<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1994
REGISTRATION NOS.: 33-56239
811-07233
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
[X]
PRE-EFFECTIVE AMENDMENT NO. 1
[X]
POST-EFFECTIVE AMENDMENT NO.
[ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
[X]
AMENDMENT NO. 1
[X]
-------------------
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600
SHELDON CURTIS, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<CAPTION>
<S> <C>
CHRISTINE A. EDWARDS, Esq. DAVID M. BUTOWSKY, Esq.
Two World Trade Center Gordon Altman Butowsky
New York, New York 10048 Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
</TABLE>
-------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of this registration
statement.
-------------------
The Registrant hereby amends this registration statement on such date or
<PAGE>
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that the
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
CROSS-REFERENCE SHEET
FORM N-1A
<TABLE>
<CAPTION>
ITEM CAPTION
- ------------- -----------------------------------------------------
PART A PROSPECTUS
- ------------- -----------------------------------------------------
<S> <C> <C>
1. .... Cover Page
2. .... Summary of Fund Expenses; Prospectus Summary
3. .... Performance Information
Investment Objective and Policies; Risk
Considerations; The Fund and its Management; Cover
Page; Investment Restrictions; Prospectus Summary;
4. .... Appendix
The Fund and Its Management; Back Cover; Investment
5. .... Objective and Policies
Dividends, Distributions and Taxes; Additional
6. .... Information
Purchase of Fund Shares; Shareholder Services;
7. .... Redemptions and Repurchases
8. .... Redemptions and Repurchases; Shareholder Services
9. .... Not Applicable
</TABLE>
<TABLE>
<CAPTION>
PART B STATEMENT OF ADDITIONAL INFORMATION
- ---------- ----------------------------------------------------------
<S> <C> <C>
10. .... Cover Page
11. .... Table of Contents
12. .... The Fund and Its Management
Investment Practices and Policies; Risk Considerations;
Investment Restrictions; Portfolio Transactions and
13. .... Brokerage
14. .... The Fund and Its Management; Trustees and Officers
15. .... Trustees and Officers
The Fund and Its Management; Purchase of Fund Shares;
16. .... Custodian and Transfer Agent; Independent Accountants
17. .... Portfolio Transactions and Brokerage
18. .... Description of Shares
Repurchase of Fund Shares; Redemptions and Repurchases;
19. .... Statements of Assets and Liabilities; Shareholder Services
20. .... Dividends, Distributions and Taxes
21. .... Purchase of Fund Shares
22. .... Dividends, Distributions and Taxes
23. .... Performance Information
</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>
<PAGE>
DEAN WITTER
GLOBAL ASSET ALLOCATION FUND
PROSPECTUS- , 199
- -----------------------------------------------------------------------------
DEAN WITTER GLOBAL ASSET ALLOCATION FUND (THE "FUND") IS AN OPEN-END,
DIVERSIFIED MANAGEMENT INVESTMENT COMPANY WHOSE INVESTMENT OBJECTIVE IS TO
SEEK LONG-TERM TOTAL RETURN ON ITS INVESTMENTS. THE FUND SEEKS TO MEET ITS
INVESTMENT OBJECTIVE BY ALLOCATING ITS ASSETS AMONG U.S. AND FOREIGN
EQUITIES, FIXED-INCOME SECURITIES AND MONEY MARKET INSTRUMENTS.
Initial Offering--Shares are being offered in an underwriting by Dean Witter
Distributors Inc. at $10.00 per share with no underwriting commission, with
all proceeds going to the Fund. All expenses in connection with the
organization of the Fund and this offering will be paid by the Investment
Manager and Underwriter except for a maximum of $250,000 of organizational
expenses to be reimbursed by the Fund. The initial offering will run from
approximately January 25, 1995 through February 21, 1995.
Continuous Offering--A continuous offering will commence approximately one
week after the closing date (anticipated for February 28, 1995) of the
initial offering. Shares of the Fund will be priced at the net asset value
per share next determined following receipt of an order.
Repurchases and/or redemptions of shares purchased in either the initial
offering or the continuous offering are subject in most cases to a contingent
deferred sales charge, which declines from 5% to 1% of the amount redeemed,
if made within six years of purchase, which charge will be paid to the Fund's
Underwriter/ Distributor, Dean Witter Distributors Inc. See "Repurchases and
Redemptions--Contingent Deferred Sales Charge." In addition, the Fund pays
the Underwriter/Distributor a Rule 12b-1 distribution fee pursuant to a Plan
of Distribution at the annual rate of 1.0% of the lesser of the (i) average
daily aggregate net sales or (ii) average daily net assets of the Fund. See
"Purchase of Fund Shares--Continuous Offering--Plan of Distribution."
TABLE OF CONTENTS
Prospectus Summary .................................................... 2
Summary of Fund Expenses .............................................. 3
The Fund and its Management ........................................... 4
Investment Objective and Policies ..................................... 5
Risk Considerations ................................................... 6
Investment Restrictions ............................................... 12
Underwriting .......................................................... 13
Purchase of Fund Shares--Continuous Offering .......................... 13
Shareholder Services .................................................. 16
Redemptions and Repurchases ........................................... 18
Dividends, Distributions and Taxes .................................... 20
Performance Information ............................................... 20
Additional Information ................................................ 21
Appendix .............................................................. 22
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 , 199 , 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.
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.
DEAN WITTER
GLOBAL ASSET ALLOCATION FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550 OR (800) 526-3143
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
<PAGE>
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., Underwriter/Distributor
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
- -----------------------------------------------------------------------------
The Fund The Fund is organized as a Trust, commonly known as a
Massachusetts business trust, and is an open-end, diversified
management investment company. The Fund allocates its assets
among U.S. and foreign equities, fixed-income securities and
money market instruments.
- ------------------------------------------------------------------------------
Shares Offered Shares of beneficial interest with $.01 par value (see page
21).
- -----------------------------------------------------------------------------
Initial Shares are being offered in an Underwriting by Dean Witter
Offering Distributors Inc. at $10.00 per share with no
underwriting discount or commission. The minimum purchase is
100 shares ($1,000). Shares redeemed within six years of
purchase are subject to a contingent deferred sales charge
under most circumstances. The initial offering will run
approximately from January 25, 1995 through February 21, 1995.
The closing will take place on February 28, 1995 or such other
date as may be agreed upon by Dean Witter Distributors Inc.
and the Fund (the "Closing Date"). Shares will not be issued
and dividends will not be declared by the Fund until
after the Closing Date. If any orders received during the
initial offering period are accompanied by payment, such
payment will be returned unless an accompanying request for
investment in a Dean Witter money market fund is received at
the time the payment is made. Any purchase order may be
cancelled at any time prior to the Closing Date (see page 13).
- ------------------------------------------------------------------------------
Continuous A continuous offering will commence within approximately one
Offering week after completion of the initial offering. During
the continuous offering, the minimum initial investment will
be $1,000 and the minimum subsequent investment will be $100
(see page 13).
- ------------------------------------------------------------------------------
Investment The investment objective of the Fund is to seek long-term
Objective total return on its investments.
- ------------------------------------------------------------------------------
Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment
Manager and Manager of the Fund, and its wholly-owned subsidiary, Dean
Sub-Advisers Witter Services Company Inc., serve in various investment
management, advisory, management and administrative capacities
to ninety-one investment companies and other portfolios with
net assets under management of approximately $69.5 billion at
October 31, 1994. InterCapital has retained TCW Funds
Management, Inc. ("TCW") and Morgan Grenfell Investment
Services Ltd. ("MGIS") as Sub-Advisers to provide investment
advice and manage the Fund's non-U.S. portfolio. TCW, which is
responsible for Canadian and Latin American investments,
serves as investment adviser to 12 TCW/DW Funds and had at
October 31, 1994, together with its affiliates, approximately
$50 billion under management or committed to management in
various fiduciary or advisory capacities, primarily to
institutional investors. MGIS, which is responsible for the
Fund's investments outside of the Western Hemisphere,
currently serves as investment adviser for U.S. corporate
and public employee benefit plans, investment companies,
endowments and foundations with assets of approximately $
billion at October 31, 1994 (see page 4).
- -----------------------------------------------------------------------------
Management Fee The Investment Manager receives a monthly fee at the annual
rate of 1.0% of the Fund's average daily net assets. The Sub-
Advisers each receive a monthly fee from InterCapital equal to
30% of InterCapital's investment management fee (see page 4).
The management fee is higher than that paid by most other
investment companies.
- -----------------------------------------------------------------------------
Dividends and Dividends from net investment income are paid at least
Distributions annually. Capital gains, if any, are distributed at least
annually or retained for reinvestment by the Fund. Dividends
and capital gains distributions are automatically reinvested
in additional shares at net asset value unless the shareholder
elects to receive cash (see page 20).
- ------------------------------------------------------------------------------
Underwriter and Dean Witter Distributors Inc. (the "Underwriter" or
Distributor "Distributor"). The Distributor receives from the Fund a Rule
12b-1 distribution fee accrued daily and payable monthly at
the rate of 1.0% per annum of the lesser of (i) the Fund's
average daily aggregate net sales or (ii) the Fund's average
daily net assets. This fee compensates the Distributor
for the services provided in distributing shares of the Fund
and for sales related expenses. The Distributor also receives
the proceeds of any contingent deferred sales charges (see
page 13).
- -----------------------------------------------------------------------------
Redemption-- Shares are redeemable by the shareholder at net asset value.
Contingent An account may be involuntarily redeemed if the total value of
Deferred Sales the account is less than $100. Although no commission or sales
Charge load is imposed upon the purchase of shares, a contingent
deferred sales charge (which declines from 5% to 1%) is
imposed on any redemption of shares if after such redemption
the aggregate current value of an account with the Fund
<PAGE>
falls below the aggregate amount of the investor's purchase
payments made during the first six years preceding the
redemption. However, there is no charge imposed on redemption
of shares purchased through reinvestment of dividends or
distributions (see page 18).
- ----------------------------------------------------------------------------
Risk The net asset value of the Fund's shares will fluctuate with
Considerations changes in market value of portfolio securities. It should be
recognized that the foreign securities and markets in which
the Fund may invest pose different and greater risks than
those customarily associated with domestic securities and
their markets. The Fund may engage in various investment
practices which present special risks, including investments
in forward foreign currency exchange contracts, lower-rated
fixed-income securities, convertible securities, adjustable
rate mortgages, options and futures, investment companies,
rights and warrants, repurchase agreements, when-issued and
delayed delivery securities and forward commitments, when, as
and if issued securities, reverse repurchase agreements and
dollar rolls and private placements (see page 6).
- -----------------------------------------------------------------------------
Shareholder Automatic Investment of Dividends and Distributions;
Services Investment of Distributions Received in Cash; Systematic
Withdrawal Plan; Exchange Privilege; EasyInvest(sm), Tax-
Sheltered Retirement Plans (see pages 16 through 18).
- -----------------------------------------------------------------------------
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>
<PAGE>
SUMMARY OF FUND EXPENSES
- -----------------------------------------------------------------------------
The following table illustrates all expenses and fees that a shareholder of
the Fund will incur.
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases ........................................... None
Maximum Sales Charge Imposed on Reinvested Dividends ................................ None
Contingent Deferred Sales Charge (as a percentage of the lesser of original purchase
price or redemption proceeds) ...................................................... 5.0%
</TABLE>
A contingent deferred sales charge is imposed at the following declining
rates:
<TABLE>
<CAPTION>
Year Since Purchase
Payment Made Percentage
- -------------------------- --------------
<S> <C>
First ..................... 5.0%
Second .................... 4.0%
Third ..................... 3.0%
Fourth .................... 2.0%
Fifth ..................... 2.0%
Sixth ..................... 1.0%
None
Seventh and thereafter ...
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Redemption Fees .......................................................... None
Exchange Fee ............................................................. None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) ..
Management Fees+ ......................................................... 1.00%
12b-1 Fees*+ ............................................................. 1.00%
Other Expenses+ .......................................................... 0.40%
Total Fund Operating Expenses**+ ......................................... 2.40%
</TABLE>
"Other Expenses," as shown above, are based upon expected amounts of
expenses of the Fund for its first full fiscal year.
* The 12b-1 fee is accrued daily and payable monthly, at an annual rate of
1.00% of the lesser of: (a) the average daily aggregate gross sales of
the Fund's shares since the inception of the Fund (not including
reinvestments of dividends or distributions), less the average daily
aggregate net asset value of the Fund's shares redeemed since the Fund's
inception upon which a contingent deferred sales charge has been imposed
or waived, or (b) the Fund's average daily net assets. A portion of the
12b-1 fee equal to 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.
** "Total Fund Operating Expenses," as shown above, is based upon the sum
of the 12b-1 Fees, Management Fees and estimated "Other Expenses," which
may be incurred by the Fund.
+ The Investment Manager has undertaken to assume all operating expenses
(except for any 12b-1 and/or brokerage fees) and to waive the
compensation provided for in its Management Agreement until such time as
the Fund has $50 million of net assets or until six months from the date
of commencement of the Fund's operations, whichever occurs first. The
fees and expenses disclosed above do not reflect the assumption of any
expenses or the waiver of any compensation by the Investment Manager.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- ----------------------------------------------------------------------------------- -------- ---------
<S> <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: .......................... $74 $105
You would pay the following expenses on the same investment, assuming no
redemption: ........................................................................ $24 $ 75
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
<PAGE>
indirectly. For a more complete description of these costs and expenses, see
"The Fund and its Management," "Plan of Distribution" and "Redemption and
Repurchases."
Long-term shareholders of the Fund may pay more in sales charges and
distribution fees than the economic equivalent of the maximum front-end sales
charges permitted by the NASD.
3
<PAGE>
<PAGE>
THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------
Dean Witter Global Asset Allocation Fund (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 October 18, 1994.
Dean Witter InterCapital Inc. ("InterCapital" or the "Investment
Manager"), whose address is Two World Trade Center, New York, New York 10048,
is the Fund's Investment Manager. The Investment Manager, which was
incorporated in July, 1992, is a wholly-owned subsidiary of Dean Witter,
Discover & Co. ("DWDC"), a balanced financial services organization providing
a broad range of nationally marketed credit and investment products.
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc., serve in various investment management, advisory, management and
administrative capacities to ninety-one investment companies (the "Dean
Witter Funds"), thirty of which are listed on the New York Stock Exchange,
with combined assets of approximately $67.5 billion at October 31, 1994. The
Investment Manager also manages portfolios of pension plans, other
institutions and individuals which aggregated approximately $2.0 billion at
such date.
The Fund has retained the Investment Manager to manage its business
affairs and manage the investment of the Fund's U.S. assets, including the
placing of orders for the purchase and sale of portfolio securities, and to
supervise the investment of all the Fund's assets. In addition, the Fund has
retained InterCapital to provide it with administrative services and
InterCapital has, in turn, retained Dean Witter Services Company to perform
these administrative services.
Under Sub-Advisory Agreements between InterCapital and TCW Funds
Management, Inc. ("TCW") and Morgan Grenfell Investment Services Ltd.
("MGIS"), TCW and MGIS provide the Fund with investment advice and portfolio
management relating to the Fund's investments in securities issued by issuers
located in Canada and Latin America (TCW) and outside the Western Hemisphere
(MGIS), subject to the overall supervision of the Investment Manager.
TCW is located at 865 South Figueroa Street, Suite 1800, Los Angeles,
California 90017. TCW was organized in 1987 as a wholly-owned subsidiary of
The TCW Group, Inc., whose subsidiaries, including Trust Company of the West
and TCW Asset Management Company, provide a variety of trust, investment
management and investment advisory services. Robert A. Day, who is Chairman of
the Board of Directors of TCW, may be deemed to be a control person of TCW by
virtue of the aggregate ownership by Mr. Day and his family of more than 25% of
the outstanding voting stock of The TCW Group, Inc. As of October 31, 1994, TCW
and its affiliated companies had $50 billion under management or committed to
management, primarily from institutional investors.
MGIS, whose address is 20 Finsbury Circus, London, England, currently
manages assets in excess of $ billion for U.S. corporate and public
employee benefit plans, investment companies, endowments and foundations.
MGIS is an indirect subsidiary of Deutsche Bank AG, the largest commercial
bank in Germany.
The Fund's Trustees review the various services provided by the Investment
Manager and the Sub-Advisers 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 the
annual rate of 1.0% to the Fund's net assets. As compensation for their
services provided pursuant to their Sub-Advisory Agreements, the Investment
Manager pays each Sub-Adviser monthly compensation equal to 30% of its
monthly compensation.
The Fund's expenses include: the fee of the Investment Manager; the fee
pursuant to the Plan of Distribution (see "Purchase of Fund Shares"); taxes;
certain legal, transfer agent, custodian and auditing fees; and printing and
other expenses relating to the Fund's operations which are not expressly
assumed by the Investment Manager under its Investment Management Agreement
with the Fund. The Investment Manager has undertaken to assume all operating
expenses (except for the Plan of
4
<PAGE>
<PAGE>
Distribution Fee and any brokerage fees) and waive the compensation provided
for in its Investment Management Agreement until such time as the Fund has
$50 million of net assets or until six months from the date of commencement
of the Fund's operations, whichever occurs first.
INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------
The investment objective of the Fund is to seek long-term total return on
its investments. This objective is a fundamental policy of the Fund and may
not be changed without shareholder approval. There is no assurance that the
objective will be achieved. The Fund's investment policies described below,
unless otherwise stated, are not fundamental and may be changed without
shareholder approval.
The Fund seeks to achieve its investment objective through a managed
investment policy utilizing a portfolio of U.S. and foreign equity, debt and
money market securities. The Investment Manager, with the assistance of the
Fund's Sub-Advisers, will initially allocate, and periodically reallocate,
the composition of the Fund's assets based upon an overall evaluation of
global monetary, economic and financial market trends and the anticipated
relative total return on securities available in different capital markets
around the world. In allocating among equity, fixed-income and money market
securities within a given capital market, the Investment Manager, with the
assistance of the Sub-Advisers, will consider the relative opportunity for
price appreciation of equity and fixed-income securities, dividend yields and
the level of interest rates paid on fixed-income securities of various
maturities. Therefore, at any given time, the Fund's assets may be invested
in any amounts of either U.S. or foreign equity or fixed-income (including
money market) securities, or in any combination thereof. Under normal
circumstances, the Fund will have at least 65% of its total assets invested
in securities issued in at least three separate countries (including the
U.S.).
The Investment Manager will meet with the Fund's Sub-Advisers, at least
quarterly, to discuss the Fund's overall strategy of asset allocation
described above. Once determinations of the equity, fixed-income and money
market sector allocation and geographic distribution of the Fund's assets
have been made, the Investment Manager and each Sub-Adviser will be
responsible for the individual security selection within its geographic area
of responsibility. The final determinations of the sector and geographic
asset allocations of the Fund will be made by the Investment Manager.
Within the equity sector, the Fund seeks to invest in those economic
sectors expected to benefit from major trends and in individual stocks which
are deemed to have superior investment potential. The Fund may purchase
equity securities (including convertible debt obligations and, except for
certain foreign jurisdictions, convertible preferred stock) sold on the New
York, American and other domestic and foreign stock exchanges and in the
over-the-counter market.
Within the fixed-income sector, the Fund seeks to maximize the return on
its investments by adjusting maturities and coupon rates to prevailing
interest rate trends around the world, and by taking cognizance of various
conditions and trends in the foreign currency exchange markets. The
fixed-income securities in which the Fund may invest include debt securities
with maturities of greater than one year, which are issued or guaranteed by
the U.S. Government and its agencies or instrumentalities, by foreign
governments (including foreign states, provinces and municipalities) and
agencies or instrumentalities thereof and debt securities and preferred
stocks issued by U.S. and foreign corporations and other similar business
entities. The Fund may also invest in fixed-income securities issued or
guaranteed by international organizations designed or supported by multiple
governmental entities (which are not obligations of the U.S. Government or
foreign governments) to promote economic reconstruction or development such
as the International Bank for Reconstruction and Development (the "World
Bank").
Generally, the fixed-income securities (including "convertible"
securities, see below) in which the Fund will invest will be rated at the
time of their purchase BBB or better by Standard & Poor's Corporation ("S&P")
or Baa or better by Moody's Investor Service, Inc. ("Moody's"), or investment
grade by a nationally
5
<PAGE>
<PAGE>
recognized statistical rating organization ("NRSRO"), or which, if unrated,
are deemed to be of comparable quality by the Fund's Investment Manager
and/or Sub-Adviser. However, the Fund may invest up to 10% of its net assets
in fixed-income securities (including convertible securities) which are rated
below investment grade by a NRSRO or which are unrated (see below for a
discussion of the risks of investing in lower-rated and unrated fixed-income
securities and the Appendix for a description of the Moody's and S&P's
ratings).
Investments in securities rated either Baa by Moody's or BBB by S&P may
have speculative characteristics and, therefore, changes in economic
conditions or other circumstances are more likely to weaken their capacity to
make principal and interest payments than would be the case with investments
in securities with higher credit ratings. If a fixed-income security held by
the Fund is rated BBB or Baa and is subsequently downgraded by a rating
agency, the Fund will retain such security in its portfolio until the
Investment Manager and/or Sub-Adviser determines that it is practicable to
sell the security without undue market or tax consequences to the Fund. In
the event that such downgraded securities constitute 5% or more of the Fund's
total assets, the Fund will seek to immediately sell sufficient securities to
reduce the total to below 5%.
Within its money market sector, the Fund seeks to maximize returns by
exploiting spreads among short-term instruments. The money market portion of
the Fund's portfolio will contain short-term (maturities of up to thirteen
months) fixed-income securities, issued by private and governmental
institutions. Such securities may include: U.S. and foreign government
securities; domestic and foreign bank obligations; certificates of deposit
issued by foreign and domestic banks; obligations of savings institutions;
fully insured certificates of deposit; and commercial paper rated within the
two highest grades by S&P or the highest grade by Moody's or, if not rated,
issued by a company having an outstanding debt issue rated at least AA by S&P
or Aa by Moody's. Also included within the money market sector are repurchase
agreements and reverse repurchase agreements with maturities of under
thirteen months.
The principal currencies in which securities held in the Fund's portfolio
will be denominated are: the U.S. dollar; Australian dollar; Deutsche mark;
Japanese yen; French franc; British pound; Canadian dollar; Mexican peso;
Swiss franc; Dutch guilder; Hong Kong dollar; New Zealand dollar; Spanish
peseta; Swedish krona; and European Currency Unit.
RISK CONSIDERATIONS
- -----------------------------------------------------------------------------
FOREIGN SECURITIES
Foreign securities investments may be affected by changes in currency
rates or exchange control regulations, changes in governmental administration
or economic or monetary policy (in the United States and abroad) or changed
circumstances in dealings between nations. Fluctuations in the relative rates
of exchange between the currencies of different nations will affect the value
of the Fund's investments denominated in foreign currency. Changes in foreign
currency exchange rates relative to the U.S. dollar will affect the U.S.
dollar value of the Fund's assets denominated in that currency and thereby
impact upon the Fund's total return on such assets.
Foreign currency exchange rates are determined by forces of supply and
demand on the foreign exchange markets. These forces are themselves affected
by the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. Moreover,
foreign currency exchange rates may be affected by the regulatory control of
the exchanges on which the currencies trade. The foreign currency
transactions of the Fund will be conducted on a spot basis or through forward
foreign currency exchange contracts (described below). The Fund will incur
certain costs in connection with these currency transactions.
Investments in foreign securities will also occasion risks relating to
political and economic developments abroad, including the possibility of
expropriations or confiscatory taxation, limitations on the use or transfer
of Fund assets and any effects of foreign social, economic or political
instability. Foreign companies are
6
<PAGE>
<PAGE>
not subject to the regulatory requirements of U.S. companies and, as such,
there may be less publicly available information about such companies.
Moreover, foreign companies are not subject to uniform accounting, auditing
and financial reporting standards and requirements comparable to those
applicable to U.S. companies.
Securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be more
volatile. Furthermore, foreign exchanges and broker-dealers are generally
subject to less government and exchange scrutiny and regulation than their
American counterparts. Brokerage commissions, dealer concessions and other
transaction costs may be higher on foreign markets than in the U.S. In
addition, differences in clearance and settlement procedures on foreign
markets may occasion delays in settlements of the Fund's trades effected in
such markets. As such, the inability to dispose of portfolio securities due
to settlement delays could result in losses to the Fund due to subsequent
declines in value of such securities, and the inability of the Fund to make
intended security purchases due to settlement problems could result in a
failure of the Fund to make potentially advantageous investments.
Certain of the foreign markets in which the Fund may invest will be
emerging markets. These new and incompletely formed markets will have
increased risk levels above those occasioned by investing in foreign markets
generally. The types of these risks are set forth above. The Fund's
management will take cognizance of these risks in allocating any of the
Fund's investments in either fixed-income or equity securities issued by
issuers in emerging market countries.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter into forward
foreign currency exchange contracts ("forward contracts") in connection with
its foreign securities investments.
A forward contract involves an obligation to purchase or sell a currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the
contract. The Fund may enter into forward contracts as a hedge against
fluctuations in future foreign exchange rates.
The Fund will enter into forward contracts under various circumstances.
When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may, for example, desire to "lock in"
the price of the security in U.S. dollars or some other foreign currency
which the Fund is temporarily holding in its portfolio. By entering into a
forward contract for the purchase or sale, for a fixed amount of dollars or
other currency, of the amount of foreign currency involved in the underlying
security transactions, the Fund will be able to protect itself against a
possible loss resulting from an adverse change in the relationship between
the U.S. dollar or other currency which is being used for the security
purchase (by the Fund or the counterparty) and the foreign currency in which
the security is denominated during the period between the date on which the
security is purchased or sold and the date on which payment is made or
received.
At other times, when, for example, the Fund's Investment Manager or one of
its Sub-Adviser's believes that the currency of a particular foreign country
may suffer a substantial decline against the U.S. dollar or some other
foreign currency, the Fund may enter into a forward contract to sell, for a
fixed amount of dollars or other currency, the amount of foreign currency
approximating the value of some or all of the Fund's securities holdings (or
securities which the fund has purchased for its portfolio) denominated in
such foreign currency. Under identical circumstances, the Fund may enter into
a forward contract to sell, for a fixed amount of U.S. dollars or other
currency, an amount of foreign currency other than the currency in which the
securities to be hedged are denominated approximating the value of some or
all of the portfolio securities to be hedged. This method of hedging, called
"cross-hedging," will be selected when it is determined that the foreign
currency in which the portfolio securities are denominated has insufficient
liquidity or is trading at a discount as compared with some other foreign
currency with which it tends to move in tandem.
In addition, when the Fund anticipates purchasing securities at some time
in the future, and wishes to lock in the current exchange rate of the
currency in which those securities are denominated against the U.S. dollar or
some other foreign currency, the Fund may enter into a forward contract to
purchase an amount of currency equal to some or all of the value of the
anticipated purchase, for a fixed amount of U.S. dollars or other currency.
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In all of the above circumstances, if the currency in which the Fund
securities holdings (or anticipated portfolio securities) are denominated
rises in value with respect to the currency which is being purchased (or
sold), then the Fund will have realized fewer gains than had the Fund not
entered into the forward contracts. Moreover, the precise matching of the
forward contract amounts and the value of the securities involved will not
generally be possible, since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and
the date it matures. The Fund is not required to enter into such transactions
with regard to its foreign currency-denominated securities and will not do so
unless deemed appropriate. The Fund generally will not enter into a forward
contract with a term of greater than one year, although it may enter into
forward contracts for periods of up to five years. The Fund may be limited in
its ability to enter into hedging transactions involving forward contracts by
the Internal Revenue Code requirements relating to qualification as a
regulated investment company (see "Dividends, Distributions and Taxes").
AMERICAN DEPOSITORY RECEIPTS: The Fund may also invest in securities of
foreign issuers in the form of American Depository Receipts (ADRs), European
Depository Receipts (EDRs) or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or
trust company evidencing ownership of the underlying securities. EDRs are
European receipts evidencing a similar arrangement. Generally, ADRs, in
registered form, are designed for use in the United States securities markets
and EDRs, in bearer form, are designed for use in European securities
markets.
FIXED-INCOME SECURITIES
LOWER-RATED SECURITIES. There is no limitation other than the overall 10%
limitation described above on the percentage of the Fund's total assets which
may be invested in convertible securities (see below) and debt securities
below investment grade. Securities below investment grade are the equivalent
of high yield, high risk bonds, commonly known as "junk bonds." Investment
grade is generally considered to be debt securities rated BBB or higher by
S&P or Baa or higher by Moody's. However, the Fund will not invest in debt
securities that are in default in payment of principal or interest.
Because of the special nature of the Fund's permitted investments in lower
rated debt securities, it must take account of certain special considerations
in assessing the risks associated with such investments. The prices of lower
rated securities have been found to be less sensitive to changes in
prevailing interest rates than higher rated investments, but are likely to be
more sensitive to adverse economic changes or individual corporate
developments. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress
which would adversely affect their ability to service their principal and
interest payment obligations, to meet their projected business goals or to
obtain additional financing. If the issuer of a fixed-income security owned
by the Fund defaults, the Fund may incur additional expenses to seek
recovery. In addition, periods of economic uncertainty and change can be
expected to result in an increased volatility of market prices of lower rated
securities and a corresponding volatility in the net asset value of a share
of the Fund.
CONVERTIBLE SECURITIES. Among the fixed-income securities in which the Fund
may invest are "convertible" securities. A convertible security is a bond,
debenture, note, preferred stock or other security that may be converted into
or exchanged for a prescribed amount of common stock of the same or a
different issuer within a particular period of time at a specified price or
formula. Convertible securities rank senior to common stocks in a
corporation's capital structure and, therefore, entail less risk than the
corporation's common stock. The value of a convertible security is a function
of its "investment value" (its value as if it did not have a conversion
privilege), and its "conversion value" (the security's worth if it were to be
exchanged for the underlying security, at market value, pursuant to its
conversion privilege).
ADJUSTABLE RATE MORTGAGE SECURITIES. The Fund may also invest in adjustable
rate mortgage securities ("ARMs"), which are pass-through mortgage securities
collateralized by mortgages with adjustable rather than fixed rates. ARMs
eligible for inclusion in a mortgage pool generally provide for a fixed
initial mortgage interest rate for either the first three, six, twelve or
thirteen scheduled monthly payments. Thereafter, the interest rates are
subject to periodic adjustment based on changes to a designated benchmark
index.
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ARMs contain maximum and minimum rates beyond which the mortgage interest
rate may not vary over the lifetime of the security. In addition, certain
ARMs provide for additional limitations on the maximum amount by which the
mortgage interest rate may adjust for any single adjustment period.
Alternatively, certain ARMs contain limitations on changes in the required
monthly payment. In the event that a monthly payment is not sufficient to pay
the interest accruing on an ARM, any such excess interest is added to the
principal balance of the mortgage loan, which is repaid through future
monthly payments. If the monthly payment for such an instrument exceeds the
sum of the interest accrued at the applicable mortgage interest rate and the
principal payment required at such point to amortize the outstanding
principal balance over the remaining term of the loan, the excess is utilized
to reduce the then outstanding principal balance of the ARM.
ZERO COUPON SECURITIES. A portion of the fixed-income securities purchased by
the Fund may be zero coupon securities. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive
their full value at maturity. 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 on interest-paying securities if prevailing
interest rates rise. For this reason, zero coupon securities are subject to
substantially greater price fluctuations during periods of changing
prevailing interest rates than are comparable securities which pay interest
currently. The Fund may have to sell a portion of its holdings of zero coupon
securities to enable it to meet a certain level of distributions.
OPTIONS AND FUTURES TRANSACTIONS
The Fund may purchase and sell (write) call and put options on portfolio
securities which are denominated in either U.S. dollars or foreign currencies
and on the U.S. dollar and foreign currencies, which are or may in the future
be listed on several U.S. and foreign securities exchanges or are written in
over-the-counter transactions ("OTC options"). OTC options are purchased from
or sold (written) to dealers or financial institutions which have entered
into direct agreements with the Fund.
The Fund is permitted to write covered call options on portfolio
securities and the U.S. dollar and foreign currencies, without limit, in
order to hedge against the decline in the value of a security or currency in
which such security is denominated and to close out long call option
positions. The Fund may write covered put options, under which the Fund
incurs an obligation to buy the security (or currency) underlying the option
from the purchaser of the put at the option's exercise price at any time
during the option period, at the purchaser's election.
The Fund may purchase listed and OTC call and put options in amounts
equalling up to 5% of its total assets. The Fund may purchase call options to
close out a covered call position or to protect against an increase in the
price of a security it anticipates purchasing or, in the case of call options
on a foreign currency, to hedge against an adverse exchange rate change of
the currency in which the security it anticipates purchasing is denominated
vis-a-vis the currency in which the exercise price is denominated. The Fund
may purchase put options on securities which it holds in its portfolio to
protect itself against a decline in the value of the security and to close
out written put positions in a manner similar to call option closing purchase
transactions. There are no other limits on the Fund's ability to purchase
call and put options.
The Fund may purchase and sell futures contracts that are currently
traded, or may in the future be traded, on U.S. and foreign commodity
exchanges on underlying portfolio securities, on any currency ("currency"
futures), on U.S. and foreign fixed-income securities ("interest rate"
futures) and on such indexes of U.S. or foreign equity or fixed-income
securities as may exist or come into being ("index" futures). The Fund may
purchase or sell interest rate futures contracts for the purpose of hedging
some or all of the value of its portfolio securities (or anticipated
portfolio securities) against changes in prevailing interest rates. The Fund
may purchase or sell index futures contracts for the purpose of hedging some
or all of its portfolio (or anticipated portfolio) securities against changes
in their prices (or the currency in which they are denominated). As a futures
contract purchaser, the Fund incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a
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specified time in the future for a specified price. As a seller of a futures
contract, the Fund incurs an obligation to deliver the specified amount of
the underlying obligation at a specified time in return for an agreed upon
price.
The Fund also may purchase and write call and put options on futures
contracts which are traded on an exchange and enter into closing transactions
with respect to such options to terminate an existing position.
New futures contracts, options and other financial products and various
combinations thereof continue to be developed. The Fund may invest in any
such futures, options or products as may be developed, to the extent
consistent with its investment objective and applicable regulatory
requirements.
RISKS OF OPTIONS AND FUTURES TRANSACTIONS. The Fund may close out its
position as writer of an option, or as a buyer or seller of a futures
contract, only if a liquid secondary market exists for options or futures
contracts of that series. There is no assurance that such a market will
exist, particularly in the case of OTC options, as such options may generally
only be closed out by entering into a closing purchase transaction with the
purchasing dealer. Also, exchanges may limit the amount by which the price of
many futures contracts may move on any day. If the price moves equal the
daily limit on successive days, then it may prove impossible to liquidate a
futures position until the daily limit moves have ceased.
While the futures contracts and options transactions to be engaged in by
the Fund for the purpose of hedging the Fund's portfolio securities are not
speculative in nature, there are risks inherent in the use of such
instruments. One such risk is that the Investment Manager or Sub-Adviser
could be incorrect in its expectations as to the direction or extent of
various interest rate or price movements or the time span within which the
movements take place. For example, if the Fund sold futures contracts for the
sale of securities in anticipation of an increase in interest rates, and then
interest rates went down instead, causing bond prices to rise, the Fund would
lose money on the sale. Another risk which will arise in employing futures
contracts to protect against the price volatility of portfolio securities is
that the prices of securities, currencies and indexes subject to futures
contracts (and thereby the futures contract prices) may correlate imperfectly
with the behavior of the U.S. dollar cash prices of the Fund's portfolio
securities and their denominated currencies. See the Statement of Additional
Information for a further discussion of risks.
INVESTMENT IN OTHER INVESTMENT VEHICLES. Under the Investment Company Act of
1940, as amended (the "Act"), the Fund generally may invest up to 10% of its
total assets in the aggregate in shares of other investment companies and up
to 3% of its total assets in any one investment company, as long as that
investment does not represent more than 5% of the voting stock of the
acquired investment company at the time such shares are purchased. Investment
in other investment companies or vehicles may be the sole or most practical
means by which the Fund can participate in certain foreign markets. Such
investment may involve the payment of substantial premiums above the value of
such issuers' portfolio securities, and is subject to limitations under the
Act and market availability. In addition, special tax considerations may
apply. The Fund does not intend to invest in such vehicles or funds unless,
in the judgment of the Investment Manager or Sub-Adviser, the potential
benefits of such investment justify the payment of any applicable premium or
sales charge. As a shareholder in an investment company, the Fund would bear
its ratable share of that investment company's expenses, including its
advisory and administration fees. At the same time the Fund would continue to
pay its own management fees and other expenses, as a result of which the Fund
and its shareholders in effect will be absorbing duplicate levels of advisory
fees with respect to investments in such other investment companies.
RIGHTS AND WARRANTS. The Fund may acquire rights and/or warrants which are
attached to other securities in its portfolio, or which are issued as a
distribution by the issuer of a security held in its portfolio. Rights and/or
warrants are, in effect, options to purchase equity securities at a specific
price, generally valid for a specific period of time, and have no voting
rights, pay no dividends and have no rights with respect to the corporation
issuing them.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements, which
may be viewed as a type of secured lending by the Fund, and which typically
involve the acquisition by the Fund of government securities or other
securities from a selling financial institution such as a bank, savings and
loan association or broker-dealer. The agreement provides that the Fund will
sell back to the institution, and that the
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institution will repurchase, the underlying security at a specified price and
at a fixed time in the future, usually not more than seven days from the date
of purchase. While repurchase agreements involve certain risks not associated
with direct investments in debt securities, including the risks of default or
bankruptcy of the selling financial institution, the Fund follows procedures
to minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions and maintaining adequate collateralization.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time, in the ordinary course of business, the Fund may purchase
securities on a when-issued or delayed delivery basis or may purchase or sell
securities on a forward commitment basis. 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.
There is no overall limit on the percentage of the Fund's assets which may be
committed to the purchase of securities on a when-issued, delayed delivery or
forward commitment basis. An increase in the percentage of the Fund's assets
committed to the purchase of securities on a when-issued, delayed delivery or
forward commitment basis may increase the volatility of the Fund's net asset
value.
WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security
depends upon the occurrence of a subsequent event, such as approval of a
merger, corporate reorganization, leveraged buyout or debt restructuring. If
the anticipated event does not occur and the securities are not issued, the
Fund will have lost an investment opportunity. There is no overall limit on
the percentage of the Fund's assets which may be committed to the purchase of
securities on a "when, as and if issued" basis. An increase in the percentage
of the Fund's assets committed to the purchase of securities on a "when, as
and if issued" basis may increase the volatility of its net asset value.
REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLLS. The Fund may also use reverse
repurchase agreements and dollar rolls as part of its investment strategy.
Reverse repurchase agreements involve sales by the Fund of portfolio assets
concurrently with an agreement by the Fund to repurchase the same assets at a
later date at a
fixed price. The Fund may enter into dollar rolls in which the Fund sells
securities and simultaneously contracts to repurchase substantially similar
(same type and coupon) securities on a specified future date. Reverse
repurchase agreements and dollar rolls involve the risk that the market value
of the securities the Fund is obligated to repurchase under the agreement may
decline below the repurchase price. In the event the buyer of securities
under a reverse repurchase agreement or dollar roll files for bankruptcy or
becomes insolvent, the Fund's use of proceeds of the agreement may be
restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the
securities. Reverse Repurchase agreements and dollar rolls are speculative
techniques involving leverage, and are considered borrowings by the Fund.
RESTRICTED SECURITIES. The Fund may invest up to 5% of its total assets in
securities which are subject to restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), or which are otherwise not readily marketable. (Securities eligible
for resale pursuant to Rule 144A under the Securities Act, and determined to
be liquid pursuant to the procedures discussed in the following paragraph,
are not subject to the foregoing restriction.) These securities are generally
referred to as private placements or restricted securities. Limitations on
the resale of such securities may have an adverse effect on their
marketability, and may prevent the Fund from disposing of them promptly at
reasonable prices. The Fund may have to bear the expense of registering such
securities for resale and the risk of substantial delays in effecting such
registration.
The Securities and Exchange Commission has adopted Rule 144A under the
Securities Act, which permits the Fund to sell restricted securities to
qualifed institutional buyers without limitation. The Investment Manager,
pursuant to procedures adopted by the Trustees of the Fund, will make a
determination as to the liquidity of each restricted security purchased by
the Fund. The procedures require that the following factors be taken into
account in making a liquidity determination: (1) the frequency of trades and
price quotes for the security; (2) the number of dealers and other potential
purchasers who have issued quotes on the security; (3) any dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (the time needed to dispose
of the security, the method of
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soliciting offers, and the mechanics of transfer). Investing in restricted
securities sellable pursuant to Rule 144A could have the effect of increasing
the level of the illiquidity of the Fund to the extent that qualified
institutional buyers of such securities become, for a time, uninterested in
purchasing these securities. If a restricted security is determined to be
"liquid," such security will not be included within the category "illiquid
securities," which under current policy may not exceed 15% of the Fund's net
assets.
PORTFOLIO MANAGEMENT
The Fund's portfolio is actively managed by its Investment Manager and its
Sub-Advisers 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 and the Sub-Advisers will rely on
information from various sources, including research, analysis and appraisals
of brokers and dealers, the views of Trustees of the Fund and others
regarding economic developments and interest rate trends, and the Investment
Manager's and Sub-Adviser's own analysis of factors they deem relevant.
The individuals who are primarily responsible for the day-to-day
management of the Fund's portfolio are Mark Bavoso, Senior Vice President of
InterCapital, Paul G. Wargnier, Managing Director of TCW and Michael Bullock,
Chairman and Chief Investment Officer of MGIS. Mr. Bavoso is a member of
InterCapital's Large Capitalization Equity Group and has been a portfolio
manager at InterCapital for over five years. Mr. Wargnier has been a
portfolio manager of affiliates of The TCW Group, Inc. since June, 1990,
prior to which he was Vice President and Director of Research of D.A.
Campbell Co., Inc., an institutional brokerage firm. Mr. Bullock is Chairman
of MGIS and chief investment officer of its parent company, Morgan Grenfell
Asset Management Limited.
Personnel of the Investment Manager and the Sub-Advisers have substantial
experience in the use of the investment techniques described above under the
heading "Options and Futures Transactions," which techniques require skills
different from those needed to select the portfolio securities underlying
various options and futures contracts.
Orders for transactions in portfolio securities and commodities may be
placed for the Fund with a number of brokers and dealers, including Dean
Witter Reynolds Inc. ("DWR"), a broker-dealer affiliate of InterCapital, and
two affiliated broker-dealers of MGIS (Morgan Grenfell Asia and Partners
Securities Pte. Limited, Morgan Grenfell Asia Securities (Hong Kong Limited).
Pursuant to an order of the Securities and Exchange Commission, the Fund may
effect principal transactions in certain money market instruments with DWR, a
broker-dealer affiliate of the Investment Manager. In addition, the Fund may
incur brokerage commissions on transactions conducted through DWR and the two
above-mentioned affiliated broker-dealers of the MGIS.
Although the Fund does not intend to engage in short-term trading, it may
sell portfolio securities without regard to the length of time they have been
held when such sale will, in the opinion of the Investment Manager or
Sub-Adviser, contribute to the Fund's investment objective.
The portfolio trading engaged in by the Fund may result in its portfolio
turnover rate exceeding 200%. The Fund is expected to incur higher than
normal brokerage commission costs due to its portfolio turnover rate.
Short-term gains and losses taxable at ordinary income rates may result from
such portfolio transactions. See "Dividends, Distributions and Taxes" for a
full discussion of the tax implications of the Fund's trading policy. A more
extensive discussion of the Fund's portfolio brokerage policies is set forth
in the Statement of Additional Information.
The expenses of the Fund relating to its portfolio management are likely
to be greater than those incurred by other investment companies investing
primarily in securities issued by domestic issuers as custodial costs,
brokerage commissions and other transaction charges related to investing on
foreign markets are generally higher than in the United States.
INVESTMENT RESTRICTIONS
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The investment restrictions listed below are among the restrictions which
have been adopted by the Fund as fundamental policies. Under the Act, a
fundamental policy may not be changed without the vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act. For
purposes of the
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following limitations: (i) all percentage limitations apply immediately after
a purchase or initial investment, and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in
total or net assets does not require elimination of any security from the
portfolio.
The Fund may not:
1. As to 75% of its total assets, 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. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to obligations
issued or guaranteed by the United States Government, its agencies or
instrumentalities.
3. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years
of continuous operation. This restriction shall not apply to any obligation
issued or guaranteed by the United States Government, its agencies or
instrumentalities.
4. As to 75% of its total assets, purchase more than 10% of the voting
securities, or more than 10% of any class of securities, of any issuer.
UNDERWRITING
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Dean Witter Distributors Inc. (the "Underwriter") has agreed to purchase
up to 10,000,000 shares from the Fund, which number may be increased or
decreased in accordance with the Underwriting Agreement. The initial offering
will run approximately from January 25, 1995 through February 21, 1995. The
Underwriting Agreement provides that the obligation of the Underwriter is
subject to certain conditions precedent and that the Underwriter will be
obligated to purchase the shares on February 28, 1995, or such other date as
may be agreed upon by the Underwriter and the Fund (the "Closing Date").
Shares will not be issued and dividends will not be declared by the Fund
until after the Closing Date. For this reason, payment is not required to be
made prior to the Closing Date. If any orders received during the initial
offering period are accompanied by payment, such payment will be returned
unless an accompanying request for investment in a Dean Witter money market
fund is received at the time the payment is made. Prospective investors in
money market funds should request and read the money market fund prospectus
prior to investing. All such funds received and invested in a Dean Witter
money market fund will be automatically invested in the Fund on the Closing
Date without any further action by the investor. Any investor may cancel his
or her purchase of Fund shares without penalty at any time prior to the
Closing Date.
The Underwriter will purchase shares from the Fund at $10.00 per share. No
underwriting discounts or selling commissions will be deducted from the
initial public offering price. The Underwriter may, however, receive
contingent deferred sales charges from future redemptions of such shares (see
"Repurchases and Redemptions--Contingent Deferred Sales Charge").
The Underwriter shall, regardless of its expected underwriting commitment,
be entitled and obligated to purchase only the number of shares for which
purchase orders have been received by the Underwriter prior to 2:00 p.m., New
York time, on the third business day preceding the Closing Date, or such
other date as may be agreed to between the parties.
The minimum number of Fund shares which may be purchased by any
shareholder pursuant to this offering is 100 shares. Certificates for shares
purchased will not be issued unless requested by the shareholder in writing.
PURCHASE OF FUND SHARES--CONTINUOUS OFFERING
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Dean Witter Distributors Inc. (the "Distributor") will act as the
Distributor of the Fund's shares during the continuous offering. Pursuant to
a Distribution Agreement between the Fund and the Distributor, shares of the
Fund are distributed by the Distributor and offered by DWR and other dealers
which have entered into agreements with the Distributor ("Selected
Broker-Dealers"). The principal executive office of the
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Distributor, an affiliate of InterCapital, is located at Two World Trade
Center, New York, New York 10048.
The offering price will be the net asset value per share next determined
following receipt of an order by the Transfer Agent (see "Determination of
Net Asset Value"). While no sales charge is imposed at the time shares are
purchased, a contingent deferred sales charge may be imposed at the time of
redemption (see "Repurchases and Redemptions"). Sales personnel are
compensated for selling shares of the Fund at the time of their sale by the
Distributor and/or 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, educational and/or
business seminars and merchandise. The Fund and the Distributor reserve the
right to reject any purchase orders.
The minimum initial purchase is $1,000. Minimum subsequent purchases of
$100 or more may be made by sending a check, payable to Dean Witter Global
Asset Allocation Fund directly to Dean Witter Trust Company (the "Transfer
Agent") at P.O. Box 1040, Jersey City, NJ 07303 or by contacting an account
executive of DWR or other Selected Broker-Dealer. 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 required 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. Certificates
for shares purchased will not be issued unless a request is made by the
shareholder in writing to the Transfer Agent. The offering price will be the
net asset value per share next determined following receipt of an order (see
"Determination of Net Asset Value").
Shares of the Fund are sold through the Distributor on a normal five
business day settlement basis; that is, payment is due on the fifth business
day (settlement date) after the order is placed with the Distributor. Shares
of the Fund purchased through the Distributor are entitled to any dividends
declared beginning on the next business day following settlement date. Since
DWR and other Selected Broker-Dealers forward investors' funds on settlement
date, they will benefit from the temporary use of the funds if payment is
made prior thereto. Shares purchased through the Transfer Agent are entitled
to any dividends declared beginning on the next business day following
receipt of an order. As noted above, orders placed directly with the Transfer
Agent must be accompanied by payment.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Act (the "Plan"), under which the Fund pays the Distributor a fee, which is
accrued daily and payable monthly, at an annual rate of 1.0% of the lesser
of: (a) the average daily aggregate gross sales of the Fund's shares since
the inception of the Fund (not including reinvestments of dividends or
capital gains distributions), less the average daily aggregate net asset
value of the Fund's shares redeemed since the Fund's inception upon which a
contingent deferred sales charge has been imposed or waived; or (b) the
Fund's average daily net assets. This fee is treated by the Fund as an
expense in the year it is accrued. A portion of the fee payable pursuant to
the Plan, equal to 0.25% of the Fund's average daily net assets, is
characterized as a service fee within the meaning of NASD guidelines.
Amounts paid under the Plan are paid to the Distributor for services
provided and the expenses borne by the Distributor and others in the
distribution of the Fund's shares, including the payment of commissions for
sales of the Fund's shares and incentive compensation to and expenses of
DWR's account executives and others who engage in or support distribution of
shares or who service shareholder accounts, including overhead and telephone
expenses; printing and distribution of prospectuses and reports used in
connection with the offering of the Fund's shares to other than current
shareholders; and preparation, printing and distribution of sales literature
and advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan to compensate DWR and other Selected Broker-Dealers for
their opportunity costs in advancing such amounts, which compensation would
be in the form of a carrying charge on any unreimbursed expenses.
At any given time, the expenses in distributing shares of the Fund may be
in excess of the total of (i) the payments made by the Fund pursuant to the
Plan, and (ii) the proceeds of contingent deferred sales charges paid by
investors upon the redemption of shares (see "Redemption and
Repurchases--Contingent
14
<PAGE>
<PAGE>
Deferred Sales Charge"). For example, if $1 million in expenses in
distributing shares of the Fund had been incurred and $750,000 had been
received as described in (i) and (ii) above, the excess expense would amount
to $250,000.
Because there is no requirement under the Plan that the Distributor be
reimbursed for all distribution expenses or any requirement that the Plan be
continued from year to year, such excess amount, if any, does not constitute
a liability of the Fund. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under
the Plan, and the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares, if for any reason the Plan is terminated
the Trustees will consider at that time the manner in which to treat such
expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or contingent deferred sales charges, may or may not be
recovered through future distribution fees or contingent deferred sales
charges.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined once daily at 4:00
p.m., New York time by taking the value of all assets of the Fund,
subtracting all its liabilities, dividing by the number of shares outstanding
and adjusting to the nearest cent. 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) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
domestic or foreign stock exchange is valued at its latest sale price on that
exchange prior to the time assets are valued; if there were no sales that
day, the security is valued at the latest bid price (in cases where a
security is traded on more than one exchange, the security is valued on the
exchange designated as the primary market by the Trustees); (2) an option is
valued at the mean between the latest bid and asked prices); (3) a futures
contract is valued at the latest sales price on the commodities exchange on
which it trades unless the Board determines that such price does not reflect
its market value, in which case it will be valued at its fair value as
determined by the Board of Trustees; (4) all other portfolio securities for
which over-the-counter market quotations are readily available are valued at
the latest bid price; (5) when market quotations are not readily available,
including circumstances under which it is determined by the Investment
Manager or Sub-Adviser 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 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); (6) the value
of short-term debt securities which mature at a date less than sixty days
subsequent to valuation date will be determined on an amortized cost or
amortized value basis; and (7) the value of other assets will be determined
in good faith at fair value under procedures established by and under the
general supervision of the Fund's Trustees.
Generally, trading in foreign securities, as well as corporate bonds,
United States government securities and money market instruments, is
substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times. Foreign
currency exchange rates are also generally determined prior to the close of
the New York Stock Exchange. Occasionally, events which affect the values of
such securities and such exchange rates may occur between the times at which
they are determined and the close of the New York Stock Exchange and will
therefore not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as
determined in good faith under procedures established by and under the
supervision of some Trustees.
Certain securities in the Fund's portfolio may be valued by an outside
pricing service approved by
the Fund's Trustees. The pricing service utilizes a matrix system
incorporating security quality, maturity
and coupon as the evaluation model parameters, and/or research 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.
15
<PAGE>
<PAGE>
SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------
AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS.
All income dividends and capital gains distributions are automatically paid
in full and fractional shares of the Fund (or, if specified by the
shareholder, any other open-end investment company for which InterCapital
serves as investment manager (collectively, with the Fund, the "Dean Witter
Funds")), unless the shareholder requests that they be paid in cash. Shares
so acquired are not subject to the imposition of a contingent deferred sales
charge upon their redemption (see "Redemptions and Repurchases").
INVESTMENT OF DIVIDENDS OR 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 thirty days after the payment
date. Shares so acquired are not subject to the imposition of a contingent
deferred sales charge upon their redemption (see "Redemptions and
Repurchases").
EASYINVEST.(SM) Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Transfer Agent for
investment in shares of the Fund.
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 net asset
value. The Withdrawal Plan provides for monthly or quarterly (March, June,
September and December) checks in any amount, not less than $25, or in any
whole percentage of the account balance, on an annualized basis. Any
applicable contingent deferred sales charge will be imposed on shares
redeemed under the Withdrawal Plan (See "Redemptions and
Repurchases--Contingent Deferred Sales Charge"). Therefore, any shareholder
participating in the Withdrawal Plan will have sufficient shares redeemed
from his or her account so that the proceeds (net of any applicable
contingent deferred sales charge) to the shareholder will be the designated
monthly or quarterly amount.
TAX-SHELTERED RETIREMENT PLANS. Retirement plans are available for use by
corporations, the self-employed, 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.
Shareholders should contact their DWR or other Selected Broker-Dealer
account executive or the Transfer Agent for further information about any of
the above services.
EXCHANGE PRIVILEGE
The Fund makes available to its shareholders an "Exchange Privilege"
allowing the exchange of shares of the Fund for shares of other Dean Witter
Funds sold with a contingent deferred sales charge ("CDSC funds"), and for
shares of Dean Witter Short-Term U.S. Treasury Trust, Dean Witter Limited
Term Municipal Trust, Dean Witter Short-Term Bond Fund and five Dean Witter
Funds which are money market funds (the foregoing eight non-CDSC funds are
hereinafter collectively referred to in this section as the "Exchange
Funds.") 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.
An exchange to another CDSC fund or any 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 from the Fund, shares of the Fund are redeemed out of the
Fund at their next calculated net asset value and the proceeds of the
redemption are used to purchase shares of the money market fund at their net
asset value determined the following day. Subsequent exchanges between any of
the money market funds and any of the CDSC funds can be effected on the same
basis. No contingent deferred sales charge ("CDSC") is imposed at the time of
any exchange, although any applicable CDSC will be imposed upon ultimate
redemption. Shares of the Fund acquired in exchange for shares of another
CDSC fund having a different CDSC schedule than that of this Fund will be
subject to the CDSC schedule of this Fund, even if such shares are
subsequently re-exchanged for shares of the CDSC fund originally purchased.
During the period of time the shareholder remains invested in shares of an
16
<PAGE>
<PAGE>
Exchange Fund (calculated from the last day of the month in which the shares
were acquired) the holding period (for the purpose of determining the rate of
the contingent deferred sales charge) is frozen. If those shares are
subsequently reexchanged for shares of a CDSC 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 are reacquired. Thus, the CDSC is
based upon the time (calculated as described above) the shareholder was
invested in shares of a CDSC fund (see "Redemptions and
Repurchases--Contingent Deferred Sales Charge"). However, in the case of
shares exchanged for shares of an Exchange Fund, upon a redemption of shares
which results in a CDSC being imposed, a credit (not to exceed the amount of
the CDSC) will be given in an amount equal to the Exchange Fund 12b-1
distribution fees, if any, incurred on or after that date which are
attributable to those shares. (Exchange Fund 12b-1 distribution fees are
described in the prospectuses for those funds.)
In addition, shares of the Fund may be acquired in exchange for shares of
Dean Witter Funds sold with a front-end sales charge ("front-end sales charge
funds"), but shares of the Fund, however acquired, may not be exchanged for
shares of front-end sales charge funds. Shares of a CDSC fund acquired in
exchange for shares of a front-end sales charge fund (or in exchange for
shares of other Dean Witter Funds for which shares of a front-end sales
charge fund have been exchanged) are not subject to any CDSC upon their
redemption.
Purchases and exchanges should be made for investment purposes only. A
pattern of frequent exchanges may be deemed by the Investment Manager to be
abusive and contrary to the best interests of the Fund's other shareholders
and, at the Investment Manager's discretion, may be limited by the Fund's
refusal to accept additional purchases and/or exchanges from the investor.
Although the Fund does not have any specific definition of what constitutes a
pattern of frequent exchanges, and will consider all relevant factors in
determining whether a particular situation is abusive and contrary to the
best interests of the Fund and its other shareholders, investors should be
aware that the Fund and each of the other Dean Witter Funds may in their
discretion limit or otherwise restrict the number of times this Exchange
Privilege may be exercised by any investor. Any such restriction will be made
by the Fund on a prospective basis only, upon notice to the shareholder not
later than ten days following such shareholder's most recent exchange.
The Exchange Privilege may be terminated or revised at any time by the
Fund and/or any of such Dean Witter Funds for which shares of the Fund have
been 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 shareholders who hold shares of an Exchange Fund
pursuant to the Exchange Privilege, and provided further that the Exchange
Privilege may be terminated or materially revised without notice under
certain unusual circumstances. Shareholders maintaining margin accounts with
DWR or another Selected Dealer are referred to their account executive
regarding restrictions on exchange of shares of the Fund pledged in the
margin account.
The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain a copy and examine it carefully
before investing. Exchanges are subject to the minimum investment requirement
and any other conditions imposed by each fund. An exchange will be treated
for federal income tax purposes the same as a repurchase or redemption of
shares, on which the shareholder 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 dealer of record
and its account numbers are part of the account information, shareholders may
initiate an exchange of shares of the Fund for shares of any of the Dean
Witter Funds (for which the Exchange Privilege is available) pursuant to this
Exchange Privilege by contacting their DWR or other Selected Broker-Dealer
account executive (no Exchange Privilege Authorization Form is required).
Other shareholders (and those shareholders who are clients of DWR or another
Selected Broker-Dealer but who wish to make exchanges directly by telephoning
the Transfer Agent) must complete and forward to the Transfer Agent an
Exchange Privilege Authorization Form, copies of which may be obtained from
the Transfer Agent, to initiate an exchange. If the Authorization Form is
used, exchanges may be made in
17
<PAGE>
<PAGE>
writing or by contacting the Transfer Agent at (800) 526-3143 (toll free).
The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures may
include requiring various forms of personal identification such as name,
mailing address, social security or other tax identification number and DWR
or other Selected Broker-Dealer account number (if any). Telephone
instructions may also be recorded. If such procedures are not employed, the
Fund may be liable for any losses due to unauthorized or fraudulent
instructions.
Telephone exchange instructions will be accepted if received by the
Transfer Agent between 9:00 a.m. and 4:00 p.m. New York time, on any day the
New York Stock Exchange is open. Any shareholder wishing to make an exchange
who has previously filed an Exchange Privilege Authorization Form and who is
unable to reach the Fund by telephone should contact his or her DWR or other
Selected Broker-Dealer account executive, if appropriate, or make a written
exchange request. Shareholders are advised that during periods of drastic
economic or market changes, it is possible that the telephone exchange
procedures may be difficult to implement, although this has not been the case
with 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
- -----------------------------------------------------------------------------
REDEMPTION. Shares of the Fund can be redeemed for cash at any time at the
net asset value per share next determined; however, such redemption proceeds
may be reduced by the amount of any applicable contingent deferred sales
charges (see below). If shares are held in a shareholder's account without a
share certificate, a written request for redemption to the Fund's Transfer
Agent at P.O. Box 983, Jersey City, NJ 07303 is required. If certificates are
held by the shareholder, the shares may be redeemed by surrendering the
certificates with a written request for redemption, along with any additional
documentation required by the Transfer Agent.
CONTINGENT DEFERRED SALES CHARGE. Shares of the Fund which are held for six
years or more after purchase (calculated from the last day of the month in
which the shares were purchased) will not be subject to any charge upon
redemption. Shares redeemed sooner than six years after purchase may,
however, be subject to a charge upon redemption. This charge is called a
"contingent deferred sales charge" ("CDSC"), and it will be a percentage of
the dollar amount of shares redeemed and will be assessed on an amount equal
to the lesser of the current market value or the cost of the shares being
redeemed. The size of this percentage will depend upon how long the shares
have been held, as set forth in the table below:
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge As A
Year Since Purchase Percentage Of Amount
Payment Made Redeemed
- -------------------------- -----------------------
<S> <C>
First ..................... 5.0%
Second .................... 4.0%
Third ..................... 3.0%
Fourth .................... 2.0%
Fifth ..................... 2.0%
Sixth ..................... 1.0%
Seventh and thereafter ... None
</TABLE>
A CDSC will not be imposed on: (i) any amount which represents an increase
in value of shares purchased within the six years preceding the redemption;
(ii) the current net asset value of shares purchased more than six years
prior to the redemption; and (iii) the current net asset asset value of
shares purchased through reinvestment of dividends or distributions and/or
shares acquired in exchange for shares of Dean Witter Funds sold with a
front-end sales charge or of other Dean Witter Funds acquired in exchange for
such shares. Moreover, in determining whether a CDSC is applicable it will be
assumed that amounts described in (i), (ii) and (iii) above (in that order)
are redeemed first. In addition, no CDSC will be imposed on redemptions of
shares which were purchased by the employee benefit plans established by DWR
and SPS Transaction Services, Inc. (an affiliate of DWR) for their employees
as qualified under Section 401(k) of the Internal Revenue Code.
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<PAGE>
In addition, the CDSC, if otherwise applicable, will be waived in the case
of (i) redemptions of shares held at the time a shareholder dies or becomes
disabled, only if the shares are (a) registered either in the name of an
individual shareholder (not a trust), or in the names of such shareholder and
his or her spouse as joint tenants with right of survivorship, or (b) held in
a qualified corporate or self-employed retirement plan, Individual Retirement
Account or Custodial Account under Section 403(b)(7) of the Internal Revenue
Code, provided in either case that the redemption is requested within one
year of the death or initial determination of disability, and (ii)
redemptions in connection with the following retirement plan distributions:
(a) lump-sum or other distributions from a qualified corporate or
self-employed retirement plan following retirement (or in the case of a "key
employee" of a "top heavy" plan, following attainment of age 59 1/2 ); (b)
distributions from an Individual Retirement Account or Custodial Account
under Section 403(b)(7) of the Internal Revenue Code following attainment of
age 59 1/2 ; and (c) a tax-free return of an excess contribution to an IRA.
For the purpose of determining disability, the Distributor utilizes the
definition of disability contained in Section 72(m)(7) of the Internal
Revenue Code, which relates to the inability to engage in gainful employment.
All waivers will be granted only following receipt by the Distributor of
confirmation of the shareholder's entitlement.
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 per share next determined (see "Purchase of Fund Shares")
after such purchase order is received by DWR or other Selected Broker-Dealer,
reduced by any applicable CDSC.
The CDSC, if any, will be the only fee imposed upon repurchase by the
Fund, the Distributor, DWR or other Selected Broker-Dealer. The offer by DWR
and other Selected Broker-Dealers to repurchase shares may be suspended
without notice 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 another Selected Dealer
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 privilege
may, within thirty 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 the net asset value next determined after a
reinstatement request, together with the proceeds, is received by the
Transfer Agent and receive a pro rata credit for any CDSC paid in connection
with such redemption or repurchase.
INVOLUNTARY REDEMPTION. The Fund reserves the right to redeem, upon sixty
days' notice and at net asset value, the shares of any shareholder whose
shares have a value of less than $100 as a result of redemptions or
repurchases, or such lesser amount as may be fixed by the Board of Trustees.
However, before the Fund redeems such shares and sends the proceeds to the
shareholder, it will notify the shareholder that the value of the shares is
less than $100 and allow the shareholder to make an additional investment in
an amount which will increase the value of the account to $100 or more before
the redemption is processed. No CDSC will be imposed on any involuntary
redemption.
19
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DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS. The Fund intends to pay at least annually
dividends and to distribute substantially all of the Fund's net investment
income and net short-term capital gains, if there are any. The Fund intends
to distribute dividends from net long-term capital gains, if any, at least
once each year. The Fund may, however, determine either to distribute or to
retain all or part of any long-term capital gains in any year for
reinvestment.
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 be paid in cash. (See "Shareholder
Services--Automatic Investment of Dividends and Distributions".)
TAXES. Because the Fund intends to distribute 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. Shareholders who are required to pay taxes on
their income will normally have to pay federal income taxes, and any state
income taxes, on the dividends and distributions they receive from the Fund.
Such dividends and distributions, to the extent that they are derived from
net investment income or 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.
One of the requirements for the Fund to remain qualified as a regulated
investment company is that less than 30% of the Fund's gross income be
derived from gains from the sale or other disposition of securities held for
less than three months. Accordingly, the Fund may be restricted in the
writing of options on securities held for less than three months, in the
writing of options which expire in less than three months, and in effecting
closing transactions with respect to call or put options which have been
written or purchased less than three months prior to such transactions. The
Fund may also be restricted in its ability to engage in transactions
involving futures contracts.
Distributions of net 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. Capital gains distributions are not
eligible for the dividends received deduction.
At the end of the calendar year, shareholders will be sent full
information on their dividends and capital gains distributions for tax
purposes, including information as to the portion taxable as ordinary income,
the portion taxable as long-term capital gains, and the amount of dividends
eligible for the Federal dividends received deduction available to
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 their accuracy.
Dividends, interest and gains received by the Fund may give rise to
withholding and other taxes imposed by foreign countries. If it qualifies for
and makes the appropriate election with the Internal Revenue Service, the
Fund will report annually to its shareholders the amount per share of such
taxes to enable shareholders to claim United States foreign tax credits or
deductions with respect to such taxes. In the absence of such an election,
the Fund would deduct foreign tax in computing the amount of its
distributable income.
Shareholders should consult their tax advisers as to the applicability of
the foregoing to their current situation.
PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------
From time to time the Fund may quote its "total return" in advertisements
and sales literature. The total return of the Fund is based on historical
earnings and is not intended to indicate future performance. 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
for the life of the Fund, if less than any of the foregoing. Average annual
total return
20
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<PAGE>
reflects all income earned by the Fund, any appreciation or depreciation of
the Fund's assets, all expenses incurred by the Fund and all sales charges
which would be incurred by redeeming shareholders, 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 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. Such calculations may or may not reflect the deduction of the
contingent deferred sales charge which, if reflected, would reduce the
performance quoted. The Fund from time to time may also advertise its
performance relative to certain performance rankings and indexes compiled by
independent organizations (such as mutual fund performance rankings of 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.
The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. Under certain
circumstances, the Trustees may be removed by action of the Trustees or by
the Shareholders.
Under Massachusetts law, shareholders of a business trust may, under
certain limited circumstances, be held personally liable as partners for the
obligations of the Fund. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Fund, requires that notice of such Fund obligations include such disclaimer,
and provides for indemnification 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, in
the opinion of Massachusetts counsel to the Fund, the risk to Fund
shareholders of personal liability is remote.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed to
the Fund at the telephone
number or address set forth on the front cover of those Prospectus.
The Investment Manager provided the initial capital for the Fund by
purchasing 10,000 shares of the Fund for $100,000 on December 7, 1994. As of
the date of this Prospectus, the Investment Manager owned 100% of the
outstanding shares of the Fund. The Investment Manager may be deemed to
control the Fund until such time as it owns less than 25% of the outstanding
shares of the Fund.
21
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APPENDIX
- -----------------------------------------------------------------------------
RATINGS OF CORPORATE DEBT INSTRUMENTS
MOODY'S INVESTORS SERVICE INC. ("MOODY'S")
BOND RATINGS
<TABLE>
<CAPTION>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa Bonds which are rated Baa are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well. Bonds rated Aaa, Aa, A and Baa
are considered investment grade bonds.
Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate,
and therefore not well safeguarded during both good and bad times in
the future. Uncertainty of position characterizes bonds in this
class.
B Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
</TABLE>
Rating Refinements: Moody's may apply numerical modifiers, 1, 2, and 3 in
each generic rating classification from Aa through B in its municipal bond
rating system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and a modifier 3 indicates that the issue ranks in the lower end if
its generic rating category.
COMMERCIAL PAPER RATINGS
Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess
of nine months. The ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations,
all judged to be investment grade, to indicate the relative repayment
capacity of rated issuers: Prime-1, Prime-2, Prime-3.
22
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<PAGE>
Issuers rated Prime-1 have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated Prime-3
have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated Not Prime do not fall within any of the Prime
rating categories.
STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S")
BOND RATINGS
A Standard & Poor's bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers,
or lessees.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
Standard & Poor's does not perform an audit in connection with any rating
and may, on occasion, rely on unaudited financial information. The ratings
may be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other reasons.
<TABLE>
<CAPTION>
<S> <C>
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small
degree.
A Debt rated "A" has a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher-rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than for debt
in higher-rated categories. Bonds rated AAA, AA, A and BBB are
considered investment grade bonds.
BB Debt rated "BB" has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties
or exposure to adverse business, financial or economic conditions
which could lead to inadequate capacity or willingness to pay interest
and repay principal.
B Debt rated "B" has a greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC Debt rated "CCC" has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayments of
principal. In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal.
CC The rating "CC" is typically applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC" rating.
C The rating "C" is typically applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC-" debt rating.
Cl The rating "Cl" is reserved for income bonds on which no interest is
being paid.
23
<PAGE>
<PAGE>
D Debt rated "D" is in payment default. The 'D' rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
'D' rating also will be used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.
NR Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that Standard &
Poor's does not rate a particular type of obligation as a matter of
policy.
Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded as having
predominantly speculative characteristics with respect to capacity to
pay interest and repay principal. "BB" indicates the least degree of
speculation and "C" the highest degree of speculation. While such debt
will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to
adverse conditions. Plus (+) or minus (-): The rating from "AA" to
"CCC" may be modified by the addition of a plus or minus sign to
show relative standing with the major ratings categories.
</TABLE>
COMMERCIAL PAPER RATINGS
Standard and Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to
purchase or sell a security. The ratings are based upon current information
furnished by the issuer or obtained by S&P from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into
group categories, ranging from "A" for the highest quality obligations to "D"
for the lowest. Ratings are applicable to both taxable and tax-exempt
commercial paper. The categories are as follows:
Issues assigned A ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designation 1, 2, and 3 to indicate the relative degree of safety.
<TABLE>
<CAPTION>
<S> <C>
A-1 indicates that the degree of safety regarding timely payment is very
strong.
A-2 indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as
overwhelming as for issues designated "A-1".
A-3 indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying
the higher designations.
</TABLE>
24
<PAGE>
<PAGE>
DEAN WITTER
GLOBAL ASSET ALLOCATION FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and
General Counsel
Mark Bavoso
Vice President
Thomas F. Caloia
Treasurer
CUSTODIAN
The Chase Manhattan Bank N.A.
One Chase Plaza
New York, NY 10005
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Dean Witter Trust Company
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.
SUBADVISERS
TCW Funds Management, Inc.
Morgan Grenfell Investment Services Limited
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
, 199
DEAN WITTER
GLOBAL ASSET ALLOCATION
FUND
- -----------------------------------------------------------------------------
Dean Witter Global Asset Allocation Fund (the "Fund") is an open-end
diversified management investment company whose investment objective is to
seek long-term total return on its investments. The Fund seeks to meet its
investment objective by allocating its assets among U.S. and foreign
equities, fixed-income securities and money market instruments. (See
"Investment Practices and Policies.")
A Prospectus for the Fund dated , which provides the basic
information you should know before investing in the Fund, may be obtained
without charge from the Fund at its address or telephone number 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 Global Asset Allocation Fund
Two World Trade Center
New York, New York 10048
(212) 392-2550
<PAGE>
<PAGE>
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
The Fund and its Management .............................. 3
Trustees and Officers .................................... 7
Investment Practices and Policies ........................ 10
Investment Restrictions .................................. 25
Portfolio Transactions and Brokerage ..................... 26
The Underwriter .......................................... 27
The Distributor .......................................... 28
Shareholder Services ..................................... 30
Redemptions and Repurchases .............................. 34
Dividends, Distributions and Taxes ....................... 37
Performance Information .................................. 38
Shares of the Fund ....................................... 39
Custodian and Transfer Agent ............................. 40
Independent Accountants .................................. 40
Reports to Shareholders .................................. 40
Legal Counsel ............................................ 40
Experts .................................................. 40
Registration Statement ................................... 40
Statement of Assets and Liabilities at December 7, 1994 . 41
Report of Independent Accountants ........................ 43
</TABLE>
2
<PAGE>
<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 October 18, 1994.
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 Dean Witter, Discover & Co.
("DWDC"), a Delaware corporation. In an internal reorganization which took
place in January, 1993, InterCapital assumed the investment advisory,
administrative and management activities previously performed by the
InterCapital Division of Dean Witter Reynolds Inc. ("DWR"), a broker-dealer
affiliate of InterCapital. (As hereinafter used in this Statement of
Additional Information, the terms "InterCapital" and "Investment Manager"
refer to DWR's InterCapital Division prior to the internal reorganization and
to Dean Witter InterCapital Inc. thereafter.) The daily management of the
Fund and research relating to the portfolio of of the Fund is conducted by or
under the direction of officers of the Fund and of the Investment Manager and
Sub-Advisers, subject to review of investments by the Fund's Board of
Trustees. In addition, Trustees of the Fund provide guidance on economic
factors and interest rate trends. Information as to these Trustees and
Officers is contained under the caption "Trustees and Officers."
InterCapital is also the investment manager (or investment adviser and
administrator) of the following investment companies: Dean Witter Liquid
Asset Fund, Inc., InterCapital Income Securities Inc., Dean Witter High Yield
Securities Inc., Dean Witter Tax-Free Daily Income Trust, Dean Witter
Developing Growth Securities Trust, Dean Witter Tax-Exempt Securities Trust,
Dean Witter Dividend Growth Securities Inc., Dean Witter Natural Resource
Development Securities Inc., Dean Witter American Value Fund, Dean Witter
U.S. Government Money Market Trust, Dean Witter Variable Investment Series,
Dean Witter World Wide Investment Trust, Dean Witter Select Municipal
Reinvestment Fund, Dean Witter U.S. Government Securities Trust, Dean Witter
California Tax-Free Income Fund, Dean Witter New York Tax-Free Income Fund,
Dean Witter Convertible Securities Trust, Dean Witter Federal Securities
Trust, Dean Witter Value-Added Market Series, High Income Advantage Trust,
Dean Witter Government Income Trust, InterCapital Insured Municipal Bond
Trust, Dean Witter Utilities Fund, Dean Witter Managed Assets Trust, High
Income Advantage Trust II, Dean Witter California Tax-Free Daily Income
Trust, Dean Witter Strategist Fund, High Income Advantage Trust III, Dean
Witter World Wide Income Trust, Dean Witter Intermediate Income Securities,
Dean Witter New York Municipal Money Market Trust, 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 Global
Short-Term Income Fund Inc., Dean Witter Multi-State Municipal Series Trust,
Dean Witter Short-Term U.S. Treasury Trust, Dean Witter Premier Income Trust,
InterCapital Quality Municipal Investment Trust, InterCapital Insured
Municipal Trust, Dean Witter Diversified Income Trust, Dean Witter Health
Sciences Trust, Dean Witter Global Dividend Growth Securities, Dean Witter
Limited Term Municipal Trust, InterCapital Insured Municipal Securities,
InterCapital Insured California Municipal Securities, InterCapital Insured
Municipal Income Trust, InterCapital California Insured Municipal Income
Trust, InterCapital Quality Municipal Income Trust, InterCapital Quality
Municipal Securities, InterCapital California Quality Municipal Securities,
InterCapital New York Quality Municipal Securities, Active Assets Money
Trust, Active Assets Tax-Free Trust, Active Assets California Tax-Free Trust,
Active Assets Government Securities Trust, Municipal Income Trust, Municipal
Income Trust II, Municipal Income Trust III, Municipal Income Opportunities
Trust, Municipal Income Opportunities Trust II, Municipal Income
Opportunities Trust III, Prime Income Trust, Municipal Premium Income Trust,
Dean Witter Short-Term Bond Fund, Dean Witter High Income Securities, Dean
Witter Global Utilities Fund, Dean Witter National Municipal Trust, Dean
Witter International SmallCap Fund, Dean Witter Retirement Series, Dean
Witter Mid-Cap Growth Fund and Dean Witter Select Dimensions Investment
Series. The foregoing investment companies, together with the Fund, are
collectively referred to as the Dean Witter Funds. In addition, Dean Witter
Services Company Inc. ("DWSC"), a wholly-owned subsidiary of InterCapital,
serves as
3
<PAGE>
<PAGE>
manager for the following investment companies for which TCW Funds
Management, Inc. is the investment adviser: TCW/DW Core Equity Trust, TCW/DW
North American Government Income Trust, TCW/DW Latin American Growth Fund,
TCW/DW Income and Growth Fund, TCW/DW Small Cap Growth Fund, TCW/DW Balanced
Fund, TCW/DW Term Trust 2000, TCW/DW Term Trust 2002, TCW/DW Term Trust 2003,
TCW/DW North American Intermediate Fund, TCW/DW Total Return Trust, TCW/DW
Global Convertible Trust and TCW/DW Emerging Markets Opportunities Trust (the
"TCW/DW Funds"). InterCapital also serves as: (i) sub-adviser to Templeton
Global Opportunities Trust, an open-end investment company; (ii)
administrator of The BlackRock Strategic Term Trust Inc., a closed-end
investment company; and (iii) sub-administrator of MassMutual Participation
Investors and Templeton Global Governments Income Trust, closed-end
investment companies.
The Investment Manager also serves as an investment adviser for Dean
Witter World Wide Investment Fund, an investment company organized under the
laws of Luxembourg, shares of which are not available for purchase in the
United States or by American citizens outside the United States.
Pursuant to an Investment Management Agreement (the "Management
Agreement") with the Investment Manager, the Fund has retained the Investment
Manager to manage the investment of the Fund's U.S. assets, including the
placing of orders for the purchase and sale of portfolio securities and
supervise the investment of all of the Fund's assets. The Investment Manager
in conjunction with TCW Funds Management, Inc. ("TCW") and Morgan Grenfell
Investment Services Ltd. ("MGIS") (the "Sub-Advisers") 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.
The Management 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 Management Agreement
in no way restricts the Investment Manager from acting as investment manager
or adviser to others.
Under the terms of the Management Agreement, in addition to managing the
Fund's investments, the Investment Manager maintains certain of the Fund's
books and records and furnishes, at its own expense, such office space,
facilities, equipment, clerical help and bookkeeping and legal services as
the Fund may reasonably require in the conduct of its business, including the
preparation of prospectuses, statements of additional information, proxy
statements and reports required to be filed with federal and state securities
commissions (except insofar as the participation or assistance of independent
accountants and attorneys is, in the opinion of the Investment Manager,
necessary or desirable). In addition, the Investment Manager pays the
salaries of all personnel, including officers of the Fund, who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone service, heat, light, power and other utilities provided to the
Fund.
Expenses not expressly assumed by the Investment Manager under the
Management Agreement, the Sub-Advisers pursuant to the Sub-Advisory
Agreements (see below), or by Dean Witter Distributors Inc., the Distributor
of the Fund's shares ("Distributors" or "the Distributor") will be paid by
the Fund. The expenses borne by the Fund include, but are not limited to:
expenses of the Plan of Distribution pursuant to Rule 12b-1 (see "The
Distributor"); charges and expenses of any registrar; custodian, stock
transfer and dividend disbursing agent; brokerage commissions; taxes;
engraving and printing of share certificates; registration costs of the Fund
and its shares under federal and state securities laws; the cost and expense
of printing, including typesetting, and distributing Prospectuses and
Statements of Additional Information of the Fund and supplements thereto to
the Fund's shareholders; all expenses of shareholders' and Trustees' meetings
and of preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Manager or
Sub-Adviser or any corporate affiliate of the Investment Manager or
Sub-Adviser; 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
4
<PAGE>
<PAGE>
the Fund or of the Investment Manager or Sub-Adviser (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 1.0% to the Fund's daily net assets.
Pursuant to a Sub-Advisory Agreement between the Investment Manager and
TCW, TCW has been retained, subject to the overall supervision of the
Investment Manager and the Trustees of the Fund, to assist the Investment
Manager in determining the asset allocations of the Fund, and to manage the
portion of the Fund's portfolio invested in securities issued by issuers
located in Canada and Latin America.
TCW is a wholly-owned subsidiary of The TCW Group, Inc., whose subsidiaries,
including Trust Company of the West and TCW Asset Management Company, provide a
variety of trust, investment management and investment advisory services. As of
October 31, 1994, TCW and its affiliates had $50 billion under management or
committed to management. Trust Company of the West and its affiliates have
managed equity securities portfolios for institutional investors since 1971.
TCW is headquartered at 865 South Figueroa Street, Suite 1800, Los Angeles,
California 90017 and is registered as an investment adviser under the
Investment Advisers Act of 1940.
Pursuant to a Sub-Advisory Agreement between the Investment Manager and
MGIS, MGIS has been retained, subject to the overall supervision of the
Investment Manager and the Trustees of the Fund, to assist the Investment
Manager in determining the asset allocations of the Fund, and to manage the
portion of the Fund's portfolio invested in securities issued by issuers
located outside of the Western Hemisphere.
MGIS was organized as a British corporation in 1972 and currently manages
assets of approximately $ billion for U.S. corporate and public employee
benefit plans, investment companies, endowments and foundations. MGIS'
principal office is located at 20 Finsbury Circus, London, England. MGIS is a
subsidiary of London based Morgan Grenfell Asset Management Limited, which is
itself a subsidiary of London-based Morgan Grenfell Group plc (which is owned
by Deutsche Bank AG, an international commercial and investment banking
group) and is registered as an investment adviser under the Investment
Advisers Act of 1940. In 1838, Morgan Grenfell was founded to provide
merchant banking services, primarily trade financing between Great Britain
and the United States. In 1958, its investment management arm began
operations. In recent years, Morgan Grenfell Group plc has achieved a
prominent position in the securities industry by providing investment and
commercial banking services, financial services, and discretionary management
and advisory services covering all of the world's leading securities markets.
Morgan Grenfell Asset Management Limited, through its various investment
management subsidiaries, which have extensive experience in global investment
management, is currently managing in excess of $ billion worldwide.
Both the Investment Manager and the Sub-Advisers have authorized any of
their directors, officers and employees who have been elected as Trustees or
officers of the Fund to serve in the capacities in which they have been
elected. Services furnished by the Investment Manager and the Sub-Advisers
may be furnished by directors, officers and employees of the Investment
Manager and the Sub-Advisers. In connection with the services rendered by the
Sub-Advisers, the Sub-Advisers bear the following expenses: (a) the salaries
and expenses of their personnel; and (b) all expenses incurred by them in
connection with performing the services provided by it as Sub-Advisers, as
described above.
As full compensation for the services and facilities furnished to the Fund
and the Investment Manager and expenses of the Fund and the Investment
Manager assumed by the Sub-Advisers, the Investment Manager pays each
Sub-Adviser monthly compensation equal to 30% of the Investment Manager's
monthly compensation payable under the Management Agreement.
5
<PAGE>
<PAGE>
Pursuant to the Management Agreement, total operating expenses of the Fund
are subject to applicable limitations under rules and regulations of states
where the Fund is authorized to sell its shares. Therefore, operating
expenses are effectively subject to the most restrictive of such limitations
as the same may be amended from time to time. Presently, the most restrictive
limitation is as follows. If, in any fiscal year, the Fund's total operating
expenses, exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses (to the extent permitted by applicable state
securities laws and regulations), exceed 2 1/2 % of the first $30,000,000 of
average daily net assets, 2% of the next $70,000,000 and 1 1/2 % of any
excess over $100,000,000, the Investment Manager will reimburse the Fund for
the amount of such excess. Pursuant to the Sub-Advisory Agreements, if any
such reimbursement is made by the Investment Manager, the Investment Manager
will, in turn, be reimbursed for 30% of such payments by each Sub-Adviser.
The reimbursement, if any, will be calculated daily and credited on a monthly
basis.
The Investment Manager will pay the organizational expenses of the Fund
incurred prior to the offering of the Fund's shares. The Fund agreed to bear
and reimburse the Investment Manager for such expenses, in an amount of up to
a maximum of $250,000. The Fund will defer and will amortize the reimbursed
expenses on the straight line method over a period not to exceed five years
from the date of commencement of the Fund's operations.
The Management Agreement and the Sub-Advisory Agreements were initially
approved by the Trustees on December 6, 1994 and by InterCapital as the sole
shareholder on December 7, 1994. The agreements may be terminated at any
time, without penalty, on thirty days' notice by the Trustees of the Fund, by
the holders of a majority of the outstanding shares of the Fund, as defined
in the Investment Company Act of 1940, as amended (the "Act"), or by the
Investment Manager and/or Sub-Adviser. The agreements will automatically
terminate in the event of their assignment (as defined in the Act).
Under their terms, the Management Agreement and the Sub-Advisory Agreement
will continue in effect until April 30, 1996, and from year to year
thereafter, provided their continuance is approved at least annually by the
vote of the holders of a majority of the outstanding shares of the Fund, as
defined in the Act, or by the 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 Management Agreement is terminated, or if the
affiliation between InterCapital and its parent company is terminated, the
Fund will eliminate the name "Dean Witter" from its name if DWR or its parent
company shall so request.
6
<PAGE>
<PAGE>
TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------------
The Trustees and Executive Officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with
InterCapital, and with the Dean Witter Funds and the TCW/DW Funds are shown
below:
<TABLE>
<CAPTION>
NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------------- --------------------------------------------------------
<S> <C>
Jack F. Bennett Retired; Director or Trustee of the Dean Witter Funds; formerly Trustee
c/o Gordon Altman Senior Vice President and Director of Exxon Corporation
Butowsky Weitzen Shalov & Wein (1975-January, 1989) and Under Secretary of the U.S. Treasury
Counsel to the for Monetary Affairs (1974-1975); Director of Philips
Independent Trustees Electronics N.V., Tandem Computers Inc. and Massachusetts
114 West 47th Street Mutual Insurance Company; director or trustee of various
New York, New York not-for-profit and business organizations.
Michael Bozic President and Chief Executive Officer of Hills Department
Trustee Stores (since May, 1991); formerly Chairman and Chief Executive
c/o Hills Stores Inc. Officer (January, 1987-August, 1990) and President and Chief
15 Dan Road Operating Officer (August, 1990-February, 1991) of the Sears
Canton, Massachusetts Merchandise Group of Sears, Roebuck and Co.; Director or Trustee
of the Dean Witter Funds; Director of Harley Davidson Credit
Inc., the United Negro College Fund and Domain Inc. (home
decor retailer).
Charles A. Fiumefreddo* Chairman, Chief Executive Officer and Director of InterCapital,
Chairman of the Board, DWSC and Distributors; Executive Vice President and Director
President, Chief Executive of DWR; Chairman, Director or Trustee, President and Chief
Officer and Trustee 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 ("DWTC"); Director
and/or officer of various DWDC subsidiaries; formerly Executive
Vice President and Director of DWDC (until February, 1993).
Edwin J. Garn Director or Trustee of the Dean Witter Funds; formerly United
Trustee States Senator (R-Utah) (1974-1992) and Chairman, Senate
c/o Huntsman Chemical Banking Committee (1980-1986); formerly Mayor of Salt Lake
Corporation City, Utah (1971-1974); formerly Astronaut, Space Shuttle
2000 Eagle Gate Tower Discovery (April 12-19, 1985); Vice Chairman, Huntsman Chemical
Salt Lake City, Utah Corporation (since January, 1993); member of the board of
various civic and charitable organizations.
7
<PAGE>
<PAGE>
NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------------- --------------------------------------------------------
John R. Haire Trustee Two World Trade Center Chairman of the Audit Committee and Chairman of the Committee
New York, New York of the Independent Directors or Trustees and Director or Trustee
of the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly
President, Council for Aid to Education (1978-October, 1989)
and Chairman and Chief Executive Officer of Anchor Corporation,
an Investment Advisor (1964-1978); Director of Washington
National Corporation (insurance) and Browne & Co., Inc.
(printing).
Dr. Manuel H. Johnson Trustee c/o Johnson Smick Senior Partner, Johnson Smick International, Inc., a consulting
International, Inc. 1133 Connecticut Avenue, firm; Koch Professor of International Economics and Director
N.W. Washington, DC of the Center for Global Market Studies at George Mason
University (since September, 1990); Co-Chairman and a founder
of the Group of Seven Council (G7C), an international economic
commission (since September, 1990); Director or Trustee of
the Dean Witter Funds; Trustee of the TCW/DW Funds; Director
of Greenwich Capital Markets Inc. (broker-dealer); formerly
Vice Chairman of the Board of Governors of the Federal Reserve
System (February, 1986-August, 1990) and Assistant Secretary
of the U.S. Treasury (1982-1986).
Paul Kolton Trustee c/o Gordon Altman Butowsky Director or Trustee of the Dean Witter Funds; Chairman of
Weitzen Shalov & Wein Counsel to the the Audit Committee and Chairman of the Committee of the
Independent Trustees 114 West 47th Street New Independent Trustees and Trustee of the TCW/DW Funds; formerly
York, New York Chairman of the Financial Accounting Standards Advisory Council
and Chairman and Chief Executive Officer of the American Stock
Exchange; Director of UCC Investors Holding Inc. (Uniroyal
Chemical Company, Inc.); director or trustee of various
not-for-profit organizations.
Michael E. Nugent Trustee c/o Triumph Capital, General Partner, Triumph Capital, L.P., a private investment
L.P. 237 Park Avenue New York, New York partnership (since April, 1988); Director or Trustee of the
Dean Witter Funds; Trustee of the TCW/DW Funds; formerly Vice
President, Bankers Trust Company and BT Capital Corporation
(September, 1984-March, 1988); Director of various business
organizations.
Philip J. Purcell* Trustee Two World Trade Chairman of the Board of Directors and Chief Executive Officer
Center New York, New York of DWDC, DWR and Novus Credit Services Inc.; Director of
InterCapital, DWSC and Distributors; Director or Trustee of
the Dean Witter Funds; Director and/or officer of various
DWDC subsidiaries.
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NAME, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- ----------------------------------------------- --------------------------------------------------------
John L. Schroeder Trustee c/o The Home Executive Vice President and Chief Investment Officer of the
Insurance Company 59 Maiden Lane New York, New Home Insurance Company (since August, 1991); Director or Trustee
York of the Dean Witter Funds; Director of Citizens Utilities Company;
formerly Chairman and Chief Investment Officer of Axe-Houghton
Management and the Axe-Houghton Funds (April, 1983-June, 1991)
and President of USF&G Financial Services, Inc. (June,
1990-June, 1991).
Sheldon Curtis Senior Vice President and General Counsel of InterCapital
Vice President, and DWSC; Senior Vice President and Secretary of DWTC; Senior
Secretary and General Counsel Vice President, Assistant Secretary and Assistant General
Two World Trade Center Counsel of Distributors; Assistant Secretary of DWDC and DWR;
New York, New York Vice President, Secretary and General Counsel of the Dean
Witter Funds and the TCW/DW Funds.
Mark Bavoso Senior Vice President of InterCapital since
Vice President Two World Trade Center New
York, New York
Thomas F. Caloia First Vice President (since May, 1991) and Assistant Treasurer
Treasurer Two World Trade Center New York, New (since April, 1988) of InterCapital; First Vice President
York and Assistant Treasurer of DWSC; Treasurer of the Dean Witter
Funds and the TCW/DW Funds.
<FN>
- ----------
* Denotes Trustees of the Fund, as defined in the Act.
</TABLE>
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, David A. Hughey, Executive Vice President and Chief
Administrative Officer of InterCapital, DWSC and Distributors and Executive
Vice President, Chief Administrative Officer and Director of DWTC, Edmund C.
Puckhaber, Executive Vice President of InterCapital, and Director of DWTC are
Vice Presidents of the Fund, and Marilyn K. Cranney and Barry Fink, First
Vice Presidents and Assistant General Counsels of InterCapital and DWSC, and
Lawrence S. Lafer, Lou Anne D. McInnis and Ruth Rossi, Vice Presidents and
Assistant General Counsels of InterCapital and DWSC, are Assistant
Secretaries of the Fund.
The Fund pays each Trustee who is not an employee or retired employee of
the Investment Manager or an affiliated company an annual fee of $1,200 plus
$50 for each meeting of the Trustees, the Audit Committee, or the Committee
of the Independent Trustees attended by the Trustee in person (the Fund pays
the Chairman of the Audit Committee an additional annual fee of $1,000 and
pays the Chairman of the Committee of the Independent Trustees an additional
annual fee of $1,000, in each case inclusive of the Committee meeting fees).
The Fund also reimburses such Trustees for travel and other out-of-pocket
expenses incurred by them in connection with attending such meetings.
Trustees and officers of the Fund who are or have been employed by the
Investment Manager or an affiliated company receive no compensation or
expense reimbursement from the Fund.
9
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INVESTMENT PRACTICES AND POLICIES
- -----------------------------------------------------------------------------
Forward Foreign Currency Exchange Contracts. As discussed in the
Prospectus, the Fund may enter into forward foreign currency exchange
contracts ("forward contracts") as a hedge against fluctuations in future
foreign exchange rates. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign currency exchange market, or through entering into forward
contracts to purchase or sell foreign currencies. A forward contract involves
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by
the parties, at a price set at the time of the contract. These contracts are
traded in the interbank market conducted directly between currency traders
(usually large, commercial and investment banks) and their customers. Such
forward contracts will only be entered into with United States banks and
their foreign branches or foreign banks whose assets total $1 billion or
more. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.
When management of the Fund believes that the currency of a particular
foreign country may suffer a substantial movement against the U.S. dollar, it
may enter into a forward contract to purchase or sell, for a fixed amount of
dollars or other currency, the amount of foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. The Fund will not enter into such forward contracts or
maintain a net exposure to such contracts where the consummation of the
contracts would obligate the Fund to deliver an amount of foreign currency in
excess of the value of the Fund's portfolio securities or other assets
denominated in that currency. Under normal circumstances, consideration of
the prospect for currency parities will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, the management of the Fund believes that it is important to have the
flexibility to enter into such forward contracts when it determines that the
best interests of the Fund will be served. The Fund's custodian bank will
place cash, U.S. Government securities or other appropriate liquid high grade
debt securities in a segregated account of the Fund in an amount equal to the
value of the Fund's total assets committed to the consummation of forward
contracts entered into under the circumstances set forth above. If the value
of the securities placed in the segregated account declines, additional cash
or securities will be placed in the account on a daily basis so that the
value of the account will equal the amount of the Fund's commitments with
respect to such contracts.
Where, for example, the Fund is hedging a portfolio position consisting of
foreign securities denominated in a foreign currency against adverse exchange
rate moves vis-a-vis the U.S. dollar, at the maturity of the forward contract
for delivery by the Fund of a foreign currency, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may
retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the
same amount of the foreign currency (however, the ability of the Fund to
terminate a contract is contingent upon the willingness of the currency
trader with whom the contract has been entered into to permit an offsetting
transaction). It is impossible to forecast the market value of portfolio
securities at the expiration of the contract. Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of
the foreign currency. Conversely, it may be necessary to sell on the spot
market some of the foreign currency received upon the sale of the portfolio
securities if its market value exceeds the amount of foreign currency the
Fund is obligated to deliver.
If the Fund retains the portfolio securities and engages in an offsetting
transaction, the Fund will incur a gain or loss to the extent that there has
been movement in spot or forward contract prices. If the Fund engages in an
offsetting transaction, it may subsequently enter into a new forward contract
to sell the foreign currency. Should forward prices decline during the period
between the Fund's entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase
of the foreign currency, the Fund will realize a gain to the extent the price
of the currency
10
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it has agreed to sell exceeds the price of the currency it has agreed to
purchase. Should forward prices increase, the Fund will suffer a loss to the
extent the price of the currency it has agreed to purchase exceeds the price
of the currency it has agreed to sell.
If the Fund purchases a fixed-income security which is denominated in U.S.
dollars but which will pay out its principal based upon a formula tied to the
exchange rate between the U.S. dollar and a foreign currency, it may hedge
against a decline in the principal value of the security by entering into a
forward contract to sell an amount of the relevant foreign currency equal to
some or all of the principal value of the security.
At times when the Fund has written a call option on a security or the
currency in which it is denominated, it may wish to enter into a forward
contract to purchase or sell the foreign currency in which the security is
denominated. A forward contract would, for example, hedge the risk of the
security on which a call option has been written declining in value to a
greater extent than the value of the premium received for the option. The
Fund will maintain with its Custodian at all times, cash, U.S. Government
securities, or other appropriate high grade debt obligations in a segregated
account equal in value to all forward contract obligations and option
contract obligations entered into in hedge situations such as this.
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. It will, however, do so from time to time, and
investors should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize
a profit based on the spread between the prices at which they are buying and
selling various currencies. Thus a dealer may offer to sell a foreign
currency to the Fund at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the dealer.
OPTIONS AND FUTURES TRANSACTIONS
As stated in the Prospectus, the Fund may write covered call options
against securities held in its portfolio and covered put options on eligible
portfolio securities and stock indexes and purchase options of the same
series to effect closing transactions, and may hedge against potential
changes in the market value of investments (or anticipated investments) and
facilitate the reallocation of the Fund's assets into and out of equities and
fixed-income securities by purchasing put and call options on portfolio (or
eligible portfolio) securities and engaging in transactions involving futures
contracts and options on such contracts. The Fund may also hedge against
potential changes in the market value of the currencies in which its
investments (or anticipated investments) are denominated by purchasing put
and call options on currencies and engage in transactions involving currency
futures contracts and options on such contracts.
Call and put options on U.S. Treasury notes, bonds and bills and equity
securities are listed on exchanges and are written in over-the-counter
transactions ("OTC options"). Listed options are issued by the Options
Clearing Corporation ("OCC") and other clearing entities including foreign
exchanges. Ownership of a listed call option gives the Fund the right to buy
from the OCC the underlying security covered by the option at the stated
exercise price (the price per unit of the underlying security) by filing an
exercise notice prior to the expiration date of the option. The writer
(seller) of the option would then have the obligation to sell to the OCC the
underlying security at that exercise price prior to the expiration date of
the option, regardless of its then current market price. Ownership of a
listed put option would give the Fund the right to sell the underlying
security to the OCC at the stated exercise price. Upon notice of exercise of
the put option, the writer of the put would have the obligation to purchase
the underlying security from the OCC at the exercise price.
Options on Treasury Bonds and Notes. Because trading in options written on
Treasury bonds and notes tends to center on the most recently auctioned
issues, the exchanges on which such securities trade will not continue
indefinitely to introduce options with new expirations to replace expiring
options on particular issues. Instead, the expirations introduced at the
commencement of options trading on a particular issue will be allowed to run
their course, with the possible addition of a limited number of new
expirations as the original ones expire. Options trading on each issue of
bonds or notes will thus be
11
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<PAGE>
phased out as new options are listed on more recent issues, and options
representing a full range of expirations will not ordinarily be available for
every issue on which options are traded.
Options on Treasury Bills. Because a deliverable Treasury bill changes
from week to week, writers of Treasury bill calls cannot provide in advance
for their potential exercise settlement obligations by acquiring and holding
the underlying security. However, if the Fund holds a long position in
Treasury bills with a principal amount of the securities deliverable upon
exercise of the option, the position may be hedged from a risk standpoint by
the writing of a call option. For so long as the call option is outstanding,
the Fund will hold the Treasury bills in a segregated account with its
Custodian, so that they will be treated as being covered.
Options on Foreign Currencies. The Fund may purchase and write options on
foreign currencies for purposes similar to those involved with investing in
forward foreign currency exchange contracts. For example, in order to protect
against declines in the dollar value of portfolio securities which are
denominated in a foreign currency, the Fund may purchase put options on an
amount of such foreign currency equivalent to the current value of the
portfolio securities involved. As a result, the Fund would be enabled to sell
the foreign currency for a fixed amount of U.S. dollars, thereby "locking in"
the dollar value of the portfolio securities (less the amount of the premiums
paid for the options). Conversely, the Fund may purchase call options on
foreign currencies in which securities it anticipates purchasing are
denominated to secure a set U.S. dollar price for such securities and protect
against a decline in the value of the U.S. dollar against such foreign
currency. The Fund may also purchase call and put options to close out
written option positions.
The Fund may also write call options on foreign currency to protect
against potential declines in its portfolio securities which are denominated
in foreign currencies. If the U.S. dollar value of the portfolio securities
falls as a result of a decline in the exchange rate between the foreign
currency in which a security is denominated and the U.S. dollar, then a loss
to the Fund occasioned by such value decline would be ameliorated by receipt
of the premium on the option sold. At the same time, however, the Fund gives
up the benefit of any rise in value of the relevant portfolio securities
above the exercise price of the option and, in fact, only receives a benefit
from the writing of the option to the extent that the value of the portfolio
securities falls below the price of the premium received. The Fund may also
write options to close out long call option positions.
The markets in foreign currency options are relatively new and the Fund's
ability to establish and close out positions on such options is subject to
the maintenance of a liquid secondary market. Although the Fund will not
purchase or write such options unless and until, in the opinion of the
management of the Fund, the market for them has developed sufficiently to
ensure that the risks in connection with such options are not greater than
the risks in connection with the underlying currency, there can be no
assurance that a liquid secondary market will exist for a particular option
at any specific time. In addition, options on foreign currencies are affected
by all of those factors which influence foreign exchange rates and
investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of
the option position may vary with changes in the value of either or both
currencies and have no relationship to the investment merits of a foreign
security, including foreign securities held in a "hedged" investment
portfolio. Because foreign currency transactions occurring in the interbank
market involve substantially larger amounts than those that may be involved
in the use of foreign currency options, investors may be disadvantaged by
having to deal in an odd lot market (generally consisting of transactions of
less than $1 million) for the underlying foreign currencies at prices that
are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information available is generally representative of very large
transactions in the interbank market and thus may not reflect relatively
smaller transactions (i.e., less than $1 million) where rates may be less
favorable. The interbank market in foreign currencies is a global,
around-the-clock market. To the extent that the U.S. options markets are
closed while the markets for the underlying currencies remain open,
significant price and rate movements may take place in the underlying markets
that are not reflected in the options market.
12
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OTC Options. Exchange-listed options are issued by the OCC which assures
that all transactions in such options are properly executed. OTC options are
purchased from or sold (written) to dealers or financial institutions which
have entered into direct agreements with the Fund. With OTC options, such
variables as expiration date, exercise price and premium will be agreed upon
between the Fund and the transacting dealer, without the intermediation of a
third party such as the OCC. If the transacting dealer fails to make or take
delivery of the securities underlying an option it has written, in accordance
with the terms of that option, the Fund would lose the premium paid for the
option as well as any anticipated benefit of the transaction. The Fund will
engage in OTC option transactions only with primary U.S. Government
securities dealers recognized by the Federal Reserve Bank of New York.
Covered Call Writing. The Fund is permitted to write covered call options
on portfolio securities and the U.S. dollar and foreign currencies, without
limit. Generally, a call option is "covered" if the Fund owns, or has the
right to acquire, without additional cash consideration (or for additional
cash consideration held for the Fund by its Custodian in a segregated
account) the underlying security (currency) subject to the option except that
in the case of call options on U.S. Treasury Bills, the Fund might own U.S.
Treasury Bills of a different series from those underlying the call option,
but with a principal amount and value corresponding to the exercise price and
a maturity date no later than that of the securities (currency) deliverable
under the call option. A call option is also covered if the Fund holds a call
on the same security (currency) as the underlying security (currency) of the
written option, where the exercise price of the call used for coverage is
equal to or less than the exercise price of the call written or greater than
the exercise price of the call written if the mark to market difference is
maintained by the Fund in cash, U.S. Government securities or other high
grade debt obligations which the Fund holds in a segregated account
maintained with its Custodian.
The Fund will receive from the purchaser, in return for a call it has
written, a "premium"; i.e., the price of the option. Receipt of these
premiums may better enable the Fund to achieve a greater total return than
would be realized from holding the underlying securities (currency) alone.
Moreover, the income received from the premium will offset a portion of the
potential loss incurred by the Fund if the securities (currency) underlying
the option are ultimately sold (exchanged) by the Fund at a loss. The premium
received will fluctuate with varying economic market conditions. If the
market value of the portfolio securities (or the currencies in which they are
denominated) upon which call options have been written increases, the Fund
may receive less total return from the portion of its portfolio upon which
calls have been written than it would have had such calls not been written.
As regards listed options and certain OTC options, during the option
period, the Fund may be required, at any time, to deliver the underlying
security (currency) against payment of the exercise price on any calls it has
written (exercise of certain listed and OTC options may be limited to
specific expiration dates). This obligation is terminated upon the expiration
of the option period or at such earlier time when the writer effects a
closing purchase transaction. A closing purchase transaction is accomplished
by purchasing an option of the same series as the option previously written.
However, once the Fund has been assigned an exercise notice, the Fund will be
unable to effect a closing purchase transaction.
Closing purchase transactions are ordinarily effected to realize a profit
on an outstanding call option to prevent an underlying security (currency)
from being called, to permit the sale of an underlying security (or the
exchange of the underlying currency) or to enable the Fund to write another
call option on the underlying security (currency) with either a different
exercise price or expiration date or both. Also, effecting a closing purchase
transaction will permit the cash or proceeds from the concurrent sale of any
securities subject to the option to be used for other investments by the
Fund. The Fund may realize a net gain or loss from a closing purchase
transaction depending upon whether the amount of the premium received on the
call option is more or less than the cost of effecting the closing purchase
transaction. Any loss incurred in a closing purchase transaction may be
wholly or partially offset by unrealized appreciation in the market value of
the underlying security (currency). Conversely, a gain resulting from a
closing purchase transaction could be offset in whole or in part or exceeded
by a decline in the market value of the underlying security (currency).
The Fund may also purchase put options to close out written put positions
in a manner similar to call options closing purchase transactions. In
addition, the Fund may sell a put option which it has previously
13
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purchased prior to the sale of the securities (currency) underlying such
option. Such a sale would result in a net gain or loss depending on whether
the amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold. Any such gain or loss
could be offset in whole or in part by a change in the market value of the
underlying security (currency). If a put option purchased by the Fund expired
without being sold or exercised, the premium would be lost.
Covered Put Writing. As a writer of a covered put option, the Fund incurs
an obligation to buy the security underlying the option from the purchaser of
the put, at the option's exercise price at any time during the option period,
at the purchaser's election (certain listed and OTC put options written by
the Fund will be exercisable by the purchaser only on a specific date). A put
is "covered" if, at all times, the Fund maintains, in a segregated account
maintained on its behalf at the Fund's Custodian, cash, U.S. Government
securities or other high grade obligations in an amount equal to at least the
exercise price of the option, at all times during the option period.
Similarly, a short put position could be covered by the Fund by its purchase
of a put option on the same security as the underlying security of the
written option, where the exercise price of the purchased option is equal to
or more than the exercise price of the put written or less than the exercise
price of the put written if the mark to market difference is maintained by
the Fund in cash, U.S. Government securities or other high grade debt
obligations which the Fund holds in a segregated account maintained at its
Custodian. In writing puts, the Fund assumes the risk of loss should the
market value of the underlying security decline below the exercise price of
the option (any loss being decreased by the receipt of the premium on the
option written). In the case of listed options, during the option period, the
Fund may be required, at any time, to make payment of the exercise price
against delivery of the underlying security. The operation of and limitations
on covered put options in other respects are substantially identical to those
of call options.
The Fund will write put options for two purposes: (1) to receive the
income derived from the premiums paid by purchasers; and (2) when the
Investment Manager wishes to purchase the security underlying the option at a
price lower than its current market price, in which case it will write the
covered put at an exercise price reflecting the lower purchase price sought.
The potential gain on a covered put option is limited to the premium received
on the option (less the commissions paid on the transaction) while the
potential loss equals the difference between the exercise price of the option
and the current market price of the underlying securities when the put is
exercised, offset by the premium received (less the commissions paid on the
transaction).
Purchasing Call and Put Options. The Fund may purchase listed and OTC call
and put options in amounts equalling up to 5% of its total assets. The Fund
may purchase call options in order to close out a covered call position (see
"Covered Call Writing" above) or purchase call options on securities they
intend to purchase. The Fund may also purchase a call option on foreign
currency to hedge against an adverse exchange rate move of the currency in
which the security it anticipates purchasing is denominated vis-a-vis the
currency in which the exercise price is denominated. The purchase of the call
option to effect a closing transaction or a call written over-the-counter may
be a listed or an OTC option. In either case, the call purchased is likely to
be on the same securities (currencies) and have the same terms as the written
option. If purchased over-the-counter, the option would generally be acquired
from the dealer or financial institution which purchased the call written by
the Fund.
The Fund may purchase put options on securities (currency) which it holds
(or has the right to acquire) in its portfolio only to protect itself against
a decline in the value of the security (currency), if the value of the
underlying security (currency) were to fall below the exercise price of the
put purchased in an amount greater than the premium paid for the option, the
Fund would incur no additional loss. The Fund may also purchase put options
to close out written put positions in a manner similar to call options
closing purchase transactions. In addition, the Fund may sell a put option
which it has previously purchased prior to the sale of the securities
(currency) underlying such option. Such a sale would result in a net gain or
loss depending on whether the amount received on the sale is more or less
than the premium and other transaction costs paid on the put option which is
sold. Any such gain or loss could be offset in whole or in part by a change
in the market value of the underlying security (currency). If a put option
purchased by the Fund expired without being sold or exercised, the premium
would be lost.
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Risks of Options Transactions. During the option period, the covered call
writer has, in return for the premium on the option, given up the opportunity
for capital appreciation above the exercise price should the market price of
the underlying security (or the currency in which it is denominated)
increase, but has retained the risk of loss should the price of the
underlying security (currency) decline. The covered put writer also retains
the risk of loss should the market value of the underlying security
(currency) decline below the exercise price of the option less the premium
received on the sale of the option. In both cases, the writer has no control
over the time when it may be required to fulfill its obligation as a writer
of the option. Once an option writer has received an exercise notice, it
cannot effect a closing purchase transaction in order to terminate its
obligation under the option and must deliver or receive the underlying
securities (currency) at the exercise price.
Prior to exercise or expiration, an option position can only be terminated
by entering into a closing purchase or sale transaction. If a covered call
option writer is unable to effect a closing purchase transaction or to
purchase an offsetting over-the-counter option, it cannot sell the underlying
security until the option expires or the option is exercised. Accordingly, a
covered call option writer may not be able to sell (exchange) an underlying
security (currency) at a time when it might otherwise be advantageous to do
so. A covered put option writer who is unable to effect a closing purchase
transaction or to purchase an offsetting over-the-counter option would
continue to bear the risk of decline in the market price of the underlying
security (currency) until the option expires or is exercised. In addition, a
covered put writer would be unable to utilize the amount held in cash or U.S.
Government or other high grade short-term debt obligations as security for
the put option for other investment purposes until the exercise or expiration
of the option.
The Fund's ability to close out its position as a writer of an option is
dependent upon the existence of a liquid secondary market on option
exchanges. There is no assurance that such a market will exist, particularly
in the case of OTC options, as such options will generally only be closed out
by entering into a closing purchase transaction with the purchasing dealer.
However, the Fund may be able to purchase an offsetting option which does not
close out its position as a writer but constitutes an asset of equal value to
the obligation under the option written. If the Fund is not able to either
enter into a closing purchase transaction or purchase an offsetting position,
it will be required to maintain the securities subject to the call, or the
collateral underlying the put, even though it might not be advantageous to do
so, until a closing transaction can be entered into (or the option is
exercised or expires).
Among the possible reasons for the absence of a liquid secondary market on
an exchange are: (i) insufficient trading interest in certain options; (ii)
restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes
or series of options or underlying securities; (iv) interruption of the
normal operations on an exchange; (v) inadequacy of the facilities of an
exchange or the Options Clearing Corporation ("OCC") to handle current
trading volume; or (vi) a decision by one or more exchanges to discontinue
the trading of options (or a particular class or series of options), in which
event the secondary market on that exchange (or in that class or series of
options) would cease to exist, although outstanding options on that exchange
that had been issued by the OCC as a result of trades on that exchange would
generally continue to be exercisable in accordance with their terms.
Exchanges limit the amount by which the price of a futures contract may
move on any day. If the price moves equal the daily limit on successive days,
then it may prove impossible to liquidate a futures position until the daily
limit moves have ceased. In the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of variation margin
on open futures positions. In such situations, if the Fund has insufficient
cash, it may have to sell portfolio securities to meet daily variation margin
requirements at a time when it may be disadvantageous to do so. In addition,
the Fund may be required to take or make delivery of the instruments
underlying interest rate futures contracts it holds at a time when it is
disadvantageous to do so. The inability to close out options and futures
positions could also have an adverse impact on the Fund's ability to
effectively hedge its portfolio.
In the event of the bankruptcy of a broker through which the Fund engages
in transactions in options, futures or options thereon, the Fund could
experience delays and/or losses in liquidating open
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positions purchased or sold through the broker and/or incur a loss of all or
part of its margin deposits with the broker. Similarly, in the event of the
bankruptcy of the writer of an OTC option purchased by the Fund, the Fund
could experience a loss of all or part of the value of the option.
Transactions are entered into by the Fund only with brokers or financial
institutions deemed creditworthy by the Investment Manager.
Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security or futures
contract (whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or written
on one or more accounts or through one or more brokers). An exchange may
order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. These position limits may
restrict the number of listed options which the Fund may write.
While the futures contracts and options transactions to be engaged in by
the Fund for the purpose of hedging the Fund's portfolio securities are not
speculative in nature, there are risks inherent in the use of such
instruments. One such risk which may arise in employing futures contracts to
protect against the price volatility of portfolio securities is that the
prices of securities and indexes subject to futures contracts (and thereby
the futures contract prices) may correlate imperfectly with the behavior of
the cash prices of the Fund's portfolio securities. Another such risk is that
prices of interest rate futures contracts may not move in tandem with the
changes in prevailing interest rates against which the Fund seeks a hedge. A
correlation may also be distorted by the fact that the futures market is
dominated by short-term traders seeking to profit from the difference between
a contract or security price objective and their cost of borrowed funds. Such
distortions are generally minor and would diminish as the contract approached
maturity.
The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be
reflected in the option markets.
Stock Index Options. Options on stock indexes are similar to options on
stock except that, rather than the right to take or make delivery of stock at
a specified price, an option on a stock index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the closing level
of the stock index upon which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple (the "multiplier"). The multiplier for an index
option performs a function similar to the unit of trading for a stock option.
It determines the total dollar value per contract of each point in the
difference between the exercise price of an option and the current level of
the underlying index. A multiplier of 100 means that a one-point difference
will yield $100. Options on different indexes may have different multipliers.
The writer of the option is obligated, in return for the premium received, to
make delivery of this amount. Unlike stock options, all settlements are in
cash and a gain or loss depends on price movements in the stock market
generally (or in a particular segment of the market) rather than the price
movements in individual stocks. Currently, options are traded on the S&P 100
Index and the S&P 500 Index on the Chicago Board Options Exchange, the Major
Market Index and the Computer Technology Index, Oil Index and Institutional
Index on the American Stock Exchange and the NYSE Index and NYSE Beta Index
on the New York Stock Exchange, The Financial News Composite Index on the
Pacific Stock Exchange and the Value Line Index, National O-T-C Index and
Utilities Index on the Philadelphia Stock Exchange, each of which and any
similar index on which options are traded in the future which include stocks
that are not limited to any particular industry or segment of the market is
referred to as a "broadly based stock market index." Options on stock indexes
provide the Fund with a means of protecting the Fund against the risk of
market wide price movements. If the Investment Manager anticipates a market
decline, the Fund could purchase a stock index put option. If the expected
market decline materialized, the resulting decrease in the value of the
Fund's portfolio would be offset to the extent of the increase in the value
of the put option. If the Investment Manager anticipates a market rise, the
Fund may
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purchase a stock index call option to enable the Fund to participate in such
rise until completion of anticipated common stock purchases by the Fund.
Purchases and sales of stock index options also enable the Investment Manager
to more speedily achieve changes in the Fund's equity positions.
The Fund will write put options on stock indexes only if such positions
are covered by cash, U.S. Government securities or other high grade debt
obligations equal to the aggregate exercise price of the puts, which cover is
held for the Fund in a segregated account maintained for it by the Fund's
Custodian. All call options on stock indexes written by the Fund will be
covered either by a portfolio of stocks substantially replicating the
movement of the index underlying the call option or by holding a separate
call option on the same stock index with a strike price no higher than the
strike price of the call option sold by the Fund.
Risks of Options on Indexes. Because exercises of stock index options are
settled in cash, call writers such as the Fund cannot provide in advance for
their potential settlement obligations by acquiring and holding the
underlying securities. A call writer can offset some of the risk of its
writing position by holding a diversified portfolio of stocks similar to
those on which the underlying index is based. However, most investors cannot,
as a practical matter, acquire and hold a portfolio containing exactly the
same stocks as the underlying index, and, as a result, bear a risk that the
value of the securities held will vary from the value of the index. Even if
an index call writer could assemble a stock portfolio that exactly reproduced
the composition of the underlying index, the writer still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in
writing index options. When an index option is exercised, the amount of cash
that the holder is entitled to receive is determined by the difference
between the exercise price and the closing index level on the date when the
option is exercised. As with other kinds of options, the writer will not
learn that it has been assigned until the next business day, at the earliest.
The time lag between exercise and notice of assignment poses no risk for the
writer or a covered call on a specific underlying security, such as a common
stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In
contrast, even if the writer of an index call holds stocks that exactly match
the composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those stocks against payment of the
exercise price. Instead, it will be required to pay cash in an amount based
on the closing index value on the exercise date; and by the time it learns
that it has been assigned, the index may have declined, with a corresponding
decrease in the value of its stock portfolio. This "timing risk" is an
inherent limitation on the ability of index call writers to cover their risk
exposure by holding stock positions.
A holder of an index option who exercises it before the closing index
value for that day is available runs the risk that the level of the
underlying index may subsequently change. If such a change causes the
exercised option to fall out-of-the-money, the exercising holder will be
required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the
assigned writer.
If dissemination of the current level of an underlying index is
interrupted, or if trading is interrupted in stocks accounting for a
substantial portion of the value of an index, the trading of options on that
index will ordinarily be halted. If the trading of options on an underlying
index is halted, an exchange may impose restrictions prohibiting the exercise
of such options.
Futures Contracts. The Fund may purchase and sell interest rate and stock
index futures contracts ("futures contracts") that are traded on U.S. and
foreign commodity exchanges on such underlying securities as U.S. Treasury
bonds, notes and bills ("interest rate" futures), on the U.S. dollar and
foreign currencies, and such indexes as the S&P 500 Index, the Moody's
Investment-Grade Corporate Bond Index and the New York Stock Exchange
Composite Index ("index" futures).
As a futures contract purchaser, the Fund incurs an obligation to take
delivery of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Fund incurs an obligation to deliver the specified amount of
the underlying obligation at a specified time in return for an agreed upon
price.
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The Fund will purchase or sell interest rate futures contracts and bond
index futures contracts for the purpose of hedging its fixed-income portfolio
(or anticipated portfolio) securities against changes in prevailing interest
rates. If the Investment Manager or a Sub-Adviser anticipates that interest
rates may rise and, concomitantly, the price of fixed-income securities fall,
the Fund may sell an interest rate futures contract or a bond index futures
contract. If declining interest rates are anticipated, the Fund may purchase
an interest rate futures contract to protect against a potential increase in
the price of U.S. Government securities the Fund intends to purchase.
Subsequently, appropriate fixed-income securities may be purchased by the
Fund in an orderly fashion; as securities are purchased, corresponding
futures positions would be terminated by offsetting sales of contracts.
The Fund will purchase or sell futures contracts on the U.S. dollar and on
foreign currencies to hedge against an anticipated rise or decline in the
value of the U.S. dollar or foreign currency in which a portfolio security of
the Fund is denominated vis-a-vis another currency.
The Fund will purchase or sell stock index futures contracts for the
purpose of hedging its equity portfolio (or anticipated portfolio) securities
against changes in their prices. If the Investment Manager or a Sub-Adviser
anticipates that the prices of stock held by the Fund may fall, the Fund may
sell a stock index futures contract. Conversely, if the Investment Manager or
a Sub-Adviser wishes to hedge against anticipated price rises in those stocks
which the Fund intends to purchase, the Fund may purchase stock index futures
contracts. In addition, interest rate and stock index futures contracts will
be bought or sold in order to close out a short or long position in a
corresponding futures contract.
Although most interest rate futures contracts call for actual delivery or
acceptance of securities, the contracts usually are closed out before the
settlement date without the making or taking of delivery. Index futures
contracts provide for the delivery of an amount of cash equal to a specified
dollar amount times the difference between the stock index value at the open
or close of the last trading day of the contract and the futures contract
price. A futures contract sale is closed out by effecting a futures contract
and the futures contract price. A futures contract sale is closed out by
effecting a futures contract purchase for the same aggregate amount of the
specific type of equity security and the same delivery date. If the sale
price exceeds the offsetting purchase price, the seller would be paid the
difference and would realize a gain. If the offsetting purchase price exceeds
the sale price, the seller would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same aggregate amount of the specific type of equity
security and the same delivery date. If the offsetting sale price exceeds the
purchase price, the purchaser would realize a gain, whereas if the purchase
price exceeds the offsetting sale price, the purchaser would realize a loss.
There is no assurance that the Fund will be able to enter into a closing
transaction.
Interest Rate Futures Contracts. When the Fund enters into an interest
rate futures contract, it is initially required to deposit with the Fund's
Custodian, in a segregated account in the name of the broker performing the
transaction, an "initial margin" of cash or U.S. Government securities or
other high grade short-term debt obligations equal to approximately 2% of the
contract amount. Initial margin requirements are established by the exchanges
on which futures contracts trade and may, from time to time, change. In
addition, brokers may establish margin deposit requirements in excess of
those required by the exchanges.
Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a broker's client but is, rather, a good faith deposit on the
futures contract which will be returned to the Fund upon the proper
termination of the futures contract. The margin deposits made are marked to
market daily and the Fund may be required to make subsequent deposits called
"variation margin", with the Fund's Custodian, in the account in the name of
the broker, which are reflective of price fluctuations in the futures
contract. Currently, interest rates futures contracts can be purchased on
debt securities such as U.S. Treasury Bills and Bonds, U.S. Treasury Notes
with maturities between 6 1/2 and 10 years, GNMA Certificates and Bank
Certificates of Deposit.
Index Futures Contracts. The Fund may invest in index futures contracts.
An index futures contract sale creates an obligation by the Fund, as seller,
to deliver cash at a specified future time. An index
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futures contract purchase would create an obligation by the Fund, as
purchaser, to take delivery of cash at a specified future time. Futures
contracts on indexes do not require the physical delivery of securities, but
provide for a final cash settlement on the expiration date which reflects
accumulated profits and losses credited or debited to each party's account.
The Fund is required to maintain margin deposits with brokerage firms
through which it effects index futures contracts in a manner similar to that
described above for interest rate futures contracts. Currently, the initial
margin requirement is approximately 5% of the contract amount for index
futures. In addition, due to current industry practice, daily variations in
gains and losses on open contracts are required to be reflected in cash in
the form of variation margin payments. The Fund may be required to make
additional margin payments during the term of the contract.
At any time prior to expiration of the futures contract, the Fund may
elect to close the position by taking an opposite position which will operate
to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required
to be paid by or released to the Fund and the Fund realizes a loss or a gain.
Currently, index futures contracts can be purchased or sold with respect
to, among others, the Standard & Poor's 500 Stock Price Index and the
Standard & Poor's 100 Stock Price Index on the Chicago Mercantile Exchange,
the New York Stock Exchange Composite Index on the New York Futures Exchange,
the Major Market Index on the American Stock Exchange, the Moody's
Investment-Grade Corporate Bond Index on the Chicago Board of Trade and the
Value Line Stock Index on the Kansas City Board of Trade.
Options on Futures Contracts. The Fund may purchase and write call and put
options on futures contracts and enter into closing transactions with respect
to such options to terminate an existing position. An option on a futures
contract gives the purchaser the right (in return for the premium paid), and
the writer the obligation, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the term of the option. Upon
exercise of the option, the delivery of the futures position by the writer of
the option to the holder of the option is accompanied by delivery of the
accumulated balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract at the time of
exercise exceeds, in the case of a call, or is less than, in the case of a
put, the exercise price of the option on the futures contract.
The Fund will purchase and write options on futures contracts for
identical purposes to those set forth above for the purchase of a futures
contract (purchase of a call option or sale of a put option) and the sale of
a futures contract (purchase of a put option or sale of a call option), or to
close out a long or short position in futures contracts. If, for example, the
Investment Manager or a Sub-Adviser wished to protect against an increase in
interest rates and the resulting negative impact on the value of a portion of
its fixed-income portfolio, it might write a call option on an interest rate
futures contract, the underlying security of which correlates with the
portion of the portfolio the Investment Manager or Sub-Adviser seeks to
hedge. Any premiums received in the writing of options on futures contracts
may, of course, augment the total return of the Fund and thereby provide a
further hedge against losses resulting from price declines in portions of the
Fund's portfolio.
The writer of an option on a futures contract is required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to futures contracts. Premiums received from the writing of an
option on a futures contract are included in initial margin deposits.
Limitations on Futures Contracts and Options on Futures. The Fund may not
enter into futures contracts or purchase related options thereon if,
immediately thereafter, the amount committed to margin plus the amount paid
for premiums for unexpired options on futures contracts exceeds 5% of the
value of the Fund's total assets, after taking into account unrealized gains
and unrealized losses on such contracts it has entered into, provided,
however, that in the case of an option that is in-the-money (the exercise
price of the call (put), option is less (more) than the market price of the
underlying security) at the time of purchase, the in-the-money amount may be
excluded in calculating the 5%. However, there
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is no overall limitation on the percentage of the Fund's assets which may be
subject to a hedge position. In addition, in accordance with the regulations
of the Commodity Futures Trading Commission ("CFTC") under which the Fund is
exempted from registration as a commodity pool operator, the Fund may only
enter into futures contracts and options on futures contracts transactions
for purposes of hedging a part or all of its portfolio. If the CFTC changes
its regulations so that the Fund would be permitted to write options on
futures contracts for purposes other than hedging the Fund's investments
without CFTC registration, the Fund may engage in such transactions for those
purposes. Except as described above, there are no other limitations on the
use of futures and options thereon by the Fund.
Risks of Transactions in Futures Contracts and Related Options. The Fund
may sell a futures contract to protect against the decline in the value of
securities held by the Fund. However, it is possible that the futures market
may advance and the value of securities held in the portfolio of the Fund may
decline. If this occurred, the Fund would lose money on the futures contract
and also experience a decline in value of its portfolio securities. However,
while this could occur for a very brief period or to a very small degree,
over time the value of a diversified portfolio will tend to move in the same
direction as the futures contracts.
If the Fund purchases a futures contract to hedge against the increase in
value of securities it intends to buy, and the value of such securities
decreases, then the Fund may determine not to invest in the securities as
planned and will realize a loss on the futures contract that is not offset by
a reduction in the price of the securities.
In addition, if the Fund holds a long position in a futures contract or
has sold a put option on a futures contract, it will hold cash, U.S.
Government securities or other high grade debt obligations equal to the
purchase price of the contract or the exercise price of the put option (less
the amount of initial or variation margin on deposit) in a segregated account
maintained for the Fund by its Custodian. Alternatively, the Fund could cover
its long position by purchasing a put option on the same futures contract
with an exercise price as high or higher than the price of the contract held
by the Fund.
If the Fund maintains a short position in a futures contract or has sold a
call option on a futures contract, it will cover this position by holding, in
a segregated account maintained at its Custodian, cash, U.S. Government
securities or other high grade debt obligations equal in value (when added to
any initial or variation margin on deposit) to the market value of the
securities underlying the futures contract or the exercise price of the
option. Such a position may also be covered by owning the securities
underlying the futures contract (in the case of a stock index futures
contract a portfolio of securities substantially replicating the relevant
index), or by holding a call option permitting the Fund to purchase the same
contract at a price no higher than the price at which the short position was
established.
Exchanges may limit the amount by which the price of futures contracts may
move on any day. If the price moves equal the daily limit on successive days,
then it may prove impossible to liquidate a futures position until the daily
limit moves have ceased.
The extent to which the Fund may enter into transactions involving options
and futures contracts may be limited by the Internal Revenue Code's
requirements for qualification as a regulated investment company and the
Fund's intention to qualify as such. See "Dividends, Distributions and Taxes"
in the Prospectus and the Statement of Additional Information.
There may exist an imperfect correlation between the price movements of
futures contracts purchased by the Fund and the movements in the prices of
the securities whcih are the subject of the hedge. If participants in the
futures market elect to close out their contracts through offsetting
transactions rather than meet margin deposit requirements, distortions in the
normal relationship between the debt securities and futures markets could
result. Price distortions could also result if investors in futures contracts
opt to make or take delivery of underlying securities rather than engage in
closing transactions due to the resultant reduction in the liquidity of the
futures market. In addition, due to the fact that, from the point of view of
speculators, the deposit requirements in the futures markets are less onerous
than margin requirements in the cash market, increased participation by
speculators in the futures market could cause temporary price distortions.
Due to the possibility of price distortions in the
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futures market and because of the imperfect correlation between movements in
the prices of securities and movements in the prices of futures contracts, a
correct forecast of interest rate trends by the Investment Manager may still
not result in a successful hedging transaction.
There is no assurance that a liquid secondary market will exist for
futures contracts and related options in which the Fund may invest. In the
event a liquid market does not exist, it may not be possible to close out a
futures position, and in the event of adverse price movements, the Fund would
continue to be required to make daily cash payments of variation margin. In
addition, limitations imposed by an exchange or board of trade on which
futures contracts are traded may compel or prevent the Fund from closing out
a contract which may result in reduced gain or increased loss to the Fund.
The absence of a liquid market in futures contracts might cause the Fund to
make or take delivery of the underlying securities at a time when it may be
disadvantageous to do so.
Compared to the purchase or sale of futures contracts, the purchase of
call or put options on futures contracts involves less potential risk to the
Fund because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances when the
purchase of a call or put option on a futures contract would result in a loss
to the Fund notwithstanding that the purchase or sale of a futures contract
would not result in a loss, as in the instance where there is no movement in
the prices of the futures contract or underlying securities.
OTHER INVESTMENT PRACTICES
Zero Coupon Securities. As discussed in the Prospectus, a portion of the
U.S. Government securities purchased by the Fund may be "zero coupon"
Treasury securities. These are U.S. Treasury bills, 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. In addition, a portion of the fixed-income securities purchased by
the Fund may be "zero coupon" securities. "Zero coupon" 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.
Currently, the only U.S. Treasury security issued without coupons is the
Treasury bill. However, in the last few years a number of banks and brokerage
firms have separated ("stripped") the principal portions 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).
Warrants and Rights. The Fund may invest up to 5% of the value of its net
assets in warrants, including not more than 2% in warrants not listed on
either the New York or American Stock Exchange. Warrants are, in effect, an
option to purchase equity securities at a specific price, generally valid for
a specific period of time, and have no voting rights, pay no dividends and
have no rights with respect to the corporations issuing them. The Fund may
acquire warrants attached to other securities without reference to the
foregoing limitations.
The Fund may also invest up to 5% of the value of its net assets in stock
rights.
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Repurchase Agreements. As discussed in the Prospectus, when cash may be
available for only a few days, it may be invested by the Fund in repurchase
agreements until such time as it may otherwise be invested or used for
payments of obligations of the Fund. These agreements, which may be viewed as
a type of secured lending by the Fund, typically involve the acquisition by
the Fund of debt securities from a selling financial institution such as a
bank, savings and loan association or broker-dealer. The agreement provides
that the Fund will sell back to the institution, and that the institution
will repurchase, the underlying security ("collateral") at a specified price
and at a fixed time in the future, usually not more than seven days from the
date of purchase. The collateral will be maintained in a segregated account
and will be marked to market daily to determine that the value of the
collateral, as specified in the agreement, does not decrease below the
purchase price plus accrued interest. If such decrease occurs, additional
collateral will be requested and, when received, added to the account to
maintain full collateralization. The Fund will accrue interest from the
institution until the time when the repurchase is to occur. Although such
date is deemed by the Fund to be the maturity date of a repurchase agreement,
the maturities of securities subject ot repurchase agreements are not subject
to any limits.
While repurchase agreements involve certain risks not associated with
direct investments in debt securities, the Fund follows procedures designed
to minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions whose financial condition will be continually monitored by the
Investment Manager and Sub-Advisers subject to procedures established by the
Board of Trustees of the Fund. In addition, as described above, the value of
the collateral underlying the repurchase agreement will be at least equal to
the repurchase price, including any accrued interest earned on the repurchase
agreement. In the event of a default or bankruptcy by a selling financial
institution, the Fund will seek to liquidate such collateral. However, the
exercising of the Fund's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase were less than the repurchase price,
the Fund could suffer a loss. It is the current policy of the Fund not to
invest in repurchase agreements that do not mature within seven days if any
such investment, together with any other illiquid assets held by the Fund,
amounts to more than 15% of its net assets. The Fund's investments in
repurchase agreements may at times be substantial when, in the view of the
Investment Manager, liquidity, tax or other considerations warrant.
Reverse Repurchase Agreements and Dollar Rolls. As discussed in the
Prospectus, the Fund may also use reverse repurchase agreements and dollar
rolls as part of its investment strategy. Reverse repurchase agreements
involve sales by the Fund of portfolio assets concurrently with an agreement
by the Fund to repurchase the same assets at a later date at a fixed price.
Generally, the effect of such a transaction is that the Fund can recover all
or most of the cash invested in the portfolio securities involved during the
term of the reverse repurchase agreement, while it will be able to keep the
interest income associated with those portfolio securities. Such transactions
are only advantageous if the interest cost to the Fund of the reverse
repurchase transaction is less than the cost of obtaining the cash otherwise.
The Fund may enter into dollar rolls in which the Fund sells securities
for delivery in the current months and simultaneously contracts to repurchase
substantially similar (same type and coupon) securities on a specified future
date. During the roll period, the Fund forgoes principal and interest paid on
the securities. The Fund is compensated by the difference between the current
sales price and the lower forward price for the future purchase (often
referred to as the "drop") as well as by the interest earned on the cash
proceeds of the initial sale.
The Fund will establish a segregated account with its custodian bank in
which it will maintain cash, U.S. Government Securities or other liquid high
grade debt obligations equal in value to its obligations in respect of
reverse repurchase agreements and dollar rolls. Reverse repurchase agreements
and dollar rolls involve the risk that the market value of the securities the
Fund is obligated to repurchase under the agreement may decline below the
repurchase price. In the event the buyer of securities under a reverse
repurchase agreement or dollar roll files for bankruptcy or becomes
insolvent, the Fund's use of proceeds of the agreement may be restricted
pending a determination by the other party, or its trustee or receiver,
whether to enforce the Fund's obligation to repurchase the securities.
Reverse repurchase agreements and dollar rolls are speculative techniques
involving leverage, and are considered borrowings by the Fund.
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Lending of Portfolio Securities. Consistent with applicable regulatory
requirements, the Fund may lend its portfolio securities to brokers, dealers
and other financial institutions, provided that such loans are callable at
any time by the Fund (subject to notice provisions described below), and are
at all times secured by cash or cash equivalents, which are maintained in a
segregated account pursuant to applicable regulations and that are equal to
at least the market value, determined daily, of the loaned securities. The
advantage of such loans is that the Fund continues to receive the income on
the loaned securities while at the same time earning interest on the cash
amounts deposited as collateral, which will be invested in short-term
obligations. The Fund will not lend its portfolio securities if such loans
are not permitted by the laws or regulations of any state in which its shares
are qualified for sale and will not lend more than 25% of the value of its
total assets. A loan may be terminated by the borrower on one business day's
notice, or by the Fund on four business days' notice. If the borrower fails
to deliver the loaned securities within four days after recepit of notice,
the Fund could use the collateral to replace the securities while holding the
borrower liable for any excess of replacement cost over collateral. As with
any extensions of credit, there are risks of delay in recovery and in some
cases even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities
will only be made to firms deemed by the Fund's management to be creditworthy
and when the income which can be earned from such loans justifies the
attendant risks. Upon termination of the loan, the borrower is required to
return the securities to the Fund. Any gain or loss in the market price
during the loan period would inure to the Fund. The creditworthiness of firms
to which the Fund lends its portfolio securities will be monitored on an
ongoing basis by the Investment Manager and Sub-Advisers pursuant to
procedures adopted and reviewed, on an ongoing basis, by the Board of
Trustees of the Fund.
When voting or consent rights which accompany loaned securities pass to
the borrower, the Fund will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of such rights if the matters involved would have a material effect
on the Fund's investment in such loaned securities. The Fund will pay
reasonable finder's, administrative and custodial fees in connection with a
loan of its securities. However, the Fund has no intention of lending any of
its portfolio securities during its fiscal year ending January 31, 1996.
When-Issued and Delayed Delivery Securities and Forward Commitments. As
discussed in the Prospectus, from time to time the Fund may purchase
securities on a when-issued or delayed delivery basis or may purchase or sell
securities on a forward commitment basis. 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 commitment.
While the Fund will only purchase securities on a when-issued, delayed
delivery or forward 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 or dividends accrue to the purchaser prior
to the settlement date. At the time the Fund makes the commitment to purchase
or sell securities on a when-issued, delayed delivery or forward 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, the 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 high
grade debt portfolio securities equal in value to commitments to purchase
securities on a when-issued, delayed delivery or forward commitment basis.
Subject to the foregoing restrictions, the Fund may purchase securities on
such basis without limit. The Investment Manager and the Board of Trustees do
not believe that the Fund's net asset value will be adversely affected by the
purchase of securities on such basis.
When, As and If Issued Securities. As discussed in the Prospectus, the
Fund may purchase securities on a "when, as and if issued" basis under which
the issuance of the security depends upon the occurrence of a subsequent
event, such as approval of a merger, corporate reorganization, leveraged
buyout or debt restructuring. The commitment for the purchase of any such
security will not be recognized in the portfolio of the Fund until the
Investment Manager or Sub-Adviser determines that issuance of the security is
probable. At such time, the Fund will record the transaction and, in
determining its net asset value, will reflect the value of the security
daily. At such time, the Fund will also establish a
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segregated account with its custodian bank in which it will maintain cash or
cash equivalents or other high grade debt portfolio securities equal in value
to recognized commitments for such securities. Once a segregated account has
been established, if the anticipated event does not occur and the securities
are not issued, the Fund will have lost an investment opportunity. The value
of the Fund's commitments to purchase the securities of any one issuer,
together with the value of all securities of such issuer owned by the Fund,
may not exceed 5% of the value of the Fund's total assets at the time the
initial commitment to purchase such securities is made (see "Investment
Restrictions"). Subject to the foregoing restrictions, the Fund may purchase
securities on such basis without limit. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a "when, as and if
issued" basis may increase the volatility of its net asset value. The
Investment Manager and the Trustees do not believe that the net asset value
of the Fund will be adversely affected by its purchase of securities on such
basis. The Fund may also sell securities on a "when, as and if issued" basis
provided that the issuance of the security will result automatically from the
exchange or conversion of a security owned by the Fund at the time of the
sale.
Private Placements. As discussed in the Prospectus, the Fund may invest up
to 5% of its total assets in securities which are subject to restrictions on
resale because they have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or which are otherwise not readily
marketable. (Securities eligible for resale pursuant to Rule 144A of the
Securities Act, and determined to be liquid pursuant to the procedures
discussed in the following paragraph, are not subject to the foregoing
restriction.) Limitations on the resale of such securities may have an
adverse effect on their marketability, and may prevent the Fund from
disposing of them promptly at reasonable prices. The Fund may have to bear
the expense of registering such securities for resale and the risk of
substantial delays in effecting such registration.
The Securities and Exchange Commission ("SEC") has adopted Rule 144A under
the Securities Act, which permits the Fund to sell restricted securities to
qualified institutional buyers without limitation. The Investment Manager,
pursuant to procedures adopted by the Trustees of the Fund, will make a
determination as to the liquidity of each restricted security purchased by
the Fund. The procedures require that the following factors be taken into
account in making a liquidity determination: (1) the frequency of trades and
price quotes for the security; (2) the number of dealers and other potential
purchasers who have issued quotes on the security; (3) any dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (the time needed to dispose
of the security, the method of soliciting offers, and the mechanics of
transfer). If a restricted security is determined to be "liquid", such
security will not be included within the category "illiquid securities",
which under the SEC's current policies may not exceed 15% of the Fund's net
assets, and will not be subject to the 5% limitation set out in the preceding
paragraph.
The Rule 144A marketplace of sellers and qualified institutional buyers is
new and still developing and may take a period of time to develop into a
mature liquid market. As such, the market for certain private placements
purchased pursuant to Rule 144A may be initially small or may, subsequent to
purchase, become illiquid. Furthermore, the Investment Manager may not posses
all the information concerning an issue of securities that it wishes to
purchase in a private placement to which it would normally have had access,
had the registration statement necessitated by a public offering been filed
with the Securities and Exchange Commission.
PORTFOLIO TURNOVER
It is anticipated that the Fund's portfolio turnover rate will not exceed
200%. A 200% turnover rate would occur, for example, if 200% of the
securities held in the Fund's portfolio (excluding all securities whose
maturities at acquisition were one year or less) were sold and replaced
within one year.
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INVESTMENT RESTRICTIONS
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In addition to the investment restrictions enumerated in the Prospectus,
the investment restrictions listed below have been adopted by the Fund as
fundamental policies, except as otherwise indicated. Under the Act, a
fundamental policy may not be changed without the vote of a majority of the
outstanding voting securities of the Fund, as defined in the Act. Such a
majority is defined as the lesser of (a) 67% or more of the shares present at
a meeting of Shareholders, if the holders of 50% of the outstanding shares of
the Fund are present or represented by proxy or (b) more than 50% of the
outstanding shares of the Fund. For purposes of the following restrictions:
(i) all percentage limitations apply immediately after a purchase or initial
investment; and (ii) any subsequent change in any applicable percentage
resulting from market fluctuations or other changes in total or net assets
does not require elimination of any security from the portfolio.
The Fund may not:
1. Purchase or sell real estate or interests therein, although the
Fund may purchase securities of issuers which engage in real estate
operations and securities secured by real estate or interests therein.
2. Purchase oil, gas or other mineral leases, rights or royalty
contracts or exploration or development programs, except that the Fund may
invest in the securities of companies which operate, invest in, or sponsor
such programs.
3. Borrow money, except that the Fund may borrow from a bank for
temporary or emergency purposes in amounts not exceeding 5% (taken at the
lower of cost or current value) of its total assets (not including the
amount borrowed), and (ii) may engage in reverse repurchase agreements and
dollar rolls.
4. Pledge its assets or assign or otherwise encumber them except to
secure borrowings effected within the limitations set forth in restriction
(3). For the purpose of this restriction, collateral arrangements with
respect to the writing of options and collateral arrangements with respect
to initial or variation margin for futures are not deemed to be pledges of
assets.
5. 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)
entering into any repurchase or reverse repurchase agreement; (b)
purchasing any securities on a when-issued or delayed delivery basis; (c)
purchasing or selling futures contracts, forward foreign exchange
contracts or options; (d) borrowing money in accordance with restrictions
described above; or (e) lending portfolio securities.
6. Make loans of money or securities, except: (a) by the purchase of
publicly distributed debt obligations in which the Fund may invest
consistent with its investment objective and policies; (b) by investment
in repurchase agreements; or (c) by lending its portfolio securities.
7. Make short sales of securities.
8. Purchase securities on margin, except for such short-term loans as
are necessary for the clearance of portfolio securities. The deposit or
payment by the Fund of initial or variation margin in connection with
futures contracts or related options thereon is not considered the
purchase of a security on margin.
9. Engage in the underwriting of securities, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933 in
disposing of a portfolio security.
10. Purchase or sell commodities or commodities contracts except that
the Fund may purchase or sell futures contracts or option on futures.
In addition, as a nonfundamental policy, the Fund may not invest in
securities of any issuer if, to the knowledge of the Fund, any officer or
trustee of the Fund or any officer or director of the Investment Manager owns
more than 1/2 of 1% of the outstanding securities of such issuer, and such
officers, trustees and directors who own more than 1/2 of 1% own in the
aggregate more than 5% of the outstanding securities of such issuers.
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PORTFOLIO TRANSACTIONS AND BROKERAGE
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Subject to the general supervision of the Board of Trustees, the
Investment Manager and the Sub-Advisers are 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 securities on a stock exchange are effected
through brokers who charge a commission for their services. In the
over-the-counter market, securities are generally traded on a "net" basis
with dealers acting as principal for their own accounts without a stated
commission, although the price of the security usually includes a profit to
the dealer. The Fund also expects that securities will be purchased at times
in underwritten offerings where the price includes a fixed amount of
compensation, generally referred to as the underwriter's concession or
discount. Options and futures transactions will usually be effected through a
broker and a commission will be charged. On occasion, the Fund may also
purchase certain money market instruments directly from an issuer, in which
case no commissions or discounts are paid.
The Investment Manager and the Sub-Advisers currently serve as investment
manager to a number of clients, including other investment companies, and may
in the future act as investment adviser to others. It is the practice of the
Investment Manager and the Sub-Advisers to cause purchase and sale
transactions to be allocated among the Fund and others whose assets it
manages in such manner as it deems equitable. In making such allocations
among the Fund and other client accounts, the main factors considered are the
respective investment objectives, the relative size of portfolio holdings of
the same or comparable securities, the availability of cash for investment,
the size of investment commitments generally held and the opinions of the
persons responsible for managing the portfolios of the Fund and other client
accounts.
The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with
this policy, when securities transactions are effected on a stock exchange,
the Fund's policy is to pay commissions which are considered fair and
reasonable without necessarily determining that the lowest possible
commissions are paid in all circumstances. The Fund believes that a
requirement always to seek the lowest possible commission cost could impede
effective portfolio management and preclude the Fund and the Investment
Manager and Sub-Advisers from obtaining a high quality of brokerage and
research services. In seeking to determine the reasonableness of brokerage
commissions paid in any transaction, the Investment Manager and Sub-Advisers
rely upon their experience and knowledge regarding commissions generally
charged by various brokers and on their judgment in evaluating the brokerage
and research services received from the broker effecting the transaction.
Such determinations are necessarily subjective and imprecise, as in most
cases an exact dollar value for those services is not ascertainable.
The Fund anticipates that certain of its transactions involving foreign
securities will be effected on foreign securities exchanges. Fixed
commissions on such transactions are generally higher than negotiated
commissions on domestic transactions. There is also generally less government
supervision and regulation of foreign securities exchanges and brokers than
in the United States.
In seeking to implement the Fund's policies, the Investment Manager and
Sub-Advisers effect transactions with those brokers and dealers who the
Investment Manager and Sub-Advisers believe provide the most favorable prices
and are capable of providing efficient executions. If the Investment Manager
and/or Sub-Advisers believe such prices and executions are obtainable from
more than one broker or dealer, they may give consideration to placing
portfolio transactions with those brokers and dealers who also furnish
research and other services to the Fund or the Investment Manager and/or
Sub-Advisers. Such services may include, but are not limited to, any one or
more of the following: information as to the availability of securities for
purchase or sale; statistical or factual information or opinions pertaining
to investment; wire services; and appraisals or evaluations of portfolio
securities.
The information and services received by the Investment Manager and
Sub-Advisers from brokers and dealers may be of benefit to them in the
management of accounts of some of their other clients and may not in all
cases benefit the Fund directly. While the receipt of such information and
services is useful
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in varying degrees and would generally reduce the amount of research or
services otherwise performed by the Investment Manager and/or Sub-Advisers
and thereby reduce their 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. Government and
Government Agency Securities, Bank Money Instruments (i.e., Certificates of
Deposit and Bankers' Acceptances) and Commercial Paper. 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 the unlisted trading privileges
may be effected through DWR and/or affiliated broker-dealers of a
Sub-Adviser. In order for these broker-dealers to effect any portfolio
transactions for the Fund, the commissions, fees or other remuneration
received by them must be reasonable and fair compared to the commissions,
fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold
on an exchange during a comparable period of time. This standard would allow
DWR to receive no more than the remuneration which would be expected to be
received by an unaffiliated broker in a commensurate arm's-length
transaction. Furthermore, the Board of Trustees of the Fund, including a
majority of the Trustees who are not "interested" persons of the Fund, as
defined in the Act, have adopted procedures which are reasonably designed to
provide that any commissions, fees or other remuneration paid to DWR and
affiliates of the Sub-Adviser are consistent with the foregoing standard. The
Fund does not reduce the management fee it pays to the Investment Manager by
any amount of the brokerage commissions it may pay to DWR.
THE UNDERWRITER
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Dean Witter Distributors Inc. (the "Underwriter") has agreed to purchase
up to 10,000,000 shares from the Fund, which number may be increased or
decreased in accordance with the Underwriting Agreement. The Underwriting
Agreement provides that the obligation of the Underwriter is subject to
certain conditions precedent (such as the filing of certain forms and
documents required by various federal and state agencies and the rendering of
certain opinions of counsel) and that the Underwriter will be obligated to
purchase the shares on February 28, 1995, or such other date as may be agreed
upon between the Underwriter and the Fund (the "Closing Date"). Shares will
not be issued and dividends will not be declared by the Fund until after the
Closing Date.
The Underwriter will purchase shares from the Fund at $10.00 per share. No
underwriting discounts or selling commissions will be deducted from the
initial public offering price. The Underwriter will, however, receive
contingent deferred sales charges from future redemptions of such shares.
The Underwriter shall, regardless of its expected underwriting commitment,
be entitled and obligated to purchase only the number of shares for which
purchase orders have been received by the Underwriter prior to 2:00 p.m., New
York time, on the third business day preceding the Closing Date, or such
other date as may be agreed to between the parties.
The minimum number of Fund shares which may be purchased pursuant to this
offering is 100 shares. Certificates for shares purchased will not be issued
unless requested by the shareholder in writing.
The Underwriter has agreed to pay certain expenses of the initial offering
and the subsequent Continuous Offering of the Fund's shares. The Fund has
agreed to pay certain compensation to the Underwriter pursuant to a Plan of
Distribution pursuant to Rule 12b-1 under the Act, to compensate the
Underwriter for services it renders and the expenses it bears under the
Underwriting Agreement (see "The Distributor"). The Fund will bear the cost
of initial typesetting, printing and distribution of Prospectuses and
Statements of Additional Information and supplements thereto to shareholders.
The Fund has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
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THE DISTRIBUTOR
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As discussed in the Prospectus, shares of the Fund are distributed by Dean
Witter Distributors Inc. (the "Distributor"). The Distributor has entered
into a selected dealer agreement with DWR, which through its own sales
organization sells shares of the Fund. In addition, the Distributor may enter
into selected dealer agreements with other selected broker-dealers. The
Distributor, a Delaware corporation, is a wholly-owned subsidiary of DWDC.
The Board of Trustees of the Fund including a majority of the Trustees who
are not, and were not at the time they voted, interested persons of the Fund,
as defined in the Act (the "Independent Trustees"), approved, at their
meeting held on December 6, 1994, a Distribution Agreement appointing the
Distributor as exclusive distributor of the Fund's shares and providing for
the Distributor to bear distribution expenses not borne by the Fund. By its
terms, the Distribution Agreement has an initial term ending April 30, 1995,
and provides that it will remain in effect from year to year thereafter if
approved by the Board.
The Distributor bears all expenses it may incur in providing services
under the Distribution Agreement. Such expenses include the payment of
commissions for sales of the Fund's shares and incentive compensation to
account executives. The Distributor also pays certain expenses in connection
with the distribution of the Fund's shares, including the costs of preparing,
printing and distributing advertising or promotional materials, and 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 bears
the costs of initial typesetting, printing and distribution of prospectuses
and supplements thereto to shareholders. The Fund also bears the costs of
registering the Fund and its shares under federal and state securities laws.
The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended. Under the Distribution Agreement, 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.
PLAN OF DISTRIBUTION
To compensate the Distributor for the services it or any selected dealer
provides and for the expenses it bears under the Distribution Agreement, the
Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the Act
(the "Plan") pursuant to which the Fund pays the Distributor compensation
accrued daily and payable monthly at the annual rate of 1.0% of the lesser
of: (a) the average daily aggregate gross sales of the Fund's shares since
the inception of the Fund (not including reinvestments of dividends or
capital gains distributions), less the average daily aggregate net asset
value of the Fund's shares redeemed since the Fund's inception upon which a
contingent deferred sales charge has been imposed or upon which such charge
has been waived; or (b) the Fund's average daily net assets. The Distributor
receives the proceeds of contingent deferred sales charges imposed on certain
redemptions of shares, which are separate and apart from payments made
pursuant to the Plan.
The Distributor has informed the Fund that an amount of the fees payable
by the Fund each year pursuant to the Plan of Distribution equal to 0.25% of
the Fund's average daily net assets is characterized as a "service fee" under
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. (of which the Distributor is a member). Such fee is a payment made for
personal service and/or the maintenance of shareholder accounts. The
remaining portion of the Plan of Distribution fee payments made by the Fund
is characterized as an "asset-based sales charge" as such is defined by the
aforementioned Rules of Fair Practice.
The Plan was adopted by a vote of the Trustees of the Fund on December 6,
1994, at a meeting of the Trustees called for the purpose of voting on such
Plan. The vote included the vote of a majority of the Trustees of the Fund
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 the Plan
(the "Independent 12b-1 Trustees"). In making their decision to adopt the
Plan, the Trustees requested from the Distributor and received such
information as they deemed necessary to make an informed determination as to
whether
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or not adoption of the Plan was in the best interests of the shareholders of
the Fund. After due consideration of the information received, the Trustees,
including the Independent 12b-1 Trustees, determined that adoption of the
Plan would benefit the shareholders of the Fund. InterCapital, as sole
shareholder of the Fund, approved the Plan on December 7, 1994, whereupon the
Plan went into effect.
Under its terms, the Plan will continue until April 30, 1995 and will
remain in effect from year to year thereafter, provided such continuance is
approved annually by a vote of the Trustees in the manner described above.
Under the Plan and as required by Rule 12b-1, the Trustees will receive and
review promptly after the end of each fiscal quarter a written report
provided by the Distributor of the amounts expended by the Distributor under
the Plan and the purpose for which such expenditures were made.
The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method shares of the Fund are
sold without a sales load being deducted at the time of purchase, so that the
full amount of an investor's purchase payment will be invested in shares
without any deduction for sales charges. Shares of the Fund may be subject to
a contingent deferred sales charge, payable to the Distributor, if redeemed
during the six years after their purchase. DWR compensates its account
executives by paying them, from its own funds, commissions for the sale of
the Fund's shares, currently a gross sales credit of up to 5% of the amount
sold and an annual residual commission of up to 0.25 of 1% of the current
value (not including reinvested dividends or distributions) of the amount
sold. The gross sales credit is a charge which reflects commissions paid by
DWR to its account executives and Fund associated distribution-related
expenses, including sales compensation and overhead. The distribution fee
that the Distributor receives from the Fund under the Plan, in effect,
offsets distribution expenses incurred on behalf of the Fund and opportunity
costs, such as the gross sales credit and an assumed interest charge thereon
("carrying charge"). In the Distributor's reporting of the distribution
expenses to the Fund, such assumed interest (computed at the "broker's call
rate") has been calculated on the gross sales credit as it is reduced by
amounts received by the Distributor under the Plan and any contingent
deferred sales charges received by the Distributor upon redemption of shares
of the Fund. No other interest charge is included as a distribution expense
in the Distributor's calculation of its distribution costs for this purpose.
The broker's call rate is the interest rate charged to securities brokers on
loans secured by exchange-listed securities.
At any given time, the expenses in distributing shares of the Fund may be
more or less than the total of (i) the payments made by the Fund pursuant to
the Plan and (ii) the proceeds of contingent deferred sales charges paid by
investors upon redemption of shares. Because there is no requirement under
the Plan that the Distributor be reimbursed for all expenses or any
requirement that the Plan be continued from year to year, this excess amount
does not constitute a liability of the Fund. Although there is no legal
obligation for the Fund to pay distribution expenses in excess of payments
made under the Plan and the proceeds of contingent deferred sales charges
paid by investors upon redemption of shares, if for any reason the Plan is
terminated, the Trustees will consider at that time the manner in which to
treat such expenses. Any cumulative expenses incurred, but not yet recovered
through distribution fees or contingent deferred sales charges, may or may
not be recovered through future distribution fees or contingent deferred
sales charges.
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, DWR or certain of their 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.
The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of
the Fund, and all material amendments of the Plan must also 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 12b-1 Trustees or by a vote of a majority of the outstanding
voting securities of the Fund (as defined in the Act) on not more than thirty
days' written notice to any other party to the Plan. So long as the Plan is
in effect, the election and nomination of Independent Trustees shall be
committed to the discretion of the Independent Trustees.
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DETERMINATION OF NET ASSET VALUE
As stated in the Prospectus, short-term securities with remaining
maturities of sixty days or less at the time of purchase are valued at
amortized cost, unless the Trustees determine such does not reflect the
securities' market value, in which case these securities will be valued at
their fair value as determined by the Trustees. Other short-term debt
securities will be valued on a mark-to-market basis until such time as they
reach a remaining maturity of sixty days, whereupon they will be valued at
amortized cost using their value on the 61st day unless the Trustees
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Trustees. Listed options on debt securities are valued at the latest sale
price on the exchange on which they are listed unless no sales of such
options have taken place that day, in which case they will be valued at the
mean between their latest bid and asked prices. Unlisted options on debt
securities and all options on equity securities are valued at the mean
between their latest bid and asked prices. Futures are valued at the latest
sale price on the commodities exchange on which they trade unless the
Trustees determine such price does not reflect their market value, in which
case they will be valued at their fair value as determined by the Trustees.
All other securities and other assets are valued at their fair value as
determined in good faith under procedures established by and under the
supervision of the Trustees.
The net asset value per share of the Fund is determined once daily at 4:00
p.m. New York time on each day that the New York Stock Exchange is open by
taking the value of all assets of the Fund, subtracting its liabilities,
dividing by the number of shares outstanding and adjusting to the nearest
cent. The New York Stock Exchange currently observes the following holidays:
New Year's Day; Presidents Day; Good Friday; Memorial Day; Independence Day;
Labor Day; Thanksgiving Day; and Christmas Day.
Generally, trading in foreign securities, as well as corporate bonds,
United States government securities and money market instruments, is
substantially completed each day at various times prior to 4:00 p.m., New
York time. The values of such securities used in computing the net asset
value of the Fund's shares are determined as of such times. Foreign currency
exchange rates are also generally determined prior to 4:00 p.m., New York
time. Occasionally, events which affect the values of such securities and
such exchange rates may occur between the times at which they are determined
and 4:00 p.m., New York time, and will therefore not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these securities will
be valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees.
SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------
Upon the purchase of shares of the Fund, a Shareholder Investment Account
is opened for the investor on the books of the Fund and maintained by Dean
Witter Trust Company (the "Transfer Agent"). This is an open account in which
shares owned by the investor are credited by the Transfer Agent in lieu of
issuance of a share certificate. If a share certificate is desired, it must
be requested in writing for each transaction. Certificates are issued only
for full shares and may be redeposited in the account at any time. There is
no charge to the investor for issuance of a certificate. Whenever a
shareholder instituted transaction takes place in the Shareholder Investment
Account, the shareholder will be mailed a confirmation of the transaction
from the Fund or from DWR or other selected broker-dealer.
Automatic Investment of Dividends and Distributions. As stated in the
Prospectus, 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. 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, at the net asset value per share, in shares
of the Fund (or in cash if the shareholder so requests) as of the close of
business on the record date. At any time an investor may request the Transfer
Agent, in writing, to have subsequent dividends and/or capital gains
distributions paid to him or her 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 record date of
30
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the dividend or distribution. 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, and will
be forwarded to the shareholder, upon the receipt of proper instructions.
Targeted Dividends.(SM) 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 Dean Witter
Fund other than Dean Witter Global Asset Allocation Fund. 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 of the dividend or distribution 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 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
the program.
EasyInvest.(SM) Shareholders may subscribe to EasyInvest, an automatic
purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Transfer Agent for
investment in shares of the Fund. Shares purchased through EasyInvest will be
added to the shareholder's existing account at the net asset value calculated
the 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.
Investment of Dividends or Distributions Received in Cash. As discussed in
the Prospectus, any shareholder who receives a cash payment representing a
dividend or distribution may invest such dividend or distribution at net
asset value, without the imposition of a contingent deferred sales charge
upon redemption, 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 proceeds by the
Transfer Agent.
Systematic Withdrawal Plan. As discussed in the Prospectus, 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 net asset value. The Withdrawal Plan provides for monthly or
quarterly (March, June, September and December) checks in any dollar amount,
not less then $25, or in any whole percentage of the account balance, on an
annualized basis.
The Transfer Agent acts as agent for the shareholder in tendering to the
Fund for redemption sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment designated in the application. The
shares will be redeemed at their net asset value determined, at the
shareholder's option, on the tenth or twenty-fifth day (or next 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 brokerage account, within five business days after the date of
redemption. The Withdrawal Plan may be terminated at any time by the Fund.
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 share-holder'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 tax purposes. Although the
shareholder may make additional investments of $2,500 or more under the
Withdrawal Plan, withdrawals made concurrently with purchases of additional
shares may be inadvisable because of the contingent deferred sales charge
applicable to the redemption of shares purchased during the preceding six
years (see "Redemptions and Repurchases --Contingent Deferred Sales Charge").
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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 through his or her Account Executive or by written
notification to the Transfer Agent. In addition, the party and/or the address
to which checks are mailed may be changed by written notification to the
Transfer Agent, with signature guarantees required in the manner described
above. The shareholder may also terminate the Withdrawal Plan at any time by
written notice to the Transfer Agent. In the event of such termination, the
account will be continued as a regular shareholder investment account. The
shareholder may also redeem all or part of the shares held in the Withdrawal
Plan account (see "Redemptions and Repurchases" in the Prospectus) at any
time.
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
Global Asset Allocation Fund, directly to the Fund's 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.
EXCHANGE PRIVILEGE
As discussed in the Prospectus, the Fund makes available to its
shareholders an Exchange Privilege whereby shareholders of the Fund may
exchange their shares for shares of other Dean Witter Funds sold with a
contingent deferred sales charge ("CDSC funds") and for shares of Dean Witter
Short-Term U.S. Treasury Trust, Dean Witter Limited Term Municipal Trust,
Dean Witter Short-Term Bond Fund and five Dean Witter Funds which are money
market funds (the foregoing eight non-CDSC Funds are hereinafter referred to
as "Exchange Funds"). 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. 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.)
As described below, and in the Prospectus under the captions "Exchange
Privilege" and "Contingent Deferred Sales Charge", a contingent deferred
sales charge ("CDSC") may be imposed upon a redemption, depending on a number
of factors, including the number of years from the time of purchase until the
time of redemption or exchange ("holding period"). When shares of the Fund or
any other CDSC fund are exchanged for shares of an Exchange Fund, the
Exchange Fund 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 investment
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 CDSC fund.
However, in the case of shares of the Fund exchanged into the Exchange Fund,
upon a redemption of shares which results in a CDSC being imposed, a credit
(not to exceed the amount of the CDSC) will be given in an amount equal to
the Exchange Fund 12b-1 distribution fees, if any, incurred on or after that
date which are attributable to those shares. Shareholders acquiring shares of
an Exchange Fund pursuant to
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this exchange privilege may exchange those shares back into a CDSC fund from
the Exchange Fund, with no CDSC being imposed on such exchange. The
investment 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 CDSC fund are reacquired. A CDSC is imposed only upon an ultimate
redemption, based upon the time (calculated as described above) the
shareholder was invested in a CDSC fund.
In addition, shares of the Fund may be acquired in exchange for shares of
Dean Witter Funds sold with a front-end sales charge ("front-end sales charge
funds"), but shares of the Fund, however acquired, may not be exchanged for
shares of front-end sales charge funds. Shares of a CDSC fund acquired in
exchange for shares of a front-end sales charge fund (or in exchange for
shares of other Dean Witter Funds for which shares of a front-end sales
charge fund have been exchanged) are not subject to any CDSC upon their
redemption.
When shares initially purchased in a CDSC fund are exchanged for shares of
another CDSC fund, or for shares of an Exchange Fund, the date of purchase of
the shares of the fund exchanged into, for purposes of the CDSC upon
redemption, will be the last day of the month in which the shares being
exchanged were originally purchased. In allocating the purchase payments
between funds for purposes of the CSDC, the amount which represents the
current net asset value of shares at the time of the exchange which were (i)
purchased more than three or six years (depending on the CDSC schedule
applicable to the shares) prior to the exchange, (ii) originally acquired
through reinvestment of dividends or distributions and (iii) acquired in
exchange for shares of front-end sales charge funds, or for shares of other
Dean Witter Funds for which shares of front-end sales charge funds have been
exchanged (all such shares called "Free Shares"), will be exchanged first.
Shares of Dean Witter Dividend Growth Securities Inc. and Dean Witter Natural
Resource Development Securities Inc. acquired prior to July 2, 1984, and
shares of Dean Witter Strategist Fund acquired prior to November 8, 1989, are
also considered Free Shares and will be the first Free Shares to be
exchanged. After an exchange, all dividends earned on shares in an Exchange
Fund will be considered Free Shares. If the exchanged amount exceeds the
value of such Free Shares, an exchange is made, on a block-by-block basis, of
non-Free Shares held for the longest period of time (except that if shares
held for identical periods of time but subject to different CDSC schedules
are held in the same Exchange Privilege account, the shares of that block
that are subject to a lower CDSC rate will be exchanged prior to the shares
of that block that are subject to a higher CDSC rate). Shares equal to any
appreciation in 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 purchaser payment for, or (b) the
current net asset value of, those exchanged in non-Free Shares. Based upon
the procedures described in the Prospectus under the caption "Contingent
Deferred Sales Charge", any applicable CDSC will be imposed upon the ultimate
redemption of shares of any fund, regardless of the number of exchanges since
those shares were originally purchased.
The Transfer Agent acts as agent for shareholders of the Fund in effecting
redemptions of Fund shares and in applying the proceeds to the purchase of
other fund shares. In the absence of negligence on its part, neither the
Transfer Agent nor the Fund shall be liable for any redemption of Fund shares
caused by unauthorized telephone instructions. Accordingly, in such event the
investor shall bear the risk of loss. The staff of the Securities and
Exchange Commission is currently considering the propriety of such a policy.
With respect to the redemption or repurchase of shares of the Fund, the
application of proceeds to the purchase of new shares in the Fund or any
other of the funds and the general administration of the Exchange Privilege,
the Transfer Agent acts as agent for the Distributor and for the
shareholder's selected broker-dealer, if any, in the performance of such
functions.
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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
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.
Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment is $5,000
for Dean Witter Liquid Asset Fund Inc., Dean Witter Tax-Free Daily Income
Trust, 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 is $10,000 for Dean Witter Short-Term U.S. Treasury Trust,
although that fund, in its discretion, may accept initial purchases of as low
as $5,000. The minimum initial investment for all other Dean Witter Funds for
which the Exchange Privilege is available is $1,000.) Upon exchange into an
Exchange Fund, the shares of that fund will be held in a special Exchange
Privilege Account separately from accounts of those shareholders who have
acquired their shares directly from that fund. As a result, certain services
normally available to shareholders of money market funds, including the check
writing feature, will not be available for funds held in that account.
The Fund and each of the other Dean Witter Funds may limit the number of
times this Exchange Privilege may be exercised by any investor within a
specified period of time. Also, the Exchange Privilege may be terminated or
revised at any time by the Fund and/or any of the Dean Witter funds for which
shares of the Fund have been exchanged, upon such notice as may be required
by applicable regulatory agencies (presently sixty days 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 the Exchange Privilege, and provided further that the
Exchange Privilege may be terminated or materially revised without notice 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, 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
- -----------------------------------------------------------------------------
Redemption. As stated in the Prospectus, shares of the Fund can be
redeemed for cash at any time at the net asset value per share next
determined; however, such redemption proceeds may be reduced by the amount of
any applicable contingent deferred sales charges (see below). If shares are
held in a shareholder's account without a share certificate, a written
request for redemption to the Fund's Transfer Agent at P.O. Box 983, Jersey
City, NJ 07303 is required. If certificates are held by the shareholder, the
shares may be redeemed by surrendering the certificates with a written
request for redemption. The share certificate, or an accompanying stock
power, and the request for redemption, must be signed by the shareholder or
shareholders exactly as the shares are registered. Each request for
redemption, whether or not accompanied by a share certificate, must be sent
to the Fund's Transfer Agent, which will redeem the shares at their net asset
value next computed (see "Purchase of Fund Shares") after it receives the
request, and certificate, if any, in good order. Any redemption request
received after such computation will be redeemed at the next determined net
asset value. The term
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"good order" means that the share certificate, if any, and request for
redemption are properly signed, accompanied by any documentation required by
the Transfer Agent, and bear signature guarantees when required by the Fund
or the Transfer Agent. If redemption is requested by a corporation,
partnership, trust or fiduciary, the Transfer Agent may require that written
evidence of authority acceptable to the Transfer Agent be submitted before
such request is accepted.
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 the Distributor or a 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, 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). A stock
power may be obtained from any dealer or commercial bank. The Fund may change
the signature guarantee requirements from time to time upon notice to
shareholders, which may be by means of a new prospectus.
Contingent Deferred Sales Charge. As stated in the Prospectus, a
contingent deferred sales charge ("CDSC") will be imposed on any redemption
by an investor if after such redemption the current value of the investor's
shares of the Fund is less than the dollar amount of all payments by the
shareholder for the purchase of Fund shares during the preceding six years.
However, no CDSC will be imposed to the extent that the net asset value of
the shares redeemed does not exceed: (a) the current net asset value of
shares purchased more than six years prior to the redemption, plus (b) the
current net asset value of shares purchased through reinvestment of dividends
or distributions of the Fund or another Dean Witter Fund (see "Shareholder
Services--Targeted Dividends"), plus (c) the current net asset value of
shares acquired in exchange for (i) shares of Dean Witter front-end sales
charge funds, or (ii) shares of other Dean Witter Funds for which shares of
front-end sales charge funds have been exchanged (see "Shareholder
Services--Exchange Privilege"), plus (d) increases in the net asset value of
the investor's shares above the total amount of payments for the purchase of
Fund shares made during the preceding six years. The CDSC will be paid to the
Distributor. In addition, no CDSC will be imposed on redemptions of shares
which were purchased by the employee benefit plans established by DWR and SPS
Transaction Services, Inc. (an affiliate of DWR) for their employees as
qualified under Section 401(k) of the Internal Revenue Code.
In determining the applicability of a CDSC to each redemption, the amount
which represents an increase in the net asset value of the investor's shares
above the amount of the total payments for the purchase of shares within the
last six years will be redeemed first. In the event the redemption amount
exceeds such increase in value, the next portion of the amount redeemed will
be the amount which represents the net asset value of the Investor's shares
purchased more than six years prior to the redemption and/or shares purchased
through reinvestment of dividends or distributions and/or shares acquired in
exchange for shares of Dean Witter front-end sales charge funds, or for
shares of other Dean Witter funds for which shares of front-end sales charge
funds have been exchanged. A portion of the amount redeemed which exceeds an
amount which represents both such increase in value and the value of shares
purchased more than six years prior to the redemption and/or shares purchased
through reinvestment of dividends or distributions and/or shares acquired in
the above-described exchanges will be subject to a CDSC.
The amount of CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Fund shares until the time of
redemption of such shares. For purposes of determining the number of years
from the time of any payments for the purchase of shares, all payments made
during a month will be aggregated and deemed to have been made on the last
day of the month. The following table sets forth the rates of the CDSC:
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<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR SINCE PURCHASE PAYMENT PERCENTAGE OF AMOUNT
MADE REDEEMED
- --------------------------- -----------------------
<S> <C>
First ...................... 5.0%
Second ..................... 4.0%
Third ...................... 3.0%
Fourth ..................... 2.0%
Fifth ...................... 2.0%
Sixth ...................... 1.0%
None
Seventh and thereafter ....
</TABLE>
In determining the rate of the CDSC, it will be assumed that a redemption
is made of shares held by the investor for the longest period of time within
the applicable six-year period. This will result in any such CDSC being
imposed at the lowest possible rate. Accordingly, shareholders may redeem,
without incurring any CDSC, amounts equal to any net increase in the value of
their shares above the amount of their purchase payments made within the past
six years and amounts equal to the current value of shares purchased more
than six years prior to the redemption and shares purchased through
reinvestment of dividends or distributions or acquired in exchange for shares
of Dean Witter front-end sales charge funds, or for shares of other Dean
Witter Funds for which shares of front-end sales charge funds have been
exchanged. The CDSC will be imposed, in accordance with the table shown
above, on any redemptions within six years of purchase which are in excess of
these amounts and which redemptions are not (a) requested within one year of
death or initial determination of disability of a shareholder, or (b) made
pursuant to certain taxable distributions from retirement plans or retirement
accounts, as described in the Prospectus.
Payment for Shares Redeemed or Repurchased. As discussed in the
Prospectus, 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. The term good order means
that the share certificate, if any, and request for redemption are properly
signed, accompanied by any documentation required by the Transfer Agent, and
bear signature guarantees when required by the Fund or Transfer Agent. 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 fairly to determine the value of its 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, 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 another
selected broker-dealer are referred to their account executive regarding
restrictions on redemption of shares of the Fund pledged in the margin
account.
Transfers of Shares. In the event a shareholder requests a transfer of any
shares to a new registration, such shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the contingent deferred sales charge or free of such charge
(and with regard to the length of time shares subject to the charge have been
held), any transfer involving less than all of the shares in an account will
be made on a pro-rata basis (that is, by transferring shares in the same
proportion that the transferred shares bear to the total shares in the
account immediately prior to the transfer). The transferred shares will
continue to be subject to any applicable contingent deferred sales charge as
if they had not been so transferred.
Reinstatement Privilege. As discussed in the Prospectus, a shareholder who
has had his or her shares redeemed or repurchased and has not previously
exercised this reinstatement privilege may, within thirty days after the date
of redemption or repurchase, reinstate any portion or all of the proceeds
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of such redemption or repurchase in shares of the Fund at the net asset value
next determined after a reinstatement request, together with the proceeds, is
received by the Transfer Agent.
Exercise of the reinstatement privilege will not affect the federal income
tax treatment of any gain or loss realized upon the redemption or repurchase,
except that if the redemption or repurchase resulted in a loss and
reinstatement is made in shares of the Fund, some or all of the loss,
depending on the amount reinstated, will not be allowed as a deduction for
federal income tax purposes but will be applied to adjust the cost basis of
the shares acquired upon reinstatement.
DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------
As discussed in the Prospectus, the Fund will determine either to
distribute or to retain all or part of any net long-term capital gains in any
year for reinvestment. If any such gains are retained, the Fund will pay
federal income tax thereon, and, if the Fund makes an election, the
shareholders would include such undistributed gains in their income and
shareholders will be able to claim their share of the tax paid by the Fund as
a credit against their individual federal income tax.
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.
Gains or losses on sales of securities by the Fund will generally be
long-term capital gains or losses if the securities have been held by the
Fund for more than twelve months. Gains or losses on the sale of securities
held for twelve months or less will be generally short-term capital gains or
losses.
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986 (the "Code"). If so
qualified, the Fund will not be subject to federal income tax on its net
investment income and capital gains, if any, realized during any fiscal year
if it distributes such income and capital gains to its shareholders. In
addition, the Fund intends to distribute to its shareholders each calendar
year a sufficient amount of ordinary income and capital gains to avoid the
imposition of a 4% excise tax.
After the end of the calendar year, shareholders will be sent full
information on their dividends and capital gains distributions for tax
purposes, including information as to the portion taxable as ordinary income,
the portion taxable as long-term capital gains, and the amount of dividends
eligible for the Federal dividends received deduction available to
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 their accuracy.
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 net
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. Therefore, an
investor should consider the tax implications of purchasing Fund shares
immediately prior to a distribution record date.
The Fund may elect to retain net capital gains and pay corporate income
tax thereon. In such event, each shareholder of record on the last day of the
Fund's taxable year would be required to include in income for tax purposes
such shareholder's proportionate share of the Fund's undistributed net
capital gain. In addition, each shareholder would be entitled to credit such
shareholder's proportionate share of the tax paid by the Fund against federal
income tax liabilities, to claim refunds to the extent that the credit
exceeds such liabilities, and to increase the basis of his shares held for
federal income tax purposes by an amount equal to 65% of such shareholder's
proportionate share of the undistributed net capital gain.
Any loss realized by shareholders upon a redemption of shares within six
months of the date of their purchase will be treated as a long-term capital
loss to the extent of any distributions of net long-term capital gains during
the six-month period.
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Dividends, interest and capital gains received by the Fund may give rise
to withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Investors may be entitled to claim United States foreign tax credits
or deductions with respect to such taxes, subject to certain provisions and
limitations contained in the Code. If more than 50% of the Fund's total
assets at the close of its fiscal year consist of securities of foreign
corporations, the Fund would be eligible and would determine whether or not
to file an election with the Internal Revenue Service pursuant to which
shareholders of the Fund will be required to include their respective pro
rata portions of such withholding taxes in their United States income tax
returns as gross income, treat such respective pro rata portions as taxes
paid by them, and deduct such respective pro rata portions in computing their
taxable income or, alternatively, use them as foreign tax credits against
their United States income taxes. If the Fund does elect to file the election
with the Internal Revenue Service, the Fund will report annually to its
shareholders the amount per share of such withholding.
Special Rules for Certain Foreign Currency Transactions. In general, gains
from foreign currencies and from foreign currency options, foreign currency
futures and forward foreign exchange contracts relating to investments in
stock, securities or foreign currencies are currently considered to be
qualifying income for purposes of determining whether the Fund qualifies as a
regulated investment company. It is currently unclear, however, who will be
treated as the issuer of certain foreign currency instruments or how foreign
currency options, futures, or forward foreign currency contracts will be
valued for purposes of the regulated investment company diversification
requirements applicable to the Fund.
Under Code Section 988, special rules are provided for certain
transactions in a foreign currency other than the taxpayer's function
currency (i.e., unless certain special rules apply, currencies other than the
U.S. dollar). In general, foreign currency gains or losses from forward
contracts, from futures contracts that are not "regulated futures contracts",
and from unlisted options will be treated as ordinary income or loss under
Code Section 988. Also, certain foreign exchange gains or losses derived with
respect to foreign fixed-income securities are also subject to Section 988
treatment. In general, therefore, Code Section 988 gains or losses will
increase or decrease the amount of the Fund's investment company taxable
income available to be distributed to shareholders as ordinary income, rather
than increasing or decreasing the amount of the Fund's net capital gain.
Additionally, if Code Section 988 losses exceed other investment company
taxable income during a taxable year, the Fund would not be able to make any
ordinary dividend distributions.
If the Fund invests in an entity which is classified as a "passive foreign
investment company" ("PFIC") for U.S. tax purposes, the application of
certain technical tax provisions applying to such companies could result in
the imposition of federal income tax with respect to such investments at the
Fund level which could not be eliminated by distributions to shareholders.
The U.S. Treasury issued proposed regulation section 1.1291-8 which
establishes a mark-to-market regime which allows invesmtent companies
investing in PFIC's to avoid most, if not all, of the difficulties posed by
the PFIC rules. In any event, it is not anticipated that any taxes on the
Fund wilth respect to investments in PFIC's would be significant.
Shareholders are urged to consult their attorneys or 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
"total return" in advertisements and sales literature. 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 operations, if shorter than
any of the foregoing. The ending redeemable value is reduced by any
contingent deferred sales charge at the end of the one, five or ten year or
other period. For the purpose of this calculation, it is assumed that all
dividends and distributions are reinvested. The formula for
38
<PAGE>
<PAGE>
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.
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 to total return figures. Such calculations may or may not reflect
the deduction of the contingent deferred sales charge which, if reflected,
would reduce the performance quoted. For example, the average annual total
return of the Fund may be calculated in the manner described above, but
without deduction for any applicable contingent deferred sales charge.
In addition, 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 (without
reduction for any contingent deferred sales charge) by the initial $1,000
investment and subtracting 1 from the result.
The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in shares of the Fund by adding 1 to the Fund's
aggregate total return to date (expressed as a decimal and without taking
into account the effect of any applicable CDSC) and multiplying by $10,000,
$50,000 or $100,000, as the case may be.
The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations.
SHARES OF THE FUND
- -----------------------------------------------------------------------------
The shareholders of the Fund are entitled to a full vote for each full
share of beneficial interest held. The Fund is authorized to issue an
unlimited number of shares of beneficial interest. The Trustees themselves
have the power to alter the number and the terms of office of the Trustees
(as provided for in the Declaration of Trust), and they may at any time
lengthen or shorten 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). However, the Trustees have
not authorized any such additional series or classes of shares and the Fund
has no present intention to add 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/her or its own bad faith, willful misfeasance, gross negligence or
reckless disregard of his/her or its duties. It also provides that all third
persons shall look solely to the Fund 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 or
the Trustees.
39
<PAGE>
<PAGE>
CUSTODIAN AND TRANSFER AGENT
- -----------------------------------------------------------------------------
The Chase Manhattan Bank N.A., One Chase Plaza, New York, New York 10005
is the Custodian of the Fund's assets in the United States and around the
world. As Custodian, The Chase Manhattan Bank has contracted with various
foreign banks and depositaries to hold portfolio securities of non-U.S.
issuers on behalf of the Fund. Any of the Fund's cash balances with the
Custodian in excess of $100,000 are unprotected by federal deposit insurance.
Such balances may, at times, be substantial.
Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 is the Transfer Agent of the Fund's shares and
Dividend Disbursing Agent for payment of dividends and distributions on Fund
shares and Agent for shareholders under various investment plans described
herein. Dean Witter Trust Company is an affiliate of Dean Witter InterCapital
Inc., the Fund's Investment Manager and Dean Witter Distributors Inc., the
Fund's Distributor. As Transfer Agent and Dividend Disbursing Agent, Dean
Witter Trust Company's responsibilities include maintaining shareholder
accounts; disbursing cash dividends and reinvesting dividends; processing
account registration changes; handling purchase and redemption transactions;
mailing prospectuses and reports; mailing and tabulating proxies; processing
share certificate transactions; and maintaining shareholder records and
lists. For these services Dean Witter Trust Company receives a per
shareholder account fee from the Fund.
INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
Price Waterhouse LLP serves as the independent accountants of the Fund.
The independent accountants are responsible for auditing the annual financial
statements of the Fund.
REPORTS TO SHAREHOLDERS
- -----------------------------------------------------------------------------
The Fund will send to shareholders, at least semi-annually, reports
showing the Fund's portfolio and other information. An annual report,
containing financial statements audited by independent account-ants, will be
sent to shareholders each year.
The Fund's fiscal year ends on January 31. The financial statements of the
Fund must be audited at least once a year by independent accountants whose
selection is made annually by the Fund's Board of Trustees.
LEGAL COUNSEL
- -----------------------------------------------------------------------------
Sheldon Curtis, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.
EXPERTS
- -----------------------------------------------------------------------------
The Statement of Assets and Liabilities of the Fund included in this
Statement of Additional Information and incorporated by reference in the
Prospectus has 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.
40
<PAGE>
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
Statement of Assets and Liabilities at December 7, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS: Cash .........................................................................$100,000
Deferred organizational expenses (Note 1) ........................................... 160,000
----------
Total Assets ....................................................................... 260,000
LIABILITIES: Organizational expenses payable (Note 1) ................................ 160,000
Commitments (Notes 1 and 2) .........................................................
----------
Net Assets ......................................................................... $100,000
==========
Net Asset Value Per Share (10,000 shares of beneficial interest outstanding;
unlimited authorized shares of beneficial interest of $.01 par value) .............. $10.00
==========
</TABLE>
NOTE 1 --Dean Witter Global Asset Allocation Fund (the "Fund") was
organized as a Massachusetts business trust on October 18, 1994. To date the
Fund has had no transactions other than those relating to organizational
matters and the sale of 10,000 shares of beneficial interest for $100,000 to
Dean Witter InterCapital Inc. (the "Investment Manager"). The Fund is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as a diversified, open-end management investment company. Organizational
expenses of the Fund incurred prior to the offering of the Fund's shares will
be paid by the Investment Manager. It is currently estimated that the
Investment Manager will incur, and be reimbursed by the Fund for
approximately $160,000 in organizational expenses. These expenses will be
deferred and amortized by the Fund on the straight-line method over a period
not to exceed five years from the date of commencement of the Fund's
operations. In the event that, at any time during the five year period
beginning with the date of the commencement of operations, the initial shares
acquired by the Investment Manager prior to such date are redeemed, by any
holder thereof, the redemption proceeds payable in respect of such shares
will be reduced by the pro rata share (based on the proportionate share of
the initial shares redeemed to the total number of original shares
outstanding at the time of redemption) of the then unamortized deferred
organizational expenses as of the date of such redemption. In the event that
the Fund liquidates before the deferred organizational expenses are fully
amortized, the Investment Manager shall bear such unamortized deferred
organizational expenses.
NOTE 2 --The Fund has entered into an investment management agreement with
the Investment Manager. The Investment Manager has entered into Sub-Advisory
Agreements with TCW Funds Management, Inc. ("TCW") and Morgan Grenfell
Investment Services Limited ("MGIS"). TCW and MGIS will provide investment
advice and portfolio management relating to the Fund's investments in
securities, issued by issuers located in Canada and Latin America (TCW) and
outside the Western Hemisphere (MGIS), subject to the overall supervision of
the Investment Manager. Certain officers and/or trustees of the Fund are
officers and/or directors of the Investment Manager. The Fund has retained
the Investment Manager to manage the investment of the Fund's U.S. assets and
supervise the investment of all the Fund's assets. Under the terms of the
investment management agreement, the Investment Manager maintains certain of
the Fund's books and records and furnishes, at its own expense, such office
space, facilities, equipment, supplies, clerical help and bookkeeping and
certain legal services as the Fund may reasonably require in the conduct of
its business. 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 the Fund's
telephone service, heat, light, power and other utilities provided to the
Fund.
As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund will pay
the Investment Manager monthly compensation calculated daily by applying the
annual rate of 1.0% to the Fund's daily net assets. As full compensation for
their services to be provided pursuant to the Sub-Advisory Agreements, the
Investment Manager will pay each Sub-Advisor monthly compensation equal to
30% of its monthly compensation.
41
<PAGE>
<PAGE>
Shares of the Fund will be distributed by Dean Witter Distributors Inc.
(the "Distributor"), a wholly-owned subsidiary of Dean Witter, Discover & Co.
and an affiliate of the Investment Manager. The Fund has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the Act (the "Plan"). The Plan
provides that the Distributor will bear the expense of all promotional and
distribution related activities on behalf of the Fund, including the payment
of commissions for sales of the Fund's shares and incentive compensation to
and expenses of Dean Witter Reynolds Inc. ("DWR") account executives and
others who engage in or support distribution of shares or who service
shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering
of the Fund's shares to other than current shareholders; and preparation,
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may utilize fees paid pursuant to the Plan to
compensate DWR and others for their opportunity costs in advancing such
amounts, which compensation would be in the form of a carrying charge on any
unreimbursed distribution expenses incurred.
To compensate the Distributor for the services provided and for the
expenses borne by the Distributor and others under the Plan, the Fund will
pay the Distributor compensation accrued daily and payable monthly at the
annual rate of 1.0% of the lesser of; (a) the average daily aggregate gross
sales of the Fund's shares since the inception of the Fund (not including
reinvestments of dividends or capital gains distributions), less the average
daily aggregate net asset value of the Fund's shares redeemed since the
Fund's inception upon which a contingent deferred sales charge has been
imposed or waived; or (b) the Fund's average daily net assets.
Dean Witter Trust Company (the "Transfer Agent"), an affiliate of the
Investment Manager and the Distributor, is the transfer agent of the Fund's
shares, dividend disbursing agent for payment of dividends and distributions
on Fund shares and agent for shareholders under various investment plans.
The Investment Manager has undertaken to assume all operating expenses
(except for the Plan fee and any brokerage fees) and waive the compensation
provided for in its investment management agreement for services rendered
until such time as the Fund has $50 million of net assets or until six months
from the date of commencement of the Fund's operations, whichever occurs
first.
42
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Shareholder and Trustees of
Dean Witter Global Asset Allocation Fund
In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of Dean Witter
Global Asset Allocation Fund ("the Fund") at December 7, 1994, in conformity
with generally accepted accounting principles. This financial statement is
the responsibility of the Fund's management; our responsibility is to express
an opinion on this financial statement based on our audit. We conducted our
audit of this financial statement in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
December 8, 1994
43
<PAGE>
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
None
(b) Exhibits:
1. -- Declaration of Trust of Registrant*
2. -- By-Laws of Registrant
3. -- None
4. -- Not Applicable
5.(a) -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
(b) -- Form of Sub-Advisory Agreement between Dean Witter
InterCapital Inc. and Morgan Grenfell Investment
Services Limited
(c) -- Form of Sub-Advisory Agreement between Dean Witter
InterCapital Inc. and TCW Funds Management, Inc.
6.(a) -- Form of Distribution Agreement between Registrant and
Dean Witter Distributors Inc.
(b) -- Forms of Selected Dealer Agreement between Dean
Witter Distributors Inc. and Selected Dealers
(c)-- Form of Underwriting Agreement between Registrant and
Dean Witter Distributors Inc.
7. -- None
8.(a)-- Form of Custodian Agreement
(b)-- Form of Transfer Agency and Services Agreement
between Registrant and Dean Witter Trust Company
9. -- Form of Services Agreement between Dean Witter
InterCapital Inc. and Dean Witter Services Company
Inc.
1
<PAGE>
10. -- Opinion of Sheldon Curtis, Esq.
11. -- Consent of Independent Accountants
12. -- None
13. -- Investment Letter of Dean Witter InterCapital Inc.
14. -- None
15. -- Form of Plan of Distribution between Registrant and
Dean Witter Distributors Inc.
16. -- Schedule for Computation of Performance Quotations -
to be filed with first post-effective amendment
27. -- Financial Data Schedule
Other-- Powers of Attorney
________________________
* Filed in the Form N-1A Registration Statement on October 28, 1994.
Item 25. Persons Controlled by or Under Common Control With
Registrant.
Prior to the effectiveness of this Registration Statement, the
Registrant will sell 10,000 of its shares of beneficial interest to
Dean Witter InterCapital Inc., a Delaware corporation. Dean Witter
InterCapital Inc. is a wholly-owned subsidiary of Dean Witter
Reynolds Inc., a Delaware corporation, which in turn is a wholly-
owned subsidiary of Dean Witter, Discover & Co., a Delaware
corporation, that is a balanced financial services organization
providing a broad range of nationally marketed credit and investment
products.
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record Holders
Title of Class at December 13, 1994
-------------- -------------------------
Shares of Beneficial Interest 1
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
2
<PAGE>
of the Registrant, and, with respect to any criminal proceeding, they
had reasonable cause to believe their conduct was not unlawful. In
addition, indemnification is permitted only if it is determined that
the actions in question did not render them liable by reason of
willful misfeasance, bad faith or gross negligence in the performance
of their duties or by reason of reckless disregard of their
obligations and duties to the Registrant. Trustees, officers,
employees and agents will be indemnified for the expense of
litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation.
The Registrant may also advance money for these expenses provided
that they give their undertakings to repay the Registrant unless
their conduct is later determined to permit indemnification.
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
3
<PAGE>
another trust or corporation, against any liability asserted against
him and incurred by him or arising out of his position. However, in
no event will Registrant maintain insurance to indemnify any such
person for any act for which Registrant itself is not permitted to
indemnify him.
Item 28. Business and Other Connections of Investment Adviser.
See "The Fund and Its Management" in the Prospectus regarding
the business of the investment adviser. The following information is
given regarding officers of Dean Witter InterCapital Inc.
InterCapital is a wholly-owned subsidiary of Dean Witter, Discover &
Co. The principal address of the Dean Witter Funds is Two World
Trade Center, New York, New York 10048.
The term "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.
4
<PAGE>
(7) Dean Witter Developing Growth Securities Trust
(8) Dean Witter Retirement Series
(9) Dean Witter Federal Securities Trust
(10) Dean Witter World Wide Investment Trust
(11) Dean Witter U.S. Government Securities Trust
(12) Dean Witter Select Municipal Reinvestment Fund
(13) Dean Witter High Yield Securities Inc.
(14) Dean Witter Intermediate Income Securities
(15) Dean Witter New York Tax-Free Income Fund
(16) Dean Witter California Tax-Free Income Fund
(17) Dean Witter Health Sciences Trust
(18) Dean Witter California Tax-Free Daily Income Trust
(19) Dean Witter Managed Assets Trust
(20) Dean Witter American Value Fund
(21) Dean Witter Strategist Fund
(22) Dean Witter Utilities Fund
(23) Dean Witter World Wide Income Trust
(24) Dean Witter New York Municipal Money Market Trust
(25) Dean Witter Capital Growth Securities
(26) Dean Witter Precious Metals and Minerals Trust
(27) Dean Witter European Growth Fund Inc.
(28) Dean Witter Global Short-Term Income Fund Inc.
(29) Dean Witter Pacific Growth Fund Inc.
(30) Dean Witter Multi-State Municipal Series Trust
(31) Dean Witter Premier Income Trust
(32) Dean Witter Short-Term U.S. Treasury Trust
(33) Dean Witter Diversified Income Trust
(34) Dean Witter U.S. Government Money Market Trust
(35) Dean Witter Global Dividend Growth Securities
(36) Active Assets California Tax-Free Trust
(37) Dean Witter Natural Resource Development Securities Inc.
(38) Active Assets Government Securities Trust
(39) Active Assets Money Trust
(40) Active Assets Tax-Free Trust
(41) Dean Witter Limited Term Municipal Trust
(42) Dean Witter Variable Investment Series
(43) Dean Witter Value-Added Market Series
(44) Dean Witter Global Utilities Fund
(45) Dean Witter High Income Securities
(46) Dean Witter National Municipal Trust
(47) Dean Witter International SmallCap Fund
(48) Dean Witter Mid-Cap Growth Fund
(49) Dean Witter Select Dimensions Investment Series
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
5
<PAGE>
(7) TCW/DW North American Intermediate Income Trust
(8) TCW/DW Global Convertible Trust
(9) TCW/DW Total Return 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; Formerly Executive
Vice President and Director of Dean Witter,
Discover & Co. ("DWDC"); Director and/or officer
of various DWDC subsidiaries.
Philip J. Purcell Chairman, Chief Executive Officer and Director of
Director of DWDC and DWR; Director of DWSC and
Distributors; Director or Trustee of the Dean
Witter Funds; Director and/or officer of various
DWDC subsidiaries.
Richard M. DeMartini Executive Vice President of DWDC; President and
Director Chief Operating Officer of Dean Witter Capital
and Director of DWR, DWSC, Distributors and DWTC;
Trustee of the TCW/DW Funds.
James F. Higgins Executive Vice President of DWDC; President and
Director Chief Operating Officer of Dean Witter Financial;
and Director of DWR, DWSC, Distributors and DWTC.
Thomas C. Schneider Executive Vice President and Chief Financial
Executive Vice Officer of DWDC, DWR, DWSC and Distributors;
President, Chief Director of DWR, DWSC and Distributors.
Financial Officer and
Director
Christine A. Edwards Executive Vice President, Secretary and General
Director Counsel of DWDC and DWR; Executive Vice President,
Secretary and Chief Legal Officer of Distributors;
and Director of DWR, DWSC and Distributors.
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
- ----------------- --------------------------------------------------
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;
and Vice President of the Dean Witter Funds and
the TCW/DW Funds.
David A. Hughey Executive Vice President and Chief Administrative
Executive Vice Officer of DWSC, Distributors and DWTC; Director
President and Chief of DWTC; Vice President of the Dean Witter Funds
Administrative Officer and the TCW/DW Funds.
Edmund C. Puckhaber Director of DWTC; Vice President of the Dean
Executive Vice Witter Funds.
President
John Van Heuvelen President, Chief Operating Officer and Director
Executive Vice of DWTC.
President
Sheldon Curtis Assistant Secretary of DWR; Senior Vice President,
Senior Vice President, Secretary and General Counsel of DWSC; Senior Vice
General Counsel and President, Assistant General Counsel and Assistant
Secretary Secretary of Distributors; Senior Vice President
and Secretary of DWTC; and 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.
Thomas H. Connelly
Senior Vice President Vice President of various Dean Witter Funds.
Edward Gaylor
Senior Vice President Vice President of various Dean Witter 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.
John B. Kemp, III Director of the Provident Savings Bank, Jersey
Senior Vice President City, New Jersey.
Anita Kolleeny
Senior Vice President Vice President of various Dean Witter Funds.
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
- ----------------- -------------------------------------------------
Jonathan R. Page
Senior Vice President Vice President of various Dean Witter Funds.
Ira Ross
Senior Vice President Vice President of various Dean Witter Funds.
Rochelle G. Siegel
Senior Vice President Vice President of various Dean Witter Funds.
Paul D. Vance
Senior Vice President Vice President of various Dean Witter Funds.
Elizabeth A. Vetell
Senior Vice President
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.
Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President DWSC, Assistant Treasurer of Distributors; and
Assistant Treasurer Treasurer of the Dean Witter Funds and the TCW/DW
Funds.
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.
Barry Fink First Vice President and Assistant Secretary of
First Vice President DWSC; Assistant Secretary of the Dean Witter
and Assistant Secretary Funds and the TCW/DW Funds.
Michael Interrante First Vice President and Controller of DWSC;
First Vice President Assistant Treasurer of Distributors and First Vice
and Controller President and Treasurer of DWTC.
Robert Zimmerman
First Vice President
Joan Allman
Vice President
Joseph Arcieri
Vice President Vice President of various Dean Witter Funds.
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
- ----------------- --------------------------------------------------
Stephen Brophy
Vice President
Terence P. Brennan, II
Vice President
Douglas Brown
Vice President
Thomas Chronert
Vice President
Rosalie Clough
Vice President
Patricia A. Cuddy
Vice President Vice President of various Dean Witter Funds.
B. Catherine Connelly
Vice President
Salvatore DeSteno
Vice President Vice President of DWSC.
Frank J. DeVito
Vice President Vice President of DWSC.
Dwight Doolan
Vice President
Bruce Dunn
Vice President
Jeffrey D. Geffen
Vice President
Deborah Genovese
Vice President
Peter W. Gurman
Vice President
Russell Harper
Vice President
John Hechtlinger
Vice President
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
- ---------------- -------------------------------------------------
David Hoffman
Vice President
David Johnson
Vice President
Christopher Jones
Vice President
Stanley Kapica
Vice President
Konrad J. Krill
Vice President Vice President of various Dean Witter Funds.
Paul LaCosta
Vice President Vice President of various Dean Witter Funds.
Lawrence S. Lafer Vice President and Assistant Secretary of DWSC;
Vice President and Assistant Secretary of the Dean Witter Funds and
Assistant Secretary the TCW/DW Funds.
Thomas Lawlor
Vice President
Lou Anne 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
James Mulcahy
Vice President
James Nash
Vice President
Richard Norris
Vice President
Hugh Rose
Vice President
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.
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
- ----------------- -------------------------------------------------
Carl F. Sadler
Vice President
Rafael Scolari
Vice President Vice President of Prime Income Trust
Diane Lisa Sobin
Vice President Vice President of various Dean Witter Funds.
Kathleen Stromberg
Vice President Vice President of various Dean Witter Funds.
Vinh Q. Tran
Vice President Vice President of various Dean Witter Funds.
Alice Weiss
Vice President Vice President of various Dean Witter Funds.
Jayne M. Wolff
Vice President Vice President of various Dean Witter Funds.
Marianne Zalys
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 Natural Resource Development Securities Inc.
(7) Dean Witter World Wide Investment Trust
(8) Dean Witter Capital Growth Securities
(9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Short-Term Bond Fund
(15) Dean Witter Federal Securities Trust
(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
11
<PAGE>
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Managed Assets Trust
(22) Dean Witter Limited Term Municipal Trust
(23) Dean Witter World Wide Income Trust
(24) Dean Witter Utilities Fund
(25) Dean Witter Strategist Fund
(26) Dean Witter New York Municipal Money Market Trust
(27) Dean Witter Intermediate Income Securities
(28) Prime Income Trust
(29) Dean Witter European Growth Fund Inc.
(30) Dean Witter Developing Growth Securities Trust
(31) Dean Witter Precious Metals and Minerals Trust
(32) Dean Witter Pacific Growth Fund Inc.
(33) Dean Witter Multi-State Municipal Series Trust
(34) Dean Witter Premier Income Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
(38) Dean Witter Global Dividend Growth Securities
(39) Dean Witter American Value Fund
(40) Dean Witter U.S. Government Money Market Trust
(41) Dean Witter Global Short-Term Income Fund Inc.
(42) Dean Witter Variable Investment Series
(43) Dean Witter Value-Added Market Series
(44) Dean Witter Global Utilities Fund
(45) Dean Witter High Income Securities
(46) Dean Witter National Municipal Trust
(47) Dean Witter International SmallCap Fund
(48) Dean Witter Mid-Cap Growth Fund
(1) TCW/DW Core Equity Trust
(2) TCW/DW North American Government Income Trust
(3) TCW/DW Latin American Growth Fund
(4) TCW/DW Income and Growth Fund
(5) TCW/DW Small Cap Growth Fund
(6) TCW/DW Balanced Fund
(7) TCW/DW North American Intermediate Income Trust
(8) TCW/DW Global Convertible Trust
(9) TCW/DW Total Return 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.
12
<PAGE>
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
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.
------------
The undersigned Registrant hereby undertakes to file a post-
effective amendment, using financial statements which need not be audited,
within four to six months from the effective date of the Registrant's
Registration Statement under the Securities Act of 1933.
The undersigned Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the Investment Company Act of 1940 with regard
to facilitating shareholder communications in the event the requisite
percentage of shareholders so requests, to the same extent as if Registrant
were subject to the provisions of that Section.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and the State of New York
on the 14th day of December, 1994.
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
By: /s/ Sheldon Curtis
------------------------------------
Sheldon Curtis
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
Signatures Title Date
---------- ----- ----
(1) Principal Executive Officer Chairman, President,
Chief Executive
Officer and Trustee
By:/s/ Charles A. Fiumefreddo 12/14/94
-------------------------------
Charles A. Fiumefreddo
(2) Principal Financial Officer Treasurer and Principal
Accounting Officer
By:/s/ Thomas F. Caloia 12/14/94
--------------------------------
Thomas F. Caloia
(3) Majority of the Trustees
Charles A. Fiumefreddo
Philip J. Purcell
By:/s/ Sheldon Curtis 12/14/94
----------------------------------
Sheldon Curtis
Attorney-in-Fact
John R. Haire
Paul Kolton
Michael E. Nugent
John L. Schroeder
By:/s/ David M. Butowsky 12/14/94
-----------------------------------
David M. Butowsky
Attorney-in-Fact
Jack F. Bennett
Michael Bozic
Edwin J. Garn
Manuel H. Johnson
<PAGE>
EXHIBITS
1. -- Declaration of Trust of Registrant*
2. -- By-Laws of Registrant
3. -- None
4. -- Not Applicable
5.(a) -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.
(b) -- Form of Sub-Advisory Agreement between Dean Witter
InterCapital Inc. and Morgan Grenfell Investment
Services Limited
(c) -- Form of Sub-Advisory Agreement between Dean Witter
InterCapital Inc. and TCW Funds Management, Inc.
6.(a) -- Form of Distribution Agreement between Registrant and
Dean Witter Distributors Inc.
(b) -- Forms of Selected Dealer Agreement between Dean Witter
Distributors Inc. and Selected Dealers
(c)-- Form of Underwriting Agreement between Registrant and
Dean Witter Distributors Inc.
7. -- None
8.(a)-- Form of Custodian Agreement
(b)-- Form of Transfer Agency and Services Agreement between
Registrant and Dean Witter Trust Company
9. -- Form of Services Agreement between Dean Witter
InterCapital Inc. and Dean Witter Services Company Inc.
10. -- Opinion of Sheldon Curtis, Esq.
11. -- Consent of Independent Accountants
12. -- None
13. -- Investment Letter of Dean Witter InterCapital Inc.
14. -- None
15. -- Form of Plan of Distribution between Registrant and Dean
Witter Distributors Inc.
16. -- Schedule for Computation of Performance Quotations -
to be filed with first post-effective amendment
27. -- Financial Data Schedule
Other-- Powers of Attorney
________________________
* Filed in the Form N-1A Registration Statement on October 28, 1994.
<PAGE>
EXHIBIT 2
BY-LAWS
OF
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
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
Global Asset Allocation Fund dated October 18, 1994.
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 as otherwise required by Section
16(c) of the 1940 Act and to the extent required by the corporate or business
statute of any state in which the Shares of the Trust are sold, 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 issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be
<PAGE>
<PAGE>
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 Section 32 of the Corporations Law of the
State of Massachusetts.
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.
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 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.
2
<PAGE>
<PAGE>
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 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.
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 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.
3
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<PAGE>
(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.
(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
4
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<PAGE>
(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.
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.
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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; he 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
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.
(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.
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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.
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 holders' name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of
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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 all 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 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.
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.
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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.
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,
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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 Global Asset Allocation
Fund, dated October 18, 1994, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Global Asset Allocation Fund 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 Global
Asset Allocation Fund 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 Global Asset Allocation Fund, but the Trust Estate only shall be
liable.
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EXHIBIT 5(a)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of the day of , 1995 by and between Dean Witter
Global Asset Allocation Fund, 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, enter into a
Sub-Advisory Agreement (or Agreements) with a Sub-Advisor (or Sub-Advisors)
to make determinations as to 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 to take such further action, including the placing
of purchase and sale orders on behalf of the Fund, as the Sub-Advisor(s), in
consultation with the Investment Manager, shall deem necessary or
appropriate; provided that the Investment Manager shall be responsible for
monitoring compliance by such Sub-Advisor(s) with the investment policies and
restrictions of the Fund and with such other limitations or directions as the
Trustee of the Fund may from time to time prescribe.
3. 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.
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4. 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.
5. 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 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.
6. 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.
7. 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 % 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.
8. 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
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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
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.
9. 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.
10. 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.
11. This Agreement shall remain in effect until April 30, 1996 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.
12. 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.
13. 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.
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14. 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, Dean Witter Reynolds Inc., or any corporate affiliate of the
Investment Manager's parent, may use or grant to others the right to use the
name "Dean Witter", or any combination or abbreviation thereof, as all or a
portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, (iv) at the
request of the Investment Manager or its parent, the Fund will take such
action as may be required to provide its consent to the use of the name "Dean
Witter", or any combination or abbreviation thereof, by the Investment
Manager or its parent or any corporate affiliate of the Investment Manager's
parent, or by any person to whom the Investment Manager or its parent or any
corporate affiliate of the Investment Manager's parent shall have granted the
right to such use, and (v) upon the termination of any investment advisory
agreement into which the Investment Manager and the Fund may enter, or upon
termination of affiliation of the Investment Manager with its parent, the
Fund shall, upon request by the Investment Manager or its parent, cease to
use the name "Dean Witter" as a component of its name, and shall not use the
name, or any combination or abbreviation thereof, as a part of its name or
for any other commercial purpose, and shall cause its officers, Trustees and
shareholders to take any and all actions which the Investment Manager or its
parent may request to effect the foregoing and to reconvey to the Investment
Manager or its parent any and all rights to such name.
15. The Declaration of Trust establishing Dean Witter Global Asset
Allocation Fund, dated October 18, 1994, 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 Global Asset Allocation Fund 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 Global
Asset Allocation Fund 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 Global Asset Allocation Fund, 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 Global Asset Allocation Fund
By
..........................................
Attest:
...........................................
Dean Witter InterCapital Inc.
By
...........................................
Attest:
...........................................
4
<PAGE>
EXHIBIT 5(b)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1994 by and between
Dean Witter InterCapital Inc., a Delaware corporation (herein referred to as
the "Investment Manager"), and Morgan Grenfell Investment Services Limited, a
British corporation (herein referred to as the "Sub-Advisor").
WHEREAS, Dean Witter Global Asset Allocation Fund (herein referred to as
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 has entered into an Investment Management
Agreement with the Fund (the "Investment Management Agreement") wherein the
Investment Manager has agreed to provide investment management services to
the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment advisor as under
the Investment Advisers Act of 1940 and is a member of the Investment
Management Regulatory Organization (IMRO), and, as such, is regulated by IMRO
in the conduct of its investment business in the U.K., and engages in the
business of acting as an investment advisor; and
WHEREAS, the Investment Manager desires to retain the services of the
Sub-Advisor to render investment advisory services for the Fund in the manner
and on the terms and conditions hereinafter set forth; and
WHEREAS, the Sub-Advisor desires to be retained by the Investment Manager
to perform services on said terms and conditions:
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. Subject to the supervision of the Fund, its officers and Trustees, and
the Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then-current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Trustees of the Fund and
communicated by the Investment Manager to the Sub-Advisor, the Sub-Advisor
agrees to provide the Fund with investment advisory services with respect to
the Fund's investments to obtain and evaluate such information and advice
relating to the economy, securities markets and securities as it deems
necessary or useful to discharge its duties hereunder; to continuously manage
the assets of the Fund in a manner consistent with the investment objective
and policies of the Fund; to make decisions as to foreign currency matters
and make determinations as to forward foreign exchange contracts and options
and futures contracts in foreign currencies; shall determine the securities
to be purchased, sold or otherwise disposed of by the Fund and the timing of
such purchases, sales and dispositions; to take such further action,
including the placing of purchase and sale orders on behalf of the Fund, as
it shall deem necessary or appropriate; to furnish to or place at the
disposal of the Fund and the Investment Manager such of the information,
evaluations, analyses and opinions formulated or obtained by it in the
discharge of its duties as the Fund and the Investment Manager may, from time
to time, reasonably request. The Investment Manager and the Sub-Advisor shall
each make its officers and employees available to the other from time to time
at reasonable times to review investment policies of the Fund and to consult
with each other.
2. The Sub-Advisor 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 Sub-Advisor shall
be deemed to include persons employed or otherwise retained by the
Sub-Advisor 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 Sub-Advisor shall maintain whatever
records as may be required to be maintained by it under the Act. All such
records so maintained shall be made available to the Fund, upon the request
of the Investment Manager or the Fund.
3. The Fund will, from time to time, furnish or otherwise make available
to the Sub-Advisor such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the
Sub-Advisor may reasonably require in order to discharge its duties and
obligations hereunder or to comply with any applicable law and regulations
and the investment objectives, policies and restrictions from time to time
prescribed by the Trustees of the Fund.
1
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<PAGE>
4. The Sub-Advisor shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at
its own expense, pay the compensation of the officers and employees, if any,
of the Fund, employed by the Sub-Advisor, and such clerical help and
bookkeeping services as the Sub-Advisor shall reasonably require in
performing its duties hereunder.
5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including, without limitation: any fees paid to the Investment
Manager; fees pursuant to any plan of distribution that the Fund may adopt;
the charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer or dividend agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to federal, state or other governmental agencies or
pursuant to any foreign laws; 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 or pursuant to any foreign laws (including filing
fees and legal fees and disbursements of counsel); the cost and expense of
printing (including typesetting) and distributing prospectuses of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
of the Investment Manager or Sub-Advisor; 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, the Investment Manager or the
Sub-Advisor, 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 Sub-Advisor, the Investment Manager shall pay to the
Sub-Advisor monthly compensation equal to % of its monthly compensation
receivable pursuant to the Investment Management Agreement. Any subsequent
change in the Investment Management Agreement which has the effect of raising
or lowering the compensation of the Investment Manager will have the
concomitant effect of raising or lowering the fee payable to the Sub-Advisor
under this Agreement. In addition, if the Investment Manager has undertaken
in the Fund's Registration Statement as filed under the Act (the
"Registration Statement") or elsewhere to waive all or part of its fee under
the Investment Management Agreement, the Sub-Advisor's fee payable under this
Agreement will be proportionately waived in whole or in part. The calculation
of the fee payable to the Sub-Advisor pursuant to this Agreement will be
made, each month, at the time designated for the monthly calculation of the
fee payable to the Investment Manager pursuant to the Investment Management
Agreement. If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
the part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fee as set forth above. Subject
to the provisions of paragraph 7 hereof, payment of the Sub-Advisor'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 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 imposed by
state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, the Sub-Advisor shall reduce its
advisory fee to the extent of % of such excess and, if required, pursuant to
any such laws or regulations, will reimburse the Investment Manager for
annual operating expenses in the amount of % of such excess of any expense
limitation that may be applicable, it being understood that the Investment
Manager has agreed to effect a reduction and reimbursement of 100% of such
excess in accordance with the terms of the
2
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<PAGE>
Investment Management Agreement; 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 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 or the largest expense reimbursement 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 Sub-Advisor will use its best efforts in the performance of
investment activities on behalf of the Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Sub-Advisor shall not be liable to the Investment
Manager or the Fund or any of its investors for any error of judgment or
mistake of law or for any act or omission by the Sub-Advisor or for any
losses sustained by the Fund or its investors.
9. It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, director, officer or employee of,
or be otherwise interested in, the Sub-Advisor, and in any person controlled
by or under common control with the Sub-Advisor, and that the Sub-Advisor and
any person controlled by or under common control with the Sub-Advisor may
have an interest in the Fund. It is also understood that the Sub-Advisor and
any affiliated persons thereof or any persons controlled by or under common
control with the Sub-Advisor have and may have advisory, management 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; provided, however, that neither the Sub-Advisor
nor any of its affiliates organized with a corporate name or other name under
which it is performing its business activities which contains the names
"Morgan Grenfell", with the exception of C.J. Lawrence Morgan Grenfell, Inc.,
shall undertake to act as investment advisor or sub-advisor for any other
U.S. registered investment company with similar investment policies which is
sold primarily to retail investors, and which is sponsored, distributed or
managed by a U.S. registered broker-dealer or one of its affiliates.
10. This Agreement shall remain in effect until April 30, 1996 and from
year to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Fund or by the 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 and the Sub-Advisor,
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 (within the
meaning of the Act) unless such automatic termination shall be prevented by
an exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement without payment of penalty on thirty days' written notice to
the Fund and the Sub-Advisor and; (e) the Sub-Advisor may terminate this
Agreement without the payment of penalty on thirty days' written notice to
the Fund and the Investment Manager. 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,
the Investment Manager nor the Sub-Advisor shall be liable for failing to do
so.
3
<PAGE>
<PAGE>
12. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
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 INTERCAPITAL INC.
By: ......................................
Attest: ...................................
MORGAN GRENFELL INVESTMENT
SERVICES LIMITED
BY: .......................................
ATTEST: ....................................
ACCEPTED AND AGREED TO AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
DEAN WITTER GLOBAL
ASSET ALLOCATION FUND
BY: ......................................
ATTEST: ...................................
4
<PAGE>
EXHIBIT 5(c)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1994 by and between
Dean Witter InterCapital Inc., a Delaware corporation (herein referred to as
the "Investment Manager"), and TCW Funds Management, Inc. (herein referred to
as the "Sub-Advisor").
WHEREAS, Dean Witter Global Asset Allocation Fund (herein referred to as
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 has entered into an Investment Management
Agreement with the Fund (the "Investment Management Agreement") wherein the
Investment Manager has agreed to provide investment management services to
the Fund; and
WHEREAS, the Sub-Advisor is registered as an investment advisor as under
the Investment Advisers Act of 1940 and engages in the business of acting as
an investment advisor; and
WHEREAS, the Investment Manager desires to retain the services of the
Sub-Advisor to render investment advisory services for the Fund in the manner
and on the terms and conditions hereinafter set forth; and
WHEREAS, the Sub-Advisor desires to be retained by the Investment Manager
to perform services on said terms and conditions:
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. Subject to the supervision of the Fund, its officers and Trustees, and
the Investment Manager, and in accordance with the investment objectives,
policies and restrictions set forth in the then-current Registration
Statement relating to the Fund, and such investment objectives, policies and
restrictions from time to time prescribed by the Trustees of the Fund and
communicated by the Investment Manager to the Sub-Advisor, the Sub-Advisor
agrees to provide the Fund with investment advisory services with respect to
the Fund's investments; to obtain and evaluate such information and advice
relating to the economy, securities markets and securities as it deems
necessary or useful to discharge its duties hereunder; to continuously manage
the assets of the Fund in a manner consistent with the investment objective
and policies of the Fund; to make decisions as to foreign currency matters
and make determinations as to forward foreign exchange contracts and options
and futures contracts in foreign currencies; shall determine the securities
to be purchased, sold or otherwise disposed of by the Fund and the timing of
such purchases, sales and dispositions; to take such further action,
including the placing of purchase and sale orders on behalf of the Fund, as
it shall deem necessary or appropriate; to furnish to or place at the
disposal of the Fund and the Investment Manager such of the information,
evaluations, analyses and opinions formulated or obtained by it in the
discharge of its duties as the Fund and the Investment Manager may, from time
to time, reasonably request. The Investment Manager and the Sub-Advisor shall
each make its officers and employees available to the other from time to time
at reasonable times to review investment policies of the Fund and to consult
with each other.
2. The Sub-Advisor 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 Sub-Advisor shall
be deemed to include persons employed or otherwise retained by the
Sub-Advisor 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 Sub-Advisor shall maintain whatever
records as may be required to be maintained by it under the Act. All such
records so maintained shall be made available to the Fund, upon the request
of the Investment Manager or the Fund.
3. The Fund shall, from time to time, furnish or otherwise make available
to the Sub-Advisor such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the
Sub-Advisor may reasonably require in order to discharge its duties and
obligations hereunder or to comply with any applicable law and regulations
and the investment objectives, policies and restrictions from time to time
prescribed by the Trustees of the Fund.
1
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<PAGE>
4. The Sub-Advisor shall bear the cost of rendering the investment
advisory services to be performed by it under this Agreement, and shall, at
its own expense, pay the compensation of the officers and employees, if any,
of the Fund, employed by the Sub-Advisor, and such clerical help and
bookkeeping services as the Sub-Advisor shall reasonably require in
performing its duties hereunder.
5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including, without limitation: any fees paid to the Investment
Manager; fees pursuant to any plan of distribution that the Fund may adopt;
the charges and expenses of any registrar, any custodian, sub-custodian or
depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer or dividend agent or
agents appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to federal, state or other governmental agencies or
pursuant to any foreign laws; 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 or pursuant to any foreign laws (including filing
fees and legal fees and disbursements of counsel); the cost and expense of
printing (including typesetting) and distributing prospectuses of the Fund
and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
of the Investment Manager or Sub-Advisor; 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, the Investment Manager or the
Sub-Advisor, 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 Sub-Advisor, the Investment Manager shall pay to the
Sub-Advisor monthly compensation equal to % of its monthly compensation
receivable pursuant to the Investment Management Agreement. Any subsequent
change in the Investment Management Agreement which has the effect of raising
or lowering the compensation of the Investment Manager will have the
concomitant effect of raising or lowering the fee payable to the Sub-Advisor
under this Agreement. In addition, if the Investment Manager has undertaken
in the Fund's Registration Statement as filed under the Act (the
"Registration Statement") or elsewhere to waive all or part of its fee under
the Investment Management Agreement, the Sub-Advisor's fee payable under this
Agreement will be proportionately waived in whole or in part. The calculation
of the fee payable to the Sub-Advisor pursuant to this Agreement will be
made, each month, at the time designated for the monthly calculation of the
fee payable to the Investment Manager pursuant to the Investment Management
Agreement. If this Agreement becomes effective subsequent to the first day of
a month or shall terminate before the last day of a month, compensation for
the part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fee as set forth above. Subject
to the provisions of paragraph 7 hereof, payment of the Sub-Advisor'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 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 imposed by
state securities laws or regulations thereunder, as such limitations may be
raised or lowered from time to time, the Sub-Advisor shall reduce its
advisory fee to the extent of % of such excess and, if required, pursuant to
any such laws or regulations, will reimburse the Investment Manager for
annual operating expenses in the amount of % of such excess of any expense
limitation that may be applicable, it being understood that the Investment
Manager has agreed to effect a reduction and reimbursement of 100% of such
excess in accordance with the terms of the
2
<PAGE>
<PAGE>
Investment Management Agreement; 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 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 or the largest expense reimbursement 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 Sub-Advisor will use its best efforts in the performance of
investment activities on behalf of the Fund, but in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Sub-Advisor shall not be liable to the Investment
Manager or the Fund or any of its investors for any error of judgment or
mistake of law or for any act or omission by the Sub-Advisor or for any
losses sustained by the Fund or its investors. The Sub-Advisor shall be
indemnified by the Fund as an agent of the Fund in accordance with the terms
of Section 4.8 of the Fund's By-Laws.
9. This Agreement shall remain in effect until April 30, 1996 and from
year to year thereafter provided such continuance is approved at least
annually by the vote of holders of a majority, as defined in the Act, of the
outstanding voting securities of the Fund or by the 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 and the Sub-Advisor,
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 (within the
meaning of the Act) unless such automatic termination shall be prevented by
an exemptive order of the Securities and Exchange Commission; (c) this
Agreement shall immediately terminate in the event of the termination of the
Investment Management Agreement; (d) the Investment Manager may terminate
this Agreement without payment of penalty on thirty days' written notice to
the Fund and the Sub-Advisor and; (e) the Sub-Advisor may terminate this
Agreement without the payment of penalty on thirty days' written notice to
the Fund and the Investment Manager. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed post-paid, to the other
party at the principal office of such party.
10. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund,
the Investment Manager nor the Sub-Advisor shall be liable for failing to do
so.
11. This Agreement shall be construed in accordance with the law of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.
3
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<PAGE>
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 INTERCAPITAL INC.
By: .....................................
Attest: ..................................
TCW FUNDS MANAGEMENT, INC.
BY: ......................................
ATTEST: ...................................
ACCEPTED AND AGREED TO AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN:
DEAN WITTER GLOBAL ASSET
ALLOCATION FUND
BY: .......................................
ATTEST: ....................................
4
<PAGE>
EXHIBIT 6(a)
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
DISTRIBUTION AGREEMENT
AGREEMENT made as of this day of , 1994, between Dean Witter Global
Asset Allocation Fund, 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.
(b) The Shares are to be resold by the Distributor at the net asset value
per share, as set forth in the Prospectus, to investors or to securities
dealers, including DWR, 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(d) 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 have been some other extraordinary event
which, in the judgment of the Trust, makes it impracticable to sell the
Shares.
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(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).
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
less any applicable contingent deferred sales charge. All payments by the
Trust hereunder shall be made in the manner set forth below.
The proceeds of any redemption of Shares shall be paid by the Trust as
follows: (i) any applicable contingent deferred sales charge shall be paid to
the Distributor or to the Selected Dealer, or, when applicable, pursuant to
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. ("NASD"), retained by the Fund and (ii) the balance shall be paid to the
redeeming shareholders, in each case in accordance with applicable provisions
of the Prospectus, in New York Clearing House funds. The Distributor is
authorized to direct the Trust to pay directly to any Selected Dealer any
contingent deferred sales charges payable by the Trust to the Distributor in
respect of Shares sold by the Selected Dealer to the redeeming shareholders.
(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 share holder'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.
With respect to Shares tendered for redemption or repuchase 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 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.
(d) 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
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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 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 share holders, 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 qualify and maintain the
qualification of an appropriate number of the Shares for sale under the
securities laws of such states as the Distributor and the Trust may approve.
Any such qualification may be withheld, terminated or withdrawn by the Trust
at any time in its discretion. As provided in Section 8(c) hereof, the
expense of qualification and maintenance of qualification shall be borne by
the Trust. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Trust in
connection with such qualification.
(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 by 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 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. It is also understood that Selected Dealers, including
DWR, may also sell shares for other registered investment companies.
(b) The Distributor and any Selected Dealers shall not give any
information or make any representations, other than those contained in the
Registration Statement or related Prospectus and any sales literature
specifically approved by the Trust.
(c) The Distributor agrees that it will comply with the terms and
limitations of the Rules of Fair Practice of the 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 sales
commissions 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. It is understood and
agreed that, so long as the Trust's Plan of Distribution pursuant to Rule
12b-1 under the 1940 Act continues in effect, any expenses incurred by the
Distributor hereunder
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may be paid from amounts the Distributor and any Selected Dealer are entitled
to receive from the Trust under such Plan. It is further understood and
agreed that expenses for which the Distributor and any other Selected Dealer
may be paid under said Plan include opportunity costs, which may be
calculated as a carrying charge on the excess of distribution expenses,
incurred by the Distributor and/or the Selected Dealer over distribution
revenues received by each of them, respectively, under this Agreement.
(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 bear the cost and expenses of qualification of the
Shares for sale, and, if necessary or advisable in connection therewith, 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 qualification therein until the Trust
decides to discontinue such qualification 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.
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(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 related Prospectus and Statement of Additional Information, as
from time to time amended, or the annual or interim reports to shareholders.
(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 subsection 4(c) 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 subsection 3(d).
(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 indemnifiying
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 Trust 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 Trust 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 Trust 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 Trust 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 Trust or the Distributor and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Trust 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, 1995, and thereafter, but only so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the
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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 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 Trus tees 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 financial 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 Plan of Distribution pursuant to Rule
12b-1 under the 1940 Act, 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 Global Asset Allocation Fund, dated October 18, 1994, 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 Global Asset Allocation Fund 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 Global Asset Allocation Fund 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 Global Asset Allocation Fund, 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 GLOBAL ASSET ALLOCATION FUND
By: ....................................
DEAN WITTER DISTRIBUTORS INC.
By: ....................................
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EXHIBIT 6(b)
DEAN WITTER DISTRIBUTORS INC.
Gentlemen:
Dean Witter Distributors Inc. (the "Distributor") has a distribution
agreement (the "Distribution Agreement") with Dean Witter Global Asset
Allocation Fund, a Massachusetts business trust (the "Fund"), pursuant to
which it acts as the Distributor for the sale of the Fund's shares of
beneficial interest, par value $0.01 per share (the "Shares"). Under the
Distribution Agreement, the Distributor has the right to distribute Shares
for resale.
The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and the Shares being offered to
the public are registered under the Securities Act of 1933, as amended. You
have received a copy of the Distribution Agreement between us and the Fund
and reference is made herein to certain provisions of such Distribution
Agreement. The terms used herein, including "Prospectus" and "Registration
Statement" of the Fund and "Selected Dealer" shall have the same meaning in
this Agreement as in the Distribution Agreement. As principal, we offer to
sell shares to your customers, upon the following terms and conditions:
1. In all sales of Shares to the public you shall act on behalf of your
customers, and in no transaction shall you have any authority to act as agent
for the Fund, for us or for any Selected Dealer.
2. Orders received from you will be accepted through us or on our behalf
only at the net asset value applicable to each order, as set forth in the
current Prospectus. The procedure relating to the handling of orders shall be
subject to instructions which we or the Fund shall forward from time to time
to you. All orders are subject to acceptance or rejection by the Distributor
or the Fund in the sole discretion of either.
3. You shall not place orders for any Shares unless you have already
received purchase orders for such Shares at the applicable net asset values
and subject to the terms hereof and of the Distribution Agreement and the
Prospectus. You agree that you will not offer or sell any of the Shares
except under circumstances that will result in compliance with the applicable
Federal and state securities laws and that in connection with sales and
offers to sell Shares you will furnish to each person to whom any such sale
or offer is made a copy of the Prospectus (as then amended or supplemented)
and will not furnish to any person any information relating to the Shares,
which is inconsistent in any respect with the information contained in the
Prospectus (as then amended or supplemented) or cause any advertisement to be
published by radio or television or in any newspaper or posted in any public
place or use any sales promotional material without our consent and the
consent of the Fund.
4. The Distributor will compensate you for sales of Shares of the Fund and
personal services to Fund shareholders by paying you a sales charge and/or
other commission (which may be in the form of a gross sales credit and/or an
annual residual commission) and/or a service fee, under the terms as are set
forth in the Fund's Prospectus.
5. If any Shares sold to your customers under the terms of this Agreement
are repurchased by us for the account of the Fund or are tendered for
redemption within seven business days after the date of the confirmation of
the original purchase by you, it is agreed that you shall forfeit your right
to, and refund to us, any commission received by you with respect to such
Shares.
6. No person is authorized to make any representations concerning the
Shares or the Fund except those contained in the current Prospectus and in
such printed information subsequently issued by us or the Fund as information
supplemental to such Prospectus. In selling Shares, you shall rely solely on
the representations contained in the Prospectus and supplemental information
mentioned above. Any printed information which we furnish you other than the
Prospectus and the Fund's periodic reports and proxy solicitation material
are our sole responsibility and not the responsibility of the Fund, and you
agree that the Fund shall have no liability or responsibility to you in these
respects unless expressly assumed in connection therewith.
7. You agree to deliver to each of the purchasers making purchases a copy
of the then current Prospectus at or prior to the time of offering or sale,
and you agree thereafter to deliver to such purchasers copies of the annual
and interim reports and proxy solicitation materials of the Fund. You further
agree to endeavor to obtain proxies from such purchasers. Additional copies
of the Prospectus, annual or interim reports and proxy solicitation materials
of the Fund will be supplied to you in reasonable quantities upon request.
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8. You are hereby authorized (i) to place orders directly with the Fund or
its agent for Shares of the Fund to be sold by us subject to the applicable
terms and conditions governing the placement of orders for the purchase of
Fund Shares, as set forth in the Distribution Agreement, and (ii) to tender
Shares directly to the Fund or its agent for redemption subject to the
applicable terms and conditions set forth in the Distribution Agreement.
9. We reserve the right in our discretion, without notice, to suspend
sales or withdraw the offering of Shares entirely. Each party hereto has the
right to cancel this agreement upon notice to the other party.
10. I. You shall indemnify and hold harmless the Distributor, from and
against any claims, damages and liabilities which arise as a result of action
taken pursuant to instructions from you, or on your behalf to: a)(i) place
orders for Shares of the Fund with the Fund's transfer agent or direct the
transfer agent to receive instructions for the order of Shares, and (ii)
accept monies or direct that the transfer agent accept monies as payment for
the order of such Shares, all as contemplated by and in accordance with
Section 3 of the Distribution Agreement; b)(i) place orders for the
redemption of Shares of the Fund with the Fund's transfer agent or direct the
transfer agent to receive instruction for the redemption of Shares and (ii)
to pay redemption proceeds or to direct that the transfer agent pay
redemption proceeds in connection with orders for the redemption of Shares,
all as contemplated by and in accordance with Section 4 of the Distribution
Agreement; provided, however, that in no case, (i) is this indemnity in favor
of the Distributor and any such controlling persons to be deemed to protect
the Distributor or any such controlling persons thereof against any liability
to which the Distributor or any such controlling persons would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement or the Distribution Agreement; or
(ii) are you to be liable under the indemnity agreement contained in this
paragraph with respect to any claim made against the Distributor or any such
controlling persons, unless the Distributor or any such controlling persons,
as the case may be, shall have notified you in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Distributor or such
controlling persons (or after the Distributor or such controlling persons
shall have received notice of such service on any designated agent), but
failure to notify you of any such claim shall not relieve you from any
liability which you may have to the person against whom such action is
brought otherwise than on account of the indemnity agreement contained in
this paragraph. You will be entitled to participate at your own expense in
the defense, or, if you so elect, to assume the defense, of any suit brought
to enforce any such liability, but if you elect to assume the defense, such
defense shall be conducted by counsel chosen by you and satisfactory to the
Distributor or such controlling person or persons, defendant or defendants in
the suit. In the event you elect to assume the defense of any such suit and
retain such counsel, the Distributor or such controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, but, in case you do not elect to assume
the defense of any such suit, you will reimburse the Distributor or such
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. You shall
promptly notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or directors in connection with
the issuance or sale of the Shares.
II. If the indemnification provided for in this Section 10 is unavailable
or insufficient to hold harmless the Distributor, as provided above in
respect of any losses, claims, damages, liabilities or expenses (or actions
in respect thereof) referred to herein, then you shall contribute to the
amount paid or payable by the Distributor as a result of such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by you
on the one hand and the Distributor on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then you shall contribute to
such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also your
relative fault on the one hand and the relative fault of the Distributor on
the other, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. You and the
Distributor agree that it would not be just and equitable if contribution
were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to
above. The amount paid or payable by the Distributor as a result of the
losses, claims, damages, liabilities or expenses (or actions in respect
thereof)
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referred to above shall be deemed to include any legal or other expenses
reasonably incurred by the Distributor in connection with investigating or
defending any such claim. Notwithstanding the provisions of this subsection
(II), you shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares distributed by it to the
public were offered to the public exceeds the amount of any damages which it
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act
of 1933) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
11. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the distribution and
redemption of Fund Shares. We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us herein.
Nothing contained in this paragraph is intended to operate as, and the
provisions of this paragraph shall not in any way whatsoever constitute, a
waiver by you of compliance with any provision of the Securities Act of 1933,
as amended, or of the rules and regulations of the Securities and Exchange
Commission issued thereunder.
12. You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States,
we both hereby agree to abide by the Rules of Fair Practice of such
Association.
13. Upon application to us, we will inform you as to the states in which
we believe the Shares have been qualified for sale under, or are exempt from
the requirements of, the respective securities laws of such states, but we
assume no responsibility or obligation as to your right to sell Shares in any
jurisdiction.
14. All communications to us should be sent to the address shown below.
Any notice to you shall be duly given if mailed or telegraphed to you at the
address specified by you below.
15. This Agreement shall become effective as of the date of your
acceptance hereof, provided that you return to us promptly a signed and dated
copy.
Dean Witter Distributors Inc.
By ........................................................
(Authorized Signature)
Please return one signed copy
of this agreement to:
Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048
Accepted:
Firm Name:
By:
Address:
Date:
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DEAN WITTER GLOBAL ASSET ALLOCATION FUND
SELECTED DEALERS AGREEMENT
Gentlemen:
Dean Witter Distributors Inc. (the "Distributor") has a distribution
agreement (the "Distribution Agreement") with Dean Witter Global Asset
Allocation Fund, a Massachusetts business trust (the "Fund"), pursuant to which
it acts as the Distributor for the sale of the Fund's shares of beneficial
interest, par value $0.01 per share (the "Shares"). Under the Distribution
Agreement, the Distributor has the right to distribute Shares for resale.
The Fund is an open-end management investment company registered under the
Investment Company Act of 1940, as amended, and the Shares being offered to
the public are registered under the Securities Act of 1933, as amended. You
have received a copy of the Distribution Agreement between us and the Fund
and reference is made herein to certain provisions of such Distribution
Agreement. The terms used herein, including "Prospectus" and "Registration
Statement" of the Fund and "Selected Dealer" shall have the same meaning in
this Agreement as in the Distribution Agreement. As principal, we offer to
sell shares to you, as a Selected Dealer, upon the following terms and
conditions:
1. In all sales of Shares to the public you shall act as dealer for your
own account, and in no transaction shall you have any authority to act as
agent for the Fund, for us or for any Selected Dealer.
2. Orders received from you will be accepted through us or on our behalf
only at the net asset value applicable to each order, as set forth in the
current Prospectus. The procedure relating to the handling of orders shall be
subject to instructions which we or the Fund shall forward from time to time
to you. All orders are subject to acceptance or rejection by the Distributor
or the Fund in the sole discretion of either.
3. You shall not place orders for any Shares unless you have already
received purchase orders for such Shares at the applicable net asset values
and subject to the terms hereof and of the Distribution Agreement and the
Prospectus. You agree that you will not offer or sell any of the Shares
except under circumstances that will result in compliance with the applicable
Federal and state securities laws and that in connection with sales and
offers to sell Shares you will furnish to each person to whom any such sale
or offer is made a copy of the Prospectus (as then amended or supplemented)
and will not furnish to any person any information relating to the Shares,
which is inconsistent in any respect with the information contained in the
Prospectus (as then amended or supplemented) or cause any advertisement to be
published by radio or television or in any newspaper or posted in any public
place or use any sales promotional material without our consent and the
consent of the Fund.
4. The Distributor will compensate you for sales of shares of the Fund and
personal services to Fund shareholders by paying you a sales charge and/or
other commissions, which may be in the form of a gross sales credit and/or an
annual residual commission) and/or a service fee, under the terms and in the
percentage amounts as may be in effect from time to time by the Distributor.
5. You shall not withhold placing orders received from your customers so
as to profit yourself as a result of such withholding; e.g., by a change in
the "net asset value" from that used in determining the offering price to
your customers.
6. If any Shares sold to you under the terms of this Agreement are
repurchased by us for the account of the Fund or are tendered for redemption
within seven business days after the date of the confirmation of the original
purchase by you, it is agreed that you shall forfeit your right to, and
refund to us, any commission received by you with respect to such Shares.
7. No person is authorized to make any representations concerning the
Shares or the Fund except those contained in the current Prospectus and in
such printed information subsequently issued by us or the Fund as information
supplemental to such Prospectus. In purchasing Shares through us you shall
rely solely on the representations contained in the Prospectus and
supplemental information above mentioned. Any printed information which we
furnish you other than the Prospectus and the Fund's periodic reports and
proxy solicitation material are our sole responsibility and not the
responsibility of the Fund, and you agree that the Fund shall have no
liability or responsibility to you in these respects unless expressly assumed
in connection therewith.
8. You agree to deliver to each of the purchasers from you a copy of the
then current Prospectus at or prior to the time of offering or sale and you
agree thereafter to deliver to such purchasers copies of the annual and
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interim reports and proxy solicitation materials of the Fund. You further
agree to endeavor to obtain proxies from such purchasers. Additional copies
of the Prospectus, annual or interim reports and proxy solicitation materials
of the Fund will be supplied to you in reasonable quantities upon request.
9. You are hereby authorized (i) to place orders directly with the Fund or
its agent for shares of the Fund to be sold by us subject to the applicable
terms and conditions governing the placement of orders for the purchase of
Fund shares, as set forth in the Distribution Agreement, and (ii) to tender
shares directly to the Fund or its agent for redemption subject to the
applicable terms and conditions set forth in the Distribution Agreement.
10. We reserve the right in our discretion, without notice, to suspend
sales or withdraw the offering of Shares entirely. Each party hereto has the
right to cancel this agreement upon notice to the other party.
11. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the distribution and
redemption of Fund shares. We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us herein.
Nothing contained in this paragraph is intended to operate as, and the
provisions of this paragraph shall not in any way whatsoever constitute, a
waiver by you of compliance with any provision of the Securities Act of 1933,
as amended, or of the rules and regulations of the Securities and Exchange
Commission issued thereunder.
12. You represent that you are a member of the National Association of
Securities Dealers, Inc. and, with respect to any sales in the United States,
we both hereby agree to abide by the Rules of Fair Practice of such
Association.
13. Upon application to us, we will inform you as to the states in which
we believe the Shares have been qualified for sale under, or are exempt from
the requirements of, the respective securities laws of such states, but we
assume no responsibility or obligation as to your right to sell Shares in any
jurisdiction.
14. All communications to us should be sent to the address shown below.
Any notice to you shall be duly given if mailed or telegraphed to you at the
address specified by you below.
15. This Agreement shall become effective as of the date of your
acceptance hereof, provided that you return to us promptly a signed and dated
copy.
Dean Witter Distributors Inc.
By .....................................................
(Authorized Signature)
Please return one signed copy
of this agreement to:
Dean Witter Distributors Inc.
Two World Trade Center
New York, New York 10048
Accepted:
Firm Name:
By:
Address:
Date:
2
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EXHIBIT 6(c)
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
SHARES OF BENEFICIAL INTEREST
$.01 PER VALUE
UNDERWRITING AGREEMENT
, 1994
DEAN WITTER DISTRIBUTORS INC.
2 World Trade Center
New York, New York 10048
Dear Sirs:
1. Introductory. Dean Witter Global Asset Allocation Fund, an
unincorporated business trust organized under the laws of The Commonwealth of
Massachusetts (the "Fund"), proposes to sell, pursuant to the terms of this
Agreement, to you (the "Underwriter") up to 10,000,000 shares of its shares
of beneficial interest, $.01 par value, subject to increase or decrease as
provided in this Agreement. Such shares are hereinafter referred to as the
"Shares".
The Underwriter may sell such of the Shares purchased by it, as it may
elect, to dealers chosen by it (the "Selected Dealers"), at their net asset
value, reoffering by the Selected Dealers to the public at net asset value.
It is proposed that Dean Witter InterCapital Inc. (the "Manager") will act
as investment manager for the Fund.
2. Representation and Warranties of the Fund and the Manager. (a) The Fund
represents and warrants to, and agrees with, the Underwriter that:
(i) A registration statement on Form N-1A, including a preliminary
prospectus, copies of which have heretofore been delivered to you, has
been carefully prepared by the Fund in conformity with the requirements of
the Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended (the "1940 Act"), and the
published rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under such Acts, and
has been filed with the Commission under both such Acts; and the Fund has
so prepared and proposed so to file prior to the effective date under the
1933 Act of such registration statement an amendment to such registration
statement including the final form of prospectus and the statement of
additional information. Such registration statement (including all
exhibits), as finally amended and supplemented at the time such
registration statement becomes effective under the 1933 Act, and the
prospectus and statement of additional information forming part of such
registration statement, or, if different in any respect, the prospectus in
the form first filed with the Commission pursuant to Rule 497(c) under the
1933 Act, are herein respectively referred to as the "Registration
Statement" and the "Prospectus", and each preliminary prospectus is herein
referred to as a "Preliminary Prospectus". Reference to the Prospectus and
Preliminary Prospectus herein shall encompass both the prospectus and
statement of additional information.
(ii) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and, at its date of issue, each
Preliminary Prospectus conformed in all material respects with the
requirements of the 1933 Act and the Rules and Regulations thereunder and
did not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; and, when the Registration Statement becomes
effective under the 1933 Act and at all times subsequent thereto up to and
including the Closing Date (as herein defined). The Registration Statement
and the Prospectus and any amendments or supplements thereto, and the
Notification of Registration on Form N-8A will contain all material
statements and information required to be included therein by the 1933
Act, the 1940 Act and the Rules and Regulations thereunder and will
conform in all material respects to the requirements of the 1933 Act, the
1940 Act and the Rules and Regulations and will not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations,
warranties and
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agreements shall not apply to information contained in or omitted from any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon, and in conformity with,
written information furnished to the Fund by or on behalf of the Underwriter,
or by or on behalf of the Manager specifically for use in the preparation
thereof.
(iii) The Statement of Assets and Liabilities of the Fund set forth in
the Statement of Additional Information fairly presents the financial
position of the Fund as of the date indicated and has been prepared in
accordance with generally accepted accounting principles. Price
Waterhouse, who have expressed their opinion on said Statement, are
independent accountants as required by the 1933 Act and Rules and
Regulations thereunder.
(iv) Subsequent to the dates as of which information is given in the
Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Fund has not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business, and there
has not been any material adverse change in the financial position of the
Fund, or any change in the authorized or outstanding shares of common
stock of the Fund or any issuance of options to purchase shares of common
stock of the Fund.
(v) Except as set forth in the Prospectus, there is no action, suit or
proceeding before or by any court or governmental agency or body pending,
or to the knowledge of the Fund threatened, which might result in any
material adverse change in the condition (financial or otherwise),
business or prospects of the Fund, or which would materially and adversely
affect its properties or assets.
(vi) The Fund has been duly established and is validly existing as an
unincorporated business trust under the laws of The Commonwealth of
Massachusetts, with power and authority to own its property and conduct
its business as described in the Prospectus; the Fund is duly qualified to
do business in all jurisdictions in which the conduct of its business
requires such qualification; and the Fund has no subsidiaries.
(vii) The Fund is registered with the Commission under the 1940 Act as
an open-end diversified management investment company.
(viii) The Fund has an authorized capitalization as set forth in the
Registration Statement, and all outstanding shares of beneficial interest
of the Fund conform to the description thereof in the Prospectus and are
duly and validly authorized and issued, fully paid and nonassessable; and
the Shares, upon the issuance thereof in accordance with this Agreement,
will conform to the description thereof contained in the Prospectus, and
will be duly and validly authorized and issued, fully paid and
nonassessable (although shareholders of the Fund may be liable for certain
obligations of the Fund as set forth under the caption "Additional
Information" in the Prospectus).
(ix) The Fund has full legal right, power and authority to enter into
this Agreement, and the execution and delivery of this Agreement by the
Fund, the consummation of the transactions herein contemplated and
fulfillment of the terms hereof by the Fund will be in compliance with all
applicable legal requirements to which the Fund is subject and will not
conflict with the terms or provisions of any order of the Commission, the
Declaration of Trust or By-Laws of the Fund, or any agreement or
instrument to which the Fund is a party or by which it is bound.
(x) The Fund has adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the 1940 Act. Pursuant to Rule 12b-1, the Plan has
been approved by the Fund's sole shareholder and by the Trustees of the
Fund, including a majority of the Trustees who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan, cast in person at a meeting called for the purpose
of voting on such Plan.
(xi) The Fund has full legal right, power and authority to enter into
the Distribution Agreement, the Custodian Agreement, the Transfer Agency
and Service Agreement and the Investment Management Agreement referred to
in the Registration Statement and the execution and delivery of the
Distribution Agreement, Custodian Agreement, the Transfer Agency and
Service Agreement, Management Agreement and the Advisory Agreement, the
consummation of the transactions therein contemplated and fulfillment of
the terms thereof, will be in compliance with all applicable legal
requirements to which the Fund is subject and will not conflict with the
terms or provisions of any order of the Commission, the Declaration of
Trust or By-Laws of the Fund, or any agreement or instrument to which the
Fund is a party or by which it is bound.
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(b) The Manager represents and warrants to, and agrees with, the Fund
that:
(i) The Manager is an investment adviser registered under the
Investment Advisers Act of 1940.
(ii) The Manager has full legal right, power and authority to enter
into this Agreement and the Investment Management Agreement, and the
execution and delivery of this Agreement and the Investment Management
Agreement, the consummation of the transactions herein and therein
contemplated and the fulfillment of the terms hereof and thereof, will be
in compliance with all applicable legal requirements to which it is
subject and will not conflict with the terms or provisions of, or
constitute a default under, its articles of incorporation or by-laws or
any agreement or instrument to which it is a party or by which it is
bound.
(iii) The description of the Manager in the Registration Statement is
true and correct and does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and is hereby
deemed to be furnished in writing to the Fund for the purposes of Section
2(a)(ii) hereof.
3. Purchase by, and Sale to, the Underwriter. The Fund agrees to sell to
the Underwriter, and upon the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions of this
Agreement, the Underwriter agrees to purchase from the Fund, up to 10,000,000
Shares (which number of Shares may be increased or decreased as provided
below), at a price of $10.00 per Share. It is understood and agreed that the
Underwriter may be compensated by the Fund for its services under this
Agreement in accordance with the provisions of the Plan.
The number of Shares which the Underwriter may purchase pursuant hereto
shall, upon written agreement between the Underwriter and the Fund not later
than 10:00 A.M., New York time, on the third business day preceding the
Closing Date (the "Notification Time"), be increased or decreased to such
greater or lesser number of Shares as the Fund and the Underwriter may agree
upon, in which case the number of Shares set forth in the preceding paragraph
shall for all purposes hereof be increased or decreased to such greater or
lesser number of Shares. The Underwriter shall, in any event, be entitled and
obligated to purchase only the number of shares for which purchase orders
have been received by the Underwriter prior to the Notification Time.
The Fund is advised that the Underwriter proposes to make a public
offering of the Shares as soon after the Registration Statement shall have
become effective under the 1933 Act as it deems advisable, at the public
offering price and upon the terms and conditions set forth in the Prospectus.
4. Delivery and Payment. Delivery of the Shares or, at the election of
the Underwriter, non-negotiable share deposits receipts issued by the Dean
Witter Trust Company as transfer and dividend disbursing agent, acknowledging
the deposit of the Shares ("deposit receipts") and payment therefor, shall be
made at 10:00 A.M., New York time, at the office of Dean Witter Distributors
Inc., Two World Trade Center, New York, New York 10048, on July 29, 1994 or
such later time and date as may be agreed upon between the Underwriter and
the Fund (such date and time being herein referred to as the "Closing Date").
The place of delivery of the payment for the shares may be varied by
agreement between the Underwriter and the Fund.
On the Closing Date, the certificates or deposit receipts for the Shares
which are subject to purchase orders received by the Underwriter prior to the
Notification Time (registered in such names and for such denominations as you
shall have requested in writing prior to the Closing Date), shall be
delivered by the Fund to the Underwriter for the account of the Underwriter,
against payment of the purchase price therefor by a wire transfer in federal
funds. Such certificates or deposit receipts shall be made available for
checking and packaging at the New York office of Dean Witter Distributors
Inc. on or prior to the Closing Date.
On the Closing Date, the Underwriter agrees to purchase and pay for the
Shares for which it received purchase orders prior to the Notification Time
as specified above, provided that the Underwriter shall not have any
obligation to purchase and pay for any Shares as to which purchase orders are
not in effect on the Closing Date.
The Fund agrees to calculate and report to the Underwriter daily, upon
request, the net asset value of the Fund during the first 60 days after the
Closing Date.
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5. Covenants and Agreements of the Fund. The Fund agrees with the
Underwriter that:
(i) The Fund will use its best efforts to cause the Registration
Statement to become effective under the 1933 Act, will advise the
Underwriter promptly as to the time at which the Registration Statement
becomes so effective, will advise the Underwriter promptly of the issuance
by the Commission of any stop order suspending such effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible the lifting thereof, if
issued. The Fund will advise the Underwriter promptly of any request by
the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for additional information, and will not at
any time file any amendment to the Registration Statement or supplement to
the Prospectus which shall not have been submitted to the Underwriter a
reasonable time prior to the proposed filing thereof and to which the
Underwriter shall reasonably object in writing promptly following receipt
of such amendment or supplement or which is not in compliance with the
1933 Act, the 1940 Act or the Rules and Regulations thereto.
(ii) The Fund will prepare and file with the Commission, promptly upon
the request of the Underwriter, any amendments or supplements to the
Registration Statement which in the opinion of the Underwriter may be
necessary to enable the Underwriter to continue the distribution of the
Shares and will use its best efforts to cause the same to become effective
as promptly as possible.
(iii) If at any time after the effective date under the 1933 Act of
the Registration Statement when a prospectus relating to the Shares is
required to be delivered under the 1933 Act, any event relating to or
affecting the Fund occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact, or omit to state any material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the 1933 Act, the Fund will promptly notify the
Underwriter thereof and will prepare an amended or supplemented prospectus
which will correct such statement or omission; and, in case the
Underwriter is required to deliver a prospectus relating to the Shares
nine months or more after such effective date of the Registration
Statement, the Fund upon the request of the Underwriter will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(iv) The Fund will deliver to the Underwriter, at or before the
Closing Date, two signed copies of the Registration Statement and all
amendments thereto including all financial statements and exhibits
thereto, and the Notification of Registration on Form N-8A filed by the
Fund pursuant to the 1940 Act and will deliver to the Underwriter such
number of copies of the Registration Statement, including such financial
statements but without exhibits, and of all amendments thereto, as the
Underwriter may reasonably request. The Fund will deliver or mail to or
upon the order of the Underwriter, from time to time until the effective
date under the 1933 Act of the Registration Statement, as many copies of
any Preliminary Prospectus as the Underwriter may reasonably request. The
Fund will deliver or mail to or upon the order of the Underwriter on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Shares is
required under the 1933 Act, as many copies of the Prospectus, in final
form or as thereafter amended or supplemented as the Underwriter may
reasonably request.
(v) As soon as is practicable after the effective date under the 1933
Act of the Registration Statement, the Fund will make generally available
to its security holders an earnings statement which will be in reasonable
detail (but which need not be audited) and will comply with Section 11(a)
of the 1933 Act, covering a period of at least twelve months beginning
after such effective date of the Registration Statement.
(vi) The Fund will cooperate with the Underwriter to enable the Shares
to be qualified for sale under the securities laws of such jurisdictions
as the Underwriter may designate and at the request of the Underwriter
will make such applications and furnish such information as may be
required of it as the issuer of the Shares for that purpose; provided,
however, that the Fund shall not be required to qualify to do business or
to file a general consent to service of process in any such jurisdiction.
The Fund will, from time to time, prepare and file such statements and
reports as are or may be required of it as the issuer of the
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Shares to continue such qualifications in effect for so long a period as
the Underwriter may reasonably request for the distribution of the Shares.
(vii) The Fund will furnish to its shareholders annual reports
containing financial statements examined by independent accountants and
with semi-annual summary financial information which may be unaudited.
During the period of one year from the date hereof, the Fund will deliver
to the Underwriter, at Dean Witter Distributors Inc., Two World Trade
Center, New York, New York 10048, Attention: Law Department, (a) copies of
each annual report of the Fund to its shareholders, (b) as soon as they
are available, copies of any other reports (financial or other) which the
Fund shall publish or otherwise make available to any of its security
holders as such, and (c) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission.
6. Payment of Expenses.
(a) The Fund will pay its organization expenses, which, for purposes of
this Agreement shall include: all costs and expenses in connection with the
establishment of the Fund and its qualification to do business in any state,
the qualification of Shares for sale under the Blue Sky or securities laws of
the several jurisdictions (including, without limitation, filing fees); the
preparation, printing and reproduction of the Declaration of Trust and
By-Laws of the Fund, this Agreement, the Distribution Agreement, the
Investment Management Agreement, the Custodian Agreement, the Transfer Agency
and Service Agreement, the Plan and other documents in quantities sufficient
for filing under the 1933 Act, the 1940 Act and the Blue Sky or securities
laws of any jurisdiction; and filing fees and fees and disbursements of
counsel related to Blue Sky matters; all costs and expenses in connection
with printing any certificates representing the Shares; fees and
disbursements of counsel and independent accountants for the Fund and of
counsel for Trustees who are not interested persons of the Fund or the
Manager; registration fees under the 1933 Act and the 1940 Act; any taxes on
the issue and delivery of the Shares on the Closing Date to the Underwriter
and the fees of the Fund's transfer agent. The Manager will pay the
organization expenses of the Fund incurred prior to the closing date of the
initial offering of the Fund's shares whether or not the amount of any such
expense is then ascertainable. The Fund will reimburse the Manager for such
expenses not to exceed $200,000. Any balance of organization expenses not
paid by the Fund shall be paid by the Manager. In the event the transactions
contemplated hereunder are not consummated, the Manager will pay all the
organization expenses which the Fund would have paid if such transactions
were consummated. Whether or not the transactions contemplated hereunder are
consummated, the Manager will pay all expenses in connection with the
activity and travel of officers, Trustees and counsel for the Fund and the
cost of preparing and making sales presentations to the personnel of the
Manager, including costs of travel of officers and Trustees of the Fund to
locations where such presentations are made.
(b) Subject to the provisions of the Plan, the Underwriter will pay: its
internal expenses in connection with marketing and meetings, including
expenses of its own personnel and costs of travel of its personnel to the
locations where sales presentations to its personnel and to Selected Dealers
are made; all costs and expenses in connection with printing and distributing
the Registration Statement, the Prospectus and the Blue Sky Surveys in
quantities sufficient for offering and sale of the Shares by the Underwriter;
all costs in connection with the sale of Shares, including costs of
preparing, printing and distributing sales literature relating to the Shares,
all advertising and fees and expenses of public relations counsel; and fees
and expenses of legal counsel for the Underwriter (except in respect of
qualification of the Shares for sale under the Blue Sky or securities laws of
any jurisdiction).
7. Indemnification and Contribution.
(a) The Fund shall indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter 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 Statement of Additional Information, as
from time to time amended and supplemented, or the annual or interim reports
to shareholders of the Fund, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, information
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furnished to the Fund in connection therewith by or on behalf of the
Underwriter; provided, however, that in no case (i) is the indemnity of the
Fund in favor of the Underwriter and any such controlling persons to be
deemed to protect the Underwriter or any such controlling persons thereof
against any liability to the Fund or its security holders to which the
Underwriter or any such controlling persons would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement; or (ii) is the Fund to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Underwriter or any such controlling persons, unless
the Underwriter or any such controlling persons, as the case may be, shall
have notified the Fund in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the claim
shall have been served upon the Underwriter or such controlling persons (or
after the Underwriter or such controlling persons shall have received notice
of such service on any designated agent), but failure to notify the Fund of
any such claim shall not relieve it from any liability which it may have to
the person against whom such action is brought otherwise than on account of
its indemnity agreement contained in this paragraph. The Fund will be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense, of any suit brought to enforce any such
liability, but if the Fund elects to assume the defense, such defense shall
be conducted by counsel chosen by it and satisfactory to the Underwriter or
such controlling person or persons, defendant or defendants in the suit. In
the event the Fund elects to assume the defense of any such suit and retain
such counsel, the Underwriter or such controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them, but, in case the Fund does not elect to
assume the defense of any such suit, it will reimburse the Underwriter or
such controlling person or persons, defendant or defendants in the suit, for
the reasonable fees and expenses of any counsel retained by them. The Fund
shall promptly notify the Underwriter 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 Underwriter shall indemnify and hold harmless the Fund and each
of its Trustees and officers and each person, if any, who controls the Fund
against any loss, liability, claim, damage, or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only
with respect to statements or omissions made in reliance upon, and in
conformity with, information furnished to the Fund in writing by or on behalf
of the Underwriter for use in connection with the Registration Statement or
related Prospectus and Statement of Additional Information, as from time to
time amended, or the annual or interim reports to shareholders.
(ii) In case any action shall be brought against the Fund or any person to
be indemnified by this subsection 7(b) in respect of which indemnity may be
sought against the Underwriter, the Underwriter shall have the rights and
duties given to the Fund, and the Fund and each person so indemnified shall
have the rights and duties given to the Underwriter by the provisions of
subsection (a) of this Section 7.
(c) If the indemnification provided for in this Section 7 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
Underwriter 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 Underwriter 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 Underwriter 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 Underwriter, 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 Underwriter and the parties'
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relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Fund and the Underwriter 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 Underwriter 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.
(d) Nothing contained in this Section 7 shall be construed to provide for
indemnification or contribution in violation of Section 17(i) of the 1940
Act.
8. Survival of Indemnities, Warranties, etc. The respective indemnities,
convenants, agreements, representations, warranties, certificates and other
statements of the Fund, the Manager and the Underwriter, as set forth in this
Agreement or made by them, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter, the Fund, the Manager, or any of their officers or trustees or
directors, or any controlling person, and shall survive delivery of and
payment for the Shares.
9. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder shall be subject to the accuracy of (except as
otherwise stated herein), as of the date hereof and on and as of the Closing
Date (except with respect to representations and warranties in respect of
each Preliminary Prospectus which are in each case as of its date of
issuance), the representations and warranties of the Manager and the Fund and
the compliance on and as of the Closing Date by the Fund and the Manager with
their respective covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to the Closing Date and to the
following additional conditions:
(i) The Registration Statement shall become effective under the 1933
Act not later than 5:00 P.M., New York time, on the day of this Agreement,
and no stop order suspending the effectiveness thereof shall have been
issued and no proceedings for that purpose shall have been initiated or,
to the knowledge of the Fund or the Underwriter, threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been compiled with to the reasonable satisfaction
of the Underwriter.
(ii) Prior to the Closing Date no event shall have occurred to cause
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, to contain an untrue statement of fact which, in the
opinion of the Underwriter, is material, or omit to state a fact which, in
the opinion of the Underwriter, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(iii) The Underwriter shall have received from Price Waterhouse a
letter, dated the Closing Date, confirming that they are independent
accountants within the meaning of the 1933 Act, the 1940 Act and the Rules
and Regulations, and stating in effect that:
(a) In their opinion, the Statement of Assets and Liabilities
reported on by them and included in the Registration Statement complies
as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations; and
(b) On the basis of the procedures specified in their letter,
nothing has come to their attention which caused them to believe that,
except as set forth in or contemplated by the Prospectus, during the
period from the date on which the Fund's Registration Statement is
declared effective by the Commission under the 1933 Act to a specified
date not more than three business days prior to the delivery of such
letter, there was any change in the authorized or outstanding shares of
beneficial interest of the Fund or any creation of long-term debt or
short-term notes of the Fund or any decrease
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in the net asset value per share of beneficial interest from that set
forth in the Prospectus or that the Fund did not have a net worth of at
least $100,000.
(iv) The Underwriter shall have received from Lane & Altman,
Massachusetts counsel for the Fund, an opinion or opinions, dated the
Closing Day, to the following effect:
(a) The Fund has been duly established and is validly existing in
conformity with the laws of The Commonwealth of Massachusetts as an
unincorporated business trust, has made all filings required to be made
by a business trust under the Massachusetts General Laws, and has the
power and authority to own its properties and conduct its business as
described in the Prospectus;
(b) The Fund has authorized shares of beneficial interest as set forth
in the Registration Statement, and all of the issued shares of
beneficial interest of the Fund, including the Shares, have been duly
paid and non-assessable; and the Shares conform to the description of
the shares of beneficial interest contained in the Prospectus; and
(c) As to all matters of Massachusetts law and the documents described
therein, the information set forth under the caption "Additional
Information" in the Prospectus and under the caption "Description of
Shares" in all material respects and fairly presents the information
required to be shown.
(v) The Underwriter shall have received from Sheldon Curtis, Esq.,
General Counsel of the Fund, an opinion or opinions, dated the Closing
Date, to the following effect:
(a) This Agreement has been duly authorized, executed and delivered by
the Fund;
(b) The Registration Statement has become effective under the 1933
Act; to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that or a
similar purpose have been instituted or are pending or contemplated by
the Commission;
(c) The notification of registration under the 1940 Act and any
amendments or supplements thereto comply as to form in all material
respects with the requirements of the 1940 Act and the rules and
regulations thereunder;
(d) The Fund is registered with the Commission under the 1940 Act as
an open-end diversified management investment company;
(e) Such counsel is familiar with all contracts filed or incorporated
by reference as exhibits to the Registration Statement and does not know
of any contracts required to be so filed or incorporated which are not
so filed or incorporated;
(f) The issuance of the Shares and the sale of the Shares in
accordance with this Agreement do not result in a breach or violation of
any of the terms or provisions of, or constitute a default under any
indenture, mortgage, deed of trust, note agreement or other agreement or
instrument know to such counsel to which the Fund is a party or by which
the Fund is bound, or the Fund's Declaration of Trust or By-Laws;
(g) The Distribution Agreement, the Custodian Agreement, the Transfer
Agency and Service Agreement, the Plan and the Investment Management
Agreement referred to in the Registration Statement have been duly
authorized, pursuant to the requirements of the laws of The Commonwealth
of Massachusetts and the 1940 Act and executed and delivered by the Fund
and each constitutes the valid and binding obligation of the Fund in
accordance with its terms;
(h) There are pending no legal or governmental proceedings know to
such counsel to which the Fund is a party or to which property of the
Fund may be subject other than as set forth in the Prospectus and, to
the best of the knowledge of such counsel, no such proceedings are
contemplated;
(i) No authorization, consent, approval, permit or license of, or
filing with, any governmental or public body is required to authorize,
or is required in connection with, the execution, delivery and
performance of this Agreement or the issuance or sale of the Shares
hereunder, except as has been
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obtained under the 1933 Act and the 1940 Act or as may be required under
the securities or Blue Sky laws of the several states and;
(j) The Registration Statement and the Prospectus, as of the effective
date of the Registration Statement, appeared on their face to be
appropriately responsive in all material respects to the requirements of
the 1933 Act, the 1940 Act and the applicable Rules and Regulations;
such counsel does not believe that the Registration Statement or the
Prospectus, on such effective date, contained any untrue statement of
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading (except that such counsel shall express no opinion as to the
financial statements); the description in the Registration Statement and
Prospectus of contracts, other documents, statutes, regulations and
governmental proceeding is accurate in all material respects and fairly
present the information required to be shown.
As to all matters of Massachusetts law, Sheldon Curtis may rely upon the
opinion or opinions delivered pursuant to paragraph (iv) of this Section 9.
(vi) The Underwriter shall have received an opinion, dated the Closing
Date, to the following effect:
(a) The Underwriter has been duly organized and is a validly existing
corporation under the laws of the State of Delaware; and
(b) The Underwriting Agreement has been duly authorized, executed and
delivered by the Underwriter and is a valid and legally binding obligation of
the Underwriter;
(vii) The Underwriter shall have received from Counsel of the Manager, an
opinion, dated the Closing Date, to the following effect:
(a) The Adviser has been duly organized and is a validly existing
corporation under the laws of the State of Delaware with full power and
authority to transact business as the Manager of the Fund as contemplated by
the Prospectus;
(b) The Investment Management Agreement has been duly authorized, executed
and delivered by the Manager and is a valid and legally binding obligation of
the Manager;
(c) The Manager is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and is registered as an investment adviser
in such states as may be required for operation of the Fund;
(d) The Manager has full legal right, power and authority to enter into the
Investment Management Agreement, and the execution and delivery of the
Investment Management Agreement, the consummation of the transactions therein
contemplated and fulfillment of the terms thereof will not conflict with any
applicable legal requirement by which the Manager is bound, nor will they
conflict with the terms or provisions of, or constitute a default under its
Certificate of Incorporation or By-Laws or any agreement or instrument to
which it is a party or by which it is bound; and
(e) The description of the Manager in the Prospectus and Statement of
Additional Information is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statement therein not
misleading.
(viii) The Underwriter shall have received certificates, dated the Closing
Date, of the President or other Executive Officer competent to act on behalf
of the Underwriter and the chief financial or accounting officer of the Fund
to the effect that:
(a) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of the signers
after reasonable investigation, no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act;
(b) Neither any Preliminary Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, as of the time when the Registration Statement became effective
under the 1933 Act and at all time subsequent thereto up to the delivery of
such
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certificate, included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(c) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Fund has not incurred any
material liabilities or obligations, direct or contingent, nor entered into
any material transaction, not in the ordinary course of business, and there
has not been any material adverse change in the condition (financial or
otherwise), business, prospects or results of operations of the Fund, or any
change in the capitalization of the Fund; and
(d) to the best of the knowledge of the signers after reasonable
investigation, the representations and warranties of the Fund and the
Manager, as the case may be, in this Agreement are true and correct at and as
of the Closing Date (except with respect to representations and warranties in
respect of each Preliminary Prospectus which are in each case as of its date
of issuance) and the Fund and the Manager, as the case may be, have each
complied with all the agreements and satisfied all the conditions on their
respective parts to be performed or satisfied at or prior to the Closing
Date.
(ix) The Fund and the Manager shall have furnished to the Underwriter such
additional certificates as the Underwriter may have reasonably requested as
to the accuracy, at and as of the Closing Date, of the representations and
warranties herein, as to the performance of their obligations hereunder and
as to other conditions concurrent and precedent to the obligations of the
Underwriter hereunder.
If any of the conditions hereinabove provided for in this Section shall
not have been fulfilled when and as required by this Agreement, this
Agreement may be terminated by the Underwriter by notifying the Fund of such
termination in writing or by telegram at or prior to the Closing Date, but
the Underwriter shall be entitled to waive any of such conditions.
10. Effective Date. This Agreement shall become effective at 11:00 A.M.,
New York time, on the first full business day following the effective date
under the 1933 Act of the Registration Statement, or at such earlier time
after such effective date of the Registration Statement as the Underwriter in
its discretion shall first release the Shares for offering to the public;
provided, however, that the provisions of Section 6 and 7 shall at all time
be effective. For the purpose of this Section 10, the Shares shall be deemed
to have been released to the public upon release by the underwriter of the
publication of a newspaper advertisement relating to the Shares or upon
release of telegrams or letters offering the Shares for sale to securities
dealers, whichever shall first occur.
11. Termination. This Agreement may be terminated by the Fund at any time
before it becomes effective in accordance with Section 10 by notice from the
Fund to the Underwriter and may be terminated by the Underwriter at any time
before it becomes effective in accordance with Section 10 by notice from the
Underwriter to the Fund. In the event of any termination of this Agreement
under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 6 and 7.
This Agreement may be terminated after it becomes effective by the
Underwriter by notice to the Fund (i) if at or prior to the Closing Date
trading in securities on the New York or American Stock Exchanges shall have
been suspended or minimum or maximum price shall have been established on
either exchange, or a banking moratorium shall have been declared by State of
New York or United States authorities; (ii) if at or prior to the Closing
Date there shall have been an outbreak of hostilities between the United
States and any foreign power, or of any other insurrection or armed conflict
involving the United States which, in the judgment of the Underwriter, makes
it impracticable or inadvisable to offer or sell the Shares; (iii) if there
shall have been any material adverse development or prospective development
involving particularly the business of the Fund or the transactions
contemplated by this Agreement, which in the judgment of the Underwriter,
makes it impracticable or inadvisable to offer or deliver the Shares on the
terms contemplated by the Prospectus; (iv) if there shall be any litigation,
pending or threatened, which in the judgment of the Underwriter makes it
impracticable or inadvisable to offer or deliver the Shares on the terms
contemplated by the Prospectus; or (v) if at or prior to the Closing Date
there has been a material adverse change in the levels of equity securities
prices as reflected by the recognized indices of such prices, as compared
with such levels available as of the date of this Agreement. Any such
termination shall be without liability of any party to any party except as
provided in Sections 6 and 7 hereof.
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12. Notices. All communications hereunder shall be in writing and, if sent
to the Underwriter shall be mailed, delivered or telegraphed and confirmed to
you, at Dean Witter Distributors Inc., Two World Trade Center, New York, New
York 10048, or, if sent to the Fund, shall be mailed, delivered or
telegraphed and confirmed to Dean Witter Global Asset Allocation Fund, Two
World Trade Center, New York, New York 10048, Attention: General Counsel, or,
if sent to the Manager shall be mailed, delivered or telegraphed and
confirmed to Dean Witter InterCapital Inc., Two World Trade Center, New York,
New York 10048, Attention: General Counsel.
13. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriter, the Fund and the Manager and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the
representations, warranties and indemnities of the Fund and the Manager
contained in this Agreement shall also be for the benefit of the person or
persons, if any, who control the Underwriter within the meaning of Section 15
of the 1933 Act, their respective successors and legal representatives, and
the indemnities of the Underwriter shall also be for the benefit of each
Trustee of the Fund, each of the officers of the Fund who has signed the
Registration Statement and the Manager and the person or persons, if any, who
control the Fund and the Manager within the meaning of Section 15 of the 1933
Act.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Personal Liability. The Declaration of Trust establishing Dean Witter
Global Asset Allocation Fund, dated October 18, 1994, a copy of which,
together with all other amendments thereto ("Declaration"), is on file in the
office of The Commonwealth of Massachusetts, provides that the name Dean
Witter Global Asset Allocation Fund refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally,
and not Trustees, shareholder, officer, employee or agent of Dean Witter
Global Asset Allocation Fund 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 Global Asset Allocation Fund, but the Trust Estate only shall be
liable.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose in a
counterpart of this letter, whereupon this letter and your acceptance in such
counterpart shall constitute a binding agreement between us.
Very truly yours,
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
By: ........................................................................
DEAN WITTER INTERCAPITAL INC.,
as Manager
By: ........................................................................
Accepted and delivered in New York, New York
as of the date first above written.
DEAN WITTER DISTRIBUTORS INC.
By: ........................................................................
11
Exhibit 8(a)
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective December 7, 1994, and is between THE CHASE
MANHATTAN BANK, N.A.
(the "Bank") and Dean Witter Global Asset Allocation Fund (the "Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) One or more custody accounts singly, a ("Custody Account") and
collectively, the ("Custody Accounts") for any and all stocks, shares, bonds,
debentures, notes, mortgages or other obligations for the payment of money,
bullion, coin and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same or
evidencing or representing any other rights or interests therein and other
similar property whether certificated or uncertificated as may be received by
the Bank or its Subcustodian (as defined in Section 3) for the account of the
Customer' portfolios ("Securities"); and
(b) One or more deposit accounts singly, a ("Deposit Account") and
collectively, the ("Deposit Accounts") for any and all cash in any currency
received by the Bank or its Subcustodian for the account of the Customer's
portfolios, which cash shall not be subject to withdrawal by draft or check.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
the Bank:
(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed
in Schedule A of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.
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The Bank reserves the right to add new, replace or remove
Subcustodians. The will Customer be given reasonable notice by the Bank of any
amendment to Schedule A. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
With respect to Assets credited to the Accounts in the custody of a
Subcustodian:
(a) The Bank will identify such Assets on its books as belonging to
the Customer.
(b) A Subcustodian will hold such Assets together with assets
belonging to other customers of the Bank in accounts identified on such
Subcustodian's books as special custody accounts for the exclusive benefit of
customers of the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be
subject only to the instructions of the Bank or its agent. Any Securities held
in a securities depository for the account of a Subcustodian will be subject
only to the instructions of such Subcustodian acting in accordance with
instructions of the Bank.
(d) Any agreement the Bank enters into with a Subcustodian for
holding its customer's assets shall provide that such assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian or its creditors including a receiver or trustee in
bankruptcy except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the
Deposit Account upon receipt of Instructions which include all information
required by the Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its
discretion, may advance the Customer such excess amount which shall be deemed a
loan payable on demand, bearing interest at the rate customarily charged by the
Bank on similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or
at any time prior to actual collection and reconciliation to the Deposit
Account, with interest, dividends, redemptions or any other amount due, the
Customer will promptly return any such amount upon oral or written
notification: (i) that such amount has not been received in the ordinary course
of business or (ii) that such amount was incorrectly credited. If the Customer
does not promptly return any amount upon such notification, the Bank shall be
entitled, upon oral or written notification to the Customer, to reverse such
credit by debiting the Deposit Account for the amount previously credited. The
Bank or its Subcustodian shall have no duty or obligation to institute legal
proceedings, file a claim or a proof of claim in any insolvency proceeding or
take any other action with respect to the collection of such amount, but may
act for the Customer upon Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the
Bank or its Subcustodian upon receipt by the Bank of Instructions which include
all information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account may be
made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
Securities to a purchaser, dealer or their agents against a receipt with the
expectation of receiving later payment and free delivery. Delivery of
Securities out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to the Bank.
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<PAGE>
(b) The Bank, in its discretion, may credit or debit the Accounts
on a contractual settlement date with cash or Securities with respect to any
sale, exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in
its discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and debits
of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the
Bank will wire instruct each subcustodian to:
(a) Present for payment any Securities which are called, redeemed
or retired or otherwise become payable and all coupons and other income items
which call for payment upon presentation, to the extent that the Bank or
Subcustodian is actually aware of such opportunities and hold monies received
upon such presentations for credit to a Deposit Account.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(i) Exchange interim receipts or temporary Securities for
definitive Securities.
(j) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(k) At least monthly and from time to time, issue statements to the
Customer identifying the Assets in the Accounts.
Promptly after the close of business each day, the Bank will send the
Customer an advice or notification of any transfers of Assets to or from the
Accounts during the said day. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless the
Customer sends the Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, the Customer shall be deemed to have
approved such statement. In such event, or where the Customer has otherwise
approved any such statement, the Bank shall, to the extent permitted by law, be
released, relieved and discharged with respect to all matters set forth in such
statement or reasonably implied therefrom as though it had been settled by the
decree of a court of competent jurisdiction in an action where the Customer and
all persons having or claiming an interest in the Customer or the Customer's
Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. The Bank shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Bank or by its Subcustodians of any
payment, redemption or other transaction regarding Securities in the Custody
Account in respect of which the Bank has agreed to take any action under this
Agreement.
8. CORPORATE ACTIONS; PROXIES.
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase
plans and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer notice of such Corporate Actions to the extent that the Bank's central
corporate actions department has actual knowledge of a Corporate Action in time
to notify its customers.
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<PAGE>
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions
are not received in time for the Bank to take timely action, or actual notice
of such Corporate Action was received too late to seek Instructions, the Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it deems,
in good faith, to be appropriate in which case it shall be held harmless for
any such action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing.
Such proxies shall be executed in the appropriate nominee name relating to
Securities in the Custody Account registered in the name of such nominee but
without indicating the manner in which such proxies are to be voted; and where
bearer Securities are involved, proxies will be delivered in accordance with
Instructions.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities
depository, as the case may be. The Bank may without notice to the Customer
cause any such Securities to cease to be registered in the name of any such
nominee and to be registered in the name of the Customer. In the event that
any Securities registered in a nominee name are called for partial redemption
by the issuer, the Bank may allot the called portion to the respective
beneficial holders of such class of security in any manner the Bank deems to be
fair and equitable. The Customer agrees to hold the Bank, Subcustodians, and
their respective nominees harmless from any liability arising directly or
indirectly from their status as a mere record holder of Securities in the
Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated in resolutions
of the Board of Trustees of the Customer, certified to the Bank from time to
time by the Customer's Secretary or Assistant Secretary, to act on behalf of
the Customer under this Agreement. Such persons shall continue to be
Authorized Persons until such time as the Bank receives Instructions from the
Customer or its designated agent that any such employee or agent is no longer
an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold
the Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or the Bank's failure to produce such
confirmation at any subsequent time. The Bank may electronically record any
Instructions given by telephone, and any other telephone discussions with
respect to the Custody Account. The Customer shall be responsible for
safeguarding any testkeys, identification codes or other security devices which
the Bank shall make available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this Agreement as
follows:
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Assets. The Bank shall
be liable to the Customer for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care with respect to the
safekeeping of such Assets to the same
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<PAGE>
extent that the Bank would be liable to the Customer if the Bank were holding
such Assets in New York. In the event of any loss to the Customer by reason of
the failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the Customer's
direct damages plus interest at the Fed Funds rate of interest from the date of
the loss, to be determined based on the market value of the property which is
the subject of the loss at the date of discovery of such loss and without
reference to any special conditions or circumstances.
(ii) The Bank will not be responsible for any act, omission, default
or for the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.
(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant to
Instructions or otherwise within the scope of this Agreement if such act or
omission was in good faith, without negligence. In performing its obligations
under this Agreement, the Bank may rely on the genuineness of any document
which it believes in good faith to have been validly executed.
(iv) The Customer agrees to pay for and hold the Bank harmless from
any liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses with respect to income
from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon the
advice of counsel (who may be counsel for the Customer) on all matters and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii) Without limiting the foregoing, the Bank shall not be liable
for any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not limited
to, losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which prevent
the orderly execution of securities transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion,
fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of
this Section 12, it is specificallyacknowledged that the Bank shall have no
duty or responsibility to:
(i) question Instructions or make any suggestions to the Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments
or the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any
default in the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant to this Agreement;
(v) review or reconcile trade confirmations received from brokers.
The Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations against
Instructions issued to and statements issued by the Bank.
5
<PAGE>
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any
of the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the
Bank's reasonable out-of-pocket or incidental expenses, including, but not
limited to, legal fees. The Bank shall have a lien on and is authorized to
charge any Accounts of the Customer for any amount owing to the Bank under any
provision of this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the
administration of the Customer's trading and investment activity, the Bank is
authorized, at the request of the Customer, which may include standing
instructions, to enter into spot or forward foreign exchange contracts with the
Customer or an Authorized Person for the Customer and may also provide foreign
exchange through its subsidiaries, affiliates or Subcustodians. Instructions,
including standing instructions, may be issued with respect to such contracts
but the Bank may establish rules or limitations concerning any foreign exchange
facility made available. In all cases where the Bank, its subsidiaries,
affiliates or Subcustodians enter into a foreign exchange contract related to
Accounts, the terms and conditions of the then current foreign exchange
contract of the Bank, its subsidiary, affiliate or Subcustodian and, to the
extent not inconsistent, this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies that
it is a resident of the United States and agrees to notify the Bank of any
changes in residency. The Bank may rely upon this certification or the
certification of such other facts as may be required to administer the Bank's
obligations under this Agreement. The Customer will indemnify the Bank against
all losses, liability, claims or demands arising directly or indirectly from
any such certifications.
(c) Access to Records. The Bank shall allow the Customer's
independent public accountant reasonable access to the records of the Bank
relating to the Assets as is required in connection with their examination of
books and records pertaining to the Customer's affairs. Subject to
restrictions under applicable law, the Bank shall also obtain an undertaking to
permit the Customer's independent public accountants reasonable access to the
records of any Subcustodian which has physical possession of any Assets as may
be required in connection with the examination of the Customer's books and
records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that
the Assets deposited in the Accounts are (Check one):
-- Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
X Mutual Fund assets subject to certain Securities and Exchange
Commission ("SEC") rules and regulations;
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<PAGE>
-- Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A, Exhibits I - _______ and the following Rider(s) [Check applicable
rider(s)]:
-- ERISA
X MUTUAL FUND
-- SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no
failure or delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise, or the
exercise of any other power or right. No waiver by a party of any provision of
this Agreement, or waiver of any breach or default, is effective unless in
writing and signed by the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective
when actually received. Any notices or other communications which may be
required under this Agreement are to be sent to the parties at the following
addresses or such other addresses as may subsequently be given to the other
party in writing:
Bank: The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center, 18th Fl.
Brooklyn, NY 11245
Attention: Global Securities Services
or telex:
Customer: Dean Witter InterCapital
2 World Trade Center, 72nd Floor
New York, NY 10048
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<PAGE>
(i) Termination. This Agreement may be terminated by the Customer
or the Bank by giving sixty (60) days written notice to the other, provided
that such notice to the Bank shall specify the names of the persons to whom the
Bank shall deliver the Assets in the Accounts. If notice of termination is
given by the Bank, the Customer shall, within sixty (60) days following receipt
of the notice, deliver to the Bank Instructions specifying the names of the
persons to whom the Bank shall deliver the Assets. In either case the Bank
will deliver the Assets to the persons so specified, after deducting any
amounts which the Bank determines in good faith to be owed to it under Section
13. If within sixty (60) days following receipt of a notice of termination by
the Bank, the Bank does not receive Instructions from the Customer specifying
the names of the persons to whom the Bank shall deliver the Assets, the Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions of this Agreement, or to Authorized Persons, or may continue to hold
the Assets until Instructions are provided to the Bank. The obligations of the
parties hereto regarding indemnities shall survive the termination of this
Agreement.
CUSTOMER
By:______________________________
Title
THE CHASE MANHATTAN BANK, N.A.
By:________________________________
Title
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<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 19 , before me
personally came , to me known, who being by me duly sworn, did
depose and say that he/she resides in at
; that he/she is of ,
the entity described in and which executed the foregoing instrument; that
he/she knows the seal of said entity, that the seal affixed to said instrument
is such seal, that it was so affixed by order of said entity, and that he/she
signed his/her name thereto by like order.
Sworn to before me this
day of , 19 .
Notary
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<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of ,19 ,
before me personally came , to me known, who being by me
duly sworn, did depose and say that he/she resides in
at ; that he/she is a Vice
President of THE CHASE MANHATTAN BANK, (National Association), the corporation
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation, that the seal affixed to said instrument is such
corporate seal, that it was so affixed by order of the Board of Directors of
said corporation, and that he/she signed his/her name thereto by like order.
Sworn to before me this
day of , 19 .
Notary
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<PAGE>
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
Dean Witter Global Asset Allocation Fund
effective ________________
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or under
the authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository, which are further
defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined
in Rule 17f-5 (c) (3) under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution
or trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's government
or an agency thereof and that has shareholders' equity in excess of $200
million in U.S. currency (or a foreign currency equivalent thereof), (ii) a
majority owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a country
other than the United States and that has shareholders' equity in excess of
$100 million in U.S. currency (or a foreign currency equivalent thereof)(iii) a
banking institution or trust company incorporated or organized under the laws
of a country other than the United States or a majority owned direct or
indirect subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the United
States which has such other qualifications as shall be specified in
Instructions and approved by the Bank; or (iv) any other entity that shall have
been so qualified by exemptive order, rule or other appropriate action of the
SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of a
country other than the United States, which operates (i) the central system for
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<PAGE>
handling securities or equivalent book-entries in that country, (ii) a
transnational system for the central handling of securities or equivalent book-
entries, or (iii) any entity that shall have been so qualified by exemptive
order, rule or other appropriate action of the SEC.
The Customer represents that its Board of Directors has approved each
of the Subcustodians listed in Schedule A to this Agreement and the terms of
the standard form of subcustody agreement between the Bank and its
Subcustodians and further represents that its Board has determined that the use
of each Subcustodian and the terms of the standard form of subcustody agreement
are consistent with the best interests of the Customer and its shareholders.
The Bank will supply the Customer with any amendment to Schedule A for
approval. The Customer has supplied or will supply the Bank with certified
copies of its Board of Directors resolution(s) with respect to the foregoing
prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is to
be made and Customer shall be solely responsible to assure that Instructions
are in accord with any limitations or restrictions applicable to the Customer
by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise
become payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory
fees, distributions or operating expenses on behalf of the Customer;
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the Bank, its
Subcustodian or the Customer's transfer agent, such shares to be purchased or
redeemed;
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<PAGE>
(j) For the purpose of redeeming in kind shares of the Customer
against delivery to the Bank, its Subcustodian or the Customer's transfer agent
of such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Bank and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Bank of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Bank will receive from brokers the Securities previously
deposited. The Bank will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due
other than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related transactions;
(n) For other proper purposes as may be specified in Instructions
issued by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section
14(i).
Section 12. Standard of Care; Liabilities.
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion,
after due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign custodian
and each eligible foreign securities depository holding the Customer's
Securities pursuant to this Agreement afford protection for such Securities at
least equal to that afforded by the Bank's established procedures with respect
to similar securities held by the Bank and its securities depositories in New
York.
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<PAGE>
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of internal
accounting controls applicable to the Bank's duties under this Agreement. The
Bank shall endeavor to obtain and furnish the Customer with such similar
reports as it may reasonably request with respect to each Subcustodian and
securities depository holding the Customer's assets.
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<PAGE>
GLOBAL CUSTODY AGREEMENT
with Dean Witter Global Asset Allocation Fund
(Customer)
dated ________________
DOMESTIC SPECIAL TERMS AND CONDITIONS
Domestic Corporate Actions and Proxies
With repsect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the provisions of Section
8 of the Agreement:
The Bank will send to the Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of the Bank's
nominee or the nominee of a central depository) and communications with respect
to Securities in the Custody Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
the Bank for forwarding to its customers. In addition, the Bank will follow
coupon payments, redemptions, exchanges or similar matters with respect to
Securities in the Custody Account and advise the Customer or the Authorized
Person for such Account or rights issued, tender offers or any other
discretionary rights with respect to such Securities, in each case, of which
Bank has received notice from the issuer of the Securities, or as to which
notice is published in publications routinely utilized by the Bank for this
purpose.
15
EXHIBIT 8(b)
AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT
with
DEAN WITTER TRUST COMPANY
DWR
(open-end)
<PAGE>
TABLE OF CONTENTS
Page
Article 1 Terms of Appointment; Duties of DWTC . . . 2
Article 2 Fees and Expenses. . . . . . . . . . . . . 6
Article 3 Representations and Warranties of DWTC . . 7
Article 4 Representations and Warranties of the
Fund . . . . . . . . . . . . . . . . . . . 8
Article 5 Duty of Care and Indemnification . . . . . 9
Article 6 Documents and Covenants of the Fund and
DWTC . . . . . . . . . . . . . . . . . . . 12
Article 7 Duration and Termination of Agreement. . . 16
Article 8 Assignment . . . . . . . . . . . . . . . . 16
Article 9 Affiliations . . . . . . . . . . . . . . . 17
Article 10 Amendment. . . . . . . . . . . . . . . . . 18
Article 11 Applicable Law . . . . . . . . . . . . . . 18
Article 12 Miscellaneous. . . . . . . . . . . . . . . 18
Article 13 Merger of Agreement. . . . . . . . . . . . 20
Article 14 Personal Liability . . . . . . . . . . . . 21
i
<PAGE>
AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of the 1st
day of August, 1993 by and between each of the Dean Witter
Funds listed on the signature pages hereof, each of such Funds
acting severally on its own behalf and not jointly with any of
such other Funds (each such Fund hereinafter referred to as
the "Fund"), each such Fund having its principal office and
place of business at Two World Trade Center, New York, New
York, 10048, and DEAN WITTER TRUST COMPANY, a trust company
organized under the laws of New Jersey, having its principal
office and place of business at Harborside Financial Center,
Plaza Two, Jersey City, New Jersey 07311 ("DWTC").
WHEREAS, the Fund desires to appoint DWTC as its
transfer agent, dividend disbursing agent and shareholder
servicing agent and DWTC desires to accept such appointment;
NOW THEREFORE, in consideration of the mutual
covenants herein contained, the parties hereto agree as
follows:
1
<PAGE>
Article 1 Terms of Appointment; Duties of DWTC
1.1 Subject to the terms and conditions set
forth in this Agreement, the Fund hereby employs and appoints
DWTC to act as, and DWTC agrees to act as, the transfer agent
for each series and class of shares of the Fund, whether now
or hereafter authorized or issued ("Shares"), dividend
disbursing agent and shareholder servicing agent in connection
with any accumulation, open-account or similar plans provided
to the holders of such Shares ("Shareholders") and set out in
the currently effective prospectus and statement of additional
information ("prospectus") of the Fund, including without
limitation any periodic investment plan or periodic withdrawal
program.
1.2 DWTC agrees that it will perform the fol-
lowing services:
(a) In accordance with procedures established
from time to time by agreement between the Fund and DWTC, DWTC
shall:
(i) Receive for acceptance, orders for the
purchase of Shares, and promptly deliver payment and
appropriate documentation therefor to the custodian of the
assets of the Fund (the "Custodian");
2
<PAGE>
(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and issue certificates therefor
or hold such Shares in book form in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption
requests and redemption directions and deliver the appropriate
documentation therefor to the Custodian;
(iv) At the appropriate time as and when it
receives monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the
registered owners thereof upon receipt of appropriate
instructions;
(vi) Prepare and transmit payments for divi-
dends and distributions declared by the Fund;
(vii) Calculate any sales charges payable by
a Shareholder on purchases and/or redemptions of Shares of the
Fund as such charges may be reflected in the prospectus;
(viii) Maintain records of account for and
advise the Fund and its Shareholders as to the foregoing; and
3
<PAGE>
(ix) Record the issuance of Shares of the Fund
and maintain pursuant to Rule 17Ad-10(e) under the Securities
Exchange Act of 1934 ("1934 Act") a record of the total number
of Shares of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding. DWTC
shall also provide to the Fund on a regular basis the total
number of Shares which are authorized, issued and outstanding
and shall notify the Fund in case any proposed issue of Shares
by the Fund would result in an overissue. In case any issue
of Shares would result in an overissue, DWTC shall refuse to
issue such Shares and shall not countersign and issue any
certificates requested for such Shares. When recording the
issuance of Shares, DWTC shall have no obligation to take
cognizance of any Blue Sky laws relating to the issue of sale
of such Shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the
services set forth in the above paragraph (a), DWTC shall: (i)
perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, shareholder ser-
vicing agent in connection with dividend reinvestment,
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to, maintaining all
Shareholder accounts, preparing Shareholder meeting lists,
4
<PAGE>
mailing proxies, receiving and tabulating proxies, mailing
shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing appropriate forms required with
respect to dividends and distributions by federal tax
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other confirm-
able transactions in Shareholder accounts, preparing and
mailing activity statements for Shareholders and providing
Shareholder account information; (ii) open any and all bank
accounts which may be necessary or appropriate in order to
provide the foregoing services; and (iii) provide a system
which will enable the Fund to monitor the total number of
Shares sold in each State or other jurisdiction.
(c) In addition, the Fund shall (i) identify
to DWTC in writing those transactions and assets to be treated
as exempt from Blue Sky reporting for each State and (ii)
verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of DWTC for the
Fund's registration status under the Blue Sky or securities
laws of any State or other jurisdiction is solely limited to
the initial establishment of transactions subject to Blue Sky
compliance by the Fund and the reporting of such transactions
5
<PAGE>
to the Fund as provided above and as agreed from time to time
by the Fund and DWTC.
(d) DWTC shall provide such additional
services and functions not specifically described herein as
may be mutually agreed between DWTC and the Fund. Procedures
applicable to such services may be established from time to
time by agreement between the Fund and DWTC.
Article 2 Fees and Expenses
2.1 For performance by DWTC pursuant to this
Agreement, each Fund agrees to pay DWTC an annual maintenance
fee for each Shareholder account and certain transactional
fees, if applicable, as set out in the respective fee schedule
attached hereto as Schedule A. Such fees and out-of-pocket
expenses and advances identified under Section 2.2 below may
be changed from time to time subject to mutual written
agreement between the Fund and DWTC.
2.2 In addition to the fees paid under Section
2.1 above, the Fund agrees to reimburse DWTC in connection
with the services rendered by DWTC hereunder. In addition,
any other expenses incurred by DWTC at the request or with the
consent of the Fund will be reimbursed by the Fund.
2.3 The Fund agrees to pay all fees and
reimbursable expenses within a reasonable period of time
6
<PAGE>
following the mailing of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and
other mailings to all Shareholder accounts shall be advanced
to DWTC by the Fund upon request prior to the mailing date of
such materials.
Article 3 Representations and Warranties of DWTC
DWTC represents and warrants to the Fund that:
3.1 It is a trust company duly organized and
existing and in good standing under the laws of New Jersey and
it is duly qualified to carry on its business in New Jersey.
3.2 It is and will remain registered with the
U.S. Securities and Exchange Commission ("SEC") as a Transfer
Agent pursuant to the requirements of Section 17A of the 1934
Act.
3.3 It is empowered under applicable laws and
by its charter and By-Laws to enter into and perform this
Agreement.
3.4 All requisite corporate proceedings have
been taken to authorize it to enter into and perform this
Agreement.
3.5 It has and will continue to have access to
the necessary facilities, equipment and personnel to perform
its duties and obligations under this Agreement.
7
<PAGE>
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to DWTC that:
4.1 It is a corporation duly organized and
existing and in good standing under the laws of Delaware or
Maryland or a trust duly organized and existing and in good
standing under the laws of Massachusetts, as the case may be.
4.2 It is empowered under applicable laws and
by its Articles of Incorporation or Declaration of Trust, as
the case may be, and under its By-Laws to enter into and
perform this Agreement.
4.3 All corporate proceedings necessary to
authorize it to enter into and perform this Agreement have
been taken.
4.4 It is an investment company registered
with the SEC under the Investment Company Act of 1940, as
amended (the "1940 Act").
4.5 A registration statement under the
Securities Act of 1933 (the "1933 Act") is currently effective
and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale.
8
<PAGE>
Article 5 Duty of Care and Indemnification
5.1 DWTC shall not be responsible for, and the
Fund shall indemnify and hold DWTC harmless from and against,
any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or
attributable to:
(a) All actions of DWTC or its agents or
subcontractors required to be taken pursuant to this
Agreement, provided that such actions are taken in good faith
and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with
the terms of this Agreement, or which arise out of the Fund's
lack of good faith, negligence or willful misconduct or which
arise out of breach of any representation or warranty of the
Fund hereunder.
(c) The reliance on or use by DWTC or its agents or
subcontractors of information, records and documents which (i)
are received by DWTC or its agents or subcontractors and
furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other
person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by DWTC or
its agents or subcontractors of, any instructions or requests
9
<PAGE>
of the Fund.
(e) The offer or sale of Shares in violation of any
requirement under the federal securities laws or regulations
or the securities or Blue Sky laws of any State or other
jurisdiction that such Shares be registered in such State or
other jurisdiction or in violation of any stop order or other
determination or ruling by any federal agency or any State or
other jurisdiction with respect to the offer or sale of such
Shares in such State or other jurisdiction.
5.2 DWTC shall indemnify and hold the Fund
harmless from or against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability
arising out of or attributable to any action or failure or
omission to act by DWTC as a result of the lack of good faith,
negligence or willful misconduct of DWTC, its officers,
employees or agents.
5.3 At any time, DWTC may apply to any officer
of the Fund for instructions, and may consult with legal
counsel to the Fund, with respect to any matter arising in
connection with the services to be performed by DWTC under
this Agreement, and DWTC and its agents or subcontractors
shall not be liable and shall be indemnified by the Fund for
any action taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel. DWTC, its
10
<PAGE>
agents and subcontractors shall be protected and indemnified
in acting upon any paper or document furnished by or on behalf
of the Fund, reasonably believed to be genuine and to have
been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided
to DWTC or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any
change of authority of any person, until receipt of written
notice thereof from the Fund. DWTC, its agents and
subcontractors shall also be protected and indemnified in
recognizing stock certificates which are reasonably believed
to bear the proper manual or facsimile signature of the
officers of the Fund, and the proper countersignature of any
former transfer agent or registrar, or of a co-transfer agent
or co-registrar.
5.4 In the event either party is unable to
perform its obligations under the terms of this Agreement
because of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from
such failure to perform or otherwise from such causes.
11
<PAGE>
5.5 Neither party to this Agreement shall be
liable to the other party for consequential damages under any
provision of this Agreement or for any act or failure to act
hereunder.
5.6 In order that the indemnification
provisions contained in this Article 5 shall apply, upon the
assertion of a claim for which either party may be required to
indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall
keep the other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the party
seeking indemnification in the defense of such claim. The
party seeking indemnification shall in no case confess any
claim or make any compromise in any case in which the other
party may be required to indemnify it except with the other
party's prior written consent.
Article 6 Documents and Covenants of the Fund and DWTC
6.1 The Fund shall promptly furnish to DWTC
the following:
(a) If a corporation:
(i) A certified copy of the resolution of the Board
of Directors of the Fund authorizing the appointment of DWTC
and the execution and delivery of this Agreement;
12
<PAGE>
(ii) A certified copy of the Articles of
Incorporation and By-Laws of the Fund and all amendments
thereto;
(iii) Certified copies of each vote of the Board
of Directors designating persons authorized to give
instructions on behalf of the Fund and signature cards bearing
the signature of any officer of the Fund or any other person
authorized to sign written instructions on behalf of the Fund;
(iv) A specimen of the certificate for Shares of the
Fund in the form approved by the Board of Directors, with a
certificate of the Secretary of the Fund as to such approval;
(b) If a business trust:
(i) A certified copy of the resolution of the Board
of Trustees of the Fund authorizing the appointment of DWTC
and the execution and delivery of this Agreement;
(ii) A certified copy of the Declaration of Trust
and By-laws of the Fund and all amendments thereto;
(iii) Certified copies of each vote of the Board
of Trustees designating persons authorized to give
instructions on behalf of the Fund and signature cards bearing
the signature of any officer of the Fund or any other person
authorized to sign written instructions on behalf of the Fund;
13
<PAGE>
(iv) A specimen of the certificate for Shares of the
Fund in the form approved by the Board of Trustees, with a
certificate of the Secretary of the Fund as to such approval;
(c) The current registration statements and any
amendments and supplements thereto filed with the SEC pursuant
to the requirements of the 1933 Act or the 1940 Act;
(d) All account application forms or other
documents relating to Shareholder accounts and/or relating to
any plan, program or service offered or to be offered by the
Fund; and
(e) Such other certificates, documents or opinions
as DWTC deems to be appropriate or necessary for the proper
performance of its duties.
6.2 DWTC hereby agrees to establish and
maintain facilities and procedures reasonably acceptable to
the Fund for safekeeping of Share certificates, check forms
and facsimile signature imprinting devices, if any; and for
the preparation or use, and for keeping account of, such
certificates, forms and devices.
6.3 DWTC shall prepare and keep records
relating to the services to be performed hereunder, in the
form and manner as it may deem advisable and as required by
applicable laws and regulations. To the extent required by
14
<PAGE>
Section 31 of the 1940 Act, and the rules and regulations
thereunder, DWTC agrees that all such records prepared or
maintained by DWTC relating to the services performed by DWTC
hereunder are the property of the Fund and will be preserved,
maintained and made available in accordance with such Section
31 of the 1940 Act, and the rules and regulations thereunder,
and will be surrendered promptly to the Fund on and in
accordance with its request.
6.4 DWTC and the Fund agree that all books,
records, information and data pertaining to the business of
the other party which are exchanged or received pursuant to
the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to
any other person except as may be required by law or with the
prior consent of DWTC and the Fund.
6.5 In case of any request or demands for the
inspection of the Shareholder records of the Fund, DWTC will
endeavor to notify the Fund and to secure instructions from an
authorized officer of the Fund as to such inspection. DWTC
reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the
Shareholder records to such person.
15
<PAGE>
Article 7 Duration and Termination of Agreement
7.1 This Agreement shall remain in full force
and effect until July 31, 1996 and from year-to-year
thereafter unless terminated by either party as provided in
Section 7.2 hereof.
7.2 This Agreement may be terminated by the
Fund on 60 days written notice, and by DWTC on 90 days written
notice, to the other party without payment of any penalty.
7.3 Should the Fund exercise its right to
terminate, all out-of-pocket expenses associated with the
movement of records and other materials will be borne by the
Fund. Additionally, DWTC reserves the right to charge for any
other reasonable fees and expenses associated with such
termination.
Article 8 Assignment
8.1 Except as provided in Section 8.3 below,
neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the written consent of
the other party.
8.2 This Agreement shall inure to the benefit
of and be binding upon the parties and their respective
permitted successors and assigns.
16
<PAGE>
8.3 DWTC may, in its sole discretion and
without further consent by the Fund, subcontract, in whole or
in part, for the performance of its obligations and duties
hereunder with any person or entity including but not limited
to companies which are affiliated with DWTC; provided,
however, that such person or entity has and maintains the
qualifications, if any, required to perform such obligations
and duties, and that DWTC shall be as fully responsible to the
Fund for the acts and omissions of any agent or subcontractor
as it is for its own acts or omissions under this Agreement.
Article 9 Affiliations
9.1 DWTC may now or hereafter, without the
consent of or notice to the Fund, function as transfer agent
and/or shareholder servicing agent for any other investment
company registered with the SEC under the 1940 Act and for any
other issuer, including without limitation any investment
company whose adviser, administrator, sponsor or principal
underwriter is or may become affiliated with Dean Witter,
Discover & Co. or any of its direct or indirect subsidiaries
or affiliates.
9.2 It is understood and agreed that the
Directors or Trustees (as the case may be), officers,
employees, agents and shareholders of the Fund, and the
directors, officers, employees, agents and shareholders of the
17
<PAGE>
Fund's investment adviser and/or distributor, are or may be
interested in DWTC as directors, officers, employees, agents
and shareholders or otherwise, and that the directors,
officers, employees, agents and shareholders of DWTC may be
interested in the Fund as Directors or Trustees (as the case
may be), officers, employees, agents and shareholders or
otherwise, or in the investment adviser and/or distributor as
directors, officers, employees, agents, shareholders or
otherwise.
Article 10 Amendment
10.1 This Agreement may be amended or modified
by a written agreement executed by both parties and authorized
or approved by a resolution of the Board of Directors or the
Board of Trustees (as the case may be) of the Fund.
Article 11 Applicable Law
11.1 This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with
the laws of the State of New York.
Article 12 Miscellaneous
12.1 In the event that one or more additional
investment companies managed or administered by Dean Witter
InterCapital Inc. or any of its affiliates ("Additional
Funds") desires to retain DWTC to act as transfer agent,
dividend disbursing agent and/or shareholder servicing agent,
18
<PAGE>
and DWTC desires to render such services, such services shall
be provided pursuant to a letter agreement, substantially in
the form of Exhibit A hereto, between DWTC and each Additional
Fund.
12.2 In the event of an alleged loss or
destruction of any Share certificate, no new certificate shall
be issued in lieu thereof, unless there shall first be
furnished to DWTC an affidavit of loss or non-receipt by the
holder of Shares with respect to which a certificate has been
lost or destroyed, supported by an appropriate bond
satisfactory to DWTC and the Fund issued by a surety company
satisfactory to DWTC, except that DWTC may accept an affidavit
of loss and indemnity agreement executed by the registered
holder (or legal representative) without surety in such form
as DWTC deems appropriate indemnifying DWTC and the Fund for
the issuance of a replacement certificate, in cases where the
alleged loss is in the amount of $1000 or less.
12.3 In the event that any check or other order for
payment of money on the account of any Shareholder or new
investor is returned unpaid for any reason, DWTC will (a) give
prompt notification to the Fund's distributor ("Distributor")
(or to the Fund if the Fund acts as its own distributor) of
such non-payment; and (b) take such other action, including
imposition of a reasonable processing or handling fee, as DWTC
19
<PAGE>
may, in its sole discretion, deem appropriate or as the Fund
and, if applicable, the Distributor may instruct DWTC.
12.4 Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Fund
or to DWTC shall be sufficiently given if addressed to that
party and received by it at its office set forth below or at
such other place as it may from time to time designate in
writing.
To the Fund:
(Name of Fund)
Two World Trade Center
New York, New York 10048
Attention: General Counsel
To DWTC:
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311
Attention: President
Article 13 Merger of Agreement
13.1 This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior
agreement with respect to the subject matter hereof whether
oral or written.
20
<PAGE>
Article 14 Personal Liability
14.1 In the case of a Fund organized as a
Massachusetts business trust, a copy of the Declaration of
Trust of the Fund is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees
of the Fund as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the
Trustees or shareholders individually but are binding only
upon the assets and property of the Fund; provided, however,
that the Declaration of Trust of the Fund provides that the
assets of a particular Series of the Fund shall under no
circumstances be charged with liabilities attributable to any
other Series of the Fund and that all persons extending credit
to, or contracting with or having any claim against, a
particular Series of the Fund shall look only to the assets of
that particular Series for payment of such credit, contract or
claim.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Amended and Restated Agreement to be executed in their
names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
(1) Dean Witter Liquid Asset Fund Inc.
(2) Dean Witter Tax-Free Daily Income Trust
(3) Dean Witter California Tax-Free Daily Income Trust
(4) Dean Witter Retirement Series
(5) Dean Witter Dividend Growth Securities Inc.
(6) Dean Witter Natural Resource Development Securities Inc.
(7) Dean Witter World Wide Investment Trust
(8) Dean Witter Capital Growth Securities
(9) Dean Witter Convertible Securities Trust
(10) Active Assets Tax-Free Trust
(11) Active Assets Money Trust
(12) Active Assets California Tax-Free Trust
(13) Active Assets Government Securities Trust
(14) Dean Witter Equity Income Trust
(15) Dean Witter Federal Securities Trust
(16) Dean Witter U.S. Government Securities Trust
(17) Dean Witter High Yield Securities Inc.
(18) Dean Witter New York Tax-Free Income Fund
(19) Dean Witter Tax-Exempt Securities Trust
(20) Dean Witter California Tax-Free Income Fund
(21) Dean Witter Managed Assets Trust
(22) Dean Witter Limited Term Municipal Trust
(23) Dean Witter World Wide Income Trust
(24) Dean Witter Utilities Fund
(25) Dean Witter Strategist Fund
(26) Dean Witter New York Municipal Money Market Trust
(27) Dean Witter Intermediate Income Securities
(28) Prime Income Trust
(29) Dean Witter European Growth Fund Inc.
(30) Dean Witter Developing Growth Securities Trust
(31) Dean Witter Precious Metals and Minerals Trust
(32) Dean Witter Pacific Growth Fund Inc.
(33) Dean Witter Multi-State Municipal Series Trust
(34) Dean Witter Premier Income Trust
(35) Dean Witter Short-Term U.S. Treasury Trust
(36) Dean Witter Diversified Income Trust
(37) Dean Witter Health Sciences Trust
(38) Dean Witter Global Dividend Growth Securities
(39) Dean Witter American Value Fund
22
<PAGE>
(40) Dean Witter U.S. Government Money Market Trust
(41) Dean Witter Global Short-Term Income Fund Inc.
(42) Dean Witter Value-Added Market Series
(43) Dean Witter Select Municipal Reinvestment Fund
(44) Dean Witter Variable Investment Series
By:/s/ Sheldon Curtis
------------------------------------
Sheldon Curtis
Vice President and General Counsel
ATTEST:
/s/ Barry Fink
- -------------------------
Barry Fink
Assistant Secretary
DEAN WITTER TRUST COMPANY
By:/s/ Charles A. Fiumefreddo
----------------------------------
Charles A. Fiumefreddo
Chairman
ATTEST:
/s/ David A. Hughey
- --------------------------
David A. Hughey
Executive Vice President
f:\transfer.dw
23
<PAGE>
EXHIBIT A
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, NJ 07311
Gentlemen:
The undersigned, Dean Witter Global Asset Allocation Fund
a (Massachusetts business trust/Maryland Corporation) (the
"Fund"), desires to employ and appoint Dean Witter Trust
Company ("DWTC") to act as transfer agent for each series and
class of shares of the Fund, whether now or hereafter
authorized or issued ("Shares"), dividend disbursing agent and
shareholder servicing agent, registrar and agent in connection
with any accumulation, open-account or similar plan provided
to the holders of Shares, including without limitation any
periodic investment plan or periodic withdrawal plan.
The Fund hereby agrees that, in consideration for
the payment by the Fund to DWTC of fees as set out in the fee
schedule attached hereto as Schedule A, DWTC shall provide
such services to the Fund pursuant to the terms and conditions
set forth in the Transfer Agency and Service Agreement annexed
hereto, as if the Fund was a signatory thereto.
24
<PAGE>
Please indicate DWTC's acceptance of employment and
appointment by the Fund in the capacities set forth above by
so indicating in the space provided below.
Very truly yours,
Dean Witter Global Asset Allocation Fund
By:..................................
Sheldon Curtis
Vice President and General Counsel
ACCEPTED AND AGREED TO:
DEAN WITTER TRUST COMPANY
By:.......................
Its:......................
Date:.....................
f:\transfer.dw
25
<PAGE>
SCHEDULE A
Fund: Dean Witter Global Asset Allocation Fund
Fees: (1) Annual maintenance fee of $11.00 per shareholder account,
payable monthly.
(2) A fee equal to 1/12 of the fee set forth in (1) above, for
providing Forms 1099 for accounts closed during the year,
payable following the end of the calendar year.
(3) Out-of-pocket expenses in accordance with Section 2.2 of the
Agreement
(4) Fees for additional services not set forth in this Agreement
shall be as negotiated between the parties.
f:\schedA\25
EXHIBIT 9
SERVICES AGREEMENT
AGREEMENT made as of the 31st day of December, 1993 by and between Dean
Witter InterCapital Inc., a Delaware corporation (herein referred to as
"InterCapital"), and Dean Witter Services Company Inc., a New Jersey
corporation (herein referred to as "DWS").
WHEREAS, InterCapital has entered into separate agreements (each such
agreement being herein referred to as an "Investment Management Agreement")
with certain investment companies as set forth on Schedule A (each such
investment company being herein referred to as a "Fund" and, collectively, as
the "Funds") pursuant to which InterCapital is to perform, or supervise the
performance of, among other services, administrative services for the Funds
(and, in the case of Funds with multiple portfolios, the Series or Portfolios
of the Funds (such Series and Portfolio being herein individually referred to
as "a Series" and, collectively, as "the Series"));
WHEREAS, InterCapital desires to retain DWS to perform the administrative
services as described below; and
WHEREAS, DWS desires to be retained by InterCapital to perform such
administrative services:
Now, therefore, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DWS agrees to provide administrative services to each Fund as hereinafter
set forth. Without limiting the generality of the foregoing, DWS shall (i)
administer the Fund's business affairs and supervise the overall day-to-day
operations of the Fund (other than rendering investment advice); (ii) provide
the Fund with full administrative services, including the maintenance of
certain books and records, such as journals, ledger accounts and other records
required under the Investment Company Act of 1940, as amended (the"Act"), the
notification to the Fund and InterCapital of available funds for investment,
the reconciliation of account information and balances among the Fund's
custodian, transfer agent and dividend disbursing agent and InterCapital, and
the calculation of the net asset value of the Fund's shares; (iii) provide the
Fund with the services of persons competent to perform such supervisory,
administrative and clerical functions as are necessary to provide effective
operation of the Fund; (iv) oversee the performance of administrative and
professional services rendered to the Fund by others, including its custodian,
transfer agent and dividend disbursing agent, as well as accounting, auditing
and other services; (v) provide the Fund with adequate general office space and
facilities; (vi) assist in the preparation and the printing of the periodic
updating of the Fund's registration statement and prospectus (and, in the case
of an open-end Fund, the statement of additional information), tax returns,
proxy statements, and reports to its shareholders and the Securities and
Exchange Commission; and (vii) monitor the compliance of the Fund's investment
policies and restrictions.
In the event that InterCapital enters into an Investment Management Agreement
with another investment company, and wishes to retain DWS to perform
administrative services hereunder, it shall notify DWS in writing. If DWS is
willing to render such services, it shall notify InterCapital in writing,
whereupon such other Fund shall become a Fund as defined herein.
2. DWS shall, at its own expense, maintain such staff and employ or retain
such personnel and consult with such other persons as it shall from time to
time determine to be necessary or useful to the performance of its obligations
under this Agreement. Without limiting the generality of the foregoing, the
staff and personnel of DWS shall be deemed to include officers of DWS and
persons employed or otherwise retained by DWS (including officers and employees
of InterCapital, with the consent of InterCapital) to furnish services,
statistical and other factual data, information with respect to technical and
scientific developments, and such other information, advice and assistance as
DWS may desire. DWS shall maintain each Fund's records and books of account
(other than those maintained by the Fund's transfer agent, registrar, custodian
and other agencies). All such books and records so maintained shall be the
property of the Fund and, upon request therefor, DWS shall surrender to
InterCapital or to the Fund such of the books and records so requested.
3. InterCapital will, from time to time, furnish or otherwise make available
to DWS such financial reports, proxy statements and other information relating
to the business and affairs of the Fund as DWS may
1
<PAGE>
reasonably require in order to discharge its duties and obligations to the Fund
under this Agreement or to comply with any applicable law and regulation or
request of the Board of Directors/Trustees of the Fund.
4. For the services to be rendered, the facilities furnished, and the
expenses assumed by DWS, InterCapital shall pay to DWS monthly compensation
calculated daily (in the case of an open-end Fund) or weekly (in the case of a
closed-end Fund) by applying the annual rate or rates set forth on Schedule B
to the net assets of each Fund. Except as hereinafter set forth, (i) in the
case of an open-end Fund, compensation under this Agreement shall be calculated
by applying 1/365th of the annual rate or rates to the Fund's or the Series'
daily net assets determined as of the close of business on that day or the last
previous business day and (ii) in the case of a closed-end Fund, compensation
under this Agreement shall be calculated by applying the annual rate or rates
to the Fund's average weekly net assets determined as of the close of the last
business day of each week. If this Agreement becomes effective subsequent to
the first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
on Schedule B. Subject to the provisions of paragraph 5 hereof, payment of DWS'
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 5 hereof.
5. In the event the operating expenses of any open-end Fund and/or any Series
thereof, or of InterCapital Income Securities Inc., including amounts payable
to InterCapital pursuant to the Investment Management Agreement, for any fiscal
year ending on a date on which this Agreement is in effect, exceed the expense
limitations applicable to the Fund and/or any Series thereof imposed by state
securities laws or regulations thereunder, as such limitations may be raised or
lowered from time to time, or, in the case of InterCapital Income Securities
Inc. or Dean Witter Variable Investment Series or any Series thereof, the
expense limitation specified in the Fund's Investment Management Agreement, the
fee payable hereunder shall be reduced on a pro rata basis in the same
proportion as the fee payable by the Fund under the Investment Management
Agreement is reduced.
6. DWS shall bear the cost of rendering the administrative services to be
performed by it under this Agreement, and shall, at its own expense, pay the
compensation of the officers and employees, if any, of the Fund employed by
DWS, and such clerical help and bookkeeping services as DWS shall reasonably
require in performing its duties hereunder.
7. DWS will use its best efforts in the performance of administrative
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, 1994, and thereafter shall
continue automatically for successive periods of one year unless terminated by
either party by written notice delivered to the other party within 30 days of
the expiration of the then-existing period. Notwithstanding the foregoing, this
Agreement may be terminated at any time, by either party on 30 days' written
notice delivered to the other party. In the
2
<PAGE>
event that the Investment Management Agreement between any Fund and
InterCapital is terminated, this Agreement will automatically terminate with
respect to such Fund.
10. This Agreement may be amended or modified by the parties in any manner by
mutual written agreement executed by each of the parties hereto.
11. This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written in New York, New York.
DEAN WITTER INTERCAPITAL INC.
By: .....................
Attest:
.....................
DEAN WITTER SERVICES COMPANY INC.
By: .....................
Attest:
.....................
3
<PAGE>
SCHEDULE A
DEAN WITTER FUNDS
AT DECEMBER 31, 1993
OPEN-END FUNDS
1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Dean Witter American Value Fund
6. Dean Witter California Tax-Free Daily Income Trust
7. Dean Witter California Tax-Free Income Fund
8. Dean Witter Capital Growth Securities
9. Dean Witter Convertible Securities Trust
10. Dean Witter Developing Growth Securities Trust
11. Dean Witter Diversified Income Trust
12. Dean Witter Dividend Growth Securities Inc.
13. Dean Witter Equity Income Trust
14. Dean Witter European Growth Fund Inc.
15. Dean Witter Federal Securities Trust
16. Dean Witter Global Dividend Growth Securities
17. Dean Witter Global Short-Term Income Fund Inc.
18. Dean Witter Health Sciences Trust
19. Dean Witter High Yield Securities Inc.
20. Dean Witter Intermediate Income Securities
21. Dean Witter Limited Term Municipal Trust
22. Dean Witter Liquid Asset Fund Inc.
23. Dean Witter Managed Assets Trust
24. Dean Witter Multi-State Municipal Series Trust
25. Dean Witter Natural Resource Development Securities Inc.
26. Dean Witter New York Municipal Money Market Trust
27. Dean Witter New York Tax-Free Income Fund
28. Dean Witter Pacific Growth Fund Inc.
29. Dean Witter Precious Metals and Minerals Trust
30. Dean Witter Premier Income Trust
31. Dean Witter Retirement Series
32. Dean Witter Select Municipal Reinvestment Fund
33. Dean Witter Short-Term U.S. Treasury Trust
34. Dean Witter Strategist Fund
35. Dean Witter Tax-Exempt Securities Trust
36. Dean Witter Tax-Free Daily Income Trust
37. Dean Witter U.S. Government Money Market Trust
38. Dean Witter U.S. Government Securities Trust
39. Dean Witter Utilities Fund
40. Dean Witter Value-Added Market Series
41. Dean Witter Variable Investment Series
42. Dean Witter World Wide Income Trust
43. Dean Witter World Wide Investment Trust
CLOSED-END FUNDS
44. High Income Advantage Trust
45. High Income Advantage Trust II
46. High Income Advantage Trust III
47. InterCapital Income Securities Inc.
48. Dean Witter Government Income Trust
49. InterCapital Insured Municipal Bond Trust
50. InterCapital Insured Municipal Trust
51. InterCapital Insured Municipal Income Trust
52. InterCapital California Insured Municipal Income Trust
53. InterCapital Quality Municipal Investment Trust
54. InterCapital Quality Municipal Income Trust
55. InterCapital Quality Municipal Securities
56. InterCapital California Quality Municipal Securities
57. InterCapital New York Quality Municipal Securities
4
<PAGE>
SCHEDULE B
DEAN WITTER INTERCAPITAL INC.
Two World Trade Center
New York, New York 10048
December 7, 1994
Dean Witter Services Company Inc.
Two World Trade Center
New York, New York 10048
Re: Dean Witter Global Asset Allocation Fund (the "Fund")
Dear Sirs:
Please be advised that, having entered into an Investment Management
Agreement with the Fund, we wish to retain you to perform administrative
services in respect of the Fund under our Services Agreement with you, dated
December 31, 1993 (attached hereto), for monthly compensation calculated daily
by applying the following annual rate to the Fund's net assets: 0.01%.
Your execution of this letter, where indicated, shall constitute
notification to us of your willingness to render administrative services in
respect of the Fund under the attached Services Agreement, in consideration of
the above-stated compensation.
Very truly yours,
DEAN WITTER INTERCAPITAL INC.
By:____________________________________
ACCEPTED: DEAN WITTER SERVICES COMPANY INC.
BY:____________________________________
5
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
December 15, 1994
Dean Witter Global Asset Allocation Fund
Two World Trade Center
New York, New York 10048
Dear Sirs:
With respect to the Registration Statement on Form N-1A (File
No. 33-56239) (the "Registration Statement") filed by Dean Witter
Global Asset Allocation Fund, a Massachusetts business trust (the
"Fund"), with the Securities and Exchange Commission for the
purpose of registering under the Securities Act of 1933, as
amended, an indefinite number of shares of Beneficial Interest of
$0.01 par value of the Fund (the "Shares"), I, as your counsel,
have examined such Fund records, certificates and other documents
and reviewed such questions of law as I have considered necessary
or appropriate for the purposes of this opinion , and on the basis
of such examination and review, I advise you that, in my opinion,
proper trust proceedings have been taken by the Fund so that the
Shares have been validly authorized; and when the Shares have been
issued and sold in accordance with the terms of the Underwriting
Agreement referred to in the Registration Statement, the Shares
will be validly issued, fully paid and non-assessable.
As to matters of Massachusetts law contained in the foregoing
opinion, I have relied upon the opinion of Lane & Altman, dated
December 15, 1994.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to me under the
caption "Legal Counsel" in the Statement of Additional Information
forming a part of the Registration Statement. In giving this
consent, I do not thereby admit that I am within the category of
persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
Sheldon Curtis
Vice President
and General Counsel
<PAGE>
Lane & Altman
Counsellors at Law
101 Federal Street Telephone
Boston, Massachusetts 617-345-9800
02110
Telefax
617345-0400
Reference
December 15, 1994
Sheldon Curtis, Vice President and
General Counsel
Dean Witter InterCapital, Inc.
Two World Trade Center
New York, NY 10048
RE: Dean Witter Global Asset Allocation Fund
Dear Sir:
We understand that the trustees (the "Trustees") of Dean
Witter Global Asset Allocation Fund, a Massachusetts
business trust (the "Trust"), intend, on or about December
15, 1994, to cause to be filed on behalf of the Trust a
Pre-effective Amendment No. 1 to Registration Statement No.
33-56239 (as amended, the "Registration Statement") for the
purpose of registering for sale Shares of Beneficial
Interest, $.0l par value, of the Trust (the "Shares"). We
further understand that the Shares will be issued and sold
pursuant to an underwriting agreement (the "Underwriting
Agreement") and distribution agreement (the "Distribution
Agreement") to be entered into between the Trust and Dean
Witter Distributors Inc.
You have requested that we act as special counsel to the
Trust regarding certain matters of Massachusetts law
respecting the organization of the Trust, and in such
capacity we are furnishing you with this opinion.
The Trust is created under a written declaration of
trust finally executed and delivered in Boston,
Massachusetts on October 20, 1994 (the "Trust Agreement").
The Trustees (as defined in the Trust Agreement) have the
powers set forth in the Trust Agreement, subject to the
terms, provisions and conditions therein provided.
In connection with the opinions set forth herein, you
and the Trust have provided to us originals, copies or
facsimile transmissions of, and we have reviewed and relied
upon, among other things: a copy of the Trust Agreement; a
certificate of the Assistant Secretary of the Trust dated
December 12, 1994 attesting to the due adoption on December
6, 1994 of certain resolutions of the Board of Trustees of
<PAGE>
Lane & Altman
Counsellors at Law
Sheldon Curtis, Vice President
and General Counsel
Dean Witter InterCapital, Inc.
December 15, 1994
Page 2
the Trust, and the copies of such resolutions attached
thereto; forms of the Underwriting Agreement and
Distribution Agreement; and the Registration Statement
(including the exhibits thereto). We have assumed that the
by-laws filed as an exhibit to the Registration Statement
have been duly adopted by the Trustees. We have also
reviewed and relied upon a certificate of the Secretary of
State of the Commonwealth of Massachusetts dated December
14, 1994 attesting to the valid existence of the Trust.
In rendering this opinion we have assumed, without
independent verification, (i) the due authority of all
individuals signing in representative capacities and the
genuineness of signatures, (ii) the authenticity,
completeness and continued effectiveness of all documents or
copies furnished to us, (iii) that the resolutions provided
have been duly adopted by the Trustees, and (iv) that no
amendments, agreements, resolutions or actions have been
approved, executed or adopted which would limit, supersede
or modify the items described above. We have also examined
such questions of law as we have concluded necessary or
appropriate for purposes of the opinions expressed below.
Where documents are referred to in resolutions approved by
the Trustees, or in the Registration Statement, we assume
such documents are the same as in the most recent form
provided to us, whether as an exhibit to the Registration
Statement, or otherwise. When any opinion set forth below
relates to the existence or standing of the Trust, such
opinion is based entirely upon and is limited by the items
referred to above, and we understand that the foregoing
assumptions, limitations and qualifications are acceptable
to you.
Based upon the foregoing, and with respect to
Massachusetts law only (except that no opinion is herein
expressed with respect to compliance with the Massachusetts
Uniform Securities Act), to the extent that Massachusetts
law may be applicable, and without reference to the laws of
any of the other several states or of the United States of
America, including State and Federal securities laws, we are
of the opinion that:
1. The Trust is a business trust with transferable
shares, organized in compliance with the requirements of The
Commonwealth of Massachusetts and the Trust Agreement is
legal and valid.
2. The Shares to which the Registration Statement
relates and which are to be registered under the Securities
Act of 1933, as amended, will be legally and validly issued
<PAGE>
Lane & Altman
Counsellors at Law
Sheldon Curtis, Vice President
and General Counsel
Dean Witter InterCapital, Inc.
December 15, 1994
Page 3
upon receipt by the Trust of consideration determined by the
Trustees in compliance with Article VI, Section 6.4 of the
Trust Agreement. We are further of the opinion that such
Shares, when issued, will be fully paid and non-assessable
by the Trust.
We understand that you will rely on this opinion solely
in connection with your opinion to be filed with the
Securities and Exchange Commission as an Exhibit to the
Registration Statement. We hereby consent to such use of
this opinion and we also consent to the filing of said
opinion with the Securities and Exchange Commission. In so
consenting, we do not thereby admit to be within the
category of persons whose consent is required under Section
7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
LANE & ALTMAN
kmk/dwglob/.aa3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Pre-Effective Amendment No.1 to the Registration
Statement on Form N-1A (the "Registration Statement") of our report dated
December 8, 1994, relating to the Statement of Assets and Liabilities of Dean
Witter Global Asset Allocation Fund, 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 references to us under the headings "Independent Accountants"
and "Experts" in such Statement of Additional Information.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 8, 1994
Exhibit 13
December 7, 1994
Dean Witter Global Asset Allocation Fund
Two World Trade Center
New York, New York 10048
Gentlemen:
We are purchasing from you today 10,000 of your shares of
beneficial interest, with $0.01 par value, at a price of $10.00
per share, or an aggregate price of $100,000 to provide the
initial capital you require pursuant to Section 14 of the
Investment Company Act of 1940 in order to make a public offering
of your shares.
We hereby represent that we are acquiring said shares for
investment and not for distribution or resale to the public.
We hereby further represent that in the event we redeem
such shares prior to complete amortization by you of your
organization expenses, the amount we receive upon redemption may
be reduced by the proportionate amount which the total unamortized
balance bears to the number of shares being redeemed. For this
purpose, the proportionate amount is based on the ratio of the
number of shares originally issued by you in connection with the
furnishing of the initial capital.
Very truly yours,
DEAN WITTER INTERCAPITAL INC.
By
---------------------------------
Charles A. Fiumefreddo
Chairman
<PAGE>
EXHIBIT 15
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
OF
DEAN WITTER GLOBAL ASSET ALLOCATION FUND
WHEREAS, Dean Witter Global Asset Allocation Fund (the "Fund") intends to
engage 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");
WHEREAS, the Fund desires to adopt a Plan of Distribution pursuant to Rule
12b-1 under the Act, and the Trustees have determined that there is a
reasonable likelihood that adoption of this Plan of Distribution will benefit
the Fund and its shareholders;
WHEREAS, the Fund and Dean Witter Distributors Inc. (the "Distributors")
have entered into a separate Distribution Agreement dated as of the date
hereof, 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 adopts, and the Distributor hereby agrees
to the terms of, this Plan of Distribution (the "Plan") in accordance with
Rule 12b-1 under the Act on the following terms and conditions:
1. The Fund shall pay, to the Distributor as the distributor of securities
of which the Fund is the issuer, compensation for distribution of its shares
at the rate of the lesser of (i) % per annum of the average daily
aggregate sales of the Fund's shares since its inception (not including
reinvestment of dividends and capital gains distributions from the Fund) less
the average daily aggregate net asset value of the Fund's shares redeemed
since the Fund's inception upon which a contingent deferred sales charge has
been imposed or upon which such charge has been waived, or (ii) % per
annum of the Fund's daily net assets. Such compensation shall be calculated
and accrued daily and paid monthly or at such other intervals as the Trustees
shall determine. The Distributor may direct that all or any part of the
amounts receivable by it under this Plan be paid directly to Dean Witter
Reynolds Inc. ("DWR"), its affiliates or other broker-dealers who provide
distribution and/or shareholder services. All payments made hereunder
pursuant to the Plan shall be in accordance with the terms and limitations of
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc.
2. The amount set forth in paragraph 1 of this Plan shall be paid for
services of the Distributor, DWR, its affiliates and other broker-dealers it
may select in connection with the distribution of the Fund's shares,
including personal services to shareholders with respect to their holdings of
Fund shares, and may be spent by the Distributor, DWR, its affiliates and
such broker-dealers on any activities or expenses related to the distribution
of the Fund's shares or services to shareholders, including, but not limited
to: compensation to, and expenses of, account executives or other employees
of the Distributor, DWR, its affiliates or other broker-dealers; overhead and
other branch office distribution-related expenses and telephone expenses of
persons who engage in or support distribution of shares or who provide
personal services to shareholders; printing of prospectuses and reports for
other than existing shareholders; preparation, printing and distribution of
sales literature and advertising materials and opportunity costs in incurring
the foregoing expenses (which may be calculated as a carrying charge on the
excess of the distribution expenses incurred by the Distributor, DWR, its
affiliates or other broker-dealers over distribution revenues received by
them). The overhead and other branch office distribution-related expenses
referred to in this paragraph 2 may include: (a) the expenses of operating
the branch offices of the Distributor or other broker-dealers, including DWR,
in connection with the sale of Fund shares, including lease costs, the
salaries and employee benefits of operations and sales support personnel,
utility costs, communications costs and the costs of stationery and supplies;
(b) the costs of client sales seminars; (c) travel expenses of mutual fund
sales coordinators to promote the sale of Fund shares; and (d) other expenses
relating to branch promotion of Fund sales.
3. This Plan shall not take effect until it has been approved by a vote of
at least a majority (as defined in the Act) of the outstanding voting
securities of the Fund.
4. This Plan shall not take effect until it has been approved, together
with any related agreements, by votes of a majority of the Trustees of the
Fund and of those Trustees who are not "interested persons" of the Fund (as
defined in the Act) and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Rule 12b-1
Trustees"), cast in person at a meeting (or meetings) called for the purpose
of voting on this Plan and such related agreements.
5. This Plan shall continue in effect until April 30, 1995 and from year
to year thereafter for so long as such continuance is specifically approved
at least annually in the manner provided for approval of this Plan in
paragraph 4 hereof.
1
<PAGE>
<PAGE>
6. The Distributor shall provide to the Trustees of the Fund and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made. In this
regard, the Trustees shall request the Distributor to specify such items of
expenses as the Trustees deem appropriate. The Trustees shall consider such
items as they deem relevant in making the determinations required in
paragraph 5 above hereof.
7. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund, and will terminate in the event of its assignment (as
defined in the Act). In the event of any such termination or in the event of
nonrenewal, the Fund shall have no obligation to pay expenses which have been
incurred by the Distributor, DWR, its affiliates or other broker-dealers in
excess of payments made by the Fund pursuant to this Plan. However, this
shall not preclude consideration by the Trustees of the manner in which such
excess expenses shall be treated.
8. This Plan may not be amended to increase materially the amount of
distribution expenses provided for in paragraph 1 hereof unless such
amendment is approved by a vote of at least a majority (as defined in the
Act) of the outstanding Voting Securities of the Fund, and no material
amendment to the Plan shall be made unless approved in the manner provided
for approval and annual renewal in paragraph 4 hereof.
9. While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Trustees who are not interested persons.
10. The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 6 hereof, for a period of not less
than six years from the date of this Plan, or the agreements or such report,
as the case may be, the first two years in an easily accessible place.
11. The Declaration of Trust establishing Dean Witter Global Asset
Allocation Fund, dated October 18, 1994, 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 Global Asset Allocation Fund 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 Global
Asset Allocation Fund 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 Global Asset Allocation Fund, but the Trust Estate only shall be
liable.
IN WITNESS WHEREOF, the Fund and the Distributor have executed this Plan
of Distribution as of the day and year set forth below in New York, New York.
Date: , 1994
Dean Witter Global Asset Allocation Fund
By .......................................
Attest: ..................................
Dean Witter Distributors Inc.
By ........................................
Attest: ...................................
2
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> DEC-07-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 260,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 160,000
<TOTAL-LIABILITIES> 160,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 10,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 160,000
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 160,000
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Charles A. Fiumefreddo,
whose signature appears below, constitutes and appoints Sheldon
Curtis, Marilyn K. Cranney and Barry Fink, or any of them, his true
and lawful attorneys-in-fact and agents, with full power of
substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: December 6, 1994
---------------------------
Charles A. Fiumefreddo
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John R. Haire, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss or either of them,
his true and lawful attorneys-in-fact and agents, with full power
of substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, may lawfully do or cause to be done by
virtue hereof.
Dated: December 6, 1994
--------------------------------
John R. Haire
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Paul Kolton, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or either of
them, his true and lawful attorneys-in-fact and agents, with full
power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any
and all capacities, to sign any amendments to any registration
statement of DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.
Dated: December 6, 1994
--------------------------
Paul Kolton
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Michael E. Nugent, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or either of
them, his true and lawful attorneys-in-fact and agents, with full
power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any
and all capacities, to sign any amendments to any registration
statement of DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.
Dated: December 6, 1994
--------------------------------------
Michael E. Nugent
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that John L. Schroeder, whose
signature appears below, constitutes and appoints David M.
Butowsky, Ronald M. Feiman and Stuart M. Strauss, or either of
them, his true and lawful attorneys-in-fact and agents, with full
power of substitution among himself and each of the persons
appointed herein, for him and in his name, place and stead, in any
and all capacities, to sign any amendments to any registration
statement of DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.
Dated: December 6, 1994
-----------------------------------
John L. Schroeder
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Philip J. Purcell, whose
signature appears below, constitutes and appoints Sheldon Curtis,
Marilyn K. Cranney and Barry Fink, or any of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution among himself and each of the persons appointed
herein, for him and in his name, place and stead, in any and all
capacities, to sign any amendments to any registration statement of
DEAN WITTER GLOBAL ASSET ALLOCATION FUND, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by
virtue hereof.
Dated: December 6, 1994
-----------------------------------------
Philip Purcell
