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VAN KAMPEN AMERICAN CAPITAL
RESERVE FUND
SUPPLEMENT DATED SEPTEMBER 28, 1996,
TO THE PROSPECTUS DATED SEPTEMBER 28, 1996
On June 24, 1996, VK/AC Holding, Inc. announced it had entered into an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings II,
Inc. and MSAM Acquisition Inc., pursuant to which MSAM Acquisition Inc. will be
merged with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. will be the
surviving corporation. Van Kampen American Capital, Inc. is a wholly owned
subsidiary of VK/AC Holding, Inc. The Fund's investment adviser, Van Kampen
American Capital Asset Management, Inc. (the "Adviser"), is a wholly owned
subsidiary of Van Kampen American Capital, Inc.
The proposed transaction may be deemed to cause an assignment, within the
meaning of the Investment Company Act of 1940, of the investment advisory
agreement between the Adviser and the Fund. Accordingly, the completion of the
transaction is contingent upon, among other things and subject to certain
conditions, the approval of both the Board of Trustees of the Fund and the
shareholders of the Fund of a new investment advisory agreement between the Fund
and the Adviser. The Fund's Board of Trustees approved the new investment
advisory agreement on July 25, 1996, and called a special meeting of
shareholders to consider the new investment advisory agreement, which meeting
will be held on October 25, 1996. The record date for the meeting was August 27,
1996. Management of the Fund anticipates that investment advisory fees under the
new investment advisory agreement will be in the same amount as those paid under
the current investment advisory agreement between the Fund and the Adviser.
MSAM Acquisition Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.
which, in turn, is a wholly owned subsidiary of Morgan Stanley Group Inc.
Subject to a number of conditions being met, it is currently anticipated that
the closing of the transaction will occur on or about October 31, 1996.
Thereafter, VK/AC Holding, Inc. and the Adviser will be indirect subsidiaries of
Morgan Stanley Group Inc.
Morgan Stanley Group Inc. and various of its directly or indirectly owned
subsidiaries, including Morgan Stanley & Co. Incorporated, a registered broker-
dealer and investment adviser, and Morgan Stanley International, are engaged in
a wide range of financial services. Their principal businesses include
securities underwriting, distribution and trading; merger, acquisition,
restructuring and other corporate finance advisory activities; merchant banking;
stock brokerage and research services; asset management; trading of futures,
options, foreign exchange, commodities and swaps (involving foreign exchange,
commodities, indices and interest rates); real estate advice, financing and
investing; and global custody, securities clearance services and securities
lending.
