<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / 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 240.14a-11(c) or
Section 240.14a-12
VAN KAMPEN AMERICAN CAPITAL EXCHANGE FUND
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
- November 1997 -
IMPORTANT NOTICE
TO VAN KAMPEN AMERICAN CAPITAL
EXCHANGE FUND PARTNERS
QUESTIONS
& ANSWERS
- --------------------------------------------------------------------------------
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the issues to be voted on.
- --------------------------------------------------------------------------------
Q WHY AM I RECEIVING THIS PROXY STATEMENT?
A This is the Annual Meeting of Partners and the Managing General
Partners have nominated eight new individuals for election to the Board as a
result of a transaction by and among Smith Barney Mutual Funds Management
Inc., and its affiliates, and your Fund's Adviser, and its affiliates. Please
refer to the proxy statement for a detailed explanation of the proposed items.
Q HOW WILL THIS AFFECT MY ACCOUNT?
A You can expect the same level of management expertise and high-quality
service you've grown accustomed to.
Q WILL MY VOTE MAKE A DIFFERENCE?
A Your vote is needed to ensure that the proposals can be acted upon.
Your immediate response on the enclosed proxy card(s) will help save on the
costs of any further solicitations. We encourage all Partners to participate
in the governance of their Fund.
Q HOW DO THE MANAGING GENERAL PARTNERS OF THE FUND SUGGEST THAT I VOTE?
A After careful consideration, the Managing General Partners of your Fund
unanimously recommend that you vote "FOR" each of the items proposed on the
enclosed proxy card(s).
Q WHO IS PAYING FOR EXPENSES RELATED TO THE MEETING?
A The Fund will pay for the expenses relating to the Meeting.
Q WHO DO I CALL IF I HAVE QUESTIONS?
A We will be happy to answer your questions about the proxy solicitation.
Please call us at 1-800-341-2929 between 7:00 a.m. and 7:00 p.m. Central time,
Monday through Friday. (TDD users call 1-800-421-2833.)
Q WHERE DO I MAIL MY PROXY CARD(S)?
A You may use the enclosed postage paid envelope or mail your proxy
card(s) to:
Proxy Tabulator
P.O. Box 9113
Hingham, MA 02043-9113
<PAGE> 3
ABOUT THE PROXY CARD
Please vote on each issue using blue RATIFICATION OF INDEPENDENT
or black ink to mark an X in one of PUBLIC ACCOUNTANTS - mark "For,"
the boxes provided on the proxy card. "Against", or "Abstain"
ELECTION OF MANAGING GENERAL PARTNERS - Sign, date, and return the
mark "For All," "Withhold" or "For All proxy card in the enclosed
Except" postage-paid envelope. All
registered owners of an account,
To withhold authority to vote for one as shown in the address, must
or more nominees, check FOR ALL EXCEPT sign the card. When signing as
and write the nominee's name on the attorney, trustee, executor,
line below. administrator, custodian,
guardian or corporate officer,
please indicate your full title.
<TABLE>
<S><C>
[SAMPLE]
/X/ PLEASE MARK PROXY
VOTES AS
IN THIS VAN KAMPEN AMERICAN CAPITAL EXCHANGE FUND
EXAMPLE ANNUAL MEETING OF PARTNERS
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
FOR
FOR ALL
ALL WITHHOLD EXCEPT FOR AGAINST ABSTAIN
1. To vote to elect eight Managing / / / / / / 2. To ratify the selection / / / / / /
General Partners to serve until of KPMG Peat Marwick LLP
their respective successors are as independent public
duly elected and qualified. accountants.
XXXXXXXXXXXXX XXXXXXXXXXXXX XXXXXXXXXXXXXX
To withhold authority to vote for one or more nominees, check FOR
ALL EXCEPT and write the nominee's name(s) on the line below.
-----------------------------------------------------------
Please be sure to sign and date this Proxy. Date
Partner sign here Co-owner sign here
- ------------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
VAN KAMPEN AMERICAN CAPITAL
EXCHANGE FUND
A CALIFORNIA LIMITED PARTNERSHIP
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
TELEPHONE (800) 341-2929
NOTICE OF ANNUAL MEETING OF
PARTNERS
TO BE HELD DECEMBER 18, 1997
An Annual Meeting of Partners (the "Meeting") of Van Kampen American Capital
Exchange Fund, a California limited partnership (the "Fund"), will be held at
the offices of Van Kampen American Capital, Inc., One Parkview Plaza, Oakbrook
Terrace, Illinois 60181, on Thursday, December 18, 1997 at 3:30 p.m. for the
following purposes:
1. To elect eight new Managing General Partners;
2. To ratify or reject the selection of KPMG Peat Marwick LLP as independent
public accountants for the current fiscal year of the Fund; and
3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
Partners of record at the close of business on October 31, 1997 are entitled
to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Managing General Partners
RONALD A. NYBERG
Ronald A. Nyberg, Vice President and Secretary
November 26, 1997
<PAGE> 5
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT TO A PARTNER
UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE FUND BY CALLING (800)
341-2929 OR BY WRITING TO THE FUND AT 2800 POST OAK BOULEVARD, HOUSTON, TEXAS
77056.
PARTNERS OF THE FUND ARE INVITED TO ATTEND THE MEETING IN PERSON. IF YOU DO
NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON
THE ENCLOSED PROXY CARD, DATE AND SIGN SUCH PROXY CARD, AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT
YOU MAIL YOUR PROXY PROMPTLY.
THE MANAGING GENERAL PARTNERS RECOMMEND THAT YOU CAST YOUR VOTE:
- FOR ALL OF THE NOMINEES FOR THE MANAGING GENERAL PARTNERS LISTED IN THE
PROXY STATEMENT.
- FOR THE RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR OF THE FUND.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
<PAGE> 6
PROXY STATEMENT
VAN KAMPEN AMERICAN CAPITAL EXCHANGE FUND
A CALIFORNIA LIMITED PARTNERSHIP
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
TELEPHONE (800) 341-2929
ANNUAL MEETING OF PARTNERS
DECEMBER 18, 1997
This proxy statement is furnished in connection with the solicitation by the
Managing General Partners of Van Kampen American Capital Exchange Fund, a
California limited partnership (the "Fund"), of proxies to be voted at an Annual
Meeting of Partners, and all adjournments thereof (the "Meeting"), to be held at
the offices of Van Kampen American Capital, Inc., One Parkview Plaza, Oakbrook
Terrace, Illinois 60181, on Thursday, December 18, 1997, at 3:30 p.m. The
approximate mailing date of this proxy statement and accompanying form of proxy
is November 26, 1997.
The primary purpose of the Meeting is to permit the Fund's Partners to elect
eight Managing General Partners and ratify or reject the selection of KPMG Peat
Marwick LLP as independent public accountants.
Participating in the Meeting are holders of units of partnership interest
(collectively, the "Shares") of the Fund.
The Managing General Partners have fixed the close of business on October 31,
1997 as the record date (the "Record Date") for the determination of holders of
Shares of the Fund entitled to vote at the Meeting. Partners of the Fund on the
Record Date will be entitled to one vote per Share with respect to the proposals
submitted to the Partners of the Fund for each Share of the Fund then held, with
no Share having cumulative voting rights.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT TO A PARTNER
UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE FUND BY CALLING (800)
341-2929 OR BY WRITING TO THE FUND AT 2800 POST OAK BOULEVARD, HOUSTON, TEXAS
77056.
<PAGE> 7
At the close of business on October 31, 1997, there were issued and
outstanding 290,699 Shares of the Fund.
As of October 31, 1997, no person was known by the Fund to own beneficially 5%
or more of the Fund's outstanding Shares except as follows:
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OWNERSHIP AT PERCENTAGE
OF HOLDER OCTOBER 31, 1997 OWNERSHIP
---------------- ---------------- ----------
<S> <C> <C>
Comerica Bank Detroit & 45,045 15.50%
Edward Mardigian, Trustees
Helen Mardigian Trust
P.O. Box 75000
Detroit, MI 48275-0001
Richard F. McCarthy & 15,000 5.16%
Walter R. McCarthy, Trustees
Richard F. McCarthy Trust
540 Indian Mound St. E. 1-D
Wayzata, MN 55391-1745
George O. & Sidney M. Thorson 14,738 5.07%
A Partnership
P.O. Box 1847
Friday Harbor, WA 98250-1847
</TABLE>
VOTING
The vote of more than 50% of the Shares represented at the Meeting, assuming a
quorum is present, is required for the election of each Managing General Partner
(Proposal 1 below) and for the ratification of the selection of KPMG Peat
Marwick LLP as independent public accountants (Proposal 2 below).
The Managing General Partners recommend that you cast your vote:
- FOR ALL of the nominees for the Managing General Partners of the Fund listed
in the proxy statement.
- FOR the ratification of the selection of KPMG Peat Marwick LLP as
independent public accountants for the current fiscal year of the Fund
ending December 31, 1997.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon. Proxies received
prior to the Meeting on which no vote is indicated will be voted "for" the
proposal as to which it is entitled to vote. A Partner who abstains from voting
on any or all matters will be deemed present at the Meeting for quorum purposes,
but will not be deemed
2
<PAGE> 8
to have voted on the particular matter (or matters) as to which the Partner has
abstained. Similarly, in the event a nominee (such as a brokerage firm) holding
shares for beneficial owners votes on certain matters pursuant to discretionary
authority or instructions from beneficial owners, but with respect to one or
more other matters does not receive instructions from beneficial owners or does
not exercise discretionary authority (a so-called "non-vote"), the Shares held
by the nominee will be deemed present at the Meeting for quorum purposes but
will not be deemed to have voted on such other matters. A majority of the
outstanding Shares entitled to vote on a proposal must be present in person or
by proxy to have a quorum to conduct business at the Meeting.
Partners who execute proxies may revoke them at any time before they are voted
by filing with the Fund a written notice of revocation, by delivering a duly
executed proxy bearing a later date or by attending the Meeting and voting in
person.
The Fund knows of no business other than that mentioned in Proposals 1 and 2
of the Notice that will be presented for consideration at the Meeting. If any
other matters are properly presented, it is the intention of the persons named
on the enclosed proxy to vote proxies in accordance with their best judgment. In
the event a quorum is present at the Meeting but sufficient votes to approve any
of the proposals are not received, the persons named as proxies may propose one
or more adjournments of the Meeting to permit further solicitation of proxies
provided they determine that such an adjournment and additional solicitation is
reasonable and in the interest of Partners based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of affirmative votes then cast, the percentage of negative votes then cast, the
nature of the proposed solicitation activities and the nature of the reasons for
such further solicitation.
- ------------------------------------------------------------------------------
PROPOSAL 1: ELECTION OF MANAGING GENERAL PARTNERS
- ------------------------------------------------------------------------------
BACKGROUND
Van Kampen American Capital Asset Management, Inc. serves as investment
adviser to the Fund (the "Adviser"). The Adviser is a wholly-owned subsidiary of
Van Kampen American Capital, Inc. ("VKAC"). VKAC is a diversified asset
management company with more than two million retail investor accounts,
extensive capabilities for managing institutional portfolios and more than $60
billion under management or supervision. VKAC's more than 50 open-end and 37
closed end funds (including the Fund) and more than 2,500 unit investment trusts
are professionally distributed by leading financial advisers nationwide.
Generally, Van Kampen American Capital Distributors, Inc., a wholly-owned
subsidiary of VKAC, has been the sponsor of the funds mentioned above and acts
as distributor to such funds. VKAC is an indirect wholly-owned subsidiary of
Morgan Stanley, Dean Witter, Discover & Co. ("MSDWD")
3
<PAGE> 9
Prior to the Adviser becoming a subsidiary of VKAC in 1994, the Adviser was an
indirect wholly-owned subsidiary of The Travelers Inc. and was therefore also
affiliated with Smith Barney Mutual Funds Management, Inc. and PFS Distributors,
Inc., other subsidiaries of The Travelers Inc. In 1994, the Adviser served as
investment adviser to more than 30 open end funds, including the Fund, several
funds organized under the Common Sense Trust (the "Common Sense Funds") and to
three closed end investment companies (the "AC Closed End Funds") (collectively,
the Fund, the Common Sense Funds and the AC Closed End Funds are referred to as
the "Fund Complex"). In 1994, other investment advisory subsidiaries of VKAC
served as investment adviser to more than 20 open end funds and more than 30
closed end funds.
The Common Sense Funds are currently advised by the Adviser and distributed by
PFS Distributors, Inc. In addition, the Common Sense Trust International Equity
Fund is subadvised by Smith Barney Mutual Funds Management Inc. Pursuant to
recent transactions, the Adviser agreed to assign those advisory agreements for
the Common Sense Funds to Smith Barney Mutual Funds Management Inc., subject to
the approval of the Common Sense Funds' board of trustees and the Common Sense
Funds' shareholders.
NOMINATION OF MANAGING GENERAL PARTNERS
Each of the current Managing General Partners serves as a Managing General
Partner for the Fund and, together with other individuals, serves as a trustee
to the AC Closed End Funds and as a trustee for the Common Sense Funds. In
connection with the events described above, the Fund and the AC Closed End Funds
would remain part of the VKAC family of funds and continue to be advised and
serviced by the Adviser and its affiliates. Alternatively, the Common Sense
Funds would become a part of the Smith Barney-related family of funds. After
meetings discussing these proposed transactions, the Common Sense trustees
approved the advisory changes for the Common Sense Funds and approved submitting
such changes to shareholders of the Common Sense Funds.
In light of these events, the Managing General Partners have discussed the
impacts, if any, on the Fund and the Fund's Partners of these changes. The
Managing General Partners also discussed, among other things, the operating
efficiency and effectiveness of boards in general and as they may be impacted by
the proposed changes, the relationships between VKAC and Smith Barney-related
entities, the understanding and capabilities of the Adviser and other service
providers and the impact on the management companies of multiple boards for
similar funds. The Managing General Partners reviewed the background and
experience of VKAC. Currently, VKAC serves as investment adviser to 37 closed
end funds including the AC Closed End Funds; each of the other 34 closed end
funds (the "VKAC Closed End Funds") has a board of trustees comprised of the
4
<PAGE> 10
same seven members. The Managing General Partners reviewed the qualifications,
knowledge and experience of the trustees of the VKAC Closed End Funds.
Based on the foregoing, the Managing General Partners considered it in the
best interests of the Partners of the Fund to nominate each nominee listed below
as a Managing General Partner of the Fund. As described in the biographical
information below, each nominee (except Dr. Muller) is a trustee of the VKAC
Closed End Funds and two open end investment companies advised by Van Kampen
American Capital Management, Inc. ("Management, Inc.") and a nominee for the AC
Closed End Funds. Dr. Muller is a trustee of the AC Closed End Funds and the
Common Sense Funds and a nominee for the VKAC Closed End Funds and two open end
investment companies advised by Management, Inc. If elected, each of the eight
nominees will become a Managing General Partner of the Fund and a trustee of the
AC Closed End Funds, the VKAC Closed End Funds and two open end investment
companies advised by Management, Inc. Dr. Muller will resign as a trustee of the
Common Sense Trust. The Managing General Partners are resigning from the boards
of the Fund and the AC Closed End Funds and will remain as trustees of the
Common Sense Trust.
Eight Managing General Partners are to be elected, each to serve until the
next annual meeting of Partners and until a successor is elected and shall
qualify. If a Managing General Partner is not reelected, he shall be deemed to
have withdrawn from the partnership as a Managing General Partner under the
terms of the Agreement. Any newly elected Managing General Partner will be
required to acquire Shares of the Fund having a net asset value of at least
$5,000 on or before his or her admission as a Managing General Partner.
It is the intention of the persons named in the accompanying form of proxy to
nominate and to vote such proxy for the election of the persons named below, or
if any such persons shall be unable to serve, to vote for the election of such
other person or persons as shall be determined by the persons named in the proxy
in accordance with their judgment. The Fund, however, has no reason to believe
that it will be necessary to designate a substitute nominee.
GENERAL INFORMATION
The following schedule sets forth certain information regarding each nominee
for election as Managing General Partner. All nominees have consented to being
named in this proxy statement and have agreed to serve if elected.
5
<PAGE> 11
INFORMATION REGARDING NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OR EMPLOYMENT IN PAST 5 YEARS
--------------------- -----------------------------
<S> <C>
David C. Arch..................... Mr. Arch is Chairman and Chief Executive
1800 Swift Drive Officer of Blistex Inc., a consumer health
Oak Brook, IL 60523 care product's manufacturer. Director of
Age: 52 Elmhurst College and the Illinois
Manufacturers' Association. Mr. Arch is also
a trustee of each of the VKAC Closed End
Funds and two open end investment companies
advised by Management, Inc. and is a nominee
for trustee of the AC Closed End Funds.
Rod Dammeyer...................... Mr. Dammeyer is Managing Director of EGI
Two North Riverside Plaza (Equity Group Investments, Inc.) Corporate
Suite 1950 Investments, a division of Equity Group
Chicago, IL 60606 Investments, Inc., a company that makes
Age: 57 private equity investments in other
companies, and President, Chief Executive
Officer and Director of Anixter
International Inc., a value-added provider
of integrated networking and cabling
solutions that support business information
and network infrastructure requirements
(employed by Anixter since 1985). Prior to
1997, Mr. Dammeyer was President, Chief
Executive Officer and a Director of Great
American Management & Investment, Inc., a
diversified manufacturing company. He is
also a Director of Teletech Holdings Inc.,
Lukens, Inc., Falcon Building Products,
Inc., Revco D.S., Inc., Jacor
Communications, Inc., Capsure Holdings
Corp., IMC Global Inc., Antec Corporation
and a member of the Chase Manhattan
Corporation National Advisory Board. Mr.
Dammeyer was previously a Director of Santa
Fe Energy Resources, Inc., Lomas Financial
Corporation, Santa Fe Pacific Corporation,
Q-Tel, S.A. de C.V. and Servicios
Financieros Quadrum, S.A. Mr. Dammeyer is
also a trustee of each of the VKAC Closed
End Funds and two open end investment
companies advised by Management, Inc. and is
a nominee for trustee of the AC Closed End
Funds.
Howard J Kerr..................... Mr. Kerr is President and Chief Executive
736 North Western Ave. Officer of Pocklington Corporation, Inc., an
P.O. Box 317 investment holding company. Mr. Kerr is also
Lake Forest, IL 60045 a Director of Canbra Foods, Ltd., a Canadian
Age: 62 oilseed crushing, refining, processing and
packaging operation.
</TABLE>
6
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OR EMPLOYMENT IN PAST 5 YEARS
--------------------- -----------------------------
<S> <C>
Mr. Kerr is also a trustee of each of the
VKAC Closed End Funds and two open end
investment companies advised by Management,
Inc. and is a nominee for trustee of the AC
Closed End Funds.
Dennis J. McDonnell*.............. Mr. McDonnell is President, Chief Operating
One Parkview Plaza Officer and a Director of Van Kampen
Oakbrook Terrace, IL 60181 American Capital Advisory Corp. ("Advisory
Age: 55 Corp."), the Adviser, Van Kampen American
Capital Advisors, Inc. and Management, Inc.
He is also an Executive Vice President and
Director of VK/AC Holding, Inc. and VKAC.
Mr. McDonnell is President and Director of
Van Kampen Merritt Equity Advisors Corp. He
is President and a trustee of the VKAC
Closed End Funds and two open end investment
companies advised by Management, Inc.,
President of open end investment companies
advised by the Adviser and Advisory Corp.
and a nominee for trustee of the AC Closed
End Funds. Prior to September of 1996, Mr.
McDonnell was Chief Executive Officer and
Director of MCM Group, Inc., McCarthy,
Crisanti and Maffei, Inc. and Chairman and
Director of MCM Asia Pacific Company,
Limited and MCM (Europe) Limited. Prior to
July of 1996, Mr. McDonnell was President,
Chief Operating Officer and Trustee of VSM
Inc. and VCJ Inc. Mr. McDonnell has been an
Executive Vice President of the Fund since
1995.
Steven Muller, Ph.D............... Dr. Muller is Chairman of The 21st Century
President Emeritus Foundation (public affairs). He is President
The Johns Hopkins University Emeritus of The Johns Hopkins University. He
Suite 711 is also a Director of Beneficial Corporation
1619 Massachusetts Avenue, N.W. (bank holding company) and Millipore
Washington, D.C. 20036 Corporation (bio- technology). Prior to May,
Age: 70 1997, Dr. Muller was a Director of BT Alex.
Brown & Sons (investment banking). Dr.
Muller is currently a Trustee of the Common
Sense Trust and a nominee for election as
trustee of each of the VKAC Closed End
Funds, two open end investment companies
advised by Management, Inc. and the AC
Closed End Funds.
Theodore A. Myers................. Mr. Myers is a Senior Financial Advisor of
550 Washington Avenue Qualitech Steel Corporation, a manufacturer
Glencoe, IL 60022 of special quality bar products, as well as
Age: 67 iron carbide (a steel scrap substitute). Mr.
Myers is a Director
</TABLE>
7
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OR EMPLOYMENT IN PAST 5 YEARS
--------------------- -----------------------------
<S> <C>
of COVA Series Trust (an open end investment
company). He is also a member of the Arthur
Andersen Chief Financial Officer Advisory
Committee. Prior to 1997, Mr. Myers was a
Director of McLouth Steel, and prior to July
of 1996, Mr. Myers was an executive Vice
President and Chief Financial Officer of
Qualitech Steel Corporation. Prior to
August, 1993, Mr. Myers was Senior Vice
President, Chief Financial Officer and a
Director of Food Brands America (formerly
known as Doskocil Companies, Inc.), a food
processing and distribution company. Mr.
Myers is also a trustee of each of the VKAC
Closed End Funds and two open end investment
companies advised by Management, Inc. and is
a nominee for trustee of the AC Closed End
Funds.
Hugo F. Sonnenschein.............. Mr. Sonnenschein is President of the
5801 South Ellis Avenue University of Chicago. Mr. Sonnenschein is a
Suite 502 member of the Board of Trustees of the
Chicago, IL 60637 University of Rochester and a member of its
Age: 57 investment committee. Prior to July, 1993,
Mr. Sonnenschein was Dean of the School of
Arts and Sciences at the University of
Pennsylvania. Mr. Sonnenschein is a member
of the National Academy of Sciences and a
fellow of the American Academy of Arts and
Sciences. Mr. Sonnenschein is also a trustee
of each of the VKAC Closed End Funds and two
open end investment companies advised by
Management, Inc. and is a nominee for
trustee of the AC Closed End Funds.
Wayne W. Whalen................... Mr. Whalen is a partner in the law firm of
333 West Wacker Drive Skadden, Arps, Slate, Meagher & Flom
Chicago, IL 60606 (Illinois), legal counsel to the VKAC Closed
Age: 58 End Funds and certain open end investment
companies advised by the Adviser, Advisory
Corp. and Management, Inc. Mr. Whalen is
also a trustee of each of the VKAC Closed
End Funds, a director/trustee of open end
investment companies advised by the Adviser,
Advisory Corp. and Management, Inc. and is a
nominee for trustee of the AC Closed End
Funds.
</TABLE>
- ------------------------------------------------------------------------------
* Mr. McDonnell is an "interested person" (within the meaning of Section
2(a)(19) of the 1940 Act) of the Adviser and each Fund by reason of his
position with the Adviser.
8
<PAGE> 14
Mr. McDonnell owns preferred shares in MSAM Holdings II, Inc., a wholly-owned
subsidiary of MSDWD, which in turn are exchangeable for shares of MSDWD and has
options to purchase shares of MSDWD. In addition, Mr. McDonnell has entered into
an employment contract with VKAC which terminates on February 17, 1998.
OFFICERS OF THE FUND
The following information relates to the officers of the Fund who are not
nominees. Each officer also serves in the same capacity for all or a number of
the other investment companies advised by the Adviser or an affiliate of the
Adviser. The officers of the Fund serve for one year or until their respective
successors are chosen and qualified. The Fund's officers receive no compensation
from the Fund but may also be officers of the Adviser or officers of affiliates
of the Adviser and receive compensation in such capacities.
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- --------------------- ----------------- ---------------------
<S> <C> <C>
Peter Hegel.......... Vice President Executive Vice President of Advisory
One Parkview Plaza since 1996 Corp., the Adviser, Management, Inc.
Oakbrook Terrace, and Van Kampen American Capital
IL 60181 Advisors, Inc. Prior to July of 1996,
Age: 41 Director of VSM Inc. Prior to September
of 1996, Director of McCarthy, Crisanti
& Maffei, Inc. Vice President of the
VKAC Closed End Funds, the AC Closed
End Funds and open end investment
companies advised by the Adviser,
Advisory Corp. and Management, Inc.
Ronald A. Nyberg..... Vice President, Executive Vice President, General
One Parkview Plaza Principal Legal Counsel, Secretary and Director of VKAC
Oakbrook Terrace, Officer and and VK/AC Holding, Inc. Executive Vice
IL 60181 Secretary President, General Counsel, Assistant
Age: 44 since 1995 Secretary and Director of the Adviser,
Advisory Corp., Van Kampen American
Capital Advisors, Inc., Management,
Inc., Van Kampen American Capital
Distributors, Inc., Van Kampen American
Capital Exchange Corporation, American
Capital Contractual Services, Inc., Van
Kampen American Capital Trust Company,
VK/AC System, Inc., Van Kampen American
Capital Insurance Agency of Illinois,
Inc. and Van Kampen American Capital
Recordkeeping Services, Inc. Executive
Vice President, General Counsel and
Assistant Secretary of ACCESS Investor
Services, Inc. Executive Vice
President, General Counsel and Director
of Van Kampen Merritt Equity Advisors
Corp. Prior to July of 1996, Executive
Vice President and General Counsel of
VSM Inc. and VCJ Inc. Prior to
September of 1996, General Counsel of
McCarthy, Crisanti & Maffei, Inc. Prior
to June 1997, Director of ICI Mutual
Insurance Co., a provider of insurance
to members of the Investment Company
Institute. Vice President and Secretary
of the VKAC Closed End Funds, the AC
Closed End Funds and open end
</TABLE>
9
<PAGE> 15
<TABLE>
<S> <C> <C>
Alan T. Sachtleben.... Chief Investment Executive Vice President of the
2800 Post Oak Blvd. Officer Adviser, Advisory Corp., Management,
Houston, TX 77056 since 1987 Inc. and Van Kampen American Capital
Age: 55 Advisors, Inc. Vice President of the AC
Closed End Funds, open end investment
companies advised by the Adviser and
Advisory Corp.
Paul R. Wolkenberg.... Vice President Executive Vice President and a Director
2800 Post Oak Blvd. since 1990 of VKAC Holding, Inc. and VKAC.
Houston, TX 77056 Executive Vice President of Van Kampen
Age: 53 American Capital Distributors, Inc. and
the Adviser. President and a Director
of Van Kampen American Capital Trust
Company and ACCESS Investor Services,
Inc. President, Chief Operating Officer
and a Director of Van Kampen American
Capital Recordkeeping Services, Inc.
Vice President of the AC Closed End
Funds and open end investment companies
advised by the Adviser and Advisory
Corp.
Edward C. Wood III.... Vice President Senior Vice President of the Adviser,
One Parkview Plaza and Chief Advisory Corp. and Management, Inc.
Oakbrook Terrace, IL Financial Vice President and Chief Financial
60181 Officer Officer of the VKAC Closed End Funds,
Age: 41 since 1996 the AC Closed End Funds and open end
investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
Curtis W. Morell...... Vice President Senior Vice President of the Adviser
2800 Post Oak Blvd. and Chief and Advisory Corp. Vice President and
Houston, TX 77056 Accounting Chief Accounting Officer of the VKAC
Age: 51 Officer Closed End Funds, the AC Closed End
since 1976 Funds and open end investment companies
advised by the Adviser, Advisory Corp.
and Management, Inc.
John L. Sullivan...... Treasurer First Vice President of the Adviser and
One Parkview Plaza since 1996 Advisory Corp. Treasurer of the VKAC
Oakbrook Terrace, Closed End Funds, the AC Closed End
IL 60181 Funds and open end investment companies
Age: 42 advised by the Adviser, Advisory Corp.
and Management, Inc.
Tanya M. Loden........ Financial Vice President of the Adviser and
2800 Post Oak Blvd. Officer Advisory Corp. Controller of the VKAC
Houston, TX 77056 since 1991 Closed End Funds, the AC Closed End
Age: 38 Funds and open end investment companies
advised by the Adviser, Advisory Corp.
and Management, Inc.
</TABLE>
10
<PAGE> 16
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- --------------------- ----------------- ---------------------
<S> <C> <C>
Steven M. Hill........ Assistant Assistant Vice President of the Adviser
One Parkview Plaza Treasurer and Advisory Corp. Assistant Treasurer
Oakbrook Terrace, since 1996 of the VKAC Closed End Funds, the AC
IL 60181 Closed End Funds and open end
Age: 33 investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
Michael Robert Assistant Assistant Vice President of the Adviser
Sullivan............ Controller and Advisory Corp. Assistant Controller
2800 Post Oak Blvd. since 1996 of the VKAC Closed End Funds, the AC
Houston, TX 77056 Closed End Funds and open end
Age: 64 investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
Scott E. Martin....... Legal Officer Senior Vice President, Deputy General
One Parkview Plaza and Assistant Counsel and Assistant Secretary of VKAC
Oakbrook, Secretary and VK/AC Holding, Inc. Senior Vice
IL 60181 since 1996 President, Deputy General Counsel and
Age: 41 Secretary of Van Kampen American
Capital Distributors, Inc., the
Adviser, Advisory Corp., Management,
Inc., Van Kampen American Capital
Advisors, Inc., ACCESS Investor
Services, Inc., Van Kampen American
Capital Insurance Agency of Illinois,
Inc., VK/AC System, Inc., Van Kampen
American Capital Recordkeeping
Services, Inc., Van Kampen American
Capital Exchange Corporation, American
Capital Contractual Services, Inc. and
Van Kampen Merritt Equity Advisors
Corp. Prior to April of 1997, Senior
Vice President, Deputy General Counsel
and Secretary of Van Kampen American
Capital Services, Inc. and Van Kampen
Merritt Holdings Corp. Prior to
September of 1996, Deputy General
Counsel and Secretary of McCarthy,
Crisanti & Maffei, Inc. Prior to July
of 1996, Senior Vice President, Deputy
General Counsel and Secretary of VSM
Inc. and VCJ Inc. Assistant Secretary
of the VKAC Closed End Funds, the AC
Closed End Funds and open end
investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
Weston B. Wetherell... Legal Officer Vice President, Associate General
One Parkview Plaza and Assistant Counsel and Assistant Secretary of
Oakbrook, IL 60181 Secretary VKAC, Van Kampen American Capital
Age: 41 since 1996 Distributors, Inc., the Adviser,
Advisory Corp., Management, Inc. and
Van Kampen American Capital Advisors,
Inc. Prior to September 1996, Assistant
Secretary of McCarthy, Crisanti &
Maffei, Inc. Assistant Secretary of the
VKAC Closed End Funds, the AC Closed
End Funds and open end investment
companies advised by the Adviser,
Advisory Corp. and Management, Inc.
</TABLE>
11
<PAGE> 17
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- --------------------- ----------------- ---------------------
<S> <C> <C>
Nicholas Dalmaso...... Legal Officer Vice President, Assistant Secretary and
One Park Plaza and Assistant Senior Attorney of VKAC, the Adviser,
Oakbrook Terrace, Secretary Advisory Corp., Van Kampen American
IL 60181 since 1996 Capital Distributors, Inc., Van Kampen
Age: 32 American Capital Advisors, Inc. and
Management, Inc. Assistant Secretary of
the VKAC Closed End Funds, the AC
Closed End Funds and open end
investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
Huey P. Falgout, Legal Officer Assistant Vice President and Senior
Jr.................. and Assistant Attorney of VKAC. Assistant Vice
2800 Post Oak Blvd. Secretary President and Assistant Secretary of
Houston, TX 77056 since 1996 the Adviser, Advisory Corp., ACCESS
Age: 34 Investor Services, Inc., American
Capital Contractual Services, Inc.,
Management, Inc., Van Kampen American
Capital Exchange Corporation, Van
Kampen American Capital Advisors, Inc.
and Van Kampen American Capital
Distributors, Inc. Assistant Secretary
of the VKAC Closed End Funds, the AC
Closed End Funds and open end
investment companies advised by the
Adviser, Advisory Corp. and Management,
Inc.
</TABLE>
REMUNERATION PAID TO MANAGING GENERAL PARTNERS
No remuneration is paid by a Fund to a Managing General Partner who is an
affiliated person of the Adviser. Managing General Partners who are not
affiliated with the the Adviser are compensated by the Fund and reimbursed for
out-of-pocket expenses. A Managing General Partner is currently compensated at
the annual rate of $5,000 plus $750 per meeting of the Managing General Partners
and $500 per committee meeting attended and is reimbursed for out-of-pocket
expenses. The Managing General Partners also receive compensation for serving in
similar capacities for other funds advised by the Adviser.
As of October 31, 1997, all officers and Managing General Partners of the Fund
as a group owned, directly or beneficially, less than 1% of the outstanding
Shares of the Fund.
12
<PAGE> 18
The Fund has adopted a retirement plan under which a Managing General Partner
who has received compensation from the Fund prior to such Managing General
Partner's retirement, has at least 10 years of service (including years of
service prior to the adoption of the retirement plan) and retires at or after
attaining the age of 67 is eligible to receive a retirement benefit for each of
the ten years or a discounted one-time lump sum investment benefit following
such retirement from the Fund. The retirement benefit payable per year is based
upon the highest total annual compensation received by the Managing General
Partner in any of the three calendar years preceding retirement. A Managing
General Partner with at least five but less than ten years of service at
retirement is eligible to receive a prorated reduced benefit. Finally, a
Managing General Partner may receive retirement benefits under the Fund's
retirement plan in the event that such Managing General Partner retires prior to
age 67 after five years of service if the Nominating Committee of the Fund
determines that the earlier retirement date is appropriate. Under the
circumstances surrounding the decision to resign, the Nominating Committee of
the Fund has determined that the early retirement of those Managing General
Partners under the age of 67 as of December 31, 1997 is appropriate under the
circumstances and that each retiring Managing General Partner should receive
retirement benefits under the Fund's retirement plan. In connection with their
resignation from service as Managing General Partner of the Fund, each resigning
Trustee will receive the vested portion of their retirement benefits under the
Fund's retirement plan (if any). In addition, in recognition of their years of
service, the Adviser or its affiliates will pay to each resigning Managing
General Partner an amount equal to all or a portion of the unvested portion of
their retirement benefits. In connection therewith, Messrs. Carlton and Gross
will each receive $45,000 upon their resignations as Managing General Partners
of the Fund, to be paid by the Adviser or its affiliates. Mr. Shepard will
receive $74,602 upon his retirement as a Managing General Partner of the Fund,
$38,602 of such amount to be paid by the Fund pursuant to its retirement plan
and $36,000 to be paid by the Adviser or its affiliates. Payments will be made
on or about January 1, 1998. Mr. Powell will not receive any compensation due to
his affiliation with the Fund and the Adviser.
Additional information regarding compensation and benefits paid by the Fund
and the related Funds in the Fund Complex is set forth in Annex A.
The nominees have indicated that they are currently in the process of
reviewing and seeking to adopt a comprehensive compensation and benefits package
for the VKAC Closed End Funds, the AC Closed End Funds, the two open end
investment companies advised by Management, Inc. and the Fund. Currently, each
trustee of a VKAC Closed End Fund not affiliated with the fund's investment
adviser receives an annual retainer of $2,500 and a meeting fee of $250 per
meeting from each fund. Each VKAC Closed End Fund has a deferred compensation
plan allowing trustees to defer receipt of all or a portion of their trustee
compensation and the deferred
13
<PAGE> 19
amounts earn a rate of return determined by reference to the VKAC Closed End
Fund(s) selected by such trustee. Each VKAC Closed End Fund has a retirement
plan for its non-affiliated trustees which provides that each trustee that
retires with ten or more years of service (including years of service prior to
the plan's adoption) is eligible for a retirement benefit payable annually for
the ten-year period following such trustee's retirement equal to the annual
retainer in the year such trustee resigns. Under certain conditions, reduced
benefits are available for early retirement. For the calendar year ended
December 31, 1996, each non-affiliated trustee of the VKAC Closed End Funds
earned aggregate compensation (prior to deferral) from the VKAC Closed End
Funds' complex equal to approximately $138,500. For the calendar year ended
December 31, 1996, Mr. Whalen, who serves as a director/trustee of other
investment companies in the VKAC family of funds, earned aggregate compensation
from funds advised by the Adviser and its affiliates, including the VKAC Closed
End Funds, of approximately $243,400.
STANDING COMMITTEES
The Managing General Partners met seven times during the last fiscal year.
During such fiscal year all Managing General Partners attended at least 75% of
the aggregate of (a) the total number of meetings of the Board and (b) the total
number of meetings held by all committees of the Board on which they served.
The Fund has an Audit Committee which makes recommendations to the Managing
General Partners concerning the selection of the Fund's independent public
accountants, reviews with such independent public accountants the scope and
results of the annual audits and considers any comments which the independent
public accountants may have regarding the Fund's financial statements or books
of account. The committee currently consists of Messrs. Carlton, Gross and
Shepard. The Committee held two meetings during the last fiscal year.
The Fund has a Nominating Committee, the functions of which are (a) selecting
and recommending to the Managing General Partners nominees for election as
Managing General Partners and (b) proposing and recommending to the Managing
General Partners the terms of compensation for Managing General Partners. The
committee currently consists of Messrs. Carlton, Gross and Shepard. The
committee held three meetings during the last fiscal year. The committee is
prepared to review nominations for Managing General Partners from Partners in
written communications addressed to the committee at the Fund's headquarters,
although the committee expects to be able to identify from its own resources an
ample number of qualified candidates.
If the nominees listed for election as Managing General Partners of the Fund
are elected by the partners at the Meeting, they will replace the Managing
General Partners currently serving on the above-named committees. Committee
assignments are expected to be decided by newly-elected Managing General
Partners after the Meeting.
14
<PAGE> 20
PARTNER APPROVAL
The vote of more than 50% of the shares represented at the Meeting, assuming a
quorum is present, is required to elect each nominee as a Managing General
Partner of the Fund. THE MANAGING GENERAL PARTNERS OF THE FUND RECOMMEND A VOTE
"FOR" ALL OF THE NOMINEES.
- ------------------------------------------------------------------------------
PROPOSAL 2: RATIFICATION OF INDEPENDENT PUBLIC
ACCOUNTANTS
- ------------------------------------------------------------------------------
The Managing General Partners of the Fund, including a majority of the Fund's
Managing General Partners who are not "interested persons" of the Fund (as
defined by the 1940 Act), have selected the firm of KPMG Peat Marwick LLP,
independent public accountants, to examine the financial statements for the
current fiscal year of the Fund. The Fund knows of no direct or indirect
financial interest of such firm in the Fund. Such appointment is subject to
ratification or rejection by the Partners of the Fund. Unless a contrary
specification is made, the accompanying proxy will be voted in favor of
ratifying the selection of such accountants.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting and should be available to respond to questions from Partners.
PARTNER APPROVAL
The vote of more than 50% of the shares represented at the Meeting, assuming a
quorum is present, is required to ratify the selection of the independent public
accountants. THE MANAGING GENERAL PARTNERS RECOMMEND A VOTE "FOR" RATIFICATION
OF THIS PROPOSAL.
- ------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------
The Fund will bear the expense of preparing, printing and mailing the enclosed
form of proxy, the accompanying Notice and this Proxy Statement.
In order to obtain the necessary quorum at the Meeting, additional
solicitation may be made by mail, telephone, telegraph or personal interview by
representatives of the Fund, the Adviser, its affiliates or First Data Investors
Services Group, a solicitation firm located in Boston, Massachusetts that has
been engaged to assist in proxy solicitation at an estimated cost of
approximately $3,000.
- ------------------------------------------------------------------------------
PARTNER PROPOSALS
- ------------------------------------------------------------------------------
To be considered for presentation at a Partners' meeting, rules promulgated by
the SEC require that, among other things, a shareholder's proposal must be
received at the offices of the Fund a reasonable time before a solicitation is
made. Timely submission of a proposal does not necessarily mean that such
proposal will be included. Any Partner who wishes to submit proposals for
consideration at a
15
<PAGE> 21
meeting of the Fund's Partners should send such proposal to the Fund at 2800
Post Oak Boulevard, Houston, Texas 77056.
- ------------------------------------------------------------------------------
GENERAL
- ------------------------------------------------------------------------------
Management of the Fund does not intend to present and does not have reason to
believe that others will present any other items of business at the Meeting.
However, if other matters are properly presented to the Meeting for a vote, the
proxies will be voted upon such matters in accordance with the judgment of the
persons acting under the proxies.
A list of Partners of the Fund entitled to be present and vote at the Meeting
will be available at the offices of the Fund at 2800 Post Oak Boulevard,
Houston, Texas 77056 or VKAC at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, for inspection by any Partner during regular business hours for ten days
prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting for the Fund may necessitate
adjournment and may subject the Fund to additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
RONALD A. NYBERG,
Vice President and Secretary
November 26, 1997
16
<PAGE> 22
ANNEX A
1996 COMPENSATION TABLE*
<TABLE>
<CAPTION>
PENSION OR RETIREMENT
BENEFITS ACCRUAL PER
YEAR AGGREGATE COMPENSATION FUND AS PART OF
DIRECTOR/TRUSTEE ELECTED FROM THE FUND(1) FUND EXPENSES(2)
---------------- ------- ---------------------- ---------------------
<S> <C> <C> <C>
Dr. Donald M. Carlton......................... 1996 $6,000 --
Stephen R. Gross.............................. 1996 6,000 --
Dr. Norman Hackerman(4)....................... 1979 2,500 --
Dr. F. Robert Paulsen(4)...................... 1979 9,000 --
Alan B. Shepard, Jr. ......................... 1992 7,250 --
Miller Upton(4)............................... 1991 1,440 --
<CAPTION>
TOTAL(3)
COMPENSATION
FROM THE FUND
ESTIMATED ANNUAL BENEFITS COMPLEX PAID
DIRECTOR/TRUSTEE PER FUND UPON RETIREMENT TO TRUSTEES
---------------- ------------------------- -------------
<S> <C> <C>
Dr. Donald M. Carlton......................... $ (5) $46,750
Stephen R. Gross.............................. (5) 52,750
Dr. Norman Hackerman(4)....................... 6,750 13,500
Dr. F. Robert Paulsen(4)...................... 9,000 59,750
Alan B. Shepard, Jr. ......................... (5) 47,750
Miller Upton(4)............................... 6,750 13,500
</TABLE>
- ---------------
* The compensation shown for the Fund and the total compensation shown for the
Fund Complex is for the calendar year ended December 31, 1996. Mr. Powell is
not compensated for his service as a Managing General Partner because of his
affiliation with the Adviser.
(1) The Managing General Partners of the Fund instituted a Retirement Plan
effective April 1, 1996. For the current Managing General Partners not
affiliated with the Adviser, the annual retirement benefit payable per year
for the ten-year period after such Managing General Partner's retirement is
based upon the highest total annual compensation received in any of the
three calendar years preceding retirement. Managing General Partners with at
least five but less than ten years of service (including years of service
prior to the plan's adoption) at retirement will receive a prorated reduced
benefit. Under the Plan, for the Managing General Partners retiring on April
1, 1996, the annual retirement benefit payable per year for the ten-year
period after such Managing General Partner's retirement is equal to 75% of
the total compensation received from the Fund during the 1995 calendar year.
Those resigning Managing General Partners, as described in this proxy
statement, will receive the retirement benefits from the Fund and the
Adviser as described in footnote 5 below.
(2) Retirement benefits accrued per Fund as part of Fund expenses are $31,719.
(3) Reflects eleven investment companies in the Fund complex.
(4) Messrs. Hackerman and Upton retired as Managing General Partners on April 1,
1996. Mr. Paulsen retired as a Managing General Partner on April 10, 1997.
(5) Under the terms of the retirement plan, Mr. Shephard is entitled to $38,602,
which represents a discounted lump sum payment of his vested retirement
benefits to be paid in lieu of receiving benefits over 10 years. In
connection with their years of service and retirement benefits forgone,
Messrs. Carlton, Gross and Shephard will also receive $45,000, $45,000 and
$36,000, respectively, to be paid by the Adviser or its affiliates.
A-1
<PAGE> 23
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
Emerging Growth Fund
Enterprise Fund
Growth Fund
Pace Fund
Growth & Income
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal Income Fund
Municipal Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
MORGAN STANLEY
FUND, INC.
Aggressive Equity Fund
American Value Fund
Asian Growth Fund
Emerging Markets Fund
Global Equity Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
U.S. Real Estate Fund
Value Fund
Worldwide High Income Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00
p.m. Central time at 1-800-341-2911 for Van Kampen American Capital funds or
Morgan Stanley retail funds.
<PAGE> 24
EXCHANGE
<PAGE> 25
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL
SAVE THE EXPENSE OF ADDITIONAL MAILINGS.
Please be sure to sign and date this Proxy.
Please return the proxy card in the enclosed envelope.
-Please fold and detach card at perforation before mailing-
VAN KAMPEN AMERICAN CAPITAL EXCHANGE FUND, FOR THE ANNUAL MEETING OF
A CALIFORNIA LIMITED PARTNERSHIP PARTNERS TO BE HELD ON
PROXY SOLICITED BY THE MANAGING GENERAL PARTNERS DECEMBER 18, 1997
The undersigned, revoking previous proxies, hereby appoint(s) Ronald A.
Nyberg, Weston B. Wetherell and Edward C. Wood, III or any one of them,
proxies, with full power of substitution, to vote all units of partnership
interest of the Fund which the undersigned is entitled to vote at the Annual
Meeting of Partners of the Fund to be held at the offices of Van Kampen
American Capital, Inc., One Parkview Plaza, Oakbrook Terrace, Illinois 60181,
on Thursday December 18, 1997 at 3:30 p.m., and at any adjournments thereof.
All powers may be exercised by a majority of said proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that one. This proxy
shall be voted as recommended by the Managing General Partners, unless
otherwise indicated on the reverse side, and in their discretion upon such
other matters as may properly come before the Meeting. Receipt of the Notice
of the Meeting and the accompanying Proxy Statement is hereby acknowledged.
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date ______________________, 1997
NOTE: Please sign exactly as your
name appears on this Proxy. When
signing in a fiduciary capacity,
such as executor, administrator,
trustee, attorney, guardian, etc.,
please so indicate. Corporate and
partnership proxies should be
signed by an authorized person
indicating the person's title.
----------------------------------
| |
| |
----------------------------------
Signature(s) (Title(s) if applicable)
WHERE UNITS OF PARTNERSHIP INTEREST
ARE REGISTERED WITH JOINT OWNERS,
ALL JOINT OWNERS SHOULD SIGN.
<PAGE> 26
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL
SAVE THE EXPENSE OF ADDITIONAL MAILINGS.
Please return the proxy card in the enclosed envelope.
-Please fold and detach card at perforation before mailing-
Please refer to the Proxy Statement discussion of the following matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said proxies shall vote in accordance with their best
judgment.
THE MANAGING GENERAL PARTNERS RECOMMEND A VOTE FOR THE FOLLOWING:
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW, AS SHOWN, USING BLUE OR
BLACK INK OR DARK PENCIL. DO NOT USE RED INK. [ ]
<TABLE>
<S> <C> <C> <C>
FOR FOR ALL
1. To vote to elect eight managing general partners ALL WITHHOLD EXCEPT
to serve until their respective successors are
duly elected and qualified.
David C. Arch, Rod Dammeyer, [ ] [ ] [ ]
Howard J Kerr, Dennis J. McDonnell, Steven
Muller, Theodore A. Myers, Hugo F. Sonnenschein,
Wayne W. Whalen
INSTRUCTION: to withhold authority to vote for one or
more nominees, check FOR ALL EXCEPT and write the
nominee's name(s) on the line below.
- -----------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the selection of KPMG Peat Marwick LLP
as independent public accountants. [ ] [ ] [ ]
</TABLE>
