VAN KAMPEN MERRITT MONEY MARKET TRUST /IL, DEF 14A, 1995-06-02

VAN KAMPEN MERRITT MONEY MARKET TRUST /IL
DEF 14A, 1995-06-02

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<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 (AMENDMENT NO. )

Filed by the Co-Registrants /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ /Preliminary Proxy Statement / /Confidential, for Use of the Com-

mission Only (as permitted
by Rule 14a-6(e)(2))

/X/Definitive Proxy Statement

/ /Definitive Additional Materials

/ /Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

VAN KAMPEN MERRITT U.S. GOVERNMENT TRUST (811-3950)

VAN KAMPEN MERRITT TAX FREE FUND (811-4386)

VAN KAMPEN MERRITT PENNSYLVANIA TAX FREE INCOME FUND (811-4983)

VAN KAMPEN MERRITT EQUITY TRUST (811-4805)

VAN KAMPEN MERRITT TRUST (811-4629)

VAN KAMPEN MERRITT TAX FREE MONEY FUND (811-4718)

VAN KAMPEN MERRITT MONEY MARKET TRUST (811-3514)

(Names of Co-Registrants as Specified in Their Charters)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per each Co-Registrant (an aggregate of $875 for the Co-Registrants
listed above) per Item 22(a)(2) of Schedule 14A.

/X/ Fee paid previously with preliminary materials.

<PAGE> 2

Dear Van Kampen Merritt Fund Shareholder:

Each proxy card enclosed in this envelope represents your voting privilege in
a separate Van Kampen Merritt Fund. We have grouped your proxy cards together
for your convenience and to reduce postage expenses.

The meeting date for your Fund is July 21, 1995. Please sign all proxy cards
and return them in the postage-paid envelope included with this material.

We appreciate your prompt return of your proxy cards.

<PAGE> 3

June 2, 1995

Dear Van Kampen Merritt Fund Shareholder:

As you may know, the merger of The Van Kampen Merritt Companies, Inc., the
parent of your Fund(s) investment adviser, and American Capital Management &
Research, Inc. was completed in late December 1994 and the combined entity was
renamed Van Kampen American Capital, Inc. As part of our continuing effort to
maximize the merger's benefit to Fund shareholders, we are proposing several
items related to your Fund(s), including board consolidations and business
reorganizations. The attached proxy statement seeks shareholder approval on
these items.

While we encourage you to carefully read the full proxy statement, we have
created a brief question-and-answer section for your convenience.

Your vote is important and your participation
in the affairs of your Fund(s) does make a difference.

The proposals have been approved by the Trustees of the Fund(s), who recommend
you vote "FOR APPROVAL" on these proposals. YOUR IMMEDIATE RESPONSE WILL HELP
SAVE ON THE COSTS OF ADDITIONAL SOLICITATIONS. EACH FUND VOTES SEPARATELY, SO
PLEASE SIGN AND RETURN ALL YOUR FUND PROXY FORMS. We look forward to your
participation, and we thank you for your continued confidence in Van Kampen
American Capital.

PLEASE SIGN AND RETURN YOUR PROXY CARD(S) IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.

Sincerely,

Don G. Powell
Chief Executive Officer
<PAGE> 4

INFORMATION ABOUT YOUR PROXY STATEMENT

Q. WHY AM I RECEIVING THIS PROXY STATEMENT?

A. Federal securities laws require a vote by Fund shareholders whenever there
are certain changes in a Fund's business or organizational documents.
Among the proposed items your Fund is seeking shareholder approval on are:

- consolidation of the Van Kampen Merritt and American Capital fund boards

- reorganization and conversion of each of the Van Kampen Merritt funds
organized (with the exception of the Pennsylvania Tax Free Income Fund)
as a Massachusetts business trust into a Delaware business trust.

- amendment and restatement of the Declaration of Trust for the
Pennsylvania Tax Free Income Fund.

Please refer to the proxy statement for a detailed explanation of the
proposed items.

Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. Your Fund's investment objective(s) and shares will not change. You can
expect the same management expertise and high quality shareholder service
you've grown accustomed to.

By consolidating the Van Kampen Merritt and American Capital fund boards,
you will be able to take advantage of additional shareholder privileges
such as exchangeability of shares between Van Kampen Merritt funds and
American Capital funds. Additionally, by reorganizing the funds into
Delaware business trusts, you will benefit from greater protection from
certain liabilities related to the Fund. The reorganization of your Fund
into a Delaware business trust will not affect the investment objective,
investment policies or tax status of your Fund.

Q. WHY DO I NEED TO VOTE?

A. Your vote is needed to ensure that a majority of shareholders is
represented at the shareholder meeting, so that the proposals can be acted
upon. Your immediate response to this proxy will help save on the costs of
any further solicitations for a shareholder vote. We encourage all
shareholders to participate in the affairs of their Fund(s).

Q. HOW DO THE BOARD MEMBERS OF MY FUND SUGGEST THAT I VOTE?

A. After careful consideration, the board members of your Fund unanimously
recommend that you vote "FOR APPROVAL" on all the items proposed on the
enclosed proxy card(s).

<PAGE> 5

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 9111

Hingham, MA 02043

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 1-800-341-2911 between 7:00 a.m. and 7:00 p.m. Central
time, Monday through Friday.

<PAGE> 6

VAN KAMPEN MERRITT U.S. GOVERNMENT FUND

VAN KAMPEN MERRITT TAX FREE HIGH INCOME FUND
VAN KAMPEN MERRITT MUNICIPAL INCOME FUND
VAN KAMPEN MERRITT LIMITED TERM MUNICIPAL INCOME FUND
VAN KAMPEN MERRITT CALIFORNIA INSURED TAX FREE FUND
VAN KAMPEN MERRITT FLORIDA INSURED TAX FREE INCOME FUND
VAN KAMPEN MERRITT NEW JERSEY TAX FREE INCOME FUND
VAN KAMPEN MERRITT NEW YORK TAX FREE INCOME FUND
VAN KAMPEN MERRITT PENNSYLVANIA TAX FREE INCOME FUND
VAN KAMPEN MERRITT HIGH YIELD FUND
VAN KAMPEN MERRITT SHORT-TERM GLOBAL INCOME FUND
VAN KAMPEN MERRITT ADJUSTABLE RATE U.S. GOVERNMENT FUND
VAN KAMPEN MERRITT STRATEGIC INCOME FUND
VAN KAMPEN MERRITT EMERGING MARKETS INCOME FUND
VAN KAMPEN MERRITT GROWTH AND INCOME FUND
VAN KAMPEN MERRITT UTILITY FUND
VAN KAMPEN MERRITT BALANCED FUND
VAN KAMPEN MERRITT TAX FREE MONEY FUND
VAN KAMPEN MERRITT MONEY MARKET FUND

ONE PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181
TELEPHONE (800) 341-2911

NOTICE OF JOINT MEETING OF SHAREHOLDERS
TO BE HELD JULY 21, 1995

TO THE SHAREHOLDERS OF EACH OF THE FUNDS LISTED BELOW:

Notice is hereby given to the holders of shares of beneficial interest,
without par value (collectively, the "Shares"), of each of: Van Kampen Merritt
U.S. Government Fund (the "Government Fund"), a sub-trust of Van Kampen Merritt
U.S. Government Trust, a Massachusetts business trust (the "Government Trust");
Van Kampen Merritt Tax Free High Income Fund (the "Tax Free High Income Fund"),
Van Kampen Merritt Municipal Income Fund (the "Municipal Income Fund"), Van
Kampen Merritt Limited Term Municipal Income Fund (the "Limited Term Municipal
Fund"), Van Kampen Merritt California Insured Tax Free Fund (the "California
Fund"), Van Kampen Merritt Florida Insured Tax Free Income Fund (the "Florida
Fund"), Van Kampen Merritt New Jersey Tax Free Income Fund (the "New Jersey
Fund") and Van Kampen Merritt New York Tax Free Income Fund (the "New York
Fund"), each of which is a sub-trust of Van Kampen Merritt Tax Free Fund, a
Massachusetts business trust (the "Tax Free Trust"); Van Kampen Merritt
Pennsylvania Tax Free Income Fund (the "Pennsylvania Fund"), a Pennsylvania
trust; Van Kampen Merritt High Yield Fund (the "High Yield Fund"), Van Kampen
Merritt Short-Term Global Income Fund (the "Global Fund"), Van Kampen Merritt
Adjustable Rate U.S. Government Fund (the "Adjustable Rate Fund"), Van Kampen
Merritt Strategic Income Fund (the "Strategic Income Fund"), and Van Kampen
Merritt Emerging Markets Income Fund (the "Emerging Markets Fund"), each of
which is a sub-trust of Van Kampen Merritt Trust, a Massachusetts business trust
(the "VKM Trust"); Van
<PAGE> 7

Kampen Merritt Growth and Income Fund (the "Growth and Income Fund"),
Van Kampen Merritt Utility Fund (the "Utility Fund") and Van Kampen Merritt
Balanced Fund (the "Balanced Fund"), each of which is a sub-trust of Van Kampen
Merritt Equity Trust, a Massachusetts business trust (the "Equity Trust"); Van
Kampen Merritt Tax Free Money Fund (the "Tax Free Money Fund"), a Massachusetts
business trust; and Van Kampen Merritt Money Market Fund (the "Money Market
Fund"), a series of Van Kampen Merritt Money Market Trust, a Massachusetts
business trust (the "Money Market Trust") (collectively, the Government Fund,
Tax Free High Income Fund, Municipal Income Fund, Limited Term Municipal Fund,
California Fund, Florida Fund, New Jersey Fund, New York Fund, Pennsylvania
Fund, High Yield Fund, Global Fund, Adjustable Rate Fund, Strategic Income Fund,
Emerging Markets Fund, Growth and Income Fund, Utility Fund, Balanced Fund, Tax
Free Money Fund and Money Market Fund are hereinafter referred to as the "VK
Funds") (collectively, the Government Trust, Tax Free Trust, Pennsylvania Fund,
VKM Trust, Equity Trust, Tax Free Money Fund and Money Market Trust are
hereinafter referred to as the "VK Trusts") that a Joint Meeting of the
Shareholders of the Funds (the "Meeting") will be held at the Hyatt Regency Oak
Brook, York Room - Lower Level, 1909 Spring Road, Oak Brook, Illinois 60521, on
Friday, July 21, 1995, at 2:30 p.m., for the following purposes:

1. For each VK Fund (except the Pennsylvania Fund), to approve or disapprove
such VK Fund's reorganization and conversion to a Delaware business trust (or
series thereof);

2. For the Pennsylvania Fund, to approve or disapprove the amendment and
restatement of its Agreement and Declaration of Trust;

3. For each VK Trust, to elect fifteen trustees to serve until their
respective successors are duly elected and qualified;

4. For the Global Fund, to approve or disapprove a change in the fundamental
investment policy with respect to the concentration of its investments;

5. For each VK Fund, to ratify or reject the selection of KPMG Peat Marwick
LLP as independent public accountants for its current fiscal year; and

6. To transact such other business as may properly come before the Meeting.

Holders of record of the Shares of each of the VK Funds at the close of
business on May 26, 1995 are entitled to notice of, and to vote at, the Meeting
and any adjournment thereof.

By order of the Board of Trustees

RONALD A. NYBERG, Vice President and
Secretary
June 2, 1995
<PAGE> 8

EACH OF THE VK FUNDS WILL FURNISH, WITHOUT CHARGE, A COPY OF THE MOST RECENT
ANNUAL REPORT (AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL
REPORT, IF ANY) TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO VAN KAMPEN AMERICAN CAPITAL FUNDS BY CALLING (800) 341-2911 OR BY
WRITING TO THE RESPECTIVE VK FUND, ONE PARKVIEW PLAZA, OAKBROOK TERRACE,
ILLINOIS 60181.

SHAREHOLDERS OF EACH OF THE VK FUNDS 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 WITH RESPECT TO EACH VK FUND IN WHICH
YOU WERE A SHAREHOLDER AS OF THE RECORD DATE, DATE AND SIGN IT, AND RETURN SUCH
CARD(S) 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.

MANAGEMENT OF EACH RESPECTIVE VK FUND RECOMMENDS THAT YOU CAST YOUR VOTE:

- FOR APPROVAL OF THE REORGANIZATION AND CONVERSION OF EACH VK FUND (EXCEPT
THE PENNSYLVANIA FUND) INTO A DELAWARE BUSINESS TRUST (OR SERIES THEREOF);

- FOR APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE AGREEMENT AND
DECLARATION OF TRUST OF THE PENNSYLVANIA FUND;

- IN FAVOR OF THE NOMINEES FOR THE BOARD OF TRUSTEES LISTED IN THE PROXY
STATEMENT WITH RESPECT TO EACH VK TRUST;

- FOR APPROVAL OF A CHANGE IN THE FUNDAMENTAL INVESTMENT POLICY REGARDING THE
CONCENTRATION OF INVESTMENTS WITH RESPECT TO THE GLOBAL FUND; AND

- FOR THE RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR OF EACH VK FUND.

YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
<PAGE> 9

PROXY STATEMENT

VAN KAMPEN MERRITT U.S. GOVERNMENT FUND
VAN KAMPEN MERRITT TAX FREE HIGH INCOME FUND
VAN KAMPEN MERRITT MUNICIPAL INCOME FUND
VAN KAMPEN MERRITT LIMITED TERM MUNICIPAL INCOME FUND
VAN KAMPEN MERRITT CALIFORNIA INSURED TAX FREE FUND
VAN KAMPEN MERRITT FLORIDA INSURED TAX FREE INCOME FUND
VAN KAMPEN MERRITT NEW JERSEY TAX FREE INCOME FUND
VAN KAMPEN MERRITT NEW YORK TAX FREE INCOME FUND
VAN KAMPEN MERRITT PENNSYLVANIA TAX FREE INCOME FUND
VAN KAMPEN MERRITT HIGH YIELD FUND
VAN KAMPEN MERRITT SHORT-TERM GLOBAL INCOME FUND
VAN KAMPEN MERRITT ADJUSTABLE RATE U.S. GOVERNMENT FUND
VAN KAMPEN MERRITT STRATEGIC INCOME FUND
VAN KAMPEN MERRITT EMERGING MARKETS INCOME FUND
VAN KAMPEN MERRITT GROWTH AND INCOME FUND
VAN KAMPEN MERRITT UTILITY FUND
VAN KAMPEN MERRITT BALANCED FUND
VAN KAMPEN MERRITT TAX FREE MONEY FUND
VAN KAMPEN MERRITT MONEY MARKET FUND

ONE PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181
TELEPHONE (800) 341-2911

JOINT MEETING OF SHAREHOLDERS

JULY 21, 1995

This Proxy Statement is furnished in connection with the solicitation by the
Boards of Trustees (the "VK Board") of each of the VK Trusts (defined below) of
proxies to be voted at a Joint Meeting of Shareholders (the "Meeting") of the VK
Funds (defined below), to be held at the Hyatt Regency Oak Brook, York Room-
Lower Level, 1909 Spring Road, Oak Brook, Illinois 60521, on Friday, July 21,
1995, at 2:30 p.m. Any and all adjournments of the Meeting will be held at Van
Kampen American Capital, Inc., One Parkview Plaza, Oakbrook Terrace, Illinois
60181. The approximate mailing date of this Proxy Statement and accompanying
form of proxy is June 2, 1995.

Participating in the Meeting are holders of common shares of beneficial
interest, without par value (collectively, the "Shares"), of each of: Van Kampen
Merritt U.S. Government Trust, a Massachusetts business trust (the "Government
Trust"), on behalf of its sub-trust Van Kampen Merritt U.S. Government Fund (the
"Government Fund"); Van Kampen Merritt Tax Free Fund, a Massachusetts business
trust (the "Tax Free Trust"), on behalf of its sub-trusts Van Kampen
<PAGE> 10

Merritt Tax Free High Income Fund (the "Tax Free High Income Fund"), Van Kampen
Merritt Municipal Income Fund ("the "Municipal Income Fund"), Van Kampen Merritt
Limited Term Municipal Income Fund (the "Limited Term Municipal Fund"), Van
Kampen Merritt California Insured Tax Free Fund (the "California Fund"), Van
Kampen Merritt Florida Insured Tax Free Income Fund (the "Florida Fund"), Van
Kampen Merritt New Jersey Tax Free Income Fund (the "New Jersey Fund") and Van
Kampen Merritt New York Tax Free Income Fund (the "New York Fund"); Van Kampen
Merritt Pennsylvania Tax Free Income Fund, a Pennsylvania trust (the
"Pennsylvania Fund"); Van Kampen Merritt Trust, a Massachusetts business trust
(the "VKM Trust"), on behalf of its sub-trusts Van Kampen Merritt High Yield
Fund (the "High Yield Fund"), Van Kampen Merritt Short-Term Global Income Fund
(the "Global Fund"), Van Kampen Merritt Adjustable Rate U.S. Government Fund
(the "Adjustable Rate Fund"), Van Kampen Merritt Strategic Income Fund (the
"Strategic Income Fund") and Van Kampen Merritt Emerging Markets Income Fund
(the "Emerging Markets Fund"); Van Kampen Merritt Equity Trust, a Massachusetts
business trust (the "Equity Trust"), on behalf of its sub-trusts Van Kampen
Merritt Growth and Income Fund (the "Growth and Income Fund"), Van Kampen
Merritt Utility Fund (the "Utility Fund") and Van Kampen Merritt Balanced Fund
(the "Balanced Fund"); Van Kampen Merritt Tax Free Money Fund, a Massachusetts
business trust (the "Tax Free Money Fund"); and Van Kampen Merritt Money Market
Trust, a Massachusetts business trust (the "Money Market Trust") on behalf of
its series Van Kampen Merritt Money Market Fund (the "Money Market Fund").

Collectively, the Government Trust, Tax Free Trust, Pennsylvania Fund, VKM
Trust, Equity Trust, Tax Free Money Fund and Money Market Trust are hereinafter
referred to as the "VK Trusts". Collectively, the Government Fund, Tax Free High
Income Fund, Municipal Income Fund, Limited Term Municipal Fund, California
Fund, Florida Fund, New Jersey Fund, New York Fund, Pennsylvania Fund, High
Yield Fund, Global Fund, Adjustable Rate Fund, Strategic Income Fund, Emerging
Markets Fund, Growth and Income Fund, Utility Fund, Balanced Fund, Tax Free
Money Fund, Money Market Fund and Van Kampen Merritt Insured Tax Free Income
Fund (the "Insured Fund"), a sub-trust of the Tax Free Trust, are hereinafter
referred to as the "VK Funds".

The Meeting is scheduled as a joint meeting of the respective shareholders of
the VK Funds, excluding the Insured Fund, because the shareholders of each of
the VK Funds, excluding the Insured Fund, are expected to consider and vote on
similar matters. The VK Board has determined that the use of a joint Proxy
Statement for the Meeting is in the best interest of the shareholders of each of
the VK Funds, excluding the Insured Fund. In the event that any shareholder of
any VK Fund present at the Meeting objects to the holding of a joint meeting and
moves for an adjournment of the meeting of such VK Fund to a time immediately

2
<PAGE> 11

after the Meeting, so that such VK Fund's meeting may be held separately, the
persons named as proxies will vote in favor of such adjournment. Except as
described below in connection with the election of trustees of each respective
VK Trust, shareholders of each VK Fund will vote separately on each of the
proposals relating to their VK Fund, and an unfavorable vote on a proposal by
the shareholders of one VK Fund will not affect the implementation of such a
proposal by another VK Fund if the proposal is approved by the shareholders of
that VK Fund.

The shareholders of the Insured Fund, a sub-trust of the Tax Free Trust, will
meet separately to vote on proposals substantially identical to Proposals 1, 3
and 5 set forth herein. The VK Board has determined that it is in the best
interest of shareholders of the Insured Fund to meet separately. The votes of
shareholders of the Insured Fund will be combined with the votes of shareholders
of Tax Free High Income Fund, Municipal Income Fund, Limited Term Municipal
Income Fund, California Fund, Florida Fund, New Jersey Fund and New York Fund,
the other sub-trusts of the Tax Free Trust, with respect to the proposed
election of the nominees set forth in Proposal 3 to the Board of Trustees of the
Tax Free Trust.

All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein. Abstentions do not constitute votes "for" or "against" a
matter and will be disregarded in determining the "votes cast" on an issue.
Broker non-votes (i.e., proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owner or other person
entitled to vote shares on a particular matter with respect to which the broker
or nominees do not have discretionary power) will be treated the same as
abstentions. Except for the Money Market Trust, 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. For the Money Market Trust,
one-third 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. Abstentions and broker non-votes will be deemed present for quorum
purposes. Unless instructions to the contrary are marked, Shares represented by
a proxy will be voted "FOR" each proposal as to which it is entitled to vote.

The VK Board has fixed the close of business on May 26, 1995, as the record
date (the "Record Date") for the determination of holders of Shares of each VK
Fund entitled to vote at the Meeting. Shareholders of a VK Fund on the Record
Date will be entitled to one vote with respect to each proposal submitted to the
shareholders of such VK Fund for each Share of such VK Fund then held, with no
Share having cumulative voting rights.

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<PAGE> 12

The following table summarizes each proposal to be presented at the Meeting
and the VK Funds solicited with respect to such proposal:

<TABLE>
<CAPTION>
PROPOSAL AFFECTED TRUSTS/FUNDS
------------------------------------------- ------------------------
<S> <C> <C>
1. Reorganization and Conversion to a Delaware Each VK Fund, except the
Business Trust (or series thereof) Pennsylvania Fund
2. Amendment and Restatement of Agreement and Pennsylvania Fund only
Declaration of Trust
3. Election of Trustees Each VK Trust (1)
4. Amendment of Fundamental Investment Policy Global Fund only
5. Ratification of Independent Public Each VK Fund
Accountants
</TABLE>

- - ---------------

(1) The shareholders of all of the VK Funds organized under a VK Trust vote
together as a single class on this proposal.

4
<PAGE> 13

At the close of business on May 26, 1995, there were issued and outstanding
Shares of each of the VK Funds, excluding the Insured Fund, set forth below:

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS D SHARES
VK FUND NAME OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
- - ------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Government Fund.......... 206,639,400 31,358,446 805,067 N/A
Tax Free High Income
Fund................... 43,620,685 8,600,786 491,647 147,213
Municipal Income Fund.... 34,371,681 11,201,014 294,164 70,144
Limited Term Municipal
Fund................... 1,623,700 1,722,448 495,205 N/A
California Fund.......... 8,312,155 1,138,125 171,684 N/A
Florida Fund............. 681,935 902,182 2,907 N/A
New Jersey Fund.......... 292,936 482,747 21,598 N/A
New York Fund............ 279,126 639,229 16,186 N/A
Pennsylvania Fund........ 12,631,997 2,466,016 162,421 N/A
High Yield Fund.......... 27,257,388 5,623,754 194,668 N/A
Global Fund.............. 10,123,833 17,758,594 22,410 N/A
Adjustable Rate Fund..... 610,470 2,057,007 303,875 N/A
Strategic Income Fund.... 2,430,165 4,421,312 148,112 N/A
Emerging Markets Fund.... 420,100 140,100 140,100 N/A
Growth and Income Fund... 2,597,373 1,688,404 73,315 N/A
Utility Fund............. 3,826,445 6,168,585 93,211 N/A
Balanced Fund............ 310,167 427,428 47,105 N/A
Tax Free Money Fund...... 32,471,954 N/A N/A N/A
Money Market Fund........ 22,212,671 6,621,386 N/A N/A
</TABLE>

The persons who, to the knowledge of the VK Funds, owned beneficially more
than 5% of a class of a VK Fund's outstanding Shares as of May 19, 1995 are set
forth at Appendix A hereto.

VOTING

Unless specified otherwise, all Shares of a VK Fund affected by a proposal
will vote together as a single class on such proposal. The voting requirement
for passage of a particular proposal depends on the nature of the particular
proposal.

With respect to Proposal 1, the affirmative vote of a majority of the Shares
of the respective VK Fund (excluding the Money Market Fund and Pennsylvania
Fund) present in person or by proxy at the Meeting and entitled to vote on the
proposal is required to approve the reorganization of the respective VK Fund.
With respect to the Money Market Fund, the favorable vote of the holders of more
than 50% of the outstanding Shares entitled to vote is required to approve the
reorganization of the Money Market Fund. Proposal 1 is not applicable to the
Pennsylvania Fund.

5
<PAGE> 14

With respect to Proposal 2, a vote of not less than a majority of the Shares
of the Pennsylvania Fund is required to approve the proposed Amended and
Restated Agreement and Declaration of Trust.

With respect to Proposal 3, the Shares of all the VK Funds organized as sub-
trusts or series of a VK Trust shall vote together as a single class of such VK
Trust and an affirmative vote of a plurality of the Shares of a VK Trust, voting
together as a single class, is required to elect the trustees of such VK Trust.
With respect to the Tax Free Trust, Shares of the Tax Free High Income Fund,
Municipal Income Fund, Limited Term Municipal Fund, California Fund, Florida
Fund, New Jersey Fund and New York Fund will vote together as a single class,
together with the Shares of the Insured Fund, who will vote at a separate
meeting. With respect to the VKM Trust, Shares of the High Yield Fund, Global
Fund, Adjustable Rate Fund, Strategic Income and Emerging Markets Fund will vote
together as a single class. With respect to the Equity Trust, Shares of the
Growth and Income Fund, Utility Fund, and Balanced Fund will vote together as a
single class.

With respect to Proposal 4, a vote of the "majority of the outstanding voting
securities" is required which shall mean the lesser of (i) 67% or more of the
voting securities of the Global Fund entitled to vote thereon present in person
or by proxy at the Meeting, if holders of more than 50% of the outstanding
voting securities entitled to vote thereon are present in person or represented
by proxy, or (ii) more than 50% of the outstanding voting securities of the
Global Fund entitled to vote thereon.

With respect to Proposal 5, an affirmative vote of a majority of the Shares of
a VK Fund (excluding the Money Market Fund) present in person or by proxy is
necessary to ratify the selection of the independent public accountants for such
fund. With respect to the Money Market Fund, an affirmative vote of a majority
of the Shares of the Money Market Fund cast is necessary to ratify the selection
of the independent public accountants for such fund.

On the matters coming before the Meeting as to which a choice has been
specified by the Shareholders by means of the ballot on the proxy, the Shares
will be voted accordingly. The VK Board recommends that you cast your vote:

- FOR APPROVAL of the reorganization and conversion of each VK Fund (except
the Pennsylvania Fund) to a Delaware business trust (or series thereof);

- FOR APPROVAL of the amendment and restatement of the Agreement and
Declaration of Trust of the Pennsylvania Fund;

- IN FAVOR of the nominees for the Boards of Trustees listed in this Proxy
Statement with respect to each VK Trust;

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<PAGE> 15

- FOR APPROVAL of a change in the fundamental investment policy regarding the
concentration of investments with respect to the Global Fund;

- FOR the ratification of the selection of KPMG Peat Marwick LLP as
independent public accountants for the current fiscal year of each VK Fund.

Shareholders who execute proxies may revoke them at any time before they are
voted by filing with the respective VK 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 VK Funds know of no business other than that mentioned in proposals one
through five of the Notice which 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 with respect to one or more VK Funds or VK
Trusts are not received, the persons named as proxies may propose one or more
adjournments of the meeting of the concerned VK Fund or VK Trust to permit
further solicitation of proxies provided they determine that such an adjournment
and additional solicitation is reasonable and in the interest of shareholders
based on a consideration of all relevant factors, including the nature of the
relevant proposal, the percentage of 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.

- - ------------------------------------------------------------------------------
BACKGROUND FOR PROPOSALS 1, 2 AND 3
- - ------------------------------------------------------------------------------

On December 20, 1994, The Van Kampen Merritt Companies, Inc. acquired from The
Travelers Inc. all of the outstanding capital stock of American Capital
Management & Research, Inc., the parent company of American Capital Asset
Management, Inc. (such transaction being referred to herein as the
"Acquisition"). At the time of the Acquisition, The Van Kampen Merritt
Companies, Inc. also was the parent company of Van Kampen Merritt Investment
Advisory Corp. In connection with the Acquisition, American Capital Management &
Research, Inc. was merged into The Van Kampen Merritt Companies, Inc.
Immediately after the Acquisition, each of the foregoing surviving entities was
renamed. The following

7
<PAGE> 16

table sets forth the old name, the new name and the abbreviated name used in
this Proxy Statement to refer to each such entity:

<TABLE>
<CAPTION>
OLD NAME NEW NAME ABBREVIATED NAME
- - ----------------------- ----------------------- -----------------------
<S> <C> <C>
The Van Kampen Merritt Van Kampen American Van Kampen
Companies, Inc. Capital, Inc. American Capital
American Capital Asset Van Kampen American AC Adviser
Management, Inc. Capital
Asset Management, Inc.
Van Kampen Merritt Van Kampen American VK Adviser
Investment Advisory Capital
Corp. Investment Advisory
Corp.
</TABLE>

The VK Adviser and the AC Adviser currently are each wholly-owned subsidiaries
of Van Kampen American Capital. The VK Adviser serves as investment adviser for
each of the VK Funds as well as for other registered investment companies.
Nineteen of the VK Funds are organized as Massachusetts business trusts (or
subtrusts thereof) and the Pennsylvania Fund is organized for tax purposes as a
Pennsylvania trust. The VK Board, which supervises the operations of each of the
VK Funds, currently consists of the same seven members for each VK Fund.

The AC Adviser serves as the investment adviser for twenty-nine open-end
investment companies (the "AC Funds") as well as for other registered investment
companies. Ten of the AC Funds are organized as Massachusetts business trusts
(or series thereof), and nineteen of the AC Funds are organized as Maryland
corporations (or series thereof). The Boards of Directors/Trustees, which
supervises the operations of each of the AC Funds, currently consists of the
same eight members (the "AC Board") for each AC Fund.

On February 10, 1995, the VK Board and the AC Board held a joint meeting to
discuss with management ("Management") of the VK Adviser and the AC Adviser the
costs and potential benefits to shareholders of, among other things, (i)
permitting exchangeability of shares between the VK Funds and the AC Funds, (ii)
selecting a common transfer agent to facilitate exchangeability and enhance
shareholder services, (iii) combining certain of the VK Funds and the AC Funds
in order to achieve certain economies of scale and efficiencies, and (iv)
consolidating the VK Board and the AC Board into a combined board of directors
(collectively, the "Consolidation").

The VK Board and the AC Board created a joint committee (the "Joint
Committee") to consider the possible costs and benefits to shareholders
associated

8
<PAGE> 17

with the Consolidation. The Joint Committee met on February 20, 1995 to identify
and discuss the possible costs and benefits of the Consolidation to the
shareholders. Following such meeting, the Joint Committee requested certain
additional information from Management with respect to those possible costs and
benefits identified by the Joint Committee.

The VK Board and the AC Board held a joint meeting on March 14, 1995 for the
purpose of, among other things, reviewing the findings of the Joint Committee
and reviewing the additional information requested from Management. At the
meeting, the VK Board and the AC Board each approved in principle certain
elements of the Consolidation, including the combination of the VK Board and the
AC Board, subject to the favorable resolution of certain outstanding
administrative matters with respect to the operation of a combined board and
subject to receiving certain additional information from Management. The VK
Board and the AC Board also considered reorganizing the VK Funds (excluding the
Pennsylvania Fund) and the AC Funds in one jurisdiction under substantially
similar charter documents, as part of the Consolidation.

The Joint Committee met again on March 27, 1995 and April 3, 1995 to address
the open administrative matters and to review the additional information
provided by Management. Following a discussion of such matters and a review of
the additional information provided by Management, the Joint Committee
recommended to the VK Board that it approve each element of the Consolidation,
including: (i) combining the VK Board and the AC Board, (ii) reorganizing each
of the VK Funds (excluding the Pennsylvania Fund) into Delaware business trusts
(or series thereof) in order to facilitate governance of such funds under
uniform organizational documents following the Consolidation and in order to
take advantage of certain beneficial aspects of Delaware law with respect to
business trusts and (iii) the amendment and restatement of the Agreement and
Declaration of Trust of the Pennsylvania Fund to conform it to the extent
practicable with the new trust instrument of the Delaware business trusts while
maintaining the tax benefits of operating as a Pennsylvania trust. The Joint
Committee also made analogous recommendations to the AC Board.

The VK Board and the AC Board held a joint meeting on April 6-7, 1995 to
review the findings of the Joint Committee. The VK Board unanimously approved
each element of the Consolidation on April 7, 1995, including proposals to
combine the VK Board and the AC Board, reorganize each of the VK Funds
(excluding the Pennsylvania Fund) as Delaware business trusts (or series
thereof) and amend and restate the Agreement and Declaration of Trust for the
Pennsylvania Fund to conform it to the extent practicable with the new trust
instrument of the Delaware business trusts while maintaining the tax benefits of
operating as a Pennsylvania Trust. The AC Board approved each element of the
Consolidation with respect to the AC Funds on May 11, 1995. Each of the VK Board
and the AC Board also

9
<PAGE> 18

approved submitting such proposals to the respective shareholders of the VK
Funds and the AC Funds for the requisite shareholder approvals. Proposal 1 of
this Proxy Statement seeks shareholder approval to reorganize each of the VK
Funds (except the Pennsylvania Fund) into a Delaware business trust (or series
thereof). Proposal 2 of this Proxy Statement seeks shareholder approval to amend
and restate the Agreement and Declaration of Trust of the Pennsylvania Fund to
conform it to the extent possible to the form of new trust instrument of the
Delaware business trusts to be adopted by each other VK Fund and each AC Fund.
Proposal 3 of this Proxy Statement seeks shareholder approval for each of the VK
Trusts to expand the number of its trustees from seven to fifteen, re-elect to
the VK Board each of the incumbent trustees and elect to the VK Board each of
the eight members of the AC Board. The VK Board has determined that reorganizing
each of the VK Funds (except the Pennsylvania Fund) into a Delaware business
trusts (or series thereof), amending and restating the Agreement and Declaration
of Trust of the Pennsylvania Fund and combining the VK Board and the AC Board
are essential elements of the Consolidation and recommend that shareholders vote
FOR APPROVAL of Proposal 1, FOR APPROVAL of Proposal 2 and IN FAVOR of each of
the nominees in Proposal 3.

This Proxy Statement has been prepared and mailed to the shareholders of each
VK Fund (excluding the Insured Fund, for which separate proxy materials are
being mailed) to obtain the necessary shareholder approvals for each of such VK
Funds to complete the Consolidation. A substantially similar proxy statement
with respect to such proposals has been prepared and mailed to the shareholders
of each AC Fund to obtain the necessary shareholder approvals for each of the AC
Funds to complete the Consolidation. Certain additional proposals not related to
the Consolidation are included in this Proxy Statement and the Insured Fund
Proxy Statement, which additional proposals differ among the VK Funds, the
Insured Fund and the AC Funds.

- - ------------------------------------------------------------------------------
PROPOSAL 1: APPROVAL OF THE REORGANIZATION AND CONVERSION OF EACH VK FUND
(EXCLUDING THE PENNSYLVANIA FUND) TO A DELAWARE BUSINESS TRUST (OR
SERIES THEREOF)
- - ------------------------------------------------------------------------------

The VK Board has unanimously approved an Agreement and Plan of Reorganization
and Liquidation (a "Plan of Reorganization") substantially in the form attached
hereto as Appendix B with respect to each VK Fund, excluding the Pennsylvania
Fund. The Plan of Reorganization provides for the reorganization (the
"Reorganization") of each VK Fund other than the Pennsylvania Fund (each a
"Massachusetts Fund") into a series (each a "Delaware Fund") of a Delaware
business trust (each a "Delaware Trust"). The Pennsylvania Fund will not
reorganize as a Delaware business trust for tax purposes, but Proposal No. 2 in
this

10
<PAGE> 19

Proxy is being submitted to the shareholders of the Pennsylvania Fund to amend
and restate its organizational document to conform it, to the extent
practicable, to the proposed organizational documents of the proposed Delaware
Funds. Each of the AC Funds also is seeking approval from its respective
shareholders to reorganize as a Delaware business trust (or series thereof).

REASONS FOR THE REORGANIZATIONS

The principal purposes of the Reorganizations are to take advantage of certain
beneficial aspects of Delaware law with respect to business trusts and to
facilitate governance of the VK Funds and the AC Funds under uniform
organizational documents following the Consolidation.

Delaware law provides that the shareholders of a Delaware business trust shall
not be subject to liability for obligations of the trust. Under Massachusetts
law, Massachusetts Fund shareholders are potentially liable for obligations of
the Massachusetts Fund. Although the risk of such liability is remote, the VK
Board has determined that Delaware law affords greater protection against
potential shareholder liability. Similarly, Delaware law provides that, should
the Delaware Funds issue multiple series of shares, each series shall not be
liable for the debts of any other series, which liability is another potential,
although remote, risk in the case of a Massachusetts business trust.

The VK Board believes that the Delaware business trust form of organization
may enable the Delaware Funds to adopt new methods of operations and employ new
technologies that are expected to reduce costs of operation when, and if,
implemented. Delaware law, for example, explicitly authorizes electronic or
telephonic communications between a Delaware Fund and its shareholders. The VK
Board hopes to take advantage of this provision to improve shareholder voting
procedures and reduce costs. Under Delaware law and the proposed trust
instrument of the Delaware Trusts, the Delaware Funds may be required to have
fewer shareholder meetings, potentially further reducing costs, although neither
Massachusetts business trusts nor Delaware business trusts are required to hold
annual shareholder meetings. Of course, the investment objectives and the
fundamental investment restrictions of both the Massachusetts Funds and Delaware
Funds will remain fundamental, and may be changed only by shareholder vote.

The VK Board and the AC Board also have determined that substantially uniform
organizational documents will facilitate their ability to jointly govern the VK
Funds and the AC Funds in an efficient and timely manner and will enhance the
ability of the VK Funds and the AC Funds to react in a consistent manner when
faced with similar corporate governance issues.

For a more detailed comparison of the Massachusetts Funds' declarations of
trust and the proposed Delaware Funds' trust instrument, see "Certain
Comparative Information About Massachusetts Funds and Delaware Funds" below.

11
<PAGE> 20

PROCEDURES FOR REORGANIZATIONS

In order to accomplish the Reorganizations, each VK Trust other than the
Pennsylvania Fund (each a "Massachusetts Trust") has organized a corresponding
Delaware Trust. Each Delaware Trust was formed as a Delaware business trust
pursuant to an Agreement and Declaration of Trust (the "Trust Instrument") which
authorizes the issuance of shares in different series. Each Massachusetts Trust
has caused its corresponding Delaware Trust to create a series (i.e., a Delaware
Fund) that corresponds to each series (i.e., each Massachusetts Fund) of the
Massachusetts Trust. The investment objectives and policies of each Delaware
Fund are the same as those of its corresponding Massachusetts Fund.

To facilitate the Reorganizations, one share of each class of each Delaware
Fund will be issued to its corresponding Massachusetts Fund. If the
Reorganization of a Massachusetts Fund is approved by its shareholders, such
approval shall authorize the Massachusetts Fund, as sole shareholder of the
corresponding Delaware Fund, to (i) elect as trustees of the Delaware Trust the
nominees elected as trustees of the Massachusetts Trust pursuant to Proposal 3
hereof, (ii) approve or disapprove the selection of the independent public
accountants described in Proposal 5 hereof, (iii) approve an investment advisory
agreement between the respective Delaware Fund and the VK Adviser substantially
identical to the investment advisory agreement currently in effect between the
Massachusetts Fund and the VK Adviser and (iv) approve a Rule 12b-1 plan and a
service plan between the respective Delaware Fund and Van Kampen American
Capital Distributors, Inc. (the "Distributor") substantially identical to the
plans currently in effect between the Massachusetts Fund and the Distributor.

On the effective date of each Reorganization approved by shareholders, each
Massachusetts Fund will transfer all of its assets and liabilities to its
corresponding Delaware Fund in exchange for shares of such Delaware Fund having
an equal net asset value. The Massachusetts Fund will then be liquidated and
each shareholder of the Massachusetts Fund will receive for his or her shares of
the Massachusetts Fund an equal number of shares of the corresponding Delaware
Fund. A shareholder's investment in the Massachusetts Fund will remain exactly
the same after the Reorganization and the corresponding Delaware Fund will
operate in the same manner and with the same investment objectives, policies and
restrictions as the corresponding Massachusetts Fund had in the past.

If shareholders of a Massachusetts Fund do not approve the Reorganization, the
Massachusetts Fund will continue in business as a Massachusetts business trust
(or sub-trust thereof, as applicable). The consummation of the Reorganization of
any one Massachusetts Fund is not contingent upon the consummation of the
Reorganization of other Massachusetts Funds or the AC Funds, individually or as
a group.

12
<PAGE> 21

It will not be necessary for holders of certificates of the Massachusetts
Funds to exchange their certificates for new certificates of the corresponding
Delaware Funds following consummation of the Reorganizations. Certificates for
shares of the Massachusetts Funds issued prior to the Reorganizations shall
represent outstanding shares of the corresponding Delaware Funds after the
Reorganizations. New certificates will not be issued by the Delaware Funds after
the Reorganizations to shareholders of the Delaware Funds unless specifically
requested in writing. Shareholders of the Massachusetts Funds who have not been
issued certificates and whose shares are held in an open account will
automatically have those shares designated similarly as shares of the
corresponding Delaware Fund.

Each Reorganization approved by shareholders will become effective at the
later of August 1, 1995 or as soon as practicable following receipt of such
approval, taking into consideration all of the elements of the Consolidation. At
such time, each new advisory agreement, new Rule 12b-1 plan and new service plan
will become effective and will continue thereafter if approved as required by
the Investment Company Act of 1940, as amended ("1940 Act").

CERTAIN COMPARATIVE INFORMATION ABOUT MASSACHUSETTS FUNDS AND DELAWARE FUNDS

Summary of the Trust Instrument. Each Delaware Trust has been established
pursuant to a Trust Instrument under the laws of the State of Delaware. The
Trust Instruments of each Delaware Trust were created in connection with the
Reorganizations of the Massachusetts Funds and are identical, except for the
names of the respective Delaware Trusts. It is currently anticipated that each
VK Fund's name will be changed to include the phrase "Van Kampen American
Capital" concurrent with its Reorganization. Names of certain VK Funds may also
be changed to differentiate such funds from other funds in the combined fund
complex or reflect other changes deemed appropriate by the VK Board. The
investment objectives, policies and limitations of each Delaware Fund after the
reorganization will be the same as those of its corresponding Massachusetts
Fund, including the revised policies and limitations, if approved, adopted by
shareholders of the Global Fund pursuant to Proposal 4 of this Proxy. Prior to
the Reorganizations, each Delaware Fund will not have any material assets or
liabilities. During the Reorganization, the Massachusetts Fund will be the sole
shareholder of its corresponding Delaware Fund immediately prior to the
distribution of Delaware Fund shares to Massachusetts Fund shareholders.

As a Delaware business trust, each Delaware Trust's operations will be
governed by its Trust Instrument, its Bylaws and applicable Delaware law rather
than by such Massachusetts Trust's Declaration of Trust, Bylaws and applicable
Massachusetts law. The operations of each Delaware Trust will continue to be
subject to the provisions of the 1940 Act, the rules and regulations of the
Securities and Exchange Commission (the "SEC") thereunder, and applicable state
securities law.

13
<PAGE> 22

Trustees of the Delaware Trusts. Subject to the provisions of the Trust
Instrument, the business of each Delaware Trust is supervised by its trustees.
The responsibilities, powers, and fiduciary duties of the trustees of the
Delaware Trusts will be substantially the same as those of the trustees of the
Massachusetts Trusts, except that Delaware trustees would have the additional
authority to remove a trustee from office without cause upon the approval of
two-thirds of the trustees in office prior to such removal. The trustees of each
Delaware Trust will be all of the trustees elected by respective Massachusetts
Trust pursuant to Proposal 3.

Series of Delaware Trusts and Massachusetts Trusts. The Trust Instrument of
each Delaware Trust permits the trustees to create one or more series of the
Delaware Trust and, with respect to each series, to issue an unlimited number of
full or fractional shares of that series or of one or more classes of shares of
that series. The trustees of each Massachusetts Trust have identical rights
under the Declaration of Trust of the Massachusetts Trusts. Each share of a
series of a Delaware Trust, like each share of a series of a Massachusetts
Trust, represents an equal proportionate interest with each other share in that
series, none having priority or preference over another.

Delaware Trust Shareholder Liability and Massachusetts Trust Shareholder
Liability. One area of difference between the Delaware business trusts and the
Massachusetts business trusts is the potential liability of shareholders.
Generally, shareholders of each Delaware Trust will not be personally liable for
obligations of such Delaware Trust under Delaware law. The Delaware Business
Trust Act (the "Delaware Act") provides that a shareholder of a Delaware
business trust shall be entitled to the same limitation of liability extended to
shareholders of private corporations for profit. However, no similar statutory
or other authority limiting shareholder liability of business trusts applies in
many other states, including Massachusetts. As a result, to the extent that the
Delaware Trust or a shareholder is subject to the jurisdiction of courts in
those states, the courts may not apply Delaware law, and may thereby subject the
Delaware Trust shareholders to liability. To guard against this risk, the Trust
Instrument (i) contains an express disclaimer of shareholder liability for acts
or obligations of the Delaware Trust and requires that notice of such disclaimer
be given in each agreement, obligation, and instrument entered into as executed
by the Delaware Trust or its trustees and (ii) provides for indemnification out
of the series or fund property of any shareholder held personally liable for the
obligations of the Delaware Trust. Thus, the risk of a Delaware Trust
shareholder incurring financial loss beyond his or her investment because of
shareholder liability is limited to circumstances in which (1) a court refused
to apply Delaware law, (2) no contractual limitation of liability was in effect,
and (3) the series itself would be unable to meet its obligations. In light of
Delaware law, the nature of the Delaware Trust's business, and the nature of its
assets, the VK Adviser believes that the risk of personal liability to a
Delaware Trust shareholder is extremely remote.

14
<PAGE> 23

Shareholders of a Massachusetts business trust may, in certain circumstances,
be held personally liable under Massachusetts law for the obligations of such
Massachusetts business trust. The Massachusetts Declaration of Trust, like the
Delaware Trust Instrument, contains an express disclaimer of shareholder
liability and requires that notice of such disclaimer be given in each agreement
entered into or executed by the Massachusetts Trusts or the trustees. The
Massachusetts Declaration of Trust also provides for indemnification out of the
respective Massachusetts Fund's property. Thus, the VK Board believes the risk
of shareholder liability is also remote for shareholders of Massachusetts
business trusts. Shareholders of a Massachusetts business trust, however, do not
benefit from a statutory limitation of liability that is available to
shareholders of a Delaware business trust.

Liability of Trustees. The Delaware Trust Instrument provides that the
trustees shall not be liable to any person in connection with the assets or
affairs of the Delaware Trusts and that a trustee shall not be liable for any
errors of judgment or mistakes of fact or law; but nothing in the Delaware Trust
Instrument protects a trustee against any liability to the Delaware Trust or its
shareholders to which they would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of their office. The Massachusetts Declaration of Trust
provides substantially similar protections to trustees of the Massachusetts
Trusts.

Voting Rights of Delaware Trust Shareholders and Massachusetts Trust
Shareholders. Each Delaware Fund, like its corresponding Massachusetts Fund,
will operate as an open-end management investment company registered with the
SEC under the 1940 Act. Shareholders of the Delaware Funds will, therefore, have
the power to vote at special meetings with respect to, among other things,
changes in fundamental investment policies and limitations of the proposed
Delaware Funds, ratification of the selection of the independent public
accountants for the Delaware Funds, and such additional matters relating to the
Delaware Funds as may be required by law, or which the trustees consider
desirable. If, at any time, less than two-thirds of the trustees holding office
have been elected by shareholders, the trustees then in office will promptly
call a meeting of shareholders of the affected Delaware Fund for the purpose of
electing a board of trustees. The Massachusetts Declarations of Trust (excluding
the Money Market Trust) provide that a meeting of shareholders may be called by
the holders of 51% or more of the outstanding shares; however, if the meeting is
called for the purpose of voting on the question whether to remove a trustee,
only the holders of 10% of the outstanding shares of such Massachusetts Trust
need request a shareholders meeting. The current Declaration of Trust of the
Money Market Trust provides that a meeting of shareholders may be called by the
holders of one-third or more of the outstanding shares; however, if the meeting
is to be called for the purpose of voting on the question whether to remove a
trustee, only the holders of 10% of the outstanding shares of the Money Market
Trust need request a shareholders meeting or 10 or

15
<PAGE> 24

more holders of record (who have been holders for at least six months) and who
hold in aggregate either shares having a net asset value of at least $25,000 or
at least 1% of the outstanding shares, whichever is less. The Delaware Trust
Instrument of each Delaware Trust would permit shareholders to call a special
meeting only for the purpose of removing a trustee and would require a request
by 10% of the outstanding shares of such Delaware Trust to call such a meeting.
Neither Massachusetts business trusts nor Delaware business trusts are required
to hold annual meetings.

The proposed Delaware Trust Instrument, like the current Massachusetts
Declaration of Trust, provides that shareholders shall have the power to vote
only with respect to (i) the election or removal of trustees as provided
therein, (ii) the approval or termination of investment advisory, distribution
or shareholder services contracts, (iii) the termination or reorganization of
the Delaware Trust or any series of the Delaware Trust, (iv) with respect to any
amendment of the Delaware Trust Instrument that adversely affects shareholders,
(v) to the same extent as the stockholders of a Delaware business corporation as
to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the
Delaware Trust or any series, and (vi) with respect to such additional matters
relating to the Delaware Trust as may be required by the 1940 Act, the Delaware
Trust Instrument, the Bylaws or any registration of the Delaware Trust with the
SEC.

The Delaware Trust Instrument and the Massachusetts Declaration of Trust
(excluding the Money Market Trust) generally permit the trustees to amend the
respective trust document, provided that the amendment does not adversely affect
shareholders. The Delaware Trust Instrument and the Massachusetts Declaration of
Trust (excluding the Money Market Trust) each provides that a majority of the
affected shares must approve a change that adversely affects the rights of the
shares. The current Declaration of Trust of the Money Market Trust requires
shareholders to approve all amendments to its Declaration of Trust, except for
changes to the name of the Trust. Each of the Delaware Trust Instrument and the
Massachusetts Declaration of Trust (excluding the Money Market Trust) requires a
majority of shares to establish quorum for a meeting. Pursuant to the current
Declaration of Trust of the Money Market Trust, one-third of the outstanding
shares entitled to vote on a proposal must be present in person or by proxy to
establish a quorum for a meeting.

Each Massachusetts Fund and its corresponding Delaware Fund generally requires
the approval of a majority of the shares present at a meeting at which there is
a quorum to approve a proposal presented to shareholders for a vote. The
following shareholder voting requirements will change if the Reorganization is
approved. The Massachusetts Declarations of Trust (excluding the Money Market
Trust) currently require a majority of a Massachusetts Fund's shares present at
a

16
<PAGE> 25

meeting at which there is a quorum to terminate such Massachusetts Fund or
merge such Massachusetts Fund into another fund. The Delaware Trust Instruments,
like the current Declaration of Trust of the Money Market Trust, would require a
majority of a fund's outstanding shares to terminate such fund or merge such
fund into another fund. The Massachusetts Declarations of Trust (excluding the
Money Market Trust) require the approval of two-thirds of the outstanding shares
of a fund with respect to an amendment of such Declaration of Trust that would
reduce the amount payable to shareholders upon liquidation of the Fund and an
affirmative vote of not less than a majority of affected shares on other
amendments that adversely affect any shareholders. The current Declaration of
Trust of the Money Market Trust requires a favorable vote of more than 50% of
the outstanding shares entitled to vote for all amendments, except for changes
to the name of the trust. The Delaware Trust Instrument would permit amendments
by trustees, except no amendments can repeal the limitations on personal
liability of shareholders and any amendments that adversely affect shareholders
must be approved by a majority of the adversely affected shares outstanding and
entitled to vote, if approved by a majority of the shares present at a meeting.

The foregoing is only a summary of certain of the differences between the
Massachusetts Funds, their Declarations of Trust, Bylaws and Massachusetts law
and the Delaware Funds, their Trust Instruments, Bylaws and Delaware law. It is
not a complete list of differences. Shareholders should refer to the provisions
of such Declarations of Trust, Bylaws and Massachusetts law, and the Trust
Instruments, Bylaws and Delaware law directly for a more thorough comparison.
Shareholders on the Record Date may obtain copies of the VK Fund's current and
proposed organizational documents by calling the telephone number set forth on
the first page of this Proxy Statement.

TEMPORARY AMENDMENT TO INVESTMENT LIMITATIONS

During the period prior to its Reorganization, each Massachusetts Fund will
own the only outstanding share of each class of its corresponding Delaware Fund.
By acquiring a nominal share of each class of its corresponding Delaware Fund,
each Massachusetts Fund can then vote to elect as trustees of such Delaware
Trust those nominees elected in Proposal 3 below, approve a substantially
identical but new investment advisory agreement, approve a substantially
identical but new distribution plan and new service plan and ratify the
selection of independent public accountants in order to comply with provisions
of the 1940 Act requiring such shareholder approvals.

Certain of the Massachusetts Funds have investment restrictions which require
shareholder approval before they can be changed and which might otherwise
preclude such Massachusetts Funds from completing the Reorganizations including,
for example, restrictions which prohibit such Massachusetts Fund from

17
<PAGE> 26

purchasing any securities (other than tax-exempt obligations issued or
guaranteed by the United States Government or by its agencies or
instrumentalities), if, as a result, more than 5% of a Massachusetts Fund's
total assets (taken at current value) would then be invested in securities of a
single issuer or, if, as a result, such Massachusetts Fund would hold more than
10% of the outstanding voting securities of an issuer, or a prohibition against
making investments for the purpose of exercising control or participating in
management. By approving the Reorganizations, the shareholders will be
authorizing a suspension of any and all of these restrictions only to the extent
necessary to permit the Reorganizations to take place.

FEDERAL INCOME TAX CONSEQUENCES

It is anticipated that the transactions contemplated by the Plan of
Reorganization will be tax-free. Consummation of each Reorganization is subject
to receipt of an opinion of Skadden, Arps, Slate, Meagher & Flom, counsel to
each Massachusetts Fund that, under the Internal Revenue Code of 1986, as
amended (the "Code"), the reorganization of the respective Massachusetts Fund
into a corresponding Delaware Fund pursuant to the Plan of Reorganization will
not give rise to the recognition of income, gain or loss for federal income tax
purposes to the Massachusetts Fund, the Massachusetts Trust or the shareholders
of the Massachusetts Fund. A shareholder's adjusted basis for tax purposes in
shares of a Delaware Fund after the Reorganization will be the same as such
shareholder's adjusted basis for tax purposes in the shares of the corresponding
Massachusetts Fund immediately before the Reorganizations. Shareholders should
consult their own tax advisers with respect to the state and local tax
consequences of the proposed transaction.

EXPENSES

The expenses related to the Reorganization of each Massachusetts Fund into a
Delaware Fund will be borne by the respective Massachusetts Fund and Van Kampen
American Capital as set forth under "EXPENSES" below.

RECOMMENDATION OF TRUSTEES

The VK Board has unanimously approved the proposed Reorganization of each
Massachusetts Fund, has determined that participation in the Reorganization is
in the best interests of each Massachusetts Fund and that the interests of
existing shareholders of each Massachusetts Fund will not be diluted as a result
of the Reorganization. THE VK BOARD RECOMMENDS THAT SHAREHOLDERS OF EACH
MASSACHUSETTS FUND VOTE "FOR APPROVAL" OF PROPOSAL 1.

REQUIRED VOTE

In accordance with the Declaration of Trust of each Massachusetts Fund
(excluding the Money Market Trust), an affirmative vote of a majority of the

18
<PAGE> 27

shares of such Massachusetts Fund present in person or by Proxy at the Meeting
and entitled to vote on the proposal is required to approve the respective
Reorganization and subsequent liquidation and dissolution of such Massachusetts
Fund. In accordance with the Declaration of Trust of the Money Market Trust, the
favorable vote of the holders of more than 50% of the outstanding Shares
entitled to vote at the Meeting on the proposal is required to approve the
Reorganization and subsequent liquidation and dissolution of the Money Market
Fund.

- - ------------------------------------------------------------------------------
PROPOSAL 2: APPROVAL OF AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST OF THE PENNSYLVANIA FUND
- - ------------------------------------------------------------------------------

The VK Board of the Pennsylvania Fund has unanimously approved a proposal to
amend and restate the Agreement and Declaration of Trust (the "Amended
Declaration of Trust") with respect to the Pennsylvania Fund in order to conform
its current Agreement and Declaration of Trust (the "Current Declaration of
Trust"), to the extent practicable, to the Trust Instruments of the Delaware
Trusts, as described in Proposal 1. The Pennsylvania Fund will continue to
operate as a trust under the laws of the Commonwealth of Pennsylvania. The
Pennsylvania Trust is not being reorganized as a Delaware business trust in
order to maintain the tax benefits of operating as a Pennsylvania trust.

REASONS FOR AMENDMENT

The principal purpose of the amendment and restatement of the Current
Declaration of Trust of the Pennsylvania Fund is to facilitate governance of the
Pennsylvania Fund, the other VK Funds and the AC Funds under substantially
uniform charter documents following the Consolidation.

The Amended Declaration of Trust, if approved by shareholders, will become
effective at the later of August 1, 1995 or as soon as practicable following
receipt of such approval, taking into consideration all of the elements of the
Consolidation.

CERTAIN COMPARATIVE INFORMATION ABOUT THE AMENDED DECLARATION OF TRUST AND THE
CURRENT DECLARATION OF TRUST

Operations of the Pennsylvania Fund Under the Amended Declaration of
Trust. The investment objective, policies and limitations of the Pennsylvania
Fund under the Amended Declaration of Trust will be identical to those under the
Current Declaration of Trust. The Pennsylvania Fund's operations will be
governed by the Amended Declaration of Trust and its amended Bylaws, and also by
Pennsylvania law, the provisions of the 1940 Act, the rules and regulations of
the SEC thereunder and applicable state securities law. It is anticipated that
the name

19
<PAGE> 28

of the Pennsylvania Fund will be changed following the Reorganization to "Van
Kampen American Capital Pennsylvania Tax Free Income Fund."

Trustees and Officers of the Pennsylvania Fund. Subject to the provisions of
the Amended Declaration of Trust, the business of the Pennsylvania Fund will be
supervised by its trustees. The responsibilities, powers, and fiduciary duties
of the trustees of the Pennsylvania Fund under the Amended Declaration of Trust
will be substantially the same as those of the trustees under the Current
Declaration of Trust, except that the trustees would have the additional
authority to remove a trustee from office without cause upon the approval of
two-thirds of the trustees in office prior to such removal.

Shareholder Liability. No statutory or other authority limits the liability of
shareholders of a Pennsylvania trust. To guard against this risk, the Amended
Declaration of Trust (i) contains an express disclaimer of shareholder liability
for acts or obligations of the Pennsylvania Fund and requires that notice of
such disclaimer be given in each agreement, obligation, and instrument entered
into as executed by the Pennsylvania Fund or its trustees and (ii) provides for
indemnification out of the property of the Pennsylvania Fund for any shareholder
held personally liable for the obligations of the Pennsylvania Fund. Thus, the
risk of a Pennsylvania Fund shareholder under the Amended Declaration of Trust
incurring financial loss beyond his or her investment because of shareholder
liability is limited to circumstances in which (1) no contractual limitation of
liability was in effect and (2) the series or fund itself would be unable to
meet its obligations. The provisions limiting shareholder liability in the
Amended Declaration of Trust are substantially identical to those contained in
the Current Declaration of Trust.

Liability of Trustees. The Amended Declaration of Trust provides that the
trustees shall not be liable to any person and that a trustee shall not be
liable for any errors of judgment or mistakes of fact or law; but nothing in the
Amended Declaration of Trust protects a trustee against any liability to the
trust or its shareholders to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of their office. The Current Declaration of Trust
provides substantially similar protections to trustees.

Voting Rights of Pennsylvania Trust Shareholders. Pennsylvania Trusts are not
required to hold annual meetings. The Declaration of Trust of the Massachusetts
Trusts require the affirmative vote of two-thirds of the shares of a
Massachusetts Trust to remove a trustee of a Massachusetts Trust. The proposed
Trust Instrument of a Delaware Trust would require the affirmative vote of a
majority of the Shares of a Delaware Trust to remove a trustee. The Amended
Declaration of Trust provides that a special meeting of shareholders may be
called by the holders of 10% or more of the shares.

20
<PAGE> 29

The Pennsylvania Fund will continue to operate as an open-end management
investment company registered with the SEC under the 1940 Act. Shareholders of
the Pennsylvania Fund will, therefore, have the power to vote at special
meetings with respect to, among other things, changes in fundamental investment
policies and limitations; ratification of the selection by the trustees of the
independent public accounts for the Pennsylvania Fund; and such additional
matters relating to the Pennsylvania Fund as may be required by law, or which
the trustees consider desirable. If, at any time, less than a majority of the
trustees holding office have been elected by shareholders, the trustees then in
office will promptly call a meeting of shareholders of the Pennsylvania Trust
for the purpose of electing a board of trustees.

The Amended Declaration of Trust provides that shareholders shall have the
power to vote only with respect to (i) the election or removal of trustees as
provided therein, (ii) the approval or termination of investment advisory,
distribution or shareholder services contracts, (iii) the termination or
reorganization of the Pennsylvania Fund or any series of the Pennsylvania Fund,
and (iv) with respect to such additional matters as may be required by law or
the trustees may consider desirable. The Amended Declaration of Trust also
permits the Trustees to amend the Amended Declaration of Trust without a
shareholder vote provided that the rights of the shareholders would not be
adversely affected.

The foregoing is only a summary of certain differences between the Current
Declaration of Trust and Amended Declaration of Trust. It is not a complete list
of differences. Shareholders should refer to the provisions of such documents
directly for a more thorough comparison. Shareholders on the Record Date may
obtain copies of the VK Fund's current and proposed organizational documents by
calling the telephone number set forth on the first page of this Proxy
Statement.

TAX CONSIDERATIONS

The Pennsylvania Fund's investment objective is to provide Pennsylvania
investors a high level of current income exempt from federal and Pennsylvania
income taxes and, where possible under local law, local income and personal
property taxes, through investment primarily in a varied portfolio of medium and
lower grade municipal securities. In order to provide investors with income
exempt from Pennsylvania taxes, Pennsylvania tax law requires that the
Pennsylvania Fund be organized in Pennsylvania. Accordingly, the Pennsylvania
Fund will not reorganize as a Delaware business trust.

EXPENSES

The expenses related to the Amended Declaration of Trust will be borne by Van
Kampen American Capital and the Pennsylvania Fund as set forth under "EXPENSES"
below.

21
<PAGE> 30

RECOMMENDATION OF TRUSTEES

The VK Board has unanimously approved the proposed Amended Declaration of
Trust and has determined that it is in the best interests of the Pennsylvania
Fund. THE VK BOARD RECOMMENDS THAT SHAREHOLDERS OF THE PENNSYLVANIA FUND VOTE
"FOR APPROVAL" OF PROPOSAL 2.

REQUIRED VOTE

In accordance with the Current Declaration of Trust of the Pennsylvania Fund,
an affirmative vote of the holders of a majority of the outstanding shares of
the Pennsylvania Fund is required to approve the Amended Declaration of Trust.

- - ------------------------------------------------------------------------------
PROPOSAL 3: ELECTION OF TRUSTEES
- - ------------------------------------------------------------------------------

At a meeting held on April 6-7, 1995, the VK Board unanimously approved
increasing the number of trustees for each VK Trust from seven to fifteen and
nominated each of the incumbent trustees for re-election and also nominated
Messrs. J. Miles Branagan, Dr. Richard E. Caruso, Dr. Roger Hilsman, Don G.
Powell, David Rees, Lawrence J. Sheehan, Dr. Fernando Sisto and William S.
Woodside to fill the new trustee positions. Each of the new nominees currently
serves on the AC Board. The AC Board has also unanimously on May 11, 1995,
approved increasing the number of members of the AC Board from eight to fourteen
and nominated each of its incumbent trustees for re-election and each of the
trustees of the VK Board, except for Mr. McDonnell, to fill such new positions.
Mr. McDonnell, an interested person of the VK Adviser and the AC Adviser, will
not join the AC Board so that the AC Board will remain in compliance with
Section 15(f) of the 1940 Act.

The VK Board together with the AC Board evaluated the benefits to shareholders
resulting from the proposed combination of the VK Board and the AC Board. Each
of the VK Board and the AC Board determined that a combined board could more
effectively seek to maximize the benefits of a unified fund complex including:
implementation of exchangeability of shares among the VK Funds and the AC Funds;
positioning the unified fund complex to maximize benefits for marketing; more
effective supervision of the implementation of improved shareholder service
programs across the unified fund complex; combining historical knowledge and
experience of the two fund complexes; more effective evaluation of potential
combinations of similar funds thereby achieving economies of scale for
shareholders; and the elimination of overlapping expenses and demands on
Management's attention from two separate boards.

The VK Board evaluated the costs to shareholders of the VK Funds resulting
from the combination of the VK Board and the AC Board. The principal cost

22
<PAGE> 31

associated with the combination of the two boards would be the added expense of
compensating additional trustees. Seven of the eight additional trustees are not
affiliated persons of the VK Adviser, the Distributor or Van Kampen American
Capital and such persons are eligible for compensation from the VK Funds. In
order to alleviate such additional expense, the trustees approved a reduction in
the compensation per trustee paid by each VK Fund and agreed to an aggregate
annual compensation cap from the combined fund complex of $84,000 per trustee
until December 31, 1996 based upon the current net assets and current number of
Van Kampen American Capital funds. In addition, the VK Adviser has agreed to
reimburse each VK Fund through December 31, 1996 for any increase in the
aggregate trustees' compensation paid by each respective VK Fund after the
Reorganization over the aggregate compensation paid by such VK Fund in its 1994
fiscal year. It is anticipated that by December 31, 1996, reductions in the
number of trustees on the combined board is expected to reduce the aggregate
compensation paid by each VK Fund to the combined board to approximately the
current aggregate compensation of the VK Funds. A comparison of each trustee's
compensation for the 1994 calendar year (prior to the consolidation of the
boards) and pro forma compensation following the combination of the boards is
presented below.

THE TRUSTEES

The following schedule sets forth the initial election or appointment of each
incumbent trustee to the VK Board for each VK Trust listed below:

<TABLE>
<CAPTION>
MR. MR. MR. MR. MR. MR. MR.
VK TRUST MCDONNELL GAUGHAN KENNEDY* MILLER NELSON ROBINSON WHALEN
- - --------------------------- --------- ------- -------- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Government Trust........... 1988 1989 1993 1988 1988 1992 1988
Tax Free Trust............. 1985 1989 1993 1985 1985 1992 1985
Pennsylvania Fund.......... 1987 1989 1993 1987 1987 1992 1987
VKM Trust.................. 1986 1989 1993 1986 1986 1992 1986
Equity Trust............... 1988 1989 1993 1988 1988 1992 1988
Tax Free Money Fund........ 1986 1989 1993 1986 1986 1988 1986
Money Market Trust......... 1989 1989 1993 1986 1986 1986 1989
</TABLE>

- - ---------------

* Mr. Kennedy was appointed by the trustees to the VK Board in 1993, in order to
fill a vacancy created by the resignation of John Dailey and has not
previously been elected by the shareholders. Each of the other incumbent
trustees was last approved by shareholders of the respective VK Trust at a
joint meeting of shareholders held on January 14, 1993.

With respect to each VK Trust, fifteen trustees are to be elected at the
Meeting to serve until reaching their designated retirement age or until their
successors are duly elected and qualified. The election of each nominee to the
board of a VK Trust requires the affirmative vote of a plurality of all Shares
of such VK Trust present in person or by proxy. The shareholders of all VK Funds
organized as sub-trust or

23
<PAGE> 32

series of a VK Trust will vote together as a single class to elect the trustees
of the respective VK Trust. It is the intention of the persons named in the
enclosed proxy to vote the Shares represented by them for the election of the
nominees listed below unless the proxy is marked otherwise.

The proposed Trust Instrument for each Delaware Trust and the proposed Amended
Declaration of Trust for the Pennsylvania Fund (as discussed in Proposals 1 and
2, respectively) provide that the board of trustees shall consist of not more
than twenty trustees. In the event a vacancy occurs on the board of trustees,
the trustees currently intend that the size of the board will be reduced over
time from fifteen to eight. Thereafter, subject to the provisions of the 1940
Act, the remaining trustees shall appoint a person to fill the vacancy.

Following the Meeting, the VK Funds do not contemplate holding regular
meetings of shareholders to elect trustees or otherwise. When an investment
company does not hold regular annual meetings, it is the position of the staff
of the SEC and a policy of each VK Trust and will be a policy of the proposed
Delaware Trusts that holders of record of two-thirds of the outstanding shares
of such trusts may file a declaration in writing or may vote at a special
meeting for the purpose of removing a trustee. The board will be required to
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any trustee when requested in writing to do so by the
record holders of not less than 10% of the total outstanding shares of such
trust. In addition, the board will comply with the requirements of Section 16(c)
of the 1940 Act with respect to communications with shareholders.

With respect to each VK Trust, each nominee named below has agreed to serve as
a trustee if elected; however, should any nominee(s) become unable or unwilling
to accept nomination or election, the proxies will be voted for one or more
substitute nominee(s) designated by the present VK Board.

The following sets forth the names, ages, principal occupations and other
information respecting the trustee nominees.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- - ---------------------------- ------------------------------------------
<S> <C>
J. Miles Branagan........... Co-founder, Chairman, Chief Executive
2300 205th Street Officer and President of MDT Corporation,
Torrance, CA 90501 a company which develops manufactures,
Age: 62 markets and services medical and
scientific equipment. A director or
trustee of each of the AC Funds.
</TABLE>

24
<PAGE> 33

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- - ---------------------------- ------------------------------------------
<S> <C>
Richard E. Caruso........... Founder, Chairman and Chief Executive
Two Randor Station, Suite Officer, Integra Life Sciences
314 Corporation, a firm specializing in life
King of Prussia Road sciences. Trustee of Susquehanna
Radnor, PA 19087 University and First Vice President, The
Age: 52 Baum School of Art; Founder and Director
of Uncommon Individual Foundation, a youth
development foundation. Director of
International Board of Business
Performance Group, London School of
Economics. Formerly, Director of First
Sterling Bank, and Executive Vice
President and a Director of LFC Financial
Corporation, a provider of lease and
project financing. A director or trustee
of each of the AC Funds.
Philip P. Gaughan........... Prior to February, 1989, Managing Director
9615 Torresdale Avenue and Manager of Municipal Bond Department,
Philadelphia, PA 19114 W. H. Newbold's Sons & Co. A trustee of
Age: 66 each of the VK Funds.
Roger Hilsman............... Professor of Government and International
251-1 Hamburg Cove Affairs Emeritus, Columbia University. A
Lyme, CT 06371 director or trustee of each of the AC
Age: 75 Funds.
R. Craig Kennedy............ President and Director, German Marshall
1341 E. 50th Street Fund of the United States. Formerly,
Chicago, IL 60615 advisor to the Dennis Trading Group Inc.
Age: 43 Prior to 1992, President and Chief
Executive Officer, Director and member of
the Investment Committee of the Joyce
Foundation, a private foundation. A
trustee of each of the VK Funds.
</TABLE>

25
<PAGE> 34

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- - ---------------------------- ------------------------------------------
<S> <C>
Dennis J. McDonnell*........ President, Chief Operating Officer and a
One Parkview Plaza Director of the VK Adviser, the AC Adviser
Oakbrook Terrace, IL 60181 and Van Kampen American Capital
Age: 53 Management, Inc. Director of VK/AC
Holding, Inc. and Van Kampen American
Capital. Director of McCarthy, Crisanti &
Maffei, Inc. and Chairman and a Director
of MCM Asia Pacific Company, Ltd.
President, Chief Executive Officer and a
trustee of each of the VK Funds. He also
is President, Chief Executive Officer and
a trustee of the Van Kampen Merritt Series
Trust and closed- end investment companies
advised by the VK Adviser. Prior to
December, 1991, Senior Vice President of
Van Kampen Merritt Inc.
Donald C. Miller............ Prior to 1992, Director of Royal Group,
415 North Adams Inc., a company in insurance related
Hinsdale, IL 60521 businesses. Formerly Vice Chairman and
Age: 75 Director of Continental Illinois National
Bank and Trust Company of Chicago and
Continental Illinois Corporation. Chairman
of the Board and a trustee of each of the
VK Funds.
Jack E. Nelson.............. President of Nelson Investment Planning
423 Country Club Drive Services, Inc., a financial planning
Winter Park, FL 32789 company and registered investment adviser.
Age: 59 President of Nelson Investment Brokerage
Services Inc., a member of the National
Association of Securities Dealers, Inc.
(NASD) and Securities Investors Protection
Corp. (SIPC). A trustee of each of the VK
Funds.
</TABLE>

26
<PAGE> 35

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- - ---------------------------- ------------------------------------------
<S> <C>
Don G. Powell*.............. President, Chief Executive Officer and a
2800 Post Oak Blvd. Director of VK/AC Holding, Inc. and Van
Houston, TX 77056 Kampen American Capital and Chairman,
Age: 55 Chief Executive Officer and a Director of
Van Kampen American Capital Distributors,
Inc., the VK Adviser, the AC Adviser and
Van Kampen American Capital Management,
Inc. Director, President and Chief
Executive Officer of Van Kampen American
Capital Advisers, Inc. and Van Kampen
American Capital Exchange Corp.; Director
and Executive Vice President of Advantage
Capital Corporation, ACCESS Investor
Services, Inc., Van Kampen American
Capital Services, Inc. and Van Kampen
American Capital Trust Company; Director
of McCarthy, Crisanti & Maffei, Inc.;
Director, Trustee or Managing General
Partner of each of the AC Funds and other
open-end investment companies and
closed-end investment companies advised by
the AC Adviser. He is also Chairman of the
Board and a trustee of the Van Kampen
Merritt Series Trust and closed-end
investment companies advised by the VK
Adviser.
David Rees.................. Contributing Columnist and, prior to 1995,
1601 Country Club Drive Senior Editor of Los Angeles Business
Glendale, CA 91208 Journal. A director of Source Capital,
Age: 71 Inc., a closed-end investment company
unaffiliated with Van Kampen American
Capital, a director and the second vice
president of International Institute of
Los Angeles. A director or trustee of each
of the AC Funds.
Jerome L. Robinson**........ President of Robinson Technical Products
115 River Road Corporation, a manufacturer and processor
Edgewater, NJ 07020 of welding alloys, supplies and equipment.
Age: 72 Director of Pacesetter Software, a
software programming company specializing
in white collar productivity. Director of
Panasia Bank. A trustee of each of the VK
Funds.
</TABLE>

27
<PAGE> 36

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- - ---------------------------- ------------------------------------------
<S> <C>
Lawrence J. Sheehan*........ Of Counsel to and formerly Partner (from
1999 Avenue of the Stars 1969 to 1994) of the law firm of O'Melveny
Suite 700 & Myers, legal counsel to the AC Funds.
Los Angeles, CA 90067 Director, FPA Capital Fund, Inc.; FPA New
Age: 62 Income Fund, Inc.; FPA Perennial Fund,
Inc.; Source Capital, Inc.; and TCW
Convertible Security Fund, Inc. A director
or trustee of each of the AC Funds.
Fernando Sisto.............. George M. Bond Chaired Professor and,
Stevens Institute prior to 1995, Dean of Graduate School and
of Technology Chairman, Department of Mechanical
Castle Point Station Engineering, Stevens Institute of
Hoboken, NJ 07030 Technology. Director of Dynalysis of
Age: 70 Princeton, a firm engaged in engineering
research. Chairman of the Board and a
director or trustee of each of the AC
Funds.
Wayne W. Whalen*............ Partner in the law firm of Skadden, Arps,
333 West Wacker Drive Slate, Meagher & Flom, legal counsel to
Chicago, IL 60606 the VK Funds. A trustee of each of the VK
Age: 55 Funds. He also is a trustee of the Van
Kampen Merritt Series Trust and closed-end
investment companies advised by the VK
Adviser.
William S. Woodside......... Vice Chairman of the Board of LSG Sky
712 Fifth Avenue Chefs, Inc., a caterer of airline food.
40th Floor Formerly, Director of Primerica
New York, NY 10019 Corporation (currently known as The
Age: 73 Traveler's Inc.). Formerly, Director of
James River Corporation, a producer of
paper products. Trustee, and former
President of Whitney Museum of American
Art. Formerly, Chairman of Institute for
Educational Leadership, Inc., Board of
Visitors, Graduate School of The City
University of New York, Academy of
Political Science. Trustee of Committee
for Economic Development. Director of
Public Education Fund Network, Fund for
New York City Public Education. Trustee of
Barnard College. Member of Dean's Council,
Harvard School of Public Health. Member of
Mental Health Task Force, Carter Center. A
director or trustee of each of the AC
Funds.
</TABLE>

- - ---------------

* Such nominees are "interested persons" (within the meaning of Section
2(a)(19) of the 1940 Act) of each of the VK Funds. Messrs. Powell and
McDonnell are interested persons of the VK Adviser and each VF Fund by reason
of their positions with the VK Adviser. Mr. Sheehan is an interested person
of the VK Adviser and each VK Fund by reason of his firm having acted

28
<PAGE> 37

as legal counsel to the VK Adviser. Mr. Whalen is an interested person of the
VK Funds by reason of his firm acting as legal counsel for each VK Fund.

** Mr. Robinson is an interested person of the Tax Free Money Fund by reason of
owning more than 5% of such fund's outstanding shares.

As of May 19, 1995, certain nominees owned, directly or beneficially, the
number of Class A Shares of each Fund as set forth in the table below. Nominees
who do not own any Shares of the VK Funds have been omitted from the table.
Also, VK Funds which are not owned by any nominees have been omitted from the
table. As of May 19, 1995, no nominee owned any Class B Shares or Class C Shares
of any VK Fund.

CLASS A SHARES OWNED(1)

<TABLE>
<CAPTION>
FUND NAME GAUGHAN KENNEDY MCDONNELL MILLER NELSON ROBINSON WHALEN
- - -------------------------------- ------- ------- --------- ------ ------ --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund............ 210 106 227 4,267 500 204
Balanced Fund................... 66 666 130 100 132
Global Fund..................... 261 131 444 12,975 100 500 3,161
Government Fund................. 540 69 970 3,237 500 4,340
Growth and Income Fund.......... 816 265 1,876 5,138 114 615 62
High Yield Fund................. 443 106 1,692 10,890 500
Limited Term
Municipal Fund................. 1,008 434 202
Money Market Fund............... 14,235 1,000 2,391 809
Municipal Income Fund........... 122 447 12,377 504 3,791
Pennsylvania Fund............... 252
Strategic Income Fund........... 442 86 576 172 100 173
Tax Free High Income Fund....... 162 7,781 500 453
Tax Free Money Fund............. 2,184 7,132,555 789
Utility Fund.................... 314 75 375 150 152
</TABLE>

- - ---------------

(1)Except for the Tax Free Money Fund, ownership of the trustees and officers as
a group constitutes less than 1% of the outstanding Shares of the respective
VK Fund. With respect to the Tax Free Money Fund, Mr. Robinson owns 7,132,555
shares, or approximately 22% of such fund's outstanding shares.

Messrs. Powell and McDonnell own, or have the opportunity to purchase, an
equity interest in VK/AC Holding, Inc., the parent company of Van Kampen
American Capital, and have entered into employment contract (for a term of five
years) with Van Kampen American Capital.

During each VK Fund's respective fiscal year ended in 1994, the VK Board held
between five to ten meetings for each VK Fund. All of the Trustees of each VK
Fund, including former trustee John C. Merritt who resigned from the board of
each fund on January 28, 1995, attended at least 75% of the meetings of the
respective VK Board and all committee meetings thereof of which such trustee was
a member during such fiscal year. During each VK Fund's 1994 fiscal year, the VK
Fund had no standing committees with the exception of an audit committee.

29
<PAGE> 38

Mr. Merritt, who had been a trustee and chairman of the VK Funds, Van Kampen
Merritt Series Trust and closed-end investment companies advised by the VK
Adviser, also resigned as the chairman of the board, chief executive officer and
a director of the VK Adviser, Van Kampen Merritt Management Inc., Van Kampen
Merritt Inc., and chairman, chief executive officer, president, chief operating
officer and director of The Van Kampen Merritt Companies, Inc. and VKM Holding,
Inc. Mr. Merritt's resignation from these Van Kampen Merritt-related entities
was related to the Acquisition. At or subsequent to the closing of the
Acquisition, Mr. Merritt exercised options and sold approximately 49,740 shares
of the common stock of Van Kampen American Capital at a price of $200 per share.
In addition, Mr. Merritt has a severance agreement with Van Kampen American
Capital entitling him to approximately $550,000 payable during 1995. Mr. Merritt
was also a Director of McCarthy, Crisanti & Maffei, Inc., MCM Asia Pacific
Company, Limited, a limited partner of R.L. Renck & Co., Inc., and Vice Chairman
of the Municipal Securities Rulemaking Board.

As of the end of each VK Fund's 1994 fiscal year, each VK Fund's audit
committee consisted of Messrs. Kennedy, Gaughan, Miller and Nelson
(collectively, the "Disinterested Trustees"). The audit committee makes
recommendations to the VK Board concerning the selection of the VK Fund's
independent public accountants, reviews with such accountants the scope and
results of the VK Fund's annual audit and considers any comments that the
accountants may have regarding the VK Fund's financial statements or books of
account. The Disinterested Trustees also are responsible for the annual review
of each VK Fund's investment advisory agreement and any other matters requiring
the approval of the Disinterested Trustees under the 1940 Act. During each VK
Fund's 1994 fiscal year, the audit committee of each VK Fund held between one to
two meetings.

If the Consolidation is approved at the Meeting, it is anticipated that the
combined board will have two standing committees: an Audit Committee and a
Brokerage Review Committee. It is anticipated that the Audit Committee will make
recommendations to the combined board concerning the selection of independent
public accountants, review with such accountants the scope and results of the
annual audit and consider any comments which the accountants may have regarding
the financial statements or books of account and that the Brokerage Review
Committee will monitor the respective adviser's brokerage practices. It is also
anticipated that each trustee not affiliated with the VK Funds or the AC Funds
will serve on one of the committees, but no trustee shall serve on more than one
committee and not receive additional compensation for serving on a committee.

The Disinterested Trustees of each VK Fund are required to select and nominate
Disinterested Trustees and are prepared to review nominations from shareholders
to fill any vacancies in trusteeships. Nominations from shareholders should be
in writing and addressed to the Disinterested Trustees at the respective VK
Trust's

30
<PAGE> 39

office. The Disinterested Trustees of each VK Trust expect to be able to
identify from their own resources an ample number of qualified candidates.

The compensation of trustees who are affiliated persons (as defined in the
1940 Act) of the VK Adviser, the Distributor or Van Kampen American Capital is
paid by the respective entity. Each of the VK Funds pays compensation to all
other trustees. During each VK Fund's 1994 fiscal year, each VK Fund paid
trustees who were not affiliated persons of the VK Adviser, the Distributor or
Van Kampen American Capital, $2,500 per year, and $250 per meeting of the VK
Board, plus expenses. Members of the Audit Committee received $250 for each
meeting of such committee. Under each VK Fund's retirement plan, trustees who
are not affiliated with the VK Adviser, the Distributor or Van Kampen American
Capital, have at least ten years of service and retire at or after attaining the
age of 60 are eligible to receive a retirement benefit equal to $2,500 per year
for each of the ten years following such trustee's retirement. Under certain
conditions, reduced benefits are available for early retirement. Under each VK
Fund's deferred compensation plan, a trustee who is not affiliated with the VK
Adviser, the Distributor or Van Kampen American Capital can elect to defer
receipt of all or a portion of the trustee's fees earned by such trustee until
such trustee's retirement. The deferred compensation earns a rate of return
determined by reference to the respective VK Fund's return or the return of
other VK Funds as selected by the trustee. To the extent permitted by the 1940
Act, each VK Fund may invest in securities of other funds in order to match the
deferred compensation obligation. The deferred compensation plan is not funded
and obligations thereunder represent general unsecured claims against the
general assets of the respective VK Fund.

31
<PAGE> 40

The following table provides summary compensation information for each of the
incumbent trustees of each VK Fund:

1994 COMPENSATION TABLE(1)

<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS ACCRUAL
AGGREGATE PER FUND ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION AS PART BENEFITS FROM THE FUND
FROM EACH OF FUND PER FUND UPON COMPLEX PAID
TRUSTEE VK FUND EXPENSES RETIREMENT(2) TO TRUSTEES(3)
- - ------------------- ------------ ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
R. Craig Kennedy... (4) (5) 2,500 $62,362
Philip P.
Gaughan.......... (4) (5) 2,500 $63,250
Donald C. Miller... (4) (5) 2,500 $62,178
Jack E. Nelson..... (4) (5) 2,500 $62,362
Jerome L.
Robinson......... (4) (5) 2,500 $58,475
Wayne W. Whalen.... (4) (5) 2,500 $49,875
</TABLE>

- - ---------------
(1) Messrs. Merritt and McDonnell, members of the VK Board during fiscal year
1994, were affiliated person of the VK Adviser and did not receive
compensation or retirement benefits directly from the VK Funds.

(2) This is the estimated annual benefits payable per year for the 10-year
period commencing in the year of such Trustee's retirement by a VK Fund
assuming: the Trustee has 10 or more years of service on the board of the VK
Fund and retires at or after attaining the age of 60. Trustees retiring
prior to the age of 60 or with fewer than 10 years of service for the VK
Fund may receive reduced retirement benefits from such VK Fund.

(3) Prior to the Consolidation, the Fund Complex consists of the 20 VK Funds.
The amounts shown in this column are accumulated from the Aggregate
Compensation of such funds in the Fund Complex during the calendar year
ended December 31, 1994. The VK Adviser also serves as investment adviser
for other investment companies; however, with the exception of Messrs.
McDonnell and Whalen, the trustees of the VK Board are not trustees of such
investment companies. Combining the Fund Complex with the other investment
companies advised by the VK Adviser, Mr. Whalen received Total Compensation
of $161,850 during the calendar year ended December 31, 1994.

(4) The Aggregate Compensation from each individual VK Fund during its 1994
fiscal year is shown in Appendix C. Beginning in September 1994, each
Trustee, except Messrs. Gaughan and Whalen, began deferring his aggregate
compensation paid by the VK Funds. The total amount of deferred compensation
(including interest) accrued with respect to each trustee from the Fund
Complex as of December 31, 1994 is as follows: Mr. Kennedy $14,737;

32
<PAGE> 41

Mr. Miller $14,553; Mr. Nelson $14,737; and Mr. Robinson $13,725. Beginning
on January 1, 1995, Messrs. Gaughan and Whalen began deferring all of their
compensation. Compensation deferred by a trustee is invested in one or more
VK Funds until it is distributed to the trustee.

(5) The Retirement Plan commenced as of August 1, 1994 for each of the VK Funds.
The Retirement Plan expense accruals for each VK Fund during its 1994 fiscal
year is shown in Appendix D.

If the combination of the boards is approved by shareholders, the VK Funds
anticipate certain changes in the compensation for trustees. Each VK Fund will
pay trustees who are not affiliated persons of the VK Adviser, the Distributor
or Van Kampen American Capital an annual retainer of $2,500 per year and $125
per regularly quarterly meeting of the VK Funds, plus expenses. No additional
fees are proposed at the present time to be paid for special meetings, committee
meetings or the chairmanship of the board. The principal cost associated with
the combination of the two boards would be the added expense of compensating
additional trustees. Seven of the eight additional trustees are not affiliated
persons of the VK Adviser, the Distributor or Van Kampen American Capital and
such persons are eligible for compensation from the VK Funds. In order to
alleviate such additional expense, the trustees approved a reduction in the
compensation per trustee and agreed to an aggregate annual compensation cap from
the combined fund complex of $84,000 per trustee until December 31, 1996, based
upon the current net assets and current number of Van Kampen American Capital
funds (except that Mr. Whalen, who is also a trustee of 34 closed-end funds
advised by the VK Adviser would receive an additional $119,000 for serving as a
trustee for such funds). In addition, the VK Adviser has agreed to reimburse
each VK Fund through December 31, 1996 for any increase in the aggregate
trustees' compensation paid by such fund in its 1994 fiscal year. It is
anticipated that reductions in the number of trustees on the combined board will
reduce the aggregate compensation of the combined board to approximately the
current aggregate compensation for each VK Fund.

OFFICERS

The following table sets forth certain information concerning the principal
executive officers of each of the VK Funds and certain closed-end investment
companies advised by the VK Adviser (other than information concerning Messrs.
McDonnell and Powell, which is set forth above).

The officers of the VK Funds serve for one year or until their respective
successors are chosen and qualified. The officers receive no compensation from
the VK Funds but are also officers or employees of the VK Adviser, the
Distributor or Van Kampen American Capital and receive compensation in such
capacities. The

33
<PAGE> 42

address of each of the following persons is One Parkview Plaza, Oakbrook
Terrace, Illinois 60181.

<TABLE>
<CAPTION>
POSITIONS AND OTHER PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH EACH VK FUND IN PAST 5 YEARS
- - --------------------- -------------------------- -------------------------------
<S> <C> <C>
Peter W. Hegel....... Vice President Executive Vice President and
Age: 38 Portfolio Manager of the VK
Adviser. Executive Vice
President of the AC Adviser.
Vice President of closed-end
investment companies advised by
the VK Adviser.
Ronald A. Nyberg..... Vice President and Executive Vice President,
Age: 41 Secretary General Counsel and Secretary
of Van Kampen American Capital;
Executive Vice President and a
Director of the VK Adviser and
the Distributor. Executive Vice
President of the AC Adviser.
Vice President and Secretary of
closed-end investment companies
advised by the VK Adviser.
Director of ICI Mutual
Insurance Co., a provider of
insurance to members of the
Investment Company Institute.
Prior to March 1990, Secretary
of Van Kampen Merritt Inc., the
VK Adviser and McCarthy,
Crisanti & Maffei, Inc.
Edward C. Wood III... Vice President, Treasurer Senior Vice President of the VK
Age: 39 and Chief Financial Adviser. Vice President,
Officer Treasurer and Chief Financial
Officer of closed-end
investment companies advised by
the VK Adviser.
Nicholas Dalmaso..... Assistant Secretary Assistant Vice President and
Age: 30 Attorney of Van Kampen American
Capital. Assistant Secretary of
closed-end investment companies
advised by the VK Adviser.
Prior to May, 1992, attorney
for Cantwell & Cantwell, a
Chicago law firm.
Scott E. Martin...... Assistant Secretary Senior Vice President, Deputy
Age: 38 General Counsel and Assistant
Secretary of Van Kampen
American Capital. Senior Vice
President, Deputy General
Counsel and Secretary of the VK
Adviser and the Distributor.
Assistant Secretary of
closed-end investment companies
advised by the VK Adviser.
</TABLE>

34
<PAGE> 43

<TABLE>
<CAPTION>
POSITIONS AND OTHER PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH EACH VK FUND IN PAST 5 YEARS
- - --------------------- -------------------------- -------------------------------
<S> <C> <C>
Weston B. Assistant Secretary Vice President, Associate
Wetherell.......... General Counsel and Assistant
Age: 38 Secretary of Van Kampen
American Capital, the VK
Adviser and the Distributor and
an Assistant Secretary of
McCarthy, Crisanti & Maffei,
Inc. Assistant Secretary of
closed-end investment companies
advised by the VK Adviser.
John L. Sullivan..... Controller First Vice President of the VK
Age: 39 Adviser. Controller of
closed-end investment companies
advised by the VK Adviser.
Steven M. Hill....... Assistant Treasurer Assistant Vice President of the
Age: 30 VK Adviser. Assistant Treasurer
of closed-end investment
companies advised by the VK
Adviser.
</TABLE>

SHAREHOLDER APPROVAL

The affirmative vote of a plurality of the Shares of a VK Trust present in
person or by proxy is required to elect the nominees to such VK Trust. THE
BOARDS OF TRUSTEES OF EACH VK TRUST RECOMMEND A VOTE "IN FAVOR" OF ALL OF THE
NOMINEES.

- - ------------------------------------------------------------------------------
PROPOSAL 4. APPROVAL OF CHANGE IN THE GLOBAL FUND'S FUNDAMENTAL INVESTMENT
POLICY WITH RESPECT TO CONCENTRATION OF INVESTMENTS
- - ------------------------------------------------------------------------------

The Global Fund, at its inception, designated as fundamental its policy of
concentrating its investment in the banking industry. Specifically, the Global
Fund's prospectus, dated April 28, 1995, states the following:

In normal circumstances, and as a matter of fundamental policy, the Global
Fund "concentrates" at least 25% of its assets in obligations of or issued by
domestic and foreign companies engaged in the banking
industry . . . . However, for temporary purposes when, as determined by the
Adviser, business or financial conditions warrant, the Global Fund may invest
less than 25% of its assets in such industry.

Several significant changes have occurred in the banking industry since the
Global Fund adopted its fundamental policy with respect to concentration.
Competition in the industry for debt products has substantially narrowed profit
margins from traditional lending activities. Moreover, the returns from
traditional lending activities have also lagged behind the rising costs of funds
due to recent interest rate increases engineered by the Federal Reserve Board of
Governors.

35
<PAGE> 44

In light of such changes, the VK Adviser determined that business and
financial conditions warrant investing less than 25% of the Global Fund's assets
in the banking industry on a temporary basis and, accordingly, the Global Fund
currently invests less than 25% of its assets in the banking industry. The VK
Adviser now believes that the best interest of shareholders of the Global Fund
would be served if the Global Fund adopted a fundamental policy of not investing
more than 25% of its assets in the banking industry. The adoption of such a
policy would permit the Global Fund to effectively reduce its exposure to the
risks associated with the banking industry and also enable the Global Fund to
swiftly react to other market opportunities, but would limit the Global Fund's
ability to invest in the banking industry to 25% of its assets should investment
opportunities in the banking industry improve.

At a meeting of the VK Board on April 7, 1995, the VK Adviser recommended that
the Global Fund amend its fundamental policy with respect to concentration such
that the Global Fund would no longer be permitted to invest more than 25% of its
assets in the banking industry or in any other industry. Section 13(a) of the
1940 Act states that unless authorized by a vote of a "majority of the
outstanding voting securities", an investment company may not deviate from,
among other things, its policy in respect to concentration of investments in a
particular industry, as recited in its prospectus. Although the prospectus of
the Global Fund allows it to invest less than 25% of its assets in the banking
industry, such level of investment is only for temporary purposes. In order to
maximize flexibility with respect the management of the Global Fund's portfolio,
and based on the recommendation of the VK Adviser, the VK Board unanimously
voted to seek authorization from shareholders to eliminate the Global Fund's
fundamental policy regarding concentration in the banking industry.

SHAREHOLDER APPROVAL

The affirmative vote of a "majority of the outstanding voting securities" of
the Global Fund is required for approval of this Proposal 4. The affirmative
vote of a "majority of the outstanding voting securities" is defined in the 1940
Act as the lesser of (i) 67% or more of the voting securities entitled to vote
thereon present in person or by proxy at a meeting, if holders of more than 50%
of the outstanding voting securities are present in person or represented by
proxy at such meeting, or (ii) more than 50% of the outstanding voting
securities of a fund. The holders of Shares of the Global Fund will vote
together as a single class for this Proposal 4. THE BOARD OF TRUSTEES OF THE
GLOBAL FUND RECOMMENDS A VOTE "FOR APPROVAL" OF THIS PROPOSAL 4.

36
<PAGE> 45

- - ------------------------------------------------------------------------------
PROPOSAL 5: RATIFICATION OF INDEPENDENT PUBLIC
ACCOUNTANTS
- - ------------------------------------------------------------------------------

The VK Board, including a majority of the Disinterested Trustees, have
selected the firm of KPMG Peat Marwick LLP, independent public accountants, to
examine the financial statements for the current fiscal year of each VK Fund.
Each VK Fund knows of no direct or indirect financial interest of such firm in
such VK Fund. Such appointment is subject to ratification or rejection by the
shareholders of each VK Fund. Unless a contrary specification is made, the
accompanying proxy will be voted in favor of ratifying the selection of such
accountants. It is expected that KPMG Peat Marwick LLP will also act as
independent public accountants for VK/AC Holding, Inc., Van Kampen American
Capital, the VK Adviser and the Distributor.

Representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting and will be available to respond to questions from shareholders and will
have the opportunity to make a statement if they so desire.

SHAREHOLDER APPROVAL

The shareholders of each VK Fund, voting with respect to such VK Fund as a
single class, are entitled to vote on this issue. An affirmative vote of a
majority of the Shares of each VK Fund (excluding the Money Market Fund) present
in person or by proxy and voting is required to ratify the selection of the
accountants for such VK Fund. With respect to the Money Market Fund, an
affirmative vote of a majority of the Shares of the Money Market Fund cast is
required to ratify the selection of the accountants for such fund. THE BOARDS OF
TRUSTEES OF EACH VK FUND RECOMMEND A VOTE "FOR" RATIFICATION OF KPMG PEAT
MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CURRENT FISCAL YEAR OF
EACH VK FUND.

- - ------------------------------------------------------------------------------

EXPENSES

- - ------------------------------------------------------------------------------

Van Kampen American Capital will initially bear the expense of preparing,
printing and mailing the enclosed form of proxy, the accompanying Notice, this
Proxy Statement and all other related costs in connection with the solicitation
of proxies with respect to the Consolidation, which shall include reimbursement
to banks, brokers and others for their reasonable expenses in forwarding proxy
solicitation material to the beneficial owners of the Shares of each VK Fund
(the "Proxy Expense"). During the five-year period ending on the fifth
anniversary of the consummation of the Consolidation, if a VK Fund realizes a
benefit resulting from the Consolidation, the VK Fund will reimburse Van Kampen
American Capital in an amount equal to the lesser of (i) the amount of such
benefit or (ii) such VK Fund's pro rata share of the Proxy Expense. In no event
shall the unreimbursed Proxy Expense born by Van Kampen American Capital accrue

37
<PAGE> 46

interest or bear any other type of carrying charge. No VK Fund shall reimburse
Van Kampen American Capital for any benefit received after the fifth anniversary
of the consummation of the Consolidation.

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 each of the VK Funds, the VK Adviser or Van Kampen American
Capital, or by dealers or their representatives or by Applied Mailing Systems, a
solicitation firm located in Boston, Massachusetts.

- - ------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- - ------------------------------------------------------------------------------

As a general matter, each VK Fund does not hold regular annual meetings of
shareholders. Any shareholder who wishes to submit proposals for consideration
at a meeting of such shareholder's VK Fund should send such proposal to the
respective VK Fund at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. To
be considered for presentation at a shareholders' meeting, rules promulgated by
the SEC require that, among other things, a shareholder's proposal must be
received at the offices of such VK Fund a reasonable time before a solicitation
is made. Timely submission of a proposal does not necessarily mean that such
proposal will be included.

- - ------------------------------------------------------------------------------
GENERAL
- - ------------------------------------------------------------------------------

Management of each VK 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 shareholders of each VK Fund entitled to be present and vote at the
Meeting will be available at the offices of the respective VK Fund, One Parkview
Plaza, Oakbrook Terrace, Illinois 60181, for inspection by any shareholder
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 any VK Fund may
necessitate adjournment and may subject such VK 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
June 2, 1995

38
<PAGE> 47

APPENDIX A

LIST OF 5% BENEFICIAL OWNERS

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
GOVERNMENT FUND Donaldson Lufkin Jenrette 52,787 6%
Securities Corporation Inc. Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
Bishop of the Roman Catholic 64,058 7%
Diocese of Charlotte NC Class C
C/O W.G. Weldon
P.O. Box 36776
Charlotte, NC 28236-6776
Martha J. Ruoff Estate 63,809 7%
Russell Ruoff Conservator Class C
435 North Alfred
Los Angeles, CA 90048-2504
TAX FREE HIGH INCOME Bernard Segall 27,292 5%
FUND 3501 Westlake Drive Class C
Austin, TX 78746-1610
Smith Barney Shearson 69,109 46%
388 Greenwich Street Class D
New York, NY 10013-2375
John A. Wilson 78,104 53%
Diane Brittian Co. Tr. Class D
John A. Wilson Rev. Trust
4458 Cardiff
Ft. Worth, TX 76133-3551
MUNICIPAL INCOME FUND Edward D. Jones and Co. 17,512 5%
F/A/O Frieda K. Bowker Ttee. Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
Dain Bosworth Inc. FBO 19,303 6%
Richard I. and Eleanor L. Nannini Class C
2925 Juliann Way
Reno, NV 89509-5198
Donald L. and Eleanor W. Reid 70,144 100%
1875 S. Orlando Class D
Maitland, FL 32751-6668
LIMITED TERM Edward D. Jones and Co. 26,614 5%
MUNICIPAL FUND F/A/O William J. Cole Ttee. Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
Edward D. Jones and Co. 26,614 5%
F/A/O William J. Cole Ttee. Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
</TABLE>

A-1
<PAGE> 48

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
LIMITED TERM Robert Joseph Holuba 30,541 6%
MUNICIPAL FUND 2 Hackensack Avenue Class C
Kearny, NJ 07032-4611
Sweet Candy Company 36,847 7%
Attn: Curtis Anderson Class C
224 South 2nd West
Salt Lake City, UT 84101-1801
Stanley J. & Robert J. Holuba Co. 45,007 9%
Tr. Class C
Stanley Joseph Holuba Trust
2 Hackensack Avenue
Kearny, NJ 07032-4611
Stanson Corporation 45,980 9%
2 Hackensack Avenue Class C
Kearny, NJ 07032-4611
Helen Friedman 50,765 10%
74 Hillside Avenue Class C
Short Hills, NJ 07078-2054
Stanley Jacob Holuba 53,209 10%
Robert Joseph Holuba Co. Tr. Class C
Stanley Joseph Holuba Trust
2 Hackensack Avenue
Kearny, NJ 07032-4611
CALIFORNIA INSURED Oluyemisi S. Afuape 8,655 5%
TAX FREE FUND P.O. Box 50226 Class C
Pasadena, CA 91115-0226
Eugene C. & Joan A. Ostrander Tt 8,888 5%
Eugene C. and Joan A. Ostrander Class C
Fam. Tr.
4440 Cerritos Avenue
Long Beach, CA 90807-2464
Dennis W. Zaiko 8,592 5%
G. Linda Ruiz-Zaiko Co. Tr. Class C
Zaiko Family Trust
4 Ashford Ct.
Alamo, CA 94507-2406
Richard M. Sasahara 10,889 6%
16222 S. St. Andrews Pl. Class C
Gardena, CA 90247-4624
Timothy J. & Mary Beth Conlon 12,205 7%
Ttee. Timothy J. Conlon & Mary Class C
Beth Conlon Revoc. Tr.
272 Donald Drive
Moraga, CA 94556-2310
</TABLE>

A-2
<PAGE> 49

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
CALIFORNIA INSURED Kenneth A. and Vera Scott 12,448 7%
TAX FREE FUND 38045 Wesley Ct. Class C
Palm Dale, CA 93552-3238
Carol Ruth Henry Tr. 14,963 8%
Carol Ruth Henry Rev. Liv. Tr. Class C
1105 Ironwood Rd.
Alameda, CA 94502-6620
Robert L. Hayes Tr. 17,107 9%
u/w Gloria Henry Class C
3599 Wells Rd.
Oakley, CA 94561-5011
Kenneth Henry Tr. 17,447 10%
Kenneth Henry Rev. Liv. Tr. Class C
3599 Well Rd.
Oakley, CA 94561
Abdullah M.S. Al Athel 17,550 10%
Lolowa Al Athel Class C
23511 Paseo De Valencia
Laguna Hills, CA 92653
FLORIDA INSURED TAX Peter C. and Jane H. Manus 56,224 6%
FREE 1471 NW Sweet Bay Cir. Class B
Palm City, FL 34990-8012
Wayne R. Darnell 662 22%
13840 Wilcox Rd. Class C
Largo, FL 34644-2106
Ada L. Dean 723 24%
9433 Fountainbleau Blvd. Class C
Apt. 207
Miami, FL 33172-5684
Edward D. Jones & Co. 698 24%
F/A/O Janice R. Carter Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
PaineWebber for the Benefit of 710 24%
Eunice M. Lasche Class C
7308 Ola Avenue
Tampa, FL 33604-4064
NEW JERSEY TAX FREE Donaldson Lufkin Jenrette 16,644 5%
Securities Corporation Inc. Class A
P.O. Box 2052
Jersey City, NJ 07303-2052
</TABLE>

A-3
<PAGE> 50

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
NEW JERSEY TAX FREE Maliad and Mary Maher 21,277 7%
228 Eagle Rock Avenue Class A
Roseland, NJ 07068-1711
Prudential Securities FBO 35,852 7%
Edith P.C. Taylor Class B
25 Hickory Place
Apt. D-1
Chatham, NJ 07928-1479
Edward D. Jones & Co. 1,662 7%
F/A/O Henry J. Glaser Jr. Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
Garden State Cutting 3,504 16%
Attn: Vincent Landi Class C
66 Gray Street
Paterson, NJ 07501-3502
John H. and Carol A. Schroeder 3,619 16%
20 Byron Dr. Class C
Mount Laurel, NJ 08054-4700
Louise I. Grill 10,879 50%
C/O Alvin H. Frankel POA Class C
601 Haddon Avenue
Collingswood, NJ 08108-3703
NEW YORK TAX FREE PaineWebber For the Benefit of 722 5%
Mr. Charles L. and Catherine Boss Class C
29 Emerson Place
Sag Harbor, NY 11963-2310
PaineWebber For the Benefit of 1,219 8%
Lauren M. Schwartz C/F Class C
Noah A. Schwartz
UNIF Gift to Min Act NY
98 Irma Drive
Oceanside, NY 11572-5717
Prudential Securities FBO 2,097 14%
Linda A. and Kenneth Kahn Class C
80 Lancaster
Buffalo, NY 14222-1404
PaineWebber For the Benefit of 3,146 22%
Edwin E. Koral Class C
755 Edge of Woods Rd.
Water Mill, NY 11976-2430
</TABLE>

A-4
<PAGE> 51

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
NEW YORK TAX FREE PaineWebber For the Benefit of 6,184 43%
Betty Ballin, Special Account Class C
17 Michael F Street
Locust Valley, NY 11560-1223
PENNSYLVANIA TAX FREE Donaldson Lufkin Jenrette 8,394 5%
INCOME Securities Class C
Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-2052
Donaldson Lufkin Jenrette 11,816 7%
Securities Class C
Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-2052
PaineWebber For the Benefit of 25,327 15%
Wise Business Forms Inc. Class C
Bonnie Brook Industrial Park
P.O. Box 1666
Butler, PA 16003-1666
HIGH YIELD First Incorporate 11,489 5%
105 South Parkway Class C
Columbus, NE 68601-4505
A. Donald Gilden & Gary M. Sidell 10,031 5%
Ttee. Class C
U/W/O Paul L. Strassberg
765 Robin Rd.
Amherst, NY 14228-1045
Jim Osherow 9,821 5%
4196 Derrwood Dr. Class C
Akron, OH 44333-1134
Prudential Securities FBO 10,497 5%
Doris, Michael & Richard Class C
Maceroni, & Christine Correll &
Laura Trombley
Sterling Heights, MI 48313
Kathleen G. McRae 16,293 8%
4048 Taylor Rd. Class C
Chesapeake, VA 23321-5510
Elwyn J. Remington Ttee. 21,478 10%
Elwyn J. Remington Rev. Tr. Class C
1504 1st Ave.
Antigo, WI 54409-1101
SHORT TERM GLOBAL Matthew Chapman 1,305 5%
5771 Royal Ave. Class C
Eugene, OR 97402-9335
</TABLE>

A-5
<PAGE> 52

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
SHORT TERM GLOBAL Roney & Co. FBO 1,787 7%
Ralph M. & Carla J. Wright Class C
1 Griswold St.
Detroit, MI 48226-3411
Nationsbank Tr. 802,021 7%
Health Services Self Ins. Tr. Class A
P.O. Box 831575
Dallas, TX 75283
Raymond James & Assoc. Inc. 2,184 9%
Hugh D. McPherson IRA Class C
1217 Denton Rd.
Winter Park, FL 32792-2774
Xerox Financial Services 1,161,012 11%
Life Insurance Co. Class A
1 Tower Ln. #3000
Villa Park, IL 60181-4644
Edward D. Jones & Co. 3,272 13%
F/A/O Gaines Electric Co. Inc. Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
Principal Financial IRA Cust. FBO 3,642 15%
Mary Alice Murphy Class C
P.O. Box 215132
Dallas, TX 75221-5132
Principal Financial Cust. FBO 10,423 43%
Mary A. Murphy Class C
P.O. Box 508
Dallas, TX 75221-0508
ADJUSTABLE RATE U.S. Chicago Board of Education 291,531 14%
GOVERNMENT Attn: Treasury Dept. 6 West Class B
1918 W. Pershing Rd.
Chicago, IL 60609-2321
PaineWebber For the Benefit of 45,887 15%
Breakstone Investment Partners, Class C
Ltd.
19500 Collins Ave.
N. Miami Beach, FL 33160-2259
Chicago Board of Education 53,362 17%
Attn: Treasury Dept. 6 West Class C
1918 W. Pershing Rd.
Chicago, IL 60609-2321
</TABLE>

A-6
<PAGE> 53

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
ADJUSTABLE RATE R & N Associates 110,724 18%
U.S. GOVERNMENT C/O Glen Neubert Class A
4100 McEwen Rd.
Dallas, TX 75244-5107
Putnam Savings Bank 98,334 32%
A Corporation Class C
P.O. Box 151
Putnam, CT 06260-0151
STRATEGIC INCOME Joseph E. & Frances J. Mullaney 7,862 5%
107 Timber Ridge Rd. Class C
Newtown, PA 18940-2807
Rabun O. Smith & 8,324 5%
Kimberly Smith Harris Class C
305 Tanglewood Ct.
Warner Robins, GA 31093-2110
Donaldson Lufkin Jenrette 8,881 5%
Securities Corporation Inc. Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
MER & Co. FBO 8,634 5%
Don Sykes Class C
P.O. Box 1447
Terre Haute, IN 47808-1447
Raymond James & Assoc. Inc. 14,137 9%
Fredrick E. Starn IRA Class C
219 Thornton Dr.
Palm Beach Gardens, FL 33418-8036
Felipe G. Sanchez 13,829 9%
Mexico DF Enrique Class C
Rebsamen No. 314
Col Narvarte, MX 03100
Edward D. Jones & Co. F/A/O 15,197 10%
Edward D. Jones & Co. Cust. Class C
FBO Herman L. Dunning IRA
P.O. Box 2500
Maryland Hts, MO 63043-8500
EMERGING MARKETS Van Kampen American Capital 420,100 100%
Distributors, Inc. Class A
One Parkview Plz., 9th Floor
Oakbrook Terrace, IL 60181-4486
Van Kampen American Capital 140,100 100%
Distributors, Inc. Class B
One Parkview Plz., 9th Floor
Oakbrook Terrace, IL 60181-4486
</TABLE>

A-7
<PAGE> 54

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
EMERGING MARKETS Van Kampen American Capital 140,100 100%
Distributors, Inc. Class C
One Parkview Plz., 9th Floor
Oakbrook Terrace, IL 60181-4486
GROWTH AND INCOME Edward D. Jones and Co. 3,763 5%
FUND F/A/O International Guards Union Class C
P.O. Box 2500
Maryland Heights, MO 63043-8500
Donaldson Lufkin Jenrette 3,976 5%
Securities Corporation Inc. Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
Donaldson Lufkin Jenrette 5,242 7%
Securities Corporation Inc. Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
Parker Hunter Inc. FBO 14,476 19%
Dolores M.L. Esparraguera IRA Class C
Parker/Hunter Custodian
9 Glenview Avenue
Oil City, PA 16301-2137
Parker Hunter Inc. FBO 16,354 22%
Frank Esparraguera IRA Class C
Parker/Hunter Custodian
9 Glenview Avenue
Oil City, PA 16301-2137
UTILITY FUND L.J. Thompson 5,178 5%
New Canton Highway Class C
P.O. Box 273
Clyde, NC 28721-0273
Donaldson Lufkin Jenrette 6,002 6%
Securities Corporation Inc. Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
John A. Blackwell Tr. 7,014 7%
Blackwell-Stevenson Co. P/S/Plan Class C
1840 Mayview Rd.
Bridgeville, PA 15017-1556
L.P. & Teresa Anderson Foundation 6,731 7%
P.O. Box 190 Class C
Miles City, MT 59301-0190
</TABLE>

A-8
<PAGE> 55

LIST OF 5% BENEFICIAL OWNERS -- CONTINUED

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
VK FUND NAME BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- - --------------------- ---------------------------------- -------------------- ----------
<S> <C> <C> <C>
UTILITY FUND PaineWebber For the Benefit of San 6,860 7%
Jose State University FNDN Class C
Attn: John Troyan
P.O. Box 720130
San Jose, CA 95172-0130
Interstate/Johnson Lane 8,160 8%
Interstate Tower Class C
P.O. Box 1220
Charlotte, NC 28201-1220
BALANCED FUND Edward D. Jones & Co. F/A/O 15,805 5%
Clyde M. Harper Class A
P.O. Box 2500
Maryland Heights, MO 63043-8500
Donaldson Lufkin Jenrette 3,406 7%
Securities Corporation Class C
P.O. Box 2052
Jersey City, NJ 07303-2052
Parker Hunter Inc. FBO 18,534 39%
Dolores M.L. Esparraguera IRA Class C
Parker/Hunter Custodian
9 Glenview Avenue
Oil City, PA 16301-2137
Parker Hunter Inc. FBO 20,941 44%
Frank Esparraguera IRA Class C
Parker/Hunter Custodian
9 Glenview Avenue
Oil City, PA 16301-2137
TAX FREE MONEY FUND Jerome L. Robinson 2,462,554 7%
C/O Robinson Tech. Products Corp.
P.O. Box 350-115 River Rd.
Edgewater, NJ 07020
Jerome L. Robinson 4,000,000 12%
C/O Robinson Tech. Products Corp.
Re: Merchants Bank of New York
P.O. Box 350-115 River Rd.
Edgewater, NJ 07020-1007
Jerome L. Robinson 670,001 3%
C/O Robinson Tech. Products Corp.
Re: NatWest
P.O. Box 350-115 River Rd.
Edgewater, NJ 07020-1007
</TABLE>

A-9
<PAGE> 56

APPENDIX B

AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION

AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of ,
1995 (the "Agreement") between Van Kampen Merritt a
Massachusetts business trust (the "Van Kampen Trust"), on behalf of its
sub-trust, Van Kampen Merritt (the "Van Kampen Fund"), and Van
Kampen Merritt , a Delaware business trust (the "New Trust"), on
behalf of its series, Van Kampen Merritt Fund (the "New
Fund").

WHEREAS the Van Kampen Fund is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and

WHEREAS the Van Kampen Trust is authorized to issue an unlimited number of
shares of beneficial interest without par value;

WHEREAS the New Trust was organized pursuant to an Agreement and Declaration
of Trust dated May , 1995, and is presently authorized to establish and
designate separate series thereof which may issue shares of beneficial interest,
without par value, including shares of a series such as the New Fund;

WHEREAS, for good and sufficient business reasons the parties desire to change
the place of organization of the Van Kampen Trust and Van Kampen Fund; and

WHEREAS, the parties intend that this transaction (the "Reorganization")
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:

1. Plan of Reorganization. The Van Kampen Fund shall, prior to the Effective
Time of the Reorganization, as defined below, transfer all of its business and
assets and assign all of its liabilities to the New Fund, and the New Fund shall
acquire all such business and assets and shall assume all such liabilities of
the Van Kampen Fund in exchange for delivery to the Van Kampen Fund of a number
of shares of the New Fund (both full and fractional) equivalent to the number of
shares of the Van Kampen Fund outstanding immediately prior to the Effective
Time of the Reorganization. All debts, liabilities, obligations and duties of
the Van Kampen Fund, to the extent that they exist at or after the Effective
Time of the Reorganization, shall after the Effective Time of the Reorganization
attach to the New Fund and may be enforced against the New Fund to the same
extent as if the same had been incurred by the New Fund.

B-1
<PAGE> 57

2. Liquidation and Dissolution of the Van Kampen Fund. At the Effective Time
of the Reorganization, the Van Kampen Fund will liquidate and the shares of the
New Fund (both full and fractional) received by the Van Kampen Fund will be
distributed to the shareholders of the Van Kampen Fund in exchange for their
shares of the Van Kampen Fund, each shareholder to receive a number of shares of
the New Fund equal to the number of shares of the Van Kampen Fund held by such
person. Such liquidation and distribution will be accompanied by the
establishment of an open account on the share records of the New Fund in the
name of each shareholder of the Van Kampen Fund and representing the respective
pro rata number of shares of the New Fund due such shareholder. Certificates for
shares of the Van Kampen Fund issued prior to the Reorganization shall represent
outstanding shares of the New Fund after the Effective Time of the
Reorganization. As soon as practicable after the Effective Time of the
Reorganization, the Van Kampen Trust shall file with the Trust Division of the
Secretary of State of the Commonwealth of Massachusetts (the "Division") a copy
of the resolutions of its Trustees to terminate the Van Kampen Trust, in such
form as shall be satisfactory to the Division, and which resolutions shall
include the exact date of the Van Kampen Trust's termination and shall take, in
accordance with Massachusetts law, all other steps as shall be necessary and
proper to effect a complete dissolution of the Van Kampen Trust and the Van
Kampen Fund.

3. Issued Share. Prior to the Effective Time of the Reorganization and after
the Van Kampen Fund has taken the actions authorized by shareholders of the Van
Kampen Fund pursuant to Section 4(f) hereof, the single share of the New Fund
heretofore held by the Van Kampen Fund shall be redeemed and canceled by the New
Fund.

4. Conditions Precedent. The obligations of the Van Kampen Fund, the New Trust
and the New Fund to effectuate the Plan of Reorganization and Liquidation
hereunder shall be subject to the satisfaction of each of the following
conditions:

(a) Such authority, including "no-action" letters and orders from the
Securities and Exchange Commission (the "Commission") and state securities
commissions as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement, shall have been received.

(b) One or more post-effective amendments to the Registration Statement of
the Van Kampen Trust on Form N-1A under the Securities Act of 1933 and the
1940 Act, containing (i) such amendments to such Registration Statement as are
determined by the Board of Trustees of the Van Kampen Trust to be necessary
and appropriate as a result of the Plan of Reorganization and Liquidation and
(ii) the adoption by the New Trust of such Registration Statement as its own,
on behalf of the New Fund, shall have been filed with the Commission and such
post-effective amendment or amendments to the Registration Statement shall
have become effective, and no stop-order suspending the effectiveness of the

B-2
<PAGE> 58

Registration Statement shall have been issued, and no proceeding for that
purpose shall have been initiated or threatened by the Commission (and not
withdrawn or terminated).

(c) Each party shall have received an opinion of Skadden, Arps, Slate,
Meagher & Flom that both the New Trust and New Fund are duly formed and
existing under the laws of the State of Delaware and that the shares of the
New Trust to be issued pursuant to the terms of this Agreement have been duly
authorized, and, when issued and delivered as provided in this Agreement, will
have been validly issued, fully paid and nonassessable.

(d) Each party shall have received an opinion of Skadden, Arps, Slate,
Meagher & Flom to the effect that the reorganization contemplated by this
Agreement qualifies as a "reorganization" under Section 368(a)(1) of the Code,
and each party shall have received an opinion of Skadden, Arps, Slate, Meagher
& Flom to the effect that each series established pursuant to the Agreement
and Declaration of Trust of the New Trust will be treated as a separate
association taxable as a corporation for federal income tax purposes which
potentially qualifies as a regulated investment company under the Code to the
extent that the New Fund complies with the requirements of Section 851 of the
Code.

(e) The Shares of the New Fund shall have been duly qualified for offering
to the public in all states of the United States, the Commonwealth of Puerto
Rico and the District of Columbia (except where such qualifications are not
required) so as to permit the transfers contemplated by this Agreement to be
consummated.

(f) A vote approving this Agreement and the reorganization contemplated
hereby shall have been adopted by at least a majority of the outstanding
shares of beneficial interest of the Van Kampen Fund entitled to vote at an
annual or special meeting and the shareholders of the Van Kampen Fund shall
have voted at such meeting to direct the Van Kampen Fund to vote, and the Fund
shall have voted, as the sole shareholder of the New Fund to:

(1) elect the Nominees set forth in the Proxy Statement delivered to the
shareholders of the Van Kampen Fund as Trustees of the Trust;

(2) approve an Investment Advisory Agreement (the "Advisory Agreement")
between the New Fund and Van Kampen American Capital Investment Advisory
Corp.;

(3) approve a Plan of Distribution under Rule 12b-1 with respect to each
class of shares of the New Fund (the "Plans of Distribution"); and

(4) ratify the selection of KPMG Peat Marwick LLP as the New Fund's
independent auditors for the fiscal year ending .

B-3
<PAGE> 59

(g) The Trustees of the New Trust shall have taken the following actions at
a meeting duly called for such purposes:

(1) approval of the Advisory Agreement;

(2) approval of an Underwriting Agreement between the New Fund and Van
Kampen American Capital Distributors, Inc.;

(3) approval of the Plans of Distribution;

(4) selection of KPMG Peat Marwick LLP as the New Fund's independent
auditors for the fiscal year ending ;

(5) authorization of the issuance by the New Trust, prior to the Effective
Time of the Reorganization, of one share of the New Fund to the Van Kampen
Fund in consideration for the payment of $ for the purpose of
enabling the Van Kampen Fund to vote on the matters referred to in paragraph
(f) in this Section 4;

(6) submission of the matters referred to in paragraph (f) of this Section
4 to the Van Kampen Fund as the sole shareholder of the New Fund; and

(7) authorization of the issuance by the New Trust of shares of the New
Fund at the Effective Time of the Reorganization in exchange for the assets
of the Fund pursuant to the terms and provisions of this Agreement.

At any time prior to the Effective Time of the Reorganization, any of the
foregoing conditions may be waived by the Board of Trustees of the Van Kampen
Trust if, in the judgment of such Board, such waiver will not have a material
adverse effect on the benefits intended under this Agreement to the shareholders
of the Van Kampen Fund.

5. Effective Time of the Reorganization. The exchange of the Van Kampen Fund's
business and assets for shares of the New Fund shall be effective as of 5:00
P.M., Delaware Time on , 1995 or at such other time and date as fixed
by the mutual consent of the parties (the "Effective Time of the
Reorganization").

6. Termination. The Trustees of the Van Kampen Trust and the Trustees of the
New Trust may terminate this Agreement and abandon the reorganization
contemplated hereby, notwithstanding approval thereof by the shareholders of the
Van Kampen Fund at any time prior to the Effective Time of the Reorganization,
if circumstances should develop that, in their judgment, make proceeding with
this Agreement inadvisable.

7. Limitation of Liability of the Trustees and Shareholders. Each of the Van
Kampen Trust and the New Trust acknowledge and agree that, pursuant to the
Agreement and Declaration of Trust of both the Van Kampen Trust and the New
Trust, shareholders, trustees, officers, employees or agents of the Trust shall
not

B-4
<PAGE> 60

personally be bound by or liable under this Agreement, nor shall resort be had
to their private property for the satisfaction of any obligation or claim
hereunder.

IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first written above.

----------------------------------

By:
----------------------------------

Its:
----------------------------------

----------------------------------

By:
----------------------------------

Its:
----------------------------------

----------------------------------

By:
----------------------------------

Its:
----------------------------------

B-5
<PAGE> 61

APPENDIX C

1994 AGGREGATE COMPENSATION FROM EACH VK FUND

The following schedule sets forth the aggregate compensation paid to each
incumbent trustee by each VK Fund during its respective 1994 fiscal year.

<TABLE>
<CAPTION>
TRUSTEE
-------------------------------------------------------
VK FUND NAME GAUGHAN KENNEDY MILLER NELSON ROBINSON WHALEN
- - ------------------------------------------------------------------------ ------- ------- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund.................................................... $3,158 $2,658 $3,158 $3,158 $3,161 $ 890
Balanced Fund........................................................... 250 250 250 250 250 250
California Fund......................................................... 3,778 2,891 2,891 2,891 2,892 2,903
Emerging Markets Fund................................................... 766 766 766 766 767 266
Florida Fund............................................................ 1,012 750 750 750 750 1,013
Global Fund............................................................. 3,783 3,783 3,783 3,783 3,786 891
Government Fund......................................................... 3,778 2,891 2,891 2,891 2,892 2,903
Growth and Income Fund.................................................. 3,783 3,783 3,783 3,783 3,786 891
High Yield Fund......................................................... 4,033 4,033 4,033 4,033 4,036 1,141
Insured Fund............................................................ 3,778 2,891 2,891 2,891 2,892 2,903
Limited Term Municipal Fund............................................. 3,778 2,891 2,891 2,891 2,892 2,903
Money Market Fund....................................................... 3,783 3,783 3,783 3,783 3,786 891
Municipal Income Fund................................................... 3,778 2,891 2,891 2,891 2,892 2,903
New Jersey Fund......................................................... 1,012 750 750 750 750 1,012
New York Fund........................................................... 1,012 750 750 750 750 1,012
Pennsylvania Fund....................................................... 3,778 2,891 2,891 2,891 2,892 2,903
Strategic Income Fund................................................... 2,016 2,016 2,016 2,016 2,017 891
Tax Free High Income Fund............................................... 3,778 2,891 2,891 2,891 2,892 2,903
Tax Free Money Fund..................................................... 3,783 3,783 3,783 3,783 0 891
Utility Fund............................................................ 3,158 3,158 3,158 3,158 3,161 891
</TABLE>

C-1
<PAGE> 62

APPENDIX D

1994 RETIREMENT BENEFITS ACCRUED AS PART OF VK FUND EXPENSES

The following schedule sets forth the pension or retirement benefits accrued
for each nominee by each VK Fund during its respective 1994 fiscal year.

<TABLE>
<CAPTION>
TRUSTEE
------------------------------------------------------------
FUND GAUGHAN KENNEDY MILLER NELSON ROBINSON WHALEN
- - ----------------------------------------------------------- ------- ------- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
Adjustable Rate Fund(1)....................................
Balanced Fund(1)...........................................
California Fund............................................ $ 990 $45 $1,732 $511 $830 $329
Emerging Markets Fund(1)...................................
Florida Fund(1)............................................
Global Fund(1).............................................
Government Fund............................................ 997 45 1,414 495 833 340
Growth and Income Fund(1)..................................
High Yield Fund(1).........................................
Insured Fund............................................... 996 45 2,017 520 832 339
Limited Term Municipal Fund................................ 559 44 0 371 710 230
Money Market Fund(1).......................................
Municipal Income Fund...................................... 824 45 1,131 428 827 278
New Jersey Fund(1).........................................
New York Fund(1)...........................................
Pennsylvania Fund.......................................... 990 45 1,494 466 830 312
Strategic Income Fund(1)...................................
Tax Free High Income Fund.................................. 994 45 1,881 484 831 330
Tax Free Money Fund(1).....................................
Utility Fund(1)............................................
</TABLE>

- - -------------------------

(1) The 1994 fiscal year for each of these VK Funds ended on June 30, 1994; and
the Retirement Plan did not commence until August 1994 for each VK Fund.

D-1
<PAGE> 63

-------

VKSTG

-------
<PAGE> 64

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT U.S. GOVERNMENT FUND
A SUB-TRUST OF VAN KAMPEN MERRITT U.S. GOVERNMENT TRUST
PROXY SOLICITED BY THE TRUSTEES

The undersigned holder of shares of beneficial interest, without par value, of
the above referenced fund (the "Fund"), hereby appoints Ronald A. Nyberg and
Edward C. Wood, III, and each of them, with full power of substitution and
revocation, as proxies to represent the undersigned at the Meeting of
Shareholders to be held at the Hyatt Regency Oak Brook, York Room - Lower
Level, 1909 Spring Road, Oak Brook, IL 60521, on Friday, July 21, 1995 at 2:30
p.m., and at any and all adjournments thereof (the "Meeting"), and thereat to
vote all shares of beneficial interest of the Fund which the undersigned would
be entitled to vote, with all powers the undersigned would possess if personally
present, in accordance with the instructions specified on the reverse side.
The undersigned hereby acknowledges receipt of the accompanying Notice of Joint
Meeting and Proxy Statement for the Joint Meeting to be held on July 21,1995.

DATE:____________________________,1995

Please sign this proxy in the
box below exactly as your name
appears on the books of the Fund.
Joint owners should each sign
personally. Trustees and other
fiduciaries should indicate the
capacity in which they sign, and
where more than one name appears, a
majority must sign. If a
corporation, this signature should be
that of an authorized officer who
should state his or her title.

<PAGE> 65
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

Please detach at perforation before mailing
- - -------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. As to the proposal to approve the Fund's reorganization and
conversion to a series of Delaware business trust: / / / / / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

4. Not Applicable to the Fund.
FOR AGAINST ABSTAIN
5. As to the proposal to ratify the selection of KPMG Peat Marwick
LLP as independent public accountants for the current fiscal / / / / / /
year of the Fund:

</TABLE>
<PAGE> 66

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT TAX FREE HIGH INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 67
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 68

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT MUNICIPAL INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 69
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 70

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT LIMITED TERM MUNICIPAL INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 71
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 72

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT CALIFORNIA INSURED TAX FREE FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 73
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 74

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT FLORIDA INSURED TAX FREE INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 75
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 76

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT NEW JERSEY TAX FREE INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 77
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 78

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT NEW YORK TAX FREE INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TAX FREE FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 79
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 80

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------

VAN KAMPEN MERRITT PENNSYLVANIA TAX FREE INCOME FUND
PROXY SOLICITED BY THE TRUSTEES

The undersigned holder of shares of beneficial interest, without par value, of
the above referenced fund (the "Fund"), hereby appoints Ronald A. Nyberg and
Edward C. Wood, III, and each of them, with full power of substitution and
revocation, as proxies to represent the undersigned at the Meeting of
Shareholders to be held at the Hyatt Regency Oak Brook, York Room - Lower
Level, 1909 Spring Road, Oak Brook, IL 60521, on Friday, July 21, 1995 at 2:30
p.m., and at any and all adjournments thereof (the "Meeting"), and thereat to
vote all shares of beneficial interest of the Fund which the undersigned would
be entitled to vote, with all powers the undersigned would possess if
personally present, in accordance with the instructions specified on the
reverse side. The undersigned hereby acknowledges receipt of the accompanying
Notice of Joint Meeting and Proxy Statement for the Joint Meeting to be held on
July 21,1995.

DATE: ______________________________,1995
Please sign this proxy in the box below
exactly as your name appears on the books
of the Fund. Joint owners should each sign
personally. Trustees and other fiduciaries
should indicate the capacity in which they
sign, and where more than one name appears,
a majority must sign. If a corporation,
this signature should be that of an
authorized officer who should state his or
her title.

If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they jointly
(or, if only one is present and voting, then that one) shall have authority and may exercise all powers granted hereby. This Proxy,
when properly executed, will be voted in accordance with the instructions marked hereon by the undersigned. IF NO SPECIFICATION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red ink. / /

Please detach at perforation before mailing.
- - ------------------------------------------------------------------------------------------------------------------------------------
1. Not Applicable to the Fund.
FOR AGAINST ABSTAIN
2. As to the proposal to approve the amendment and restatement
of the Fund's Agreement and Declaration of Trust: / / / / / /

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected
and qualified: / / / / / /

J. Miles Branagan, Dr. Richard E. Caruso, Philip P. Gaughan,
Dr. Roger Hilsman, R. Craig Kennedy, Dennis J. McDonnell,
Donald C. Miller, Jack E. Nelson, Don G. Powell, David Rees,
Jerome L. Robinson, Lawrence J. Sheehan, Dr. Fernando Sisto, __________________________________________________
Wayne W. Whalen, William S. Woodside
__________________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right. __________________________________________________

4. Not Applicable to the Fund.

FOR AGAINST ABSTAIN
5. As to the proposal to ratify the selection of KPMG Peat
Marwick LLP as independent public accountants for the current
fiscal year of the Fund: / / / / / /

L L L

</TABLE>

<PAGE> 82

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT HIGH YIELD FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 83
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 84

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------

VAN KAMPEN MERRITT SHORT-TERM GLOBAL INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TRUST
PROXY SOLICITED BY THE TRUSTEES

The undersigned holder of shares of beneficial interest, without par value, of
the above referenced fund (the "Fund"), hereby appoints Ronald A. Nyberg and
Edward C. Wood, III, and each of them, with full power of substitution and
revocation, as proxies to represent the undersigned at the Meeting of
Shareholders to be held at the Hyatt Regency Oak Brook, York Room - Lower
Level, 1909 Spring Road, Oak Brook, IL 60521, on Friday, July 21, 1995 at 2:30
p.m., and at any and all adjournments thereof (the "Meeting"), and thereat to
vote all shares of beneficial interest of the Fund which the undersigned would
be entitled to vote, with all powers the undersigned would possess if
personally present, in accordance with the instructions specified on the
reverse side. The undersigned hereby acknowledges receipt of the accompanying
Notice of Joint Meeting and Proxy Statement for the Joint Meeting to be held on
July 21,1995.

<PAGE> 85

If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they jointly (or, if
only one is present and voting, then that one) shall have authority and may exercise all powers granted hereby. This Proxy,
when properly executed, will be voted in accordance with the instructions marked hereon by the undersigned. IF NO SPECIFICATION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red ink. / /

Please detach at perforation before mailing.
- - ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. As to the proposal to approve the Fund's reorganization
and conversion to a series of a Delaware business trust: / / / / / /

2. Not Applicable to the Fund

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust
to serve until their respective successors are duly
elected and qualified: / / / / / /

J. Miles Branagan, Dr. Richard E. Caruso, Philip P. Gaughan,
Dr. Roger Hilsman, R. Craig Kennedy, Dennis J. McDonnell,
Donald C. Miller, Jack E. Nelson, Don G. Powell, David Rees, _______________________________________________
Jerome L. Robinson, Lawrence J. Sheehan, Dr. Fernando Sisto,
Wayne W. Whalen, William S. Woodside _______________________________________________

INSTRUCTION: To withhold authority to vote for one or more _______________________________________________
of the nominees, check FOR ALL EXCEPT and write the
nominee's name(s) on the lines to the right.

FOR AGAINST ABSTAIN
4. As to the proposal to approve a change in the Fund's
fundamental investment policy with respect to the
concentration of its investments: / / / / / /

FOR AGAINST ABSTAIN
5. As to the proposal to ratify the selection of KPMG Peat
Marwick LLP as independent public accountants for the
current fiscal year of the Fund: / / / / / /

L L L

</TABLE>

<PAGE> 86

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT ADJUSTABLE RATE U.S. GOVERNMENT FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 87
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 88

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT STRATEGIC INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 89
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 90

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT EMERGING MARKETS INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 91
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 92

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT GROWTH AND INCOME FUND
A SUB-TRUST OF VAN KAMPEN MERRITT EQUITY TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 93
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 94

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT UTILITY FUND
A SUB-TRUST OF VAN KAMPEN MERRITT EQUITY TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 95
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 96

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT BALANCED FUND
A SUB-TRUST OF VAN KAMPEN MERRITT EQUITY TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 97
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 98

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT TAX FREE MONEY FUND
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 99
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>
<PAGE> 100

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 detach at perforation before mailing.
- - --------------------------------------------------------------------------------
VAN KAMPEN MERRITT MONEY MARKET FUND
A SERIES OF VAN KAMPEN MERRITT MONEY MARKET TRUST
PROXY SOLICITED BY THE TRUSTEES

DATE:____________________________,1995

<PAGE> 101
<TABLE>
<S><C>
If more than one of the proxies, or their substitutes, are present at the Meeting or any adjournment thereof, they
jointly (or, if only one is present and voting, then that one) shall have authority and may exercise all powers
granted hereby. This Proxy, when properly executed, will be voted in accordance with the instructions marked hereon by
the undersigned. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED BELOW
AND IN THE DISCRETION OF THE PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

Please vote by filling in the appropriate boxes below, as shown, using blue or black ink or dark pencil. Do not use red
ink. / /

2. Not Applicable to the Fund.

FOR ALL WITHHOLD FOR ALL EXCEPT
3. Authority to vote to elect fifteen trustees of the Trust to
serve until their respective successors are duly elected / / / / / /
and qualified:

________________________________________

________________________________________
INSTRUCTION: To withhold authority to vote for one or more
of the nominees, check FOR ALL EXCEPT and write the nominee's
name(s) on the lines to the right.

</TABLE>