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Updated 4/26/95
FILE NO. 811-2611
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 (X)
AMENDMENT NO. 16 (X)
(CHECK APPROPRIATE BOX OR BOXES)
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AMERICAN CAPITAL EXCHANGE FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
2800 POST OAK BOULEVARD, HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 993-0500
NORI L. GABERT
VICE PRESIDENT AND
ASSOCIATE GENERAL COUNSEL
VAN KAMPEN AMERICAN CAPITAL ASSET MANAGEMENT, INC.
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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COPIES OF ALL CORRESPONDENCE TO:
JOHN A. DUDLEY, ESQ.
SULLIVAN & WORCESTER
1025 CONNECTICUT AVENUE
WASHINGTON, D.C. 20036
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
Items 1, 2 and 3 of Part A are not required pursuant to Item F.4. of the general
instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT
(a) (i) American Capital Exchange Fund ("Registrant") is an open-end
diversified management investment company (a California
Limited Partnership), registered under the Investment Company
Act of 1940 (the "1940 Act") and formed on December 4, 1975
under the Uniform Limited Partnership Act of California.
Registrant commenced business as an investment company on
December 13, 1976 under the name American General Exchange
Fund.
(ii) The Registrant's principal investment objective is long-term
growth of capital, while the production of current income is
an important secondary objective. Registrant attempts to
achieve these objectives by investing in common stocks or
convertible securities. Registrant may, however, for
defensive purposes, temporarily own other types of
securities, including investment grade bonds, preferred
stocks and money market obligations such as government
securities, certificates of deposit and commercial paper. The
foregoing policies may not be changed without approval of a
majority of the Registrant's outstanding voting securities.
Registrant's temporary investments will consist of U.S.
Treasury Bills and U.S. Treasury Bonds, both issued by and
supported by the full faith and credit of the United States
Government, and commercial paper rated P-1, if by Moody's
Investors Service, Inc., or A-1 if by Standard & Poor's
Corporation and repurchase agreements with domestic banks and
broker-dealers.
(b) Inapplicable.
(c) If Registrant were unable to pay its liabilities, partners
receiving distributions could be liable to creditors of Registrant
to the extent of such distributions, plus interest.
ITEM 5. MANAGEMENT OF THE FUND
(a) A Board of five Managing General Partners has the responsibility
for overseeing the affairs of Registrant. The Adviser determines
the investment of Registrant's assets, provides administrative
services and manages Registrant's business and affairs.
(b) Van Kampen American Capital Asset Management, Inc. (the
"Adviser"), 2800 Post Oak Boulevard, Houston, Texas 77056, acts as
investment adviser to Registrant.
The Adviser, together with its predecessors, has been in the
investment advisory business since 1926 and has served as
investment adviser to Registrant since 1976. The Adviser presently
manages the assets of 47 investment company portfolios with total
net assets of approximately $16.4 billion at March 31, 1995. The
Adviser is a wholly owned subsidiary of Van Kampen American
Capital, Inc. ("VKAC"), which is a wholly owned subsidiary of
VK/AC Holding, Inc., VK/AC Holding, Inc. is controlled, through
the ownership of a substantial majority of its common stock, by
the Clayton & Dubilier Private Equity Fund IV Limited Partnership
("C&D L.P."), a Connecticut limited partnership. C&D L.P. is
managed by Clayton, Dubilier & Rice, Inc., a New York based
private investment firm. The General Partner of C&D L.P. is
Clayton & Dubilier Associates IV Limited Partnership ("C&D
Associates L.P."). The general partners of C&D Associates L.P. are
Joseph L. Rice, III, B. Charles Ames, Alberto Cribiore, Donald J.
Gogel and Hubbard C. Howe, each of whom is a principal of Clayton,
Dubilier & Rice, Inc. In addition, certain officers, directors and
employees of VKAC own, in the aggregate, not more than six percent
of the common stock of VK/AC Holding, Inc. and have the right to
acquire, upon the exercise of options, approximately an additional
10% of the common stock of VK/AC Holding, Inc.
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Mr. Don G. Powell is Chief Executive Officer and Chairman of the
Board of the Registrant, and President, Chief Executive Officer
and Director of the Adviser.
The Registrant retains the Adviser to manage the investment of its
assets and to place orders for the purchase and sale of its
portfolio securities. Under an investment advisory agreement dated
December 20 1994 (the "Advisory Agreement"), the Registrant pays
the Adviser a fee monthly calculated at the annual rate of 0.5% of
average daily net assets of the Registrant. Under the Advisory
Agreement, Registrant also reimburses the Adviser for the cost of
the Registrant's accounting services, which include maintaining
its financial books and records and calculating its daily net
asset value.
(c) Mr. Stephen Boyd is primarily responsible for the day-to-day
management of the Fund's portfolio. Mr. Boyd has been manager of
the Fund's portfolio since 1991.
(d) Inapplicable.
(e) For the fiscal years ended December 31, 1992, 1993 and 1994,
ACCESS Investor Services, Inc. ("ACCESS"), shareholder service
agent and dividend disbursing agent for the Registrant, received
fees aggregating $17,160, $18,000 and $18,000, respectively for
these services.
(f) For the last fiscal year, advisory fees plus the cost of
accounting services paid by the Registrant equaled 0.63% of the
Registrant's average net assets. Operating expenses paid by the
Registrant include partner service agency fees, custodial fees,
legal and accounting fees, the costs of reports and proxies to
partners, managing general partners' fees, and all other business
expenses not specifically assumed by the Adviser. For the same
period, the Registrant's total operating expenses were 0.26% of
average net assets.
(g) Prior to December 20, 1994, the Registrant placed brokerage
transactions with brokers that were considered affiliated persons
of the Adviser's former parent, The Travelers Inc. Such affiliated
persons included Smith Barney Inc. ("Smith Barney") and Robinson
Humphrey, Inc. ("Robinson Humphrey"). Effective December 20, 1994,
Smith Barney and Robinson Humphrey ceased to be affiliates of the
Adviser.
The Adviser places portfolio transactions for other advisory
accounts, including other investment companies. Research services
furnished by firms through which the Registrant effects its
securities transactions may be used by the Adviser in servicing
all of its accounts; not all such services may be used by the
Adviser in connection with the Registrant. In the opinion of the
Adviser, the benefits from research services to each of the
accounts (including the Registrant) managed by the Adviser cannot
be measured separately. Because the volume and nature of the
trading activities of the accounts are not uniform, the amount of
commissions in excess of the lowest available rate paid by each
account for brokerage and research services will vary. In the
opinion of the Adviser, however, such costs to the Registrant will
not be disproportionate to the benefits received by the Registrant
on a continuing basis.
The Adviser seeks to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell
securities by the Registrant and another advisory account. In some
cases, this procedure could have an adverse effect on the price or
the amount of securities available to the Registrant. In making
such allocations, the main factors considered by the Adviser are
the respective investment objectives, the relative size of the
portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of the investment
commitments generally held, and the opinions of the persons
responsible for recommending the investment.
ITEM 5A. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Inapplicable.
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ITEM 6. CAPITAL STOCK AND OTHER SECURITIES
(a) Registrant has outstanding units of partnership interest
("shares") with equal rights to participate in distributions made
by Registrant and equal rights to Registrant's assets. Each share
is entitled to one vote, and there is no cumulative voting. Shares
may be redeemed at any time at net asset value with no charge.
(b) Inapplicable.
(c) Inapplicable.
(d) Inapplicable.
(e) Inquiries regarding Registrant or its shares should be made to the
Registrant's partner service agent, ACCESS, at P.O. Box 418256,
Kansas City, Missouri 64141-9256 or to the Registrant at 2800 Post
Oak Boulevard, Houston, Texas 77056.
(f) The Registrant makes quarterly distributions of net investment
income, exclusive of capital gains, to the partners. The Managing
General Partners determine each year whether and to what extent
any realized capital gains are to be distributed and such
distributions, if any, will be made annually. Distributions, when
made, are made equally among the outstanding shares held by
partners. Dividends and capital gains distributions are
automatically applied to purchase additional shares of the
Registrant at the next determined net asset value unless the
shareholder instructs otherwise.
(g) Registrant is classified as a partnership for federal income tax
purposes. Each partner is required to report on his/her personal
federal income tax return his/her share of Registrant's income,
gains, losses, deductions or credits for the taxable year of
Registrant ending within or with his/her taxable year, regardless
of whether cash or other properties are distributed to him/her.
For federal income tax purposes, capital gain or loss is allocated
equally among shares outstanding on the day recognized, and all
other items of Registrant's income, gain, loss, deduction and
credit during a year is allocated to each partner in the
proportion which the total number of shares he/she held on each
day during the year bears to the total of the outstanding shares
of Registrant on each day during the year.
The tax basis to each partner of his/her shares in Registrant is
determined by reference to the basis of the securities and any
money that he/she contributed to Registrant in exchange for
his/her shares increased by his/her share of Registrant's taxable
income and decreased (but not below zero) principally by
Registrant's distributions and his/her share of Registrant's net
losses. If cash distributed exceeds basis, the excess will be
taxable as gain from the sale of a capital asset. Registrant's
tax basis in the securities contributed by the partners is the
same as that of the partners contributing such securities.
Redemptions for cash will generally be taxable as capital gains to
the extent that such cash exceeds a partner's adjusted basis in
his total shares of Registrant. The receipt of securities on
redemption is not a taxable event to the partner or to Registrant.
The partner's basis in securities received on redemption will be
the same as Registrant's. Net long-term capital gains realized by
Registrant will be taxable to the partners at the current capital
gain rates.
ITEM 7. PURCHASE OF SECURITIES BEING OFFERED
Inapplicable.
ITEM 8. REDEMPTION OR REPURCHASES
(a) Partners may redeem shares at any time without charge at the next
determined net asset value by submitting a written request in
proper form to ACCESS at P.O. Box 418256, Kansas City, Missouri
64141-9256.
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The net asset value of shares redeemed (other than redemptions
under a systematic withdrawal plan) may be paid in cash or
securities, at the option of Registrant, and will ordinarily be
paid in whole or in part in securities. Registrant's valuation
will determine the quantity of securities tendered. Registrant
will select securities for tender in redemptions based on tax or
investment considerations.
Registrant will determine its per share net asset value as of the
close of each business day on the New York Stock Exchange.
Registrant's net assets equal the value of its portfolio
securities, plus all cash and other assets (including dividends
and interest accrued but not collected) less all liabilities
(including accrued expenses but excluding partner capital
contributions). Registrant's portfolio securities are valued at
the last sales price on the exchange where principally traded, or,
if no sale occurred on that day, at the mean between the closing
bid and asked prices; securities not so traded are valued in like
manner, if market quotations are available, or at the mean between
the highest bid and the lowest asked prices if there is no last
sales price or closing bid and asked prices. The value of any
other securities and assets is the fair value as determined in
good faith by the Managing General Partners.
Payment for shares redeemed will be made within seven days after
acceptance by ACCESS of the request and any other necessary
documents in proper order. Redemptions are not made on days during
which the New York Stock Exchange is closed. The New York Stock
Exchange is currently closed on weekends and on the following
holidays: New Year's Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. The right of redemption may be suspended and the payment
therefore may be postponed for more than seven days during any
period when (a) the New York Stock Exchange is closed for other
than customary weekends or holidays; (b) trading on the New York
Stock Exchange is restricted; (c) an emergency exists as a result
of which disposal by the Registrant of securities owned by it is
not reasonably practicable or it is not reasonably practicable for
the Registrant to fairly determine the value of its net assets; or
(d) the Securities and Exchange Commission, by order, so permits.
(b) While there is no charge when shares are redeemed or repurchased
through Registrant or through Van Kampen American Capital
Distributors, Inc., an affiliate of the Adviser, dealers may make
a charge for effecting a repurchase.
(c) Inapplicable.
(d) Inapplicable.
ITEM 9. PENDING LEGAL PROCEEDINGS
Inapplicable.
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Updated 4/26/95
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
ITEM 10. COVER PAGE
American Capital Exchange Fund ("Registrant") is an open-end diversified
management investment company (a California Limited Partnership), registered
under the Investment Company Act of 1940 ("1940 Act") and formed on December 4,
1975 under the Uniform Limited Partnership Act of California. Registrant
commenced business as an investment company on December 13, 1976 under the name
American General Exchange Fund.
The Registrant's principal investment objective is long-term growth of
capital, while the production of current income is an important secondary
objective. Registrant attempts to achieve these objectives by investing in
common stocks or convertible securities. Registrant may, however, for defensive
purposes, temporarily own other types of securities, including investment grade
bonds, preferred stocks and money market obligations such as government
securities, certificates of deposit and commercial paper. The foregoing policies
may not be changed without approval of a majority of the Registrant's
outstanding voting securities. Registrant's temporary investments will consist
of U.S. Treasury Bills and U.S. Treasury Bonds, both issued by and supported by
full faith and credit of the United States Government, and commercial paper
rated P-1, if by Moody's Investors Service, Inc., or A-1 if by Standard & Poor's
Corporation and repurchase agreements with domestic banks and broker-dealers.
ITEM 11. TABLE OF CONTENTS
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General Information and History............................................... 1
Investment Objectives and Policies............................................ 1
Management of the Fund........................................................ 3
Control Persons and Principal Holders of Securities........................... 5
Investment Advisory and Other Services........................................ 5
Brokerage Allocation and Other Practices...................................... 7
Capital Stock and Other Securities............................................ 9
Purchase, Redemption and Pricing of Securities Being Offered.................. 9
Tax Status.................................................................... 9
Underwriters.................................................................. 9
Calculation of Performance Data............................................... 9
Financial Statements.......................................................... 9
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ITEM 12. GENERAL INFORMATION AND HISTORY
Inapplicable.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES
(a) In seeking to attain its investment objective of long-term growth of
capital, and, secondarily, production of income, Registrant will
acquire securities for long-term appreciation and does not intend to
engage to any significant degree in short-term trading. Capital
gains taxes will be considered in determining the sale of portfolio
securities. However, sales will be effected whenever believed to be
in the best interests of the Partners, even though capital gains may
be recognized thereby.
Registrant has no present intention of investing in corporate bonds,
preferred stocks or certificates of deposit in an amount in excess of five
percent of the value of its net assets.
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(b) Registrant has adopted certain investment restrictions which may be
altered or rescinded only on approval of the holders of the lesser
of (i) 67% or more of the Registrant's shares present or represented
by proxy at a meeting if the holders of more than 50% of its
outstanding shares are present or represented by proxy, or (ii) more
than 50% of the Registrant's outstanding shares. Registrant may not:
(1) Purchase securities on margin or make short sales.
(2) Purchase or write any options, puts, calls, straddles, spreads
or combinations thereof.
(3) Borrow money, except from banks for a purpose other than the
purchase of securities, such borrowing not to exceed five
percent of the Registrant's total assets at market value at the
time of borrowing. Any such borrowing may be secured provided
that not more than ten percent of the total assets at market
value at the time of pledging may be used as security for such
borrowings.
(4) Engage in the underwriting of securities or invest in securities
subject to restrictions on resale.
(5) Invest more than 25% of its assets at market value at the time
of purchase in securities of companies all of which conduct
their principal activities in the same industry.
(6) Invest in real estate (including interests in real estate
investment trusts) or invest in oil, gas or mineral exploration
or development programs, except in publicly traded securities of
issuers which engage in such business.
(7) Buy or sell commodities or commodity contracts.
(8) Make loans of money or securities to other persons provided that
this limitation shall not prevent the purchase of a portion of
an issue of bonds, notes, debentures or other debt securities
which are publicly distributed or of a type customarily
purchased by institutional investors.
(9) Invest more than five percent of its total assets at market
value at the time of purchase in the securities of any one
issuer (other than obligations of the United States Government
or any instrumentalities thereof).
(10) Purchase securities if such purchase would result in the
Registrant owning more than ten percent of the outstanding
voting securities of any one issuer at the time of purchase.
(11) Invest in securities of companies which have a record, together
with their predecessors, of less than three years of continuous
operation.
(12) Purchase securities issued by any other investment company or
investment trust.
(13) Purchase or hold securities of any company if any of its General
Partners, or officers or directors of Registrant's investment
adviser, who beneficially own more than 0.5% of the securities
of that company together own beneficially more than five percent
of the securities of such company.
(14) Invest in companies for the purpose of exercising control or
management. (Registrant's officers may be authorized to vote
proxies issued with respect to its portfolio securities
consistently with its investment objectives).
(15) Invest in or hold warrants unless received with respect to
securities held by Registrant.
(16) Invest in foreign securities unless listed at the time of
purchase on the New York Stock Exchange.
(17) Invest more than five percent of its total assets at market
value at the time of purchase in equity securities which are not
readily marketable.
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Registrant does not issue senior securities.
(c) Inapplicable.
(d) The Registrant's portfolio had no turnover during the fiscal years
ended December 31, 1992, 1993 and 1994.
ITEM 14. MANAGEMENT OF THE FUND
(a) The principal executive officers and Managing General Partners of
Registrant are as follows:
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(1) (2) (3)
NAME AND POSITION HELD PRINCIPAL OCCUPATIONS
ADDRESS WITH REGISTRANT DURING PAST 5 YEARS
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Norman Hackerman Managing General Chairman of the Scientific Advisory Board,
The Welch Foundation Partner The Robert A. Welch Foundation;
4605 Post Oak Place Directorships include Radian Corporation
Suite 200 (technology/services), Columbia Scientific
Houston, TX 77027 Instruments, Inc. (instrument manufacturing),
American General Series Portfolio Co. (mutual
fund); Vista Chemical Co. and Medical Polymers,
Inc. (OTC Pharmaceuticals); formerly
Director, Electrosource, Inc., (lead storage
battery manufacturer), Fueltech, Inc.
(combustion), Scientific Measurement
Systems, Inc. (industrial tomography), and
Carbon Fuels Corp. (coal refinery).
F. Robert Paulsen Managing General Dean Emeritus and Professor Emeritus of
2801 N. Indian Ruins Partner Higher Education, The University of Arizona,
Tucson, AZ 85715 Tucson, Arizona; Director, American General
Series Portfolio Co. (mutual fund).(2)
Don G. Powell Managing General Chairman of the Board and Chief Executive
Van Kampen Partner, Chief Officer Chairman of the Board, Chief
American Capital, Inc. Executive Officer and Executive Officer and Director of VK/AC
2800 Post Oak Blvd., Chairman of the Board Holding, Inc. ("Holding") and Van Kampen
45th Flr American Capital, Inc. ("VKAC"); President,
Houston, TX 77056 Chief Executive Officer and Director of the
Adviser; Executive Vice President and
Director of Van Kampen American Capital
Distributors, Inc.(1)(2)(3)
Alan B. Shepard, Jr. Managing General President, Seven Fourteen Enterprises, Inc.
Seven Fourteen Partner (investments); Partner, Houston Partners
Enterprises (venture capital); Director, Vice Chairman,
1512 Bonifacio Rd. Kwik-Copy Corporation (printing); formerly
P.O. Box 63 Director of Shaklee Corporation (direct
Pebble Beach, CA sales).(2)
93953-0063
Miller Upton Managing General Economist; Consultant; Director, American
914 Tarrant Drive Partner General Series Portfolio Co. (mutual fund);
Fontana, WI 53125 formerly Director, Home Life Insurance
Company of New York and Household
International, Inc. (mutual fund).(2)
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<TABLE>
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(1) (2) (3)
NAME AND POSITION HELD PRINCIPAL OCCUPATIONS
ADDRESS WITH REGISTRANT DURING PAST 5 YEARS
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Stephen L. Boyd Investment Officer Senior Vice President -- Portfolio Manager
2800 Post Oak Blvd. of the Adviser; formerly Senior Vice
Houston, TX 77056 President and Chief Investment Officer,
Wertheim Asset Management Services, Inc.;
formerly Partner, Rollert & Sullivan.(3)
Tanya M. Loden Financial Officer Vice President and Controller of most of the
2800 Post Oak Blvd. investment companies advised by the Adviser;
Houston, TX 77056 formerly Tax Manager/Assistant Controller of
the American Capital Mutual Funds.(3)
Ronald A. Nyberg Principal Legal Executive Vice President, General Counsel
One Parkview Plaza Officer and Secretary of VKAC and Holding; Vice
Oakbrook Terrace, IL President of ACCESS Investor Services, Inc.
60181 and Van Kampen American Capital Services,
Inc.; Vice President and General Counsel and
Assistant Secretary of Van Kampen American
Capital Investment Advisory Corp., Senior
Vice President and General Counsel of the
Adviser; Executive Vice President and
General Counsel and director of Van Kampen
American Capital Distributors, Inc.
Curtis W. Morell Principal Financial Treasurer and Vice President of most of the
2800 Post Oak Blvd. and Accounting investment companies advised by American
Houston, TX 77056 Officer Capital Asset Management, Inc.(3)
Dennis J. McDonnell Vice President Executive Vice President of Holding and
One Parkview Plaza VKAC; Executive Vice President, Director,
Oakbrook Terrace, IL President and Chief Operating Officer of Van
60181 Kampen American Capital Investment Advisory
Corp.
Alan T. Sachtleben Chief Investment Senior Vice President -- Chief Investment
2800 Post Oak Blvd. Officer Officer/Equity and Director of Van Kampen
Houston, TX 77056 American Capital Asset Management, Inc.;
Executive Vice President and Director of Van
Kampen American Capital, Inc. and VK/AC
Holding, Inc.(3)
Nori L. Gabert Legal Officer and Vice President, Associate General Counsel
2800 Post Oak Blvd. Secretary and Corporate Secretary of the Adviser.(3)
Houston, TX 77056
J. David Wise Assistant Secretary Vice President, Associate General Counsel
2800 Post Oak Blvd. and Compliance Review Officer, Van Kampen
Houston, TX 77056 American Capital Asset Management, Inc.(3)
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(1) A director or trustee of American Capital Comstock Fund, Inc., American
Capital Corporate Bond Fund, Inc., American Capital Emerging Growth Fund,
Inc., American Capital Enterprise Fund, Inc., American Capital Equity Income
Fund, Inc., American Capital Federal Mortgage Trust, American Capital Global
Management Assets Fund, Inc., American Capital Government Securities, Inc.,
American Capital Government Target Series, American Capital Growth and
Income Fund, Inc., American Capital Harbor Fund, Inc., American Capital High
Yield Investments, Inc., American Capital Life Investment Trust, American
Capital Municipal Bond Fund, Inc., American Capital Pace Fund, Inc.,
American Capital Real Estate Securities Fund, Inc., American Capital Reserve
Fund, Inc., American Capital Small
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Capitalization Fund, Inc., American Capital Tax-Exempt Trust, American
Capital Texas Municipal Securities, Inc., American Capital U.S. Government
Trust for Income American Capital Utilities Income Fund, Inc. and American
Capital World Portfolio Series, Inc.
(2) A director/trustee/general managing partner of American Capital Bond Fund,
Inc., American Capital Convertible Securities, Inc., and American Capital
Income Trust, American Capital Exchange Fund, investment companies advised
by the Adviser and trustee of Common Sense Trust, an open-end investment
company of which the Adviser serves as adviser for nine of the Portfolios.
(3) An officer of other investment companies advised by the Adviser.
(b) See Item 14(a).
(c) During the last fiscal year the four Managing General Partners who
were not affiliated with the Adviser received as a group $34,250 in
Managing General Partner's fees from Registrant and in addition were
reimbursed for out-of-pocket expenses. Such Managing General
Partners also received compensation for serving as directors of
other investment companies advised by the Adviser as identified in
the notes to the foregoing table.
COMPENSATION TABLE
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PENSION OR TOTAL(1)
RETIREMENT COMPENSATION
AGGREGATE BENEFITS FROM REGISTRANT
COMPENSATION ACCRUED AS AND FUND
FROM PART OF FUND COMPLEX PAID
NAME OF PERSON REGISTRANT EXPENSES TO DIRECTORS
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Dr. Norman Hackerman................................. $ 9,000.00 N/A $47,000
Dr. F. Robert Paulsen................................ 9,000.00 N/A 52,000
Alan B. Shepard, Jr.................................. 7,250.00 N/A 48,250
Miller Upton......................................... 9,000.00 N/A 47,000
</TABLE>
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(1) Reflects thirteen investment companies in the Fund complex.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) Inapplicable.
(b) At April 12, 1995, 14% of the Registrant's outstanding shares was
held by Comerica Bank of Detroit and Edward Mardigian, P.O. Box
64101, Detroit, Michigan 48264-4101, as Trustees under a revocable
trust established by and for the benefit of Helen Mardigian,
address c/o the Trustees.
(c) At April 12, 1995, all Managing General Partners and officers as a
group owned less than one percent of Registrant's outstanding
voting securities.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES
(a) (i) Van Kampen American Capital Asset Management, Inc. (the
"Adviser"), Van Kampen American Capital Distributors, Inc.
(the "Distributor") and Advantage Capital Corporation, a
retail broker-dealer affiliate of the Distributor, are wholly
owned subsidiaries of Van Kampen American Capital, Inc.
("VKAC"), which is a wholly owned subsidiary of VK/AC Holding,
Inc. VK/AC Holding, Inc. is controlled through the ownership
of a substantial majority of its common stock, by the Clayton
& Dubilier Private Equity Fund IV Limited Partnership ("C&D
L.P."), a Connecticut limited partnership. C& D L.P. is
managed by Clayton, Dubilier & Rice, Inc., a New York based
private investment firm. The General Partner of C&D L.P. is
Clayton & Dubilier Associates IV Limited Partnership ("C&D
Associates L.P."). The general partners of C&D Associates L.P,
are Joseph L. Rice, III, B. Charles Ames, Alberto Cribiore,
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Donald I. Gogel and Hubbard C. Howe, each of whom is a
principal of Clayton, Dubilier & Rice, Inc. In addition,
certain officers, directors and employees of VKAC own, in the
aggregate, not more than six percent of the common stock of
VK/AC Holding, Inc. and have the right to acquire, upon the
exercise of options, approximately an additional 10% of the
common stock of VK/AC Holding, Inc.
(ii) See Item 14(a).
(iii) Registrant and the Adviser are parties to an investment
advisory agreement, dated December 20, 1994. Under the
Advisory Agreement, Registrant pays to the Adviser as
compensation for the services rendered, facilities furnished,
and expenses paid by it a fee payable monthly computed on
average daily net assets of Registrant at annual rate of
0.50%. The Adviser received $200,210, $194,562 and $187,807,
respectively, in advisory fees from the Registrant during the
fiscal years ended December 31, 1992, 1993 and 1994,
respectively.
The average net asset value is determined by taking the
average of all of the determinations of net asset value for
each business day during a given calendar month. Such fee is
payable for each calendar month as soon as practicable after
the end of that month. The fee payable to the Adviser is
reduced by any commissions, tender solicitation and other
fees, brokerage or similar payments received by the Adviser
or any other direct or indirect majority owned subsidiary of
VKAC, in connection with the purchase and sale of portfolio
investments of the Fund, less any direct expenses incurred by
such subsidiary of VKAC in connection with obtaining such
payments. The Adviser agrees to use its best efforts to
recapture tender solicitation fees and exchange offer fees
for the Fund's benefit, and to advise the Managing General
Partners of Registrant of any other commissions, fees,
brokerage or similar payments which may be possible under
applicable laws for the Adviser or any other direct or
indirect majority owned subsidiary of VKAC to receive in
connection with Registrant's portfolio transactions or other
arrangements which may benefit Registrant.
The agreement also provides that, in the event the ordinary
business expenses of Registrant for any fiscal year exceed
one and one-half percent of the first $30 million of the
Fund's average net assets, plus one percent of any excess
over $30 million, the compensation due the Adviser will be
reduced by the amount of such excess and that, if a reduction
in and refund of the advisory fee is insufficient, the
Adviser will pay the Fund monthly an amount sufficient to
make up the deficiency, subject to readjustment during the
year. Ordinary business expenses do not include (1) interest
and taxes, (2) brokerage commissions and (3) certain
litigation and indemnification expenses as described in the
Advisory Agreement.
The Advisory Agreement may be continued from year to year if
specifically approved at least annually (a)(i) by the Fund's
Managing General Partners or (ii) by vote of a majority of
the Fund's outstanding voting securities and (b) by the
affirmative vote of a majority of the Managing General
Partners who are not parties to the agreement or interested
persons of any such party by votes cast in person at a
meeting called for such purpose. The Advisory Agreement
provides that it shall terminate automatically if assigned
and that it may be terminated without penalty by either party
on 30 days' written notice.
(b) Under the Advisory Agreement, Registrant retains the Adviser to
manage the investment of its assets and to place orders for the
purchase and sale of its portfolio securities. The Adviser is
responsible for obtaining and evaluating economic, statistical, and
financial data and for formulating and implementing investment
programs in furtherance of Registrant's investment objectives. The
Adviser also furnishes at no cost to Registrant (except as noted
herein) the services of sufficient executive and clerical personnel
for Registrant as are necessary to prepare
6
<PAGE> 12
registration statements, partner reports, and notices and proxy
solicitation materials. In addition, the Adviser furnishes at no
cost to Registrant the services of a Chief Executive Officer and
other executive and clerical personnel, as needed.
Under the Advisory Agreement, Registrant bears the cost of its
accounting services, which includes maintaining its financial books
and records and calculating its daily net asset value. The costs of
such accounting services include the salaries and overhead expenses
of the Fund's Principal Financial and Accounting Officer and the
personnel operating under his direction. For the fiscal years ended
December 31, 1992, 1993 and 1994, the Registrant paid $45,454,
$62,097 and $48,431, respectively, for such services. A portion of
these amounts were paid to the Adviser in reimbursement of
personnel, facilities and equipment costs attributable to the
provision of accounting services to Registrant. The services
provided by the Adviser are at cost which is allocated among the
investment companies advised or sub-advised by the Adviser.
Registrant also pays transfer agency fees, custodian fees, legal and
auditing fees, the costs of reports to partners and all other
ordinary expenses not specifically assumed by the Adviser.
(c) Inapplicable.
(d) Inapplicable.
(e) Inapplicable.
(f) Inapplicable.
(g) Inapplicable.
(h) The Custodian of all the assets of Registrant is State Street Bank
and Trust Company located at 225 Franklin Street, Boston,
Massachusetts 02110.
KPMG Peat Marwick, Nationsbank Center, 700 Louisiana, Houston, Texas
77002, are the independent auditors for Registrant.
(i) Inapplicable.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
(a) The Adviser is responsible for decisions to buy and sell securities
for the Registrant and for the placement of its portfolio business
and the negotiation of the commissions paid on such transactions. It
is the policy of the Adviser to seek the best security price
available with respect to each transaction. In over-the-counter
transactions, orders are placed directly with a principal market
maker unless it is believed that a better price and execution can be
obtained by using a broker. Except to the extent that the Registrant
may pay higher brokerage commissions for brokerage and research
services (as described below) on a portion of its transactions
executed on securities exchanges, the Adviser seeks the best
security price at the most favorable commission rate. The Registrant
paid no brokerage commissions during the fiscal years ended December
31, 1992, 1993 and 1994, respectively.
(b) Inapplicable to this filing.
(c) In selecting dealers and in negotiating commissions, the Adviser
considers the firm's reliability, the quality of its execution
services on a continuing basis and its financial condition. When
more than one firm is believed to meet these criteria, preference
may be given to firms which also provide research services to
Registrant or the Adviser.
Section 28(e) of the Securities Exchange Act of 1934 ("Section
28(e)") permits an investment adviser, under certain circumstances,
to cause an account to pay a broker or dealer who supplies brokerage
and research services, a commission for effecting a securities
transaction in excess of the amount of commission another broker or
dealer would have charged for effecting the transaction. Brokerage
and research services include (a) furnishing advice as to
7
<PAGE> 13
the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities
or purchasers or sellers of securities, (b) furnishing analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and the performance of accounts, and
(c) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody).
Pursuant to provisions of the investment advisory agreement, the
Fund's Managing General Partners have authorized the Adviser to
cause the Fund to incur brokerage commissions in an amount higher
than the lowest available rate in return for research services
provided to the Adviser. The Adviser is of the opinion that the
continued receipt of supplemental investment research services from
dealers is essential to its provision of high quality portfolio
management services to Registrant. The Adviser undertakes that such
higher commissions will not be paid by Registrant unless (a) the
Adviser determines in good faith that the amount is reasonable in
relation to the services in terms of the particular transaction or
in terms of the Adviser's overall responsibilities with respect to
the accounts as to which it exercises investment discretion, (b)
such payment is made in compliance with the provisions of Section
28(e) and other applicable state and federal laws, and (c) in the
opinion of the Adviser, the total commissions paid by Registrant are
reasonable in relation to the expected benefits to Registrant over
the long term. The investment advisory fee paid by Registrant under
the investment advisory agreement is not reduced as a result of the
Adviser's receipt of research services.
The Adviser places portfolio transactions for other advisory
accounts including other investment companies. Research services
furnished by firms through which Registrant effects its securities
transactions may be used by the Adviser in servicing all of its
accounts; not all of such services may be used by the Adviser in
connection with Registrant. In the opinion of the Adviser, the
benefits from research services to each of the accounts (including
Registrant) managed by the Adviser cannot be measured separately.
Because the volume and nature of the trading activities of the
accounts are not uniform, the amount of commissions in excess of the
lowest available rate paid by each account for brokerage and
research services will vary. However, in the opinion of the Adviser,
such costs to Registrant will not be disproportionate to the
benefits received by Registrant on a continuing basis.
The Adviser seeks to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell
securities by Registrant and another advisory account. In some
cases, this procedure could have an adverse effect on the price or
the amount of securities available to Registrant. In making such
allocations among Registrant and other advisory accounts, the main
factors considered by the Adviser 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 opinions of the
persons responsible for recommending the investment.
(d) During the fiscal year ended December 31, 1994, the Registrant paid
no brokerage commissions.
(e) Inapplicable.
8
<PAGE> 14
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES
See Part A, Item 6.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
(a) Inapplicable.
(b) No shares are being offered to the public. The redemption price per
share is equivalent to the net asset value per share as more fully
described in Part A, Item 8(a).
(c) Inapplicable.
ITEM 20. TAX STATUS
See Part A, Item 6(g).
ITEM 21. UNDERWRITERS
Inapplicable.
ITEM 22. CALCULATIONS OF PERFORMANCE DATA
Inapplicable.
ITEM 23. FINANCIAL STATEMENTS
Attached.
9
<PAGE> 15
Updated 4/26/95
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
<TABLE>
<CAPTION>
INCLUDED IN PART B
----------- ------
<S> <C>
Investment Portfolio X
December 31, 1994
Statement of Assets and Liabilities X
December 31, 1994
Statement of Operations X
Year ended December 31, 1994
Statement of Changes in Net Assets X
Year ended December 31, 1993
Year ended December 31, 1994
Notes to Financial Statements X
Financial Highlights X
Year ended December 31, 1990
Year ended December 31, 1991
Year ended December 31, 1992
Year ended December 31, 1993
Year ended December 31, 1994
Report of Independent Auditors X
</TABLE>
Schedules II to VIII, inclusive, are omitted because the required
information is included in the financial statements filed herewith, or because
the conditions requiring their filing do not exist.
(b) Exhibits
<TABLE>
<S> <C>
(1) Articles of Partnership. Previously filed with the SEC as Exhibit
A to Amendment No. 2 on Form S-5 to the Registration Statement of
the Registrant under the Securities Act of 1933 (File No. 2-55128)
and incorporated herein by reference.
(1.1) Certificate of Limited Partnership filed December 9, 1994.
(2) Bylaws of Registrant. Previously filed with the SEC as Exhibit 2.1
to Amendment No. 1 on Form N-1 to the Registration Statement of
the Registrant under the Securities Act of 1933 (File No. 2-55128)
and incorporated herein by reference.
(3) Inapplicable.
(4) Copy of specimen certificate of Registrant. Previously filed with
the SEC as Exhibit No. 4 to Amendment No. 5 of Form N-l to
Registration Statement of Registrant under the Investment Company
Act of 1940 (File No. 811-2611) and incorporated herein by
reference.
(5) Investment Advisory Agreement dated December 20, 1994.
(6) Inapplicable.
(7) Inapplicable.
</TABLE>
C-1
<PAGE> 16
<TABLE>
<S> <C>
(8) Amendment to Custodian Agreement dated March 10, 1989 incorporated
herein by reference to Form N-1A of Registrant's Registration No.
2-55128, Post-Effective Amendment No. 10, filed on April 27, 1989.
(9) Inapplicable.
(10) Inapplicable.
(11) Consent of Independent Accountants.
(12) Inapplicable.
(13) Inapplicable.
(14) Inapplicable.
(15) Inapplicable.
(27) Financial Data Schedule.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
AS OF MARCH 31, 1995:
<TABLE>
<CAPTION>
(1)
NUMBER OF RECORD (2)
TITLE OF CLASS HOLDERS
----------------------------------------------------- ----------------
<S> <C>
Units of Partnership Interest 168
</TABLE>
ITEM 27. INDEMNIFICATION
Article XIII, Section 13.4 of Registrant's Certificate and Agreement of
Limited Partnership provides as follows:
"The Partnership shall indemnify each General Partner (including officers
and or directors of a corporate General Partner and including former General
Partners who have not ceased to be liable as General Partners under the
Partnership Act) against judgments, fines, amounts paid in settlement, and
expenses (including attorneys' fees) reasonably incurred by him in any civil,
criminal or investigative proceeding in which he is involved or threatened to be
involved by reason of his being a General Partner of the Partnership, provided
that he acted in good faith, within what he reasonably believed to be the scope
of his authority, and for a purpose which he reasonably believed to be within
the scope of his authority, and for a purpose which he reasonably believed to be
in the best interests of the Partnership or the Limited Partners. To the extent
that a General Partner has been successful on the merits or otherwise in defense
of any such proceeding or in defense of any claim or matter therein, he shall be
deemed to have acted in good faith and in a manner he believed to be in the best
interests of the Partnership or the Limited Partners. The determination under
any other circumstances as to whether a General Partner acted in good faith,
within what he reasonably believed to be the scope of his authority, and for a
purpose which he reasonably believed to be in the best interests of the
Partnership or the Limited Partners, shall be made by action of the General
Partners who were not parties to such proceedings, or by independent legal
counsel selected by the General Partners (who may be the regular counsel for the
Partnership) in a written opinion. No General Partner shall be indemnified under
this provision against any liability to the Partnership or its Partners 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. The indemnification provided hereunder shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under any applicable
statute, agreement, vote of the General Partners or Limited Partners, or
otherwise."
C-2
<PAGE> 17
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
During the last two fiscal years, the investment adviser has not engaged in
any business of a substantial nature except as investment adviser to the
American Capital Funds Group (listed below) and to the Emerging Growth Portfolio
of the Smith Barney Series Fund, and as adviser to Common Sense Trust, Western
Reserve Life -- Emerging Growth Portfolio and Smith Barney/Travelers Series Fund
Inc. -- American Capital Enterprise Portfolio, all registered open-end
investment companies. The American Capital Funds Group and Common Sense Trust
are all located at 2800 Post Oak Blvd., Houston, Texas 77056. The Emerging
Growth Portfolio of the Smith Barney Series Fund and the American Capital
Enterprise Portfolio of the Smith Barney/Travelers Series Fund Inc. are located
at Two World Trade Center, New York, New York 10048. Western Reserve
Life -- Emerging Growth Portfolio is located at 201 Highland Avenue, Largo,
Florida 34640.
The American Capital Funds Group of registered investment companies for
which Van Kampen American Capital Asset Management, Inc. (formerly American
Capital Asset Management, Inc.) currently serves as investment adviser are
listed below:
American Capital Bond Fund, Inc.
American Capital Comstock Fund, Inc.
American Capital Convertible Securities, Inc.
American Capital Corporate Bond Fund, Inc.
American Capital Emerging Growth Fund, Inc.
American Capital Enterprise Fund, Inc.
American Capital Equity Income Fund, Inc.
American Capital Exchange Fund
American Capital Federal Mortgage Trust
American Capital Global Managed Assets Fund, Inc.
American Capital Government Securities, Inc.
American Capital Government Target Series
American Capital Growth and Income Fund, Inc.
American Capital Harbor Fund, Inc.
American Capital High Yield Investments, Inc.
American Capital Income Trust
American Capital Life Investment Trust
American Capital Municipal Bond Fund, Inc.
American Capital Pace Fund, Inc.
American Capital Real Estate Securities Fund, Inc.
American Capital Reserve Fund, Inc.
American Capital Small Capitalization Fund, Inc.
American Capital Tax-Exempt Trust
American Capital Texas Municipal Securities, Inc.
American Capital U.S. Government Trust for Income
American Capital Utilities Income Fund, Inc.
American Capital World Portfolio Series, Inc.
Mosher, Inc.
C-3
<PAGE> 18
During the last two fiscal years, no officer or director of the investment
adviser has engaged in any other business, profession, vocation or employment of
a substantial nature except as follows:
William N. Brown; Senior Vice President
Vice President and Director;
ACCESS Investor Services, Inc.
Advantage Capital Corporation
American Capital Shareholders Corporation
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Van Kampen American Capital Services, Inc.
Van Kampen American Capital Trust Company
Vice President;
Advantage Capital Credit Services, Inc.
American Capital Contractual Services, Inc.
Huey P. Falgout, Jr.; Vice President and Assistant Secretary
Vice President and Assistant Corporate Secretary;
ACCESS Investor Services, Inc.
Advantage Capital Corporation
Advantage Capital Credit Services, Inc.
Advantage Capital Insurance Agency, Inc.
Advantage Capital Insurance Agency of Alabama, Inc.
Advantage Capital Insurance Agency of Hawaii, Inc.
Advantage Capital Insurance Agency of Massachusetts, Inc.
Advantage Capital Insurance Agency of Ohio, Inc.
Advantage Capital Insurance Agency of Oklahoma, Inc.
Advantage Capital Insurance Agency of Texas, Inc.
American Capital Shareholders Corporation
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Van Kampen American Capital Services, Inc.
ACCESS Investor Services, Inc.
Van Kampen American Capital Trust Company
Nori L. Gabert; Vice President, Associate General Counsel and Secretary
Vice President, Corporate Secretary and Counsel;
American Capital Contractual Services, Inc.
Vice President and Corporate Secretary;
American Capital Shareholders Corporation
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Vice President and Assistant Corporate Secretary;
ACCESS Investor Services, Inc.
Advantage Capital Corporation
Advantage Capital Credit Services, Inc.
Van Kampen American Capital Services, Inc.
Van Kampen American Capital Trust Company
C-4
<PAGE> 19
Wayne D. Godlin; Vice President -- Portfolio Manager
Vice President;
Van Kampen American Capital Advisors, Inc.
Ronald A. Nyberg; Senior Vice President and General Counsel
Executive Vice President, General Counsel and Corporate Secretary;
Van Kampen American Capital, Inc.
VK/AC Holding, Inc.
Executive Vice President, General Counsel and Director;
Van Kampen American Capital Distributors, Inc.
Van Kampen American Capital Investment Advisory Corp.
Van Kampen American Capital Management, Inc.
Vice President, General Counsel and Assistant Corporate Secretary;
American Capital Shareholders Corporation
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Vice President and Assistant Corporate Secretary;
American Capital Contractual Services, Inc.
Vice President;
ACCESS Investor Services, Inc.
Advantage Capital Corporation
Advantage Capital Credit Services, Inc.
Van Kampen American Capital Services, Inc.
Van Kampen American Capital Trust Company
General Counsel and Assistant Secretary;
McCarthy, Crisanti & Maffei, Inc.
McCarthy, Crisanti & Maffei Acquisition Corporation
Robert C. Peck, Jr.; Senior Vice President, Chief Investment
Officer -- Fixed-Income Department and Director
Senior Vice President, Chief Investment Officer -- Fixed-Income Department
and Director;
Van Kampen American Capital Advisors, Inc.
Don G. Powell; President, Chief Executive Officer and Director
President, Chief Executive Officer and Director;
Van Kampen American Capital, Inc.
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Van Kampen American Capital Holding, Inc.
VK/AC Holding, Inc.
Chairman, Chief Executive Officer and Director;
Van Kampen American Capital Distributors, Inc.
Van Kampen American Capital Investment Advisory Corp.
Van Kampen American Capital Management, Inc.
Executive Vice President and Director;
ACCESS Investor Services, Inc.
Advantage Capital Corporation
Advantage Capital Credit Services, Inc.
American Capital Contractual Services, Inc.
C-5
<PAGE> 20
American Capital Shareholders Corporation
Van Kampen American Capital Services, Inc.
Van Kampen American Capital Trust Company
Director;
McCarthy, Crisanti & Maffei, Inc.
McCarthy, Crisanti & Maffei Acquisition Corporation
William R. Rybak; Senior Vice President, Chief Financial Officer and Treasurer
Executive Vice President, Chief Financial Officer and Director;
Van Kampen American Capital Distributors, Inc.
Van Kampen American Capital Investment Advisory Corp.
Van Kampen American Capital Management, Inc.
Executive Vice President and Chief Financial Officer;
Van Kampen American Capital, Inc.
VK/AC Holding, Inc.
Vice President, Chief Financial Officer and Treasurer;
ACCESS Investor Services, Inc.
Van Kampen American Capital Advisors, Inc.
Van Kampen American Capital Exchange Corp.
Van Kampen American Capital Services, Inc.
Van Kampen American Capital Trust Company
Vice President and Chief Financial Officer;
Advantage Capital Corporation
American Capital Contractual Services, Inc.
Vice President and Treasurer;
Advantage Capital Credit Services, Inc.
Treasurer;
Advantage Capital Insurance Agency, Inc.
Advantage Capital Insurance Agency of Alabama, Inc.
Advantage Capital Insurance Agency of Hawaii, Inc.
Advantage Capital Insurance Agency of Massachusetts, Inc.
Advantage Capital Insurance Agency of Ohio, Inc.
Advantage Capital Insurance Agency of Oklahoma, Inc.
Alan T. Sachtleben; Senior Vice President, Chief Investment Officer -- Equity
Department and Director
Executive Vice President;
Van Kampen American Capital, Inc.
VK/AC Holding, Inc.
Senior Vice President, Chief Investment Officer -- Equity Department and
Director;
Van Kampen American Capital Advisors, Inc.
J. David Wise; Vice President, Associate General Counsel, Compliance Review
Officer and Assistant Secretary
Vice President, General Counsel and Corporate Secretary;
Van Kampen American Capital Trust Company
Vice President and Assistant Corporate Secretary;
Van Kampen American Capital Services, Inc.
C-6
<PAGE> 21
Vice President;
ACCESS Investor Services, Inc.
Paul R. Wolkenberg; Senior Vice President
President, Chief Operating Officer and Director;
Van Kampen American Capital Services, Inc.
Executive Vice President, Chief Operating Officer and Director;
Van Kampen American Capital Trust Company
Executive Vice President and Director;
ACCESS Investor Services, Inc.
Executive Vice President;
American Capital Shareholders Corporation
Director;
Advantage Capital Corporation
Advantage Capital Credit Services, Inc.
American Capital Contractual Services, Inc.
Lea S. Zeitman; Assistant Secretary
Senior Vice President, Chief Administrative Officer, General Counsel and
Corporate Secretary;
Advantage Capital Corporation
Vice President, General Counsel and Corporate Secretary;
Advantage Capital Credit Services, Inc.
Advantage Capital Insurance Agency, Inc.
Advantage Capital Insurance Agency of Alabama, Inc.
Advantage Capital Insurance Agency of Hawaii, Inc.
Advantage Capital Insurance Agency of Ohio, Inc.
Advantage Capital Insurance Agency of Oklahoma, Inc.
Vice President and Assistant Corporate Secretary;
Van Kampen American Capital T.A., Inc.
Vice President;
American Capital Contractual Services, Inc.
Van Kampen American Capital Trust Company
Assistant Corporate Secretary;
Van Kampen American Capital Advisors, Inc.
Clerk;
Advantage Capital Insurance Agency of Massachusetts, Inc.
ITEM 29. PRINCIPAL UNDERWRITERS.
Inapplicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Unless otherwise stated below, the books or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are in the physical possession of:
Fund Treasurer
Mutual Fund Accounting
2800 Post Oak Boulevard
Houston, Texas 77056
C-7
<PAGE> 22
<TABLE>
<CAPTION>
RULE LOCATION OF REQUIRED RECORDS
- - ------ ------------------------------------------------------------------
<S> <C> <C>
31a-1 (b)(2)(iii) Van Kampen American Capital Asset Management, Inc.
2800 Post Oak Boulevard
Houston, Texas 77056
(b)(2)(iv) ACCESS Investor Services, Inc.
7501 Tiffany Springs Parkway
Kansas City, Missouri 64153
(b)(4)-(6) Van Kampen American Capital Asset Management, Inc.
(b)(9)-(11) Van Kampen American Capital Asset Management, Inc.
</TABLE>
ITEM 31. MANAGEMENT SERVICES
Inapplicable.
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes, if requested to do so by the holders of at
least 10% of the Registrant's outstanding shares, to call a meeting of
shareholders for the purpose of voting upon the question of removal of a
director or directors and to assist in communications with other shareholders as
required by Section 16(c) of the Investment Company Act of 1940.
Registrant hereby undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
C-8
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940 the
Registrant has duly caused this Post-Effective Amendment No. 16 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, and the State of Texas, on the 26th day
of April, 1995.
AMERICAN CAPITAL EXCHANGE FUND
By /s/ NORI L. GABERT
------------------------------------
Nori L. Gabert
Vice President
<PAGE> 24
AMERICAN CAPITAL EXCHANGE FUND, INC.
INDEX TO EXHIBITS TO FORM N-1A
REGISTRATION STATEMENT
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF
NO. EXHIBIT
- - ------- -------------------------------------------------------------
<S> <C>
(1.1) Certificate of Limited Partnership filed December 9, 1994.
(5) Investment Advisory Agreement dated December 20, 1994.
(11) Consent of Independent Accountants.
(27) Financial Data Schedule.
</TABLE>
<PAGE> 1
Exhibit 1.1
[SEAL] STATE OF CALIFORNIA
SECRETARY OF STATE
CERTIFICATE OF LIMITED PARTNERSHIP
IMPORTANT - Read instructions on back before completing this form
This Certificate is presented for filing pursuant to Section 15621 California
Corporations Code.
________________________________________________________________________________
1. NAME OF LIMITED PARTNERSHIP
American Capital Exchange Fund, a California limited partnership
________________________________________________________________________________
2. STREET ADDRESS OF PRINCIPAL EXECUTIVE OFFICE CITY AND STATE ZIP CODE
2800 Post Oak Boulevard Houston, TX 77056
________________________________________________________________________________
3. STREET ADDRESS OF CALIFORNIA OFFICE IF
EXECUTIVE OFFICE IS AN ANOTHER STATE CITY ZIP CODE
(c/o Heller, Ehrman, White & McAuliffe)
333 Bush Street San Francisco, CA 94104-2878
________________________________________________________________________________
4. COMPLETE IF LIMITED PARTNERSHIP WAS FORMED PRIOR TO JULY 1, 1984 AND IS IN
EXISTENCE ON DATE THIS CERTIFICATE IS EXECUTED.
THE ORIGINAL LIMITED PARTNERSHIP CERTIFICATE WAS RECORDED ON DECEMBER 4,
1975 WITH THE RECORDER OF LOS ANGELES COUNTY.
FILE OR RECORDATION NUMBER instrument No. 2189
________________________________________________________________________________
5. NAMES AND ADDRESSES OF ALL GENERAL PARTNERS: (CONTINUE ON SECOND PAGE, IF
NECESSARY)
A NAME: Norman Hackerman
The Robert A. Welch Foundation
ADDRESS: 4605 Post Oak Place, Suite 200
CITY: Houston STATE: Texas ZIP CODE: 77027
________________________________________________________________________________
B NAME: F. Robert Paulsen
ADDRESS: 2801 North Indian Ruins
CITY: Tucson STATE: Arizona ZIP CODE: 85715
________________________________________________________________________________
C NAME: Don G. Powell
ADDRESS: 2800 Post Oak Boulevard
CITY: Houston STATE: Texas ZIP CODE: 77056
________________________________________________________________________________
D NAME: Alan B. Shepard, Jr.
Seven Fourteen Enterprises, Inc.
ADDRESS: 3203 Mercer, Suite 200
CITY: Houston STATE: Texas ZIP CODE: 77027
________________________________________________________________________________
6. NAME AND ADDRESS OF AGENT FOR SERVICE OF PROCESS:
NAME: CT Corporation System
ADDRESS: CITY: STATE: CA ZIP CODE
________________________________________________________________________________
7. ANY OTHER MATTERS TO BE INCLUDED IN THIS CERTIFICATE MAY BE NOTED BE NOTED
ON SEPARATE PAGES AND BY REFERENCE HEREIN ARE A PART OF THIS CERTIFICATE.
NUMBER OF PAGES ATTACHED: /3/
________________________________________________________________________________
8. INDICATE THE NUMBER OF GENERAL PARTNERS SIGNATURES REQUIRED FOR FILING
CERTIFICATES OF AMENDMENT, RESTATEMENT, DISSOLUTION, CONTINUATION AND
CANCELLATION.
NUMBER OF GENERAL PARTNER(S) SIGNATURE(S) IS/ARE:
See Addendum Attached
(PLEASE INDICATE NUMBER ONLY)
________________________________________________________________________________
9. IT IS HEREBY DECLARED THAT I AM (WE ARE) THE PERSON(S) WHO EXECUTED THIS
CERTIFICATE OF LIMITED PARTNERSHIP WHICH EXECUTION IS MY (OUR) ACT AND DEED.
(SEE INSTRUCTIONS)
/s/ NORMAN HACKERMAN /s/ DON G. POWELL
_____________________________________ _____________________________________
SIGNATURE Norman Hackerman SIGNATURE Don G. Powell
Managing General Partner 12/6/94 Managing General Partner 12/6/94
_____________________________________ _____________________________________
POSITION OR TITLE DATE POSITION OR TITLE DATE
/s/ F. ROBERT PAULSEN /s/ ALAN B. SHEPARD, JR.
_____________________________________ _____________________________________
SIGNATURE F. Robert Paulsen SIGNATURE Alan B. Shepard, Jr.
Managing General Partner 12/6/94 Managing General Partner 12/6/94
_____________________________________ _____________________________________
POSITION OR TITLE DATE POSITION OR TITLE DATE
________________________________________________________________________________
10. RETURN ACKNOWLEDGEMENT TO:
NAME Robert A. Epsen, Esq.
ADDRESS Heller, Ehrman, White & McAuliffe
CITY 333 Bush Street
STATE San Francisco, California
ZIP CODE 94104-2878
________________________________________________________________________________
SEC. STATE REV 1/93 FORM LP-1 --FILING FEE $70.00
Approved by Secretary of State
________________________________________________________________________________
THIS SPACE FOR FILING OFFICER USE
9502500015
FILED
In the office of the Secretary of State
of the State of California
Dec. 9, 1994
/s/ TONY MILLER
TONY MILLER
ACTING SECRETARY OF STATE
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ADDENDUM TO CERTIFICATE OF LIMITED
PARTNERSHIP OF AMERICAN CAPITAL EXCHANGE FUND
ITEM 5 (Continued):
E. NAME: Miller Upton
ADDRESS: Miller Upton, Inc.
914 Tarrant Drive
Route 3, Box 85-A
CITY: Fontana STATE: Wisconsin ZIP CODE: 53125
F. NAME: American Capital Exchange Corporation
ADDRESS: 2800 Post Oak Boulevard
CITY: Houston STATE: Texas ZIP CODE: 77056
G. NAME: American Capital Asset Management, Inc.
ADDRESS: 2800 Post Oak Boulevard
CITY: Houston STATE: Texas ZIP CODE: 77056
ITEM 7:
A. As contemplated by Section 1.2 of the Certificate and Agreement of
Limited Partnership, as restated and recorded on August 30, 1976, in Book
M5449, Page 301 of Official Records of Los Angeles County, as amended, of
American General Exchange Fund, a California limited partnership (the
"Partnership"), the Managing General Partners of the Partnership adopted the
following resolution, effective as of July 26, 1983:
"RESOLVED, that in connection with the
approval of a new investment advisory
agreement to become effective on the date of
consummation of the sale of the investment
adviser by American General Corporation, the
name of Exchange Fund shall be changed on
such date to American Capital Exchange Fund
by amending Article 1, Section 1.2 of the
Restated Certificate and Agreement of Limited
Partnership ("Certificate and Agreement") to
read in its entirety as follows:
"1.2 Name. The Partnership shall
operate under the firm name of "AMERICAN
CAPITAL EXCHANGE FUND", a California Limited
Partnership. The Partnership is one of a
<PAGE> 3
number of investment companies with the same investment adviser each of
which is adopting the words "American Capital" as part of its name. The
Partnership acknowledges that it has the non-exclusive right to the use
of the words "American Capital" in its firm name and consents to the
adoption of the words "American Capital" as part of the name of other
investment companies, whether now in existence or hereafter created,
which are members of the American Capital Group of investment companies
and consents to the adoption of the words "American Capital" as part of
the name of its investment adviser and affiliated companies. The
foregoing acknowledgement and consent on the part of the Partnership is
hereby made binding upon its Partners and creditors and all other
persons claiming under or through it."
B. The following are the current Managing General Partners of the
Partnership and the respective dates of their original elections as such:
Name Date of Original Election
---- -------------------------
Norman Hackerman August 6, 1979
F. Robert Paulsen August 6, 1979
Don G. Powell June 11, 1992
Alan B. Shepard, Jr. June 11, 1992
Miller Upton June 20, 1991
All of the above Managing General Partners have been reelected annually since
the respective dates of their original elections, in accordance with the
provisions of the Certificate and Agreement.
The following are the current Non-Managing General Partners of the
Partnership:
American Capital Exchange Corporation
American Capital Asset Management, Inc.
The Non-Managing General Partners have served as such since the inception of
the Partnership; their respective corporate names have been changed in the
interim to the names set forth above.
<PAGE> 4
ITEM 8:
Certificates of amendment, restatement, dissolution, continuation and
cancellation require the signature of all General Partners, except that an
amendment substituting a Limited Partner or adding a General Partner may be
signed by any Managing General Partner and by the person to be substituted as a
Limited Partner or added as a General Partner and shall also be signed by the
assigning Limited Partner, in the case of a substitution, and an amendment
reflecting the determination of the remaining Managing General Partners to
continue the business of the Partnership upon the retirement, death or insanity
of a Managing General Partner need be signed by only one Managing General
Partner. Any certificate may be signed personally or by attorney in fact.
ITEM 9 (Continued):
/s/ MILLER UPTON
- - --------------------------------------
Signature Miller Upton
Managing General Partner 12/6/94
- - --------------------------------------
Position or Title Date
American Capital Exchange Corporation
By /s/ NORI GABERT
----------------------------------
Signature
Corporate Secretary 12/6/94
- - --------------------------------------
Position or Title Date
American Capital Asset Management, Inc.
By /s/ NORI GABERT
----------------------------------
Signature
Vice President 12/6/94
- - --------------------------------------
Position or Title Date
-3-
<PAGE> 1
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 20th day of December, 1994, by and between AMERICAN CAPITAL
EXCHANGE FUND, a California Limited Partnership hereinafter referred to as the
"FUND," and AMERICAN CAPITAL ASSET MANAGEMENT, INC., a Delaware corporation,
hereinafter referred to as the "ADVISER".
The FUND and the ADVISER agree as follows:
(1) Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the Managing
General Partners of the FUND and in conformity with applicable laws, the FUND's
Certificate and Agreement of Limited Partnership, Bylaws, registration
statements, prospectus and stated investment objectives, policies and
restrictions, shall:
a. manage the investment and reinvestment of the FUND's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the FUND's portfolio, and formulation and implementation of
investment programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the FUND's account with brokers or dealers selected
by the ADVISER;
c. conduct and manage the day-to-day operations of the FUND including, by way
of illustration, the preparation of registration statements, prospectuses,
reports, proxy solicitation materials and amendments thereto, the furnishing of
legal services except for services provided by outside counsel to the FUND
selected by the Managing General Partners, and the supervision of the FUND's
Principal Financial and Accounting Officer and the personnel working under his
direction; and
d. furnish to the FUND office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each FUND Managing General Partner and FUND officer
who is an affiliated person of the ADVISER, except the compensation of the
FUND's Principal Financial and Accounting Officer and related expenses as
provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the FUND the most favorable price and
execution available and shall maintain records adequate to demonstrate
compliance with this requirement. Subject to prior authorization by the FUND's
Managing General Partners of
<PAGE> 2
appropriate policies and procedures, the ADVISER may, to the extent authorized
by law, cause the FUND to pay a broker or dealer that provides brokerage and
research services to the ADVISER an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. In the
event of such authorization and to the extent authorized by law the ADVISER
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of such action.
Except as otherwise agreed, or as otherwise provided herein, the FUND shall
pay, or arrange for others to pay, all its expenses other than those expressly
stated to be payable by the ADVISER hereunder, which expenses payable by the
FUND shall include (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase and sale of portfolio investments; (iii)
compensation of its Managing General Partners and officers other than those who
are affiliated persons of the ADVISER; (iv) compensation of its Principal
Financial and Accounting Officer, compensation of personnel working under the
Principal Financial and Accounting Officer's direction, and expenses of office
space, facilities, and equipment used by the Principal Financial and Accounting
Officer and such personnel in the performance of their normal duties for the
FUND which consist of maintenance of the accounts, books and other documents
which constitute the record forming the basis for the FUND's financial
statements, preparation of such financial statements and other FUND documents
and reports of a financial nature required by federal and state laws, and
participation in the production of the FUND's registration statement,
prospectuses, proxy solicitation materials and reports to Partners; (v) fees of
outside counsel to and of independent accountants of the FUND selected by the
Managing General Partners; (vi) custodian, registrar and transfer agent fees
and expenses; (vii) expenses related to the repurchase or redemption of its
shares including expenses related to a program of periodic repurchases or
redemptions; (viii) expenses related to the issuance of its shares against
payment therefor by or on behalf of the subscribers thereto; (ix) fees and
related expenses of registering and qualifying the FUND and its shares for
distribution under state and federal securities laws; (x) expenses of printing
and mailing of registration statements, prospectuses, reports, notices and
proxy solicitation materials of the FUND; (xi) all other expenses incidental to
holding meetings of the FUND's Limited Partners including proxy solicitations
therefor; (xii) expenses for servicing the Limited Partners' accounts; (xiii)
insurance premiums for fidelity coverage and errors and omissions insurance;
(xiv) dues for the FUND's membership in trade associations approved by the
Managing General Partners; and (xv) such nonrecurring expenses as may arise,
including those associated with actions, suits, or proceedings to which the
FUND is a party and the legal obligation which the FUND may have to indemnify
its officers and partners with
2
<PAGE> 3
respect thereto. To the extent that any of the foregoing expenses are allocated
between the FUND and any other party, such allocations shall be pursuant to
methods approved by the Managing General Partners.
(2) Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the FUND are not impaired.
Except as otherwise required by the Investment Company Act of 1940 any of the
Partners, officers and employees of the FUND may be a shareholder, director,
officer or employee of, or be otherwise interested in, the ADVISER, and in any
person controlled by or under common control with the ADVISER, and the ADVISER,
and any person controlled by or under common control with the ADVISER, may have
an interest in the FUND.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the FUND,
or to any Partner of the FUND, for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
(3) Compensation Payable to ADVISER
The FUND shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, a monthly fee computed
at the annual rate of one half of one percent (1/2%) of the FUND's average net
assets. The ADVISER hereby agrees that it shall look for payment of such
compensation solely to the FUND's assets and not to any personal assets of any
partner of the FUND.
Such average net assets shall be determined by taking the average of all of the
determinations of net asset value, made in the manner provided in the FUND's
Certificate and Agreement of Limited Partnership, for each business day during
a given calendar month. Such fee shall be payable for each calendar month as
soon as practicable after the end of that month.
The fees payable to the ADVISER by the FUND pursuant to this Section 3 shall be
reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of American Capital Management & Research, Inc., or
its successor, in connection with the purchase and sale of portfolio
investments of the FUND, less any direct expenses incurred by such person, in
3
<PAGE> 4
connection with obtaining such commissions, fees, brokerage or similar
payments. The ADVISER shall use its best efforts to recapture all available
tender offer solicitation fees and exchange offer fees in connection with the
FUND's portfolio transactions and shall advise the Managing General Partners of
any other commissions, fees, brokerage or similar payments which may be
possible for the ADVISER, or any other direct or indirect majority owned
subsidiary of American Capital Management & Research, Inc., or its successor,
to receive in connection with the FUND's portfolio transactions or other
arrangements which may benefit the FUND.
In the event that the ordinary business expenses of the FUND for any fiscal
year should exceed 1 1/2% of the first $30 million of the FUND's average daily
net assets determined in the manner described in Section 3, plus 1% of any
excess over $30 million of such average daily net assets so taken, the
compensation due the ADVISER for such fiscal year shall be reduced by the
amount of such excess. The ADVISER's compensation shall be so reduced by a
reduction or a refund thereof, at the time such compensation is payable after
the end of each calendar month during such fiscal year of the FUND, and if such
amount should exceed such monthly compensation, the ADVISER shall pay the FUND
an amount sufficient to make up the deficiency, subject to readjustment during
the FUND's fiscal year. For purposes of this paragraph, all ordinary business
expenses of the FUND shall exclude expenses incurred by the FUND (i) for
interest and taxes; (ii) brokerage commissions; (iii) as a result of litigation
in connection with a suit involving a claim for recovery by the FUND; (iv) as a
result of litigation involving a defense against a liability asserted against
the FUND, provided that, if the ADVISER made the decision or took the actions
which resulted in such claim, it acted in good faith without negligence or
misconduct; and (v) any indemnification paid by the FUND to its officers and
Managing General Partners and the ADVISER in accordance with applicable state
and federal laws as a result of such litigation.
If the ADVISER shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
(4) Duration of Agreement.
This Agreement shall have an initial term of two years from the date hereof and
shall continue in force from year to year thereafter, but only so long as such
continuance is approved at least annually by the vote of a majority of the
FUND's Managing General Partners who are not parties to this Agreement or
interested persons of any such parties, cast in person at a meeting called for
the purpose of voting on such approval, and by a vote of a majority of the
FUND's Managing General Partners or a majority of the FUND's outstanding voting
securities.
4
<PAGE> 5
This Agreement shall terminate automatically in the event of its assignment.
The Agreement may be terminated at any time by the FUND's Managing General
Partners, by vote of a majority of the FUND's outstanding voting securities, or
by the ADVISER, on not more than 60 days', nor less than 30 days' written
notice, or upon such shorter notice as may be mutually agreed upon. Such
termination shall be without payment of any penalty.
Notwithstanding the foregoing, the ADVISER hereby agrees that should any
Limited Partner be sued for any obligation of the FUND as a general partner,
which obligation or alleged obligation was incurred by the FUND while the
ADVISER acted as such pursuant to this or any successor agreement, the ADVISER
will indemnify such Limited Partner against any liability as general partner
provided that such Limited Partner promptly notifies ADVISER in writing of the
pendency of the action (unless the ADVISER is otherwise on notice) and provided
the ADVISER has the opportunity to participate in the defense of the case.
The ADVISER hereby acknowledges that it is familiar with the provisions of the
FUND's Partnership Agreement, and specifically Article 8.4 under which action
may be taken only by majority vote of the Managing General Partners and no
individual Managing General Partner is authorized to act on behalf of the FUND
or to bind it except on such majority vote.
As further consideration for its being chosen as investment adviser for the
FUND, ADVISER will cause AMERICAN CAPITAL EXCHANGE CORPORATION, its wholly
owned subsidiary, to own not less than 1% of the FUND's outstanding Shares,
acquired for cash at net asset value, so long as such subsidiary shall remain a
Non-Managing General Partner of the FUND, except that if the ADVISER ceases to
continue as investment adviser to the FUND, it shall be permitted to withdraw
its subsidiary's capital contribution on the earlier of two years following the
termination of such status or two business days following the due approval at a
meeting of Partners of a qualified successor as investment adviser.
(5) Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person,"
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted to either the ADVISER or the FUND by the
Securities and Exchange Commission, or such interpretive positions as may be
taken by the Commission or its staff, under said Act, and the term "brokerage
and research services" shall have the meaning given in the Securities Exchange
Act of 1934 and the Rules and Regulations thereunder.
5
<PAGE> 6
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
AMERICAN CAPITAL EXCHANGE FUND
By: /s/ CURTIS W. MORELL
Name: Curtis W. Morell
Its: Vice President
AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ NORI L. GABERT
Name: Nori L. Gabert
Its: Vice President
6
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
The Managing General Partners
American Capital Exchange Fund
We consent to the use of our report included herein.
/s/ KPMG PEAT MARWICK
Houston, Texas
April 26, 1995
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<NAME> AC EXCHANGE
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 9361
<INVESTMENTS-AT-VALUE> 37693
<RECEIVABLES> 84
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<DISTRIBUTIONS-OF-INCOME> 429
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