Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Preliminary Additional Materials
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or
Section 240.14a-12
....INTERCAPITAL INCOME SECURITIES INC. . . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
....Marilyn K. Cranney. . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ x ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(j)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Fee previously paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
INTERCAPITAL INCOME SECURITIES INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 27, 1996
The Annual Meeting of Stockholders of INTERCAPITAL INCOME SECURITIES INC.
(the "Fund"), a Maryland corporation, will be held in the Conference Center,
Forty-Fourth Floor, 2 World Trade Center, New York, New York 10048, on December
27, 1996, at 11:00 a.m., New York City time, for the following purposes:
1. To elect eight (8) Directors to serve until the next Annual Meeting, or
until their successors shall have been elected and qualified;
2. To approve or disapprove the continuance of the Fund's currently
effective Investment Management Agreement with Dean Witter InterCapital Inc.;
3. To ratify or reject the selection of Price Waterhouse LLP as the Fund's
independent accountants for the fiscal year ending September 30, 1997; and
4. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
Stockholders of record as of the close of business on October 25, 1996 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting
for a total of not more than 60 days in the aggregate to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Fund's shares present in person or by proxy
at the meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
proposal to approve continuance of the Investment Management Agreement and will
vote against any such adjournment those proxies required to be voted against
that proposal.
SHELDON CURTIS,
Secretary
October 30, 1996
New York, New York
- -------------------------------------------------------------------------------
IMPORTANT
YOU CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE
UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED
PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- -------------------------------------------------------------------------------
<PAGE>
INTERCAPITAL INCOME SECURITIES INC.
TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 27, 1996
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors (the "Board") of INTERCAPITAL INCOME SECURITIES INC.
(the "Fund"), for use at the Annual Meeting of Stockholders of the Fund to be
held on December 27, 1996 (the "Meeting"), and at any adjournments thereof.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted for each of the nominees for election as
Director and in favor of Proposals 2 and 3. A proxy may be revoked at any time
prior to its exercise by any of the following: written notice of revocation,
execution and delivery of a later dated proxy to the Secretary of the Fund (if
returned and received in time to be voted), or attendance and voting at the
Meeting. Attendance at the Meeting will not in and of itself revoke a proxy.
Stockholders as of the close of business on October 25, 1996, the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting, are entitled to one vote for each share held and a fractional vote
for a fractional share. On October 25, 1996, there were outstanding 12,086,318
shares of common stock of the Fund, all with $.01 par value. No person was
known to own as much as 5% of the outstanding shares of the Fund on that date.
The Directors and officers of the Fund, together, owned less than 1% of the
Fund's outstanding shares on that date. The percentage ownership of shares of
the Fund changes from time to time depending on purchases and sales by
stockholders and the total number of shares outstanding.
The cost of soliciting proxies for the Meeting, consisting principally of
mailing and printing expenses, will be borne by the Fund. The solicitation of
proxies will be by mail, which may be supplemented by solicitation by mail,
telephone or otherwise through Directors, officers and regular employees of the
Fund or Dean Witter InterCapital Inc. ("InterCapital" or the "Investment
Manager"), and employees of broker-dealers, including Dean Witter Reynolds Inc.
("DWR"), without special compensation therefor. In addition, the Fund may
employ William F. Doring and Co. as proxy solicitor, the cost of which is not
expected to exceed $3,000 and will be borne by the Fund. The first mailing of
this proxy statement is expected to be made on or about November 4, 1996.
(1) ELECTION OF DIRECTORS
The number of Directors has currently been fixed by the Board of Directors
at eight pursuant to the By-Laws of the Fund. At the Meeting, eight Directors
are to be elected to hold office until the next Annual Meeting of Stockholders
or until their successors shall have been elected and qualified.
There are presently eight Directors.
Six of the current eight Directors (Michael Bozic, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, Michael E. Nugent and John L. Schroeder) are
"Independent Directors," that is, Directors who are not
2
<PAGE>
"interested persons" of the Fund, as that term is defined in the Investment
Company Act of 1940, as amended (the "Act"). The nominees for election as
Directors have been proposed by the Directors now serving or, in the case of
the nominees for positions as Independent Directors, by the Independent
Directors now serving. All of the Directors have been elected by the
stockholders of the Fund.
The nominees of the Board of Directors for election as Directors are
listed below. It is the intention of the persons named in the enclosed form
of proxy to vote the shares represented by them for the election of these
nominees: Michael Bozic, Charles A. Fiumefreddo, Edwin J. Garn, John R.
Haire, Manuel H. Johnson, Michael E. Nugent, Philip J. Purcell and John L.
Schroeder. Should any of the nominees become unable or unwilling to accept
nomination or election, the persons named in the proxy will exercise their
voting power in favor of such person or persons as the Board may recommend.
All of the nominees have consented to being named in this proxy statement and
to serve if elected. The Fund knows no reason why any of said nominees would
be unable or unwilling to accept nomination or election. Directors will be
elected by a plurality of the votes cast at the Meeting.
The following information regarding each of the nominees for election as
Director includes his principal occupations and employment for at least the
last five years, his age, shares of the Fund owned, if any, as of October 25,
1996 (shown in parentheses), positions with the Fund, and directorships or
trusteeships in companies which file periodic reports with the Securities and
Exchange Commission, including the 82 investment companies, including the Fund,
for which InterCapital serves as investment manager or investment adviser
(referred to herein as the "Dean Witter Funds") and the 14 investment companies
for which InterCapital's wholly-owned subsidiary, Dean Witter Services Company
Inc. ("DWSC"), serves as manager and TCW Funds Management, Inc. serves as
investment adviser (referred to herein as the "TCW/DW Funds").
The nominees for Director to be elected at this Meeting are:
MICHAEL BOZIC, Director since April, 1994; age 55; Chairman and Chief
Executive Officer of Levitz Furniture Corporation (since November, 1995);
Director or Trustee of the Dean Witter Funds; formerly President and Chief
Executive Officer of Hills Department Stores (May, 1991-July, 1995); formerly
variously Chairman, Chief Executive Officer, President and Chief Operating
Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck and Co.;
Director of Eaglemark Financial Services, Inc., the United Negro College Fund
and Weirton Steel Corporation.
CHARLES A. FIUMEFREDDO,* Director since July, 1991; age 63; Chairman,
Chief Executive Officer and Director of Dean Witter InterCapital Inc.
("InterCapital"), Dean Witter Services Company Inc. ("DWSC") and Dean Witter
Distributors Inc. ("Distributors"); Executive Vice President and Director of
Dean Witter Reynolds Inc. ("DWR"); Chairman, Director or Trustee, President
and Chief Executive Officer of the Dean Witter Funds; Chairman, Chief
Executive Officer and Trustee of the TCW/DW Funds; Chairman and Director of
Dean Witter Trust Company ("DWTC"); Director and/or officer of various Dean
Witter, Discover & Co. ("DWDC") subsidiaries; formerly Executive Vice
President and Director of DWDC (until February, 1993).
EDWIN JACOB (JAKE) GARN, Director since January, 1993; age 64; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly Mayor
of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Discovery (April 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation
(since January, 1993); Director of Franklin Quest (time management systems) and
John Alden Financial Corp.; Member of the board of various civic and charitable
organizations.
JOHN R. HAIRE, Director since January, 1983; age 71; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or
Trustees and Director or Trustee of the Dean Witter Funds;
3
<PAGE>
Chairman of the Audit Committee and Chairman of the Committee of the
Independent Trustees and Trustee of the TCW/DW Funds; formerly President,
Council for Aid to Education (1978-1989) and Chairman and Chief Executive
Officer of Anchor Corporation, an investment adviser (1964-1978); Director of
Washington National Corporation (insurance).
DR. MANUEL H. JOHNSON, Director since July, 1991; age 47; Senior Partner,
Johnson Smick International, Inc., a consulting firm; Koch Professor of
International Economics and Director of the Center for Global Market Studies at
George Mason University; Co-Chairman and a founder of the Group of Seven
Council (G7C), an international economic commission; Director or Trustee of the
Dean Witter Funds; Trustee of the TCW/DW Funds; Director of NASDAQ (since June,
1995); Director of Greenwich Capital Markets, Inc. (broker-dealer); formerly
Vice Chairman of the Board of Governors of the Federal Reserve System
(1986-1990) and Assistant Secretary of the U.S. Treasury (1982-1986).
MICHAEL E. NUGENT, Director since July, 1991; age 60; General Partner,
Triumph Capital, L.P., a private investment partnership; Director or Trustee of
the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly Vice President,
Bankers Trust Company and BT Capital Corporation (1984-1988); director of
various business organizations.
PHILIP J. PURCELL,* Director since April, 1994; age 53; Chairman of the
Board of Directors and Chief Executive Officer of DWDC, DWR and Novus Credit
Services Inc.; Director of InterCapital, DWSC and Distributors; Director or
Trustee of the Dean Witter Funds; Director and/or officer of various DWDC
subsidiaries.
JOHN L. SCHROEDER, Director since April, 1994; age 66; Retired; Director or
Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
Citizens Utilities Company; formerly Executive Vice President and Chief
Investment Officer of the Home Insurance Company (August, 1991-September, 1995)
and Chairman and Chief Investment Officer of Axe-Houghton Management
and the Axe-Houghton Funds (1983-1991).
The executive officers of the Fund other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; Robert M. Scanlan,
Vice President; Robert S. Giambrone, Vice President; Joseph J. McAlinden,
Vice President; Rochelle G. Siegel, Vice President; and Thomas F. Caloia,
Treasurer. In addition, Peter M. Avelar, Jonathan R. Page, Kevin Hurley and
James F. Willison are Vice Presidents of the Fund and Marilyn K. Cranney,
Barry Fink, Lou Anne D. McInnis, Ruth Rossi and Carsten Otto serve as
Assistant Secretaries. Mr. Curtis is 64 years old and is currently Senior
Vice President, Secretary and General Counsel of InterCapital and DWSC and
Assistant Secretary of DWR; he is also Senior Vice President, Assistant
Secretary and Assistant General Counsel of Distributors and Senior Vice
President and Secretary of DWTC. Mr. Scanlan is 60 years old and is currently
President and Chief Operating Officer of InterCapital (since March, 1993) and
DWSC; he is also Executive Vice President of Distributors and Executive Vice
President and Director of DWTC. He was previously Executive Vice President of
InterCapital (July, 1992-March, 1993) and prior thereto was Chairman of
Harborview Group Inc. Mr. Giambrone is 42 years old and is currently Senior
Vice President of InterCapital, DWSC, Distributors and DWTC (since August,
1995) and Director of DWTC (since April, 1996). He was formerly a partner of
KPMG Peat Marwick, LLP. Mr. McAlinden is 53 years old and is currently
Executive Vice President of InterCapital (since April, 1996); he is also
Chief Investment Officer of InterCapital and Director of DWTC (since April,
1996). He was previously Senior Vice President of
- ------------
* Messrs. Fiumefreddo and Purcell may be deemed "interested persons," as
defined in Section 2(a)(19) of the Act, of the Fund and its Investment
Manager due to their affiliation with the Investment Manager and/or its
affiliated companies.
4
<PAGE>
InterCapital (June, 1995-April, 1996) and prior thereto was a Managing
Director at Dillon Reed. Mr. Caloia is 50 years old and is currently First
Vice President and Assistant Treasurer of InterCapital and DWSC. Ms. Siegel
is 48 years old and is currently Senior Vice President of InterCapital. Mr.
Avelar is 38 years old and is currently Senior Vice President of
InterCapital. Mr. Page is 50 years old and is currently Senior Vice President
of InterCapital. Mr. Hurley is 51 years old and is currently Senior Vice
President of InterCapital (since February, 1995). He was formerly a Managing
Director at Ark Asset Management. Mr. Willison is 53 years old and is
currently Senior Vice President of InterCapital. Other than Messrs. Scanlan,
Giambrone, McAlinden and Hurley, each of the above officers has been an
employee of InterCapital or DWR (formerly the corporate parent of
InterCapital) for over five years.
THE BOARD OF DIRECTORS, THE INDEPENDENT DIRECTORS, AND THE COMMITTEES
The Board of Directors consists of eight (8) directors. These same
individuals also serve as directors or trustees for all of the Dean Witter
Funds, and are referred to in this section as Directors. As of the date of this
Proxy Statement, there are a total of 82 Dean Witter Funds, comprised of 122
portfolios. As of September 30, 1996, the Dean Witter Funds had total net
assets of approximately $78 billion and more than five million shareholders.
Six Directors (75% of the total number) have no affiliation or business
connection with InterCapital or any of its affiliated persons and do not own
any stock or other securities issued by InterCapital's parent company, DWDC.
These are the "disinterested" or "independent" Directors. The other two
Directors (the "management Directors") are affiliated with InterCapital. Four
of the six independent Directors are also Independent Trustees of the TCW/DW
Funds.
Law and regulation establish both general guidelines and specific duties for
the Independent Directors. The Dean Witter Funds seek as Independent Directors
individuals of distinction and experience in business and finance, government
service or academia; these are people whose advice and counsel are in demand by
others and for whom there is often competition. To accept a position on the
Funds' Boards, such individuals may reject other attractive assignments because
the Funds make substantial demands on their time. Indeed, by serving on the
Funds' Boards, certain Directors who would otherwise be qualified and in demand
to serve on bank boards would be prohibited by law from doing so.
All of the Independent Directors serve as members of the Audit Committee and
the Committee of the Independent Directors. Three of them also serve as members
of the Derivatives Committee. The Committees hold some meetings at
InterCapital's offices and some outside InterCapital. Management Directors or
officers do not attend these meetings unless they are invited for purposes of
furnishing information or making a report. There are no nominating or
compensation committees of the Directors.
The Committee of the Independent Directors is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and distribution and underwriting agreements; continually
reviewing Fund performance; checking on the pricing of portfolio securities,
brokerage commissions, transfer agent costs and performance, and trading among
Funds in the same complex; and approving fidelity bond and related insurance
coverage and allocations, as well as other matters that arise from time to
time. The Independent Directors are required to select and nominate individuals
to fill any Independent Director vacancy on the Board of any Fund that has a
Rule 12b-1 plan of distribution. Most of the Dean Witter Funds have such a
plan.
The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent
5
<PAGE>
accountants the audit plan and results of the auditing engagement; approving
professional services provided by the independent accountants and other
accounting firms prior to the performance of such services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
Board.
Finally, the Board of each Fund has formed a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect to
derivative investments, if any, made by the Fund.
For the fiscal year ended September 30, 1996, the Board of Directors of the
Fund held six meetings, and the Audit Committee, the Committee of the
Independent Directors and the Derivatives Committee of the Fund held three, ten
and three meetings, respectively. No Director attended fewer than 75% of the
meetings of the Board of Directors, the Audit Committee, the Committee of the
Independent Directors or the Derivatives Committee held while he served in such
positions.
DUTIES OF CHAIRMAN OF COMMITTEE OF THE INDEPENDENT DIRECTORS AND AUDIT
COMMITTEE
The Chairman of the Committee of the Independent Directors and the Audit
Committee maintains an office at the Funds' headquarters in New York. He is
responsible for keeping abreast of regulatory and industry developments and the
Funds' operations and management. He screens and/or prepares written materials
and identifies critical issues for the Independent Directors to consider,
develops agendas for Committee meetings, determines the type and amount of
information that the Committees will need to form a judgment on various issues,
and arranges to have that information furnished to Committee members. He also
arranges for the services of independent experts and consults with them in
advance of meetings to help refine reports and to focus on critical issues.
Members of the Committees believe that the person who serves as Chairman of
both Committees and guides their efforts is pivotal to the effective
functioning of the Committees.
The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Directors and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment advisory, management and
other operating contracts of the Funds and, on behalf of the Committees,
conducts negotiations with the Investment Manager and other service providers.
In effect, the Chairman of the Committees serves as a combination of chief
executive and support staff of the Independent Directors.
The Chairman of the Committee of the Independent Directors and the Audit
Committee is not employed by any other organization and devotes his time
primarily to the services he performs as Committee Chairman and Independent
Director of the Dean Witter Funds and as an Independent Director and, since
July 1, 1996, as Chairman of the Committee of the Independent Trustees and the
Audit Committee of the TCW/DW Funds. The current Committee Chairman has had
more than 35 years experience as a senior executive in the investment company
industry.
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT DIRECTORS FOR ALL DEAN
WITTER FUNDS
The Independent Directors and the Funds' management believe that having the
same Independent Directors for each of the Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Directors for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent Directors of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the possibility of separate
groups of Independent Directors arriving at conflicting decisions
6
<PAGE>
regarding operations and management of the Funds and avoids the cost and
confusion that would likely ensue. Finally, having the same Independent
Directors serve on all Fund Boards enhances the ability of each Fund to obtain,
at modest cost to each separate Fund, the services of Independent Directors,
and a Chairman of their Committees, of the caliber, experience and business
acumen of the individuals who serve as Independent Directors of the Dean Witter
Funds.
SHARE OWNERSHIP BY DIRECTORS
The Directors have adopted a policy pursuant to which each Director and/or
his or her spouse is required to invest at least $25,000 in any of the Funds in
the Dean Witter Funds complex (and, if applicable, in the TCW/DW Funds complex)
on whose boards the Director serves. In addition, the policy contemplates that
the Directors will, over time, increase their aggregate investment in the Funds
above the $25,000 minimum requirement. The Directors may allocate their
investments among specific Funds in any manner they determine is appropriate
based on their individual investment objectives. As of the date of this proxy
statement, each Director is in compliance with the policy. Any future Director
will be given a one year period following his or her election within which to
comply with the foregoing. As of September 30, 1996, the total value of the
investments by the Directors and/or their spouses in shares of the Dean Witter
Funds (and, if applicable, the TCW/DW Funds) was approximately $8.5 million.
As of October 25, 1996, the aggregate number of shares of common stock of
the Fund owned by the Fund's officers and Directors as a group was less than 1
percent of the Fund's shares of common stock outstanding.
COMPENSATION OF INDEPENDENT DIRECTORS
The Fund pays each Independent Director an annual fee of $1,000 plus a per
meeting fee of $50 for meetings of the Board of Directors or committees of the
Board of Directors attended by the Director (the Fund pays the Chairman of the
Audit Committee an annual fee of $750 and pays the Chairman of the Committee of
the Independent Directors an additional annual fee of $1,200). The Fund also
reimburses such Directors for travel and other out-of-pocket expenses incurred
by them in connection with attending such meetings. Directors 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.
The following table illustrates the compensation paid to the Fund's
Independent Directors by the Fund for the fiscal year ended September 30, 1996.
FUND COMPENSATION
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT DIRECTOR FROM THE FUND
- ---------------------------- ---------------
Michael Bozic .................................... 1,750
Edwin J. Garn .................................... 1,850
John R. Haire .................................... 3,850
Dr. Manuel H. Johnson ............................ 1,800
Michael E. Nugent ................................ 1,750
John L. Schroeder ................................ 1,800
The following table illustrates the compensation paid to the Fund's
Independent Directors for the calendar year ended December 31, 1995 for
services to the 79 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 11 TCW/DW Funds that were in operation at
December 31, 1995. With
7
<PAGE>
respect to Messrs. Haire, Johnson, Nugent and Schroeder, the TCW/DW Funds are
included solely because of a limited exchange privilege between those Funds and
five Dean Witter Money Market Funds. Mr. Schroeder was elected as a Trustee of
the TCW/DW Funds on April 20, 1995.
COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS
<TABLE>
<CAPTION>
FOR SERVICE AS TOTAL
FOR SERVICE AS CHAIRMAN OF COMPENSATION
DIRECTOR OR FOR SERVICE AS COMMITTEE OF PAID FOR
TRUSTEE AND TRUSTEE AND INDEPENDENT SERVICES TO 79
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ DEAN WITTER
OF 79 DEAN WITTER OF 11 TCW/DW TRUSTEES AND FUNDS AND 11
NAME OF INDEPENDENT DIRECTOR FUNDS FUNDS AUDIT COMMITTEE TCW/DW FUNDS
- ---------------------------- ----------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Michael Bozic ............... $126,050 -- -- $126,050
Edwin J. Garn ............... 136,450 -- -- 136,450
John R. Haire ............... 98,450 $82,038 $217,350(1) 397,838
Dr. Manuel H. Johnson ....... 136,450 82,038 -- 218,488
Michael E. Nugent ........... 124,200 75,038 -- 199,238
John L. Schroeder ........... 136,450 46,964 -- 183,414
</TABLE>
- ------------
(1) For the 79 Dean Witter Funds in operation at December 31, 1995. As noted
above, on July 1, 1996, Mr. Haire became Chairman of the Committee of
the Independent Trustees and the Audit Committee of the TCW/DW Funds in
addition to continuing to serve in such positions for the Dean Witter
Funds.
As of the date of this Proxy Statement, 57 of the Dean Witter Funds,
including the Fund, have adopted a retirement program under which an
Independent Director who retires after serving for at least five years (or
such lesser period as may be determined by the Board) as an Independent
Director or Trustee of any Dean Witter Fund that has adopted the retirement
program (each such Fund referred to as an "Adopting Fund" and each such
Director referred to as an "Eligible Director") is entitled to retirement
payments upon reaching the eligible retirement age (normally, after attaining
age 72). Annual payments are based upon length of service. Currently, upon
retirement, each Eligible Director is entitled to receive from the Adopting
Fund, commencing as of his or her retirement date and continuing for the
remainder of his or her life, an annual retirement benefit (the "Regular
Benefit") equal to 25.0% of his or her Eligible Compensation plus 0.4166666%
of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years
up to a maximum of 50.0% after ten years of service. The foregoing
percentages may be changed by the Board.(2) "Eligible Compensation" is
one-fifth of the total compensation earned by such Eligible Director for
service to the Adopting Fund in the five year period prior to the date of the
Eligible Director's retirement. Benefits under the retirement program are not
secured or funded by the Adopting Funds.
- ------------
(2) An Eligible Director may elect alternate payments of his or her
retirement benefits based upon the combined life expectancy of such
Eligible Director and his or her spouse on the date of such Eligible
Director's retirement. The amount estimated to be payable under this
method, through the remainder of the later of the lives of such Eligible
Director and spouse, will be the actuarial equivalent of the Regular
Benefit. In addition, the Eligible Director may elect that the surviving
spouse's periodic payment of benefits will be equal to either 50% or
100% of the previous periodic amount, an election that, respectively,
increases or decreases the previous periodic amount so that the
resulting payments will be the actuarial equivalent of the Regular
Benefit.
8
<PAGE>
The following table illustrates the retirement benefits accrued to the
Fund's Independent Directors by the Fund for the fiscal year ended September
30, 1996 and by the 57 Dean Witter Funds (including the Fund) as of December
31, 1995, and the estimated retirement benefits for the Fund's Independent
Directors from the Fund as of September 30, 1996 and from the 57 Dean Witter
Funds as of December 31, 1995.
RETIREMENT BENEFITS FROM THE FUND AND ALL DEAN WITTER FUNDS
<TABLE>
<CAPTION>
FOR ALL FUNDS RETIREMENT
------------------------------- BENEFITS ESTIMATED ANNUAL
ESTIMATED ACCRUED AS BENEFITS
CREDITED YEARS ESTIMATED EXPENSES UPON RETIREMENT(3)
OF SERVICE AT PERCENTAGE OF ----------------------------- -------------------------
RETIREMENT ELIGIBLE BY ALL FROM THE FROM ALL
NAME OF INDEPENDENT DIRECTOR (MAXIMUM 10) COMPENSATION BY THE FUND ADOPTING FUNDS FUND ADOPTING FUNDS
- ---------------------------- -------------- --------------- ------------ --------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic .............. 10 50.0% $399 $ 26,359 $1,900 $ 51,550
Edwin J. Garn .............. 10 50.0 589 41,901 1,900 51,550
John R. Haire .............. 10 50.0 708 261,763 4,670 130,404
Dr. Manuel H. Johnson ..... 10 50.0 244 16,748 1,900 51,550
Michael E. Nugent .......... 10 50.0 422 30,370 1,900 51,550
John L. Schroeder .......... 8 41.7 776 51,812 1,900 42,958
</TABLE>
- ------------
(3) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Director's elections described in Footnote (2)
above.
(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT MANAGEMENT AGREEMENT
The Fund's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Manager" or "InterCapital"), pursuant to
an Investment Management Agreement dated June 30, 1993 (referred to herein as
the "Management Agreement") which took effect upon the distribution by Sears,
Roebuck and Co. ("Sears") to its shareholders of all the common shares of DWDC
(the parent company of InterCapital and DWR) then owned by Sears.
The Management Agreement was approved by the Board of Directors on October
30, 1992, and by the stockholders of the Fund at the Annual Meeting of
Stockholders held on January 13, 1993. The present Management Agreement
supersedes an earlier management agreement originally entered into by the Fund
with DWR, through its InterCapital Division, and initially approved by the
Board, including a majority of the Independent Directors, on January 18, 1983
and last approved by the stockholders of the Fund at their Annual Meeting of
Stockholders on December 30, 1991. In an internal reorganization which took
place in January, 1993, InterCapital assumed the investment management
activities previously performed by the InterCapital Division of DWR. The
assumption by InterCapital of DWR's rights and obligations under this earlier
management agreement in connection with the reorganization was approved by the
Directors at a meeting held on October 30, 1992 and also by the stockholders of
the Fund at the Annual Meeting of Stockholders on January 13, 1993.
The terms of the Management Agreement, including fees payable by the Fund
thereunder, are substantially identical in all respects to those of the earlier
management agreement except for the dates of effectiveness and expiration and
the name of the Investment Manager. The terms of the Management
9
<PAGE>
Agreement are described below. The Management Agreement was last approved by
the stockholders of the Fund as a routine matter at their Annual Meeting held
on December 20, 1995. The Management Agreement's continuation until April 30,
1997 was approved by the Directors, including a majority of the Independent
Directors, at a meeting of the Board held on April 17, 1996. In the event
stockholders do not approve continuance of the Management Agreement by the
required majority vote at the forthcoming meeting or any adjournment thereof,
the Board of Directors of the Fund will take such action as it deems to be in
the best interest of the Fund and its stockholders, which may include calling a
special meeting of stockholders to vote on a new investment management
agreement.
In considering whether or not to approve the Management Agreement, the Board
of Directors reviewed the terms of the agreement and considered all materials
and information deemed relevant to its determination. Among other things, the
Board considered the nature and scope of services to be rendered, the quality
of the Investment Manager's services and personnel, and the appropriateness of
the fees that are paid under the Management Agreement. Based upon its review,
the Board of Directors, including all of the Independent Directors, determined
that the approval of the Management Agreement was in the best interests of the
Fund and its stockholders.
The favorable vote of a majority of the outstanding voting securities of the
Fund is required for the approval of the Management Agreement. Such a majority
is defined in the Act as the lesser of: (a) 67% or more of the shares present
at the Meeting, if the holders of more than 50% of the outstanding shares of
the Fund are present or represented by proxy, or (b) more than 50% of the
outstanding shares.
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,
RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE MANAGEMENT AGREEMENT.
THE MANAGEMENT AGREEMENT
The Management Agreement provides that the Investment Manager shall obtain
and evaluate such information and advice relating to the economy, securities
and commodity markets and securities and commodities as it deems necessary or
useful to discharge its duties under the Management Agreement, and that it
shall continuously supervise the management of the assets of the Fund in a
manner consistent with the investment objectives and policies of the Fund and
subject to such other limitations and directions as the Board may, from time to
time, prescribe.
The Management Agreement provides that the Investment Manager shall
continuously manage the assets of the Fund in a manner consistent with the
Fund's investment objectives. The Investment Manager has authority to place
orders for the purchase and sale of portfolio securities on behalf of the Fund
without prior approval of its Directors. The Directors review the investment
portfolio at their regular meetings. In addition, the Investment Manager pays
the compensation of the officers of the Fund and provides the Fund with office
space and equipment, and clerical and bookkeeping services and telephone
service, heat, light, power and other utilities. The Investment Manager also
pays for the services of personnel in connection with the pricing of the Fund's
shares and the preparation of prospectuses, proxy statements and reports
required to be filed with federal and state securities commissions (except
insofar as the participation or assistance of independent accountants and
attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In return for its services and the expenses the Investment Manager
assumes under the Management Agreement, the Fund pays the Investment Manager
compensation which is computed and accrued weekly and payable monthly and which
is determined by applying the annual rate of 1/2 of 1% to the Fund's average
weekly net assets. The Management Agreement provides that if operating
expenses, including the management fee but excluding
10
<PAGE>
interest, taxes, brokerage commissions and extraordinary expenses (to the
extent permitted by state securities laws or regulations), paid or payable by
the Fund in any fiscal year exceed (a) 1 1/2% of the first $30 million of the
average weekly net assets of the Fund during such year and 1% of such average
net assets in excess of $30 million; or (b) 25% of the Fund's gross income for
such year the Investment Manager will pay the Fund the greater of the excess as
computed under (a) or (b). Any such payments will be made on a monthly basis
either by direct payment or by offset against the monthly fee payable to the
Investment Manager. During the fiscal year ended September 30, 1996, the Fund's
expenses did not exceed the limitations noted above. For the fiscal year ended
September 30, 1996, the Fund accrued to the Investment Manager total
compensation of $1,075,055. The net assets of the Fund totalled $210,675,038 at
September 30, 1996.
Under the Management Agreement, the Fund is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Manager, including, without limitation: charges and expenses of any
registrar, custodian or depository appointed by the Fund for the safekeeping of
its cash, portfolio securities or commodities and other property, and any stock
transfer or dividend agent or agents appointed by the Fund; brokers'
commissions chargeable to the Fund in connection with portfolio securities
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and corporate fees payable by the Fund
to federal, state or other governmental agencies; all costs and expenses of
engraving or printing of certificates representing shares of the Fund; all
costs and expenses in connection with registration and maintenance of
registration of the Fund and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing fees
and legal fees and disbursements of counsel); the cost and expense of printing,
including typesetting, and distributing prospectuses of the Fund to its
stockholders; all expenses of stockholders' and Directors' meetings and of
preparing, printing and mailing proxy statements and reports to stockholders;
fees and travel expenses of Directors or members of any advisory board or
committee, who are not employees of the Investment Manager or any corporate
affiliate of the Investment Manager; all expenses incident to the payment of
any dividend, distribution, withdrawal or redemption, whether in shares or in
cash, charges and expenses of any outside service used for the pricing of the
Fund's shares, charges and expenses of legal counsel, including counsel to the
Independent Directors of the Fund, and independent accountants in connection
with any matter relating to the Fund (not including compensation or expenses of
attorneys employed by the Investment Manager); association dues; interest
payable on the Fund's borrowings; fees and expenses incident to the listing of
the Fund's shares on any stock exchange; postage; insurance premiums on
property or personnel (including officers and Directors) of the Fund which
inure to its benefit; and extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs to the Fund's operations
unless otherwise explicitly provided in the Management Agreement.
The Management Agreement had an initial term ending April 30, 1994 and
provides that, after the initial period of effectiveness, it will continue in
effect from year to year thereafter provided such continuance is approved at
least annually by vote of a majority, as defined in the Act, of the outstanding
voting securities of the Fund or by the Directors of the Fund, and, in either
event, by the vote cast in person by a majority of the Directors who are not
parties to the Management Agreement or "interested persons" of any such party
(as defined in the Act) at a meeting called for the purpose of voting on such
approval. The Management Agreement's continuation until April 30, 1997 was
approved by the Directors, including a majority of the Independent Directors,
at a Meeting of the Directors held on April 17, 1996, called for the purpose of
approving the Management Agreement.
The Management Agreement also provides that it may be terminated at any time
by the Investment Manager, the Directors of the Fund or by a vote of a majority
of the outstanding voting securities of the Fund,
11
<PAGE>
in each instance without the payment of any penalty, on thirty days' notice and
will automatically terminate upon any assignment.
Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and DWSC, a wholly-owned subsidiary of InterCapital, DWSC began to
provide the administrative services to the Fund which were previously performed
directly by InterCapital. On April 17, 1995, DWSC was reorganized in the State
of Delaware, necessitating the entry into a new Services Agreement by
InterCapital and DWSC on such date. The foregoing internal reorganizations did
not result in any change in the nature or scope of the administrative services
being provided to the Fund or any of the fees paid by the Fund for the overall
services being performed under the terms of the Management Agreement.
THE INVESTMENT MANAGER
Dean Witter InterCapital Inc. is the Fund's investment manager.
InterCapital maintains its offices at Two World Trade Center, New York, New
York 10048. InterCapital, which was incorporated in July, 1992, is a
wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services organization providing a broad range of nationally
marketed credit and investment products.
The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:
Philip J. Purcell, Chairman of the Board of Directors and Chief Executive
Officer of DWDC and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Dean Witter
Capital, Executive Vice President of DWDC and Director of DWR, Distributors,
DWSC, DWTC and InterCapital; James F. Higgins, President and Chief Operating
Officer of Dean Witter Financial, Executive Vice President of DWDC and Director
of DWR, Distributors, InterCapital, DWTC and DWSC; Charles A. Fiumefreddo,
Executive Vice President and Director of DWR, Chairman of the Board of
Directors, Chief Executive Officer and Director of InterCapital, DWSC and
Distributors and Chairman of the Board of Directors and Director of DWTC;
Christine A. Edwards, Executive Vice President, Secretary and General Counsel
of DWDC, Executive Vice President, Secretary, General Counsel and Director of
DWR, Executive Vice President, Secretary, Chief Legal Officer and Director of
Distributors and Director of InterCapital and DWSC; and Thomas C. Schneider,
Executive Vice President and Chief Financial Officer of DWDC and Executive Vice
President, Chief Financial Officer and Director of DWR, Distributors,
InterCapital and DWSC.
The business address of the foregoing Executive Officer and Directors is Two
World Trade Center, New York, New York 10048.
InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. The Appendix lists the investment companies for which InterCapital
provides investment management or investment advisory services and which have
similar investment objectives to that of the Fund and sets forth the fees
payable to InterCapital by such companies, including the Fund, and their net
assets as of October 25, 1996.
DWDC has its offices at Two World Trade Center, New York, New York 10048.
There are various lawsuits pending against DWDC involving material amounts
which, in the opinion of its management, will be resolved with no material
effect on the consolidated financial position of the company.
During the fiscal year ended September 30, 1996, the Fund accrued to Dean
Witter Trust Company, the Fund's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $162,032.
12
<PAGE>
AFFILIATED BROKER
Because DWR and InterCapital are under the common control of DWDC, DWR is an
affiliated broker of InterCapital. For the fiscal year ended September 30, 1996
the Fund paid no brokerage commissions to DWR.
(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Directors have unanimously selected the firm of Price Waterhouse LLP as
the Fund's independent accountants for the fiscal year ending September 30,
1997. Its selection is being submitted for ratification or rejection by
stockholders at the Meeting. Price Waterhouse LLP has been the independent
accountants for the Fund since its inception, and has no direct or indirect
financial interest in the Fund.
A representative of Price Waterhouse LLP is expected to be present at the
Meeting and will be available to make a statement, if he or she so desires, and
to respond to appropriate questions of stockholders.
The affirmative vote of the holders of a majority of the shares represented
and entitled to vote at the Annual Meeting is required for ratification of the
selection of Price Waterhouse LLP as the independent accountants for the Fund.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT THE STOCKHOLDERS RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE
FUND.
ADDITIONAL INFORMATION
In the event that the necessary quorum to transact business, or the vote
required to approve or reject any proposal, is not obtained at the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting
for a total of not more than 60 days in the aggregate to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Fund's shares present in person or by proxy
at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of Proposal
2 and will vote against any such adjournment those proxies required to be voted
against that proposal.
Abstentions and, if applicable, broker "non-votes" will not count as votes
in favor of any of the proposals, and broker "non-votes" will not be deemed to
be present at the meeting for purposes of determining whether a particular
proposal to be voted upon has been approved. Broker "non-votes" are shares held
in street name for which the broker indicates that instructions have not been
received from the stockholders or other persons entitled to vote and for which
the broker does not have discretionary voting authority.
SHAREHOLDERS PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Stockholders must be received no later than July 3, 1996, for
inclusion in the proxy statement for that meeting. The mere submission of a
proposal does not guarantee its inclusion in the proxy materials or its
presentation at the meeting. Certain rules under the federal securities laws
must be met.
REPORTS TO STOCKHOLDERS
The Fund's most recent Annual Report, and its most recent Semi-annual Report
succeeding the Annual Report, are available without charge upon request from
Adrienne Ryan-Pinto at Dean Witter Trust Company, Harborside Financial Center,
Plaza Two, Jersey City, New Jersey 07311 (telephone 1-800-869-NEWS)
(toll-free).
13
<PAGE>
OTHER BUSINESS
The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is the intention of the persons named in the enclosed form of
proxy, or their substitutes, to vote all shares that they are entitled to vote
on any such matter, utilizing such proxy in accordance with their best judgment
on such matters.
By Order of the Board of Directors
SHELDON CURTIS
Secretary
14
<PAGE>
APPENDIX
InterCapital serves as investment manager or investment adviser to the Trust
and the other investment companies listed below which have similar investment
objectives to that of the Trust, with the net assets shown as of October 25,
1996:
<TABLE>
<CAPTION>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 10/25/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
<S> <C> <C>
1.DEAN WITTER HIGH YIELD SECURITIES INC.* ...... $ 465,764,761 0.50% on assets up to
$500 million, scaled down at
various asset levels to 0.30%
on assets over $3 billion
2.DEAN WITTER U.S. GOVERNMENT SECURITIES TRUST* $6,664,625,132 0.50% on assets up to
$1 billion, scaled down at
various asset levels to 0.30%
on assets over $12.5 billion
3.DEAN WITTER CONVERTIBLE SECURITIES TRUST* .... $ 229,837,408 0.60% on assets up to
$750 million, scaled down at
various asset levels to 0.425%
on assets over $3 billion
4.DEAN WITTER FEDERAL SECURITIES TRUST* ........ $ 711,126,845 0.55% on assets up to
$1 billion, scaled down at
various asset levels to 0.35%
on assets over $12.5 billion
5.INTERCAPITAL INCOME SECURITIES INC.** ........ $ 212,949,709 0.50%
6.HIGH INCOME ADVANTAGE TRUST** ................. $ 155,717,609 0.75% on assets up to
$250 million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
7.HIGH INCOME ADVANTAGE TRUST II** .............. $ 209,426,981 0.75% on assets up to
$250 million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
8.HIGH INCOME ADVANTAGE TRUST III** ............. $ 80,426,260 0.75% on assets up to
$250 million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
9.DEAN WITTER INTERMEDIATE INCOME SECURITIES* .. $ 201,255,950 0.60% on assets up to
$500 million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
10.DEAN WITTER WORLD WIDE INCOME TRUST* ........ $ 114,261,616 0.75% on assets up to
$250 million, scaled down at
various asset levels to 0.30%
on assets over $1 billion
11.DEAN WITTER GOVERNMENT INCOME TRUST** ....... $ 440,715,195 0.60%
12.DEAN WITTER GLOBAL SHORT-TERM INCOME FUND
INC.* ........................................ $ 87,913,510 0.55% on assets up to
$500 million and 0.50% on
assets over $500 million
13.DEAN WITTER PREMIER INCOME TRUST* ............ $ 25,526,254 0.50% (of which 40% is paid to
a Sub-Adviser)
14.DEAN WITTER SHORT-TERM U.S. TREASURY TRUST* . $ 274,058,379 0.35%
A-1
<PAGE>
NET ASSETS AS CURRENT INVESTMENT MANAGEMENT
OF 10/25/96 OR ADVISORY FEE RATE(S)
-------------- ------------------------------
15.DEAN WITTER DIVERSIFIED INCOME TRUST* ....... $ 740,759,639 0.40%
16.DEAN WITTER SHORT-TERM BOND FUND* ............ $ 39,960,083 0.70%(1)
17.DEAN WITTER HIGH INCOME SECURITIES* ......... $ 807,663,293 0.50% on assets up to
$500 million and 0.425% on
assets over $500 million.
18.PRIME INCOME TRUST** ......................... $ 967,109,601 0.90% on assets up to
$500 million and 0.85% on
assets over $500 million
19.DEAN WITTER BALANCED INCOME FUND* ............ $ 42,349,531 0.60%
20.DEAN WITTER RETIREMENT SERIES:*
(a) U.S. GOVERNMENT SECURITIES SERIES ........ $ 10,777,095 0.65% (2)
(b) INTERMEDIATE INCOME SECURITIES SERIES .... $ 6,287,271 0.65% (2)
21.DEAN WITTER VARIABLE INVESTMENT SERIES:***
(a) QUALITY INCOME PLUS PORTFOLIO ............. $ 471,930,082 0.50% on assets up to
$500 million and 0.45% on
assets over $500 million
(b) HIGH YIELD PORTFOLIO ..................... $ 235,450,410 0.50%
22.DEAN WITTER SELECT DIMENSIONS INVESTMENT
SERIES:***
(a) DIVERSIFIED INCOME PORTFOLIO ............. $ 25,653,777 0.40%(3)
(b) NORTH AMERICAN GOVERNMENT SECURITIES
PORTFOLIO ................................ $ 3,559,912 0.65%(3) (of which 40% is
paid to a Sub-Adviser)
23.DEAN WITTER INTERMEDIATE TERM
U.S. TREASURY TRUST* ......................... $ 2,297,864 0.35%(4)
</TABLE>
- ------------
* Open-end investment company.
** Closed-end investment company.
*** Open-end investment company offered only to life insurance companies in
connection with variable annuity and/or variable life insurance
contracts.
(1) InterCapital has undertaken, from January 1, 1996 through December 31,
1996, to continue to assume all operating expenses of Dean Witter
Short-Term Bond Fund (except for any brokerage fees) and to waive the
compensation provided for in its investment management agreement with
that company to the extent that such expenses and compensation on an
annualized basis exceed 1.0% of that company's average daily net assets.
(2) InterCapital has undertaken, from January 1, 1996 through July 31, 1997,
to continue to assume all operating expenses of the Series of Dean
Witter Retirement Series (except for brokerage fees and a portion of
organizational expenses) and to waive the compensation provided for each
Series in its investment management agreement with that company in
respect of each Series to the extent that such expenses and compensation
on an annualized basis exceed 1.0% of the average daily net assets of
the pertinent Series.
(3) InterCapital has undertaken, until the earlier of December 31, 1996 or
the attainment by the respective Portfolio of $50 million of net assets,
to continue to assume all operating expenses of the Portfolios of Dean
Witter Select Dimensions Investment Series (except for any brokerage
fees and a portion of organizational expenses) and to waive the
compensation provided for each Portfolio in its investment management
agreement with that company in respect of each Portfolio to the extent
that such expenses and compensation on an annualized basis exceed 0.50%
of the average daily net assets of the pertinent Portfolio.
(4) InterCapital has undertaken to assume all operating expenses of Dean
Witter Intermediate Term U.S. Treasury Trust (except for any 12b-1 fees
and brokerage expenses) and to waive the compensation provided for in
its investment management agreement with that company until such time as
that company has $50 million of net assets or until March 31, 1997,
whichever occurs first.
A-2
<PAGE>
INTERCAPITAL INCOME SECURITIES INC.
ANNUAL MEETING OF STOCKHOLDERS--DECEMBER 27, 1996
PROXY
The undersigned hereby appoints SHELDON CURTIS, ROBERT M. SCANLAN, BARRY
FINK, or any of them, proxies, each with the power of substitution, to vote on
behalf of the undersigned at the Annual Meeting of Stockholders of INTERCAPITAL
INCOME SECURITIES INC. on December 27, 1996 at 11:00 a.m., New York City time,
and at any adjournment thereof, on the proposals set forth in the Notice of
Meeting dated October 30, 1996 as follows:
THIS PROXY IS SOLICITED BY THE DIRECTORS. IF NO SPECIFICATION IS MADE ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR AND
FOR THE PROPOSALS.
IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE SO THAT YOUR VOTE ON ALL MATTERS MAY BE
COUNTED.
(Continued, and to be dated and signed on reverse side.)
<PAGE>
PLEASE MARK BOXES [X] OR [X] IN BLUE OR BLACK INK.
1. ELECTION OF DIRECTORS: [ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY
(except as marked (to vote for all
to the contrary nominees)
below)
Michael Bozic, Charles A. Fiumefreddo, Edwin J. Garn, John R. Haire,
Manuel H. Johnson, Michael E. Nugent, Philip J. Purcell, John L. Schroeder
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS: 098
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and in their discretion in the transaction of any other business which may
properly come before the meeting.
Please sign personally. If the
shares are registered in more
than one name, each joint owner
or each fiduciary should sign
personally. Only authorized
officers should sign for
corporations.
Dated
---------------------------------
---------------------------------
Signature
---------------------------------
Signature
