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VAN KAMPEN AMERICAN CAPITAL
ENTERPRISE FUND
SUPPLEMENT DATED JULY 1, 1996, TO THE PROSPECTUS DATED
APRIL 29, 1996, AS PREVIOUSLY SUPPLEMENTED ON JUNE 1, 1996.
On June 24, 1996, VK/AC Holding, Inc. announced it had entered into an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings II,
Inc. and MSAM Acquisition Inc., pursuant to which MSAM Acquisition Inc. will be
merged with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. will be the
surviving corporation. Van Kampen American Capital, Inc. is a wholly owned
subsidiary of VK/AC Holding, Inc. The Fund's investment adviser, Van Kampen
American Capital Asset Management, Inc. (the "Adviser"), is a wholly owned
subsidiary of Van Kampen American Capital, Inc.
The proposed transaction may be deemed to cause an assignment, within the
meaning of the Investment Company Act of 1940 and the Investment Advisers Act of
1940, of the investment advisory agreement between the Adviser and the Fund.
Accordingly, the completion of the transaction is contingent upon, among other
things and subject to certain de minimis exceptions, the approval of both the
Board of Trustees of the Fund and the shareholders of the Fund of a new
investment advisory agreement between the Fund and the Adviser. Management of
the Fund currently anticipates recommending to the Fund's board of trustees that
a special meeting of shareholders be called to obtain such approval and that the
record date for such shareholder meeting be a date in late August. Management of
the Fund also anticipates that investment advisory fees under the new investment
advisory agreement to be voted on at such meeting will be in the same amount as
those paid under the current investment advisory agreement between the Fund and
the Adviser.
MSAM Acquisition Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.
which, in turn, is a wholly owned subsidiary of Morgan Stanley Group Inc.
Subject to a number of conditions being met, it is currently anticipated that a
closing will occur on or about November 29, 1996. Thereafter, VK/AC Holding,
Inc. and its affiliated entities shall be part of Morgan Stanley Group Inc.
The section of the Prospectus captioned "Investment Practices" is hereby
supplemented as follows:
The Fund's investment policies currently permit it to make investments in
foreign securities. The Fund has obtained exemptive relief from the Securities
and Exchange Commission to make its investments in foreign securities, together
with other investment companies advised by the Adviser and its affiliates,
through Van Kampen American Capital Foreign Securities Fund (the "Foreign
Securities Fund"). Shares of the Foreign Securities Fund are available only to
investment
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companies advised by the Adviser and its affiliates. The Adviser believes that
the use of the Foreign Securities Fund will provide the Fund with a more
effective exposure to the performance of foreign securities while at the same
time minimizing costs. The Adviser charges no advisory fee for managing the
Foreign Securities Fund, nor is there any sales load or other charges associated
with the distribution of its shares. Other expenses incurred by the Foreign
Securities Fund are borne by it, and thus indirectly by the Van Kampen American
Capital funds that invest in them, including the Fund. With respect to such
other expenses, the Adviser anticipates that the efficiencies resulting from use
of the Foreign Securities Fund will result in cost savings for the Fund and for
other Van Kampen American Capital funds, including reduced administrative and
portfolio transaction costs. The Fund and each other Van Kampen American Capital
fund that invest in the Foreign Securities Fund will be deemed to own a pro rata
portion of each portfolio security owned by the Foreign Securities Fund. The
Fund anticipates that it will commence making investments through the Foreign
Securities Fund on or about the date hereof.
The section of the Prospectus captioned "Purchase of Shares" is hereby
supplemented as follows:
GROUP PURCHASES. Individuals who are members of a "qualified group" may
purchase Class A Shares of the Fund without the imposition of a front end sales
charge. For this purpose, a qualified group is one which (i) has been in
existence for more than six months, (ii) has a purpose other than to acquire
shares of the Fund or similar investments, (iii) has given and continues to give
its endorsement or authorization, on behalf of the group, for purchase of shares
of the Fund and other funds in the Van Kampen American Capital Family of Funds,
(iv) has a membership that the authorized dealer can certify as to the group's
members and (v) satisfies other uniform criteria established by the Distributor
for the purpose of realizing economies of scale in distributing such shares. A
qualified group does not include one whose sole organizational nexus, for
example, is that its participants are credit card holders of the same
institution, policy holders of an insurance company, customers of a bank or
broker-dealer, clients of an investment adviser or other similar groups. Shares
purchased in each group's participants account in connection with this privilege
will be subject to a contingent deferred sales charge or one percent in the
event of redemption within one year of purchase, and a commission will be paid
to authorized dealers who initiate and are responsible for such sales to each
individual as follows: 1.00% on sales to $2 million, plus 0.80% on the next
million and 0.50% on the excess over $3 million.
