to the financial statements and financial highlights
of Dean Witter Short-Term U.S. Treasury Trust, which appears in such Statement
of Additional Information, and to the incorporation by reference of our report
into the Prospectus which constitutes part of this Registration Statement. We
also consent to the reference to us under the heading "Financial Highlights"
in such Prospectus and to the references to us under the headings "Independent
Accountants" and "Experts" in the Statement of Additional Information.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
July 10, 1997
<PAGE>
Exhibit 15
AMENDED AND RESTATED PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
OF
DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
WHEREAS, Dean Witter Short-Term U.S. Treasury 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 April 28, 1993, the Fund most recently amended and restated a
Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Act which
had initially been adopted on July 22, 1991, and the Trustees then determined
that there was a reasonable likelihood that the Plan of Distribution, as then
amended and restated, 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 initial Plan and Agreement of
Distribution was entered into by the Fund with Dean Witter Reynolds Inc.
("DWR"); and
WHEREAS, on January 4, 1993, the Fund and DWR substituted Dean Witter
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 May 31, 1997, 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 amended and restated, 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 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 Trustees
determine 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. The amount of each monthly
payment may in no event exceed an amount equal to a payment at the annual
rate of 0.35 of 1% of the Fund's average net assets during the month. In the
case of all expenses other than expenses representing
<PAGE>
a residual to account executives, such amounts shall be determined at the
beginning of each calendar quarter by the Trustees, including a majority of
the Trustees who are not "interested persons" of the Fund, as defined in the
Act. Expenses representing a residual to account executives may be reimbursed
without prior determination. In the event that the Distributor proposes that
monies shall be reimbursed for other than such expenses, then in making the
quarterly determinations of the amounts that may be expended by the Fund, the
Distributor shall provide, and the Trustees shall review, a quarterly budget
of projected incremental distribution expenses to be incurred by the
Distributor, DWR, its affiliates or other broker-dealers on behalf of the
Fund, together with a report explaining the purposes and anticipated benefits
of incurring such expenses. The 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. All payments made
hereunder pursuant to the Plan shall be in accordance with the Rules of the
Association of the National Association of Securities Dealers, Inc.
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 calendar 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 calendar 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 calendar year.
7. The Distributor shall provide to the Trustees of the Fund and the
Trustees shall review, promptly after the end of each calendar 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 calendar 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 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, 1998 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 thirty 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,
conflicts with the applicable provisions of the Act, the latter shall
control.
2
<PAGE>
14. The Declaration of Trust establishing Dean Witter Short-Term U.S.
Treasury Trust, dated June 4, 1991, 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 Short-Term U.S. Treasury 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
Short-Term U.S. Treasury 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 Short-Term U.S. Treasury 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.
Date: July 22, 1991 DEAN WITTER SHORT-TERM U.S. TREASURY
As amended on January 4, 1993, TRUST
April 28, 1993 and July 23, 1997
By:
.................................
Attest:
.................................. DEAN WITTER DISTRIBUTORS INC.
By:
.................................
Attest:
.................................. DEAN WITTER REYNOLDS INC.
By:
.................................
Attest:
..................................
3
<PAGE>
SCHEDULE FOR COMPUTATIONS OF PERFORMANCE QUOTATIONS
DEAN WITTER SHORT TERM US TREASURY TRUST
(A) AVERAGE ANNUAL TOTAL RETURNS (NO LOAD FUND)
(B) TOTAL RETURN (NO LOAD FUND)
FORMULA: _ _
| _________________ |
| | |
| /\ n | EV |
t = | \ | ------- | - 1
| \ | P |
| \| |
|_ _|
EV
TR = ------- - 1
P
t = AVERAGE ANNUAL COMPOUND RETURN
n = NUMBER OF YEARS
EV = ENDING VALUE
P = INITIAL INVESTMENT
TR = TOTAL RETURN
(B) (A)
$1,000 EV AS OF TOTAL NUMBER OF AVERAGE ANNUAL
INVESTED - P 31-May-97 RETURN - TR YEARS - n COMPOUND RETURN - t
- ------------ --------- ----------- --------- -------------------
31-May-96 $1,056.30 5.63% 1.00 5.63%
31-May-92 $1,249.70 24.97% 5.00 4.56%
13-Aug-91 $1,331.50 33.15% 5.80 5.06%
(C) GROWTH OF $10,000
(D) GROWTH OF $50,000
(E) GROWTH OF $100,000
FORMULA: G= (TR+1)*P
G= GROWTH OF INITIAL INVESTMENT
P= INITIAL INVESTMENT
TR= TOTAL RETURN SINCE INCEPTION
<TABLE>
<CAPTION>
$10,000 TOTAL (C) GROWTH OF (D) GROWTH OF (E) GROWTH OF
INVESTED - P RETURN - TR $10,000 INVESTMENT - G $50,000 INVESTMENT - G $100,000 INVESTMENT - G
- ------------ ----------- ---------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
13-Aug-91 33.15 $13,315 $66,575 $133,150
</TABLE>
<PAGE>
DEAN WITTER SHORT-TERM US TREASURY TRUST
SCHEDULE OF COMPUTATION OF YIELD QUOTATION
05/31/97
6
YIELD = 2{[((a-b)/cd)+1]-1}
WHERE: a = Dividends and interest earned during the period
b = Expenses accrued for the period
c = The average daily number of share outstanding
during the period that were entitled to receive
dividends
d = The maximum offering price per share on the last
day of the period
6
YIELD = 2{[((1,200,071.21-160,285.66)/23,554,320.626X9.85)+1]-1}
= 5.44%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> MAY-31-1997
<INVESTMENTS-AT-COST> 212,892,601
<INVESTMENTS-AT-VALUE> 212,100,741
<RECEIVABLES> 42,492,163
<ASSETS-OTHER> 87,103
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 254,680,007
<PAYABLE-FOR-SECURITIES> 23,235,744
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,177,074
<TOTAL-LIABILITIES> 24,412,818
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 248,878,557
<SHARES-COMMON-STOCK> 23,379,838
<SHARES-COMMON-PRIOR> 26,278,463
<ACCUMULATED-NII-CURRENT> 394,587
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18,214,095)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (791,860)
<NET-ASSETS> 230,267,189
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16,113,858
<OTHER-INCOME> 0
<EXPENSES-NET> 2,135,558
<NET-INVESTMENT-INCOME> 13,978,300
<REALIZED-GAINS-CURRENT> (293,887)
<APPREC-INCREASE-CURRENT> 112,927
<NET-CHANGE-FROM-OPS> 13,797,340
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13,860,110)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,650,127
<NUMBER-OF-SHARES-REDEEMED> (29,680,876)
<SHARES-REINVESTED> 1,132,124
<NET-CHANGE-IN-ASSETS> (28,370,079)
<ACCUMULATED-NII-PRIOR> 276,397
<ACCUMULATED-GAINS-PRIOR> (17,920,208)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 902,158
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,135,558
<AVERAGE-NET-ASSETS> 257,759,475
<PER-SHARE-NAV-BEGIN> 9.84
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.53)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
