<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1996
REGISTRATION NOS. 33-6745
811-4718
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
<TABLE>
<CAPTION>
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 /X/
<S> <C>
Post-Effective Amendment No. 14 /X/
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 15 /X/
</TABLE>
VAN KAMPEN AMERICAN CAPITAL
TAX FREE MONEY FUND
(Exact Name of Registrant as Specified in Declaration of Trust)
One Parkview Plaza, Oakbrook Terrace, Illinois 60181
(Address of Principal Executive Offices)
(630) 684-6000
(Registrant's Telephone Number)
Ronald A. Nyberg, Esq.
Executive Vice President, General Counsel and Secretary
Van Kampen American Capital, Inc.
One Parkview Plaza, Oakbrook Terrace, Illinois 60181
(Name and Address of Agent for Service)
Copies to:
Wayne W. Whalen, Esq.
Thomas A. Hale, Esq.
Skadden, Arps, Slate, Meagher & Flom
333 W. Wacker Drive
Chicago, IL 60606
(312) 407-0700
Approximate Date of Proposed Public Offering: As soon as practicable
following effectiveness of this Registration Statement.
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE: (CHECK APPROPRIATE
BOX)
/X/ IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
/ / ON (DATE) PURSUANT TO PARAGRAPH (B)
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)
/ / ON (DATE) PURSUANT TO PARAGRAPH (A)(1)
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)
/ / ON (DATE) PURSUANT TO PARAGRAPH (A)(2) OF RULE 485
IF APPROPRIATE CHECK THE FOLLOWING:
/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR
A PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
DECLARATION PURSUANT TO RULE 24F-2
REGISTRANT HAS REGISTERED AN INDEFINITE NUMBER OF SHARES AND INTENDS TO
FILE WITH THE SECURITIES AND EXCHANGE COMMISSION A FORM 24F-2 FOR ITS FISCAL
YEAR ENDING JUNE 30, 1997 ON OR BEFORE AUGUST 29, 1997.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
CROSS REFERENCE SHEET
(AS REQUIRED BY ITEM 501(B) OF REGULATION S-K)
<TABLE>
<CAPTION>
ITEM NUMBER OF
FORM N-1A LOCATION OR CAPTION
----------- --------------------
<S> <C> <C>
PART A
Item 1. Cover Page............ Cover Page
Item 2. Synopsis.............. SHAREHOLDER TRANSACTION EXPENSES; ANNUAL FUND OPERATING
EXPENSES AND EXAMPLE
Item 3. Condensed Financial
Information......... FINANCIAL HIGHLIGHTS
Item 4. General Description of
Registrant.......... THE FUND; INVESTMENT OBJECTIVE AND POLICIES; INVESTMENT
PRACTICES; DESCRIPTION OF SHARES OF THE FUND
Item 5. Management of the
Fund................ ANNUAL FUND OPERATING EXPENSES AND EXAMPLE; INVESTMENT
PRACTICES; INVESTMENT ADVISORY SERVICES; SHAREHOLDER
SERVICES
Item 6. Capital Stock and
Other Securities..... PURCHASE OF SHARES; DISTRIBUTIONS FROM THE FUND;
REDEMPTION OF SHARES; THE DISTRIBUTION AND SERVICE PLANS;
TAX STATUS; SHAREHOLDER SERVICES; DESCRIPTION OF SHARES OF
THE FUND; ADDITIONAL INFORMATION
Item 7. Purchase of Securities
Being Offered....... SHAREHOLDER TRANSACTION EXPENSES; PURCHASE OF SHARES;
REDEMPTION OF SHARES; THE DISTRIBUTION AND SERVICE PLANS;
NET ASSET VALUE
Item 8. Redemption or
Repurchase.......... PURCHASE OF SHARES; REDEMPTION OF SHARES; NET ASSET VALUE
Item 9. Pending Legal
Proceedings......... Not Applicable
PART B
Item 10. Cover Page............ Cover Page
Item 11. Table of Contents..... Table of Contents
Item 12. General Information
and History......... The Fund and the Trust
Item 13. Investment Objectives
and Policies........ Investment Policies and Restrictions; Appendix
</TABLE>
(i.)
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NUMBER OF
FORM N-1A LOCATION OR CAPTION
----------------------------------------------------------
<S> <C> <C>
Item 14. Management of the
Fund................ Trustees and Officers
Item 15. Control Persons and
Principal Holders of
Securities.......... Trustees and Officers
Item 16. Investment Advisory
and Other
Services.............. Contained in Prospectus under captions: PURCHASE OF
SHARES; INVESTMENT ADVISORY SERVICES; THE DISTRIBUTION AND
SERVICE PLANS; Trustees and Officers; Legal Counsel;
Investment Advisory and Other Services; Custodian and
Independent Accountants; The Distributor
Item 17. Brokerage
Allocation............ Portfolio Transactions and Brokerage Allocations
Item 18. Capital Stock and
Other Securities.... Contained in the Prospectus under captions: THE FUND;
DESCRIPTION OF SHARES OF THE FUND; The Fund and the Trust
Item 19. Purchase, Redemption
and Pricing of
Securities Being
Offered............. Contained in the Prospectus under captions: PURCHASE OF
SHARES; THE DISTRIBUTION AND SERVICE PLANS; REDEMPTION OF
SHARES; NET ASSET VALUE
Item 20. Tax Status............ Contained in Prospectus under caption: TAX STATUS
Item 21. Underwriters.......... The Distributor
Item 22. Calculations of Yield
Quotations of Money
Market Funds........ Yield Information; Dividends
Item 23. Financial
Statements............ Contained in the Prospectus under caption: FINANCIAL
HIGHLIGHTS; Independent Accountants' Report; Financial
Statements; Notes to Financial Statements; Trustees and
Officers
PART C
</TABLE>
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.
(ii.)
<PAGE> 4
- ------------------------------------------------------------------------------
VAN KAMPEN AMERICAN CAPITAL
TAX FREE MONEY FUND
- ------------------------------------------------------------------------------
Van Kampen American Capital Tax Free Money Fund (the "Fund") is a
diversified open-end management investment company, commonly known as a mutual
fund. The Fund's investment objective is to provide a high level of current
income exempt from federal income taxes consistent with the preservation of
capital and liquidity through investments in a broad range of municipal
securities that will mature within 12 months of the date of purchase.
The Fund is organized as a Delaware business trust. The portfolio of the
Fund is managed by Van Kampen American Capital Investment Advisory Corp. (the
"Adviser").
An investment in the Fund is neither insured nor guaranteed by the U.S.
government. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
This Prospectus sets forth certain information about the Fund that a
prospective investor should know before investing in the Fund. Please read it
carefully and retain it for future reference. The address of the Fund is One
Parkview Plaza, Oakbrook Terrace, Illinois 60181, and its telephone number is
(800) 421-5666.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE REGULATORS NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE REGULATORS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR
ENDORSED BY, ANY BANK OR DEPOSITORY INSTITUTION; FURTHER, SUCH SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE FUND INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
A Statement of Additional Information, dated October 28, 1996, containing
additional information about the Fund is hereby incorporated by reference in its
entirety into this Prospectus. A copy of the Fund's Statement of Additional
Information may be obtained without charge by calling (800) 421-5666 or for
Telecommunications Device for the Deaf at (800) 772-8889. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission ("SEC") and is available along with other related materials at the
SEC's internet web site (http://www.sec.gov).
------------------
VAN KAMPEN AMERICAN CAPITAL SM
------------------
THIS PROSPECTUS IS DATED OCTOBER 28, 1996.
<PAGE> 5
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Shareholder Transaction Expenses............................... 3
Annual Fund Operating Expenses and Example..................... 3
Financial Highlights........................................... 5
The Fund....................................................... 6
Investment Objective and Policies.............................. 6
Investment Practices........................................... 8
Investment Advisory Services................................... 9
Purchase of Shares............................................. 11
Shareholder Services........................................... 13
Redemption of Shares........................................... 16
The Distribution and Service Plans............................. 19
Distributions from the Fund.................................... 19
Net Asset Value................................................ 20
Tax Status..................................................... 20
Description of Shares of the Fund.............................. 22
Additional Information......................................... 23
</TABLE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUND, THE ADVISER, OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUND OR BY THE DISTRIBUTOR TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO MAKE
SUCH AN OFFER IN SUCH JURISDICTION.
2
<PAGE> 6
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
- ------------------------------------------------------------------------------
<TABLE>
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of the offering price)...................... None
Maximum sales charge imposed on reinvested dividends
(as a percentage of the offering price)...................... None
Deferred sales charge (as a percentage of original purchase
price
or redemption proceeds)...................................... None
Redemption fees (as a percentage of amount redeemed)........... None
Exchange fees.................................................. None
</TABLE>
- ------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES AND EXAMPLE
- ------------------------------------------------------------------------------
<TABLE>
<S> <C>
Management fees(1) (as a percentage of average daily net
assets
net of waiver).............................................. 0.00%
12b-1 fees(2) (as a percentage of average daily net assets)... 0.25%
Other expenses(1) (as a percentage of average daily net assets
net of expense reimbursement)............................... 0.60%
Total expenses(1) (as a percentage of average daily net assets
net of waiver and expense reimbursement).................... 0.85%
</TABLE>
- ------------------------------------------------------------------------------
(1) The expenses indicated above are based on the Fund's fiscal year ended June
30, 1996. "Management fees," "Other expenses" and "Total expenses" indicated
above reflect a waiver of fees and other expenses by the Adviser. Without
such waiver, "Management fees," "Other expenses" and "Total expenses" were
0.50%, 0.78% and 1.53%, respectively.
(2) Such fees include a service fee of up to 0.25% paid by the Fund to
investors' broker-dealers as compensation for ongoing services rendered to
investors.
3
<PAGE> 7
EXAMPLE:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming a 5% annual
return. The Fund does not charge a fee
for redemptions............................. $9 $27 $47 $ 105
</TABLE>
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. The "Example" reflects expenses based on the "Annual Fund
Operating Expenses" table as shown above carried out to future years. It is
expected that as Fund assets increase, the fees waived or expenses reimbursed by
the Adviser will decrease. Accordingly, it is unlikely that future expenses as
projected will remain consistent with those determined based on the table of the
"Annual Fund Operating Expenses." THE INFORMATION CONTAINED IN THE ABOVE TABLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. For more complete
description of such costs and expenses, see "Investment Advisory Services" and
"The Distribution and Service Plans."
4
<PAGE> 8
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (for one share outstanding throughout the periods
indicated)
- --------------------------------------------------------------------------------
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. The financial highlights have been
audited by KPMG Peat Marwick LLP, independent certified public accountants,
whose report thereon appears in the Statement of Additional Information. This
information should be read in conjunction with the financial statements and
related notes thereto included in the Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------
1996 1995 1994 1993 1992 1991
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Net Investment Income.................................................... .029 .027 .017 .019 .035 .052
Less Distributions from Net Investment Income............................ (.029) (.027) (.017) (.019) (.035) (.052)
----- ----- ----- ----- ----- -----
Net Asset Value, End of Period............................................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total Return*............................................................. 2.93% 2.73% 1.70% 1.93% 3.56% 5.29%
Net Assets at End of Period (in millions)................................. $35.6 $33.2 $37.4 $43.1 $70.8 $81.5
Ratio of Expenses to Average Net Assets*.................................. .85% .89% .81% .72% .57% .56%
Ratio of Net Investment Income to Average Net Assets*..................... 2.89% 2.68% 1.69% 1.92% 3.56% 5.01%
- ----------------
* If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been
as follows:
Ratio of Expenses to Average Net Assets.................................. 1.53% 1.38% 1.29% .97% 1.18% 1.20%
Ratio of Net Investment Income to Average Net Assets..................... 2.21% 2.20% 1.20% 1.67% 2.96% 4.37%
**Non-Annualized
<CAPTION>
NOVEMBER 5, 1986
(COMMENCEMENT OF
INVESTMENT
OPERATIONS)
1990 1989 1988 TO JUNE 30, 1987
----- ----- ----- ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................................... $1.00 $1.00 $1.00 $ 1.00
----- ----- ----- -----
Net Investment Income.................................................... .057 0.53 .046 .026
Less Distributions from Net Investment Income............................ (.057) (.053) (.046) (.026)
----- ----- ----- -----
Net Asset Value, End of Period............................................ $1.00 $1.00 $1.00 $ 1.00
===== ===== ===== ======
Total Return*............................................................. 5.93% 5.50% 4.65% 4.35%**
Net Assets at End of Period (in millions)................................. $59.8 $43.6 $58.3 $ 30.0
Ratio of Expenses to Average Net Assets*.................................. .55% .78% .51% .11%
Ratio of Net Investment Income to Average Net Assets*..................... 5.69% 5.34% 4.63% 4.10%
- ----------------
* If certain expenses had not been assumed by the Adviser, total return wo
as follows:
Ratio of Expenses to Average Net Assets.................................. 1.25% 1.17% 1.08% 1.17%
Ratio of Net Investment Income to Average Net Assets..................... 4.98% 4.96% 4.06% 3.03%
**Non-Annualized
</TABLE>
See Financial Statements and Notes Thereto.
------------------------------
The "current yield" of the Fund for the seven days ended June 30, 1996, was
2.72% and its "compounded effective yield" for that period was 2.76%. The method
of calculating these yields is described in the Statement of Additional
Information.
5
<PAGE> 9
- ------------------------------------------------------------------------------
THE FUND
- ------------------------------------------------------------------------------
Van Kampen American Capital Tax Free Money Fund (the "Fund") is a mutual fund.
A mutual fund allows investors to pool their money with that of other investors
in order to obtain professional investment management. Mutual funds generally
make it possible for investors to obtain greater diversification of their
investments and to simplify their recordkeeping. The Fund is organized as a
Delaware business trust.
Van Kampen American Capital Investment Advisory Corp. (the "Adviser") provides
investment advisory and administrative services to the Fund. The Adviser and its
affiliates also act as investment adviser to other mutual funds distributed by
Van Kampen American Capital Distributors, Inc. (the "Distributor"). To obtain
prospectuses and other information on any of these other funds, please call the
telephone number on the cover page of this Prospectus.
- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
- ------------------------------------------------------------------------------
The Fund's investment objective is to provide a high level of current income
exempt from federal income taxes consistent with the preservation of capital and
liquidity through investments in a diversified portfolio of municipal securities
that will mature within 12 months of the date of purchase. These securities may
not earn as high a level of current income as securities with longer maturities
or lower quality, which may also have less liquidity and greater price
fluctuation. There can be no assurance that the Fund will attain its investment
objective.
The Fund will generally invest its assets in municipal securities, which are
obligations issued by or on behalf of States, territories and possessions of the
United States and the District of Columbia and their political subdivisions,
agencies and instrumentalities, the interest on which, in the opinion of bond
counsel or other counsel to the issuer or the Fund is exempt from federal income
tax at the time of issuance. In normal circumstances, up to 100%, but not less
than 80%, of the Fund's net assets will be invested in such securities. All of
the Fund's investments are subject, however, to the limitation that they mature
within one year of the date of their purchase or are subject to repurchase
agreements maturing within one year. The Fund's investment objective and the
foregoing policies are fundamental and cannot be changed without shareholder
approval. If the tax-exempt status of the municipal securities in which the Fund
may invest changes at some future date, the Trustees of the Fund would consider
what changes if any should be made in the Fund and might recommend to the
shareholders changes in the Fund's fundamental objectives.
The Fund will invest in municipal securities which at the time of purchase:
(a) are rated at least AA by Standard & Poor's Ratings Group ("Standard &
Poor's") or Aa by Moody's Investors Service, Inc. ("Moody's"); (b) have a
6
<PAGE> 10
Moody's short-term municipal securities rating of at least MIG-2 or VMIG-2, or a
municipal commercial paper rating of at least P-2 by Moody's or A-2 or SP-2 by
Standard & Poor's; (c) are guaranteed or insured by the U.S. government, its
agencies or instrumentalities as to the payment of principal and interest; (d)
are fully collateralized by an escrow of U.S. government securities or other
securities acceptable to the Adviser; or (e) which are unrated but considered by
the Adviser to be of comparable quality to securities having one of the above
ratings. Although the Fund may invest in U.S. government securities or
securities collateralized by an escrow of such securities, an investment in the
Fund is neither insured nor guaranteed by the U.S. government.
Municipal Securities. The Fund may invest in municipal securities which are
scheduled to mature in one year or less. This category includes, but is not
limited to, short-term tax anticipation notes, bond anticipation notes, revenue
anticipation notes, grant anticipation notes, construction loan notes,
tax-exempt commercial paper, and variable rate demand obligations.
Tax anticipation notes are typically sold to finance working capital needs of
municipalities in anticipation of receiving taxes on a future date. Bond
anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under state aid programs. Grant anticipation notes are issued in
anticipation of receipt of an intergovernmental grant in the future.
Construction loan notes are issued to provide short-term construction financing
for multi-family housing projects. Frequently construction loan notes are
insured by the Federal Housing Administration with permanent financing by the
Government National Mortgage Association at the end of the project construction
period. Tax exempt commercial paper is an unsecured promissory obligation issued
or guaranteed by a municipal issuer. The Fund may purchase other municipal
securities which have a remaining life of one year or less.
The Fund may invest in certain municipal securities which have rates of
interest that are adjusted periodically according to formulae intended to
minimize fluctuations in values of the instruments. These securities are
commonly known as variable rate demand notes. These variable rate demand
obligations are long-term securities which allow the purchaser, at its
discretion, to redeem the securities before their final maturity at par upon
notice (typically 7 to 30 days). Variable rate instruments with a demand feature
enable the Fund to purchase instruments with a stated maturity in excess of one
year. The Fund determines the maturity of variable rate instruments in
accordance with rules of the Securities and Exchange Commission (the "SEC")
which allow the Fund to consider certain of such instruments as having
maturities that are less than the maturity date on the face of the instrument.
Yields on municipal securities are dependent on a variety of factors,
including the general conditions of the money market and of the municipal bond
and municipal note markets, income tax rates, and the size, maturity and rating
of the particular offering. The ratings of Moody's and Standard & Poor's
represent their opinions as
7
<PAGE> 11
to the quality of the municipal securities which they undertake to rate. It
should be emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, municipal securities with the same maturity,
coupon and rating may have different yields.
- ------------------------------------------------------------------------------
INVESTMENT PRACTICES
- ------------------------------------------------------------------------------
The Fund may purchase and sell portfolio securities on a "when issued" and
"delayed delivery" basis, although no more than 25% of the Fund's assets will be
invested in such manner. No income accrues to the Fund on securities in
connection with such transactions prior to the date the Fund actually takes
delivery of such securities. These transactions are subject to market
fluctuation, the value of the securities at delivery may be more or less than
their purchase price, and yields generally available on comparable securities
when delivery occurs may be higher than yields on the securities obtained
pursuant to such transactions. Because the Fund relies on the buyer or seller,
as the case may be, to consummate the transaction, failure by the other party to
complete the transaction may result in the Fund missing the opportunity of
obtaining a price or yield considered to be advantageous. When the Fund is the
buyer in such a transaction, however, it will maintain, in a segregated account
with its custodian, cash or portfolio securities having an aggregate value equal
to the amount of such purchase commitments until payment is made. The Fund will
make commitments to purchase securities on such basis only with the intention of
actually acquiring these securities, but the Fund may sell such securities prior
to the settlement date if such sale is considered to be advisable. No specific
limitation exists as to the percentage of the Fund's assets which may be used to
acquire securities on a "when issued" or "delayed delivery" basis. To the extent
the Fund engages in "when issued" and "delayed delivery" transactions, it will
do so for the purpose of acquiring securities for the Fund's portfolio
consistent with the Fund's investment objective and policies and not for the
purpose of investment leverage.
The Fund may also purchase municipal securities which provide for the right to
resell them back to the issuer, a bank, or a broker dealer at an agreed upon
price or yield within a specified period of time prior to the maturity date of
these securities. These securities are known as "put" securities or securities
with stand-by commitments. The Fund may pay a higher price for such securities
than would otherwise be paid for the same security without a put. The primary
purpose of purchasing these securities is to permit the Fund to be as fully
invested as practicable in municipal securities while at the same time providing
the Fund with greater liquidity. It will be the Fund's policy to enter into
these transactions only with issuers, banks, or broker-dealers that are
determined by the Adviser to present minimal credit risks. If an issuer, bank,
or broker-dealer should default on its obligation to repurchase, the Fund might
be unable to recover all or a portion of any loss sustained from having to sell
the security elsewhere.
8
<PAGE> 12
Although it is the Fund's intention to provide current income exempt from
federal income taxes, there may be circumstances when the Fund will invest
temporarily in taxable investments, such as repurchase agreements. The Fund may
enter into such agreements with banks and broker-dealers, under which the Fund
purchases securities and agrees to resell the securities at an agreed upon time
and at an agreed upon price. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), repurchase agreements may be considered collateralized
loans by the Fund, and the difference between the amount the Fund pays for the
securities and the amount it receives upon resale is accrued as interest and
reflected in the Fund's net income. When the Fund enters into repurchase
agreements, it relies on the seller to repurchase the securities. Failure to do
so may result in a loss for the Fund if the market value of the securities is
less than the repurchase price. At the time the Fund enters into a repurchase
agreement, the value of the underlying security including accrued interest will
be equal to or exceed the value of the repurchase agreement and, for repurchase
agreements that mature in more than one day, the seller will agree that the
value of the underlying security including accrued interest will continue to be
at least equal to the value of the repurchase agreement. In determining whether
to enter into a repurchase agreement with a bank or broker-dealer, the Fund will
take into account the creditworthiness of such party. In the event of default by
such party, the Fund may not have a right to the underlying security and there
may be possible delays and expenses in liquidating the security purchased,
resulting in a decline in its value and loss of interest. The Fund will use
repurchase agreements as a means of making short-term investments, and may
invest in repurchase agreements of duration of seven days or less without
limitation. The Fund's ability to invest in repurchase agreements that mature in
more than seven days is subject to an investment restriction that limits the
Fund's investment in "illiquid" securities, including such repurchase
agreements, to 10% of the Fund's net assets. The Fund's ability to invest in
taxable temporary investments is limited to 20% of the Fund's net assets.
The Fund is subject to certain investment restrictions which constitute
fundamental policies. Fundamental policies cannot be changed without the
approval of the holders of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act. See "Investment Policies and
Restrictions" in the Statement of Additional Information.
- ------------------------------------------------------------------------------
INVESTMENT ADVISORY SERVICES
- ------------------------------------------------------------------------------
THE ADVISER. Van Kampen American Capital Investment Advisory Corp. (the
"Adviser") is the investment adviser for the Fund. The Adviser is a wholly-owned
subsidiary of Van Kampen American Capital, Inc. ("Van Kampen American Capital").
Van Kampen American Capital is a diversified asset management company with more
than two million retail investor accounts, extensive capabilities for managing
institutional portfolios, and more than $57 billion under management or
supervision. Van Kampen American Capital's more than 40 open-end and
9
<PAGE> 13
38 closed-end funds and more than 2,800 unit investment trusts are
professionally distributed by leading financial advisers nationwide. Van Kampen
American Capital Distributors, Inc., the distributor of the Fund and sponsor of
the funds mentioned above, is a wholly-owned subsidiary of Van Kampen American
Capital. The Adviser's principal office is located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181.
Van Kampen American Capital is a wholly-owned subsidiary of VK/AC Holding,
Inc. VK/AC Holding, Inc. is controlled, through the ownership of a substantial
majority of its common stock by The Clayton & Dubilier Private Equity Fund IV
Limited Partnership ("C&D L.P."), a Connecticut limited partnership. C&D L.P. is
managed by Clayton, Dubilier & Rice, Inc. a New York based private investment
firm. The General Partner of C&D L.P. is Clayton & Dubilier Associates IV
Limited Partnership ("C&D Associates L.P."). The general partners of C&D
Associates L.P. are Joseph L. Rice, III, B. Charles Ames, William A. Barbe,
Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe and
Andrall E. Pearson, each of whom is a principal of Clayton, Dubilier & Rice,
Inc. In addition, certain officers, directors and employees of Van Kampen
American Capital own in the aggregate, not more than 6% of the common stock of
VK/AC Holding, Inc. and have the right to acquire, upon the exercise of options,
approximately an additional 12% of the common stock of VK/AC Holding, Inc.
Presently, and after giving effect to the exercise of such options, no officer
or trustee of the Fund owns or would own 5% or more of the common stock of VK/AC
Holding, Inc.
ADVISORY AGREEMENT. The business and affairs of the Fund are managed under the
direction of the Trustees of the Fund. Subject to the Trustees' authority, the
Adviser and the officers of the Fund supervise and implement the Fund's
investment activities and are responsible for overall management of the Fund's
business affairs. The Fund pays the Adviser a fee (accrued daily and paid
monthly) equal to a percentage of the average daily net assets of the Fund as
follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS % PER ANNUM
- ------------------------------------------------------ ---------------
<S> <C>
First $500 million.................................... 0.500 of 1.00%
Next $500 million..................................... 0.475 of 1.00%
Next $500 million..................................... 0.425 of 1.00%
Over $1.5 billion..................................... 0.375 of 1.00%
</TABLE>
Under its investment advisory agreement, the Fund has agreed to assume and pay
the charges and expenses of the Fund's operations, including the compensation of
the Trustees of the Fund (other than those who are affiliated persons, as
defined in the 1940 Act, of the Adviser, the Distributor or Van Kampen American
Capital), the charges and expenses of independent accountants, legal counsel,
any transfer or dividend disbursing agent and the custodian (including fees for
safekeeping of securities), costs of calculating net asset value, costs of
acquiring and disposing of portfolio securities, interest (if any) on
obligations incurred by the Fund, costs of
10
<PAGE> 14
share certificates, membership dues in the Investment Company Institute or any
similar organization, costs of reports and notices to shareholders, costs of
registering shares of the Fund under federal and state securities laws,
miscellaneous expenses and all taxes and fees to federal, state or other
governmental agencies. The Adviser reserves the right in its sole discretion
from time to time to charge all or a portion of its management fee or to
reimburse the Fund for all or a portion of its other expenses.
PERSONAL INVESTING POLICIES. The Fund and the Adviser have adopted Codes of
Ethics designed to recognize the fiduciary relationship between the Fund and the
Adviser and its employees. The Codes permit trustees, directors, officers and
employees to buy and sell securities for their personal accounts subject to
procedures designed to prevent conflicts of interest including, in some
instances, preclearance of trades.
- ------------------------------------------------------------------------------
PURCHASE OF SHARES
- ------------------------------------------------------------------------------
Shares of the Fund are continuously offered through Van Kampen American
Capital Distributors, Inc. (the "Distributor"), as principal underwriter, which
is located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. Shares are
also offered through members of the National Association of Securities Dealers,
Inc. ("NASD") acting as securities dealers ("dealers") and through NASD members
acting as brokers for investors ("brokers") or eligible non-NASD members acting
as agents for investors ("financial intermediaries"). The Fund reserves the
right to suspend or terminate the continuous offering at any time and without
prior notice.
Shares of the Fund are available without a sales charge at the net asset value
per share, which will remain fixed at $1.00 per share except in extraordinary
circumstances. Share certificates will not be issued. The Fund has adopted a
distribution plan pursuant to Rule 12b-1 under the 1940 Act and a service plan
which permit the Fund through the Distributor to compensate brokers, dealers and
financial intermediaries out of the assets of the Fund for their sales of the
shares of the Fund and for shareholder services, respectively.
The minimum initial investment to open an account is $500, and the minimum
subsequent investment is $25, except as discussed under "Unit Trust Reinvestment
Programs" hereunder.
Investments may be made as follows:
1. By Mail. For initial investments send a check payable to "Van Kampen
American Capital Tax Free Money Fund" along with a completed account application
to the transfer agent of the Fund: ACCESS Investor Services, Inc., P.O. Box
418256, Kansas City, MO 64141-9256 ("ACCESS"). Subsequent investments by mail
may be made directly to the Fund accompanied by either the detachable form which
is part of the Fund's account statement or by a letter indicating the dollar
amount of the investment, the account number, and registration. Investments made
by check will begin receiving dividends on the next
11
<PAGE> 15
business day after the Fund receives good funds. For checks drawn on foreign
banks, monies must be collected before shares will be purchased.
2. By Wire. The Fund will also accept investments by wire. An investor must
first telephone the Fund at (800) 421-5666 and provide the account registration,
address, tax identification number, and the amount being wired. Investors will
then be assigned an account number and should instruct their bank or broker to
wire federal funds to the custodian of the Fund: State Street Bank and Trust
Company, Custody, ABA-011000028, Re: Van Kampen American Capital Tax Free Money
Fund for further credit to Account Name ____________, Account Number ________.
Investors will be responsible for the charges, if any, that the bank, broker,
dealer or financial intermediary may make to handle the wire transfer. A
completed account application must then be forwarded to the Fund. Subsequent
investments by wire may be made by instructing a bank or broker to wire the
specified amount in accordance with the above instructions. Please call to
advise the Fund before wiring monies.
Investments made by federal funds wire (up to $1 million, without approval by
the Fund) received prior to 12:00 p.m. Eastern time will be invested at the next
determined net asset value and begin receiving dividends on that day.
Investments made by federal funds wire received after 12:00 p.m. Eastern time
will be invested at the next determined net asset value and begin receiving
dividends on the next business day.
3. Through Financial Services Representatives. Brokers, dealers or financial
intermediaries may purchase, on behalf of investors, shares of the Fund using
either the By Mail or By Wire procedures outlined above. The Fund does not
charge for this transaction.
4. Unit Trust Reinvestment Programs. The Fund will permit unitholders of unit
investment trusts to reinvest distributions from such trusts in shares of the
Fund and other mutual funds distributed by the Distributor with no minimum or
subsequent investment requirement. In order to qualify for this privilege, the
administrator of an investor's unit investment trust must have an agreement with
the Distributor pursuant to which the administrator will (1) submit a single
bulk order and make payment with a single remittance for all investments in the
Fund during each distribution period by all investors who choose to invest in
the Fund through the program and (2) provide ACCESS with appropriate backup data
for each participating investor in a computerized format fully compatible with
ACCESS' processing system. In addition, the Fund also requires that all
dividends and other distributions by the Fund be reinvested in additional shares
without any systematic withdrawal program. There will be no minimum for
reinvestments from unit investment trusts. The Fund will send account activity
statements to investors on a quarterly basis only, even if an investor's
investment period is more frequent. Persons desiring more information with
respect to this program, including the applicable terms and conditions thereof,
should contact their securities broker,
12
<PAGE> 16
dealer, financial intermediary or the Distributor. The Fund reserves the right
to modify or terminate this program at any time.
The Fund and the Distributor reserve the right to reject any order for the
purchase of shares. In addition, the offering of shares may be suspended and
resumed at any time thereafter. Shares will not be offered in certificate form.
Account statements are prepared and mailed to you monthly, quarterly in the
case of a participant in a "Unit Trust Reinvestment Program." Account statements
are not mailed to shareholders as a result of individual redemptions by check.
- ------------------------------------------------------------------------------
SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
The Fund offers a number of shareholder services designed to facilitate
investment in its shares at little or no extra cost to the investor. Below is a
description of such services. Unless otherwise described below, each of these
services may be modified or terminated by the Fund at any time.
As used herein, the term "Participating Funds" refers to all open-end
investment companies distributed by the Distributor other than the Fund, Van
Kampen American Capital Reserve Fund ("Reserve Fund") and the Govett Funds, Inc.
INVESTMENT ACCOUNT. ACCESS Investor Services, Inc. ("ACCESS"), transfer agent
for the Fund and a wholly-owned subsidiary of Van Kampen American Capital,
performs bookkeeping, data processing and administration services related to the
maintenance of shareholder accounts. Each shareholder has an investment account
under which shares are held by ACCESS. Except as described herein, after each
share transaction in an account, the shareholder receives a statement showing
the activity in the account. Each shareholder will receive statements at least
quarterly from ACCESS showing any reinvestments of dividends and capital gains
distributions and any other activity in the account since the preceding
statement. Such shareholders also will receive separate confirmations for each
purchase or sale transaction other than reinvestment of dividends and capital
gains distributions and systematic purchases or redemptions. Additions to an
investment account may be made at any time by purchasing shares through
authorized brokers, dealers or financial intermediaries or by mailing a check
directly to ACCESS.
AUTOMATIC INVESTMENT PLAN. An automatic investment plan is available under
which a shareholder can authorize ACCESS to charge a bank account on a regular
basis to invest pre-determined amounts in the Fund. Additional information is
available from the Distributor or authorized brokers, dealers or financial
intermediaries.
DIVIDEND DIVERSIFICATION. A shareholder may, upon written request or by
completing the appropriate section of the application form accompanied by this
Prospectus or by calling (800) 421-5666 (or (800) 772-8889 for the hearing
impaired), elect to have all dividends and other distributions paid on shares of
the
13
<PAGE> 17
Fund invested into shares sold subject to an initial sales charge of any other
Participating Fund or shares without a sales charge of the Reserve Fund so long
as a pre-existing account for such class of shares exists for such shareholder.
Both accounts must be of the same type, either non-retirement or retirement. Any
two non-retirement accounts can be used. If the accounts are retirement
accounts, they must both be for the same class and of the same type of
retirement plan (e.g. IRA, 403 (b)(7), 401(k) or Keogh) and for the benefit of
the same individual. If the qualified pre-existing account does not exist, the
shareholder must establish a new account subject to minimum investment and other
requirements of the fund into which distributions would be invested.
Distributions are invested into the selected fund at its net asset value as of
the payable date of the distribution.
EXCHANGE PRIVILEGE. Shares of the Fund may be exchanged into shares sold
subject to an initial sales charge of any other Participating Fund or into
shares without a sales charge of the Reserve Fund subject to certain
limitations herein or in such other fund's prospectus. Before effecting an
exchange, shareholders in the Fund should obtain and read a current prospectus
of the fund into which the exchange is to be made. SHAREHOLDERS MAY ONLY
EXCHANGE INTO SUCH OTHER FUNDS AS ARE LEGALLY AVAILABLE FOR SALE IN THEIR STATE.
To be eligible for exchange, shares of the Fund must have been registered in
the shareholder's name for at least 30 days prior to an exchange. Shares of the
Fund registered in a shareholder's name for less than 30 days may only be
exchanged upon receipt of prior approval of the Adviser. Under normal
circumstances, it is the policy of the Adviser not to approve such requests.
Shares of the Fund which have not previously been charged a sales charge
(except for shares purchased via the reinvestment option) will have any
applicable sales charge differential imposed upon exchange into such fund.
Exchanges of shares of the Fund that previously have been charged a sales charge
lower than the sales charge applicable to the other fund will also have the
sales charge differential imposed upon the exchange into such fund.
Exchanges of shares are sales and may result in a gain or loss for federal
income tax purposes. If the shares exchanged have been held for less than 91
days, the sales
charge paid on such shares is not included in the tax basis of the exchanged
shares, but is carried over and included in the tax basis of the shares
acquired.
A shareholder wishing to make an exchange may do so by sending a written
request to ACCESS or by contacting the telephone transaction line at (800)
421-5684 (or (800) 772-8889 for the hearing impaired). A shareholder
automatically has telephone exchange privileges unless otherwise designated in
the application form accompanying this Prospectus. The exchange will take place
at the relative net asset values of the shares next determined after receipt of
such request with adjustment for any additional sales charge. Any shares
exchanged begin earning dividends on the next business day after the exchange is
affected. Van Kampen American Capital and its subsidiaries, including ACCESS
(collectively,
14
<PAGE> 18
"VKAC"), and the Fund employ procedures considered by them to be reasonable to
confirm that instructions communicated by telephone are genuine. Such procedures
include requiring certain personal identification information prior to acting
upon telephone instructions, tape recording telephone communications, and
providing written confirmation of instructions communicated by telephone. If
reasonable procedures are employed, a shareholder agrees that neither VKAC nor
the Fund will be liable for following telephone instructions which it reasonably
believes to be genuine. VKAC and the Fund may be liable for any losses due to
unauthorized or fraudulent instructions if reasonable procedures are not
followed. If the exchanging shareholder does not have an account in the fund
whose shares are being acquired, a new account will be established with the same
registration, dividend and capital gains options (except dividend
diversification options) and broker, dealer or financial intermediary of record
as the account from which shares are exchanged, unless otherwise specified by
the shareholder. In order to establish a systematic withdrawal plan for the new
account or dividend diversification options for the new account, an exchanging
shareholder must file a specific written request. The Fund reserves the right to
reject any order to acquire its shares through exchange. In addition, the Fund
may restrict or terminate the exchange privilege at any time on 60 days' notice
to its shareholders of any termination or material amendment.
SYSTEMATIC WITHDRAWAL PLAN. Any investor whose shares in a single account
total $10,000 or more at the offering price next computed after receipt of
instructions may establish a monthly, quarterly, semi-annual or annual
withdrawal plan. This plan provides for the orderly use of the entire account,
not only the income but also the capital, if necessary. Each withdrawal
constitutes a redemption of shares on which taxable gain or loss will be
recognized. The plan holder may arrange for monthly, quarterly, semi-annual, or
annual checks in any amount not less than $25.
Under the plan, sufficient shares of the Fund are redeemed to provide the
amount of the periodic withdrawal payment. Dividends and capital gains
distributions on shares held under the plan are reinvested in additional shares
at the next determined net asset value. If periodic withdrawals continuously
exceed reinvested dividends and capital gains distributions, the shareholder's
original investment will be correspondingly reduced and ultimately exhausted.
The Fund reserves the right to amend or terminate the systematic withdrawal
program on thirty days' notice to its shareholders.
CHECK WRITING PRIVILEGE. Holders of shares of the Fund may appoint ACCESS as
agent by completing the Authorization for Redemption by Check Form and the
appropriate section of the account application and returning the form and the
application to ACCESS. Once the form is properly completed, signed and returned
to the agent, a supply of checks drawn on State Street Bank and Trust Company
("State Street Bank") will be sent to such shareholder. These checks may be made
15
<PAGE> 19
payable by the holder of shares to the order of any person in any amount of $100
or more.
When a check is presented to State Street Bank for payment, full and
fractional shares required to cover the amount of the check are redeemed from
the shareholder's account by ACCESS at the next determined net asset value.
Check writing redemptions represent the sale of shares. Any gain or loss
realized on the sale of shares is a taxable event. See "Redemption of Shares."
Checks will not be honored for redemption of shares held less than 15 calendar
days, unless such shares have been paid for by bank wire. If the amount of the
check is greater than the proceeds of all shares held in the shareholder's share
account, the check will be returned and the shareholder may be subject to
additional charges. Holders of shares may not liquidate the entire account by
means of a check. The check writing privilege may be terminated or suspended at
any time by the Fund or State Street Bank. Retirement plans and accounts that
are subject to backup withholding are not eligible for the privilege. A "stop
payment" system is not available on these checks.
AUTOMATED CLEARING HOUSE ("ACH") DEPOSITS. Holders of shares can use ACH to
have redemption proceeds deposited electronically into their bank accounts.
Redemptions transferred to a bank account via the ACH plan are available to be
credited to the account on the second business day following normal payment. In
order to utilize this option, the shareholder's bank must be a member of
Automated Clearing House. In addition, the shareholder must fill out the
appropriate section of the account application. The shareholder must also
include a voided check or deposit slip from the bank account into which
redemptions are to be deposited together with the completed application. Once
ACCESS has received the application and the voided check or deposit slip, such
shareholder's designated bank account, following any redemption, will be
credited with the proceeds of such redemption. Once enrolled in the ACH plan, a
shareholder may terminate participation at any time by writing ACCESS.
- ------------------------------------------------------------------------------
REDEMPTION OF SHARES
- ------------------------------------------------------------------------------
Shareholders may redeem for cash some or all of their shares without charge by
the Fund at any time by sending a written request in proper form directly to
ACCESS, P. O. Box 418256, Kansas City, Missouri 64141-9256, by placing the
redemption request through an authorized dealer or by calling the Fund.
WRITTEN REDEMPTION REQUESTS. In the case of redemption requests sent directly
to ACCESS, the redemption request should indicate the number of shares to be
redeemed, the account number and be signed exactly as the shares are registered.
Signatures must conform exactly to the account registration. If the proceeds of
the redemption would exceed $50,000, or if the proceeds are not to be paid to
the record owner at the record address, or if the record address has changed
within the
16
<PAGE> 20
previous 30 days, signature(s) must be guaranteed by one of the following: a
bank or trust company; a broker-dealer; a credit union; a national securities
exchange, registered securities association or clearing agency; a savings and
loan association; or a federal savings bank. In the event the redemption is
requested by a corporation, partnership, trust, fiduciary, executor or
administrator, and the name and title of the individual(s) authorizing such
redemption is not shown in the account registration, a copy of the corporate
resolution or other legal documentation appointing the authorized signer and
certified within the prior 60 days must accompany the redemption request. The
redemption price is the net asset value per share next determined after the
request is received by ACCESS in proper form. Payment for shares redeemed will
ordinarily be made by check mailed within three business days after acceptance
by ACCESS of the request and any other necessary documents in proper order. Such
payments may be postponed or the right of redemption suspended as provided by
the rules of the SEC. If the shares to be redeemed have been recently purchased
by check, ACCESS may delay mailing a redemption check until it confirms that the
purchase check has cleared, usually a period of up to 15 days.
DEALER REDEMPTION REQUESTS. Shareholders may sell shares through their
securities dealer, who will telephone the request to the Distributor. Orders
received from dealers must be at least $500 unless transmitted via the FUNDSERV
network. The redemption price for such shares is the net asset value next
calculated after an order is received by a dealer provided such order is
transmitted to the Distributor prior to the Distributor's close of business on
such day. It is the responsibility of dealers to transmit redemption requests
received by them to the Distributor so they will be received prior to such time.
Any change in the redemption price due to failure of the Distributor to receive
a sell order prior to such time must be settled between the shareholder and
dealer. Shareholders must submit a written redemption request in proper form (as
described above under "Written Redemption Requests") to the dealer within three
business days after calling the dealer with the sell order. Payment for shares
redeemed will ordinarily be made by check mailed within three business days to
the dealer.
TELEPHONE REDEMPTION REQUESTS. The Fund permits redemption of shares by
telephone and for redemption proceeds to be sent to the address of record for
the account or to the bank account of record as described below. To establish
such privilege, a shareholder must complete the appropriate section of the
application accompanying this Prospectus or call the Fund at (800) 421-5666 (or
(800) 772-8889 for the hearing impaired) to request that a copy of the Telephone
Redemption Authorization form be sent to them for completion. To redeem shares,
contact the telephone transaction line at (800) 421-5684. VKAC and the Fund
employ procedures considered by them to be reasonable to confirm that
instructions communicated by telephone are genuine. Such procedures include
requiring certain personal identification information prior to acting upon
telephone instructions, tape recording telephone communications, and providing
written confirmation of instruc-
17
<PAGE> 21
tions communicated by telephone. If reasonable procedures are employed, a
shareholder agrees that neither VKAC nor the Fund will be liable for following
instructions which it reasonably believes to be genuine. VKAC and the Fund may
be liable for any losses due to unauthorized or fraudulent instructions if
reasonable procedures are not followed. Telephone redemptions may not be
available if the shareholder cannot reach ACCESS by telephone, whether because
all telephone lines are busy or for any other reason; in such case, a
shareholder would have to use the Fund's other redemption procedures previously
described. Requests received by ACCESS prior to 12:00 p.m. Eastern time on a
regular business day will be processed that day and dividends for that day will
not be earned. Requests received by ACCESS after 12:00 p.m. Eastern time on a
regular business day will be treated as requests to redeem as of 4:00 p.m.
Eastern time so that the investor will receive that day's dividend. These
privileges are available for all accounts other than retirement accounts. If the
shares to be redeemed have been recently purchased by check, ACCESS may delay
mailing a redemption check or wiring redemption proceeds until it confirms that
the purchase check has cleared, usually a period of up to 15 days. If an account
has multiple owners, ACCESS may rely on the instructions of any one owner.
For redemptions authorized by telephone, amounts of $50,000 or less may be
redeemed daily if the proceeds are to be paid by check sent to the shareholders'
address of record and amounts of at least $1,000 and up to $1 million may be
redeemed daily if the proceeds are to be paid by wire sent to the shareholder's
bank account of record. The proceeds must be payable to the shareholder(s) of
record. Proceeds from redemptions to be paid by check will ordinarily be mailed
within three business days to the shareholder's address of record. Proceeds from
redemptions to be paid by wire will ordinarily be wired to the shareholder's
bank account of record. This privilege is not available if the address of record
has been changed within 30 days prior to a telephone redemption request. The
Fund reserves the right at any time to terminate, limit or otherwise modify this
telephone redemption privilege.
REDEMPTION BY CHECK. Shareholders may effect redemptions by writing checks
drawn on their share account with the Fund. For more information, see
"Shareholder Services -- Check Writing Privilege."
GENERAL REDEMPTION INFORMATION. The Fund may redeem any shareholder account
with a net asset value on the date of the notice of redemption less than the
minimum investment as specified by the Trustees. At least 60 days advance
written notice of any such involuntary redemption is required and the
shareholder is given an opportunity to purchase the required value of additional
shares at the next determined net asset value without sales charge. Any
involuntary redemption may only occur if the shareholder account is less than
the minimum investment due to shareholder redemptions.
18
<PAGE> 22
- ------------------------------------------------------------------------------
THE DISTRIBUTION AND SERVICE PLANS
- ------------------------------------------------------------------------------
The Fund has adopted a distribution plan (the "Distribution Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Fund has also adopted a service plan (the
"Service Plan"). The Distribution Plan and the Service Plan provide that the
Fund may spend a portion of the Fund's average daily net assets in connection
with the distribution of shares and in connection with the provision of ongoing
services to shareholders. The Distribution Plan and the Service Plan are being
implemented through an agreement with the Distributor and sub-agreements between
the Distributor and brokers, dealers or financial intermediaries (collectively,
"Selling Agreements") that may provide for their customers or clients certain
services or assistance.
The Fund may spend an aggregate amount of up to 0.25% per year of its average
daily net assets pursuant to the Distribution Plan and the Service Plan. From
such amount, the Fund may spend up to the full 0.25% per year of its average
daily net assets pursuant to the Service Plan in connection with the ongoing
provision of services to holders of the Fund's shares by the Distributor and by
brokers, dealers or financial intermediaries and in connection with the
maintenance of Shareholder accounts. The Fund pays the Distributor the lesser of
the balance, if any, of the 0.25% not paid to such brokers, dealers or financial
intermediaries or the amount of the Distributor's actual distribution-related
expense.
Accounts payable to the Distributor under the Distribution Plan in a given
year may not fully reimburse the Distributor for its actual distribution-related
expenses during such year. In such event, there is no carryover of such
reimbursement obligations to succeeding years.
Various federal and state laws prohibit national banks and some
state-chartered commercial banks from underwriting or dealing in the Fund's
shares. In addition, state securities laws on this issue may differ from the
interpretations of federal law, and banks and financial institutions may be
required to register as dealers pursuant to state law. In the unlikely event
that a court were to find that these laws prevent such banks from providing such
services described above, the Fund would seek alternative providers and expects
that shareholders would not experience any disadvantage.
- ------------------------------------------------------------------------------
DISTRIBUTIONS FROM THE FUND
- ------------------------------------------------------------------------------
The Fund's present policy, which may be changed at any time by the Board of
Trustees, is to declare and pay dividends from net investment income on a daily
basis. Investments will begin earning dividends on the day federal funds are
received by the Fund prior to 12:00 p.m. Eastern time. Any investments for which
federal funds are received after 12:00 p.m. Eastern time will begin receiving
dividends on the next business day. Dividends are automatically reinvested in
additional shares of the Fund and credited to the investors' accounts daily.
19
<PAGE> 23
If investors request, they may redeem dividends paid on their shares on a
monthly basis. Investors may make such a request by checking the appropriate box
on the account application.
- ------------------------------------------------------------------------------
NET ASSET VALUE
- ------------------------------------------------------------------------------
The net asset value per share for the Fund is determined by calculating the
total value of the Fund's assets, deducting its total liabilities, and dividing
the result by the number of its shares outstanding. The net asset value per
share will normally remain fixed at $1.00 per share except in extraordinary
circumstances. The net asset value of the Fund is computed twice daily as of
12:00 p.m. and 4:00 p.m. Eastern time, Monday through Friday, except on
customary business holidays, or except on any day on which no purchase or
redemption orders are received, or there is not a sufficient degree of trading
in the Fund's portfolio securities such that the Fund's net asset value per
share might be materially affected. The Fund reserves the right to calculate the
net asset value more or less frequently than daily if deemed desirable.
The Fund values its portfolio on the basis of amortized cost, which means that
securities are valued at their acquisition cost to reflect a constant
amortization rate to maturity of any premium or discount, rather than at current
market value. Calculations are made to compare the amortized cost valuation of
the portfolio with current market values. Money market valuations are obtained
by using market quotations provided by market makers, estimates of market
values, or values obtained from published yield data of money market
instruments. If a deviation of 1/2 of 1% or more were to occur between the net
asset value calculated by reference to market values and the Fund's $1.00 per
share net asset value, or if there were any other deviation which the Trustees
believe would result in a material dilution to investors or purchasers, the
Trustees would promptly consider what action, if any, should be initiated. Other
assets are valued at fair value as determined in good faith by the Trustees of
the Fund. The method of calculating yield is described in the Statement of
Additional Information. There can be no assurance that the Fund will be able to
maintain a net asset value of $1.00 per share.
- ------------------------------------------------------------------------------
TAX STATUS
- ------------------------------------------------------------------------------
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). To qualify as a regulated investment company, the Fund
must comply with certain requirements of the Code relating to, among other
things, the sources of its income and the diversification of its assets. If the
Fund so qualifies and distributes at least 90% of its net investment income
(including tax-exempt interest and net short-term capital gain, but not net
capital gain, which is the excess of net long-term capital gain over net
short-term capital loss) in each year, it will
20
<PAGE> 24
not be required to pay federal income taxes on any income distributed to
shareholders. The Fund intends to distribute at least the minimum amount of net
investment income to satisfy the 90% distribution requirement. The Fund will not
be subject to federal income tax on any net capital gains distributed to its
shareholders.
In order to avoid a 4% excise tax the Fund will be required to distribute by
December 31 of each year, at least 98% of its ordinary income (not including
tax-exempt income) for such year and at least 98% of its capital gain net income
(the latter of which generally is computed on the basis of the one-year period
ending on October 31 of such year), plus any amounts that were not distributed
in previous taxable years. For purposes of the excise tax, any ordinary income
or capital gain net income retained by, and subject to federal income tax in the
hands of, the Fund will be treated as having been distributed.
If the Fund qualifies as a regulated investment company and satisfies the 90%
distribution requirement, and if, at the close of each quarter of the Fund's
taxable year, at least 50% of the total value of the Fund's total assets
consists of obligations the interest on which is exempt from federal income tax
("tax-exempt obligations"), the Fund will be qualified to pay exempt-interest
dividends to its shareholders to the extent of its tax-exempt interest income
(less expenses properly applicable thereto). Exempt-interest dividends are
excludable from a shareholder's income for federal income tax purposes, but may
be taxable distributions for state, local and other tax purposes.
Exempt-interest dividends are included, however, in determining what portion, if
any, of a person's social security and railroad retirement benefits will be
includable in gross income subject to federal income tax. Interest expense with
respect to indebtedness incurred or continued by a shareholder to purchase or
carry shares of the Fund is not deductible to the extent that such interest
relates to exempt-interest dividends received from the Fund.
Distributions of the Fund's investment company taxable income (which does not
include tax-exempt interest income) are taxable to shareholders as ordinary
income, whether received in shares or in cash. Shareholders who receive
distributions in the form of additional shares will have a basis for federal
income tax purposes in each such share equal to the value thereof on the
reinvestment date. Distributions in excess of the Fund's earnings and profits
will first reduce the adjusted tax basis of holder's shares and, after such
adjusted tax basis is reduced to zero, will constitute capital gains to such
holder (assuming such shares are held as a capital asset). The Fund will inform
shareholders of the source and tax status of such distributions promptly after
the close of each taxable year. Distributions from the Fund will not be eligible
for the dividends received deduction for corporations.
Exempt-interest dividends allocable to interest received by the Fund on
certain "private activity" obligations issued after August 7, 1986 will be
treated as interest on such obligations and thus will give rise to an item of
tax preference that will increase a shareholder's alternative minimum taxable
income. In addition, for corporations, alternative minimum taxable income will
be increased by a percentage of the amount by which a measure of income that
includes interest on tax-exempt
21
<PAGE> 25
obligations exceeds the amount otherwise determined to be the alternative
minimum taxable income. Accordingly, investment in the Fund may cause
shareholders to be subject to (or result in an increased liability under) the
alternative minimum tax.
Exempt-interest dividends will not be tax-exempt to the extent made to any
shareholder who is a "substantial user" of the facilities financed by tax-exempt
obligations held by the Fund or "related persons" of such substantial users.
Redemption or resale of shares of the Fund will be a taxable transaction for
federal income tax purposes. Redeeming shareholders will recognize gain or loss
in an amount equal to the difference between their basis in such redeemed shares
of the Fund and the amount received. Assuming that such shares are held as
capital assets, the gain or loss will be a capital gain or loss and will
generally be long-term if such shareholders have held their shares for more than
one year. Any loss realized on a taxable disposition of shares held for six
months or less will be disallowed to the extent of any exempt-interest dividends
received with respect to such shares.
Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in such a month and paid in January of the following
year, will be treated as having been distributed by the Fund (and received by
the shareholders) on the December 31 of the year in which the dividend was
declared. In addition, certain other distributions made after the close of a
taxable year of the Fund may be "spilled back" and treated as paid by the Fund
during such taxable year. In such case, shareholders will be treated as having
received such dividends in the taxable year in which the distribution is
actually made.
The Fund is required, in certain circumstances, to withhold 31% of dividends
and certain other payments, including redemptions, paid to shareholders who do
not furnish to the Fund their correct taxpayer identification number (in the
case of individuals, their social security number) or who are otherwise subject
to backup withholding.
The federal income tax discussion set forth above is for general information
only. Prospective shareholders should consult their tax advisors regarding the
specific federal income tax consequences of holding and disposing of shares, as
well as the effects of state, local and foreign tax laws and any proposed tax
law changes.
- ------------------------------------------------------------------------------
DESCRIPTION OF SHARES OF THE FUND
- ------------------------------------------------------------------------------
The Fund was originally organized as a Massachusetts business trust on June
16, 1986 and was reorganized as a Delaware business trust as of July 31, 1995.
The Fund is registered under the 1940 Act as an open-end, diversified management
investment company. The Fund's Declaration of Trust permits the Trustees to
issue an unlimited number of full and fractional shares in an unlimited number
of classes or series. The authorized capitalization of the Fund consists of an
unlimited number
22
<PAGE> 26
of shares of beneficial interest, par value $0.01 per share. Each share
represents an equal proportionate interest in the assets of the Fund. The
Declaration of Trust provides that shareholders are not liable for any
liabilities of the Fund or any of its series, requires inclusion of a clause to
that effect in every agreement entered into by the Fund or any of its series and
indemnifies shareholders against any such liability.
Shares of the Fund entitle their holders to one vote per share. The Fund does
not contemplate holding regular meetings of shareholders to elect Trustees or
otherwise. However, the holders of 10% or more of the outstanding shares may by
written request require a meeting to consider the removal of Trustees by a vote
of two-thirds of the shares then outstanding cast in person or by proxy at such
meeting. The Fund will assist such holders in communicating with other
shareholders of the Fund to the extent required by the 1940 Act. More detailed
information concerning the Fund is set forth in the Statement of Additional
Information.
- ------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------
This prospectus and the Statement of Additional Information do not contain all
the information set forth in the Registration Statement filed by the Fund with
the SEC under the Securities Act of 1933. Copies of the Registration Statement
may be obtained at a reasonable charge from the SEC or may be examined, without
charge, at the office of the SEC in Washington, D.C.
The fiscal year end of the Fund is June 30. The Fund sends to its shareholders
at least semi-annually reports showing the Fund's portfolio and other
information. An annual report, containing financial statements audited by the
Fund's independent accountants, is sent to shareholders each year. After the end
of each year, shareholders will receive federal income tax information regarding
dividends and capital gains distributions.
Shareholder inquiries should be directed to Van Kampen American Capital Tax
Free Money Fund, One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attn:
Correspondence.
For Automated Telephone Service which provides 24-hour direct dial access to
Fund facts and Shareholder account information, dial (800) 421-5666. For
inquiries through Telecommunications Device for the Deaf (TDD), dial (800)
772-8889.
23
<PAGE> 27
EXISTING SHAREHOLDERS--
FOR INFORMATION ON YOUR
EXISTING ACCOUNT PLEASE CALL
THE FUND'S TOLL-FREE
NUMBER--(800) 421-5666.
PROSPECTIVE INVESTORS--CALL
YOUR BROKER OR (800) 421-5666.
DEALERS--FOR DEALER
INFORMATION, SELLING
AGREEMENTS, WIRE ORDERS,
OR REDEMPTIONS CALL THE
DISTRIBUTOR'S TOLL-FREE
NUMBER--(800) 421-5666.
FOR SHAREHOLDER AND
DEALER INQUIRIES THROUGH
TELECOMMUNICATIONS
DEVICE FOR THE DEAF (TDD)
DIAL 1-800-772-8889.
FOR AUTOMATED TELEPHONE
SERVICES DIAL (800) 421-5684.
VAN KAMPEN AMERICAN CAPITAL
TAX FREE MONEY FUND
One Parkview Plaza
Oakbrook Terrace, IL 60181
Investment Adviser
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Distributor
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, IL 60181
Transfer Agent
ACCESS INVESTOR SERVICES, INC.
P.O. Box 418256
Kansas City, MO 64141-9256
Attn: Van Kampen American Capital
Tax Free Money Fund
Custodian
STATE STREET BANK AND
TRUST COMPANY
225 Franklin Street, P.O. Box 1912
Boston, MA 02105
Attn: Van Kampen American Capital
Tax Free Money Fund
Legal Counsel
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, IL 60606
Independent Accountants
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, IL 60601
<PAGE> 28
------------------------------------------------------------------------------
TAX FREE
MONEY FUND
------------------------------------------------------------------------------
P R O S P E C T U S
OCTOBER 28, 1996
- ------ ------ A WEALTH OF KNOWLEDGE - A KNOWLEDGE OF WEALTH
VAN KAMPEN AMERICAN CAPITAL
------------------------------------------------------------------------
<PAGE> 29
STATEMENT OF ADDITIONAL INFORMATION
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
Van Kampen American Capital Tax Free Money Fund (the "Fund") seeks to provide
a high level of current income exempt from federal income taxes consistent with
the preservation of capital and liquidity through investment in a diversified
portfolio of municipal securities that will mature within 12 months of the date
of purchase. There is no assurance that the Fund will achieve its investment
objective.
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the current Prospectus for the Fund dated the date
hereof (the "Prospectus"). This Statement of Additional Information does not
include all the information that a prospective investor should consider before
purchasing shares of the Fund, and investors should obtain and read the
Prospectus prior to purchasing shares. A copy of the Prospectus may be obtained
without charge by calling the Fund at (800) 421-5666. This Statement of
Additional Information incorporates by reference the entire Prospectus.
The Prospectus and this Statement of Additional Information omit certain
information contained in the registration statement filed with the Securities
and Exchange Commission ("SEC"), Washington, D.C. This omitted information may
be obtained from the SEC upon payment of the fee prescribed or inspected at the
SEC's office at no charge.
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Fund and the Trust............................................................... B-2
Investment Policies and Restrictions................................................. B-2
Trustees and Officers................................................................ B-3
Legal Counsel........................................................................ B-12
Investment Advisory and Other Services............................................... B-12
Custodian and Independent Accountants................................................ B-13
Portfolio Transactions and Brokerage Allocation...................................... B-14
The Distributor...................................................................... B-14
Yield Information.................................................................... B-15
Dividends............................................................................ B-16
Appendix............................................................................. B-17
Independent Accountants' Report...................................................... B-19
Financial Statements................................................................. B-20
Notes to Financial Statements........................................................ B-25
</TABLE>
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED OCTOBER 28, 1996.
<PAGE> 30
THE FUND AND THE TRUST
The Fund is an open-end diversified management investment company organized as
an unincorporated business trust established under the laws of the State of
Delaware by an Agreement and Declaration of Trust ("Declaration of Trust") dated
as of May 10, 1995. The Fund was originally organized in 1986 as a Massachusetts
business trust under the name Van Kampen Merritt Tax Free Income Fund. The Fund
was reorganized as a Delaware business trust as of July 31, 1995. The Fund can
issue an unlimited number of shares at par value $0.01 per share.
The Fund's Declaration of Trust provides that shareholders are not liable for
any liabilities of the Fund and requires inclusion of a clause to that effect in
every agreement entered into by the Fund and indemnifies shareholders against
any such liability. Shares of the Fund entitle their holders to one vote per
share. Except as described in the Prospectus, shares do not have cumulative
voting rights, preemptive rights or any conversion or exchange rights. The Fund
does not contemplate holding regular meetings of shareholders to elect Trustees
or otherwise. However, the holders of 10% or more of the outstanding shares may
by written request require a meeting to consider the removal of Trustees by a
vote of two-thirds of the shares then outstanding cast in person or by proxy at
such meeting. The Fund will assist such holders in communicating with other
shareholders of the Fund to the extent required by the Investment Company Act of
1940, as amended (the "1940 Act").
The Trustees may amend the Declaration of Trust in any manner without
shareholder approval, except that the Trustees may not adopt any amendment
adversely affecting the rights of shareholders without approval by a majority of
the shares present at a meeting of shareholders (or such higher vote as may be
required by the 1940 Act or other applicable law) and except that the Trustees
cannot amend the Declaration of Trust to impose any liability on shareholders,
make any assessment on shares or impose liabilities on the Trustees without
approval from each affected shareholder or Trustee, as the case may be.
Statements contained in this Statement of Additional Information as to the
contents of any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement of which
this Statement of Additional Information forms as part, each such statement
being qualified in all respects by such reference.
INVESTMENT POLICIES AND RESTRICTIONS
The investment objective of the Fund is to provide a high level of current
income exempt from federal income taxes, consistent with the preservation of
capital and liquidity through investment in a diversified portfolio of municipal
securities. The Fund will invest only in the municipal securities denominated in
U.S. dollars and must either (i) mature or have been called for redemption
within one year of the date purchased or (ii) be subject to repurchase
agreements maturing within one year. There can be no assurance that the Fund
will achieve its objective. The foregoing is a fundamental policy and cannot be
changed without approval of the shareholders of the Fund.
Fundamental investment restrictions limiting the investments of the Fund
provide that the Fund may not:
1. Purchase any securities (other than obligations issued or guaranteed by
the United States Government or by its agencies or instrumentalities) if,
as a result, more than 5% of the Fund's total assets (taken at current
value) would then be invested in securities of a single issuer or if, as a
result, the Fund would hold more than 10% of the outstanding voting
securities of an issuer except, that up to 25% of the Fund's total assets
may be invested without regard to such limitations.
2. Borrow money, except from banks for temporary or emergency purposes or in
reverse repurchase transactions as described in the Prospectus and then
not in amounts in excess of 10% of its net assets at the time of
borrowing. It can mortgage or pledge its assets only in connection with
such borrowing and in amounts not in excess of 20% of the value of its net
assets at the time of such borrowing. The Fund will not purchase any
securities while it has any outstanding borrowings.
3. Buy any securities "on margin" or sell any securities "short."
B-2
<PAGE> 31
4. Make investments for the purpose of exercising control or management.
5. Purchase any security which is restricted as to disposition under federal
securities laws or by contract or which are not readily marketable, or
enter into a repurchase agreement maturing in more than seven days with
respect to any security if, as a result, more than 10% of the Fund's total
assets would be invested in such securities.
6. Invest in securities of other investment companies, except as part of a
merger, consolidation or other acquisition.
7. Invest in interests in oil, gas or other mineral exploration or
development programs.
8. Make loans, except that the Fund can purchase and hold those publicly
distributed debt securities which it is permitted to buy, and enter into
repurchase agreements.
9. Act as an underwriter of securities, except to the extent the Fund may be
deemed to be an underwriter in connection with the sale of securities held
in its portfolio.
10. Purchase or sell real estate, commodities or commodity contracts.
The Fund may not change any of these investment restrictions without the
approval of the lesser of (i) more than 50% of the Fund's outstanding shares or
(ii) 67% of the Fund's shares present at a meeting at which the holders of more
than 50% of such outstanding shares are present in person or by proxy. As long
as the percentage restrictions described above are satisfied at the time of the
investment or borrowing, the Fund will be considered to have abided by those
restrictions even if, at a later time, a change in values or net assets causes
an increase or decrease in percentage.
From time to time, the Fund may adopt more stringent investment restrictions
in order to satisfy rules and regulations promulgated by the SEC or to be able
to offer its shares to residents in particular states. The Fund may amend or
revoke such investment restrictions if the SEC amends or revokes such rules and
regulations. In addition, in order to offer its shares to residents in
particular states, the Fund has committed that it will not purchase or sell
options and that it will not invest in warrants. The Fund may revoke any such
commitments at any time so long as it thereafter ceases to offer its shares in
the state or states involved or such commitment is no longer required by such
state or states.
TRUSTEES AND OFFICERS
The tables below list the trustees and officers of the Fund and their
principal occupations for the last five years and their affiliations, if any,
with Van Kampen American Capital Investment Advisory Corp. (the "VK Adviser"),
Van Kampen American Capital Asset Management, Inc. (the "AC Adviser"), Van
Kampen American Capital Distributors, Inc. (the "Distributor"), Van Kampen
American Capital, Inc. ("Van Kampen American Capital"), VK/AC Holding, Inc. or
ACCESS Investor Services, Inc. ("ACCESS"). For purposes hereof, the terms "Van
Kampen American Capital Funds" or "Fund Complex" includes each of the open-end
investment companies advised by the VK Adviser (excluding The Explorer
Institutional Trust) and each of the open-end investment companies advised by
the AC Adviser (excluding the Van Kampen American Capital Exchange Fund and the
Common Sense Trust).
TRUSTEES
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
J. Miles Branagan.................. Co-founder, Chairman, Chief Executive Officer and
1632 Morning Mountain Road President of MDT Corporation, a company which develops
Raleigh, NC 27614 manufactures, markets and services medical and scientific
Date of Birth: 07/14/32 equipment. Trustee of each of the Van Kampen American
Capital Funds.
</TABLE>
B-3
<PAGE> 32
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
Linda Hutton Heagy................. Managing Partner, Paul Ray Berndtson, an executive
10 South Riverside Plaza recruiting and management consulting firm. Formerly,
Suite 720 Executive Vice President of ABN AMRO, N.A., a Dutch bank
Chicago, IL 60606 holding company. Prior to 1992, Executive Vice President
Date of Birth: 06/03/49 of La Salle National Bank. Trustee of each of the Van
Kampen American Capital Funds.
Roger Hilsman...................... Professor of Government and International Affairs
251-1 Hamburg Cove Emeritus, Columbia University. Trustee of each of the Van
Lyme, CT 06371 Kampen American Capital Funds.
Date of Birth: 11/23/19
R. Craig Kennedy................... President and Director, German Marshall Fund of the
11 DuPont Circle, N.W. United States. Formerly, advisor to the Dennis Trading
Washington, D.C. 20036 Group Inc. Prior to 1992, President and Chief Executive
Date of Birth: 02/29/52 Officer, Director and member of the Investment Committee
of the Joyce Foundation, a private foundation. Trustee of
each of the Van Kampen American Capital Funds.
Dennis J. McDonnell*............... President, Chief Operating Officer and a Director of the
One Parkview Plaza VK Adviser, the AC Adviser, Van Kampen American Capital
Oakbrook Terrace, IL 60181 Advisors, Inc. and Van Kampen American Capital
Date of Birth: 05/20/42 Management, Inc. Executive Vice President and a Director
of VK/AC Holding, Inc. and Van Kampen American Capital.
President and Director of Van Kampen Merritt Equity
Advisors Corp. Director of Van Kampen Merritt Equity
Holdings Corp. Director of McCarthy, Crisanti & Maffei,
Inc. Prior to September 1996, Chief Executive Officer
McCarthy, Crisanti & Maffei, Inc. and Chairman and
Director of MCM Asia Pacific Company, Limited. Prior to
July 1996, President, Chief Operating Officer and Trustee
of VSM Inc. and VCJ Inc. President, Chief Executive
Officer and Trustee of each of the Van Kampen American
Capital Funds. President, Chairman of the Board and
Trustee of other investment companies advised by the VK
Adviser. Executive Vice President of other investment
companies advised by the AC Adviser.
Donald C. Miller................... Prior to 1992, Director of Royal Group, Inc., a company
415 North Adams in insurance related businesses. Formerly Vice Chairman
Hinsdale, IL 60521 and Director of Continental Illinois National Bank and
Date of Birth: 03/31/20 Trust Company of Chicago and Continental Illinois
Corporation. Trustee and Co-Chairman of each of the Van
Kampen American Capital Funds.
Jack E. Nelson..................... President of Nelson Investment Planning Services, Inc., a
423 Country Club Drive financial planning company and registered investment
Winter Park, FL 32789 adviser. President of Nelson Investment Brokerage
Date of Birth: 02/13/36 Services Inc., a member of the National Association of
Securities Dealers, Inc. ("NASD") and Securities
Investors Protection Corp. ("SIPC"). Trustee of each of
the Van Kampen American Capital Funds.
Jerome L. Robinson................. President of Robinson Technical Products Corporation, a
115 River Road manufacturer and processor of welding alloys, supplies
Edgewater, NJ 07020 and equipment. Director of Pacesetter Software, a
Date of Birth: 10/10/22 software programming company specializing in white collar
productivity. Director of Panasia Bank. Trustee of each
of the Van Kampen American Capital Funds.
</TABLE>
B-4
<PAGE> 33
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
Fernando Sisto..................... George M. Bond Chaired Professor and, prior to 1995, Dean
155 Hickory Lane of Graduate School and Chairman, Department of Mechanical
Closter, NJ 07624-2322 Engineering, Stevens Institute of Technology. Director of
Date of Birth: 08/02/24 Dynalysis of Princeton, a firm engaged in engineering
research. Trustee and Co-Chairman of each of the Van
Kampen American Capital Funds.
Wayne W. Whalen*................... Partner in the law firm of Skadden, Arps, Slate, Meagher
333 West Wacker Drive & Flom, legal counsel to the Van Kampen American Capital
Chicago, IL 60606 Funds, The Explorer Institutional Trust and the
Date of Birth: 08/22/39 closed-end investment companies advised by the VK
Adviser. Trustee of each of the Van Kampen American
Capital Funds, The Explorer Institutional Trust and the
closed-end investment companies advised by the VK
Adviser.
William S. Woodside................ Vice Chairman of the Board of LSG Sky Chefs, Inc., a
712 Fifth Avenue caterer of airline food. Formerly, Director of Primerica
40th Floor Corporation (currently known as The Traveler's Inc.).
New York, NY 10019 Formerly, Director of James River Corporation, a producer
Date of Birth: 01/31/22 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. Trustee of each of the Van
Kampen American Capital Funds.
</TABLE>
- ---------------
* Such trustees are "interested persons" (within the meaning of Section 2(a)(19)
of the 1940 Act). Mr. McDonnell is an interested person of the VK Adviser, the
AC Adviser and the Fund by reason of his positions with the VK Adviser and the
AC Adviser. Mr. Whalen is an interested person of the Fund by reason of his
firm acting as legal counsel to the Fund.
B-5
<PAGE> 34
OFFICERS
The address for William N. Brown, Curtis W. Morell, Robert C. Peck, Jr., Alan
T. Sachtleben, Paul R. Wolkenberg, Tanya M. Loden, Huey P. Falgout, Jr. and
Robert Sullivan is 2800 Post Oak Blvd., Houston, TX 77056. The address for Peter
W. Hegel, Ronald A. Nyberg, Edward C. Wood III, John L. Sullivan, Nicholas
Dalmaso, Scott E. Martin, Weston B. Wetherell and Steven M. Hill is One Parkview
Plaza, Oakbrook Terrace, IL 60181.
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
William N. Brown........ Vice President Executive Vice President of the AC Adviser,
Date of Birth: VK/AC Holding, Inc., Van Kampen American
05/26/53 Capital, and American Capital Contractual
Services, Inc. Executive Vice President and
Director of Van Kampen American Capital
Trust Company, Van Kampen American Capital
Advisors, Inc., Van Kampen American Capital
Exchange Corporation, ACCESS and Van Kampen
American Capital Services, Inc. Prior to
September 1996, Director of American
Capital Shareholders Corporation. Vice
President of each of the Van Kampen
American Capital Funds and other investment
companies advised by the VK Adviser and the
AC Adviser.
Peter W. Hegel.......... Vice President Executive Vice President of the VK Adviser,
Date of Birth: AC Adviser, Van Kampen American Capital
06/25/56 Management, Inc. and Van Kampen American
Capital Advisors, Inc. Prior to September
1996, Director of McCarthy, Crisanti &
Maffei, Inc. Prior to July 1996, Director
of VSM Inc. Vice President of each of the
Van Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
Curtis W. Morell........ Vice President and Senior Vice President of the VK Adviser and
Date of Birth: Chief Accounting the AC Adviser. Vice President and Chief
08/04/46 Officer Accounting Officer of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and AC Adviser.
</TABLE>
B-6
<PAGE> 35
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
Adviser.Robert C. Peck, Vice President Executive Vice President of the VK Adviser
Jr.................... and Van Kampen American Capital Management,
Date of Birth: Inc. Executive Vice President and Director
10/01/46 of the AC Adviser and Van Kampen American
Capital Advisors, Inc. Vice President of
each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and AC Adviser.
Alan T. Sachtleben...... Vice President Executive Vice President of the VK Adviser
Date of Birth: and Van Kampen American Capital Management,
04/20/42 Inc. Executive Vice President and a
Director of the AC Adviser and Van Kampen
American Capital Advisors, Inc. Vice
President of each of the Van Kampen
American Capital Funds and other investment
companies advised by the VK Adviser and AC
Adviser.
Paul R. Wolkenberg...... Vice President Executive Vice President of VK/AC Holding,
Date of Birth: Inc., Van Kampen American Capital, the
11/10/44 Distributor and the AC Adviser. President,
Chief Executive Officer and a Director of
Van Kampen American Capital Trust Company
and ACCESS. Director of American Capital
Contractual Services, Inc. Vice President
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and AC Adviser.
Edward C. Wood III...... Vice President and Senior Vice President of the VK Adviser,
Date of Birth: Chief Financial Officer the AC Adviser and Van Kampen American
01/11/56 Capital Management, Inc. Vice President and
Chief Financial Officer of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
</TABLE>
B-7
<PAGE> 36
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
John L. Sullivan........ Treasurer First Vice President of the VK Adviser and
Date of Birth: the AC Adviser. Treasurer of each of the
08/20/55 Van Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
Tanya M. Loden.......... Controller Vice President of the VK Adviser and the AC
Date of Birth: Adviser. Controller of each of the Van
11/19/59 Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and AC Adviser.
Nicholas Dalmaso........ Assistant Secretary Assistant Vice President and Senior
Date of Birth: Attorney of Van Kampen American Capital.
03/01/65 Assistant Vice President and Assistant
Secretary of the Distributor, the VK
Adviser, the AC Adviser and Van Kampen
American Capital Management, Inc. Assistant
Vice President of Van Kampen American
Capital Advisors, Inc. Assistant Secretary
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and the AC
Adviser. Prior to May 1992, attorney for
Cantwell & Cantwell, a Chicago law firm.
Huey P. Falgout, Jr..... Assistant Secretary Assistant Vice President and Senior
Date of Birth: Attorney of Van Kampen American Capital.
11/15/63 Assistant Vice President and Assistant
Secretary of the Distributor, the VK
Adviser, the AC Adviser, Van Kampen
American Capital Management, Inc., Van
Kampen American Capital Advisors, Inc.,
American Capital Contractual Services,
Inc., Van Kampen American Capital Exchange
Corporation and ACCESS. Assistant Secretary
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and AC Adviser.
Scott E. Martin......... Assistant Secretary Senior Vice President, Deputy General
Date of Birth: Counsel and Assistant Secretary of Van
08/20/56 Kampen American Capital and VK/AC Holding,
Inc. Senior Vice President, Deputy General
Counsel and Secretary of the VK Adviser,
the AC Adviser, the Distributor, Van Kampen
American Capital Management, Inc., Van
Kampen American Capital Advisors, Inc.,
American Capital Contractual Services,
Inc., Van Kampen American Capital Exchange
Corporation, Van Kampen American Capital
Services, Inc., ACCESS, Van Kampen Merritt
Equity Advisors Corp. and Van Kampen
Merritt Equity Holdings Corp. Prior to
September 1996, Deputy General Counsel and
Secretary of McCarthy, Crisanti & Maffei,
Inc. Prior to July 1996, Senior Vice
President, Deputy General Counsel and
Secretary of VSM Inc. and VCJ Inc.
Assistant Secretary of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
</TABLE>
B-8
<PAGE> 37
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
Weston B. Wetherell..... Assistant Secretary Vice President, Associate General Counsel
Date of Birth: and Assistant Secretary of Van Kampen
06/15/56 American Capital, the VK Adviser, the AC
Adviser, the Distributor, Van Kampen
American Capital Management, Inc. and Van
Kampen American Capital Advisors, Inc.
Assistant Secretary of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
Steven M. Hill.......... Assistant Treasurer Assistant Vice President of the VK Adviser
Date of Birth: and AC Adviser. Assistant Treasurer of each
10/16/64 of the Van Kampen American Capital Funds
and other investment companies advised by
the VK Adviser and the AC Adviser.
Robert Sullivan......... Assistant Controller Assistant Vice President of the VK Adviser
Date of Birth: and the AC Adviser. Assistant Controller of
03/30/33 each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and the AC
Adviser.
</TABLE>
Each of the foregoing trustees and officers holds the same position with each
of the funds in the Fund Complex. As of December 31, 1995, there were 50 funds
in the Fund Complex. Each trustee who is not an affiliated person of the VK
Adviser, the AC Adviser, the Distributor or Van Kampen American Capital (each a
"Non-Affiliated Trustee") is compensated by an annual retainer and meeting fees
for services to the funds in the Fund Complex. Each fund in the Fund Complex
provides a deferred compensation plan to its Non-Affiliated Trustees that allows
trustees to defer receipt of his or her compensation and earn a return on such
deferred amounts based upon the return of the common shares of the funds in the
Fund Complex as more fully described below. Each fund in the Fund Complex also
provides a retirement plan to its Non-Affiliated Trustees that provides
Non-Affiliated Trustees with compensation after retirement, provided that
certain eligibility requirements are met as more fully described below.
The compensation of each Non-Affiliated Trustee includes a retainer from the
Fund in an amount equal to $2,500 per calendar year, due in four quarterly
installments on the first business day of each calendar quarter. Each
Non-Affiliated Trustee receives a per meeting fee from the Fund in the amount of
$125 per regular quarterly meeting attended by the Non-Affiliated Trustee, due
on the date of such meeting, plus reasonable expenses incurred by the
Non-Affiliated Trustee in connection with his or her services as a trustee. Each
Non-Affiliated Trustee receives a per meeting fee from the Fund in the amount of
$125 per special meeting attended by the Non-Affiliated Trustee, due on the date
of such meeting, plus reasonable expenses incurred by the Non-Affiliated Trustee
in connection with his or her services as a trustee, provided that no
compensation will be paid in connection with certain telephonic special
meetings.
The trustees have approved an aggregate compensation cap with respect to funds
in the Fund Complex of $84,000 per Non-Affiliated Trustee per year (excluding
any retirement benefits) for the period July 22, 1995 through December 31, 1996,
subject to the net assets and the number of funds in the Fund Complex as of July
21, 1995 and certain other exceptions. In addition, each of the VK Adviser or
the AC Adviser, as the case may be, has agreed to reimburse each fund in the
Fund Complex through December 31, 1996 for any increase in the aggregate
trustee's compensation over the aggregate compensation paid by such fund in its
1994 fiscal year, provided that if a fund did not exist for the entire 1994
fiscal year appropriate adjustments will be made.
Each Non-Affiliated Trustee can elect to defer receipt of all or a portion of
the compensation earned by such Non-Affiliated Trustee until retirement. Amounts
deferred are retained by the Fund and earn a rate of return determined by
reference to the return on the common shares of the Fund or other funds in the
Fund Complex as selected by the respective Non-Affiliated Trustee. To the extent
permitted by the 1940 Act, the Fund may invest in securities of those funds
selected by the Non-Affiliated Trustees 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 Fund.
B-9
<PAGE> 38
The Fund adopted a retirement plan on July 21, 1994. Under the Fund's
retirement plan, a Non-Affiliated Trustee who is receiving trustee's fees from
the Fund prior to such Non-Affiliated Trustee's retirement, has at least ten
years of service and retires at or after attaining the age of 60, is eligible to
receive a retirement benefit equal to $2,500 per year for each of the ten years
following such trustee's retirement. Trustees retiring prior to the age of 60 or
with fewer than 10 years but more than 5 years of service may receive reduced
retirement benefits from a series. The retirement plan contains a Fund Complex
retirement benefit cap of $60,000 per year.
Additional information regarding compensation and benefits for trustees is set
forth below. The "Registrant" is the Fund. As indicated in the notes
accompanying the table, the amounts relate to either the Registrant's last
fiscal year ended June 30, 1996 or the Fund Complex' last calendar year ended
December 31, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
ESTIMATED TOTAL
PENSION OR ANNUAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS BEFORE DEFERRAL
COMPENSATION BENEFITS ACCRUED FROM FROM REGISTRANT
BEFORE DEFERRAL AS PART OF REGISTRANT AND FUND
FROM REGISTRANT UPON COMPLEX PAID TO
NAME(1) REGISTRANT(2) EXPENSES(3) RETIREMENT(4) TRUSTEE(5)
- --------------------------------------- ---------------- ---------------- ----------- ---------------
<S> <C> <C> <C> <C>
J. Miles Branagan...................... $3,000 $ $ 2,250 $84,250
Dr. Richard E. Caruso.................. 2,000 -0- 57,250
Philip P. Gaughan...................... 2,000 1,750 76,500
Linda Hutton Heagy..................... 3,000 2,500 38,417
Dr. Roger Hilsman...................... 3,000 -0- 91,250
R. Craig Kennedy....................... 3,250 2,500 92,625
Donald C. Miller....................... 3,250 2,500 94,625
Jack E. Nelson......................... 3,250 2,500 93,625
David Rees............................. 2,250 -0- 83,250
Jerome L. Robinson..................... -0- -0- 89,375
Lawrence J. Sheehan.................... 3,000 -0- 91,250
Dr. Fernando Sisto..................... 3,000 1,250 98,750
Wayne W. Whalen........................ 3,250 2,500 93,375
William S. Woodside.................... 3,000 -0- 79,125
</TABLE>
- ---------------
(1) Mr. McDonnell, a trustee of the Fund, is an affiliated person of the VK
Adviser and AC Adviser and is not eligible for compensation or retirement
benefits from the Registrant. Messrs. Branagan, Caruso, Hilsman, Powell,
Rees, Sheehan, Sisto and Woodside were elected by shareholders to the Board
of Trustees on July 21, 1995. Ms. Heagy was appointed to the Board of
Trustees on September 7, 1995. Mr. Don G. Powell resigned from the Board of
Trustees on August 15, 1996, and did not receive any compensation or
benefits from the Fund while a trustee because he was an affiliated person
of the VK Adviser and AC Adviser. Messrs. Gaughan and Rees retired from the
Board of Trustees on January 26, 1996 and January 29, 1996, respectively.
Messrs. Caruso and Sheehan were removed from the Board of Trustees effective
September 7, 1995 and January 29, 1996, respectively.
(2) The amounts shown in this column are the compensation paid during the
Registrant's fiscal year ended June 30, 1996 before deferral by the trustees
under the deferred compensation plan. The following trustees deferred all or
a portion of their compensation from the Registrant during the fiscal year
ended June 30, 1996: Dr. Caruso, $0; Mr. Gaughan, $1,375; Ms. Heagy, $1,250;
Mr. Kennedy, $3,250; Mr. Miller, $3,250; Mr. Nelson, $3,250; Mr. Rees, $0;
Mr. Robinson, $0; Dr. Sisto, $0; and Mr. Whalen, $3,250. The cumulative
deferred compensation (including interest) accrued with respect to each
trustee from the Registrant as of June 30, 1996 is as follows: Dr. Caruso,
$0; Mr. Gaughan, $3,385; Ms. Heagy, $1,279; Mr. Kennedy, $7,078; Mr. Miller,
$6,729; Mr. Nelson, $7,078; Mr. Rees, $0; Mr. Robinson, $0; Dr. Sisto, $0;
and Mr. Whalen, $5,565. The deferred compensation plan is described above
the Compensation Table. Amounts deferred are retained by the Fund and earn a
rate of return determined by reference to either the return on the common
shares of the Fund or other funds in the Fund Complex as selected by the
respective Non-Affiliated Trustee. To the extent permitted by the 1940 Act,
the Fund may invest in securities of those funds selected by the
Non-Affiliated Trustees in order to match the deferred compensation
obligation.
B-10
<PAGE> 39
(3) The amounts shown in this column are the Retirement Benefits accrued by each
series in operation during the Registrant's fiscal year ended June 30, 1996.
The Retirement Plan is described above the Compensation Table.
(4) The amounts shown in this column are the estimated annual benefits payable
by the Registrant in each year of the 10-year period commencing in the year
of such trustee's retirement from the Registrant assuming: the trustee has
10 or more years of service on the Board and retires at or after attaining
the age of 60. The actual annual benefit may be less if the trustee is
subject to the Fund Complex retirement benefit cap or if the trustee is not
fully vested at the time of retirement.
(5) The amounts shown in this column represent the aggregate compensation paid
by all of the funds in the Fund Complex as of December 31, 1995, before
deferral by the trustees under the deferred compensation plan. The following
trustees deferred compensation paid by the Registrant and the Fund Complex
during the calendar year ended December 31, 1995; Dr. Caruso, $41,750; Mr.
Gaughan, $57,750; Ms. Heagy, $8,750; Mr. Kennedy, $65,875; Mr. Miller,
$65,875; Mr. Nelson, $65,875; Mr. Rees, $8,375; Mr. Robinson, $62,375; Dr.
Sisto, $30,260; and Mr. Whalen, $65,625. The deferred compensation earns a
rate of return determined by reference to the return on the common shares of
the Fund or other funds in the Fund Complex as selected by the respective
Non-Affiliated Trustee. To the extent permitted by the 1940 Act, the Fund
may invest in securities of those funds selected by the Non-Affiliated
Trustees in order to match the deferred compensation obligation. The
trustees' Fund Complex compensation cap commenced on July 22, 1995 and
covered the period between July 22, 1995 and December 31, 1995. Compensation
received prior to July 22, 1995 was not subject to the cap. For the calendar
year ended December 31, 1995, while certain trustees received compensation
over $84,000 in the aggregate, no trustee received compensation in excess of
the pro rata amount of the Fund Complex cap for the period July 22, 1995
through December 31, 1995. In addition to the amounts set forth above,
certain trustees received lump sum retirement benefit distributions not
subject to the cap in 1995 related to three mutual funds that ceased
investment operations during 1995 as follows: Mr. Gaughan, $22,136; Mr.
Miller, $33,205; Mr. Nelson, $30,851; Mr. Robinson, $11,068; and Mr. Whalen,
$27,332. The VK Adviser, AC Adviser and their affiliates also serve as
investment adviser for other investment companies; however, with the
exception of Messrs. McDonnell and Whalen, the trustees were not trustees of
such investment companies. Combining the Fund Complex with other investment
companies advised by the VK Adviser, AC Adviser and their affiliates, Mr.
Whalen received Total Compensation of $268,857 during the calendar year
ended December 31, 1995.
Excluding Mr. Robinson as shown below, as of October 17, 1996, the trustees
and officers of the Fund as a group owned less than 1% of the shares of the
Fund. As of October 17, 1996, no trustee or officer of the Fund owns or would be
able to acquire 5% or more of the common stock of VK/AC Holding, Inc. Mr.
McDonnell owns, or has the opportunity to purchase, an equity interest in VK/AC
Holding, Inc., the parent company of Van Kampen American Capital, and has
entered into an employment contract (for a term until February 17, 1998) with
Van Kampen American Capital.
B-11
<PAGE> 40
As of October 17, 1996, no person was known by the Fund to own beneficially or
to hold of record as much as 5% of the outstanding shares of the Fund, except as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
OWNERSHIP AT PERCENTAGE
NAME AND ADDRESS OF HOLDER OCTOBER 17, 1996 OWNERSHIP
------------------------------------------------------ ---------------- ---------
<S> <C> <C>
Richard A. Kraemer.................................... 4,098,244 11.28%
730 Oak Ln.
Franklin Lakes, NJ 07417-2309
Jerome L. Robinson.................................... 7,132,555 19.63%
c/o Robinson Tech Products Corp.
Re: Merchants Bank of New York
P.O. Box 350-115 River Rd.
Edgewater, NJ 07020-1007
</TABLE>
LEGAL COUNSEL
Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).
INVESTMENT ADVISORY AND OTHER SERVICES
Van Kampen American Capital Investment Advisory Corp. (the "Adviser") is the
Fund's investment adviser. The Adviser was incorporated as a Delaware
corporation in 1982 (and through December 31, 1987 transacted business under the
name of American Portfolio Advisory Service Inc.). The Adviser's principal
office is located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181.
The Adviser is a wholly-owned subsidiary of Van Kampen American Capital, Inc.
("Van Kampen American Capital"), which in turn is a wholly-owned subsidiary of
VK/AC Holding, Inc. VK/AC Holding, Inc. is controlled, through the ownership of
a substantial majority of its common stock, by The Clayton & Dubilier Private
Equity Fund IV Limited Partnership ("C&D L.P."), a Connecticut limited
partnership, C&D L.P. is managed by Clayton, Dubilier & Rice, Inc., a New York
based private investment firm. The General Partner of C&D L.P. is Clayton &
Dubilier Associates IV Limited Partnership ("C&D Associates L.P."). The general
partners of C&D Associates L.P. are Joseph L. Rice, III, B. Charles Ames,
William A. Barbe, Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr.,
Hubbard C. Howe and Andrall E. Pearson each of whom is a principal of Clayton,
Dubilier & Rice, Inc. In addition, certain officers, directors and employees of
Van Kampen American Capital own, in the aggregate, not more than 6% of the
common stock of VK/AC Holding, Inc. and have the right to acquire, upon the
exercise of options, approximately an additional 12% of the common stock of
VK/AC Holding, Inc. Presently, and after giving effect to the exercise of such
options, no officer or trustee of the Fund owns or would own 5% or more of the
common stock of VK/AC Holding, Inc. Presently, and after giving effect to the
exercise of such options, no officer or trustee of the Fund owns or would own 5%
or more of the common stock of VK/AC Holding, Inc.
The investment advisory agreement provides that the Adviser will supply
investment research and portfolio management, including the selection of
securities for the Fund to purchase, hold or sell and the selection of brokers
through whom the Fund's portfolio transactions are executed. The Adviser also
administers the business affairs of the Fund, furnishes offices, necessary
facilities and equipment, provides administrative services, and permits its
officers and employees to serve without compensation as trustees and officers of
the Fund if duly elected to such positions.
The Adviser's activities are subject to the review and supervision of the
Trustees, to whom the Adviser renders periodic reports of the Fund's investment
activities.
The agreement remains in effect from year to year if specifically approved by
the Trustees or the Fund shareholders, as the case may be, and by the
disinterested Trustees in compliance with the requirements of the 1940 Act. The
agreement may be terminated without penalty upon 60 days written notice by
either party and will automatically terminate in the event of assignment.
B-12
<PAGE> 41
The Adviser has undertaken to reimburse the Fund for annual expenses which
exceed the most stringent limit prescribed by any State in which the Fund's
shares are offered for sale. Currently, the most stringent limit in any State
would require such reimbursement to the extent that aggregate operating expenses
of the Fund (excluding interest, taxes and other expenses which may be
excludable under applicable state law) exceed in any fiscal year 2 1/2% of the
average annual net assets of the Fund up to $30 million. 2% of the average
annual net assets of the Fund of the next $70 million, and 1 1/2% of the
remaining average annual net assets of the Fund. In addition to making any
required reimbursements, the Adviser may in its discretion, but is not obligated
to, waive all or any portion of its fee or assume all or any portion of the
expenses of the Fund.
For the years ended June 30, 1996, 1995 and 1994, the Fund recognized advisory
expenses of $0, $6,443 and $4,391, respectively.
OTHER AGREEMENTS
SUPPORT SERVICES AGREEMENT. Under a support services agreement with the
Distributor which terminated as of July 10, 1995 concurrent with the Fund's
change in transfer agent, the Fund received support services for shareholders,
including the handling of all written and telephonic communications, except
initial order entry and other distribution related communications. Payment by
the Fund for such services was made on cost basis for the employment of the
personnel and the equipment necessary to render the support services. At such
time, the Fund, and the other Van Kampen American Capital mutual funds
distributed by the Distributor, shared such costs proportionately among
themselves based upon their respective net asset values.
For the years ended June 30, 1996, 1995 and 1994, the Fund recognized expenses
of approximately $0, $16,300 and $16,800, respectively, representing the
Distributor's cost of providing certain support services.
ACCOUNTING SERVICES AGREEMENT. The Fund has entered into an accounting
services agreement pursuant to which the Adviser provides accounting services
supplementary to those provided by the Custodian. Such services are expected to
enable the Fund to more closely monitor and maintain its accounts and records.
The Fund shares together with the other Van Kampen American Capital mutual funds
advised by the Adviser and distributed by the Distributor in the cost of
providing such services, with 25% of such costs shared proportionately based on
the number of outstanding classes of securities per fund and with the remaining
75% of such cost based proportionally on their respective net assets per fund.
For the years ended June 30, 1996, 1995 and 1994, the Fund recognized expenses
of approximately $1,800, $1,800 and $2,000, respectively, representing the
Adviser's cost of providing accounting services.
LEGAL SERVICES AGREEMENT. The Fund and each of the other Van Kampen American
Capital funds advised by the Adviser and distributed by the Distributor have
entered into Legal Services Agreements pursuant to which Van Kampen American
Capital provides legal services, including without limitation: accurate
maintenance of the funds' minute books and records, preparation and oversight of
the funds' regulatory reports, and other information provided to shareholders,
as well as responding to day-to-day legal issues on behalf of the funds. Payment
by the Fund for such services is made on a cost basis for the salary and salary
related benefits, including but not limited to bonuses, group insurances and
other regular wages for the employment of personnel, as well as overhead and the
expenses related to the office space and the equipment necessary to render the
legal services. Other funds distributed by the Distributor also receive legal
services from Van Kampen American Capital. Of the total costs for legal services
provided to funds distributed by the Distributor, one half of such costs are
allocated equally to each fund and the remaining one half of such costs are
allocated to specific funds based on monthly time records.
For the years ended June 30, 1996, 1995 and 1994, the Fund recognized expenses
of approximately $8,200, $9,000 and $8,200, respectively, representing Van
Kampen American Capital's cost of providing legal services.
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
State Street Bank and Trust Company, 225 Franklin Street, P.O. Box 1713,
Boston, MA 02105-1713, is the custodian of the Fund and has custody of all
securities and cash of the Fund. The custodian, among other
B-13
<PAGE> 42
things, attends to the collection of principal and income, and payment for and
collection of proceeds of securities bought and sold by the Fund.
The independent accountants for the Fund are KPMG Peat Marwick LLP, Chicago,
Illinois. The selection of independent accountants will be subject to
ratification by the shareholders of the Fund at any annual meeting of
shareholders.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
The Adviser is responsible for decisions to buy and sell securities for the
Fund and broker-dealer selection. The primary consideration in effecting a
securities transaction will be execution at the most favorable securities price.
A substantial majority of the Fund's portfolio transactions may be transacted
with primary market makers acting as principal on a net basis, with no brokerage
commissions being paid by the Fund. Such principal transactions may, however,
result in a profit to the market makers. In certain instances the Adviser may
make purchases of underwritten issues at prices which include underwriting fees.
In selecting a broker-dealer to execute each particular transaction, the Adviser
will take the following into consideration: the best securities price available;
the reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund on a
continuing basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution services
offered. Subject to such policies as the Trustees of the Fund may determine, the
Adviser may cause the Fund to pay a broker-dealer that provides brokerage and
research services an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the Adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker-dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund. The Adviser may also allocate the
orders placed by it on behalf of the Fund to such broker-dealers who provide
research or statistical material, or other services to the Fund or the Adviser.
Such allocation shall be in such amounts and proportions as the Adviser shall
determine, and the Adviser will report on said allocations regularly to the
Trustees, indicating the brokers to whom such allocations have been made and the
basis therefor.
While the Adviser will be primarily responsible for the placement of the
Fund's business, the policies and practices in this regard must be consistent
with the foregoing and will at all times be subject to review by the Trustees of
the Fund.
THE DISTRIBUTOR
The Distributor offers one of the industry's broadest lines of investments --
encompassing mutual funds, closed-end funds and unit investment trusts -- and is
currently the nation's 5th largest broker-sold mutual fund group according to
Strategic Insight. Van Kampen American Capital's roots in money management
extend back to 1926. Today, Van Kampen American Capital manages or supervises
more than $57 billion in mutual funds, closed-end funds and unit investment
trusts -- assets which have been entrusted to Van Kampen American Capital in
more than 2 million investor accounts. Van Kampen American Capital has one of
the largest research teams (outside of the rating agencies) in the country, with
more than 80 analysts devoted to various specializations.
The Fund has adopted a distribution plan (the "Distribution Plan") pursuant to
Rule 12b-1 under the 1940 Act. The Fund also has adopted a service plan (the
"Service Plan"). The Distribution Plan and the Service Plan sometimes are
referred to herein as the "Plans." The Plans provide that the Fund may spend a
portion of the Fund's average daily net assets in connection with the
distribution of shares and in connection with the provision of ongoing services
to shareholders. The Plans are being implemented through an agreement (the
"Distribution and Service Agreement") with the Distributor and sub-agreements
between the Distributor and members of the NASD who are acting as securities
dealers and NASD members or eligible non-members who are acting as brokers or
agents for investors (collectively, "Selling Agreements") that may
B-14
<PAGE> 43
provide for their customers or clients certain services or assistance, which may
include, but not be limited to, processing purchase and redemption transactions,
establishing and maintaining shareholder accounts regarding the Fund, and such
other services as may be agreed to from time to time and as may be permitted by
applicable statute, rule or regulation. Brokers, dealers and financial
intermediaries that have entered into sub-agreements with the Distributor and
sell shares of the Fund are referred to herein as "financial intermediaries."
The Distributor must submit quarterly reports to the Board of Trustees of the
Fund setting forth all amounts paid under the Distribution Plan and the purposes
for which such expenditures were made, together with such other information as
from time to time is reasonably requested by the Trustees. The Plans provide
that they will continue in full force and effect from year to year so long as
such continuance is specifically approved by a vote of the Trustees, and also by
a vote of the disinterested Trustees, cast in person at a meeting called for the
purpose of voting on the Plans. Each of the Plans may not be amended to increase
materially the amount to be spent for the services described therein without
approval by a vote of a majority of the outstanding voting shares and all
material amendments to either of the Plans must be approved by the Trustees and
also by the disinterested Trustees. Each of the Plans may be terminated at any
time by a vote of a majority of the disinterested Trustees or by a vote of a
majority of the outstanding voting shares.
For the years ended June 30, 1996, 1995 and 1994, the Fund has recognized
expenses under the Plans of $88,120, $81,152 and $96,015, respectively, of which
$70,558, $86,763 and $93,964, respectively, representing payments to financial
intermediaries under the Selling Agreements. For the years ended June 30, 1996,
1995 and 1994, the Fund has reimbursed the Distributor for $0, $0 and $1,055,
respectively, for advertising expenses, and $0, $0 and $839, respectively, for
compensation of the Distributor's sales personnel.
YIELD INFORMATION
There are two methods by which the Fund's yield for a specified period of time
is calculated. Normally a seven day period will be used in determining yields in
published or mailed advertisements.
The first method, which results in an amount referred to as the "current
yield," assumes an account containing exactly one share at the beginning of the
period. (The net asset value of this share will be $1.00 except under
extraordinary circumstances.) The net change in the value of the account during
the period is then determined by subtracting this beginning value from the value
of the account at the end of the period; however, capital changes and unrealized
appreciation or depreciation of the Fund's portfolio are excluded from this
calculation. This net change in the account value is then divided by the value
of the account at the beginning of the period (i.e., normally $1.00 as discussed
above) and the resulting figure (referred to as the "base period return") is
then annualized by multiplying it by 365 and dividing by the seven days of the
period; the result is the "current yield," usually expressed to the nearest
one-hundredth of one percent.
The second method results in an amount referred to as the "compounded
effective yield." This represents an annualization of the current yield with
dividends reinvested daily. This compounded effective yield, calculated again
for a seven day period, would be computed by compounding the unannualized base
period return by adding one to the base period return, raising the sum to a
power equal to 365 divided by seven and subtracting one from the result.
In addition to using the yields in advertisements or information furnished to
present or prospective stockholders, the Fund also may quote rankings, yields or
returns as published by recognized statistical services or publishers, such as
Lipper Analytical Services, Inc. or nationally recognized financial
publications.
Yield information may be useful to investors in reviewing the performance of
the Fund. However, a number of factors should be taken into account before using
yield information as a basis for comparison with alternative investments. An
investment in the Fund is not insured and its yields are not guaranteed. They
normally will fluctuate on a daily basis. Accordingly they cannot be compared to
yields on those savings accounts or other investment alternatives which provide
a guaranteed fixed yield for a stated period of time and which may be insured by
a government agency. The yields for any given past period are not an indication
or representation by the Fund of future yields or rates of return on a Fund's
shares. Previously, the Adviser has waived a portion of its management fee and
the Adviser may in its discretion elect to discontinue waiving all or
B-15
<PAGE> 44
any portion of its fee and assuming all or any portion of the expenses of the
Fund. In the event that the Adviser elects to discontinue waiving its fee and
assuming the expenses of the Fund, the Fund's yield will be less than it
otherwise would have been. In comparing the yields of one money market fund to
another, consideration should be given to each fund's investment policy,
portfolio quality, portfolio maturity, type of instruments held and operating
expenses.
DIVIDENDS
On each day, including a Saturday, Sunday or other holiday, a dividend of all
of the Fund's net income since the last declaration is declared. The Fund's net
income for dividend purposes consists of all interest income accrued on the
Fund's portfolio, less the Fund's expenses.
Under the procedures which the Fund's Board of Trustees have adopted relating
to amortized cost valuation, the calculation of the Fund's daily dividends will
change from that indicated above in certain circumstances. If on any date the
deviation between net asset value determined on an amortized cost basis and that
determined using market quotations is 0.5% or more, the amount of such deviation
will be added to or subtracted from the daily dividend to the extent necessary
to reduce such deviation to within 0.5%.
B-16
<PAGE> 45
APPENDIX
STANDARD & POOR'S RATINGS
TAX-EXEMPT NOTES
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes. Notes maturing beyond 3 years will most likely
receive a long-term debt rating. Notes maturing in 3 years or less will likely
receive a note rating. The following criteria will be used in making that
assessment:
-- Amortization schedule (the larger the final maturity relative to other
maturities, the more likely it is to be treated as a note).
-- Source of payment (the more the issue depends on the market for its
refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1. Strong capacity to pay principal and interest. Issues determined to
possess very strong safety characteristics are given a plus (+) designation.
SP-2. Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.
TAX-EXEMPT COMMERCIAL PAPER
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market. Ratings are graded into several categories, ranging from 'A-1' for the
highest quality obligations to 'D' for the lowest. These categories are as
follows:
A-1. This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2. Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.
TAX-EXEMPT VARIABLE RATE DEMAND OBLIGATIONS
Standard & Poor's assigns "dual" ratings to all debt issues that have a put
option or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols for the put option (for
example, 'AAA/A-1+'). With short-term demand debt, Standard & Poor's note rating
symbols are used with the commercial paper rating symbols (for example,
'SP-1+/A-1+').
B-17
<PAGE> 46
MOODY'S RATINGS
TAX-EXEMPT SHORT TERM LOAN RATINGS
Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade or (MIG). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors affecting
the liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature--variable rate demand obligation (VRDO). Such ratings will be designated
as VMIG or, if the demand feature is not rated, as NR.
Moody's short-term ratings are designated Moody's Investment Grade as MIG 1 or
VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's assigns a MIG
or VMIG rating, all categories define an investment grade situation.
The purpose of the MIG or VMIG ratings is to provide investors with a simple
system by which the relative investment qualities of short-term obligations may
be evaluated.
Gradations of investment quality are indicated by rating symbols, with each
symbol representing a group in which the quality characteristics are broadly the
same.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong protection by
established cash flows, superior liquidity support or demonstrated broad based
access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
Issues or the features associated with MIG or VMIG ratings are identified by
date of issue, date of maturity or maturities or rating expiration date and
description to distinguish each rating from other ratings. Each rating
designation is unique with no implication as to any other similar issue of the
same obligor. MIG ratings terminate at the retirement of the obligation while
VMIG rating expiration will be a function of each issue's specific structural or
credit features.
TAX-EXEMPT COMMERCIAL PAPER
Moody's Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. Moody's employs the following designations, all judged to
be investment grade, to indicate the relative repayment capacity of rated
issuers:
Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
B-18
<PAGE> 47
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Trustees and Shareholders of
Van Kampen American Capital Tax Free Money Fund:
We have audited the accompanying statement of assets and liabilities of Van
Kampen American Capital Tax Free Money Fund (the "Fund"), including the
portfolio of investments, as of June 30, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen American Capital Tax Free Money Fund as of June 30, 1996, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for each
of the periods presented, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Chicago, Illinois
July 30, 1996
B-19
<PAGE> 48
PORTFOLIO OF INVESTMENTS
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Security Description Date Purchase Cost
---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
DATES 23.6%
$1,800 Louisiana St Recovery Dist Sales Tax Rev Ser
1988 (FGIC Insd).............................. 07/01/96 3.650% $ 1,800,000
1,800 New York City Muni Wtr Fin Auth Wtr Swr Sys
Ser 95 A (FGIC Insd).......................... 07/01/96 3.750 1,800,000
1,200 New York City Ser B (FGIC Insd)............... 07/01/96 3.750 1,200,000
1,300 New York City Ser B (FGIC Insd)............... 07/01/96 3.750 1,300,000
2,300 New York City Ser B (FGIC Insd)............... 07/01/96 3.750 2,300,000
------------
Total Dates................................... 8,400,000
------------
7 DAY FLOATERS 40.0%
500 Utah St Brd Regents Student Ln Rev Ser 1993 A
(Gtd: Student Ln Marketing Assoc)............. 07/02/96 3.400 500,000
600 Washington St Hsg Fin Comm Multi Family Mtg
Rev Rfdg (LOC: Harris Trust & Savings Bank)... 07/02/96 3.400 600,000
1,400 City of Chillicothe, IA Pollutn Ctl Rev Ser
1993 A Rfdg (Gtd: Midwest Power Systems
Inc.)......................................... 07/03/96 3.400 1,400,000
1,600 Dade Cnty, FL Fltg Capital Asset Acquisition
Ser S (LOC: Sanwa Bank)....................... 07/03/96 3.600 1,600,000
1,110 Fort Bend, TX Indl Dev Corp Indl Dev Rev Rfdg
(Gtd: W.W. Grainger, Inc.).................... 07/03/96 3.400 1,110,000
1,100 Illinois Dev Fin Auth Indl Dev Rev Field
Container Corp Rfdg (LOC: Amer Nat'l Bank &
Trust of Chicago)............................. 07/03/96 3.400 1,100,000
1,000 Illinois Dev Fin Auth Rev Roosevelt Univ Ser
1995 (LOC: Amer Nat'l Bank & Trust of
Chicago)...................................... 07/03/96 3.400 1,000,000
1,100 Illinois Dev Fin Auth Rev Ser 1994 Lake Forest
Academy (LOC: The Northern Trust Company)..... 07/03/96 3.400 1,100,000
1,500 Iowa Hsg Fin Auth Small Bus Ln Proj Ser 1985 A
(LOC: Federal Home Loan Bank of Des Moines)... 07/03/96 3.550 1,500,000
1,000 Missouri St Hlth & Edl Fac Auth Hlth Fac Rev
Ser 1995 B (MBIA Insd)........................ 07/03/96 3.350 1,000,000
1,000 St Paul, MN Hsg & Redev Auth Rev Ser 1985 A
(LOC: Federal Home Loan Bank of Des Moines)... 07/03/96 3.500 1,000,000
1,000 Calhoun Cnty, MI Econ Dev Corp Rev (LOC:
Comerica Bank)................................ 07/04/96 3.300 1,000,000
955 City of Sterling Heights, MI Econ Dev Corp Rev
Rfdg (LOC: First Chicago/NBD Corp)............ 07/04/96 3.500 955,000
400 Minnesota St Higher Edl Coordinating Brd Ser
1995 A Rfdg (LOC: Norwest Bank)............... 07/04/96 3.450 400,000
------------
Total 7 Day Floaters.......................... 14,265,000
------------
UPDATES (COMMERCIAL PAPER) 11.2%
1,500 West Orange Mem Hosp Tax Dist FL Rev Updates
Ser 1991 A-2 (LOC: Robobank-Nederland)........ 07/22/96 3.600 1,500,000
</TABLE>
See Notes to Financial Statements
B-20
<PAGE> 49
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Security Description Date Purchase Cost
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UPDATES (COMMERCIAL PAPER) (CONTINUED)
$1,000 Wayne Cnty, MI Downriver Sewage Disp Sys
(LOC: Comerica Bank).......................... 08/02/96 3.700% $ 1,000,000
1,500 York Cnty, SC Pollutn Ctl Rev Ser 1990 Rfdg
(Gtd: Duke Power Co.)......................... 08/05/96 3.600 1,500,000
-----------
Total Updates (Commercial Paper).............. 4,000,000
-----------
BONDS/NOTES 24.9%
1,000 Illinois St (FGIC Insd)....................... 07/01/96 5.250 1,000,000
1,100 Texas St Tax & Rev Antic Nts Ser A............ 08/30/96 4.750 1,101,297
1,000 Michigan St Genl Oblig Nts.................... 09/30/96 4.000 1,002,449
1,000 City of Chicago Genl Oblig Tender Notes Ser
1995 A (LOC: Morgan Guaranty & Trust Co.)..... 10/31/96 3.650 1,000,000
910 City of Ashdown, AR Indl Dev Rev Ser 1981
(Gtd: Allied Signal Corp.).................... 11/01/96 4.100 910,000
1,000 Washoe Cnty, NV Ser A Rfdg (AMBAC Insd)....... 12/01/96 4.000 1,002,015
1,515 Port Seattle, WA Rev Ser 1995 A Rfdg (AMBAC
Insd)......................................... 02/01/97 5.500 1,530,930
325 Trenton, NJ Wtr Util Ser B (FSA Insd)......... 04/15/97 5.300 328,859
1,000 Washington St Hsg Fin Comm Single Family Prog
Ser 1A-S (FGIC Insd).......................... 06/01/97 3.800 1,000,000
-----------
Total Bonds/Notes............................. 8,875,550
-----------
TOTAL INVESTMENTS 99.7% (A)................................................. 35,540,550
OTHER ASSETS IN EXCESS OF LIABILITIES 0.3%.................................. 92,327
-----------
NET ASSETS 100.0%........................................................... $35,632,877
===========
</TABLE>
(a) At June 30, 1996, cost is identical for both book and federal income tax
purposes.
See Notes to Financial Statements
B-21
<PAGE> 50
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Amortized Cost which Approximates Market (Note 1)........ $35,540,550
Cash..................................................................... 46,478
Receivables:
Interest............................................................... 222,275
Fund Shares Sold....................................................... 28,638
Other.................................................................... 5,993
-----------
Total Assets....................................................... 35,843,934
-----------
LIABILITIES:
Payables:
Distributor and Affiliates (Notes 2 and 4)............................. 47,219
Fund Shares Repurchased................................................ 23,373
Income Distributions................................................... 20,338
Accrued Expenses......................................................... 63,183
Deferred Compensation and Retirement Plans (Note 2)...................... 56,944
-----------
Total Liabilities.................................................. 211,057
-----------
NET ASSETS............................................................... $35,632,877
---------
NET ASSETS CONSIST OF:
Capital (Note 3)......................................................... $35,657,455
Accumulated Net Realized Loss on Investments............................. (24,578)
-----------
NET ASSETS (Equivalent to $1.00 per share for 35,657,455 shares
outstanding)........................................................... $35,632,877
===========
</TABLE>
See Notes to Financial Statements
B-22
<PAGE> 51
STATEMENT OF OPERATIONS
For the Year Ended June 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................................................... $ 1,318,881
-------------
EXPENSES:
Investment Advisory Fee (Note 2)....................................... 176,240
Distribution (12b-1) and Service Fees (Note 4)......................... 88,120
Shareholder Services (Note 2).......................................... 77,414
Printing............................................................... 40,850
Registration........................................................... 39,952
Trustees Fees and Expenses (Note 2).................................... 37,218
Legal (Note 2)......................................................... 12,240
Other.................................................................. 66,196
-------------
Total Expenses..................................................... 538,230
Less Fees Waived and Expenses Reimbursed ($176,240 and $62,508,
respectively).................................................... 238,748
-------------
Net Expenses....................................................... 299,482
-------------
NET INVESTMENT INCOME.................................................. $ 1,019,399
=============
NET REALIZED GAIN ON SECURITIES........................................ $ -0-
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS............................. $ 1,019,399
=============
</TABLE>
See Notes to Financial Statements
B-23
<PAGE> 52
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended June 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1996 June 30, 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 1,019,399 $ 938,971
Distributions from Net Investment Income................ (1,019,399) (938,971)
--------- ---------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... -0- -0-
--------- ---------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............................... 67,200,916 23,885,907
Net Asset Value of Shares Issued Through Dividend
Reinvestment.......................................... 762,564 685,467
Cost of Shares Repurchased.............................. (65,505,643) (28,779,907)
--------- ---------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS...... 2,457,837 (4,208,533)
--------- ---------
TOTAL INCREASE/DECREASE IN NET ASSETS................... 2,457,837 (4,208,533)
NET ASSETS:
Beginning of the Period................................. 33,175,040 37,383,573
--------- ---------
End of the Period....................................... $35,632,877 $33,175,040
========= ==========
</TABLE>
See Notes to Financial Statements
B-24
<PAGE> 53
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Tax Free Money Fund (the "Fund") is organized as a
Delaware business trust. The Fund is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to provide a high level of current
income exempt from federal income taxes consistent with the preservation of
capital and liquidity through investment in a broad range of municipal
securities that will mature within 12 months of the date of purchase. The Fund
commenced investment operations on November 5, 1986.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are valued at amortized cost, which
approximates market. Under this valuation method, a portfolio instrument is
valued at cost and any discount or premium is amortized on a straight-line basis
to the maturity of the instrument.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
Interest income is recorded on an accrual basis.
C. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income, if any, to its shareholders.
Therefore, no provision for federal income taxes is required.
The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At June 30, 1996, the Fund had an accumulated capital loss carryforward
of $24,578. Of this amount, $6,277, $4,541 and $13,760 will expire on June 30,
1998, 1999 and 2001, respectively. Net realized gains or losses may differ for
financial and tax reporting purposes primarily as a result of post October 31
losses which are not recognized for tax purposes until the first day of the
following fiscal year.
B-25
<PAGE> 54
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996
- --------------------------------------------------------------------------------
D. DISTRIBUTION OF INCOME AND GAINS--The Fund declares dividends from net
investment income daily and automatically reinvests such dividends daily. Net
realized gains, if any, are distributed annually. Shareholders can elect to
receive the cash equivalent of their daily dividends at each month end.
For the year ended June 30, 1996, 100% of the income distributions made by
the Fund were exempt from Federal income taxes. In January, 1997, the Fund will
provide tax information to shareholders for the 1996 calendar year.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen American
Capital Investment Advisory Corp. (the "Adviser") will provide facilities and
investment advice to the Fund for an annual fee payable monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- ---------------------------------------------------------------------
<S> <C>
First $500 million...................................... .500 of 1%
Next $500 million....................................... .475 of 1%
Next $500 million....................................... .425 of 1%
Over $1.5 billion....................................... .375 of 1%
</TABLE>
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.
For the year ended June 30, 1996, the Fund recognized expenses of
approximately $14,800 representing Van Kampen American Capital Distributors,
Inc's. or its affiliates' (collectively "VKAC") cost of providing accounting,
cash management and legal services to the Fund. Of this amount, approximately
$4,800 has been assumed by VKAC.
In July, 1995, the Fund began using ACCESS Investor Services, Inc.
("ACCESS"), an affiliate of the Adviser, as the shareholder servicing agent for
the Fund. For the year ended June 30, 1996, the Fund recognized expenses of
approximately $48,200, representing ACCESS' cost of providing transfer agency
and shareholder services plus a profit. Of this amount, approximately $2,300 has
been assumed by VKAC.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.
The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC.
B-26
<PAGE> 55
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
The Fund is authorized to issue an unlimited number of shares of capital stock
with a par value of $.01 per share. At June 30, 1996 and 1995, capital
aggregated $35,657,455 and $33,199,618, respectively. Transactions in shares
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1996 JUNE 30, 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares............................. 33,199,618 37,408,151
---------- ----------
Shares Sold.................................. 67,200,916 23,885,907
Shares Issued Through Dividend
Reinvestment............................... 762,564 685,467
Shares Repurchased........................... (65,505,643) (28,779,907)
---------- ----------
Net Change in Shares Outstanding............. 2,457,837 (4,208,533)
---------- ----------
Ending Shares................................ 35,657,455 33,199,618
========== ==========
</TABLE>
4. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.
Annual fees under the Plans of up to .25% of the Fund's average net assets are
accrued daily. Included in these fees for the year ended June 30, 1996, are
payments to VKAC of approximately $24,800.
B-27
<PAGE> 56
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
List all financial statements and exhibits as part of the Registration
Statement.
(A) FINANCIAL STATEMENTS:
Included in Part A of the Registration Statement:
Financial Highlights
Included in Part B of the Registration Statement:
Independent Accountants' Report
Financial Statements
Notes to Financial Statements
(B) EXHIBITS:
(1) Declaration of Trust+
(2) By-Laws+
(5) Investment Advisory Agreement+
(6)(a) Distribution and Service Agreement+
(b) Form of Dealer Agreement(12)
(c) Form of Broker Agreement(12)
(d) Form of Bank Agreement(12)
(8)(a) Form of Custodian Agreement*
(b) Transfer Agency Agreement+
(9)(a) Amended and Restated Fund Accounting Agreement and Amendment
No. 1 thereto+
(b) Amended and Restated Legal Services Agreement+
(10) Opinion and Consent of Skadden, Arps, Slate Meagher & Flom(12)
(11) Opinion and Consent of KPMG Peat Marwick LLP+
(13) Letter of Understanding relating to initial capital+
(15)(a) Distribution Plan Pursuant to Rule 12b-1+
(b) Form of Shareholder Assistance Agreement+
(c) Form of Administrative Services Agreement+
(d) Service Plan+
(16) Computation of Performance Quotations+
(17)(a) List of certain investment companies in response to Item
29(a)+
(b) List of officers and directors of Van Kampen American Capital
Distributors, Inc. in response to Item 29(b)+
(24) Power of attorney+
(27) Financial Data Schedule+
- ---------------
* Incorporated herein by reference to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A, file number 33-6745,
filed September 6, 1986.
(12) Incorporated herein by reference to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A, file number 33-6745,
filed August 3, 1995.
+ Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
To the best knowledge of Registrant, no person is controlled by or under
common control with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of October 17, 1996:
<TABLE>
<CAPTION>
(2)
NUMBER OF
(1) RECORD
TITLE OF CLASS HOLDERS
------------------------------------------- ---------
<S> <C>
Shares of Beneficial Interest.............. 1,872
---------
</TABLE>
C-1
<PAGE> 57
ITEM 27. INDEMNIFICATION.
Reference is made to Article 8, Section 8.4 of the Registrant's Agreement
and Declaration of Trust.
Article 8, Section 8.4 of the Agreement and Declaration of Trust provides
that each officer and trustee of the Registrant shall be indemnified by the
Registrant against all liabilities incurred in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which the officer or trustee may be or may have been involved by reason of
being or having been an officer or trustee, except that such indemnity shall not
protect any such person against a liability to the Registrant or any shareholder
thereof to which such person would otherwise be subject by reason of (i) not
acting in good faith in the reasonable belief that such person's actions were
not in the best interest of the Trust, (ii) willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office or (iii) for a criminal proceeding, not having a reasonable
cause to believe that such conduct was unlawful (collectively, "Disabling
Conduct"). Absent a court determination that an officer or trustee seeking
indemnification was not liable on the merits of Disabling Conduct in the conduct
of his or her office, the decision by the Registrant to indemnify such person
must be based upon the reasonable determination of independent counsel or
non-party independent trustees, after review of the facts, that such officer or
trustee is not guilty of Disabling Conduct in the conduct of his or her office.
The Registrant has purchased insurance on behalf of its officers and
trustees protecting such persons from liability arising from their activities as
officers or trustees of the Registrant. The insurance does not protect or
purport to protect such persons from liability to the Registrant or to its
shareholders to which such officers or trustee 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.
Conditional advancing of indemnification monies may be made if the trustee
or officer undertakes to repay the advance unless it is ultimately determined
that he or she is entitled to the indemnification and only if the following
conditions are met: (1) the trustee or officer provides security for the
undertaking; (2) the Registrant is insured against losses arising from lawful
advances; or (3) a majority of a quorum of the Registrant's disinterested,
non-party trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that a recipient of
the advance ultimately will be found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by the trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such Act and will
be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "Investment Advisory Services" in the Prospectus and "Trustees and
Officers" in the Statement of Additional Information for information regarding
the business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of each of the officers and
Directors of Van Kampen American Capital Investment Advisory Corp., reference is
made to the Adviser's current Form ADV filed under the Investment Advisers Act
of 1940, incorporated herein by reference.
C-2
<PAGE> 58
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) The sole principal underwriter is Van Kampen American Capital
Distributors, Inc., which acts as principal underwriter for certain investment
companies and unit investment trusts set forth in Exhibit 17(a) incorporated by
reference herein.
(b) Van Kampen American Capital Distributors, Inc., which is an affiliated
person of an affiliated person of Registrant, is the sole principal underwriter
for Registrant. The name, principal business address and positions and offices
with Van Kampen American Capital Distributors, Inc. of each of the directors and
officers thereof are set forth in Exhibit 17(b). Except as disclosed under the
heading "Trustees and Officers" in Part B of this Registration Statement, none
of such persons has any position or office with Registrant.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder to be maintained (i) by
Registrant will be maintained at its offices located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, ACCESS Investor Services, Inc., 7501 Tiffany
Springs Parkway, Kansas City, Missouri 64153, or at the State Street Bank and
Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts; (ii) by the
Adviser, will be maintained at its offices, located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181; and (iii) by Van Kampen American Capital
Distributors, Inc., the principal underwriter, will be maintained at its offices
located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181.
ITEM 31. MANAGEMENT SERVICES.
Not applicable.
ITEM 32. UNDERTAKINGS.
(a) Not applicable.
(b) Not applicable.
(c)Registrant undertakes, if requested to do so by the holders of at least
10% of the shareholders of a series of the Registrant, to call a meeting
of such shareholders for the purpose of voting upon the question of
removal of a trustee or trustees, and to assist in communications with
other shareholders to the extent required by Section 16(c) of the
Investment Company Act of 1940, as amended.
C-3
<PAGE> 59
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT, VAN KAMPEN AMERICAN CAPITAL TAX
FREE MONEY FUND, CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR
EFFECTIVENESS OF THIS REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE
SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS AMENDMENT TO THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THERETO DULY
AUTHORIZED, IN THE CITY OF OAKBROOK TERRACE, AND THE STATE OF ILLINOIS ON THE
23RD DAY OF OCTOBER, 1996.
VAN KAMPEN AMERICAN CAPITAL
TAX FREE MONEY FUND
By: /s/ RONALD A. NYBERG
------------------------------------
Ronald A. Nyberg, Vice President and
Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED ON OCTOBER 23, 1996 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ----------------------------------------------
<C> <S>
</TABLE>
<TABLE>
<C> <S>
/s/ DONALD MILLER* Co-Chairman of the Board and Trustee
- ----------------------------------------------
Donald Miller
/s/ FERNANDO SISTO* Co-Chairman of the Board and Trustee
- ----------------------------------------------
Fernando Sisto
Chief Executive Officer:
/s/ DENNIS J. McDONNELL* President, Chief Executive Officer and Trustee
- ----------------------------------------------
Dennis J. McDonnell
Chief Financial and Accounting Officer:
/s/ EDWARD C. WOOD, III* Vice President and Treasurer
- ----------------------------------------------
Edward C. Wood, III
Trustees:
/s/ J. MILES BRANAGAN* Trustee
- ----------------------------------------------
J. Miles Branagan
/s/ LINDA HUTTON HEAGY* Trustee
- ----------------------------------------------
Linda Hutton Heagy
/s/ ROGER HILSMAN* Trustee
- ----------------------------------------------
Roger Hilsman
/s/ R. CRAIG KENNEDY* Trustee
- ----------------------------------------------
R. Craig Kennedy
/s/ JACK E. NELSON* Trustee
- ----------------------------------------------
Jack E. Nelson
/s/ JEROME L. ROBINSON* Trustee
- ----------------------------------------------
Jerome L. Robinson
/s/ WAYNE W. WHALEN* Trustee
- ----------------------------------------------
Wayne W. Whalen
/s/ WILLIAM S. WOODSIDE* Trustee
- ----------------------------------------------
William S. Woodside
</TABLE>
- ---------------
* Signed by Ronald A. Nyberg pursuant to a power of attorney filed herewith.
<TABLE>
<C> <S>
/s/ RONALD A. NYBERG October 23, 1996
- ----------------------------------------------
Ronald A. Nyberg
Attorney-in-Fact
</TABLE>
C-4
<PAGE> 60
SCHEDULE OF EXHIBITS TO
FORM N-1A
POST-EFFECTIVE AMENDMENT NUMBER 14 AS
SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION
ON OCTOBER 28, 1996
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
----
<S> <C> <C>
(1) Declaration of Trust
(2) By-Laws
(5) Investment Advisory Agreement
(6) (a) Distribution and Service Agreement
(8) (b) Transfer Agency Agreement
(9) (a) Amended and Restated Fund Accounting Agreement and Amendment No. 1 thereto
(b) Amended and Restated Legal Services Agreement
(11) Opinion and Consent of KPMG Peat Marwick LLP
(13) Letter of Understanding relating to initial capital
(15) (a) Distribution Plan Pursuant to Rule 12b-1
(b) Form of Shareholder Assistance Agreement
(c) Form of Administrative Services Agreement
(d) Service Plan
(16) Computation of Performance Quotations
(17) (a) List of certain investment companies in response to Item 29(a)
(b) List of officers and directors of Van Kampen American Capital Distributors,
Inc. in response to Item 29(b)
(24) Power of attorney
(27) Financial Data Schedule
</TABLE>
C-5
<PAGE> 1
EXHIBIT 1
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
AGREEMENT AND DECLARATION OF TRUST
<PAGE> 2
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
AGREEMENT AND DECLARATION OF TRUST
Index
RECITALS 1
ARTICLE I THE TRUST 2
SECTION 1.1 Name 2
SECTION 1.2. Location 2
SECTION 1.3. Nature of Trust 2
SECTION 1.4. Definitions 2
SECTION 1.5. Real Property to be Converted into Personal Property 5
ARTICLE 2 PURPOSE OF THE TRUST 5
ARTICLE 3 POWERS OF THE TRUSTEES 6
SECTION 3.1. Powers in General 6
(a) Investments 6
(b) Disposition of Assets 7
(c) Ownership Powers 7
(d) Form of Holding 7
(e) Reorganization, etc. 7
(f) Voting Trusts, etc. 7
<PAGE> 3
(g) Contracts, etc. 7
(h) Guarantees, etc. 7
(i) Partnerships, etc. 8
(j) Insurance 8
(k) Pensions, etc 8
(I) Power of Collection and Litigation 8
(m) Issuance and Repurchase of Shares 8
(n) Offices 8
(o) Expenses 8
(p) Agents, etc. 9
(q) Accounts 9
(r) Valuation 9
(s) Indemnification 9
(t) General 9
SECTION 3.2. Borrowings; Financings; Issuance of Securities 9
i
<PAGE> 4
SECTION 3.3. Deposits 9
SECTION 3.4. Allocations 10
SECTION 3.5. Further Powers; Limitations 10
ARTICLE 4 TRUSTEES AND OFFICERS 10
SECTION 4.1. Number, Designation, Election, Term, etc 10
(a) Initial Trustee 10
(b) Number 10
(c) Election and Term 11
(d) Resignation and Retirement 11
(e) Removal 11
(f) Vacancies 11
(g) Acceptance of Trusts 11
(h) Effect of Death, Resignation, etc. 12
(i) Conveyance 12
(j) No Accounting 12
SECTION 4.2. Trustees' Meetings; Participation by Telephone, etc. 12
SECTION 4.3. Committees; Delegation 12
SECTION 4.4. Officers 13
SECTION 4.5. Compensation of Trustees and Officers 13
SECTION 4.6. Ownership of Shares and Securities of the Trust 13
<PAGE> 5
SECTION 4.7. Right of Trustees and Officers to Own Property or
to Engage in Business; Authority of Trustees to Permit
Others to Do Likewise 13
SECTION 4.8. Reliance on Experts 13
SECTION 4.9. Surety Bonds 14
SECTION 4.10. Apparent Authority of Trustees and Officers 14
SECTION 4.11. Other Relationships Not Prohibited 14
SECTION 4.12. Payment of Trust Expenses 14
SECTION 4.13. 0wnership of the Trust Property 15
<PAGE> 6
SECTION 4.14. By-Laws 15
ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES 15
SECTION 5.1. Appointment; Action by Less than All Trustees 15
SECTION 5.2. Certain Contracts 15
(a) Advisory 16
(b) Administration 16
(c) Underwriting 16
(d) Custodian 16
(e) Transfer and Dividend Disbursing Agent 17
(f) Shareholder Servicing 17
(g) Accounting 17
Section 5.3. Distribution Arrangements 17
Section 5.4. Service Arrangements 17
ARTICLE 6 SERIES AND SHARES 17
SECTION 6.1. Description of Series and Shares 17
(a) General 17
(b) Establishment, etc. of Series; Authorization of Shares 18
(c) Character of Separate Series and Shares Thereof 18
(d) Consideration for Shares 18
(e) Assets Belonging to Series 19
(f) Liabilities of Series 19
(g) Dividends 19
(h) Liquidation 20
(i) Voting 20
<PAGE> 7
(j) Redemption by Shareholder 20
(k) Redemption at the Option of the Trust 21
(I) Net Asset Value 21
(m) Transfer 21
(n) Equality 21
(o) Rights of Fractional Shares 22
(p) Conversion Rights 22
SECTION 6.2. Ownership of Shares 22
SECTION 6.3. Investments in the Trust 23
SECTION 6.4. No Pre-emptive Rights 23
<PAGE> 8
SECTION 6.5. Status of Shares 23
ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS 23
SECTION 7.1. Voting Powers 23
SECTION 7.2. Number of Votes and Manner of Voting; Proxies 24
SECTION 7.3. Meetings 24
SECTION 7.4. Record Dates 24
SECTION 7.5. Quorum and Required Vote 25
SECTION 7.6. Action by Written Consent 25
SECTION 7.7. Inspection of Records 25
SECTION 7.8. Additional Provisions 25
ARTICLE 8 LIMITATION OF LIABILITY; INDEMNIFICATION 25
SECTION 8.1. Trustees, Shareholders, etc. Not Personally
Liable; Notice 25
SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No
Bond or Surety 26
SECTION 8.3. Indemnification of Shareholders 26
SECTION 8.4. Indemnification of Trustees, Officers, etc. 27
<PAGE> 9
SECTION 8.5. Compromise Payment 27
SECTION 8.6. Indemnification Not Exclusive, etc. 28
SECTION 8.7. Liability of Third Persons Dealing with Trustees 28
ARTICLE 9 DURATION; REORGANIZATION; INCORPORATION;
AMENDMENTS 28
SECTION 9.1. Duration of Trust 28
SECTION 9.2. Termination of Trust 28
SECTION 9.3. Reorganization 29
SECTION 9.4. Incorporation 29
<PAGE> 10
SECTION 9.5. Amendments; etc. 29
SECTION 9.6. Filing of Copies of Declaration and Amendments 30
ARTICLE 10 MISCELLANEOUS 30
SECTION 10.1. Notices 30
SECTION 10.2. Governing Law 30
SECTION 10.3. Counterparts 30
SECTION 10.4. Reliance by Third Parties 30
SECTION 10.5. References; Headings 31
SECTION 10.6. Provisions in Conflict With Law or Regulation 31
SECTION 10.7. Use of the Name "Van Kampen American Capital" 31
Signature 32
Acknowledgments 33
<PAGE> 11
AGREEMENT AND DECLARATION OF TRUST
OF
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
This AGREEMENT AND DECLARATION OF TRUST, made at this 10th
day of May, 1995, by and between Ronald A. Nyberg, an
individual residing in Naperville, Illinois (the
"Settlor"), and the Trustee whose signature is set forth below
(the "Initial Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, the Settlor proposes to deliver to the Initial
Trustee the sum of one hundred dollars ($100.00) lawful money of
the United States of America in trust hereunder and to authorize
the Initial Trustee and all other individuals acting as Trustees
hereunder to employ such funds, and any other funds coming into
their hands or the hands of their successor or successors as
such Trustees, to carry on the business of an investment company
and as such of buying, selling, investing or otherwise dealing
in and with stocks, bonds, debentures, warrants and other
securities and interests therein, financial futures contracts,
or options with respect to securities or financial futures
contracts, and such other and further investment media and other
property as the Trustees may deem advisable, which are not
prohibited by law or the terms of this Declaration; and
WHEREAS, the Initial Trustee is willing to accept such
sum, together with any and all additions thereto and the income
or increments thereof, upon the terms, conditions and trusts
hereinafter set forth; and
WHEREAS, the beneficial interest in the assets held by the
Trustees shall be divided into transferable Shares, all in
accordance with the provisions hereinafter set forth; and
WHEREAS, it is desired that the trust established hereby
be managed and operated as a trust with transferable shares
under the laws of Delaware with respect to Delaware business
trusts in accordance with the provisions hereinafter set forth;
1
<PAGE> 12
NOW, THEREFORE, the Initial Trustee, for himself and his
successors as Trustees, hereby declares and agrees with the
Settlor, for himself and for all Persons who shall hereafter
become holders of Shares that the Trustees will hold the sum
delivered to them upon the execution hereof, and all other and
further cash, securities and other property of every type and
description which they may in any way acquire in their capacity
as such Trustees, together with the income therefrom and the
proceeds thereof, IN TRUST NEVERTHELESS, to manage and dispose
of the same for the benefit of the holders from time to time of
the Shares being issued and to be issued hereunder and in the
manner and subject to the provisions hereof, to wit:
<PAGE> 13
ARTICLE I
THE TRUST
SECTION 1.1 Name. The name of the Trust shall be
"VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND"
and so far as may be practicable, the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" wherever used
in this Agreement and Declaration of Trust, except where the
context otherwise requires) shall refer to the Trustees in their
capacity as Trustees, and not individually or personally, and
shall not refer to the officers, agents or employees of the
Trust or of such Trustees, or to the holders of the Shares of
Beneficial Interest of the Trust or any Series. If the Trustees
determine that the use of such name is not practicable, legal or
convenient at any time or in any jurisdiction, or if the Trust
is required to discontinue the use of such name pursuant to
Section 10.7 hereof, then subject to that Section, the Trustees
may use such other designation, or they may adopt such other
name for the Trust as they deem proper, and the Trust may hold
property and conduct its activities under such designation or
name.
SECTION 1.2. Location. The Trust shall maintain a
registered office in the State of Delaware and may have such
other offices or places of business as the Trustees may from
time to time determine to be necessary or expedient.
SECTION 1.3. Nature of Trust. The Trust shall be a trust
with transferable shares under the laws of The State of
Delaware, of the type defined in Title 12, Chapter 38, Section
3801 of the Delaware Code as a business trust. The Trust is not
intended to be, shall not be deemed to be, and shall not be
treated as, a general partnership, limited partnership, joint
venture, corporation or joint stock company. The Shareholders
shall be beneficiaries and their relationship to the Trustees
shall be solely in that capacity in accordance with the rights
conferred upon them hereunder.
SECTION 1.4. Definitions. As used in this Agreement and
Declaration of Trust, the following terms shall have the
meanings set forth below unless the context thereof otherwise
requires:
<PAGE> 14
"Accounting Agent" shall have the meaning designated in
Section 5.2(g) hereof.
"Administrator" shall have the meaning designated in
Section 5.2(b) hereof.
"Affiliated Person" shall have the meaning assigned to it
in the 1940 Act.
"By-Laws" shall mean the By-Laws of the Trust, as amended
from time to time.
"Certificate of Designation" shall have the meaning
designated in Section 6.1 hereof.
"Certificate of Termination" shall have the meaning
designated in Section 6.1 hereof.
"Class" or "Classes" shall mean, with respect to any
Series, any unissued Shares of such Series in respect of which
the Trustees shall from time to time fix and determine any
special provisions relating to sales charges, any rights of
redemption and the price, terms and manner of redemption,
special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the
Shareholders of such Class shall have separate voting rights or
no voting rights.
"Commission" shall have the same meaning as in the 1940
Act.
"Contracting Party" shall have the meaning designated in
the preamble to Section 5.2 hereof.
"Conversion Date" shall mean with respect to Shares of any
Class that are convertible automatically into Shares of any
other Class of a Series the date fixed by the Trustees for such
conversion.
"Covered Person" shall have the meaning designated in
Section 8.4 hereof.
<PAGE> 15
"Custodian" shall have the meaning designated in Section
5.2(d) hereof.
"Declaration" and "Declaration of Trust" shall mean this
Agreement and Declaration of Trust and all amendments or
modifications thereof as from time to time in effect. This
Agreement and Declaration of Trust is the "governing instrument"
of the Trust within the meaning of the laws of the State of
Delaware with respect to Delaware business trusts. References
in this Agreement and Declaration of Trust to "hereof", "herein"
and "hereunder" shall be deemed to refer to the Declaration of
Trust generally, and shall not be limited to the particular
text, Article or Section in which such words appear.
"Disabling Conduct" shall have the meaning designated in
Section 8.4 hereof.
"Distributor" shall have the meaning designated in Section
5.2(c) hereof.
"Dividend Disbursing Agent" shall have the meaning designated
in Section 5.2(e) hereof.
"General Items" shall have the meaning defined in Section
6.2(a) hereof.
"Initial Trustee" shall have the meaning defined in the
preamble hereto.
"Investment Advisor" shall have the meaning defined in Section
5.2(a) hereof.
"Majority of the Trustees" shall mean a majority of the
Trustees in office at the time in question. At any time at which
there shall be only one (1) Trustee in office, such term shall
mean such Trustee.
"Majority Shareholder Vote," as used with respect to (a)
the election of any Trustee at a meeting of Shareholders, shall
mean the vote for the election of such Trustee of a plurality of
all outstanding Shares of the Trust, without regard to Series,
represented in person or by proxy and entitled to vote thereon,
provided that a quorum (as determined in accordance with the
<PAGE> 16
By-Laws) is present, (b) any other action required or permitted
to be taken by Shareholders, shall mean the vote for such action
of the holders of that majority of all outstanding Shares (or,
where a separate vote of Shares of any particular Series is to
be taken, the affirmative vote of that majority of the
outstanding Shares of that Series) of the Trust which consists
of: (i) a majority of all Shares (or of Shares of the particular
Series) represented in person or by proxy and entitled to vote
on such action at the meeting of Shareholders at which such
action is to be taken, provided that a quorum (as determined in
accordance with the By-Laws) is present; or (ii) if such action
is to be taken by written consent of Shareholders, a majority of
all Shares (or of Shares of the particular Series) issued and
outstanding and entitled to vote on such action; provided that
(iii) as used with respect to any action requiring the
affirmative vote of "a majority of the outstanding voting
securities," as the quoted phrase is defined in the 1940 Act, of
the Trust or of any Series, "Majority Shareholder Vote" means
the vote for such action at a meeting of Shareholders of the
smallest majority of all outstanding Shares of the Trust (or of
Shares of the particular Series) entitled to vote on such action
which satisfies such 1940 Act voting requirement.
"1940 Act" shall mean the provisions of the Investment Company
Act of 1940 and the rules and regulations thereunder, both as
amended from time to time, and any order or orders thereunder
which may from time to time be applicable to the Trust.
"Person" shall mean and include individuals, as well as
corporations, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, banks, trust
companies, land trusts, business trusts or other organizations
established under the laws of any jurisdiction, whether or not
considered to be legal entities, and governments and agencies
and political subdivisions thereof.
"Principal Underwriter" shall have the meaning designated
in Section 5.2(c) hereof.
"Prospectus," as used with respect to the Trust (or the
Shares of a particular Series), shall mean the prospectus
relating to the Trust (or such Series) which constitutes part of
the currently effective Registration Statement of the Trust
under the Securities Act of 1933, as such prospectus may be
amended or supplemented from time to time.
"Securities" shall have the same meaning ascribed to that term
in the Securities Act of 1993.
"Series" shall mean one or more of the series of Shares
authorized by the Trustees to represent the beneficial interest
<PAGE> 17
in one or more separate components of the assets of the Trust
which are now or hereafter established and designated under or
in accordance with the provisions of Article 6 hereof.
"Settlor" shall have the meaning defined in the preamble
hereto.
"Shareholder" shall mean as of any particular time any
Person shown of record at such time on the books of the Trust as
a holder of outstanding Shares of any Series, and shall include
a pledgee into whose name any such Shares are transferred in
pledge.
"Shareholder Servicing Agent" shall have the meaning
designated in Section 5.2(f) hereof.
"Shares" shall mean the transferable units into which the
beneficial interest in the Trust and each Series of the Trust
(as the context may require) shall be divided from time to time,
and includes fractions of Shares as well as whole Shares. All
references herein to "Shares" which are not accompanied by a
reference to any particular Series or Class shall be deemed to
apply to outstanding Shares without regard to Series or Class.
"Single Class Voting," as used with respect to any matter
to be acted upon at a meeting or by written consent of
Shareholders, shall mean a style of voting in which each holder
of one or more Shares shall be entitled to one vote on the
matter in question for each Share standing in his name on the
records of the Trust, irrespective of Series or Class of a
Series, and all outstanding Shares of all Series vote as a
single class.
"Statement of Additional Information," as used with
respect to the Trust (or any Series), shall mean the statement
of additional information relating to the Trust (or such Series)
which constitutes part of the currently effective Registration
Statement of the Trust under the Securities Act of 1933, as such
statement of additional information may be amended or
supplemented from time to time.
"Transfer Agent" shall have the meaning defined in Section
5.2(e) hereof.
"Trust" shall mean the trust named in Section 1.1 hereof.
<PAGE> 18
"Trust Property" shall mean, as of any particular time,
any and all property which shall have been transferred, conveyed
or paid to the Trust or the Trustees, and all interest,
dividends, income, earnings, profits and gains therefrom, and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any funds or payments
derived from any reinvestment of such proceeds in whatever form
the same may be, and which at such time is owned or held by, or
for the account of, the Trust or the Trustees, without regard to
the Series to which such property is allocated.
"Trustees" shall mean, collectively, the Initial Trustee,
so long as he shall continue in office, and all other
individuals who at the time in question have been duly elected
or appointed as Trustees of the Trust in accordance with the
provisions hereof and who have qualified and are then in office.
At any time at which there shall be only one (I) Trustee in
office, such term shall mean such single Trustee.
SECTION 1.5. Real Property to be Converted into Personal
Property. Notwithstanding any other provision hereof, any real
property at any time forming part of the Trust Property shall be
held in trust for sale and conversion into personal property at
such time or times and in such manner and upon such terms as the
Trustees shall approve, but the Trustees shall have power until
the termination of this Trust to postpone such conversion as
long as they in their uncontrolled discretion shall think fit,
and for the purpose of determining the nature of the interest of
the Shareholders therein, all such real property shall at all
times be considered as personal property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to (a) manage, conduct,
operate and carry on the business of an investment company; (b)
subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of any and all sorts
of property, tangible or intangible, including but not limited
to Securities of any type whatsoever, whether equity or
nonequity, of any issuer, evidences of indebtedness of any
person and any other rights, interest, instruments or property
of any sort to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all
such investment of every kind and description, including without
limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons to exercise
any of said rights, powers and privileges in respect of any of
said investments. The Trustees shall not be limited by any law
<PAGE> 19
limiting the investments which may be made by fiduciaries.
ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1. Powers in General. The Trustees shall have,
without other or further authorization, full, entire, exclusive
and absolute power, control and authority over, and management
of, the business of the Trust and over the Trust Property, to
the same extent as if the Trustees were the sole owners of the
business and property of the Trust in their own right, and with
such powers of delegation as may be permitted by this
Declaration, subject only to such limitations as may be
expressly imposed by this Declaration of Trust or by applicable
law. The enumeration of any specific power or authority herein
shall not be construed as limiting the aforesaid power or
authority or any specific power or authority. Without limiting
the foregoing; they may select, and from time to time change,
the fiscal year of the Trust; they may adopt and use a seal for
the Trust, provided that unless otherwise required by the
Trustees, it shall not be necessary to place the seal upon, and
its absence shall not impair the validity of, any document,
instrument or other paper executed and delivered by or on behalf
of the Trust; they may from time to time in accordance with the
provisions of Section 6.1 hereof establish one or more Series to
which they may allocate such of the Trust Property, subject to
such liabilities, as they shall deem appropriate, each such
Series to be operated by the Trustees as a separate and distinct
investment medium and with separately defined investment
objectives and policies and distinct investment purposes, all as
established by the Trustees, or from time to time changed by
them; they may as they consider appropriate elect and remove
officers and appoint and terminate agents and consultants and
hire and terminate employees, any one or more of the foregoing
of whom may be a Trustee; they may appoint from their own
number, and terminate, any one or more committees consisting of
one or more Trustees, including without implied limitation an
Executive Committee, which may, when the Trustees are not in
session and subject to the 1940 Act, exercise some or all of the
power and authority of the Trustees as the Trustees may
determine; in accordance with Section 5.2 they may employ one or
more Investment Advisers, Administrators and Custodians and may
authorize any such service provider to employ one or more other
service providers and to deposit all or any part of such assets
in a system or systems for the central handling of Securities,
retain Transfer, Dividend Disbursing, Accounting or Shareholder
<PAGE> 20
Servicing Agents or any of the foregoing, provide for the
distribution of Shares by the Trust through one or more
Distributors, Principal Underwriters or otherwise, set record
dates or times for the determination of Shareholders entitled to
participate in, benefit from or act with respect to various
matters; and in general they may delegate to any officer of the
Trust, to any Committee of the Trustees and to any employee,
Investment Adviser, Administrator, Distributor, Custodian,
Transfer Agent, Dividend Disbursing Agent, or any other agent or
consultant of the Trust, such authority, powers, functions and
duties as they consider desirable or appropriate for the conduct
of the business and affairs of the Trust, including without
implied limitation the power and authority to act in the name of
the Trust and of the Trustees, to sign documents and to act as
attorney-in-fact for the Trustees. Without limiting the
foregoing and to the extent not inconsistent with the 1940 Act
or other applicable law, the Trustees shall have power and
authority:
(a) Investments. To subscribe for, invest in, reinvest
in, purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose
of any and all sorts of property, tangible or intangible,
including but not limited to Securities of any type whatsoever,
whether equity or nonequity, of any issuer, evidences of
indebtedness of any person and any other rights, interest,
instruments or property of any sort, to exercise any and all
rights, powers and privileges of ownership or interest in
respect of any and all such investments of every kind and
description, including without limitation the right to consent
and otherwise act with respect thereto, with power to designate
one or more Persons to exercise any of said rights, powers and
privileges in respect of any of said investments, in every case
without being limited by any law limiting the investments which
may be made by fiduciaries;
(b) Disposition of Assets. Upon such terms and conditions
as they deem best, to lend, sell, exchange, mortgage, pledge,
hypothecate, grant security interests in, encumber, negotiate,
convey, transfer or otherwise dispose of, and to trade in, any
and all of the Trust Property, free and clear of all trusts, for
cash or on terms, with or without advertisement, and on such
terms as to payment, security or otherwise, all as they shall
deem necessary or expedient;
(c) Ownership Powers. To vote or give assent, or exercise
any and all other rights, powers and privileges of ownership
with respect to, and to perform any and all duties and
obligations as owners of, any Securities or other property
forming part of the Trust Property, the same as any individual
might do; to exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
Securities, and to receive powers of attorney from, and to
execute and deliver proxies or powers of attorney to, such
Person or Persons as the Trustees shall deem proper, receiving
from or granting to such Person or Persons such power and
discretion with relation to Securities or other property of the
<PAGE> 21
Trust, all as the Trustees shall deem proper;
(d) Form of Holding. To hold any Security or other
property in a form not indicating any trust, whether in bearer,
unregistered or other negotiable form, or in the name of the
Trustees or of the Trust, or of the Series to which such
Securities or property belong, or in the name of a Custodian,
subcustodian or other nominee or nominees, or otherwise, upon
such terms, in such manner or with such powers, as the Trustees
may determine, and with or without indicating any trust or the
interest of the Trustees therein;
(e) Reorganizations etc. To consent to or participate in
any plan for the reorganization, consolidation or merger of any
corporation or issuer, any Security of which is or was held in
the Trust or any Series; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to any
Security forming part of the Trust Property;
(f) Voting Trusts, etc. To join with other holders of any
Securities in acting through a committee, depository, voting
trustee or otherwise, and in that connection to deposit any
Security with, or transfer any Security to, any such committee,
depository or trustee, and to delegate to them such power and
authority with relation to any Security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and
to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depository or trustee as the
Trustees shall deem proper;
(g) Contracts. etc. To enter into, make and perform all
such obligations, contracts, agreements and undertakings of
every kind and description, with any Person or Persons, as the
Trustees shall in their discretion deem expedient in the conduct
of the business of the Trust, for such terms as they shall see
fit, whether or not extending beyond the term of office of the
Trustees, or beyond the possible expiration of the Trust; to
amend, extend, release or cancel any such obligations,
contracts, agreements or understandings; and to execute,
acknowledge, deliver and record all written instruments which
they may deem necessary or expedient in the exercise of their
powers;
(h) Guarantees. etc. To endorse or guarantee the payment
of any notes or other obligations of any Person; to make
contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the
Trust Property or any part thereof to secure any of or all such
obligations;
<PAGE> 22
(i) Partnerships, etc. To enter into joint ventures,
general or limited partnerships and any other combinations or
association;
(j) Insurance. To purchase and pay for entirely out of
Trust Property such insurance as they may deem necessary or
appropriate for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the Trust
and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, Investment
Advisers, managers, Administrators, Distributors, Principal
Underwriters, or other independent contractors, or any thereof
(or any Person connected therewith), of the Trust, individually,
against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken
or omitted by any such Person in any such capacity, whether or
not the Trust would have the power to indemnify such Person
against such liability;
(k) Pensions, etc. To pay pensions for faithful service,
as deemed appropriate by the Trustees, and to adopt, establish
and carry out pension, profit sharing, share bonus, share
purchase, savings, thrift, deferred compensation and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts
as a means of providing such retirement and other benefits, for
any or all of the Trustees, officers, employees and agents of
the Trust;
(l) Power of Collection and Litigation. To collect, sue
for and receive all sums of money coming due to the Trust, to
employ counsel, and to commence, engage in, prosecute, intervene
in, join, defend, compound, compromise, adjust or abandon, in
the name of the Trust, any and all actions, suits, proceedings,
disputes, claims, controversies, demands or other litigation or
legal proceedings relating to the Trust, the business of the
Trust, the Trust Property, or the Trustees, officers, employees,
agents and other independent contractors of the Trust, in their
capacity as such, at law or in equity, or before any other
bodies or tribunals, and to compromise, arbitrate or otherwise
adjust any dispute to which the Trust may be a party, whether or
not any suit is commenced or any claim shall have been made or
asserted. Except to the extent required for a Delaware business
trust, the Shareholders shall have no power to vote as to
whether or not a court action, legal proceeding or claim should
or should not be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders.
(m) Issuance and Repurchase of Shares. To authorize,
issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in
Shares of any Series, and, subject to Article 6 hereof, to apply
to any such repurchase, redemption, retirement, cancellation or
<PAGE> 23
acquisition of Shares of any Series, any of the assets belonging
to the Series to which such Shares relate, whether constituting
capital or surplus or otherwise, to the full extent now or
hereafter permitted by applicable law; provided that any Shares
belonging to the Trust shall not be voted, directly or
indirectly;
(n) Offices. To have one or more offices, and to carry on
all or any of the operations and business of the Trust, in any
of the States, Districts or Territories of the United States,
and in any and all foreign countries, subject to the laws of
such State, District, Territory or country;
(o) Expenses. To incur and pay any and all such expenses
and charges as they may deem advisable (including without
limitation appropriate fees to themselves as Trustees), and to
pay all such sums of money for which they may be held liable by
way of damages, penalty, fine or otherwise;
(p) Agents, etc. To retain and employ any and all such
servants, agents, employees, attorneys, brokers, Investment
Advisers, accountants, architects, engineers, builders, escrow
agents, depositories, consultants, ancillary trustees,
custodians, agents for collection, insurers, banks and officers,
as they think best for the business of the Trust or any Series,
to supervise and direct the acts of any of the same, and to fix
and pay their compensation and define their duties;
(q) Accounts. To determine, and from time to time change,
the method or form in which the accounts of the Trust or any
Series shall be kept;
(r) Valuation. Subject to the requirements of the 1940
Act, to determine from time to time the value of all or any part
of the Trust Property and of any services, Securities, property
or other consideration to be furnished to or acquired by the
Trust, and from time to time to revalue all or any part of the
Trust Property in accordance with such appraisals or other
information as is, in the Trustees' sole judgment, necessary and
satisfactory;
(s) Indemnification. In addition to the mandatory
indemnification provided for in Article 8 hereof and to the
extent permitted by law, to indemnify or enter into agreements
with respect to indemnification with any Person with whom this
Trust has dealings, including, without limitation, any
independent contractor, to such extent as the Trustees shall
determine; and
<PAGE> 24
(t) General. Subject to the fundamental policies in effect
from time to time with respect to the Trust, to do all such
other acts and things and to conduct, operate, carry on and
engage in such other lawful businesses or business activities as
they shall in their sole and absolute discretion consider to be
incidental to the business of the Trust or any Series as an
investment company, and to exercise all powers which they shall
in their discretion consider necessary, useful or appropriate to
carry on the business of the Trust or any Series, to promote any
of the purposes for which the Trust is formed, whether or not
such things are specifically mentioned herein, in order to
protect or promote the interests of the Trust or any Series, or
otherwise to carry out the provisions of this Declaration.
SECTION 3.2. Borrowings; Financings: Issuance of
Securities. The Trustees have power, subject to the fundamental
policies in effect from time to time with respect to the Trust,
to borrow or in any other manner raise such sum or sums of
money, and to incur such other indebtedness for goods or
services, or for or in connection with the purchase or other
acquisition of property, as they shall deem advisable for the
purposes of the Trust, in any manner and on any terms, and to
evidence the same by negotiable or nonnegotiable Securities
which may mature at any time or times, even beyond the possible
date of termination of the Trust; to issue Securities of any
type for such cash, property, services or other considerations,
and at such time or times and upon such terms, as they may deem
advisable; and to reacquire any such Securities. Any such
Securities of the Trust may, at the discretion of the Trustees,
be made convertible into Shares of any Series, or may evidence
the right to purchase, subscribe for or otherwise acquire Shares
of any Series, at such times and on such terms as the Trustees
may prescribe.
SECTION 3.3. Deposits. Subject to the requirements of the
1940 Act, the Trustees shall have power to deposit any moneys or
Securities included in the Trust Property with any one or more
banks, trust companies or other banking institutions, whether or
not such deposits will draw interest. Such deposits are to be
subject to withdrawal in such manner as the Trustees may
determine, and the Trustees shall have no responsibility for any
loss which may occur by reason of the failure of the bank, trust
company or other banking institution with which any such moneys
or Securities have been deposited, except as provided in Section
8.2 hereof.
SECTION 3.4. Allocations. The Trustees shall have power to
determine whether moneys or other assets received by the Trust
shall be charged or credited to income or capital, or allocated
between income and capital, including the power to amortize or
fail to amortize any part or all of any premium or discount, to
treat any part or all of the profit resulting from the maturity
or sale of any asset, whether purchased at a premium or at a
discount, as income or capital, or to apportion the same between
income and capital, to apportion the sale price of any asset
between income and capital, and to determine in what manner any
expenses or disbursements are to be borne as between income and
<PAGE> 25
capital, whether or not in the absence of the power and
authority conferred by this Section 3.4 such assets would be
regarded as income or as capital or such expense or disbursement
would be charged to income or to capital; to treat any dividend
or other distribution on any investment as income or capital, or
to apportion the same between income and capital; to provide or
fail to provide reserves, including reserves for depreciation,
amortization or obsolescence in respect of any Trust Property in
such amounts and by such methods as they shall determine; to
allocate less than all of the consideration paid for Shares of
any Series to surplus with respect to the Series to which such
Shares relate and to allocate the balance thereof to paid-in
capital of that Series, and to reallocate such amounts from time
to time; all as the Trustees may reasonably deem proper.
SECTION 3.5. Further Powers: Limitations. The Trustees
shall have power to do all such other matters and things, and to
execute all such instruments, as they deem necessary, proper or
desirable in order to carry out, promote or advance the
interests of the Trust, although such matters or things are not
herein specifically mentioned. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith
shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a
grant of power to the Trustees. The Trustees shall not be
required to obtain any court order to deal with the Trust
Property. The Trustees may limit their right to exercise any of
their powers through express restrictive provisions in the
instruments evidencing or providing the terms for any Securities
of the Trust or in other contractual instruments adopted on
behalf of the Trust.
ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1. Number. Designation, Election. Term, etc.
(a) Initial Trustee. Upon his execution of this
Declaration of Trust or a counterpart hereof or some other
writing in which he accepts such Trusteeship and agrees to the
provisions hereof, the individual whose signature is affixed
hereto as Initial Trustee shall become the Initial Trustee
hereof.
(b) Number. The Trustees serving as such, whether named
above or hereafter becoming Trustees, may increase (to not more
than twenty (20)) or decrease the number of Trustees to a number
other than the number theretofore determined by a written
<PAGE> 26
instrument signed by a Majority of the Trustees (or by an
officer of the Trust pursuant to the vote of a Majority of the
Trustees). No decrease in the number of Trustees shall have the
effect of removing any Trustee from office prior to the
expiration of his term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee pursuant
to subsection (e) of this Section 4.1.
(c) Election and Term. The Trustees shall be elected by
the Shareholders of the Trust at the first meeting of
Shareholders immediately prior to the initial public offering of
Shares of the Trust, and the term of office of any Trustees in
office before such election shall terminate at the time of such
election. Subject to Section 16(a) of the 1940 Act and to the
preceding sentence of this subsection (c), the Trustees shall
have the power to set and alter the terms of office of the
Trustees, and at any time to lengthen or shorten their own terms
or make their terms of unlimited duration, to elect their own
successors and, pursuant to subsection (f) of this Section 4.1,
to appoint Trustees to fill vacancies; provided that Trustees
shall be elected by a Majority Shareholder Vote at any such time
or times as the Trustees shall determine that such action is
required under Section 16(a) of the 1940 Act or, if not so
required, that such action is advisable; and further provided
that, after the initial election of Trustees by the
Shareholders, the term of office of any incumbent Trustee shall
continue until the termination of this Trust or his earlier
death, resignation, retirement, bankruptcy, adjudicated
incompetency or other incapacity or removal, or if not so
terminated, until the election of such Trustee's successor in
office has become effective in accordance with this subsection
(c).
(d) Resignation and Retirement. Any Trustee may resign his
trust or retire as a Trustee, by a written instrument signed by
him and delivered to the other Trustees or to any officer of the
Trust, and such resignation or retirement shall take effect upon
such delivery or upon such later date as is specified in such
instrument.
(e) Removal. Any Trustee may be removed with or without
cause at any time: (i) by written instrument, signed by at least
two thirds (2/3) of the number of Trustees prior to such
removal, specifying the date upon which such removal shall
become effective; or (ii) by vote of Shareholders holding not
less than two thirds (2/3) of the Shares of each Series then
outstanding, cast in person or by proxy at any meeting called
for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than two thirds (2/3) of the
Shares of each Series then outstanding. Upon incapacity or
death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees
shall require in order to effect the purpose of this Paragraph.
(f) Vacancies. Any vacancy or anticipated vacancy
<PAGE> 27
resulting from any reason, including an increase in the number
of Trustees, may (but need not unless required by the 1940 Act)
be filled by a Majority of the Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the
appointment in writing of such other individual as such
remaining Trustees in their discretion shall determine; provided
that if there shall be no Trustees in office, such vacancy or
vacancies shall be filled by Majority Shareholders Vote. Any
such appointment or election shall be effective upon such
individual's written acceptance of his appointment as a Trustee
and his agreement to be bound by the provisions of this
Declaration of Trust, except that any such appointment in
anticipation of a vacancy to occur by reason of retirement,
resignation or increase in the number of Trustees to be
effective at a later date shall become effective only at or
after the effective date of said retirement, resignation or
increase in the number of Trustees.
(g) Acceptance of Trusts. Whenever any conditions to the
appointment or election of any individual as a Trustee hereunder
who was not, immediately prior to such appointment or election,
acting as a Trustee shall have been satisfied, such individual
shall become a Trustee and the Trust estate shall vest in the
new Trustee, together with the continuing Trustees, without any
further act or conveyance. Such new Trustee shall accept such
appointment or election in writing and agree in such writing to
be bound by the provisions hereof, but the execution of such
writing shall not be requisite to the effectiveness of the
appointment or election of a new Trustee.
(h) Effect of Death. Resignation, etc. No vacancy, whether
resulting from the death, resignation, retirement, bankruptcy,
adjudicated incompetency, incapacity, or removal of any Trustee,
an increase in the number of Trustees or otherwise, shall
operate to annul or terminate the Trust hereunder or to revoke
or terminate any existing agency or contract created or entered
into pursuant to the terms of this Declaration of Trust. Until
such vacancy is filled as provided in this Section 4.1, the
Trustees in office (if any), regardless of their number, shall
have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration.
(i) Convevance. In the event of the resignation or
removal of a Trustee or his otherwise ceasing to be a Trustee,
such former Trustee or his legal representative shall, upon
request of the continuing Trustees, execute and deliver such
documents as may be required for the purpose of consummating or
evidencing the conveyance to the Trust or the remaining Trustees
of any Trust Property held in such former Trustee's name, but
the execution and delivery of such documents shall not be
requisite to the vesting of title to the Trust Property in the
remaining Trustees, as provided in subsection (g) of this
Section 4.1 and in Section 4.13 hereof.
(j) No Accounting. Except to the extent required by the
<PAGE> 28
1940 Act or under circumstances which would justify his removal
for cause, no Person ceasing to be a Trustee (nor the estate of
any such Person) shall be required to make an accounting to the
Shareholders or remaining Trustees upon such cessation.
SECTION 4.2. Trustees' Meetings: Participation by
Telephone. etc. Annual and special meetings may be held from
time to time, in each case, upon the call of such officers as
may be thereunto authorized by the By-Laws or vote of the
Trustees, or by any three (3) Trustees, or pursuant to a vote of
the Trustees adopted at a duly constituted meeting of the
Trustees, and upon such notice as shall be provided in the
By-Laws. Any such meeting may be held within or without the
state of Delaware. The Trustees may act with or without a
meeting, and a written consent to any matter, signed by a
Majority of the Trustees, shall be equivalent to action duly
taken at a meeting of the Trustees, duly called and held. Except
as otherwise provided by the 1940 Act or other applicable law,
or by this Declaration of Trust or the By-Laws, any action to be
taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at
least a Majority of the Trustees, being present), within or
without Delaware. If authorized by the By-Laws, all or any one
or more Trustees may participate in a meeting of the Trustees or
any Committee thereof by means of conference telephone or
similar means of communication by means of which all Persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to such means of
communication shall constitute presence in person at such
meeting. The minutes of any meeting thus held shall be prepared
in the same manner as a meeting at which all participants were
present in person.
SECTION 4.3. Committees; Delegation. The Trustees shall
have power, consistent with their ultimate responsibility to
supervise the affairs of the Trust, to delegate from time to
time to one or more other Committees, or to any single Trustee,
the doing of such things and the execution of such deeds or
other instruments, either in the name of the Trust or the names
of the Trustees or as their attorney or attorneys in fact, or
otherwise as the Trustees may from time to time deem expedient,
and any agreement, deed, mortgage, lease or other instrument or
writing executed by the Trustee or Trustees or other Person to
whom such delegation was made shall be valid and binding upon
the Trustees and upon the Trust.
SECTION 4.4. Officers. The Trustees shall annually elect
such officers or agents, who shall have such powers, duties and
responsibilities as the Trustees may deem to be advisable, and
as they shall specify by resolution or in the By-Laws. Except as
may be provided in the By-Laws, any officer elected by the
Trustees may be removed at any time with or without cause. Any
two (2) or more offices may be held by the same individual.
SECTION 4.5. Compensation of Trustees and Officers. The
<PAGE> 29
Trustees shall fix the compensation of all officers and
Trustees. Without limiting the generality of any of the
provisions hereof, the Trustees shall be entitled to receive
reasonable compensation for their general services as such, and
to fix the amount of such compensation, and to pay themselves or
any one or more of themselves such compensation for special
services, including legal, accounting, or other professional
services, as they in good faith may deem reasonable. No Trustee
or officer resigning (except where a right to receive
compensation for a definite future period shall be expressly
provided in a written agreement with the Trust, duly approved by
the Trustees) and no Trustee or officer removed shall have any
right to any compensation as such Trustee or officer for any
period following his resignation or removal, or any right to
damages on account of his removal, whether his compensation be
by the month, or the year or otherwise.
SECTION 4.6. Ownership of Shares and Securities of the
Trust. Any Trustee, and any officer, employee or agent of the
Trust, and any organization in which any such Person is
interested, may acquire, own, hold and dispose of Shares of any
Series and other Securities of the Trust for his or its
individual account, and may exercise all rights of a holder of
such Shares or Securities to the same extent and in the same
manner as if such Person were not such a Trustee, officer,
employee or agent of the Trust; subject, in the case of Trustees
and officers, to the same limitations as directors or officers
(as the case may be) of a Delaware business corporation; and the
Trust may issue and sell or cause to be issued and sold and may
purchase any such Shares or other Securities from any such
Person or any such organization, subject only to the general
limitations, restrictions or other provisions applicable to the
sale or purchase of Shares of such Series or other Securities of
the Trust generally.
SECTION 4.7. Right of Trustees and Officers to Own
Property or to Engage in Business; Authority of Trustees to
Permit Others to Do Likewise. The Trustees, in their capacity as
Trustees, and (unless otherwise specifically directed by vote of
the Trustees) the officers of the Trust in their capacity as
such, shall not be required to devote their entire time to the
business and affairs of the Trust. Except as otherwise
specifically provided by vote of the Trustees, or by agreement
in any particular case, any Trustee or officer of the Trust may
acquire, own, hold and dispose of, for his own individual
account, any property, and acquire, own, hold, carry on and
dispose of, for his own individual account, any business entity
or business activity, whether similar or dissimilar to any
property or business entity or business activity invested in or
carried on by the Trust, and without first offering the same as
an investment opportunity to the Trust, and may exercise all
rights in respect thereof as if he were not a Trustee or officer
of the Trust. The Trustees shall also have power, generally or
in specific cases, to permit employees or agents of the Trust to
have the same rights (or lesser rights) to acquire, hold, own
and dispose of property and businesses, to carry on businesses,
and to accept investment opportunities without offering them to
the Trust, as the Trustees have by virtue of this Section 4.7.
<PAGE> 30
SECTION 4.8. Reliance on Experts. The Trustees and
officers may consult with counsel, engineers, brokers,
appraisers, auctioneers, accountants, investment bankers,
securities analysts or other Persons (any of which may be a firm
in which one or more of the Trustees or officers is or are
members or otherwise interested) whose profession gives
authority to a statement made by them on the subject in
question, and who are reasonably deemed by the Trustees or
officers in question to be competent, and the advice or opinion
of such Persons shall be full and complete personal protection
to all of the Trustees and officers in respect of any action
taken or suffered by them in good faith and in reliance on or in
accordance with such advice or opinion. In discharging their
duties, Trustees and officers, when acting in good faith, may
rely upon financial statements of the Trust represented to them
to be correct by any officer of the Trust having charge of its
books of account, or stated in a written report by an
independent certified public accountant fairly to present the
financial position of the Trust. The Trustees and officers may
rely, and shall be personally protected in acting, upon any
instrument or other document believed by them to be genuine.
SECTION 4.9. Surety Bonds. No Trustee, officer, employee
or agent of the Trust shall, as such, be obligated to give any
bond or surety or other security for the performance of any of
his duties, unless required by applicable law or regulation, or
unless the Trustees shall otherwise determine in any particular
case.
SECTION 4.10. Apparent Authority of Trustees and Officers.
No purchaser, lender, transfer agent or other Person dealing
with the Trustees or any officer of the Trust shall be bound to
make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by such officer, or to
make inquiry concerning or be liable for the application of
money or property paid, loaned or delivered to or on the order
of the Trustees or of such officer.
SECTION 4.11. Other Relationships Not Prohibited. The fact
that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or distributor
or agent of or for any Contracting Party (as defined in Section
5.2 hereof), or of or for any parent or affiliate of any
Contracting Party, or that the Contracting Party or any parent
or affiliate thereof is a Shareholder or has an interest in the
Trust or any Series, or that
(ii) any Contracting Party may have a contract providing
for the rendering of any similar services to one or more other
<PAGE> 31
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or have other business or
interests, shall not affect the validity of any contract for the
performance and assumption of services, duties and
responsibilities to, for or of the Trust and/or the Trustees or
disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or
accountability to the Trust or to the holders of Shares of any
Series; provided that, in the case of any relationship or
interest referred to in the preceding clause (i) on the part of
any Trustee or officer of the Trust, either (x) the material
facts as to such relationship or interest have been disclosed to
or are known by the Trustees not having any such relationship or
interest and the contract involved is approved in good faith by
a majority of such Trustees not having any such relationship or
interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material
facts as to such relationship or interest and as to the contract
have been disclosed to or are known by the Shareholders entitled
to vote thereon and the contract involved is specifically
approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time
it is authorized, approved or ratified by the Trustees or by the
Shareholders.
SECTION 4.12. Payment of Trust Expenses. The Trustees are
authorized to pay or to cause to be paid out of the principal or
income of the Trust, or partly out of principal and partly out
of income, and according to any allocation to a particular
Series and Class made by them pursuant to Section 6.1(f) hereof,
all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the business and affairs of the Trust
or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and
charges for the services of the Trust's officers, employees,
Investment Adviser, Administrator, Distributor, Principal
Underwriter, auditor, counsel, Custodian, Transfer Agent,
Dividend Disbursing Agent, Accounting Agent, Shareholder
Servicing Agent, and such other agents, consultants, and
independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur.
SECTION 4.13. Ownership of the Trust Property. Legal title
to all the Trust Property shall be vested in the Trustees as
joint tenants, except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the
name of one or more of the Trustees, or in the name of the
Trust, or of any particular Series, or in the name of any other
Person as nominee, on such terms as the Trustees may determine;
provided that the interest of the Trust and of the respective
Series therein is appropriately protected. The right, title and
interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee.
Upon the termination of the term of office of a Trustee as
provided in Section 4.1(c), (d) or (e) hereof, such Trustee
shall automatically cease to have any right, title or interest
in any of the Trust Property, and the right, title and interest
of such Trustee in the Trust Property shall vest automatically
in the remaining Trustees. Such vesting and cessation of title
<PAGE> 32
shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to Section 4.1(i) hereof.
SECTION 4.14. By-Laws. The Trustees may adopt and from
time to time amend or repeal By-Laws for the conduct of the
business of the Trust.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1. Appointment; Action by Less than All
Trustees. The Trustees shall be responsible for the general
operating policy of the Trust and for the general supervision of
the business of the Trust conducted by officers, agents,
employees or advisers of the Trust or by independent
contractors, but the Trustees shall not be required personally
to conduct all the business of the Trust and, consistent with
their ultimate responsibility as stated herein, the Trustees may
appoint, employ or contract with one or more officers, employees
and agents to conduct, manage and/or supervise the operations of
the Trust, and may grant or delegate such authority to such
officers, employees and/or agents as the Trustees may, in their
sole discretion, deem to be necessary or desirable, without
regard to whether such authority is normally granted or
delegated by trustees. With respect to those matters of the
operation and business of the Trust which they shall elect to
conduct themselves, except as otherwise provided by this
Declaration or the By-Laws, if any, the Trustees may authorize
any single Trustee or defined group of Trustees, or any
committee consisting of a number of Trustees less than the whole
number of Trustees then in office without specification of the
particular Trustees required to be included therein, to act for
and to bind the Trust, to the same extent as the whole number of
Trustees could do, either with respect to one or more particular
matters or classes of matters, or generally.
SECTION 5.2. Certain Contracts. Subject to compliance with
the provisions of the 1940 Act, but notwithstanding any
limitations of present and future law or custom in regard to
delegation of powers by trustees generally, the Trustees may, at
any time and from time to time in their discretion and without
limiting the generality of their powers and authority otherwise
set forth herein, enter into one or more contracts with any one
or more corporations, trusts, associations, partnerships,
limited partnerships or other types of organizations, or
individuals ("Contracting Party"), to provide for the
performance and assumption of some or all of the following
services, duties and responsibilities to, for or on behalf of
the Trust and/or any Series, and/or the Trustees, and to provide
for the performance and assumption of such other services,
<PAGE> 33
duties and responsibilities in addition to those set forth
below, as the Trustees may deem appropriate:
(a) Advisory. An investment advisory or management
agreement whereby the agent shall undertake to furnish each
Series of the Trust such management, investment advisory or
supervisory, statistical and research facilities and services,
and such other facilities and services, if any, as the Trustees
shall from time to time consider desirable, all upon such terms
and conditions as the Trustees may in their discretion determine
to be not inconsistent with this Declaration, the applicable
provisions of the 1940 Act or any applicable provisions of the
By-Laws (any such agent being herein referred to as an
"Investment Adviser"). To the extent required by the 1940 Act,
any such advisory or management agreement and any amendment
thereto shall be subject to approval by a Majority Shareholder
Vote at a meeting of the Shareholders of the applicable Series
of the Trust. Notwithstanding any provisions of this
Declaration, the Trustees may authorize the Investment Adviser
(subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases,
sales, loans or exchanges of securities of the Trust on behalf
of the Trustees or may authorize any officer or employee of the
Trust or any Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of the Investment Adviser
(and all without further action by the Trustees). Any such
purchases, sales, loans and exchanges shall be deemed to have
been authorized by all of the Trustees. The Trustees may, in
their sole discretion, call a meeting of Shareholders in order
to submit to a vote of Shareholders of the applicable Series of
Trust at such meeting the approval of continuance of any such
investment advisory or management agreement.
(b) Administration. An agreement whereby the agent,
subject to the general supervision of the Trustees and in
conformity with any policies of the Trustees with respect to the
operations of the Trust and each Series, will supervise all or
any part of the operations of the Trust and each Series, and
will provide all or any part of the administrative and clerical
personnel, office space and office equipment and services
appropriate for the efficient administration and operations of
the Trust and each Series (any such agent being herein referred
to as an "Administrator").
(c) Underwriting. An agreement providing for the sale of
Shares of any one or more Series to net the Trust not less than
the net asset value per Share (as described in Section 6.2(l)
hereof) and pursuant to which the Trust may appoint the other
party to such agreement as its principal underwriter or sales
agent for the distribution of such Shares. The agreement shall
contain such terms and conditions as the Trustees may in their
discretion determine to be not inconsistent with this
Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws (any such agent being
herein referred to as a "Distributor" or a "Principal
Underwriter," as the case may be).
<PAGE> 34
(d) Custodian. The appointment of an agent meeting the
requirements for a custodian for the assets of Investment
Companies contained in the 1940 Act as custodian of the
Securities and cash of the Trust and of each Series and of the
accounting records in connection therewith (any such agent being
herein referred to as a "Custodian").
(e) Transfer and Dividend Disbursing Agent. An agreement
with an agent to maintain records of the ownership of
outstanding Shares, the issuance and redemption and the transfer
thereof (any such agent being herein referred to as a "Transfer
Agent"), and to disburse any dividends declared by the Trustees
and in accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any such
dividends (any such agent being herein referred to as a
"Dividend Disbursing Agent").
(f) Shareholder Servicing. An agreement with an agent to
provide service with respect to the relationship of the Trust
and its Shareholders, records with respect to Shareholders and
their Shares, and similar matters (any such agent being herein
referred to as a "Shareholder Servicing Agent").
(g) Accounting. An agreement with an agent to handle all
or any part of the accounting responsibilities, whether with
respect to the Trust's properties, Shareholders or otherwise
(any such agent being herein referred to as an "Accounting
Agent").
In addition, the Trustees may from time to time cause the Trust
or any Series thereof to enter into agreements with respect to
such other services and upon such other terms and conditions as
they may deem necessary, appropriate or desirable. The same
Person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust
and/or the Trustees, and the contracts with respect thereto may
contain such terms interpretive of or in addition to the
delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent
with the 1940 Act relating to the standard of duty of and the
rights to indemnification of the Contracting Party and others,
as the Trustees may determine. Nothing herein shall preclude,
prevent or limit the Trust or a Contracting Party from entering
into subcontractual arrangements relative to any of the matters
referred to in subsections (a) through (g) of this Section 5.2.
Section 5.3. Distribution Arrangements. Subject to
compliance with the 1940 Act, the Trustees may adopt and amend
or repeal from time to time and implement one or more plans of
distribution pursuant to Rule 12b-1 of the 1940 Act which
plan(s) will provide for the payment of specified marketing,
distribution and shareholder relations expenses of the Trust and
<PAGE> 35
any or all Series and their agents and the agents of such agents.
Section 5.4. Service Arrangements. Subject to
compliance with the 1940 Act, the Trustees may adopt and amend
or repeal from time to time and implement one or more service
plans which plans will provide for the payment of ongoing
services to holders of the shares of such Trust or any Series
thereof and in connection with the maintanence of such
shareholders' accounts.
ARTICLE 6
SERIES AND SHARES
SECTION 6.1. Description of Series and Shares.
(a) General. The beneficial interest in the Trust shall be
divided into Shares (either full or fractional) having $ 0.01
par value per Share, of which an unlimited number may be issued.
The Trustees shall have the authority from time to time to
establish and designate one or more separate, distinct and
independent Series of Shares (each of which Series, including
without limitation each Series authorized in Section 6.2 hereof,
shall represent interests only in the asset attributed by the
Trustees to such Series), and to authorize separate Classes of
Shares of any such Series, as they deem necessary or desirable.
All Shares shall be of one class, provided that the Trustees
shall have the power to classify or reclassify any unissued
Shares of any Series into any number of additional Classes of
such Series as set forth in Section 6.2.
(b) Establishment. etc. of Series; Authorization of
Shares. The establishment and designation of any Series and the
authorization of the Shares thereof shall be effective upon the
execution by a Majority of the Trustees (or by an officer of the
Trust pursuant to the vote of a Majority of the Trustees) of an
instrument setting forth such establishment and designation and
the relative rights and preferences of the Shares of such Series
and the manner in which the same may be amended (a "Certificate
of Designation"), and may provide that the number of Shares of
such Series which may be issued is unlimited, or may limit the
number issuable. At any time that there are no Shares
outstanding of any particular Series previously established and
designated, the Trustees may by an instrument executed by a
Majority of the Trustees (or by an officer of the Trust pursuant
to the vote of a Majority of the Trustees) terminate such Series
and the establishment and designation thereof and the
authorization of its Shares (a "Certificate of Termination").
Each Certificate of Designation, Certificate of Termination and
<PAGE> 36
any instrument amending a Certificate of Designation shall have
the status of an amendment to this Declaration of Trust.
(c) Character of Separate Series and Shares Thereof. Each
Series established hereunder shall represent beneficial
interests in a separate component of the assets of the Trust.
Holders of Shares of a Series shall be considered Shareholders
of such Series, but such Shareholders shall also be considered
Shareholders of the Trust for purposes of receiving reports and
notices and, except as otherwise provided herein or in the
Certificate of Designation of a particular Series, or as
required by the 1940 Act or other applicable law, the right to
vote, all without distinction by Series. The Trustees shall have
exclusive power without the requirement of Shareholder approval
to establish and designate such separate and distinct Series,
and to fix and determine the relative rights and preferences as
between the shares of the respective Series, and as between the
Classes of any Series, as to rights of redemption and the price,
terms and manner of redemption, special and relative rights as
to dividends and other distributions and on liquidation, sinking
or purchase fund provisions, conversion rights, and conditions
under which the Shareholders of the several Series or the
several Classes of any Series of Shares shall have separate
voting rights or no voting rights. Except as otherwise provided
as to a particular Series herein, or in the Certificate of
Designation therefor, the Trustees shall have all the rights and
powers, and be subject to all the duties and obligations, with
respect to each such Series and the assets and affairs thereof
as they have under this Declaration with respect to the Trust
and the Trust Property in general. Separate and distinct
records shall be maintained for each Series of Shares and the
assets and liabilities attributable thereto.
(d) Consideration for Shares. The Trustees may issue
Shares of any Series for such consideration (which may include
property subject to, or acquired in connection with the
assumption of, liabilities) and on such terms as they may
determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the
Shareholders. All Shares when so issued on the terms determined
by the Trustees shall be fully paid and nonassessable (but may
be subject to mandatory contribution back to the Trust as
provided in Section 6.1(l) hereof. The Trustees may classify or
reclassify any unissued Shares, or any Shares of any Series
previously issued and reacquired by the Trust, into Shares of
one or more other Series that may be established and designated
from time to time.
(e) Assets Belonging to Series. Any portion of the Trust
Property allocated to a particular Series, and all consideration
received by the Trust for the issue or sale of Shares of such
Series, together with all assets in which such consideration is
invested or reinvested, all interest, dividends, income,
earnings, profits and gains therefrom, and proceeds thereof,
including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same
<PAGE> 37
may be, shall be held by the Trustees in trust for the benefit
of the holders of Shares of that Series and shall irrevocably
belong to that Series for all purposes, and shall be so recorded
upon the books of account of the Trust, and the Shareholders of
such Series shall not have, and shall be conclusively deemed to
have waived, any claims to the assets of any Series of which
they are not Shareholders. Such consideration, assets, interest,
dividends, income, earnings, profits, gains and proceeds,
together with any General Items allocated to that Series as
provided in the following sentence, are herein referred to
collectively as assets "belonging to" that Series. In the event
that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series
(collectively, "General Items"), the Trustees shall allocate
such General Items to and among any one or more of the Series
established and designated from time to time in such manner and
on such basis as they, in their sole discretion, deem fair and
equitable; and any General Items so allocated to a particular
Series shall belong to and be part of the assets belonging to
that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for
all purposes.
(f) Liabilities of Series. The assets belonging to each
particular Series shall be charged with the liabilities in
respect of that Series and all expenses, costs, charges and
reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as pertaining to any
particular Series shall be allocated and charged by the Trustees
to and among any one or more of the Series established and
designated from time to time in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable.
The indebtedness, expenses, costs, charges and reserves
allocated and so charged to a particular Series are herein
referred to as "liabilities of" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes. Any creditor of any Series may
look only to the assets belonging to that Series to satisfy such
creditor's debt.
(g) Dividends. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise pursuant
to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine, to the
Shareholders of that Series, from such of the income, accrued or
realized, and capital gains, realized or unrealized, and out of
the assets belonging to that Series, as the Trustees may
determine, after providing for actual and accrued liabilities of
that Series. All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the
Shareholders of that Series in proportion to the number of such
Shares held by such holders at the date and time of record
established for the payment of such dividends or distributions,
except that the dividends and distributions of investment income
and capital gains with respect to each Class of Shares of a
<PAGE> 38
particular Series shall be in such amount as may be declared
from time to time by the Trustees, and such dividends and
distributions may vary as between such Classes to reflect
differing allocations of the expenses of the Series between the
Shareholders of such several Classes and any resultant
differences between the net asset value of such several Classes
to such extent and for such purposes as the Trustees may deem
appropriate and further except that, in connection with any
dividend or distribution program or procedure, the Trustees may
determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established
by the Trustees under such program or procedure, or that
dividends or distributions shall be payable on Shares which have
been tendered by the holder thereof for redemption or
repurchase, but the redemption or repurchase proceeds of which
have not yet been paid to such Shareholder. Such dividends and
distributions may be made in cash, property or Shares of any
Class of that Series or a combination thereof as determined by
the Trustees, or pursuant to any program that the Trustees may
have in effect at the time for the election by each Shareholder
of the mode of the making of such dividend or distribution to
that Shareholder. Any such dividend or distribution paid in
Shares will be paid at the net asset value thereof as determined
in accordance with subsection (l) of this Section 6.1.
(h) Liquidation. In the event of the liquidation or
dissolution of the Trust, the Shareholders of each Series of
which Shares are outstanding shall be entitled to receive, when
and as declared by the Trustees, the excess of the assets
belonging to that Series over the liabilities of such Series.
The assets so distributable to the Shareholders of any
particular Series shall be distributed among such Shareholders
in proportion to the number of Shares of that Series held by
them and recorded on the books of the Trust. The liquidation of
any particular Series may be authorized by vote of a Majority of
the Trustees, subject to the affirmative vote of "a majority of
the outstanding voting securities" of that Series, as the quoted
phrase is defined in the 1940 Act, determined in accordance with
clause (iii) of the definition of "Majority Shareholder Vote" in
Section 1.4 hereof.
(i) Voting. The Shareholders shall have the voting rights
set forth in or determined under Article 7 hereof.
(j) Redemption by Shareholder. Each holder of Shares of a
particular Series shall have the right at such times as may be
permitted by the Trust, but no less frequently than required by
the 1940 Act, to require the Series to redeem all or any part of
his Shares of that Series at a redemption price equal to the net
asset value per Share of that Series next determined in
accordance with subsection (l) of this Section 6.1 after the
Shares are properly tendered for redemption; provided, that the
Trustees may from time to time, in their discretion, determine
and impose a fee for such redemption and that the proceeds of
the redemption of Shares (including a fractional Share) of any
Class of a particular Series shall be reduced by the amount of
<PAGE> 39
any applicable contingent deferred sales charge or other sales
charge, if any, payable on such redemption to the distributor of
Shares of such Class pursuant to the terms of the initial
issuance of the Shares of such Class (to the extent consistent
with the 1940 Act or regulations or exemptions thereunder) and
the Trust shall promptly pay to such distributor the amount of
such deferred sales charge. Payment of the redemption price
shall be in cash; provided, however, that if the Trustees
determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in
Securities or other assets belonging to such Series at the value
of such Securities or assets used in such determination of net
asset value. Notwithstanding the foregoing, the Trust may
postpone payment of the redemption price and may suspend the
right of the holders of Shares of any Series to require the
Trust to redeem Shares of that Series during any period or at
any time when and to the extent permissible under the 1940 Act.
(k) Redemption at the Option of the Trust. The Trustees
shall have the power to redeem Shares of any Series at a
redemption price determined in accordance with Section 6.1(j),
if at any time (i) the total investment in such account does not
have a value of at least such minimum amount as may be specified
in the Prospectus for such Series from time to time (ii) the
number of Shares held in such account is equal to or in excess
of a specified percentage of Shares of the Trust or any Series
as set forth from time to time in the applicable Prospectus. In
the event the Trustees determine to exercise their power to
redeem Shares provided in this Section 6.1(k), the Shareholder
shall be notified that the value of his account is less than the
applicable minimum amount and shall be allowed 30 days to make
an appropriate investment before redemption is processed.
(l) Net Asset Value. The net asset value per Share of any
Series at any time shall be the quotient obtained by dividing
the value of the net assets of such Series at such time (being
the current value of the assets belonging to such Series, less
its then existing liabilities) by the total number of Shares of
that Series then outstanding, all determined in accordance with
the methods and procedures, including without limitation those
with respect to rounding, established by the Trustees from time
to time in accordance with the requirements of the 1940 Act. The
net asset value of the several Classes of a particular Series
shall be separately computed, and may vary from one another. The
Trustees shall establish procedures for the allocation of
investment income or capital gains and expenses and liabilities
of a particular Series between the several Classes of such
Series. The Trustees may determine to maintain the net asset
value per Share of any Series at a designated constant dollar
amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declaration of
income attributable to that Series as dividends payable in
additional Shares of that Series at the designated constant
dollar amount and for the handling of any losses attributable to
that Series. Such procedures may provide that in the event of
any loss each Shareholder shall be deemed to have contributed to
the shares of beneficial interest account of that Series his pro
rata portion of the total number of Shares required to be
<PAGE> 40
canceled in order to permit the net asset value per Share of
that Series to be maintained, after reflecting such loss, at the
designated constant dollar amount. Each Shareholder of the Trust
shall be deemed to have expressly agreed, by his investment in
any Series with respect to which the Trustees shall have adopted
any such procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
(m) Transfer. All Shares of each particular Series shall
be transferable, but transfers of Shares of a particular Series
will be recorded on the Share transfer records of the Trust
applicable to that Series only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of
that Series and at such other times as may be permitted by the
Trustees.
(n) Equality. All Shares of each particular Series shall
represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities of that
Series), and each Share of any particular Series shall be equal
to each other Share thereof; but the provisions of this sentence
shall not restrict any distinctions between the several Classes
of a Series permissible under this Section 6.1 or under Section
7.1 hereof nor any distinctions permissible under subsection
(g) of this Section 6.1 that may exist with respect to dividends
and distributions on Shares of the same Series. The Trustees may
from time to time divide or combine the Shares of any class of
particular Series into a greater or lesser number of Shares of
that class of a Series without thereby changing the
proportionate beneficial interest in the assets belonging to
that Series or in any way affecting the rights of the holders of
Shares of any other Series.
(o) Rights of Fractional Shares. Any fractional Share of
any Series shall carry proportionately all the rights and
obligations of a whole Share of that Series, including rights
and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the
Trust or of the Series to which they pertain.
(p) Conversion Rights. (i) Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the
authority to provide that holders of Shares of any Series shall
have the right to convert said Shares into Shares of one or more
other Series, that holders of any Class of a Series of Shares
shall have the right to convert said Shares of such Class into
Shares of one or more other Classes of such Series, and that
Shares of any Class of a Series shall be automatically converted
into Shares of another Class of such Series, in each case in
accordance with such requirements and procedures as the Trustees
may establish.
(ii) The number of Shares of into which a convertible Share
<PAGE> 41
shall convert shall equal the number (including for this purpose
fractions of a Share) obtained by dividing the net asset value
per Share for purposes of sales and redemptions of the
converting Share on the Conversion Date by the net asset value
per Share for purposes of sales and redemptions of the Class of
Shares into which it is converting on the Conversion Date.
(iii) On the Conversion Date, the Share converting into
another share will cease to accrue dividends and will no longer
be deemed outstanding and the rights of the holders thereof
(except the right to receive the number of target Shares into
which the converting Shares have been converted and declared but
unpaid dividends to the Conversion Date) will cease.
Certificates representing Shares resulting from the conversion
need not be issued until certificates representing Shares
converted, if issued, have been received by the Trust or its
agent duly endorsed for transfer.
(vi) The Trust will appropriately reflect the conversion
of Shares of one Class of a Series into Shares of another Class
of such Series on the first periodic statements of account sent
to Shareholders of record affected which provide account
information with respect to a reporting period which includes
the date such conversion occured.
SECTION 6.2. Ownership of Shares. The ownership of
Shares shall be recorded on the books of the Trust or of a
Transfer Agent or similar agent for the Trust, which books shall
be maintained separately for the Shares of each Series that has
been authorized. Certificates evidencing the ownership of Shares
need not be issued except as the Trustees may otherwise
determine from time to time, and the Trustees shall have power
to call outstanding Share certificates and to replace them with
book entries. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of
facsimile signatures, the transfer of Shares and similar
matters. The record books of the Trust as kept by the Trust or
any Transfer Agent or similar agent, as the case may be, shall
be conclusive as to who are the Shareholders and as to the
number of Shares of each Series held from time to time by each
such Shareholder.
The holders of Shares of each Series shall upon demand
disclose to the Trustees in writing such information with
respect to their direct and indirect ownership of Shares of such
Series as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code, or to comply with the
requirements of any other authority.
SECTION 6.3. Investments in the Trust. The Trustees may
accept investments in any Series of the Trust from such Persons
and on such terms and for such consideration, not inconsistent
with the provisions of the 1940 Act, as they from time to time
<PAGE> 42
authorize. The Trustees may authorize any Distributor, Principal
Underwriter, Custodian, Transfer Agent or other Person to accept
orders for the purchase of Shares that conform to such
authorized terms and to reject any purchase orders for Shares,
whether or not conforming to such authorized terms.
SECTION 6.4. No Preemptive Rights. No Shareholder, by
virtue of holding Shares of any Series, shall have any
preemptive or other right to subscribe to any additional Shares
of that Series, or to any shares of any other Series, or any
other Securities issued by the Trust.
SECTION 6.5. Status of Shares. Every Shareholder, by
virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to the terms hereof and to have
become a party hereto. Shares shall be deemed to be personal
property, giving only the rights provided herein. Ownership of
Shares shall not entitle the Shareholder to any title in or to
the whole or any part of the Trust Property or right to call for
a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders
partners. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust or any
Series, nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Declaration of Trust.
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1. Voting Powers. The Shareholders shall have
power to vote only (i) for the election or removal of Trustees
as provided in Sections 4.1(c) and (e) hereof, (ii) with respect
to the approval or termination in accordance with the 1940 Act
of any contract with a Contracting Party as provided in Section
5.2 hereof as to which Shareholder approval is required by the
1940 Act, (iii) with respect to any termination or
reorganization of the Trust or any Series to the extent and as
provided in Sections 9.2, 9.3 and 9.4 hereof, (iv) with respect
to any amendment of this Declaration of Trust to the extent and
as provided in Section 9.5 hereof, (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 Trust or any Series, or the Shareholders of any of
them (provided. however, that a Shareholder of a particular
Series shall not in any event be entitled to maintain a
derivative or class action on behalf of any other Series or the
Shareholders thereof), and (vi) with respect to such additional
<PAGE> 43
matters relating to the Trust as may be required by the 1940
Act, this Declaration of Trust, the By-Laws or any registration
of the Trust with the Commission (or any successor agency) or
any State, or as the Trustees may consider necessary or
desirable. If and to the extent that the Trustees shall
determine that such action is required by law or by this
Declaration, they shall cause each matter required or permitted
to be voted upon at a meeting or by written consent of
Shareholders to be submitted to a separate vote of the
outstanding Shares of each Series entitled to vote thereon;
provided, that (i) when expressly required by the 1940 Act or by
other law, actions of Shareholders shall be taken by Single
Class Voting of all outstanding Shares whose holders are
entitled to vote thereon; and (ii) when the Trustees determine
that any matter to be submitted to a vote of Shareholders
affects only the rights or interests of Shareholders of one or
more but not all Series or of one or more but not all Classes of
a single Series (including without limitation any distribution
plan pursuant to Rule 12b-1 of the 1940 Act applicable to such
Class), then only the Shareholders of the Series or Classes so
affected shall be entitled to vote thereon. Any matter required
to be submitted to shareholders and affecting one or more Series
shall require separate approval by the required vote of
Shareholders of each affected Series; provided, however, that to
the extent required by the 1940 Act, there shall be no separate
Series votes on the election or removal of Trustees, the
selection of auditors for the Trust and its Series or approval
of any agreement or contract entered into by the Trust or any
Series. Shareholders of a particular Series shall not be
entitled to vote on any matter that affects only one or more
other Series.
SECTION 7.2. Number of Votes and Manner of Voting:
Proxies. On each matter submitted to a vote of the Shareholders,
each holder of Shares of any Series shall be entitled to a
number of votes equal to the number of Shares of such Series
standing in his name on the books of the Trust. There shall be
no cumulative voting in the election or removal of Trustees.
Shares may be voted in person or by proxy. A proxy with respect
to Shares held in the name of two (2) or more Persons shall be
valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until
Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this
Declaration of Trust or the By-Laws to be taken by Shareholders.
SECTION 7.3. Meetings. Meetings of Shareholders may be
called by the Trustees from time to time for the purpose of
taking action upon any matter requiring the vote or authority of
the Shareholders as herein provided, or upon any other matter
deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by mailing such notice at least
seven (7) days before such meeting, postage prepaid, stating the
time, place and purpose of the meeting, to each Shareholder at
<PAGE> 44
the Shareholder's address as it appears on the records of the
Trust. The Trustees shall promptly call and give notice of a
meeting of Shareholders for the purpose of voting upon removal
of any Trustee of the Trust when requested to do so in writing
by Shareholders holding not less than ten percent (10%) of the
Shares then outstanding. If the Trustees shall fail to call or
give notice of any meeting of Shareholders for a period of
thirty (30) days after written application by Shareholders
holding at least ten percent (10%) of the Shares then
outstanding requesting that a meeting be called for any other
purpose requiring action by the Shareholders as provided herein
or in the By-Laws, then Shareholders holding at least ten
percent (10%) of the Shares then outstanding may call and give
notice of such meeting, and thereupon the meeting shall be held
in the manner provided for herein in case of call thereof by the
Trustees. Any meetings may be held within or without The State
of Delaware. Shareholders may only act with respect to matters
set forth in the notice to Shareholders.
SECTION 7.4. Record Dates. For the purpose of
determining the Shareholders who are entitled to vote or act at
any meeting or any adjournment thereof, or who are entitled to
participate in any dividend or distribution, or for the purpose
of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding thirty (30)
days (except at or in connection with the termination of the
Trust), as the Trustees may determine; or without closing the
transfer books the Trustees may fix a date and time not more
than ninety (90) days prior to the date of any meeting of
Shareholders or other action as the date and time of record for
the determination of Shareholders entitled to vote at such
meeting or any adjournment thereof or to be treated as
Shareholders of record for purposes of such other action, and
any Shareholder who was a Shareholder at the date and time so
fixed shall be entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though he has since that
date and time disposed of his Shares, and no Shareholder
becoming such after that date and time shall be so entitled to
vote at such meeting or any adjournment thereof or to be treated
as a Shareholder of record for purposes of such other action.
SECTION 7.5. Quorum and Required Vote. A majority of the
Shares entitled to vote shall be a quorum for the transaction of
business at a Shareholders' meeting, but any lesser number shall
be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set
for the original meeting without the necessity of further
notice. A Majority Shareholder Vote at a meeting of which a
quorum is present shall decide any question, except when a
different vote is required or permitted by any provision of the
1940 Act or other applicable law or by this Declaration of Trust
or the By-Laws, or when the Trustees shall in their discretion
require a larger vote or the vote of a majority or larger
fraction of the Shares of one or more particular Series.
SECTION 7.6. Action By Written Consent. Subject to the
<PAGE> 45
provisions of the 1940 Act and other applicable law, any action
taken by Shareholders may be taken without a meeting if a
majority of Shareholders entitled to vote on the matter (or such
larger proportion thereof or of the Shares of any particular
Series as shall be required by the 1940 Act or by any express
provision of this Declaration of Trust or the By-Laws or as
shall be permitted by the Trustees) consent to the action in
writing and if the writings in which such consent is given are
filed with the records of the meetings of Shareholders, to the
same extent and for the same period as proxies given in
connection with a Shareholders' meeting. Such consent shall be
treated for all purposes as a vote taken at a meeting of
Shareholders.
SECTION 7.7. Inspection of Records. The records of the
Trust shall be open to inspection by Shareholders to the same
extent as is permitted stockholders of a Delaware business
corporation under the Delaware business corporation law.
SECTION 7.8. Additional Provisions. The By-Laws may
include further provisions for Shareholders' votes and meetings
and related matters not inconsistent with the provisions hereof.
ARTICLE 8
LIMITATION OF LIABILITY: INDEMNIFICATION
SECTION 8.1. Trustees. Shareholders. etc. Not Personally
Liable; Notice. The Trustees, officers, employees and agents of
the Trust, in incurring any debts, liabilities or obligations,
or in limiting or omitting any other actions for or in
connection with the Trust, are or shall be deemed to be acting
as Trustees, officers, employees or agents of the Trust and not
in their own capacities. No Shareholder shall be subject to any
personal liability whatsoever in tort, contract or otherwise to
any other Person or Persons in connection with the assets or the
affairs of the Trust or of any Series, and subject to Section
8.4 hereof, no Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever in tort,
contract, or otherwise, to any other Person or Persons in
connection with the assets or affairs of the Trust or of any
Series, save only that arising from his own willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office or the discharge of his
functions. The Trust (or if the matter relates only to a
particular Series, that Series) shall be solely liable for any
and all debts, claims, demands, judgments, decrees, liabilities
or obligations of any and every kind, against or with respect to
the Trust or such Series in tort, contract or otherwise in
connection with the assets or the affairs of the Trust or such
Series, and all Persons dealing with the Trust or any Series
<PAGE> 46
shall be deemed to have agreed that resort shall be had solely
to the Trust Property of the Trust or the Series Assets of such
Series, as the case may be, for the payment or performance
thereof.
The Trustees shall use their best efforts to ensure that
every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officers or
officer shall give notice that a Certificate of Trust, referring
to the Declaration of Trust, is on file with the Secretary of
the state of Delaware and shall recite to the effect that the
same was executed or made by or on behalf of the Trust or by
them as Trustees or Trustee or as officers or officer, and not
individually, and that the obligations of such instrument are
not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust,
or the particular Series in question, as the case may be, but
the omission thereof shall not operate to bind any Trustees or
Trustee or officers or officer or Shareholders or Shareholder
individually, or to subject the Series Assets of any Series to
the obligations of any other Series.
SECTION 8.2. Trustees' Good Faith Action; Expert Advice:
No Bond or Surety. The exercise by the Trustees of their powers
and discretions hereunder shall be binding upon everyone
interested. Subject to Section 8.4 hereof, a Trustee shall be
liable for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact
or law. Subject to the foregoing, (i) the Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing
of any officer, agent, employee, consultant, Investment Adviser,
Administrator, Distributor or Principal Underwriter, Custodian
or Transfer Agent, Dividend Disbursing Agent, Shareholder
Servicing Agent or Accounting Agent of the Trust, nor shall any
Trustee be responsible for the act or omission of any other
Trustee; (ii) the Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with
such advice or for failing to follow such advice; and (iii) in
discharging their duties, the Trustees, when acting in good
faith, shall be entitled to rely upon the books of account of
the Trust and upon written reports made to the Trustees by any
officer appointed by them, any independent public accountant,
and (with respect to the subject matter of the contract
involved) any officer, partner or responsible employee of a
Contracting Party appointed by the Trustees pursuant to Section
5.2 hereof. The Trustees as such shall not be required to give
any bond or surety or any other security for the performance of
their duties.
SECTION 8.3. Indemnification of Shareholders. If any
Shareholder (or former Shareholder) of the Trust shall be
charged or held to be personally liable for any obligation or
liability of the Trust solely by reason of being or having been
<PAGE> 47
a Shareholder and not because of such Shareholder's acts or
omissions or for some other reason, the Trust (upon proper and
timely request by the Shareholder) may assume the defense
against such charge and satisfy any judgment thereon or may
reimburse the Shareholders for expenses, and the Shareholder or
former Shareholder (or the heirs, executors, administrators or
other legal representatives thereof, or in the case of a
corporation or other entity, its corporate or other general
successor) shall be entitled (but solely out of the assets of
the Series of which such Shareholder or former Shareholder is or
was the holder of Shares) to be held harmless from and
indemnified against all loss and expense arising from such
liability.
SECTION 8.4. Indemnification of Trustees. Officers, etc.
Subject to the limitations, if applicable, hereinafter set forth
in this Section 8.4, the Trust shall indemnify (from the assets
of the Series or Series to which the conduct in question
relates) each of its Trustees, officers, employees and agents
(including Persons who serve at the Trust's request as
directors, officers or trustees of another organization in which
the Trust has any interest as a shareholder, creditor or
otherwise (hereinafter, together with such Person's heirs,
executors, administrators or personal representative, referred
to as a "Covered Person")) against all liabilities, including
but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may
have been threatened, while in office or thereafter, by reason
of being or having been such a Trustee or officer, director or
trustee, except with respect to any matter as to which it has
been determined that such Covered Person (i) did not act in good
faith in the reasonable belief that such Covered Person's action
was in or not opposed to the best interests of the Trust; (ii)
had acted with willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of
such Covered Person's office (iii) for a criminal proceeding,
had reasonable cause to believe that his conduct was unlawful
(the conduct described in (i), (ii) and (iii) being referred to
hereafter as "Disabling Conduct"). A determination that the
Covered Person is entitled to indemnification may be made by (i)
a final decision on the merits by a court or other body before
whom the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding
against a Covered Person for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable determination, based
upon a review of the facts, that the indemnitee was not liable
by reason of Disabling Conduct by (a) a vote of a majority of a
quorum of Trustees who are neither "interested persons" of the
Trust as defined in Section 2(a)(19) of the 1940 Act nor parties
to the proceeding (the "Disinterested Trustees"), or (b) an
independent legal counsel in a written opinion. Expenses,
including accountants' and counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid
<PAGE> 48
from time to time by one or more Series to which the conduct in
question related in advance of the final disposition of any such
action, suit or proceeding; provided that the Covered Person
shall have undertaken to repay the amounts so paid to such
Series if it is ultimately determined that indemnification of
such expenses is not authorized under this Article 8 and (i) the
Covered Person shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses
arising by reason of any lawful advances, or (iii) a majority of
a quorum of the disinterested Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a
review of readily available facts (as opposed to a full trial
type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification.
SECTION 8.5. Compromise Payment. As to any matter disposed
of by a compromise payment by any such Covered Person referred
to in Section 8.4 hereof, pursuant to a consent decree or
otherwise, no such indemnification either for said payment or
for any other expenses shall be provided unless such
indemnification shall be approved (i) by a majority of a quorum
of the disinterested Trustees or (ii) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant
to clause (i) or by independent legal counsel pursuant to clause
(ii) shall not prevent the recovery from any Covered Person of
any amount paid to such Covered Person in accordance with either
of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction
not to have acted in good faith in the reasonable belief that
such Covered Person's action was in or not opposed to the best
interests of the Trust or to have been liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the Covered Person's office.
SECTION 8.6. Indemnification Not Exclusive, etc. The right
of indemnification provided by this Article 8 shall not be
exclusive of or affect any other rights to which any such
Covered Person or shareholder may be entitled. As used in this
Article 8, a "disinterested" Person is one against whom none of
the actions, suits or other proceedings in question, and no
other action, suit or other proceeding on the same or similar
grounds is then or has been pending or threatened. Nothing
contained in this Article 8 shall affect any rights to
indemnification to which personnel of the Trust, other than
Trustees and officers, and other Persons may be entitled by
contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of any such
Person.
SECTION 8.7. Liability of Third Persons Dealing with
Trustees. No person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made
or to be made by the Trustees or to see to the application of
any payments made or property transferred to the Trust or upon
its order.
<PAGE> 49
ARTICLE 9
DURATION: REORGANIZATION: INCORPORATION; AMENDMENTS
SECTION 9.1. Duration of Trust. Unless terminated as
provided herein, the Trust shall have perpetual existence.
SECTION 9.2. Termination of Trust. The Trust may be
terminated at any time by a Majority of the Trustees, subject to
the favorable vote of the holders of not less than a majority of
the Shares outstanding and entitled to vote of each Series of
the Trust, or by an instrument or instruments in writing without
a meeting, consented to by the holders of not less than a
majority of such Shares, or by such greater or different vote of
Shareholders of any Series as may be established by the
Certificate of Designation by which such Series was authorized.
Upon termination, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued
or anticipated as may be determined by the Trustees, the Trust
shall in accordance with such procedures as the Trustees
consider appropriate reduce the remaining assets to
distributable form in cash, Securities or other property, or any
combination thereof, and distribute the proceeds to the
Shareholders, in conformity with the provisions of Section
6.1(h) hereof. After termination of the Trust or any Series and
distribution to the Shareholders as herein provided, a majority
of the Trustees shall execute and lodge among the records of the
Trust an instrument in writing setting forth the fact of such
termination. Upon termination of the Trust, the Trustees shall
thereupon, be discharged from all further liabilities and duties
hereunder, and the rights and interests of all Shareholders
shall thereupon cease. Upon termination of any Series, the
Trustees shall thereupon be discharged from all further
liabilities and duties with respect to such Series, and the
rights and interests of all Shareholders of such Series shall
thereupon cease.
SECTION 9.3. Reorganization. The Trustees may sell,
convey and transfer all or substantially all of the assets of
the Trust, or the assets belonging to any one or more Series, to
another trust, partnership, association, corporation or other
entity organized under the laws of any state of the United
States, or may transfer such assets to another Series of the
Trust, in exchange for cash, Shares or other Securities
(including, in the case of a transfer to another Series of the
Trust, Shares of such other Series), or to the extent permitted
by law then in effect may merge or consolidate the Trust or any
Series with any other Trust or any corporation, partnership, or
association organized under the laws of any state of the United
States, all upon such terms and conditions and for such
consideration when and as authorized by vote or written consent
of a Majority of the Trustees and approved by the affirmative
<PAGE> 50
vote of the holders of not less than a majority of the Shares
outstanding and entitled to vote of each Series whose assets are
affected by such transaction, or by an instrument or instruments
in writing without a meeting, consented to by the holders of not
less than a majority of such Shares, and/or by such other vote
of any Series as may be established by the Certificate of
Designation with respect to such Series. Following such
transfer, the Trustees shall distribute the cash, Shares or
other Securities or other consideration received in such
transaction (giving due effect to the assets belonging to and
indebtedness of, and any other differences among, the various
Series of which the assets have so been transferred) among the
Shareholders of the Series of which the assets have been so
transferred; and if all of the assets of the Trust have been so
transferred, the Trust shall be terminated. Nothing in this
Section 9.3 shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships,
associations or other organizations, and to sell, convey or
transfer less than substantially all of the Trust Property or
the assets belonging to any Series to such organizations or
entities.
SECTION 9.4. Incorporation. Upon approval by Majority
Shareholder Vote, the Trustees may cause to be organized or
assist in organizing a corporation or corporations under the
laws of any jurisdiction or any other trust, partnership,
association or other organization to take over all of the Trust
Property or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, convey
and transfer the Trust Property to any such corporation, trust,
association or organization, in exchange for the shares or
securities thereof, or otherwise, and to lend money to,
subscribe for the shares of securities of, and enter into any
contracts with any such corporation, trust, partnership,
association or organization in which the Trust holds or is about
to acquire shares or any other interests. The Trustees may also
cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted
by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in
organizing one or more corporation, trusts, partnerships,
associations or other organizations and selling, conveying or
transferring a portion of the Trust Property to such
organizations or entities.
SECTION 9.5. Amendments; etc. All rights granted to the
Shareholders under this Declaration of Trust are granted subject
to the reservation of the right to amend this Declaration of
Trust as herein provided, except that no amendment shall repeal
the limitations on personal liability of any Shareholder or
Trustee or the prohibition of assessment upon the Shareholders
(otherwise than as permitted under Section 6.1(l)) without the
express consent of each Shareholder or Trustee involved. Subject
to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be
amended at any time, so long as such amendment does not
<PAGE> 51
adversely affect the rights of any Shareholder with respect to
which such amendment is or purports to be applicable and so long
as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
Majority of the Trustees (or by an officer of the Trust pursuant
to the vote of a Majority of the Trustees). Any amendment to
this Declaration of Trust that adversely affects the rights of
all Shareholders may be adopted at any time by an instrument in
writing signed by a Majority of the Trustees (or by an officer
of the Trust pursuant to a vote of a Majority of the Trustees)
when authorized to do so by the vote in accordance with Section
7.1 hereof of Shareholders holding a majority of all the Shares
outstanding and entitled to vote, without regard to Series, or
if said amendment adversely affects the rights of the
Shareholders of less than all of the Series, by the vote of the
holders of a majority of all the Shares entitled to vote of each
Series so affected.
SECTION 9.6. Filing of Copies of Declaration and
Amendments. The original or a copy of this Declaration and of
each amendment hereto (including each Certificate of Designation
and Certificate of Termination) shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A
restated Declaration, integrating into a single instrument all
of the provisions of this Declaration which are then in effect
and operative, may be executed from time to time by a Majority
of the Trustees and shall, upon execution, be conclusive
evidence of all amendments contained therein and may thereafter
be referred to in lieu of the original Declaration and the
various amendments thereto. A Certificate of Trust shall be
filed in the office of the Secretary of State of the State of
Delaware.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. Any and all notices to which any
Shareholder hereunder may be entitled and any and all
communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the applicable register of the
Trust.
SECTION 10.2. Governing Law. This Declaration of Trust is,
with reference to the laws thereof, and the rights of all
parties and the construction and effect of every provision
hereof shall be, subject to and construed according to the laws
of said The State of Delaware.
<PAGE> 52
SECTION 10.3. Counterparts. This Declaration of Trust and
any amendment thereto may be simultaneously executed in several
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts, together, shall constitute but
one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
SECTION 10.4. Reliance by Third Parties. Any certificate
executed by an individual who, according to the records of the
Trust is a Trustee hereunder, certifying to: (a) the number or
identity of Trustees or Shareholders, (b) the due authorization
of the execution of any instrument or writing, (c) the form of
any vote passed at a meeting of Trustees or Shareholders, (d)
the fact that the number of Trustees or Shareholders present at
any meeting or executing any written instrument satisfies the
requirements of this Declaration of Trust, (e) the form of any
By-Law adopted, or the identity of any officers elected, by the
Trustees, (f) the existence or nonexistence of any fact or facts
which in any manner relate to the affairs of the Trust, or (g)
the name of the Trust or the establishment of a Series shall be
conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees, or any of them, and the
successors of such Person.
SECTION 10.5. References; Headings. The masculine gender
shall include the feminine and neuter genders. Headings are
placed herein for convenience of reference only and shall not be
taken as a part of this Declaration or control or affect the
meaning, construction or effect hereof.
SECTION 10.6. Provisions in Conflict With Law or
Regulation. (a) The provisions of this Declaration are
severable, and if the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with the
1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986 or with other applicable laws and
regulations, the conflicting provision shall be deemed never to
have constituted a part of this Declaration; provided, however,
that such determination shall not affect any of the remaining
provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision
in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
SECTION 10.7. Use of the Name "Van Kampen American
Capital". Van Kampen American Capital, Inc. ("Van Kampen
American Capital") has consented to the use by the Trust and by
each Series and each Series thereof to the identifying words
<PAGE> 53
"Van Kampen" or "Van Kampen Merritt" or any combination thereof
in the name of the Trust and of each Series and Series thereof.
Such consent is conditioned upon the Trust's employment of Van
Kampen American Capital, its successors or a subsidiary or
affiliate thereof as investment adviser to the Trust and to each
Series and each Series thereof. As between Van Kampen American
Capital and the Trust, Van Kampen American Capital shall control
the use of such name insofar as such name contains the
identifying words "Van Kampen" or "Van Kampen Merritt". Van
Kampen American Capital may from time to time use the
identifying words "American Capital," "Van Kampen" or "Van
Kampen Merritt" in other connections and for other purposes,
including without limitation in the names of other investment
companies, corporations or businesses that it may manage,
advise, sponsor or own or in which it may have a financial
interest. Van Kampen American Capital may require the Trust or
any Series or Series thereof to cease using the identifying
words "Van Kampen" or "Van Kampen Merritt" in the name of the
Trust or any Series or any Series thereof if the Trust or any
Series or Series thereof ceases to employ Van Kampen American
Capital, its successors or a subsidiary or affiliate thereof as
investment adviser.
<PAGE> 54
IN WITNESS WHEREOF, the undersigned, being the initial
Trustee, has set his hand and seal, for himself and his assigns,
unto this Declaration of Trust of Van Kampen American Capital
Tax Free Money Fund, all as of the day and year first above written.
/s/Ronald A. Nyberg
- ------------------------
Initial Trustee
<PAGE> 55
A C K N O W L E D G M E N T
STATE OF ILLINOIS)
) ss
COUNTY OF DUPAGE)
/s/Ronald A. Nyberg
______________________
May 10, 1995
Then personally appeared the above named Ronald A. Nyberg and
acknowledged the foregoing instrument to be his free act and
deed.
Before me,
Virginia Rodrigues
_______________________________
(Notary Public)
01/13/99
My commission expires:___________
<PAGE> 1
EXHIBIT 2
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
BYLAWS
<PAGE> 2
Van Kampen American Capital Tax Free Money Fund
Bylaws
Index
ARTICLE 1 SHAREHOLDERS AND SHAREHOLDERS' MEETINGS 1
Section 1.1. Meetings 1
Section 1.2. Presiding Officer; Secretary 1
Section 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws 1
Section 1.4. Voting; Quorum 1
Section 1.5. Inspectors 2
Section 1.6 Records at Shareholder Meetings 2
Section 1.7. Shareholders Action in Writing 2
ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS 2
Section 2.1. Number of Trustees 2
Section 2.2. Regular Meetings of Trustees 2
Section 2.3. Special Meetings of Trustees 2
Section 2.4. Notice of Meetings 3
<PAGE> 3
Section 2.5. Quorum; Presiding Trustee 3
Section 2.6. Participation by Telephone 3
Section 2.7. Location of Meetings 3
Section 2.8. Actions by Trustees 3
Section 2.9. Rulings of Presiding Trustee 3
Section 2.10. Trustees' Action in Writing 3
Section 2.11. Resignations 4
Section 2.12. Tenure of Trustees 4
<PAGE> 4
ARTICLE 3 OFFICERS 4
Section 3.1. Officers of the Trust 4
Section 3.2. Time and Terms of Election 4
Section 3.3. Resignation and Removal 4
Section 3.4. Fidelity Bond 4
Section 3.5. President 4
Section 3.6. Vice Presidents 4
Section 3.7. Treasurer and Assistant Treasurers 5
Section 3.8. Controller and Assistant Controllers 5
Section 3.9. Secretary and Assistant Secretaries 5
Section 3.10. Substitutions 5
Section 3.11. Execution of Deeds, etc. 6
Section 3.12. Power to Vote Securities 6
ARTICLE 4 COMMITTEES 6
Section 4.1. Power of Trustees to Designate Committees 6
Section 4.2. Rules for Conduct of Committee Affairs 6
Section 4.3. Trustees May Alter, Abolish, etc., Committees 6
<PAGE> 5
Section 4.4. Minutes; Review by Trustees 6
ARTICLE 5 SEAL 7
ARTICLE 6 SHARES .......................................... 7
Section 6.1. Issuance of Shares 7
Section 6.2. Uncertificated Shares 7
Section 6.3. Share Certificates 7
Section 6.4. Lost, Stolen, etc., Certificates 7
<PAGE> 6
ARTICLE 7 STOCK TRANSFERS 8
Section 7.1. Transfer Agents, Registrars, etc. 8
Section 7.2. Transfer of Shares 8
Section 7.3. Registered Shareholders 8
ARTICLE 8 AMENDMENTS 8
Section 8.1. Bylaws Subject to Amendment 8
Section 8.2. Notice of Proposal to Amend Bylaws Required 8
<PAGE> 7
Van Kampen American Capital Tax Free Money Fund
BYLAWS
These are the Bylaws of Van Kampen American Capital Tax
Free Money Fund, a trust with transferable shares established
under the laws of The State of Delaware (the "Trust"), pursuant
to an Agreement and Declaration of Trust of the Trust (the
"Declaration") made the 10th day of May, 1995, and a Certificate
of Trust filed in the office of the Secretary of State pursuant
to Section 3810 of The Delaware Business Trust Act, Title 12,
Chapter 38 of the Delaware Code. These Bylaws have been adopted
by the Trustees pursuant to the authority granted by Section 4.14
of the Declaration.
All words and terms capitalized in these Bylaws, unless
otherwise defined herein, shall have the same meanings as they
have in the Declaration.
ARTICLE 1
---------
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
SECTION 1.1. Meetings. A meeting of the Shareholders of the
---------
Trust shall be held whenever called by the Chairman, the
President or a majority of the Trustees and whenever election of
a Trustee or Trustees by Shareholders is required by the
provisions of the 1940 Act. Meetings of Shareholders shall also
be called by the Trustees when requested in writing by
Shareholders holding at least ten percent (10%) of the Shares
then outstanding for the purpose of voting upon removal of any
Trustee, or if the Trustees shall fail to call or give notice of
any such meeting of Shareholders for a period of thirty (30)
days after such application, then Shareholders holding at least
ten percent (10%) of the Shares then outstanding may call and
give notice of such meeting. Notice of Shareholders' meetings
shall be given as provided in the Declaration.
SECTION 1.2. Presiding Officer; Secretary. The President
-----------------------------
shall preside at each Shareholders' meeting as chairman of the
meeting, or in the absence of the President, the Trustees
present at the meeting shall elect one of their number as
chairman of the meeting. Unless otherwise provided for by the
Trustees, the Secretary of the Trust shall be the secretary of
all meetings of Shareholders and shall record the minutes
<PAGE> 8
thereof.
SECTION 1.3. Authority of Chairman of Meeting to
-----------------------------------
Interpret_Declaration and Bylaws. At any Shareholders' meeting
- ---------------------------------
the chairman of the meeting shall be empowered to determine the
construction or interpretation of the Declaration or these
Bylaws, or any part thereof or hereof, and his ruling shall be
final.
SECTION 1.4. Voting; Quorum. At each meeting of Shareholders,
---------------
except as otherwise provided by the Declaration, every holder of
record of Shares entitled to vote shall be entitled to a number
of votes equal to the number of Shares standing in his name on
the Share register of the Trust on the record date of the
meeting. Shareholders may vote by proxy and the form of any
such proxy may be prescribed from time to time by the Trustees.
A quorum shall exist if the holders of a majority of the
outstanding Shares of the Trust entitled to vote are present in
person or by proxy, but any lesser number shall be
sufficient for adjournments. At all meetings of the
Shareholders, votes shall be taken by ballot for all matters
which may be binding upon the Trustees pursuant to Section 7.1
of the Declaration. On other matters, votes of Shareholders
need not be taken by ballot unless otherwise provided for by the
Declaration or by vote of the Trustees, or as required by the
1940 Act, but the chairman of the meeting may in his discretion
authorize any matter to be voted upon by ballot.
SECTION 1.5. Inspectors. At any meeting of Shareholders, the
-----------
chairman of the meeting may appoint one or more Inspectors of
Election or Balloting to supervise the voting at such meeting or
any adjournment thereof. If Inspectors are not so appointed,
the chairman of the meeting may, and on the request of any
Shareholder present or represented and entitled to vote shall,
appoint one or more Inspectors for such purpose. Each
Inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of
Inspector of Election or Balloting, as the case may be, at
such meeting with strict impartiality and according to the
best of his ability. If appointed, Inspectors shall take
charge of the polls and, when the vote is completed, shall make
a certificate of the result of the vote taken and of such other
facts as may be required by law.
SECTION 1.6. Records at Shareholder Meetings. At each
--------------------------------
meeting of the Shareholders there shall be open for inspection
the minutes of the last previous Meeting of Shareholders of the
Trust and a list of the Shareholders of the Trust, certified to
be true and correct by the Secretary or other proper agent of
the Trust, as of the record date of the meeting or the date of
closing of transfer books, as the case may be. Such list of
Shareholders shall contain the name of each Shareholder.
Shareholders shall have such other rights and procedures of
inspection of the books and records of the Trust as are granted
to shareholders of a Delaware corporation.
<PAGE> 9
SECTION 1.7. Shareholders' Action in Writing. Nothing in this
--------------------------------
Article 1 shall limit the power of the Shareholders to take any
action by means of written instruments without a meeting, as
permitted by Section 7.6 of the Declaration.
ARTICLE 2
TRUSTEES AND TRUSTEES' MEETINGS
SECTION 2.1. Number of Trustees. There shall initially be one
-------------------
(1) Trustee, and the number of Trustees shall thereafter be such
number, authorized by the Declaration, as from time to time
shall be fixed by a vote adopted by a Majority of the Trustees.
SECTION 2.2. Regular Meetings of Trustees. Regular meetings
-----------------------------
of the Trustees may be held without call or notice at such
places and at such times as the Trustees may from time to time
determine; provided, that notice of such determination, and of
the time and place of the first regular meeting thereafter,
shall be given to each absent Trustee in accordance with Section
2.4 hereof.
SECTION 2.3. Special Meetings of Trustees. Special meetings
-----------------------------
of the Trustees may be held at any time and at any place when
called by the President or the Treasurer or by three (3) or
more Trustees, or if there shall be less than three (3)
Trustees, by any Trustee; provided, that notice of the time and
place thereof is given to each Trustee in accordance with
Section 2.4 hereof by the Secretary or an Assistant Secretary or
by the officer or the Trustees calling the meeting.
SECTION 2.4. Notice of Meetings. Notice of any regular or
-------------------
special meeting of the Trustees shall be sufficient if given in
writing to each Trustee, and if sent by mail at least five (5)
days, by a nationally recognized overnigh delivery service at
least two (2) days or by facsimile at least twenty-four (24)
hours, before the meeting, addressed to his usual or last known
business or residence address, or if delivered to him in person
at least twenty-four (24) hours before the meeting. Notice of a
special meeting need not be given to any Trustee who was present
at an earlier meeting, not more than thirty-one (31) days prior
to the subsequent meeting, at which the subsequent meeting was
called. Unless statute, these bylaws or a resolution of the
Trustees might otherwise dictate, notice need not state the
business to be transacted at or the purpose of any meeting of
the Board of Trustees. Notice of a meeting may be waived by any
Trustee by written waiver of notice, executed by him before or
after the meeting, and such waiver shall be filed with the
records of the meeting. Attendance by a Trustee at a meeting
shall constitute a waiver of notice, except where a Trustee
attends a meeting for the purpose of protesting prior thereto or
at its commencement the lack of notice. No notice need be given
<PAGE> 10
of action proposed to be taken by unanimous written consent.
SECTION 2.5. Quorum: Presiding Trustee. At any meeting of the
--------------------------
Trustees, a Majority of the Trustees shall constitute a quorum.
Any meeting may be adjourned from time to time by a majority of
the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without
further notice. Unless the Trustees shall otherwise elect,
generally or in a particular case, the Chairman shall be the
presiding Trustee at each meeting of the Trustees or in the
absence of the Chairman, the President shall preside over the
meeting. In the absence of both the Chairman and the President,
the Trustees present at the meeting shall elect one of their
number as presiding Trustee of the meeting.
SECTION 2.6. Participation by Telephone. One or more of the
---------------------------
Trustees may participate in a meeting thereof or of any
Committee of the Trustees by means of a conference telephone or
similar communications equipment allowing all persons
participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in
person at a meeting.
SECTION 2.7. Location of Meetings. Trustees' meetings may be
---------------------
held at any place, within or without the State of Delaware.
SECTION 2.8. Actions by Trustees. Unless statute, the
--------------------
charter or bylaws requires a greater proportion, action of a
majority of the Trustees present at a meeting at which a quorum
is present is action of the Board of Trustees. Voting at
Trustees' meetings may be conducted orally, by show of hands,
or, if requested by any Trustee, by written ballot. The
results of all voting shall be recorded by the Secretary in the
minute book.
SECTION 2.9. Rulings of Presiding Trustee. All other rules of
-----------------------------
conduct adopted and used at any Trustees' meeting shall be
determined by the presiding Trustee of such meeting, whose
ruling on all procedural matters shall be final.
SECTION 2.10. Trustees' Action in Writing. Nothing in this
----------------------------
Article 2 shall limit the power of the Trustees to take action
by means of a written instrument without a meeting, as provided
in Section 4.2 of the Declaration.
SECTION 2.11. Resignations. Any Trustee may resign at any
-------------
time by written instrument signed by him and delivered to the
Chairman, the President or the Secretary or to a meeting of the
Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time.
<PAGE> 11
SECTION 2.12. Chairman of the Board. The Trustees may from
----------------------
time to time elect on of the Trustees to serve as Chairman of
the Board of Trustees.
ARTICLE 3
OFFICERS
SECTION 3.1. Officers of the Trust. The officers of the Trust
----------------------
shall consist of a President, a Treasurer and a Secretary, and
may include one or more Vice Presidents, Assistant Treasurers
and Assistant Secretaries, and such other officers as the
Trustees may designate. Any person may hold more than one
office.
SECTION 3.2. Time and Terms of Election. The President, the
---------------------------
Treasurer and the Secretary shall be elected by the Trustees at
their first meeting and thereafter at the annual meeting of the
Trustees, as provided in Section 4.2 of the Declaration. Such
officers shall hold office until the next annual meeting of the
Trustees and until their successors shall have been duly elected
and qualified, and may be removed at any meeting by the
affirmative vote of a Majority of the Trustees. All other
officers of the Trust may be elected or appointed at any meeting
of the Trustees. Such officers shall hold office for any term,
or indefinitely, as determined by the Trustees, and shall be
subject to removal, with or without cause, at any time by the
Trustees.
SECTION 3.3. Resignation and Removal. Any officer may resign
------------------------
at any time by giving written notice to the Trustees. Such
resignation shall take effect at the time specified therein,
and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
If the office of any officer or agent becomes vacant by reason
of death, resignation, retirement, disqualification, removal
from office or otherwise, the Trustees may choose a successor,
who shall hold office for the unexpired term in respect of which
such vacancy occurred. Except to the extent expressly provided
in a written agreement with the Trust, no officer resigning or
removed shall have any right to any compensation for any period
following such resignation or removal, or any right to damage on
account of such removal.
SECTION 3.4. Fidelity Bond. The Trustees may, in their
--------------
discretion, direct any officer appointed by them to furnish at
the expense of the Trust a fidelity bond approved by the
Trustees, in such amount as the Trustees may prescribe.
<PAGE> 12
SECTION 3.5. President. The President shall be the chief
----------
executive officer of the Trust and, subject to the supervision
of the Trustees, shall have general charge and supervision of
the business, property and affairs of the Trust and such other
powers and duties as the Trustees may prescribe.
SECTION 3.6. Vice Presidents. In the absence or disability of
----------------
the President, the Vice President or, if there shall be more
than one, the Vice Presidents in the order of their seniority or
as otherwise designated by the Trustees, shall exercise all of
the powers and duties of the President. The Vice Presidents
shall have the power to execute bonds, notes, mortgages and
other contracts, agreements and instruments in the name of the
Trust, and shall do and perform such other duties as the
Trustees or the President shall direct.
SECTION 3.7. Treasurer and Assistant Treasurers. The
-----------------------------------
Treasurer shall be the chief financial officer of the Trust, and
shall have the custody of the Trust's funds and Securities, and
shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Trust and shall deposit
all moneys, and other valuable effects in the name and to the
credit of the Trust, in such depositories as may be designated
by the Trustees, taking proper vouchers for such disbursements,
shall have such other duties and powers as may be prescribed
from time to time by the Trustees, and shall render to the
Trustees, whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the
Trust. If no Controller is elected, the Treasurer shall also
have the duties and powers of the Controller, as provided in
these Bylaws. Any Assistant Treasurer shall have such duties
and powers as shall be prescribed from time to time by the
Trustees or the Treasurer, and shall be responsible to and shall
report to the Treasurer. In the absence or disability of the
Treasurer, the Assistant Treasurer or, if there shall be more
than one, the Assistant Treasurers in the order of their
seniority or as otherwise designated by the Trustees or the
Chairman, shall have the powers and duties of the Treasurer.
SECTION 3.8. Controller and Assistant Controllers. If a
-------------------------------------
Controller is elected, he shall be the chief accounting officer
of the Trust and shall be in charge of its books of account and
accounting records and of its accounting procedures, and shall
have such duties and powers as are commonly incident to the
office of a controller, and such other duties and powers as may
be prescribed from time to time by the Trustees. The
Controller shall be responsible to and shall report to the
Trustees, but in the ordinary conduct of the Trust's business,
shall be under the supervision of the Treasurer. Any Assistant
Controller shall have such duties and powers as shall be
prescribed from time to time by the Trustees or the Controller,
and shall be responsible to and shall report to the Controller.
In the absence or disability of the Controller, the Assistant
Controller or, if there shall be more than one, the Assistant
Controllers in the order of their seniority or as otherwise
designated by the Trustees, shall have the powers and duties of
the Controller.
<PAGE> 13
SECTION 3.9. Secretary and Assistant Secretaries. The
--------------------------------------
Secretary shall, if and to the extent requested by the Trustees,
attend all meetings of the Trustees, any Committee of the
Trustees and/or the Shareholders and record all votes and the
minutes of proceedings in a book to be kept for that purpose,
shall give or cause to be given notice of all meetings of the
Trustees, any Committee of the Trustees, and of the
Shareholders and shall perform such other duties as may be
prescribed by the Trustees. The Secretary, or in his absence any
Assistant Secretary, shall affix the Trust's seal to any
instrument requiring it, and when so affixed, it shall be
attested by the signature of the Secretary or an Assistant
Secretary. The Secretary shall be the custodian of the Share
records and all other books, records and papers of the Trust
(other than financial) and shall see that all books, reports,
statements, certificates and other documents and records
required by law are properly kept and filed. In the absence or
disability of the Secretary, the Assistant Secretary or, if
there shall be more than one, the Assistant Secretaries in the
order of their seniority or as otherwise designated by the
Trustees, shall have the powers and duties of the Secretary.
SECTION 3.10. Substitutions. In case of the absence or
--------------
disability of any officer of the Trust, or for any other reason
that the Trustees may deem sufficient, the Trustees may
delegate, for the time being, the powers or duties, or any of
them, of such officer to any other officer, or to any Trustee.
SECTION 3.11. Execution of Deeds, etc. Except as the
------------------------
Trustees may generally or in particular cases otherwise
authorize or direct, all deeds, leases, transfers, contracts,
proposals, bonds, notes, checks, drafts and other obligations
made, accepted or endorsed by the Trust shall be signed or
endorsed on behalf of the Trust by its properly authorized
officers or agents as provided in the Declaration.
SECTION 3.12. Power to Vote Securities. Unless otherwise
-------------------------
ordered by the Trustees, the Treasurer shall have full power and
authority on behalf of the Trust to give proxies for, and/or to
attend and to act and to vote at, any meeting of stockholders of
any corporation in which the Trust may hold stock, and at any
such meeting the Treasurer or his proxy shall possess and may
exercise any and all rights and powers incident to the ownership
of such stock which, as the owner thereof, the Trust might have
possessed and exercised if present. The Trustees, by resolution
from time to time, or, in the absence thereof, the Treasurer,
may confer like powers upon any other person or persons as
attorneys and proxies of the Trust.
ARTICLE 4
COMMITTEES
<PAGE> 14
SECTION 4.1. Power of Trustees to Designate Committees. The
------------------------------------------
Trustees, by vote of a Majority of the Trustees, may elect from
their number an Executive Committee and any other Committees and
may delegate thereto some or all of their powers except those
which by law, by the Declaration or by these Bylaws may
not be delegated; provided, that an Executive Committee shall
not be empowered to elect the President, the Treasurer or the
Secretary, to amend the Bylaws, to exercise the powers of the
Trustees under this Section 4.1 or under Section 4.3 hereof, or
to perform any act for which the action of a Majority of the
Trustees is required by law, by the Declaration or by these
Bylaws. The members of any such Committee shall serve at the
pleasure of the Trustees.
SECTION 4.2. Rules for Conduct of Committee Affairs. Except
---------------------------------------
as otherwise provided by the Trustees, each Committee elected or
appointed pursuant to this Article 4 may adopt such standing
rules and regulations for the conduct of its affairs as it may
deem desirable, subject to review and approval of such
rules and regulations by the Trustees at the next succeeding
meeting of the Trustees, but in the absence of any such action
or any contrary provisions by the Trustees, the business of each
Committee shall be conducted, so far as practicable, in the same
manner as provided herein and in the Declaration for the
Trustees.
SECTION 4.3. Trustees May Alter, Abolish, etc., Committees
---------------------------------------------
Trustees may at any time alter or abolish any Committee, change
membership of any Committee, or revoke, rescind, waive or
modify action of any Committee or the authority of any Committee
with respect to any matter or class of matters; provided, that
no such action shall impair the rights of any third parties.
SECTION 4.4. Minutes: Review by Trustees. Any Committee to
----------------------------
which the Trustees delegate any of their powers or duties shall
keep records of its meetings and shall report its actions to the
Trustees.
<PAGE> 15
ARTICLE 5
SEAL
The seal of the Trust, if any, may be affixed to any
instrument, and the seal and its attestation may be
lithographed, engraved or otherwise printed on any document with
the same force and effect as if had been imprinted and affixed
manually in the same manner and with the same force and effect
as if done by a Delaware corporation. Unless otherwise
required by the Trustees, the seal shall not be necessary to be
placed on, and its absence shall not impair the validity of, any
document, instrument or other paper executed and delivered by or
on behalf of the Trust.
ARTICLE 6
SHARES
SECTION 6.1. Issuance of Shares. The Trustees may issue an
-------------------
unlimited number of Classes of Shares of any or all Series
either in certificated or uncertificated form, they may issue
certificates to the holders of a Class of Shares of a Series
which was originally issued in uncertificated form, and if they
have issued Shares of any Series in certificated form, they may
at any time discontinue the issuance of Share certificates for
such Series and may, by written notice to such Shareholders of
such Series require the surrender of their Share certificates to
the Trust for cancellation, which surrender and cancellation
shall not affect the ownership of Shares for such Series.
SECTION 6.2. Uncertificated Shares. For any Class of Shares
----------------------
for which the Trustees issue Shares without certificates, the
Trust or the Transfer Agent may either issue receipts therefor
or may keep accounts upon the books of the Trust for the record
holders of such Shares, who shall in either case be deemed, for
all purposes hereunder, to be the holders of such Shares as if
they had received certificates therefor and shall be held to
have expressly assented and agreed to the terms hereof and of
the Declaration.
SECTION 6.3. Share Certificates. For any Class of Shares for
-------------------
which the Trustees shall issue Share certificates, each
Shareholder of such Class shall be entitled to a certificate
stating the number of Shares owned by him in such form as shall
be prescribed from time to time by the Trustees. Such
<PAGE> 16
certificate shall be signed by the President or a Vice
President, and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Trust. Such
signatures may be facsimiles if the certificate is
countersigned by a Transfer Agent, or by a Registrar,
other than a Trustee, officer or employee of the Trust. In case
any officer who has signed or whose facsimile signature has been
placed on such certificate shall cease to be such officer before
such certificate is issued, it may be issued by the Trust with
the same effect as if he were such officer at the time of its
issue.
SECTION 6.4. Lost, Stolen, etc., Certificates. If any
---------------------------------
certificate for certificated Shares shall be lost,
stolen, destroyed or mutilated, the Trustees may authorize the
issuance of a new certificate of the same tenor and for the same
number of Shares in lieu thereof. The Trustees shall require
the surrender of any mutilated certificate in respect of which a
new certificate is issued, and may, in their discretion, before
the issuance of a new certificate, require the owner of a lost,
stolen or destroyed certificate, or the owner's legal
representative, to make an affidavit or affirmation setting
forth such facts as to the loss, theft or destruction as they
deem necessary, and to give the Trust a bond in such reasonable
sum as the Trustees direct, in order to indemnify the Trust.
ARTICLE 7
TRANSFER OF SHARES
SECTION 7.1. Transfer Agents, Registrars, etc. As approved in
---------------------------------
Section 5.2(e) of the Declaration, the Trustees shall have the
authority to employ and compensate such transfer agents and
registrars with respect to the Shares of the Trust as the
Trustees shall deem necessary or desirable. In addition, the
Trustees shall have the power to employ and compensate such
dividend dispersing agents, warrant agents and agents for
reinvestment of dividends as they shall deem necessary or
desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.
SECTION 7.2 Transfer of Shares. The Shares of the Trust shall
-------------------
be transferable on the books of the Trust only upon delivery to
the Trustees or a transfer agent of the Trust of proper
documentation as provided in Section 6.1(m) of the Declaration.
The Trust, or its transfer agents, shall be authorized to refuse
any transfer unless and until presentation of such evidence as
may be reasonably required to show that the requested transfer
is proper.
SECTION 7.3 Registered Shareholders. The Trust may deem and
-------------------------
treat the holder of record of any Shares the absolute owner
<PAGE> 17
thereof for all purposes and shall not be required to take any
notice of any right or claim of right of any other person.
ARTICLE 8
AMENDMENTS
SECTION 8.1. Bylaws Subject to Amendment. These Bylaws may be
----------------------------
altered, amended or repealed, in whole or in part, at any time
by vote of the holders of a majority of the Shares issued,
outstanding and entitled to vote. The Trustees, by vote of a
Majority of the Trustees, may alter, amend or repeal these
Bylaws, in whole or in part, including Bylaws adopted by the
Shareholders, except with respect to any provision hereof which
by law, the Declaration or these Bylaws requires action by the
Shareholders. Bylaws adopted by the Trustees may be altered,
amended or repealed by the Shareholders.
SECTION 8.2. Notice of Proposal to Amend Bylaws Required. No
--------------------------------------------
proposal to amend or repeal these Bylaws or to adopt new Bylaws
shall be acted upon at a meeting unless either (i) such proposal
is stated in the notice or in the waiver of notice, as the case
may be, of the meeting of the Trustees or Shareholders at which
such action is taken, or (ii) all of the Trustees or
Shareholders, as the case may be, are present at such meeting
and all agree to consider such proposal without protesting the
lack of notice.
<PAGE> 1
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT dated as of April 7, 1995, by and
between VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND (the "Fund"), a
Delaware business trust (the "Trust"), and VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP. (the "Adviser"), a Delaware corporation.
1. (a) Retention of Adviser by Fund. The Fund hereby employs
the Adviser to act as the investment adviser for and to manage
the investment and reinvestment of the assets of the Fund in
accordance with the Fund's investment objective and policies and
limitations, and to administer its affairs to the extent
requested by, and subject to the review and supervision of, the
Board of Trustees of the Fund for the period and upon the terms
herein set forth. The investment of funds shall be subject to
all applicable restrictions of applicable law and of the
Declaration of Trust and By-Laws of the Trust, and resolutions
of the Board of Trustees of the Fund as may from time to time be
in force and delivered or made available to the Adviser.
(b) Adviser's Acceptance of Employment. The Adviser accepts
such employment and agrees during such period to render such
services, to supply investment research and portfolio management
(including without limitation the selection of securities for
the Fund to purchase, hold or sell and the selection of brokers
through whom the Fund's portfolio transactions are executed, in
accordance with the policies adopted by the Fund and its Board
of Trustees), to administer the business affairs of the Fund, to
furnish offices and necessary facilities and equipment to the
Fund, to provide administrative services for the Fund, to render
periodic reports to the Board of Trustees of the Fund, and to
permit any of its officers or employees to serve without
compensation as trustees or officers of the Fund if elected to
such positions.
(c) Independent Contractor. The Adviser shall be deemed
to be an independent contractor under this Agreement and, unless
otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way or
otherwise be deemed as agent of the Fund.
(d) Non-Exclusive Agreement. The services of the Adviser to
the Fund under this Agreement are not to be deemed exclusive,
and the Adviser shall be free to render similar services or
other services to others so long as its services hereunder are
not impaired thereby.
1
<PAGE> 2
2. (a) Fee. For the services and facilities described in
Section 1, the Fund will accrue daily and pay to the Adviser at
the end of each calendar month an investment management fee
equal to a percentage of the average daily net assets of the
Fund as follows:
FEE PERCENT OF
AVERAGE DAILY AVERAGE DAILY
NET ASSETS NET ASSETS
First $500 million 0.50% of 1%
Next $500 million 0.475% of 1%
Next $500 million 0.425% of 1%
Over $1.5 billion 0.375% of 1%
(b) Expense Limitation. The Adviser's compensation for any
fiscal year of the Fund shall be reduced by the amount, if any,
by which the Fund's expense for such fiscal year exceeds the
most restrictive applicable expense jurisdiction in which the
Fund's shares are qualified for offer and sale, as such
limitations set forth in the most recent notice thereof
furnished by the Adviser to the Fund. For purposes of this
paragraph there shall be excluded from computation of the Fund's
expenses any amount borne directly or indirectly by the Fund
which is permitted to be excluded from the computation of such
limitation by such statute or regulatory authority. If for any
month expenses of the Fund properly included in such calculation
exceed 1/12 of the amount permitted annually by the most
restrictive applicable expense limitation, the payment to the
Adviser for that month shall be reduced, and, if necessary, the
Adviser shall make a refund payment to the Fund, so that the
total net expense for the month will not exceed 1/12 of such
amount. As of the end of the Fund's fiscal year, however, the
computations and payments shall be readjusted so that the
aggregate compensation payable to the Adviser for the year is
equal to the fee set forth in subsection (a) of this Section 2,
diminished to the extent necessary so that the expenses for the
year do not exceed those permitted by the applicable expense
limitation.
(c) Determination of Net Asset Value. The net asset value of
the Fund shall be calculated as of the close of the New York
Stock Exchange on each day the Exchange is open for trading or
such other time or times as the trustees may determine in
accordance with the provisions of applicable law and of the
Declaration of Trust and By-Laws of the Trust, and resolutions
of the Board of Trustees of the Fund as from time to time in
force. For the purpose of the foregoing computations, on each
such day when net asset value is not calculated, the net asset
value of a share of beneficial interest of the Fund shall be
deemed to be the net asset value of such share as of the close
of business of the last day on which such calculation was made.
2
<PAGE> 3
(d) Proration. For the month and year in which this Agreement
becomes effective or terminates, there shall be an appropriate
proration of the Adviser's fee on the basis of the number of
days that the Agreement is in effect during such month and year,
respectively.
3. Expenses. In addition to the fee of the Adviser, the Fund
shall assume and pay any expenses for services rendered by a
custodian for the safekeeping of the Fund's securities or other
property, for keeping its books of account, for any other
charges of the custodian and for calculating the net asset value
of the Fund as provided above. The Adviser shall not be
required to pay, and the Fund shall assume and pay, the charges
and expenses of its operations, including compensation of the
trustees (other than those who are interested persons of the
Adviser and other than those who are interested persons of the
distributor of the Fund but not of the Adviser, if the
distributor has agreed to pay such compensation), charges and
expenses of independent accountants, of legal counsel and of any
transfer or dividend disbursing agent, costs of acquiring and
disposing of portfolio securities, cost of listing shares of the
New York Stock Exchange or other exchange interest (if any) on
obligations incurred by the Fund, costs of share certificates,
membership dues in the Investment Company Institute or any
similar organization, costs of reports and notices to
shareholders, costs of registering shares of the Fund under the
federal securities laws, miscellaneous expenses and all taxes
and fees to federal, state or other governmental agencies on
account of the registration of securities issued by the Fund,
filing of corporate documents or otherwise. The Fund shall not
pay or incur any obligation for any management or administrative
expenses for which the Fund intends to seek reimbursement from
the Adviser without first obtaining the written approval of the
Adviser. The Adviser shall arrange, if desired by the Fund, for
officers or employees of the Adviser to serve, without
compensation from the Fund, as trustees, officers or agents of
the Fund if duly elected or appointed to such positions and
subject to their individual consent and to any limitations
imposed by law.
4. Interested Persons. Subject to applicable statutes and
regulations, it is understood that trustees, officers,
shareholders and agents of the Fund are or may be interested in
the Adviser as directors, officers, shareholders, agents or
otherwise and that the directors, officers, shareholders and
agents of the Adviser may be interest in the Fund as trustees,
officers, shareholders, agents or otherwise.
5. Liability. The Adviser shall not be liable for any error of
judgment or of law, or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance
of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
6. (a) Term. This Agreement shall become effective on the
date hereof and shall remain in full force until the second
anniversary of the date hereof unless sooner terminated as
hereinafter provided. This Agreement shall continue in force
3
<PAGE> 4
from year to year thereafter, but only as long as such
continuance is specifically approved as least annually in the
manner required by the Investment Company Act of 1940, as
amended.
(b) Termination. This Agreement shall automatically
terminate in the event of its assignment. This Agreement may be
terminated at any time without the payment of any penalty by the
Fund or by the Adviser on sixty (60) days written notice to the
other party. The Fund may effect termination by action of the
Board of Trustees or by vote of a majority of the outstanding
shares of stock of the Fund, accompanied by appropriate notice.
This Agreement may be terminated at any time without the payment
of any penalty and without advance notice by the Board of
Trustees or by vote of a majority of the outstanding shares of
the Fund in the event that it shall have been established by a
court of competent jurisdiction that the Adviser or any officer
or director of the Adviser has taken any action which results in
a breach of the covenants of the Adviser set forth herein.
(c) Payment upon Termination. Termination of this Agreement
shall not affect the right of the Adviser to receive payment on
any unpaid balance of the compensation described in Section 2
earned prior to such termination.
7. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder shall not thereby affected.
8. Notices. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid, to
the other party at such address as such other party may
designate for the receipt of such notice.
9. Disclaimer. The Adviser acknowledges and agrees that, as
provided by Section 8.1 of the Declaration of Trust of the Trust, (i) this
Agreement has been executed by officers of the Trust in their capacity as
officers, and not individually, and (ii) the shareholders, trustees, officers,
employees and other agents of the Trust and the Fund shall not personally be
bound by or liable hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder and that any such
resort may only be had upon the assets and property of the Fund.
10. Governing Law. All questions concerning the validity,
meaning and effect of this Agreement shall be determined in
accordance with the laws (without giving effect to the
conflict-of-law principles thereof) of the State of Delaware
applicable to contracts made and to be performed in that state.
4
<PAGE> 5
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed on the day and year first above written.
VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
/s/Dennis J. McDonnell
By:_____________________________________________
Dennis J. McDonnell, President
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
/s/Dennis J. McDonnell
By:_____________________________________________
Dennis J. McDonnell, President
5
<PAGE> 1
EXHIBIT (6)(a)
DISTRIBUTION AND SERVICE AGREEMENT
THIS DISTRIBUTION AND SERVICE AGREEMENT dated as of April 7, 1995 (the
"Agreement") by and between VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND, a
Delaware business trust (the "Trust"), and VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
1. Appointment of Distributor. The Fund appoints the Distributor as a
principal underwriter and exclusive distributor of each class of its shares of
beneficial interest (the "Shares") offered for sale from time to time pursuant
to the then current prospectus of the Fund, subject to different combinations
of front-end sales charges, distribution fees, service fees and contingent
deferred sales charges. Classes of shares, if any, subject to a front-end
sales charge and a distribution and/or service fee are referred to herein as
"FESC Classes" and the Shares of such classes are referred to herein as "FESC
Shares." Classes of shares, if any, subject to a contingent-deferred sales
charge and a distribution and/or a service fee are referred to herein as "CDSC
Classes" and Shares of such classes are referred to herein as "CDSC Shares."
Classes of shares, if any, subject to a front-end sales charge, a
contingent-deferred sales charge and a distribution and/or service fee are
referred to herein as "Combination Classes" and Shares of such class are
referred to herein as "Combination Shares." The Fund reserves the right to
refuse at any time or times to sell Shares hereunder for any reason deemed
adequate by the Board of Trustees of the Fund.
The Distributor will use its best efforts to sell, through its
organization and through other dealers and agents, the Shares which the
Distributor has the right to purchase under Section 2 hereof, but the
Distributor does not undertake to sell any specific number of Shares.
The Distributor agrees that it will not take any long or short positions
in the Shares, except for long positions in those Shares purchased by the
Distributor in accordance with any systematic sales plan described in the then
current Prospectus of the Fund and except as permitted by Section 2 hereof, and
that so far as it can control the situation, it will prevent any of its
trustees, officers or shareholders from taking any long or short positions in
the Shares, except for legitimate investment purposes.
2. Sale of Shares to Distributor. The Fund hereby grants to the
Distributor the exclusive right, except as herein otherwise provided, to
purchase Shares directly from the Fund upon the terms herein set forth. Such
exclusive right hereby granted shall not apply to Shares issued or transferred
or sold at net asset value: (a) in connection with the merger or consolidation
of the Fund with any other investment company or the acquisition by the Fund of
all or substantially all of the assets of or the outstanding Shares of any
investment company; (b) in connection with a pro rata distribution directly to
the holders of Fund Shares in the nature of a stock dividend or stock split or
in connection with any other recapitalization approved by the Board of
Trustees; (c) upon the exercise of purchase or subscription rights granted to
the holders of Shares on a pro rata basis; (d) in connection with the automatic
reinvestment of dividends and distributions from the Fund; or (e) in connection
with the issue and sale of Shares to trustees, officers and employees of the
Fund; to directors, officers and employees of the investment adviser of the
Fund or any principal underwriter (including the Distributor) of the Fund; to
retirees of the Distributor that purchased shares of any mutual fund
distributed by the Distributor prior to retirement; to directors, officers and
employees of Van Kampen American Capital, Inc. (formerly The Van Kampen Merritt
Companies, Inc.) (the parent of the Distributor), VK/AC Holding, Inc. (formerly
VKM Holdings, Inc.)(the parent of The Van Kampen Merritt Companies, Inc.) and
to the subsidiaries of VK/AC Holding, Inc.; and to any trust, pension,
profit-sharing or other benefit plan for any of the aforesaid persons as
permitted by Rule 22d-1 under the Investment Company Act of 1940 (the "1940
Act").
The Distributor shall have the right to buy from the Fund the Shares
needed, but not more than the Shares needed (except for reasonable allowances
for clerical errors, delays and errors of
1
<PAGE> 2
transmission and cancellation of orders) to fill unconditional orders for
Shares received by the Distributor from dealers, agents and investors during
each period when particular net asset values and public offering prices are in
effect as provided in Section 3 hereof; and the price which the Distributor
shall pay for the Shares so purchased shall be the respective net asset value
used in determining the public offering price on which such orders were based.
The Distributor shall notify the Fund at the end of each such period, or as
soon thereafter on that business day as the orders received in such period have
been compiled, of the number of Shares of each class that the Distributor
elects to purchase hereunder.
3. Public Offering Price. The public offering price per Share shall be
determined in accordance with the then current Prospectus of the Fund. In no
event shall the public offering price exceed the net asset value per Share,
plus, with respect to the FESC Shares, a front-end sales charge not in excess
of the applicable maximum sales charge permitted under the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., as in effect
from time to time. The net asset value per share for each class of Shares,
respectively, shall be determined in the manner provided in the Declaration of
Trust and By-Laws of the Trust as then amended, the Certificate of Designation
with respect to the Fund, as amended, and in accordance with the then current
Prospectus of the Fund consistent with the terms and conditions of the
exemptive order with respect to the Fund (Release No. IC-19600) issued by the
Securities and Exchange Commission on July 28, 1993, as it may be amended from
time to time or succeeded by other exemptive orders or rules promulgated by the
Securities and Exchange Commission under the 1940 Act. The Fund will cause
immediate notice to be given to the Distributor of each change in net asset
value as soon as it is determined. Discounts to dealers purchasing FESC Shares
from the Distributor for resale and to brokers and other eligible agents making
sales of FESC Shares to investors and compensation payable from the Distributor
to dealers, brokers and other eligible agents making sales of CDSC Shares and
Combination Shares shall be set forth in the selling agreements between the
Distributor and such dealers or agents, respectively, as from time to time
amended, and, if such discounts and compensation are described in the then
current Prospectus for the Fund, shall be as so set forth.
4. Compliance with NASD Rules, SEC Orders, etc. In selling Fund Shares,
the Distributor will in all respects duly comply with all state and federal
laws relating to the sale of such securities and with all applicable rules and
regulations of all regulatory bodies, including without limitation the Rules of
Fair Practice of the National Association of Securities Dealers, Inc., and all
applicable rules and regulations of the Securities and Exchange Commission
under the 1940 Act, and will indemnify and save the Fund harmless from any
damage or expense on account of any unlawful act by the Distributor or its
agents or employees. The Distributor is not, however, to be responsible for
the acts of other dealers or agents, except to the extent that they shall be
acting for the Distributor or under its direction or authority. None of the
Distributor, any dealer, any agent or any other person is authorized by the
Fund to give any information or to make any representations, other than those
contained in the Registration Statement or Prospectus heretofore or hereafter
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "1933 Act") (as any such Registration Statement and
Prospectus may have been or may be amended from time to time), covering the
Shares, and in any supplemental information to any such Prospectus approved by
the Fund in connection with the offer or sale of Shares. None of the
Distributor, any dealer, any broker or any other person is authorized to act as
agent for the Fund in connection with the offering or sale of Shares to the
public or otherwise. All such sales shall be made by the Distributor as
principal for its own account.
In selling Shares to investors, the Distributor will adopt and comply with
certain standards, as set forth in Exhibit III attached hereto as to when each
respective class of Shares may appropriately be sold to particular investors.
The Distributor will require every broker, dealer and other eligible agent
participating in the offering of the Shares to agree to adopt and comply with
such standards as a condition precedent to their participation in the offering.
2
<PAGE> 3
5. Expenses.
(a) The Fund will pay or cause to be paid:
(i) all expenses in connection with the registration
of Shares under the federal securities laws, and the Fund will
exercise its best efforts to obtain said registration and
qualification;
(ii) all expenses in connection with the printing of
any notices of shareholders' meetings, proxy and proxy
statements and enclosures therewith, as well as any other
notice or communication sent to shareholders in connection
with any meeting of the shareholders or otherwise, any annual,
semiannual or other reports or communications sent to the
shareholders, and the expenses of sending prospectuses
relating to the Shares to existing shareholders;
(iii) all expenses of any federal or state
original-issue tax or transfer tax payable upon the issuance,
transfer or delivery of Shares from the Fund to the
Distributor; and
(iv) the cost of preparing and issuing any Share
certificates which may be issued to represent Shares.
(b) The Distributor will pay the costs and expenses of qualifying and
maintaining qualification of the Shares for sale under the securities laws of
the various states. The Distributor will also permit its officers and
employees to serve without compensation as trustees and officers of the Fund if
duly elected to such positions.
(c) The Fund shall reimburse the Distributor for out-of-pocket costs and
expenses actually incurred by it in connection with distribution of each class
of Shares respectively in accordance with the terms of a plan (the "12b-1
Plan") adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such
12b-1 Plan may be in effect from time to time; provided, however, that no
payments shall be due or paid to the Distributor hereunder with respect to a
class of Shares unless and until this Agreement shall have been approved for
each such class by a majority of the Board of Trustees of the Fund and by a
majority of the "Disinterested Trustees" (as such term is defined in such 12b-1
Plan) by vote cast in person at a meeting called for the purpose of voting on
this Agreement. A copy of such 12b-1 Plan as in effect on the date of this
Agreement is attached as Exhibit I hereto. The Fund reserves the right to
terminate such 12b-1 Plan with respect to a class of Shares at any time, as
specified in the Plan. The persons authorized to direct the payment of funds
pursuant to this Agreement and the 12b-1 Plan shall provide to the Fund's Board
of Trustees, and the Trustees shall review, at least quarterly, a written
report with respect to each of the classes of Shares of the amounts so paid and
the purposes for which such expenditures were made for each such class of
Shares.
(d) The Fund shall compensate the Distributor for providing services to,
and the maintenance of, shareholder accounts in the Fund (including prepaying
service fees to eligible brokers, dealers and financial intermediaries and
expenses incurred in connection therewith) and the Distributor may pay as agent
for and on behalf of the Fund a service fee with respect to each class of
Shares to brokers, dealers and financial intermediaries for the provision of
shareholder services and the maintenance of shareholder accounts in the Fund in
the amount with respect to each class of Shares set forth from time to time in
the Fund's prospectus. The Fund shall compensate the Distributor for such
expenses in accordance with the terms of a service plan (the "Service Plan"),
as such Service Plan may be in effect from time to time; provided, however,
that no service fee payments shall be due or paid to the Distributor hereunder
with respect to a class of Shares unless and until this Agreement shall have
been approved for each such class by a majority of the Board of Trustees of the
Fund and by a majority of the Disinterested Trustees by vote cast in person at
a meeting called for the purpose of voting on this Agreement. A copy of such
Service Plan as in effect on the date of this Agreement is attached as Exhibit
II hereto. The Fund reserves the right to terminate such Service Plan with
respect to a class of Shares at any time, as specified in the Plan. The
persons authorized to direct the payment of funds
3
<PAGE> 4
pursuant to this Agreement and the Service Plan shall provide to the Fund's
Board of Trustees, and the Trustees shall review, at least quarterly, a
written report with respect to each of the classes of Shares of the amounts
paid as service fees for each such class of Shares.
6. Redemption of Shares. In connection with the Fund's redemption of its
Shares, the Fund hereby authorizes the Distributor to repurchase, upon the
terms and conditions hereinafter set forth, as the Fund's agent and for the
Fund's account, such Shares as may be offered for sale to the Fund from time to
time by holders of such Shares or their agents.
(a) Subject to and in conformity with all applicable federal and state
legislation, any applicable rules of the National Association of Securities
Dealers, Inc., and any applicable rules and regulations of the Securities and
Exchange Commission under the 1940 Act, the Distributor may accept offers of
holders of Shares to resell such Shares to the Fund on such terms and
conditions and at such prices as described and provided for in the then current
Prospectus of the Fund.
(b) The Distributor agrees to notify the Fund at such times as the Fund
may specify of the number of each class of Shares, respectively, repurchased
for the Fund's account and the time or times of such repurchases, and the Fund
shall notify the Distributor of the prices and, in the case of a class of CDSC
Shares or Combination Shares, of the deferred sales charge as described below,
if any, applicable to repurchases of Shares of such class.
(c) The Fund shall have the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by
telegraph or by written instrument from any of the Fund's officers. In the
event that the Distributor's authorization is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this Section 6 shall not be revived except by vote of
the Board of Trustees of the Fund.
(d) The Distributor agrees that all repurchases of Shares made by the
Distributor shall be made only as agent for the Fund's account and pursuant to
the terms and conditions herein set forth.
(e) The Fund agrees to authorize and direct its Custodian to pay, for the
Fund's account, the repurchase price (together with any applicable contingent
deferred sales charge) of any Shares so repurchased for the Fund against the
authorized transfer of book shares from an open account and against delivery of
any other documentation required by the Board of Trustees of the Fund or, in
the case of certificated Shares, against delivery of the certificates
representing such Shares in proper form for transfer to the Fund.
(f) The Distributor shall receive no commissions or other compensation in
respect of any repurchases of FESC Shares for the Fund under the foregoing
authorization and appointment as agent. With respect to any repurchase of CDSC
Shares or Combination Shares, the Distributor shall receive the deferred sales
charge, if any, applicable to the respective class of Shares that have been
held for less than a specified period of time with respect to such class as set
forth from time to time in the Fund's Prospectus. The Distributor shall
receive no other commission or other compensation in respect of any repurchases
of CDSC Shares or Combination Shares for the Fund under the foregoing
authorization and appointment as agent.
(g) If any FESC Shares sold to the Distributor under the terms of this
Agreement are redeemed or repurchased by the Fund or by the Distributor as
agent or are tendered for redemption within seven business days after the date
of the Distributor's confirmation of the original purchase by the Distributor,
the Distributor shall forfeit the amount above the net asset value received by
it in respect of such Shares, provided that the portion, if any, of such amount
re-allowed by the Distributor to dealers or agents shall be repayable to the
Fund only to the extent recovered by the Distributor from the dealer or agent
concerned. The Distributor shall include in agreements with such dealers and
agents a corresponding provision for the forfeiture by them of their
concession with respect to FESC Shares purchased by them or their principals
and redeemed or repurchased by the Fund or by the Distributor as agent within
seven business days after the date of the Distributor's confirmation of such
initial purchases.
4
<PAGE> 5
7. Indemnification. The Fund agrees to indemnify and hold harmless the
Distributor and each of its trustees and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage,
or expense and reasonable counsel fees incurred in connection therewith),
arising by reason of any person acquiring any Shares, based upon the ground
that the registration statement, Prospectus, shareholder reports or other
information filed or made public by the Fund (as from time to time amended)
included an untrue statement of a material fact or omitted to state a material
fact required to be stated or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading under the 1933 Act or any other statute or the common law. However,
the Fund does not agree to indemnify the Distributor or hold it harmless to the
extent that the statement or omission was made in reliance upon, and in
conformity with, information furnished to the Fund by or on behalf of the
Distributor. In no case (i) is the indemnity of the Fund in favor of the
Distributor or any person indemnified to be deemed to protect the Distributor
or any person against any liability to the Fund or its securityholders to which
the Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Fund to be liable under its indemnity agreement
contained in this Section with respect to any claim made against the
Distributor or any person indemnified unless the Distributor or any such person
shall have notified the Fund in writing of the claim within a reasonable time
after the summons or other first written notification giving information of the
nature of the claim shall have been served upon the Distributor or any such
person (or after the Distributor or the person shall have received notice of
service on any designated agent). However, failure to notify the Fund of any
claim shall not relieve the Fund from any liability which it may have to the
Distributor or any person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Fund shall
be entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense, of any suit brought to enforce any claims, but
if the Fund elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Distributor or person or persons,
defendant or defendants in the suit. In the event the Fund elects to assume
the defense of any suit and retain counsel, the Distributor, officers or
trustees or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them.
If the Fund does not elect to assume the defense of any suit, it will reimburse
the Distributor, officers or trustees or controlling person or persons,
defendant or defendants in the suit for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees to notify the Distributor promptly
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of any of the
Shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its trustees and officers and each person, if
any, who controls the Fund within the meaning of Section 15 of the 1933 Act
against any loss, liability, damage, claim or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, damage, claim
or expense and reasonable counsel fees incurred in connection therewith)
arising by reason of any person acquiring any Shares, based upon the 1933 Act
or any other statute or common law, alleging any wrongful act of the
Distributor or any of its employees or alleging that the registration
statement, Prospectus, shareholder reports or other information filed or made
public by the Fund (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, insofar as the
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or on behalf of the Distributor. In no
case (i) is the indemnity of the Distributor in favor of the Fund or any person
indemnified to be deemed to protect the Fund or any such person against any
liability to which the Fund or such person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligation and duties
under this Amended Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against the Fund or any person indemnified unless the Fund or person, as the
case may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first
5
<PAGE> 6
written notification giving information of the nature of the claim shall have
been served upon the Fund or person (or after the Fund or such person shall
have received notice of service on any designated agent). However, failure to
notify the Distributor of any claim shall not relieve the Distributor from any
liability which it may have to the Fund or any person against whom the action
is brought otherwise than on account of its indemnity agreement contained in
this paragraph. In the case of any notice to the Distributor, it shall be
entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense, of any suit brought to enforce the claim, but if
the Distributor elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Fund, to its officers and trustees
and to any controlling person or persons, defendant or defendants in the suit.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the Fund or controlling persons, defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any suit, it will reimburse
the Fund, officers and trustees or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Distributor agrees to notify the Fund promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the Shares.
8. Continuation, Amendment or Termination of This Agreement. This
Agreement shall become effective on the Effective Date and thereafter shall
continue in full force and effect year to year with respect to each class of
Shares so long as such continuance is approved at least annually (i) by the
Board of Trustees of the Fund or by a vote of a majority of the outstanding
voting securities of the respective class of Shares of the Fund, and (ii) by
vote of a majority of the Trustees who are not parties to this Agreement or
interested persons in any such party (the "Independent Trustee") cast in person
at a meeting called for the purpose of voting on such approval, provided,
however, that (a) this Agreement may at any time be terminated with respect to
either class of Shares of the Fund without the payment of any penalty either by
vote of a majority of the Disinterested Trustees, or by vote of a majority of
the outstanding voting securities of the respective class of Shares of the
Fund, on written notice to the Distributor; (b) this Agreement shall
immediately terminate in the event of its assignment; and (c) this Agreement
may be terminated by the Distributor on ninety (90) days' written notice to the
Fund. Upon termination of this Agreement with respect to either class of
Shares of the Fund, the obligations of the parties hereunder shall cease and
terminate with respect to such class of Shares as of the date of such
termination, except for any obligation to respond for a breach of this
Agreement committed prior to such termination.
This Agreement may be amended with respect to either class of Shares at
any time by mutual consent of the parties, provided that such consent on the
part of the Fund shall have been approved (i) by the Board of Trustees of the
Fund, or by a vote of the majority of the outstanding voting securities of the
respective class of Shares of the Fund, and (ii) by vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such amendment.
For the purpose of this section, the terms "vote of a majority of the
outstanding voting securities", "interested persons" and "assignment" shall
have the meanings defined in the 1940 Act, as amended.
9. Limited Liability of Shareholder. Notwithstanding anything to the
contrary contained in this Agreement, you acknowledge and agree that, as
provided by Section 8.1 of the Agreement and Declaration of Trust of the Trust,
this Agreement is executed by the Trustees of the Trust and/or Officers of the
Fund by them not individually but as such Trustees and/or Officers, and the
obligations of the Fund hereunder are not binding upon any of the Trustees,
Officers or Shareholders individually, but bind only the trust estate.
10. Notice. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any office
of such party or at such other address as such party shall have designated in
writing.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE GOVERNED BY,
6
<PAGE> 7
THE LAW OF THE STATE OF ILLINOIS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF
LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
VAN KAMPEN AMERICAN CAPITAL TAX FREE
MONEY FUND
By: /s/ Ronald A. Nyberg
-----------------------------------
Name: Ronald A. Nyberg
Title: Vice President and Secretary
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
By: /s/ Ronald A. Nyberg
-----------------------------------
Name: Ronald A. Nyberg
Title: Executive Vice President
7
<PAGE> 1
EXHIBIT (8)(b)
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 10th day of July, 1995 by and between each of
THE VAN KAMPEN MERRITT OPEN END FUNDS set forth on Schedule "A" hereto, which
are organized under the laws of the Commonwealth of Massachusetts, having their
principal office and place of business at Oakbrook Terrace, Illinois
(collectively, the "Funds"), and ACCESS INVESTOR SERVICES, INC., a Delaware
corporation, having its principal office at Houston, Texas, and its principal
place of business at Kansas City, Missouri ("ACCESS").
R E C I T A L:
WHEREAS, each of the Funds desires to appoint ACCESS as its transfer
agent, dividend disbursing agent and shareholder service agent, and ACCESS
desires to accept such appointments;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1. TERMS OF APPOINTMENT; DUTIES OF ACCESS.
1.01 Subject to the terms and conditions set forth in this
Agreement, each of the Funds hereby employs and appoints ACCESS as its transfer
agent, dividend disbursing agent and shareholder service agent.
1.02 ACCESS hereby accepts such employment and appointments and
agrees that on and after the effective date of this Agreement it will act as
the transfer agent, dividend disbursing agent and shareholder service agent for
each of the Funds on the terms and conditions set forth herein.
1.03 ACCESS agrees that its duties and obligations hereunder
will be performed in a competent, efficient and workmanlike manner with due
diligence in accordance with reasonable industry practice, and that the
necessary facilities, equipment and personnel for such performance will be
provided.
1.04 In order to assure compliance with section 1.03 and to
implement a cooperative effort to improve the quality of transfer agency and
shareholder services received by each of the Funds and its shareholders, ACCESS
agrees to provide and maintain quantitative performance objectives, including
maximum target turn-around times and
1
<PAGE> 2
maximum target error rates, for the various services provided hereunder.
ACCESS also agrees to provide a reporting system designed to provide the Board
of Trustees of each of the Funds (the "Board") on a quarterly basis with
quantitative data comparing actual performance for the period with the
performance objectives. The foregoing procedures are designed to provide a
basis for continuing monitoring by the Board of the quality of services
rendered hereunder.
ARTICLE 2. FEES AND EXPENSES.
2.01 For the services to be performed by ACCESS pursuant to this
Agreement, each of the Funds agrees to pay ACCESS the fees provided in the fee
schedules agreed upon from time to time by each of the Funds and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above,
each of the Funds agrees to reimburse ACCESS promptly for such Fund's
reasonable out-of-pocket expenses or advances paid on its behalf by ACCESS in
connection with its performance under this Agreement for postage, freight,
envelopes, checks, drafts, continuous forms, reports and statements, telephone,
telegraph, costs of outside mailing firms, necessary outside record storage
costs, media for storage of records (e.g., microfilm, microfiche and computer
tapes) and printing costs incurred due to special requirements of such Fund.
In addition, any other special out-of-pocket expenses paid by ACCESS at the
specific request of any of the Funds will be promptly reimbursed by the
requesting Fund. Postage for mailings of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be advanced to ACCESS by the
concerned Fund three business days prior to the mailing date of such materials.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ACCESS.
ACCESS represents and warrants to each of the Funds that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
3.02 It is duly qualified to carry on its business in the states
of Texas and Missouri.
3.03 It is empowered under applicable laws and by its charter
and bylaws to enter into and perform this Agreement.
2
<PAGE> 3
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have during the term of this
Agreement access to the necessary facilities, equipment and personnel to
perform its duties and obligations hereunder.
3.06 It will maintain a system regarding "as of" transactions as
follows:
(a) Each "as of" transaction effected at a price other
than that in effect on the day of processing for which an estimate has
not been given to any of the affected Funds and which is necessitated
by ACCESS' error, or delay for which ACCESS is responsible or which
could have been avoided through the exercise of reasonable care, will
be identified, and the net effect of such transactions determined, on
a daily basis for each such Fund.
(b) The cumulative net effect of the transactions
included in paragraph (a) above will be determined each day throughout
each month. If, on any day during the month, the cumulative net
effect upon any Fund is negative and exceeds an amount equivalent to
1/2 of 1 cent per share of such Fund, ACCESS shall promptly make a
payment to such Fund (in cash or through use of a credit as described
in paragraph (c) below) in such amount as necessary to reduce the
negative cumulative net effect to less than 1/2 of 1 cent per share of
such Fund. If on the last business day of the month the cumulative
net effect (adjusted by the amount of any payments pursuant to the
preceding sentence) upon any Fund is negative, such Fund shall be
entitled to a reduction in the monthly transfer agency fee next
payable by an equivalent amount, except as provided in paragraph (c)
below. If on the last business day of the month the cumulative net
effect (similarly adjusted) upon any Fund is positive, ACCESS shall be
entitled to recover certain past payments and reductions in fees, and
to a credit against all future payments and fee reductions made under
this paragraph to such Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative
net effect upon any Fund shall be deemed to be a credit to ACCESS
which shall first be applied to recover any payments and fee
reductions made by ACCESS to such Fund under paragraph (b) above
during the calendar year by increasing the amount
3
<PAGE> 4
of the monthly transfer agency fee next payable in an amount equal to
prior payments and fee reductions made during such year, but not
exceeding the sum of that month's credit and credits arising in prior
months during such year to the extent such prior credits have not
previously been utilized as contemplated by this paragraph (c). Any
portion of a credit to ACCESS not so used shall remain as a credit to
be used as payment against the amount of any future negative
cumulative net effects that would otherwise require a payment or fee
reduction to such Fund pursuant to paragraph (b) above.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE FUNDS.
Each of the Funds hereby represents and warrants on behalf
of itself only and not any other Funds that are a party to this Agreement that:
4.01 It is duly organized and existing and in good standing under
the laws of the Commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and regulations and by
its Declaration of Trust and by-laws to enter into and perform this Agreement.
4.03 All requisite proceedings have been taken by its Board to
authorize it to enter into and perform this Agreement.
4.04 It is an open-end, diversified, management investment
company registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933,
as amended, is currently effective and will remain effective, and appropriate
state securities laws filings have been made and will continue to be made, with
respect to all of its shares being offered for sale.
ARTICLE 5. INDEMNIFICATION.
5.01 ACCESS shall not be responsible for and each of the Funds
shall indemnify and hold ACCESS harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liabilities arising out of or attributable to:
4
<PAGE> 5
(a) All actions of ACCESS required to be taken by
ACCESS for the benefit of such Fund pursuant to this Agreement,
provided ACCESS has acted in good faith with due diligence and without
negligence or willful misconduct.
(b) The reasonable reliance by ACCESS on, or
reasonable use by ACCESS of, information, records and documents which
have been prepared or maintained by or on behalf of such Fund or have
been furnished to ACCESS by or on behalf of such Fund.
(c) The reasonable reliance by ACCESS on, or the
carrying out by ACCESS of, any instructions or requests of such Fund.
(d) The offer or sale of such Fund's shares in
violation of any requirement under the federal securities laws or
regulations or the securities laws or regulations of any state or in
violation of any stop order or other determination or ruling by any
federal agency or any state with respect to the offer or sale of such
shares in such state unless such violation results from any failure by
ACCESS to comply with written instructions of such Fund that no offers
or sales of such Fund's shares be made in general or to the residents
of a particular state.
(e) Such Fund's refusal or failure to comply with the
terms of this Agreement, or such Fund's lack of good faith, negligence
or willful misconduct or the breach of any representation or warranty
of such Fund hereunder.
5.02 ACCESS shall indemnify and hold each of the Funds harmless
from and against any and all losses, damages, costs, charges, reasonable
counsel fees, payments, expenses and liability arising out of or attributable
to ACCESS' refusal or failure to comply with the terms of this Agreement, or
ACCESS' lack of good faith, negligence or willful misconduct, or the breach of
any representation or warranty of ACCESS hereunder.
5.03 At any time ACCESS may apply to any authorized officer of
any of the Funds for instructions, and may consult with any of the Funds' legal
counsel, at the expense of such concerned Fund, with respect to any matter
arising in connection with the services to be performed by ACCESS under this
Agreement, and ACCESS shall not be liable and shall be indemnified by such
concerned Fund for any action taken or omitted by it in good faith in
reasonable reliance upon such instructions or upon the opinion of such counsel.
ACCESS shall be protected and
5
<PAGE> 6
indemnified in acting upon any paper or document reasonably believed by ACCESS
to be genuine and to have been signed by the proper person or persons and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the concerned Fund. ACCESS shall also
be protected and indemnified in recognizing stock certificates which ACCESS
reasonably believes to bear the proper manual or facsimile signatures of the
officers of the concerned Fund, and the proper countersignature of any former
transfer agent or registrar, or of a co-transfer agent or co-registrar.
5.04 In the event any party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage, or other causes reasonably beyond
its control, such party shall not be liable for damages to the other for any
damages resulting from such failure to perform or otherwise from such causes.
5.05 In no event and under no circumstances shall any party to
this Agreement be liable to another party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in
this Article 5 shall apply, upon the assertion of a claim for which one party
may be required to indemnify another, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
ARTICLE 6. COVENANTS OF EACH OF THE FUNDS AND ACCESS.
6.01 Each of the Funds shall promptly furnish to ACCESS the
following:
(a) Certified copies of the resolution of its Board
authorizing the appointment of ACCESS and the execution and delivery
of this Agreement.
(b) Certified copies of its Declaration of Trust and
by-laws and all amendments thereto.
6
<PAGE> 7
6.02 ACCESS hereby agrees to maintain facilities and procedures
reasonably acceptable to each of the Funds for safekeeping of share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 ACCESS shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable; provided,
however, that all accounts, books and other records of each of the Funds
(hereinafter referred to as "Fund Records") prepared or maintained by ACCESS
hereunder shall be maintained and kept current in compliance with Section 31 of
the Investment Company Act of 1940 and the Rules thereunder (such Section and
Rules being hereinafter referred to as the "1940 Act Requirements"). To the
extent required by the 1940 Act Requirements, ACCESS agrees that all Fund
Records prepared or maintained by ACCESS hereunder are the property of the
concerned Fund and shall be preserved and made available in accordance with the
1940 Act Requirements, and shall be surrendered promptly to the concerned Fund
on its request. ACCESS agrees at such reasonable times as may be requested by
the Board and at least quarterly to provide (i) written confirmation to the
Board that all Fund Records are maintained and kept current in accordance with
the 1940 Act Requirements, and (ii) such other reports regarding its
performance hereunder as may be reasonably requested by the Board.
6.04 ACCESS and each of the Funds agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of
any of the Fund Records, ACCESS will endeavor to notify each of the concerned
Funds and to secure instructions from an authorized officer of each
7
<PAGE> 8
of the concerned Funds as to such inspection. ACCESS reserves the right,
however, to exhibit such Fund Records to any person whenever it is advised by
its counsel that it may be held liable for the failure to exhibit such Fund
Records to such person.
ARTICLE 7. TERM AND TERMINATION OF AGREEMENT.
7.01 This Agreement shall remain in effect from the date hereof
through December 31, 1996; provided, however, that this Agreement may be
terminated by any party with respect to that party for good and reasonable
cause at any time by giving written notice to the other party at least 120 days
prior to the date on which such termination is to be effective. Any unpaid
fees or reimbursable expenses payable to ACCESS shall be due on any such
termination date. ACCESS agrees to use its best efforts to cooperate with each
of the Funds and the successor transfer agent or agents in accomplishing an
orderly transition.
7.02 Subject to the prior approval of the Board, this Agreement
shall be renewed and extended for periods of not more than one year each,
unless and until this Agreement is terminated in accordance with section 7.01
above.
ARTICLE 8. MISCELLANEOUS.
8.01 Except as provided in section 8.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by any party
without the written consent of ACCESS or the concerned Fund, as the case may
be; provided, however, that no consent shall be required for any merger of any
of the Funds with, or any sale of all or substantially all the assets of any of
the Funds to, another investment company.
8.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
8.03 ACCESS may, without further consent on the part of any of
the Funds, subcontract with DST, Inc., a Missouri corporation, or any other
qualified servicer, for the performance of data processing activities;
provided, however, that ACCESS shall be as fully responsible to each of the
Funds for the acts and omissions of DST, Inc., or other qualified servicer as
it is for its own acts and omissions.
8
<PAGE> 9
8.04 ACCESS may, without further consent on the part of any of
the Funds, provide services to its affiliated companies. Such services may be
provided at cost.
8.05 This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes any
prior agreement with respect thereto, whether oral or written, and this
Agreement may not be modified except by written instrument executed by the
affected parties.
8.06 The Declarations of Trust establishing each Fund as a
Massachusetts Business Trust (each a "Trust"), copies of which, together with
all amendments thereto (the "Declarations") are on file in the office of the
Secretary of the Commonwealth of Massachusetts, provide that the names of each
Fund refer to the Trustees under each of the Declarations collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of any such Trust shall be held to any personal
liability, nor shall resort be had to their respective private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of any such Trust, but that each respective Trust's Estate only shall
be liable.
8.07 For each of those Funds that have one or more portfolios as
set forth in Schedule "A" hereto, all obligations of those Funds under this
Agreement shall apply only on a portfolio-by-portfolio basis and the assets of
one portfolio shall not be liable for the obligations of any other.
8.08 In the event of a change in the business or regulatory
environment affecting all or any portion of this Agreement, the parties hereto
agree to renegotiate such affected portions in good faith.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf and through their duly
authorized officers, as of the date first above written.
EACH OF THE VAN KAMPEN MERRITT OPEN END
FUNDS LISTED ON SCHEDULE "A" HERETO
BY: /s/ SCOTT E. MARTIN
------------------------------------
Scott E. Martin, Assistant Secretary
ATTEST:
/s/ DAVID L. KITE
- ------------------------------------
ACCESS INVESTOR SERVICES, INC.
BY: /s/ PAUL R. WOLKENBERG
------------------------------------
Paul R. Wolkenberg, President and
Chief Executive Officer
ATTEST:
/s/ DAVID L. KITE
- ------------------------------------
10
<PAGE> 11
SCHEDULE "A"
VAN KAMPEN AMERICAN CAPITAL OPEN-END FUNDS
<TABLE>
<CAPTION>
State of Type
Fund Name Organization [Business Trust "T"]
===========================================================================================================
<S> <C> <C>
Van Kampen American Capital U. S. Government Fund(1) DE T
Van Kampen American Capital Insured Tax Free Income Fund(2) DE T
Van Kampen American Capital Tax Free High Income Fund(2) DE T
Van Kampen American Capital California Insured Tax Free Fund(2) DE T
Van Kampen American Capital Municipal Income Fund(2) DE T
Van Kampen American Capital Intermediate Term Municipal Income Fund(2) DE T
Van Kampen American Capital Florida Insured Tax Free Income Fund(2) DE T
Van Kampen American Capital New Jersey Tax Free Income Fund(2) DE T
Van Kampen American Capital New York Tax Free Income Fund(2) DE T
Van Kampen American Capital High Yield Fund(3) DE T
Van Kampen American Capital Short-Term Global Income Fund(3) DE T
Van Kampen American Capital Strategic Income Fund(3) DE T
Van Kampen American Capital Utility Fund(4) DE T
Van Kampen American Capital Balanced Fund(4) DE T
Van Kampen American Capital Pennsylvania Tax Free Income Fund PA T
Van Kampen American Capital Tax Free Money Fund DE T
Van Kampen American Capital Foreign Securities Fund DE T
Van Kampen American Capital Growth Fund (4) DE T
Van Kampen American Capital Value Fund (4) DE T
Van Kampen American Capital Great American Companies Fund (4) DE T
Van Kampen American Capital Prospector Fund (4) DE T
Van Kampen American Capital Aggressive Growth Fund (4) DE T
</TABLE>
____________________________________________________
(1) A sub-trust of Van Kampen American Capital U. S. Government
Trust
(2) A sub-trust of Van Kampen American Capital Tax Free Fund
(3) A sub-trust of Van Kampen American Capital Trust
(4) A sub-trust of Van Kampen American Capital Equity Trust
11
<PAGE> 1
EXHIBIT (9)(a)
AMENDED AND RESTATED
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT, dated February 26, 1996, by and between the parties set
forth in Schedule A hereto (designated collectively hereafter as the "Funds")
and VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP., a Delaware
corporation ("Advisory Corp.").
W I T N E S S E T H:
WHEREAS, each of the Funds is registered as a management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, Advisory Corp. has the capability of providing certain
accounting services to the Funds; and
WHEREAS, each desires to utilized Advisory Corp. in the provision of
such accounting services; and
WHEREAS, Advisory Corp. intends to maintain its staff in order to
accommodate the provision of all such services.
NOW THEREFORE, in consideration of the premises and the mutual
covenants spelled out herein, it is agreed between the parties hereto as
follows:
<PAGE> 2
1. Appointment of Advisory Corp.. As agent, Advisory Corp. shall provide
each of the Funds the accounting services ("Accounting Services") as set forth
in Paragraph 2 of this Agreement. Advisory Corp. accepts such appointment and
agrees to furnish the Accounting Services in return for the compensation
provided in Paragraph 3 of this Agreement.
2. Accounting Services to be Provided. Advisory Corp. will provide to each
respective Fund accounting related services in connection with the maintenance
of the financial records of such Fund, including without limitation: (i)
maintenance of the general ledger and other financial books and records; (ii)
processing of portfolio transactions; (iii) coordination of the valuation of
portfolio securities; (iv) calculation of the Fund's net asset value; (v)
coordination of financial and regulatory reporting; (vi) preparation of
financial reports for each Fund's Board of Trustees; (vii) coordination of tax
and financial compliance issues; (viii) the establishment and maintenance of
accounting policies; (ix) recommendations with respect to dividend policies;
(x) preparation of each Fund's financial reports and other accounting and tax
related notice information to shareholders; and (xi) the assimilation and
interpretation of accounting data for meaningful management review. Advisory
Corp. shall provide accurate maintenance of each Fund's financial books and
records as required by the applicable securities statutes and regulations, and
shall hire persons (collectively the "Accounting Service Group") as needed to
provide such Accounting Services.
3. Expenses and Reimbursements. Advisory Corp. shall be reimbursed by the
Funds for all costs and services incurred in connection with the provision of
the aforementioned Accounting Services ("Accounting Service Expenses"),
including but not limited to all salary and related benefits paid to the
personnel of the Accounting Service Group, overhead and expenses related to
office space and related equipment and out-of-pocket expenses.
The Accounting Services Expenses will be paid by Advisory Corp. and
reimbursed by the Funds. Advisory Corp. will tender to each Fund a monthly
invoice as of the last business day of each month which shall certify the total
support service expenses expended. Except as provided herein, Advisory Corp.
will receive no other compensation in connection with Accounting Services
rendered in accordance with this Agreement.
4. Payment for Accounting Service Expenses Among the Funds. As to one
quarter (25%) of the Accounting Service Expenses incurred
<PAGE> 3
under the Agreement, the expense shall be allocated between all Funds based on
the number of classes of shares of beneficial interest that each respective
Fund has issued. As to the remaining three quarters (75%) of the Accounting
Service Expenses incurred under the Agreement, the expense shall be allocated
between all Funds based on their relative net assets. For purposes of
determining the percentage of expenses to be allocated to any Fund, the
liquidation preference of any preferred shares issued by any such Fund shall
not be considered a liability of such Fund for the purposes of calculating
relative net assets of such Fund.
5. Maintenance of Records. All records maintained by Advisory Corp. in
connection with the performance of its duties under this Agreement will remain
the property of each respective Fund and will be preserved by Advisory Corp.
for the periods prescribed in Section 31 of the 1940 Act and the rules
thereunder or such other applicable rules that may be adopted from time to time
under the act. In the event of termination of the Agreement, such records will
be promptly delivered to the respective Funds. Such records may be inspected
by the respective Funds at reasonable times.
6. Liability of Advisory Corp. Advisory Corp. shall not be liable to any
Fund for any action taken or thing done by it or its agents or contractors on
behalf of the fund in carrying out the terms and provisions of the Agreement if
done in good faith and without gross negligence or misconduct on the part of
Advisory Corp., its agents or contractors.
7. Indemnification By Funds. Each Fund will indemnify and hold Advisory
Corp. harmless from all lost, cost, damage and expense, including reasonable
expenses for legal counsel, incurred by Advisory Corp. resulting from: (a) any
claim, demand, action or suit in connection with Advisory Corp.'s acceptance of
this Agreement; (b) any action or omission by Advisory Corp. in the performance
of its duties hereunder; (c) Advisory Corp.'s acting upon instructions believed
by it to have been executed by a duly authorized officer of the Fund; or (d)
Advisory Corp.'s acting upon information provided by the Fund in form and under
policies agreed to by Advisory Corp. and the Fund. Advisory Corp. shall not be
entitled to such indemnification in respect of actions or omissions
constituting gross negligence or willful misconduct of Advisory Corp. or its
agents or contractors. Prior to confessing any claim against it which may be
subject to this indemnification, Advisory Corp. shall give the Fund reasonable
opportunity to defend against said claim in its own name or in the name of
Advisory Corp.
<PAGE> 4
8. Indemnification By Advisory Corp. Advisory Corp. will indemnify and
hold harmless each Fund from all loss, cost, damage and expense, including
reasonable expenses for legal counsel, incurred by the Fund resulting from any
claim, demand, action or suit arising out of Advisory Corp.'s failure to comply
with the terms of this Agreement or which arises out of the gross negligence or
willful misconduct of Advisory Corp. or its agents or contractors; provided
that such negligence or misconduct is not attributable to the Funds, their
agents or contractors. Prior to confessing any claim against it which may be
subject to this indemnification, the Fund shall give Advisory Corp. reasonable
opportunity to defend against said claim in its own name or in the name of such
Fund.
9. Further Assurances. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
10. Dual Interests. It is understood that some person or persons may be
directors, trustees, officers or shareholders of both the Funds and Advisory
Corp. (including Advisory Corp.'s affiliates), and that the existence of any
such dual interest shall not affect the validity hereof or of any transactions
hereunder except as otherwise provided by a specific provision of applicable
law.
11. Execution, Amendment and Termination. The term of this Agreement shall
begin as of the date first above written, and unless sooner terminated as
herein provided, this Agreement shall remain in effect through May, 1997, and
thereafter from year to year, if such continuation is specifically approved at
least annually by the Board of Trustees of each Fund, including a majority of
the independent Trustees of each Fund. This Agreement may be modified or
amended from time to time by mutual agreement between the parties hereto and
may be terminated after May, 1997, by at least sixty (60) days' written notice
given by one party to the others. Upon termination hereof, each Fund shall pay
to Advisory Corp. such compensation as may be due as of the date of such
termination and shall likewise reimburse Advisory Corp. for its costs, expenses
and disbursements payable under this Agreement to such date. This Agreement
may be amended in the future to include as additional parties to the Agreement
other investment companies for with Advisory Corp., any subsidiary or affiliate
serves as investment advisor or distributor if such amendment is approved by
the President of
<PAGE> 5
each Fund.
12. Assignment. Any interest of Advisory Corp. under this Agreement shall
not be assigned or transferred, either voluntarily or involuntarily, by
operation of law or otherwise, without the prior written consent of the Funds.
This Agreement shall automatically and immediately terminate in the event of
its assignment without the prior written consent of the Funds.
13. Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or sent by registered or certified mail, postage prepaid, to the
other party at such address as such other party may designate for the receipt
of such notices. Until further notice to the other parties, it is agreed that
for this purpose the address of each Fund is One Parkview Plaza, Oakbrook
Terrace, Illinois 60181, Attention: President and that of Advisory Corp. for
this purpose is One Parkview Plaza, Oakbrook Terrace, Illinois 60181,
Attention: President.
14. Personal Liability. As provided for in the Agreement and Declaration of
Trust of the various Funds, under which the Funds are organized as
unincorporated trusts, the shareholders, trustees, officers, employees and
other agents of the Fund shall not personally be found by or liable for the
matters set forth hereto, nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder.
15. Interpretative Provisions. In connection with the operation of this
Agreement, Advisory Corp. and the Funds may agree from time to time on such
provisions interpretative of or in addition to the provisions of this Agreement
as may in their joint opinion be consistent with the general tenor of this
Agreement.
16. State Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Illinois.
17. Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this amended and restated
Agreement to be executed as of the day and year first above written.
ALL OF THE PARTIES SET FORTH IN SCHEDULE A
By: /s/ Dennis J. McDonnell
---------------------------------------
Dennis J. McDonnell, President
VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
By: /s/ Dennis J. McDonnell
---------------------------------------
Dennis J. McDonnell, President
SCHEDULE A
I. Funds Advised by Van Kampen American Capital Investment Advisory Corp.
("Investment Advisory Corp.") (Collectively, the
<PAGE> 7
"Former Van Kampen Funds"):
CLOSED END FUNDS
Van Kampen American Capital Municipal Income Trust
Van Kampen American Capital California Municipal Trust
Van Kampen American Capital Intermediate Term High Income Trust
Van Kampen American Capital Limited Term High Income Trust
Van Kampen American Capital Investment Grade Municipal Trust
Van Kampen American Capital Municipal Trust
Van Kampen American Capital California Quality Municipal Trust
Van Kampen American Capital Florida Quality Municipal Trust
Van Kampen American Capital New York Quality Municipal Trust
Van Kampen American Capital Ohio Quality Municipal Trust
Van Kampen American Capital Pennsylvania Quality Municipal Trust
Van Kampen American Capital Trust For Insured Municipals
Van Kampen American Capital Trust For Investment Grade
Municipals
Van Kampen American Capital Trust For Investment Grade
California Municipals
Van Kampen American Capital Trust For Investment Grade Florida
Municipals
Van Kampen American Capital Trust For Investment Grade New
Jersey Municipals
Van Kampen American Capital Trust For Investment Grade New York
Municipals
Van Kampen American Capital Trust For Investment Grade
Pennsylvania Municipals
Van Kampen American Capital Municipal Opportunity Trust
Van Kampen American Capital Advantage Municipal Income Trust
<PAGE> 8
Van Kampen American Capital Advantage Pennsylvania Municipal
Income Trust
Van Kampen American Capital Strategic Sector Municipal Trust
Van Kampen American Capital Value Municipal Income Trust
Van Kampen American Capital California Value Municipal Income
Trust
Van Kampen American Capital Massachusetts Value Municipal Income
Trust
Van Kampen American Capital New Jersey Value Municipal Income
Trust
Van Kampen American Capital New York Value Municipal Income Trust
Van Kampen American Capital Ohio Value Municipal Income Trust
Van Kampen American Capital Pennsylvania Value Municipal Income
Trust
Van Kampen American Capital Municipal Opportunity Trust II
Van Kampen American Capital Florida Municipal Opportunity Trust
Van Kampen American Capital Advantage Municipal Income Trust II
Van Kampen American Capital Select Sector Municipal Trust
INSTITUTIONAL FUNDS
II. Funds Advised by Van Kampen American Capital Management, Inc.
("Management, Inc.") (Collectively, the "Former Van Kampen Funds"):
The Explorer Institutional Trust
on behalf of its series
Explorer Institutional Active Core Fund
Explorer Institutional Limited Duration Fund
<PAGE> 9
AMENDMENT NUMBER ONE
TO THE
AMENDED AND RESTATED FUND ACCOUNTING AGREEMENT
THIS AMENDMENT NUMBER ONE to the Amended and Restated Fund Accounting
Agreement dated February 26, 1996 (the "Agreement") by and between the parties
set forth in Schedule A, attached hereto and incorporated by reference and VAN
KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP., a Delaware corporation
("Advisory Corp.").
W I T N E S S E T H
WHEREAS, the following parties, each being an open-end management
investment company as that term is defined in the Investment Company Act of
1940, as amended, wish to become parties to the Agreement:
Funds Advised by Van Kampen American Capital Asset Management, Inc. ("Asset
Management, Inc.") (Collectively, the "Former American Capital Funds"):
Van Kampen American Capital Comstock Fund ("Comstock Fund")
Van Kampen American Capital Corporate Bond Fund ("Corporate Bond Fund")
Van Kampen American Capital Emerging Growth Fund ("Emerging Growth Fund")
Van Kampen American Capital Enterprise Fund ("Enterprise Fund")
Van Kampen American Capital Equity Income Fund ("Equity Income Fund")
Van Kampen American Capital Limited Maturity Government Fund
("Limited Maturity Government Fund")
Van Kampen American Capital Global Managed Assets Fund ("Global Managed
Assets Funds")
<PAGE> 10
Van Kampen American Capital Government Securities Fund ("Government
Securities Fund")
Van Kampen American Capital Government Target Fund ("Government Target Fund")
Van Kampen American Capital Growth and Income Fund ("Growth and Income Fund")
Van Kampen American Capital Harbor Fund ("Harbor Fund")
Van Kampen American Capital High Income Corporate Bond Fund
("High Income Corporate Bond Fund")
Van Kampen American Capital Life Investment Trust
("Life Investment Trust" or "LIT")
on behalf of its Series
Enterprise Fund ("LIT Enterprise Fund")
Domestic Income Fund ("LIT Domestic Income Fund")
Emerging Growth Fund ("LIT Emerging Growth Fund")
Government Fund ("LIT Government Fund")
Asset Allocation Fund ("LIT Asset Allocation Fund")
Money Market Fund ("LIT Money Market Fund")
Real Estate Securities Fund ("LIT Real Estate Securities Fund")
Van Kampen American Capital Pace Fund ("Pace Fund")
Van Kampen American Capital Real Estate Securities Fund ("Real
Estate Securities Fund")
Van Kampen American Capital Reserve Fund ("Reserve Fund")
Van Kampen American Capital Small Capitalization Fund ("Small
Capitalization Fund")
Van Kampen American Capital Tax-Exempt Trust ("Tax-Exempt Trust")
on behalf of its Series
Van Kampen American Capital High Yield Municipal Fund ("High Yield
<PAGE> 11
Municipal Fund")
Van Kampen American Capital Texas Tax Free Income Fund ("Texas
Tax Free Income Fund")
Van Kampen American Capital U.S. Government Trust for Income
("U.S. Government Trust for Income")
Funds Advised by Van Kampen American Capital Investment Advisory Corp.
("Investment Advisory Corp.") (Collectively, the "Former Van Kampen Funds"):
Van Kampen American Capital U.S. Government Trust ("U.S. Government Trust") on
behalf of its series
Van Kampen American Capital U.S. Government Fund ("U.S. Government Fund")
Van Kampen American Capital Tax Free Trust ("Tax Free Trust")
on behalf of its series
Van Kampen American Capital Insured Tax Free Income Fund
("Insured Tax Free Income Fund")
Van Kampen American Capital Tax Free High Income Fund ("Tax Free High Income
Fund")
Van Kampen American Capital California Insured Tax Free Fund ("California
Insured Tax Free Fund")
Van Kampen American Capital Municipal Income Fund ("Municipal Income Fund")
Van Kampen American Capital Intermediate Term Municipal IncomeFund
(Intermediate Term Municipal Income Fund")
Van Kampen American Capital Florida Insured Tax Free Income Fund
("Florida Insured Tax Free Income Fund")
Van Kampen American Capital New Jersey Tax Free Income Fund
("New Jersey Tax Free Income Fund")
Van Kampen American Capital New York Tax Free Income Fund ("New
York Tax Free Income Fund")
Van Kampen American Capital California Tax Free Income Fund
("California Tax Free Income Fund")
<PAGE> 12
Van Kampen American Capital Michigan Tax Free Income Fund
("Michigan Tax Free Income Fund")
Van Kampen American Capital Missouri Tax Free Income Fund
("Missouri Tax Free Income Fund")
Van Kampen American Capital Ohio Tax Free Income Fund ("Ohio Tax
Free Income Fund")
Van Kampen American Capital Trust ("VKAC Trust")
Van Kampen American Capital High Yield Fund ("High Yield Fund")
Van Kampen American Capital Short-Term Global Income Fund
(Short-Term Global Income Fund")
Van Kampen American Capital Strategic Income Fund ("Strategic
Income Fund")
Van Kampen American Capital Emerging Markets Income Fund
("Emerging Markets Income Fund")
Van Kampen American Capital Equity Trust ("Equity Trust")
on behalf of its series
Van Kampen American Capital Utility Fund ("Utility Fund")
Van Kampen American Capital Balanced Fund ("Balanced Fund")
Van Kampen American Capital Pennsylvania Tax Free Income Fund
("Pennsylvania Tax Free Income Fund")
Van Kampen American Capital Tax Free Money Fund ("Tax Free Money
Fund"); and
WHEREAS, the original parties desire to add the aforementioned
additional entities as parties to the Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
spelled out in the Agreement and herein, it is hereby agreed that Schedule A of
the Agreement, with the addition of Schedule B, be amended to add those parties
mentioned above as
<PAGE> 13
parties to the Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed this 29th day of April, 1996.
ALL OF THE PARTIES SET FORTH IN SCHEDULE A
By: /s/ Dennis J. McDonnell
------------------------------------------
Dennis J. McDonnell, President
ALL OF THE PARTIES SET FORTH IN SCHEDULE B
By: /s/ Dennis J. McDonnell
-----------------------------------------------------
Dennis J. McDonnell, Executive Vice President
VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
<PAGE> 14
By: /s/ Dennis J. McDonnell
--------------------------------------------
Dennis J. McDonnell, President
SCHEDULE A
CLOSED END FUNDS
I. Funds Advised by Van Kampen American Capital Investment
Advisory Corp. ("Investment Advisory Corp.") (Collectively, the
"Former Van Kampen Funds"):
Van Kampen American Capital Municipal Income Trust
Van Kampen American Capital California Municipal Trust
Van Kampen American Capital Intermediate Term High Income Trust
Van Kampen American Capital Limited Term High Income Trust
Van Kampen American Capital Investment Grade Municipal Trust
Van Kampen American Capital Municipal Trust
Van Kampen American Capital California Quality Municipal Trust
Van Kampen American Capital Florida Quality Municipal Trust
Van Kampen American Capital New York Quality Municipal Trust
Van Kampen American Capital Ohio Quality Municipal Trust
Van Kampen American Capital Pennsylvania Quality Municipal Trust
Van Kampen American Capital Trust For Insured Municipals
Van Kampen American Capital Trust For Investment Grade
Municipals
Van Kampen American Capital Trust For Investment Grade
California Municipals
<PAGE> 15
Van Kampen American Capital Trust For Investment Grade Florida
Municipals
Van Kampen American Capital Trust For Investment Grade New
Jersey Municipals
Van Kampen American Capital Trust For Investment Grade New York
Municipals
Van Kampen American Capital Trust For Investment Grade
Pennsylvania Municipals
Van Kampen American Capital Municipal Opportunity Trust
Van Kampen American Capital Advantage Municipal Income Trust
Van Kampen American Capital Advantage Pennsylvania Municipal
Income Trust
Van Kampen American Capital Strategic Sector Municipal Trust
Van Kampen American Capital Value Municipal Income Trust
Van Kampen American Capital California Value Municipal Income
Trust
Van Kampen American Capital Massachusetts Value Municipal Income
Trust
Van Kampen American Capital New Jersey Value Municipal Income
Trust
Van Kampen American Capital New York Value Municipal Income Trust
Van Kampen American Capital Ohio Value Municipal Income Trust
Van Kampen American Capital Pennsylvania Value Municipal Income
Trust
Van Kampen American Capital Municipal Opportunity Trust II
Van Kampen American Capital Florida Municipal Opportunity Trust
Van Kampen American Capital Advantage Municipal Income Trust II
Van Kampen American Capital Select Sector Municipal Trust
INSTITUTIONAL FUNDS
<PAGE> 16
II. Funds Advised by Van Kampen American Capital Management,
Inc. ("Management, Inc.") (Collectively, the "Former Van Kampen
Funds"):
The Explorer Institutional Trust
on behalf of its series
Explorer Institutional Active Core Fund
Explorer Institutional Limited Duration Fund
SCHEDULE B
OPEN END FUNDS
I. Funds Advised by Van Kampen American Capital Investment
Advisory Corp. ("Investment Advisory Corp.") (Collectively, the
"Former Van Kampen Funds"):
Van Kampen American Capital U.S. Government Trust ("U.S. Government Trust") on
behalf of its series
Van Kampen American Capital U.S. Government Fund ("U.S. Government Fund")
Van Kampen American Capital Tax Free Trust ("Tax Free Trust")
on behalf of its series
Van Kampen American Capital Insured Tax Free Income Fund ("Insured Tax Free
Income Fund")
Van Kampen American Capital Tax Free High Income Fund ("Tax Free High Income
Fund")
Van Kampen American Capital California Insured Tax Free Fund ("California
Insured Tax Free Fund")
Van Kampen American Capital Municipal Income Fund ("Municipal Income Fund")
<PAGE> 17
Van Kampen American Capital Limited Term Municipal Income Fund ("Limited Term
Municipal Income Fund")
Van Kampen American Capital Florida Insured Tax Free Income Fund ("Florida
Insured Tax Free Income Fund")
Van Kampen American Capital New Jersey Tax Free Income Fund ("New Jersey Tax
Free Income Fund")
Van Kampen American Capital New York Tax Free Income Fund ("New York Tax Free
Income Fund")
Van Kampen American Capital California Tax Free Income Fund ("California Tax
Free Income Fund")
Van Kampen American Capital Michigan Tax Free Income Fund ("Michigan Tax Free
Income Fund")
Van Kampen American Capital Missouri Tax Free Income Fund ("Missouri Tax Free
Income Fund")
Van Kampen American Capital Ohio Tax Free Income Fund ("Ohio Tax Free Income
Fund")
Van Kampen American Capital Trust ("VKAC Trust")
Van Kampen American Capital High Yield Fund ("High Yield Fund")
Van Kampen American Capital Short-Term Global Income Fund (Short-Term Global
Income Fund")
Van Kampen American Capital Strategic Income Fund ("Strategic Income Fund")
Van Kampen American Capital Emerging Markets Income Fund ("Emerging Markets
Income Fund")
Van Kampen American Capital Equity Trust ("Equity Trust")
on behalf of its series
Van Kampen American Capital Utility Fund ("Utility Fund")
Van Kampen American Capital Balanced Fund ("Balanced Fund")
Van Kampen American Capital Pennsylvania Tax Free Income Fund ("Pennsylvania
Tax Free Income Fund")
<PAGE> 18
Van Kampen American Capital Tax Free Money Fund ("Tax Free Money Fund")
II. Funds Advised by Van Kampen American Capital Asset
Management, Inc.
("Asset Management, Inc.") (Collectively, the "Former American
Capital Funds"):
Van Kampen American Capital Comstock Fund ("Comstock Fund")
Van Kampen American Capital Corporate Bond Fund ("Corporate Bond Fund")
Van Kampen American Capital Emerging Growth Fund ("Emerging Growth Fund")
Van Kampen American Capital Enterprise Fund ("Enterprise Fund")
Van Kampen American Capital Equity Income Fund ("Equity Income Fund")
Van Kampen American Capital Limited Maturity Government Fund ("Limited Maturity
Government Fund")
Van Kampen American Capital Global Managed Assets Fund ("Global Managed Assets
Funds")
Van Kampen American Capital Government Securities Fund ("Government Securities
Fund")
Van Kampen American Capital Government Target Fund ("Government Target Fund")
Van Kampen American Capital Growth and Income Fund ("Growth and Income Fund")
Van Kampen American Capital Harbor Fund ("Harbor Fund")
Van Kampen American Capital High Income Corporate Bond Fund ("High Income
Corporate Bond Fund")
Van Kampen American Capital Life Investment Trust
("Life Investment Trust" or "LIT") on behalf of its Series
Enterprise Fund ("LIT Enterprise Fund")
Domestic Income Fund ("LIT Domestic Income Fund")
Emerging Growth Fund ("LIT Emerging Growth Fund")
Government Fund ("LIT Government Fund")
<PAGE> 19
Asset Allocation Fund ("LIT Asset Allocation Fund")
Money Market Fund ("LIT Money Market Fund")
Real Estate Securities Fund ("LIT Real Estate Securities Fund")
Van Kampen American Capital Pace Fund ("Pace Fund")
Van Kampen American Capital Real Estate Securities Fund ("Real Estate
Securities Fund")
Van Kampen American Capital Reserve Fund ("Reserve Fund")
Van Kampen American Capital Small Capitalization Fund ("Small Capitalization
Fund")
Van Kampen American Capital Tax-Exempt Trust ("Tax-Exempt Trust")
on behalf of its Series
Van Kampen American Capital High Yield Municipal Fund ("High Yield
Municipal Fund")
Van Kampen American Capital Texas Tax Free Income Fund ("Texas Tax Free Income
Fund")
Van Kampen American Capital U.S. Government Trust for Income
("U.S. Government Trust for Income")
<PAGE> 1
EXHIBIT (9)(b)
AMENDED AND RESTATED
LEGAL SERVICES AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, dated as of January 1, 1995, by and
between the parties as set forth in Schedule 1, attached hereto and
incorporated by reference (designated collectively hereafter as the "Funds"),
and VAN KAMPEN AMERICAN CAPITAL, INC. (formerly Van Kampen Merritt Holdings
Corp.), a Delaware corporation ("Van Kampen").
W I T N E S S E T H:
WHEREAS, each of the Funds is registered as a management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, Van Kampen has the capability of providing certain legal services
to the Funds; and
WHEREAS, each Fund desires to utilize Van Kampen in the provision of such
legal services; and
WHEREAS, Van Kampen intends to increase its staff in order to accommodate
the provision of all such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
spelled out herein, it is agreed between the parties hereto as follows:
1. Appointment of Van Kampen. As agent, Van Kampen shall provide each of the
Funds the legal services (the "Legal Services") as set forth in Paragraph 2 of
this Agreement. Van Kampen accepts such appointments and agrees to furnish the
Legal Services in return for the compensation provided in Paragraph 3 of this
Agreement.
2. Legal Services to be Provided. Van Kampen will provide to the Funds the
following legal services, including without limitation: accurate maintenance of
the Funds' Corporate Minute books and records, preparation and oversight of
each Fund's regulatory reports and other information provided to shareholders
as well as responding to day-to-day legal issues on behalf of the Funds. Van
Kampen shall hire persons (collectively the "Legal Services Group") as needed
to provide such Legal Services and in such numbers as may be agreed from time
to time.
3. Expenses and Reimbursement. The Legal Services expenses (the "Legal Services
Expenses") for which Van Kampen may be reimbursed are salary and salary related
benefits, including but not limited to bonuses, group insurance and other
regular wages paid to the personnel of the Legal Services Group, as well as
overhead and expenses related to office space and necessary equipment. The
Legal Services
1
<PAGE> 2
Expenses will be paid by Van Kampen and reimbursed by the Funds. Van Kampen
will tender to each Fund a monthly invoice as of the last business day of each
month which shall certify the total Legal Service Expenses expended. Except as
provided herein, Van Kampen will receive no other compensation in connection
with Legal Services rendered in accordance with this Agreement, and Van Kampen
will be responsible for all other expenses relating to the providing of Legal
Services.
4. Payment for Legal Services Expense Among the Funds. One half (50%) of the
Legal Services Expenses incurred under the Agreement shall be attributable
equally to each respective Fund and all other funds to whom Van Kampen provides
Legal Services, including all other Funds for which Van Kampen serves as
investment adviser and distributor and the Govett Funds (the Non-Participating
Funds"). Van Kampen shall assume the costs of Legal Services for the
Non-Participating Funds for which reimbursement is not received. The remaining
one half (50%) of the Legal Services Expenses shall be in allocated (a) in the
event services are attributable to specific funds (including the
Non-Participating Funds) based on such specific time allocations; and (b) in
the event services are attributable only to types of funds (i.e. closed-end and
open-end funds), the relative amount of time spent on each type of fund and
then further allocated between funds of that type on the basis of relative net
assets at the end of the period.
5. Maintenance of Records. All records maintained by Van Kampen in connection
with the performance of its duties under this Agreement will remain the
property of each respective Fund and will be preserved by Van Kampen for the
periods prescribed in Section 31 of the 1940 Act and the rules thereunder or
such other applicable rules that may be adopted from time to time under the
Act. In the event of termination of the Agreement, such records will be
promptly delivered to the respective Funds. Such records may be inspected by
the respective Funds at reasonable times.
6. Liability of Van Kampen. Van Kampen shall not be liable to any Fund for any
action taken or thing done by it or its agents or contractors on behalf of the
Fund in carrying out the terms and provisions of the Agreement if done in good
faith and without negligence or misconduct on the part of Van Kampen, its
agents or contractors.
7. Indemnification By Funds. Each Fund will indemnify and hold Van Kampen
harmless from all loss, cost, damage and expense, including reasonable expenses
for legal counsel, incurred by Van Kampen resulting from (a) any claim, demand,
action or suit in connection with Van Kampen's acceptance of this Agreement;
(b) an action or omission by Van Kampen in the performance of its duties
hereunder; (c) Van Kampen's acting upon instructions believed by it to have
been executed by a duly authorized office of the Fund; or (d) Van Kampen's
acting upon information provided by the Fund in form and under policies agreed
to by Van Kampen and the Fund. Van Kampen shall not be entitled to such
indemnification in respect of action or omissions constituting negligence or
willful misconduct of Van Kampen or its agents or contractors. Prior to
confessing any claim against it which may be subject to this indemnification,
Van
2
<PAGE> 3
Kampen shall give the Fund reasonable opportunity to defend against said claim
on its own name or in the name of Van Kampen.
8. Indemnification By Van Kampen. Van Kampen will indemnify and hold harmless
each Fund from all loss, cost, damage and expense, including reasonable
expenses for legal counsel, incurred by the Fund resulting from any claim,
demand, action or suit arising out of Van Kampen's failure to comply with the
terms of this Agreement or which arises out of the negligence or willful
misconduct of Van Kampen or its agents or contractors; provided, that such
negligence or misconduct is not attributable to the Funds, their agents or
contractors. Prior to confessing any claim against it which may be subject to
this indemnification, the Fund shall give Van Kampen reasonable opportunity to
defend against said claim in its own name or in the name of such Fund.
9. Further Assurances. Each party agrees to perform such further acts and
execute such further documents as necessary to effectuate the purposes hereof.
10. Dual Interests. It is understood that some person or persons may be
directors, trustees, officers, or shareholders of both the Funds and Van Kampen
(including Van Kampen's affiliates), and that the existence of any such dual
interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided by a specific provision of applicable law.
11. Execution, Amendment and Termination. The term of this Agreement shall
begin as of the date first above written, and unless sooner terminated as
herein provided, this Agreement shall remain in effect through May 31, 1996,
and thereafter from year to year if such continuation is specifically approved
at least annually by the Board of Trustees of each Fund, including a majority
of the independent Trustees of each Fund. The Agreement may be modified or
amended from time to time by mutual agreement between the and shall likewise
reimburse Van Kampen for its costs, expenses and disbursements payable under
this Agreement to such date. This Agreement may be amended in the future to
include as additional parties to the Agreement other investment companies for
which Van Kampen, any subsidiary or affiliate serves as investment advisor or
distributor.
12. Assignment. Any interest of Van Kampen under this Agreement shall not be
assigned or transferred, either voluntarily or involuntarily, by operation of
law or otherwise, without the prior written consent of the Fund. This Agreement
shall automatically and immediately terminate in the event of its assignment
without the prior written consent of the Fund.
13. Notice. Any notice under this agreement shall be in writing, addressed and
delivered or sent by registered or certified mail, postage prepaid, to the
other party at such address as such other party may designate for the receipt
of such notices. Until further notice to the other parties, it is agreed that
for this purpose the address of each Fund is One Parkview Plaza, Oakbrook
Terrace, Illinois 60181, Attention: President
3
<PAGE> 4
and the address of Van Kampen. for this purpose is One Parkview Plaza, Oakbrook
Terrace, Illinois 60181, Attention: General Counsel.
14. Personal Liability. As provided for in the Declaration of Trust of the
various Funds, under which the Funds are organized as unincorporated trust
under the laws of the State of Delaware and Pennsylvania, as the case may be,
the shareholders, trustees, officers, employees and other agents of the Fund
shall not personally be found by or liable for the matters set forth hereunder,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim hereunder.
15. Interpretative Provisions. In connection with the operation of this
agreement, Van Kampen and the Funds may agree from time to time on such
provisions interpretative of or in addition to the provisions of this Agreement
as may in their opinion be consistent with the general tenor of this Agreement.
16. State Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Illinois.
17. Captions. The captions in the Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction effect.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
ALL OF THE PARTIES SET FORTH IN SCHEDULE 1
ATTACHED HERETO
By: /s/ Dennis J. McDonnell
-------------------------------
Dennis J. McDonnell
President
VAN KAMPEN AMERICAN CAPITAL, INC.
By: /s/ Ronald A. Nyberg
-------------------------------
Ronald A. Nyberg
Executive Vice President
5
<PAGE> 6
SCHEDULE 1
1. VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST, on behalf of its
series, Van Kampen American Capital U.S. Government Fund
2. VAN KAMPEN AMERICAN CAPITAL TAX FREE TRUST, on behalf of its series, Van
Kampen American Capital Insured Tax Free Income Fund, Van Kampen American
Capital Tax Free High Income Fund, Van Kampen American Capital California
Insured Tax Free Fund, Van Kampen American Capital Municipal Income Fund,
Van Kampen American Capital Intermediate Term Municipal Income Fund, Van
Kampen American Capital New York Tax Free Income Fund, Van Kampen American
Capital New Jersey Tax Free Income Fund, Van Kampen American Capital
Florida Insured Tax Free Income Fund, Van Kampen American Capital
California Tax Free Income Fund, Van Kampen American Capital Michigan Tax
Free Income Fund, Van Kampen American Capital Missouri Tax Free Income
Fund and Van Kampen American Capital Ohio Tax Free Income Fund
3. VAN KAMPEN AMERICAN CAPITAL TRUST, on behalf of its series, Van Kampen
American Capital High Yield Fund, Van Kampen American Capital Short-Term
Global Income Fund, and Van Kampen American Capital Strategic Income Fund.
4. VAN KAMPEN AMERICAN CAPITAL EQUITY TRUST, on behalf of its series,
Van Kampen American Capital Utility Fund, Van Kampen American Capital
Balanced Fund, Van Kampen American Capital Growth Fund, Van Kampen
American Capital Great American Companies Fund, Van Kampen American
Captial Prospector Fund and Van Kampen American Capital Aggressive Growth
Fund
5. VAN KAMPEN AMERICAN CAPITAL PENNSYLVANIA TAX FREE INCOME FUND
6. VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
7. VAN KAMPEN AMERICAN CAPITAL MUNICPAL INCOME TRUST
8. VAN KAMPEN AMERICAN CAPITAL CALIFORNIA MUNICIPAL TRUST
9. VAN KAMPEN AMERICAN CAPITAL INTERMEDIATE TERM HIGH INCOME TRUST
10. VAN KAMPEN AMERICAN CAPITAL LIMITED TERM HIGH INCOME TRUST
11. VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
12. VAN KAMPEN AMERICAN CAPITAL INVESTMENT GRADE MUNICIPAL TRUST
13. VAN KAMPEN AMERICAN CAPITAL MUNICIPAL TRUST
14. VAN KAMPEN AMERICAN CAPITAL CALIFORNIA QUALITY MUNICIPAL TRUST
15. VAN KAMPEN AMERICAN CAPITAL FLORIDA QUALITY MUNICIPAL TRUST
16. VAN KAMPEN AMERICAN CAPITAL NEW YORK QUALITY MUNICIPAL TRUST
6
<PAGE> 7
19. VAN KAMPEN AMERICAN CAPITAL OHIO QUALITY MUNICIPAL TRUST
20. VAN KAMPEN AMERICAN CAPITAL PENNSYLVANIA QUALITY MUNICIPAL TRUST
21. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INSURED MUNICIPALS
22. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE MUNICIPALS
23. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE CALIFORNIA
MUNICIPALS
24. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE FLORIDA MUNICIPALS
25. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE NEW JERSEY
MUNICIPALS
26. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE NEW YORK MUNICIPALS
27. VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE PENNSYLVANIA
MUNICIPALS
28. VAN KAMPEN AMERICAN CAPITAL MUNICIPAL OPPORTUNITY TRUST
29. VAN KAMPEN AMERICAN CAPITAL ADVANTAGE MUNICIPAL INCOME TRUST
30. VAN KAMPEN AMERICAN CAPITAL ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
31. VAN KAMPEN AMERICAN CAPITAL STRATEGIC SECTOR MUNICIPAL TRUST
32. VAN KAMPEN AMERICAN CAPITAL VALUE MUNICIPAL INCOME TRUST
33. VAN KAMPEN AMERICAN CAPITAL CALIFORNIA VALUE MUNICIPAL INCOME TRUST
34. VAN KAMPEN AMERICAN CAPITAL MASSACHUSETTS VALUE MUNICIPAL INCOME TRUST
35. VAN KAMPEN AMERICAN CAPITAL NEW JERSEY VALUE MUNICIPAL INCOME TRUST
36. VAN KAMPEN AMERICAN CAPITAL NEW YORK VALUE MUNICIPAL INCOME TRUST
37. VAN KAMPEN AMERICAN CAPITAL OHIO VALUE MUNICIPAL INCOME TRUST
38. VAN KAMPEN AMERICAN CAPITAL PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
39. VAN KAMPEN AMERICAN CAPITAL MUNICIPAL OPPORTUNITY TRUST II
40. VAN KAMPEN AMERICAN CAPITAL FLORIDA MUNICIPAL OPPORTUNITY TRUST
41. VAN KAMPEN AMERICAN CAPITAL ADVANTAGE MUNICIPAL INCOME TRUST II
42. VAN KAMPEN AMERICAN CAPITAL SELECT SECTOR MUNICIPAL TRUST
7
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders
Van Kampen American Capital Tax Free Money Fund:
We consent to the use of our report included in the Statement of Additional
Information which is incorporated by reference into the Prospectus and to the
reference to our Firm under the headings "Financial Highlights" in the
Prospectus and "Custodian and Independent Accountants" in the Statement of
Additional Information.
KPMG Peat Marwick LLP
Chicago, Illinois
October 23, 1996
<PAGE> 1
EXHIBIT 13
[Van Kampen Merritt Letterhead]
August 15, 1986
Van Kampen Merritt Tax Free Money Fund*
1001 Warrenville Road
Lisle, Illinois 60532
Dear Sirs:
The initial $100,000 investment by Van Kampen Merritt Inc. in Van Kampen
Merritt Tax Free Money Fund will not be redeemed while any organizational
expenses remain unamortized unless the proceeds of any redemption of that
initial investment are reduced by their pro rata portion of any unamortized
organizational expenses. These shares are purchased for investment purposes,
and Van Kampen Merritt Inc. has no present intention of selling or publicly
distributing these shares.
Sincerely,
By: /s/ Dennis J. McDonnell
------------------------
Senior Vice President
* As of the date of this letter, the Registrant was known as Van Kampen Merritt
Tax Free Money Fund. As of the date of this filing, the Registrant is known as
Van Kampen American Capital Tax Free Money Fund.
<PAGE> 1
EXHIBIT 15(a)
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
The plan set forth below (the "Distribution Plan") is the written plan
contemplated by Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "1940 Act"), for the VAN KAMPEN AMERICAN CAPITAL TAX FREE
MONEY FUND (the "Fund"), a series of the Van Kampen American Capital Tax Free
Trust (the "Trust"). This Distribution Plan describes the material terms and
conditions under which assets of the Fund may be used in connection with
financing distribution related activities with respect to each of its classes
of shares of beneficial interest (the "Shares"), each of which is offered and
sold subject to a different combination of front-end sales charges,
distribution fees, service fees and contingent deferred sales charges.
(1) Classes of shares, if any, subject to a front-end sales charge and a
distribution and/or service fee are referred to herein as "Front-End Classes"
and the Shares of such classes are referred to herein as "Front-End Shares."
Classes of shares, if any, subject to a contingent-deferred sales charge and
a distribution and/or a service fee are referred to herein as "CDSC Classes"
and Shares of such classes are referred to herein as "CDSC Shares." Classes
of shares, if any, subject to a front-end sales charge, a contingent-deferred
sales charge and a distribution and/or service fee are referred to herein as
"Combination Classes" and Shares of such class are referred to herein as
"Combination Shares."
The Fund has adopted a service plan (the "Service Plan") pursuant to which
the Fund is authorized to expend on an annual basis a portion of its average
net assets attributable to any or each class of Shares in connection with the
provision by the principal underwriter (within the meaning of the 1940 Act) of
the Shares and by brokers, dealers and other financial intermediaries
(collectively, "Financial Intermediaries") of personal services to holders of
Shares and/or the maintenance of shareholder accounts. The Fund also has
entered into a distribution and services agreement (the "Distribution and
Services Agreement") with Van Kampen American Capital Inc. (the "Distributor"),
pursuant to which the Distributor acts as the principal underwriter with
respect to each class of Shares and provides services to the Fund and acts as
agent on behalf of the Fund in connection with the implementation of the
Service Plan. The Distributor may enter into selling agreements (the "Selling
Agreements") with Financial Intermediaries in order to implement the
Distribution and Services Agreement, the Service Plan and this Distribution
Plan.
The Fund hereby is authorized to pay the Distributor a distribution fee
with respect to each class of its Shares to compensate the Distributor for
activities which are primarily intended to result in the sale of such Shares
("distribution related activities") performed by the Distributor with respect
to the respective class of Shares of the Fund. Such distribution related
activities include without limitation: (a) printing and distributing copies of
any prospectuses and annual and interim reports of the Fund (after the Fund has
prepared and set in type such materials) that are used by such Distributor in
connection with the offering of Shares; (b) preparing, printing or otherwise
manufacturing and distributing any other literature or materials of any nature
used by such Distributor in connection with promoting, distributing or offering
the Shares; (c) advertising, promoting and selling Shares to broker-dealers,
banks and the public; (d) distribution related overhead and the provision of
information programs and shareholder services intended to enhance the
attractiveness of investing in the Fund; (e) incurring initial outlay expenses
in connection with compensating Financial Intermediaries for (i) selling CDSC
Shares and
- ---------------
(1) The Fund is authorized to offer multiple classes of shares pursuant to an
order of the Securities and Exchange Commission exempting the Fund from
certain provisions of the 1940 Act.
1
<PAGE> 2
Combination Shares and (ii) providing personal services to shareholders and the
maintenance of shareholder accounts of all classes of Shares, including
paying interest on and incurring other carrying costs on funds borrowed to pay
such initial outlays; and (f) acting as agent for the Fund in connection with
implementing this Distribution Plan pursuant to the Selling Agreements.
The amount of the distribution fee hereby authorized with respect to each
class of Shares of the Fund shall be as follows:
With respect to Class A Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate,
shall not exceed on an annual basis 0.25% of the Fund's average daily net
assets attributable to Class A Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to Class A Shares. The
Fund may pay a distribution fee as determined from time to time by its Board of
Trustees in an annual amount not to exceed the lesser of (i) (A) 0.25% of the
Fund's average daily net asset value during such year attributable to Class A
Shares sold on or after the date on which this Distribution Plan was first
implemented with respect to Class A Shares minus (B) the amount of the service
fee with respect to the Class A Shares actually expended during such year by
the Fund pursuant to the Service Plan and (ii) the actual amount of
distribution related expenses incurred by the Distributor with respect to Class
A Shares.
With respect to Class B Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate,
shall not exceed on an annual basis 1.00% of the Fund's average daily net
assets attributable to Class B Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class B Shares. The
Fund may pay a distribution fee with respect to the Class B Shares as
determined from time to time by its Board of Trustees in an annual amount not
to exceed the lesser of (A) 0.75% of the Fund's average daily net asset value
during such year attributable to Class B Shares sold on or after the date on
which this Distribution Plan is first implemented with respect to the Class B
Shares and (B) the actual amount of distribution related expenses incurred by
the Distributor during such year plus prior unreimbursed distribution related
expenses less the amount of any contingent deferred sales charge paid to the
Distributor, in each case with respect to the Class B Shares sold on or after
the date on which this Distribution Plan is first implemented with respect to
the Class B Shares.
With respect to Class C Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate,
shall not exceed on an annual basis 1.00% of the Fund's average daily net
assets attributable to Class C Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class C Shares. The
Fund may pay a distribution fee with respect to the Class C Shares as
determined from time to time by its Board of Trustees in an annual amount not
to exceed the lesser of (A) 0.75% of the Fund's average daily net asset value
during such year attributable to Class C Shares sold on or after the date on
which this Distribution Plan is first implemented with respect to the Class C
Shares and (B) the actual amount of distribution related expenses incurred by
the Distributor during such year plus prior unreimbursed distribution related
expenses less the amount of any contingent deferred sales charge paid to the
Distributor, in each case with respect to the Class C Shares sold on or after
the date on which this Distribution Plan is first implemented with respect to
the Class C Shares.
Payments pursuant to this Distribution Plan shall not be made more often
than monthly upon receipt by the Fund of a separate written expense report with
respect to each class of Shares setting forth the expenses qualifying for such
reimbursement allocated to each class of Shares and the purposes thereof.
In the event that amounts payable hereunder with respect to shares of a
Front-End Class do not fully reimburse the Distributor for its actual
distribution related expenses with respect to the Shares of such
class, there is no carryforward of reimbursement obligations to succeeding
years. In the event the amounts payable hereunder with respect to a shares of
a CDSC Class or a Combination Class do not fully reimburse the Distributor for
its actual distribution related expenses with respect to the Shares of the
respective class, such unreimbursed distribution expenses will be carried
forward and paid by the Fund
2
<PAGE> 3
hereunder in future years so long as this Distribution Plan remains in effect,
subject to applicable laws and regulations. Reimbursements for distribution
related expenses payable hereunder with respect to a particular class of Shares
may not be used to subsidize the sale of Shares of any other class of Shares.
The Fund shall not compensate the Distributor, and neither the Fund nor
the Distributor shall compensate any Financial Intermediary, for any
distribution related expenses incurred with respect to a class of Shares prior
to the later of (a) the implementation of this Distribution Plan with respect
to such class of Shares or (b) the date that such Financial Intermediary enters
into a Selling Agreement with the Distributor.
The Fund hereby authorizes the Distributor to enter into Selling
Agreements with certain Financial Intermediaries to provide compensation to
such Financial Intermediaries for activities and services of the type referred
to in Paragraph 1 hereof. Prior to the implementation of a Selling Agreement,
such agreement shall be approved by a majority of the Board of Trustees of the
Trust and a majority of the Disinterested Trustees (within the meaning of the
1940 Act) by a vote cast in person at a meeting called for the purpose of
voting on such Selling Agreements. The Distributor may reallocate all or a
portion of its distribution fee to such Financial Intermediaries as
compensation for the above-mentioned activities and services. Such
reallocation shall be in an amount as set forth from time to time in the Fund's
prospectus. Such Selling Agreements shall provide that the Financial
Intermediaries shall provide the Distributor with such information as is
reasonably necessary to permit the Distributor to comply with the reporting
requirements set forth in Paragraphs 3 and 8 hereof.
Subject to the provisions of this Distribution Agreement, the Fund is
hereby authorized to pay a distribution fee to any person that is not an
"affiliated person" or "interested person" of the Fund or its "investment
adviser" or "principal underwriter" (as such terms are defined in the 1940 Act)
who provides any of the foregoing services for the Fund. Such fee shall be
paid only pursuant to written agreements between the Fund and such other person
the terms of which permit payments to such person only in accordance with the
provisions of this Distribution Agreement and which have the approval of a
majority of the Disinterested Trustees by vote cast separately with respect to
each class of Shares and cast in person at a meeting called for the purpose of
voting on such written agreement.
The Fund and the Distributor shall prepare separate written reports for
each class of Shares and shall submit such reports to the Fund's Board of
Trustees on a quarterly basis summarizing all payments made by them with
respect to each class of Shares pursuant to this Distribution Plan, the Service
Plan and the agreements contemplated hereby, the purposes for which such
payments were made and such other information as the Board of Trustees or the
Disinterested Trustees may reasonably request from time to time, and the Board
of Trustees shall review such reports and other information.
This Distribution Plan shall become effective upon its approval by (a) a
majority of the Board of Trustees and a majority of the Disinterested Trustees
by vote cast separately with respect to each class of Shares cast in person at
a meeting called for the purpose of voting on this Distribution Plan, and (b)
with respect to each class of Shares, a "majority of the outstanding voting
securities" (as such phrase is defined in the 1940 Act) of such class of Shares
voting separately as a class.
This Distribution Plan and any agreement contemplated hereby shall
continue in effect beyond the first anniversary of its adoption by the Board of
Trustees of the Fund only so long as (a) its continuation is approved at least
annually in the manner set forth in clause (a) of paragraph 9 above and (b) the
selection and nomination of those trustees of the Fund who are not "interested
persons" of the Fund are committed to the discretion of such trustees.
This Distribution Plan may be terminated with respect to a class of Shares
without penalty at any time by a majority of the Disinterested Trustees or by a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund.
This Distribution Plan may not be amended to increase materially the
maximum amounts permitted to be expended hereunder except with the approval of
a "majority of the outstanding voting
3
<PAGE> 4
securities" of the respective class of Shares of the Fund and may not be
amended in any other material respect except with the approval of a majority of
the Disinterested Trustees. Amendments required to conform this Distribution
Plan to changes in the Rule or to other changes in the 1940 Act or the rules
and regulations thereunder shall not be deemed to be material amendments.
To the extent any service fees paid by the Fund pursuant to the Service
Plan are deemed to be payments for the financing of any activity primarily
intended to result in the sale of Shares issued by the Fund within the meaning
of the Rule, the terms and provisions of such plan and any payments made
pursuant to such plan hereby are authorized pursuant to this Distribution Plan
in the amounts and for the purposes authorized in the Service Plan without any
further action by the Board of Trustees or the shareholders of the Fund. To
the extent the terms and provisions of the Service Plan conflict with the terms
and provisions of this Distribution Plan, the terms and provisions of the
Service Plan shall prevail with respect to amounts payable pursuant thereto.
This paragraph 13 is adopted solely due to the uncertainty that may exist with
respect to whether payments to be made by the Fund pursuant to the Service Plan
constitute payments primarily intended to result in the sale of Shares issued
by the Fund within the meaning of the Rule.
The Trustees of the Trust have adopted this Distribution Plan as trustees
under the Declaration of Trust of the Trust and the policies of the Trust
adopted hereby are not binding upon any of the Trustees or shareholders of the
Trust individually, but bind only the trust estate.
4
<PAGE> 1
EXHIBIT 15(b)
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
SHAREHOLDER ASSISTANCE AGREEMENT
This Agreement is entered into as of the 7th day of April, 1995, by
and between Van Kampen American Capital Distributors, Inc. (formerly Van
Kampen Merritt, Inc.) (the "Company") and the undersigned (the "Broker-Dealer").
WHEREAS, the Company is the principal underwriter of the open-end
investment companies listed on Schedule 1 to this Agreement (hereinafter
individually the "Fund" or collectively the "Funds"); and
WHEREAS, the Broker-Dealer is registered as a broker-dealer with the
National Association of Securities Dealers, Inc.; and
WHEREAS, each respective Fund has adopted a Distribution Plan (the
"Distribution Plan") and a service plan (the "Service Plan") pursuant to Rule
12b-1 (the "Rule") under the Investment Company Act of 1940, as amended (the
"1940 Act"), relating to such Fund, the Distribution Plans being described in
the Fund's Prospectus and Statement of Additional Information; and
WHEREAS, each respective Fund's Distribution Plans authorize the
Company to enter into distribution assistance agreements such as this Agreement
with broker-dealers selected by the Company, and the Broker-Dealer has been so
selected; and
WHEREAS, each respective Fund's Distribution Plans authorize the
Company to make payments at a rate specified in an agreement such as this
Agreement varying directly with the aggregate average daily net asset value of
shares of each respective Fund sold by such broker-dealer on or after the
effective date of this Agreement, as determined pursuant to Section 4 hereof,
and held at the close of each day in accounts of clients or customers of a
particular broker-dealer, such amount being referred to herein as the "Holding
Level"; for purposes of calculating the Holding Level, shares of such Fund
which are redeemed or otherwise disposed of from any account existing prior to
such effective date shall be deemed to have been shares sold prior to such
effective date to the extent of the number of shares held in such account
immediately after the close of business on the day prior to such effective
date; and
WHEREAS, this Agreement is a "related agreement" to the Distribution
Plan as that term is used in the Rule and is subject to all of the provisions
of the Rule as to such agreements;
NOW, THEREFORE, the Company and the Broker-Dealer agree as follows:
1. Subject to continuing compliance with its obligations
pursuant to Section 2 hereof, the Broker-Dealer shall be entitled distribution
fee and service fee to payments, if any, to be paid by the Company at the
annual percentage rate of the Holding Level set forth from time to time in the
then current Prospectus of the Fund on a quarterly basis (prorated for any
portion of such period during which this Agreement is in effect for less than
the full amount of such period); it is understood and agreed that the Company
may make final and binding determinations as to whether such continuing
compliance and as to whether or not any Fund shares are to be considered in
determining the Holding Level of any particular broker-dealer and what Fund
shares, if any, are to be attributed to such purpose to a particular
broker-dealer, to a different broker-dealer or to no broker-dealer. Payments
shall be made to the Broker-Dealer named above and portions of the payments
may be, in the discretion of the Broker-Dealer, paid over to individual
registered representatives of said Broker-Dealer to whom there have been
1
<PAGE> 2
assigned accounts of clients or customers of the Broker-Dealer with respect to
which the respective Holding Level was determined.
2. The distribution fee payments with respect to a class of the
Fund's shares to be made in accordance with Section 1 hereof, if any, shall be
paid to the Broker-Dealer as compensation for selling shares of the respective
class.
3. In consideration for the service fee payments to be made in
accordance with Section 1 hereof, the Broker-Dealer shall provide to its
clients or customers who hold shares of each respective Fund with respect to
which payments to the Broker-dealer may be made under such Fund's Distribution
Plan such services and other assistance as may from time to time be reasonably
requested by the Company, including but not limited to answering inquiries
regarding the Fund, providing information programs regarding the fund,
assisting in selected dividend payment options, account designations and
addresses and maintaining the investment of such customer or client in the Fund.
4. The Company shall have the right at any time and from time to
time without notice to the Broker-Dealer to amend its Prospectus with
respect to the amount of the service free and the amount of the distribution
fee to be paid pursuant hereto. Such amendments shall be effective as of the
date of the amended Prospectus.
5. This Agreement shall go into effect on the later of the date set
forth above or the date on which it is approved by a vote of each Fund's Board
of Directors (or Trustees, as the case may be), and of those Directors/Trustees
(the "Qualified Directors/Trustees") who are not interested persons (as defined
in the 1940 Act), of the Fund and have no direct or indirect financial interest
in the operations of the Distribution Plan or any agreement related to the
Distribution Plan cast in person at a meeting called for the purpose of voting
on this Agreement and shall continue in effect (unless terminated) until the
June 30th next succeeding such effective date and will continue thereafter only
if such continuance is specifically approved at least annually in the manner
heretofore specified for initial approval. This agreement will terminate
automatically in the event of its assignment (as that term is used in the Rule)
or if the Distribution Plan is terminated. This Agreement may also be
terminated at any time, without the payment of any penalty, on sixty (60) days
written notice to the Broker-dealer, by vote of a majority of the Qualified
Directors/Trustees or by vote of a majority (as that term is used in the Rule)
of the outstanding voting securities of the Fund.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
---------------------------------
Broker-dealer Firm Name
By:
- --------------------------- ------------------------------
Firm Address Senior Vice President
By:
------------------------
Title:
---------------------
2
<PAGE> 3
SCHEDULE 1
1. For Class A Shares, Class B Shares and Class C Shares:
Van Kampen American Capital U.S. Government Fund
Van Kampen American Capital Insured Tax Free Income Fund
Van Kampen American Capital Tax Free High Income Fund
Van Kampen American Capital California Insured Tax Free Fund
Van Kampen American Capital Municipal Income Fund
Van Kampen American Capital Intermediate Term Municipal Income Fund
Van Kampen American Capital Florida Insured Tax Free Income Fund
Van Kampen American Capital New Jersey Tax Free Income Fund
Van Kampen American Capital New York Tax Free Income Fund
Van Kampen American Capital California Tax Free Income Fund
Van Kampen American Capital Michigan Tax Free Income Fund
Van Kampen American Capital Missouri Tax Free Income Fund
Van Kampen American Capital Ohio Tax Free Income Fund
Van Kampen American Capital High Yield Fund
Van Kampen American Capital Short-Term Global Income Fund
Van Kampen American Capital Strategic Income Fund
Van Kampen American Capital Utility Fund
Van Kampen American Capital Pennsylvania Tax Free Income Fund
Van Kampen American Capital Balanced Fund
Van Kampen American Capital Growth Fund
Van Kampen American Capital Value Fund
Van Kampen American Capital Great American Companies Fund
Van Kampen American Capital Prospector Fund
Van Kampen American Capital Aggressive Growth Fund
Van Kampen American Capital Foreign Securities Fund
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Fund
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Income Corporate Bond Fund
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Asset Allocation Portfolio
Van Kampen American Capital Domestic Income Portfolio
Van Kampen American Capital Emerging Growth Portfolio
Van Kampen American Capital Enterprise Portfolio
Van Kampen American Capital Global Equity Portfolio
Van Kampen American Capital Government Portfolio
Van Kampen American Capital Growth and Income Portfolio
Van Kampen American Capital Money Market Portfolio
Van Kampen American Capital Real Estate Securities Portfolio
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital High Yield Municipal Fund
Van Kampen American Capital Texas Tax Free Income Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Global Equity Fund
Van Kampen American Capital Global Government Securities Fund
2. For Class A Shares Only:
Van Kampen American Capital Tax Free Money Fund
<PAGE> 1
EXHIBIT 15(c)
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is entered into as of the 7th day of April,
1995, by and between Van Kampen American Capital Distributors, Inc. (formerly
Van Kampen American Capital, Inc.) (the "Company") and the undersigned (the
"Intermediary").
WHEREAS, the Company is the principal underwriter of the
open-end investment companies listed on Schedule 1 to this Agreement
(hereinafter individually the "Fund" or collectively the "Funds"); and
WHEREAS, each respective Fund has adopted a Distribution Plan
(the "Distribution Plan") pursuant to Rule 12b-1 (the "Rule") under the
Investment Company Act of 1940, as amended (the "1940 Act"), and a Service Plan
(the "Service Plan") relating to such Fund, the Distribution Plans being
described in the Fund's Prospectus and Statement of Additional Information; and
WHEREAS, each respective Fund's Distribution Plans authorize
the Company to enter into distribution services agreements such as this
Agreement with certain financial intermediaries selected by the Company, and
the Intermediary has been so selected; and
WHEREAS, each respective Fund's Distribution Plans authorize
the Company to make payments at a rate specified in an agreement such as this
Agreement varying directly with the aggregate average daily net asset value of
shares of each respective Fund sold by such financial intermediary on or after
the effective date of this Agreement, as determined pursuant to Section 4
hereof, and held at the close of each day in accounts of clients or customers
of particular intermediary, such amount being referred to herein as the
"Holding Level"; for purposes of calculating the Holding Level, shares of such
Fund which are redeemed or otherwise disposed of from any account existing
prior to such effective date shall be deemed to have been shares sold prior to
such effective date to the extent of the number of shares held in such account
immediately after the close of business on the day prior to such effective
date; and
WHEREAS, this Agreement is a "related agreement" to the
Distribution Plan as that term is used in the Rule and is subject to all of the
provisions of the Rule as to such agreements;
NOW, THEREFORE, the Company and the Intermediary agree as
follows:
1. Subject to continuing compliance with its obligations
pursuant to Section 2 hereof, the Intermediary shall be entitled to
distribution fee and service fee payments, if any, to be paid by the Company
with respect to each class of the Fund's shares at the annual percentage rate
of the Holding Level set forth from time to time in the then current Prospect
of the Fund on a quarterly basis (prorated for any portion of such period
during which this Agreement is in effect for less than the full amount of such
period); it is understood and agreed that the Company may make final and
binding determinations as to whether such continuing compliance and as to
whether or not any Fund shares are to be considered in determining the Holding
Level of any particular financial intermediary and what Fund shares, if any,
are to be attributed to such purpose to a particular financial intermediary, to
a different financial intermediary or to no financial intermediary.
2. The distribution fee payments with respect to a class of
the Fund's shares to be made in accordance with Section 1 hereof, if any, shall
be paid to the Broker-Dealer as compensation for selling shares of the
respective class.
1
<PAGE> 2
3. In consideration for the service fee payments to be made
in accordance with Section 1 hereof, the Intermediary shall provide to its
clients or customers who hold shares of each respective Fund with respect to
which payments to the Intermediary may be made under such Fund's Distribution
Plan such services and other assistance as may from time to time be reasonably
requested by the Company, including but not limited to answering inquiries
regarding the Fund, providing information programs regarding the Fund,
assisting in selected dividend payment options, account designations and
addresses and maintaining the investment of such customer or client in the
Fund.
4. The Company shall have the right at any time and from time
to time without notice to the Broker-Dealer to amend its Prospectus with
respect to the amount of the service free and the amount of the distribution
fee to be paid pursuant hereto. Such amendments shall be effective as of the
date of the amended Prospectus.
5. This Agreement shall go into effect on the later of the
date set forth above or the date on which it is approved by a vote of each
Fund's Board of Directors (or Trustees, as the case may be) and of those
Directors/Trustees (the "Qualified Directors/Trustees") who are not interested
persons (as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operations of the Distribution Plan or any agreement
related to the Distribution Plan cast in person at a meeting called for the
purpose of voting on this Agreement and shall continue in effect (unless
terminated) until the June 30th next succeeding such effective date and will
continue thereafter only if such continuance is specifically approved at least
annually in the manner heretofore specified for initial approval. This
agreement will terminate automatically in the event of its assignment (as that
term is used in the Rule) or if the Distribution Plan is terminated. This
Agreement may also be terminated at any time, without the payment of any
penalty, on sixty (60) days written notice to the Intermediary, by vote of a
majority of the Qualified Directors/Trustees or by vote of a majority (as that
term is used in the Rule) of the outstanding voting securities of the Fund.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
By:
- --------------------------------- ------------------------
Intermediary Senior Vice President
- ---------------------------------
Address
By:
------------------------------
Title
2
<PAGE> 3
SCHEDULE 1
1. For Class A Shares, Class B Shares and Class C Shares:
Van Kampen American Capital U.S. Government Fund
Van Kampen American Capital Insured Tax Free Income Fund
Van Kampen American Capital Tax Free High Income Fund
Van Kampen American Capital California Insured Tax Free Fund
Van Kampen American Capital Municipal Income Fund
Van Kampen American Capital Intermediate Term Municipal Income Fund
Van Kampen American Capital Florida Insured Tax Free Income Fund
Van Kampen American Capital New Jersey Tax Free Income Fund
Van Kampen American Capital New York Tax Free Income Fund
Van Kampen American Capital California Tax Free Income Fund
Van Kampen American Capital Michigan Tax Free Income Fund
Van Kampen American Capital Missouri Tax Free Income Fund
Van Kampen American Capital Ohio Tax Free Income Fund
Van Kampen American Capital High Yield Fund
Van Kampen American Capital Short-Term Global Income Fund
Van Kampen American Capital Strategic Income Fund
Van Kampen American Capital Utility Fund
Van Kampen American Capital Pennsylvania Tax Free Income Fund
Van Kampen American Capital Balanced Fund
Van Kampen American Capital Growth Fund
Van Kampen American Capital Value Fund
Van Kampen American Capital Great American Companies Fund
Van Kampen American Capital Prospector Fund
Van Kampen American Capital Aggressive Growth Fund
Van Kampen American Capital Foreign Securities Fund
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Fund
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Income Corporate Bond Fund
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Asset Allocation Portfolio
Van Kampen American Capital Domestic Income Portfolio
Van Kampen American Capital Emerging Growth Portfolio
Van Kampen American Capital Enterprise Portfolio
Van Kampen American Capital Global Equity Portfolio
Van Kampen American Capital Government Portfolio
Van Kampen American Capital Growth and Income Portfolio
Van Kampen American Capital Money Market Portfolio
Van Kampen American Capital Real Estate Securities Portfolio
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital High Yield Municipal Fund
Van Kampen American Capital Texas Tax Free Income Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Global Equity Fund
Van Kampen American Capital Global Government Securities Fund
2. For Class A Shares Only:
Van Kampen American Capital Tax Free Money Fund
<PAGE> 1
EXHIBIT 15(d)
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
SERVICE PLAN
The plan set forth below (the "Service Plan") for the VAN KAMPEN
AMERICAN CAPITAL TAX FREE MONEY FUND (the "Fund"), describes the material terms
and conditions under which assets of the Fund may be used to compensate the
Fund's principal underwriter, within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act"), brokers, dealers and other financial
intermediaries (collectively "Financial Intermediaries") for providing personal
services to shareholders and/or the maintenance of shareholder accounts with
respect to each of its Class A Shares of beneficial interest (the "Class A
Shares"), its Class B Shares of beneficial interest (the "Class B Shares"), and
its Class C Shares of beneficial interest (the "Class C Shares"). The Class A
Shares, Class B Shares and Class C Shares sometimes are referred to herein
collectively as the "Shares." Each class of Shares is offered and sold subject
to a different combination of front-end sales charges, distribution fees,
service fees and contingent deferred sales charges.(1) Classes of shares, if
any, subject to a front-end sales charge and a distribution and/or service fee
are referred to herein as "Front-End Classes" and the Shares of such classes
are referred to herein as "Front-End Shares." Classes of shares, if any,
subject to a contingent-deferred sales charge and a distribution and or a
service fee are referred to herein as "CDSC Classes" and Shares of such classes
are referred to herein as "CDSC Shares." Classes of shares, if any, subject to
a front-end sales charge, a contingent-deferred sales charge and a distribution
and/or service fee are referred to herein as "Combination Classes" and Shares
of such class are referred to herein as "Combination Shares."
The Fund has adopted a distribution plan (the "Distribution Plan")
pursuant to which the Fund is authorized to expend on an annual basis a portion
of its average net assets attributable to each class of Shares in connection
with financing distribution related activities. The Fund also has entered into
a distribution and services agreement (the "Distribution and Services
Agreement") with Van Kampen American Capital Distributors, Inc. (formerly Van
Kampen Merritt, Inc.) (the "Distributor"), pursuant to which the Distributor
acts as agent on behalf of the Fund in connection with the implementation of
the Service Plan and acts as the principal underwriter with respect to each
class of Shares. The Distributor may enter into selling agreements (the
"Selling Agreements") with brokers, dealers and other financial intermediaries
("Financial Intermediaries") in order to implement the Distribution Agreement,
the Distribution Plan and this Service Plan.
The Fund hereby is authorized to pay a service fee with respect to its
Class A Shares, Class B Shares and Class C Shares to any person who sells such
Shares and provides personal services to shareholders and/or maintains
shareholder accounts in an annual amount not to exceed 0.25% of the average
annual net asset value of the Shares maintained in the Fund by such person that
were sold on or after the date on which this Service Plan was first
implemented. The aggregate annual amount of all such payments with respect to
each such class of Shares may not exceed 0.25% of the Fund's average annual net
assets attributable to the respective class of Shares sold on or after the date
on which this Service Plan was first implemented and maintained in the Fund
more than one year.
- --------------------
(1) The Fund is authorized to offer multiple classes of shares pursuant to
an order of the Securities and Exchange Commission exempting the Fund
from certain provisions of the 1940 Act.
1
<PAGE> 2
Payments pursuant to this Service Plan may be paid or prepaid on
behalf of the Fund by the Distributor acting as the Fund's agent.
Payments by the Fund to the Distributor pursuant to this Service Plan
shall not be made more often than monthly upon receipt by the Fund of a
separate written expense report with respect to each class of Shares setting
forth the expenses qualifying for such reimbursement allocated to each class
of Shares and the purposes thereof.
In the event that amounts payable hereunder with respect to a class of
Shares do not fully reimburse the Distributor for pre-paid service fees, such
unreimbursed service fee expenses will be carried forward and paid by the Fund
hereunder in future years so long as this Service Plan remains in effect,
subject to applicable laws and regulations. Reimbursements for service fee
related expenses payable hereunder with respect to a particular class of Shares
may not be used to subsidize services provided with respect to any other class
of Shares.
The Fund shall not compensate the Distributor, and neither the Fund nor
the Distributor shall compensate any Financial Intermediary, for any service
related expenses incurred with respect to a class of Shares prior to the later
of (a) the implementation of this Service Plan with respect to such class of
Shares or (b) the date that such Financial Intermediary enters into a Selling
Agreement with the Distributor.
The Fund hereby authorizes the Distributor to enter into Selling
Agreements with certain Financial Intermediaries to provide compensation to such
Financial Intermediaries for activities and services of the type referred to in
Paragraph 1 hereof. Prior to the implementation of a Selling Agreement, such
agreement shall be approved by a majority of the Board of Trustees of the Trust
and a majority of the Disinterested Trustees (within the meaning of the 1940
Act) by a vote cast in person at a meeting called for the purpose of voting on
such Selling Agreements. Such Selling Agreements shall provide that the
Financial Intermediaries shall provide the Distributor with such information
as is reasonably necessary to permit the Distributor to comply with the
reporting requirements set forth in Paragraphs 3 and 8 hereof.
Subject to the provisions of this Service Agreement, the Fund is hereby
authorized to pay a service fee to any person that is not an "affiliated
person" or "interested person" of the Fund or its "investment adviser" or
"principal underwriter" (as such terms are defined in the 1940 Act) who
provides any of the foregoing services for the Fund. Such fee shall be paid
only pursuant to written agreements between the Fund and such other person the
terms of which permit payments to such person only in accordance with the
provisions of this Service Agreement and which have the approval of a majority
of the Disinterested Trustees by vote cast separately with respect to each
class of Shares and cast in person at a meeting called for the purpose of
voting on such written agreement.
The Fund and the Distributor shall prepare separate written reports for
each class of Shares and shall submit such reports to the Fund's Board of
Trustees on a quarterly basis summarizing all payments made by them with
respect to each class of Shares pursuant to this Service Plan and the
agreements contemplated hereby, the purposes for which such payments were made
and such other information as the Board of Trustees or the Disinterested
Trustees may reasonably request from time to time, and the Board of Trustees
shall review such reports and other information.
This Service Plan may be terminated with respect to a class of Shares
without penalty at any time by a majority of the Disinterested Trustees or by a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund.
This Service Plan shall become effective upon its approval by (a) a
majority of the Board of Trustees and a majority of the Disinterested Trustees
by vote cast separately with respect to each class of Shares cast in person at a
meeting called for the purpose of voting on this Distribution Plan, and (b)
with respect to each class of Shares, a "majority of the outstanding voting
securities" (as such phrase is defined in the 1940 Act) of such class of Shares
voting separately as a class.
2
<PAGE> 3
This Service Plan and any agreement contemplated hereby shall continue in
effect beyond the first anniversary of its adoption by the Board of Trustees
of the Fund only so long as (a) its continuation is approved at least annually
in the manner set forth in clause (a) of paragraph 10 above and (b) the
selection and nomination of those trustees of the Fund who are not "interested
persons" of the Fund are committed to the discretion of such trustees.
This Service Plan may not be amended to increase materially the maximum
amounts permitted to be expended hereunder except with the approval of a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund. This Service Plan may not be amended in any material
respect except with the approval of a majority of the Disinterested Trustees.
Amendments required to conform this Service Plan to changes in Rule 12b-1 under
the Investment Company Act of 1940, as amended (the "1940 Act"), the 1940 Act,
the rules and regulations thereunder or the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. shall not be deemed to be
material amendments.
The Trustees of the Trust have adopted this Service Plan as trustees under
the Declaration of Trust of the Trust and the policies of the Trust adopted
hereby are not binding upon any of the Trustees or shareholders of the Trust
individually, but bind only the trust estate.
3
<PAGE> 1
EXHIBIT 16
TAX FREE MONEY FUND
COMPUTATION OF PERFORMANCE QUOTATIONS
PERIOD ENDED JUNE 30, 1996
(a) Calculation of Current Yield:
Formula (EV-BV) + BV * 365 / 7 = CY
Ending Value 1.000522558 = EV
Beginning Value 1.00 = BV
Current Yield 2.72% = CY
(b) Calculation of Compound Effective Yield: 365/7
Formula (UBR + 1) - 1 = CEY
Unannualized Base Return 0.000522588 = UBR
Compound Effective Yield 2.76% = CEY
<PAGE> 1
EXHIBIT 17(a)
INVESTMENT COMPANIES FOR WHICH
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS INC.
ACTS AS PRINCIPAL UNDERWRITER OR DEPOSITOR
OCTOBER 4, 1996
Van Kampen American Capital U.S. Government Trust
Van Kampen American Capital U.S. Government Fund
Van Kampen American Capital Tax Free Trust
Van Kampen American Capital Insured Tax Free Income Fund
Van Kampen American Capital Tax Free High Income Fund
Van Kampen American Capital California Insured Tax Free Fund
Van Kampen American Capital Municipal Income Fund
Van Kampen American Capital Intermediate Term Municipal Income Fund
Van Kampen American Capital Florida Insured Tax Free Income Fund
Van Kampen American Capital New Jersey Tax Free Income Fund
Van Kampen American Capital New York Tax Free Income Fund
Van Kampen American Capital Trust
Van Kampen American Capital High Yield Fund
Van Kampen American Capital Short-Term Global Income Fund
Van Kampen American Capital Strategic Income Fund
Van Kampen American Capital Equity Trust
Van Kampen American Capital Utility Fund
Van Kampen American Capital Balanced Fund
Van Kampen American Capital Value Fund
Van Kampen American Capital Great American Companies Fund
Van Kampen American Capital Growth Fund
Van Kampen American Capital Prospector Fund
Van Kampen American Capital Aggressive Growth Fund
Van Kampen American Capital Foreign Securities Fund
Van Kampen American Capital Pennsylvania Tax Free Income Fund
Van Kampen American Capital Tax Free Money Fund
Van Kampen American Capital Prime Rate Income Trust
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Fund
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Income Corporate Bond Fund
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Enterprise Portfolio
Van Kampen American Capital Domestic Income Portfolio
Van Kampen American Capital Emerging Growth Portfolio
Van Kampen American Capital Global Equity Portfolio
Van Kampen American Capital Government Portfolio
Van Kampen American Capital Money Market Portfolio
Van Kampen American Capital Asset Allocation Portfolio
Van Kampen American Capital Real Estate Securities Portfolio
Van Kampen American Capital Growth and Income Portfolio
<PAGE> 2
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Tax -Exempt Trust
Van Kampen American Capital High Yield Municipal Fund
Van Kampen American Capital Texas Tax Free Income Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital Global Equity Fund
Van Kampen American Capital Global Government Securities Fund
Internet Trust
Michigan Real Estate Income and Growth Trust
Van Kampen American Capital Insured Income Trust
Van Kampen American Capital Insured Income Trust (Intermediate)
Strategic Ten Trust, United States
Strategic Ten Trust, United Kingdom
Strategic Ten Trust, Hong Kong
Strategic Five Trust, United States
Van Kampen American Capital Equity Opportunity Trust
Great International Firms Trust
Gruntal & Co. Incorporated Undervalued Growth Opportunities Trust
Principal Trust Princor Emerging Growth and Treasury
International Assets Advisory Corporation Global Blue Chip Trust
Renaissance Trust
Mississippi Insured Municipal Trust
Blue Chip Opportunity and Treasury Trust
Wheat First Butcher Singer Wheat First Strategic Opportunity Unit Trust
Baby Boomer Opportunity Trust
Van Kampen American Capital Utility Income Trust
Global Energy Trust
Michigan Select Trust
<PAGE> 3
<TABLE>
<S> <C>
Emerging Markets Municipal Income Trust ....................................... Series 1
Insured Municipals Income Trust ............................................... Series 1 through 379
Insured Municipals Income Trust (Discount)..................................... Series 5 through 13
Insured Municipals Income Trust (Short Intermediate Term) ..................... Series 1 through 105
1009 Insured Municipals Income Trust (Intermediate Term) ...................... Series 5 through 88
Insured Municipals Income Trust (Limited Term) ............................... Series 9 through 85
Insured Municipals Income Trust (Premium Bond Series) ......................... Series 1 through 3
Insured Municipals Income Trust (Intermediate Laddered Maturity) .............. Series 1 and 2
Insured Tax Free Bond Trust ................................................... Series 1 through 6
Insured Tax Free Bond Trust (Limited Term) .................................... Series 1
Investors' Quality Tax-Exempt Trust ........................................... Series 1 through 93
Investors' Quality Tax-Exempt Trust-Intermediate .............................. Series 1
Investors' Corporate Income Trust ............................................. Series 1 through 12
Investors' Governmental Securities Income Trust ............................... Series 1 through 7
Van Kampen Merritt International Bond Income Trust ............................ Series 1 through 21
Alabama Investors' Quality Tax-Exempt Trust ................................... Series 1
Alabama Insured Municipals Income Trust ....................................... Series 1 through 9
Arizona Investors' Quality Tax-Exempt Trust ................................... Series 1 through 16
Arizona Insured Municipals Income Trust ....................................... Series 1 through 17
Arkansas Insured Municipals Income Trust ...................................... Series 1 through 2
Arkansas Investors' Quality Tax-Exempt Trust .................................. Series 1
California Insured Municipals Income Trust .................................... Series 1 through 158
California Insured Municipals Income Trust (Premium Bond Series) .............. Series 1
California Insured Municipals Income Trust (1st Intermediate Series) .......... Series 1 through 3
California Investors' Quality Tax-Exempt Trust ................................ Series 1 through 21
California Insured Municipals Income Trust (Intermediate Laddered) ............ Series 1 through 22
Colorado Insured Municipals Income Trust ...................................... Series 1 through 81
Colorado Investors' Quality Tax-Exempt Trust .................................. Series 1 through 18
Connecticut Insured Municipals Income Trust ................................... Series 1 through 31
Connecticut Investors' Quality Tax-Exempt Trust ............................... Series 1
Delaware Investor's Quality Tax-Exempt Trust .................................. Series 1 and 2
Florida Insured Municipal Income Trust - Intermediate ......................... Series 1 and 2
Florida Insured Municipals Income Trust ....................................... Series 1 through 107
Florida Investors' Quality Tax-Exempt Trust ................................... Series 1 and 2
Florida Insured Municipals Income Trust (Intermediate Laddered) ............... Series 1 through 13
Georgia Insured Municipals Income Trust ....................................... Series 1 through 81
Georgia Investors' Quality Tax-Exempt Trust ................................... Series 1 through 16
Hawaii Investors' Quality Tax-Exempt Trust .................................... Series 1
Investors' Quality Municipals Trust (AMT) ..................................... Series 1 through 9
Kansas Investors' Quality Tax-Exempt Trust .................................... Series 1 through 11
Kentucky Investors' Quality Tax-Exempt Trust .................................. Series 1 through 58
Louisiana Insured Municipals Income Trust ..................................... Series 1 through 17
Maine Investor's Quality Tax-Exempt Trust ..................................... Series 1
Maryland Investors' Quality Tax-Exempt Trust .................................. Series 1 through 79
Massachusetts Insured Municipals Income Trust ................................. Series 1 through 34
Massachusetts Insured Municipals Income Trust (Premium Bond Series) ........... Series 1
Michigan Financial Institutions Trust ......................................... Series 1
Michigan Insured Municipals Income Trust ...................................... Series 1 through 140
Michigan Insured Municipals Income Trust (Premium Bond Series) ................ Series 1
Michigan Insured Municipals Income Trust (1st Intermediate Series) ............ Series 1 through 3
Michigan Investors' Quality Tax-Exempt Trust .................................. Series 1 through 30
Michigan Select Trust ......................................................... Series 1
Minnesota Insured Municipals Income Trust ..................................... Series 1 through 59
Minnesota Investors' Quality Tax-Exempt Trust ................................. Series 1 through 21
Mississippi Insured Municipals Income Trust ................................... Series 1
Missouri Insured Municipals Income Trust ...................................... Series 1 through 99
Missouri Insured Municipals Income Trust (Premium Bond Series) ................ Series 1
Missouri Investors' Quality Tax-Exempt Trust .................................. Series 1 through 15
Missouri Insured Municipals Income Trust
(Intermediate Laddered Maturity) ............................................. Series 1
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Nebraska Investors' Quality Tax-Exempt Trust .................................. Series 1 through 9
New Mexico Insured Municipals Income Trust .................................... Series 1 through 18
New Jersey Insured Municipals Income Trust .................................... Series 1 through 114
New Jersey Investors' Quality Tax-Exempt Trust ............................... Series 1 through 22
New Jersey Insured Municipals Income Trust
(Intermediate Laddered Maturity) ............................................ Series 1 and 4
New York Insured Municipals Income Trust-Intermediate ......................... Series 1 through 6
New York Insured Municipals Income Trust (Limited Term) ....................... Series 1
New York Insured Municipals Income Trust ...................................... Series 1 through 136
New York Insured Tax-Free Bond Trust .......................................... Series 1
New York Insured Municipals Income Trust (Intermediate Laddered Maturity) ..... Series 1 through 17
New York Investors' Quality Tax-Exempt Trust .................................. Series 1
North Carolina Investors' Quality Tax-Exempt Trust ............................ Series 1 through 89
Ohio Insured Municipals Income Trust .......................................... Series 1 through 104
Ohio Insured Municipals Income Trust (Premium Bond Series) .................... Series 1 and 2
Ohio Insured Municipals Income Trust (Intermediate Term) ...................... Series 1
Ohio Insured Municipals Income Trust (Intermediate Laddered Maturity) ......... Series 3 through 6
Ohio Investors' Quality Tax-Exempt Trust ...................................... Series 1 through 16
Oklahoma Insured Municipal Income Trust ....................................... Series 1 through 17
Oregon Investors' Quality Tax-Exempt Trust .................................... Series 1 through 53
Pennsylvania Insured Municipals Income Trust - Intermediate ................... Series 1 through 6
Pennsylvania Insured Municipals Income Trust .................................. Series 1 through 223
Pennsylvania Insured Municipals Income Trust (Premium Bond Series) ............ Series 1
Pennsylvania Investors' Quality Tax-Exempt Trust .............................. Series 1 through 14
South Carolina Investors' Quality Tax-Exempt Trust ............................ Series 1 through 84
Stepstone Growth Equity and Treasury Securities Trust ......................... Series 1
Tennessee Insured Municipals Income Trust ..................................... Series 1-3 and 5-37
Texas Insured Municipals Income Trust ......................................... Series 1 through 40
Texas Insured Municipal Income Trust (Intermediate Ladder) .................... Series 1
Virginia Investors' Quality Tax-Exempt Trust .................................. Series 1 through 73
Van Kampen American Capital Equity Opportunity Trust .......................... Series 1 through 41
Van Kampen American Capital Utility Income Trust .............................. Series 1 through 8
Van Kampen American Capital Insured Income Trust .............................. Series 1 through 61
Van Kampen American Capital Insured Income Trust (Intermediate Term) .......... Series 1 through 60
Van Kampen Merritt Select Equity Trust ........................................ Series 1
Van Kampen Merritt Select Equity and Treasury Trust ........................... Series 1
Washington Insured Municipals Income Trust .................................... Series 1
West Virginia Insured Municipals Income Trust ................................. Series 1 through 7
Principal Financial Institutions Trust ........................................ Series 1
Internet Trust ................................................................ Series 1 through 3
Michigan Real Estate Income and Growth Trust .................................. Series 1
Strategic Ten Trust, United States ............................................ Series 1 through 10
Strategic Ten Trust, United Kingdom ........................................... Series 1 through 10
Strategic Ten Trust, Hong Kong ................................................ Series 1 through 10
Strategic Five Trust, United States ........................................... Series 1 through 4
Equity Opportunity Trust ...................................................... Series 1 through 42
Great International Firms Trust ............................................... Series 1
Undervalued Growth Opportunities Trust ........................................ Series 1
Emerging Growth and Treasury .................................................. Series 1
Global Blue Chip Trust ........................................................ Series 1
Renaissance Trust ............................................................. Series 1
Blue Chip Opportunity and Treasury Trust ...................................... Series 1 through 4
Wheat First Strategic Opportunity Unit Trust .................................. Series 1
Baby Boomer Opportunity Trust ................................................. Series 1
Global Energy Trust ........................................................... Series 1 through 2
</TABLE>
<PAGE> 1
EXHIBIT 17(b)
OFFICERS
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
<TABLE>
<CAPTION>
NAME OFFICE LOCATION
- ---- ------ --------
<S> <C> <C>
Don G. Powell Chairman & Chief Executive Officer Houston, TX
William R. Molinari President & Chief Operating Oakbrook Terrace, IL
Officer
Ronald A. Nyberg Executive Vice President & General Oakbrook Terrace, IL
Counsel
William R. Rybak Executive Vice President & Chief Oakbrook Terrace, IL
Financial Officer
Paul R. Wolkenberg Executive Vice PresidentHouston, TX
Robert A. Broman Sr. Vice PresidentOakbrook Terrace, IL
Gary R. DeMoss Sr. Vice President Oakbrook Terrace, IL
Keith K. Furlong Sr. Vice PresidentOakbrook Terrace, IL
Douglas B. Gehrman Sr. Vice President Houston, TX
Richard D. Humphrey Sr. Vice President Houston, TX
Scott E. Martin Sr. Vice President, Deputy General Oakbrook Terrace, IL
Counsel & Secretary
Debra A. Nichols Sr. Vice President Houston, TX
Charles G. Millington Sr. Vice President & Treasurer Oakbrook Terrace, IL
Robert S. West Sr. Vice President Oakbrook Terrace, IL
John H. Zimmermann, III Sr. Vice President Oakbrook Terrace, IL
Timothy K. Brown 1st Vice President Laguna Niguel, CA
James S. Fosdick 1st Vice President Oakbrook Terrace, IL
Dominic C. Martellaro 1st Vice President San Francisco, CA
Mark R. McClure 1st Vice President Oakbrook Terrace, IL
Mark T. McGannon 1st Vice President Oakbrook Terrace, IL
James J. Ryan 1st Vice President Oakbrook Terrace, IL
Michael L. Stallard 1st Vice President Oakbrook Terrace, IL
Patrick J. Woelfel 1st Vice President Oakbrook Terrace, IL
Laurence J. Althoff Vice President & Controller Oakbrook Terrace, IL
James K. Ambrosio Vice President Massapequa, NY
Patricia A. Bettlach Vice PresidentSt. Louis, MO
Carol S. Biegel Vice President Oakbrook Terrace, IL
James J. Boyne Vice President, Associate General Oakbrook Terrace, IL
Counsel & Assistant Secretary
William F. Burke, Jr. Vice President Mendham, NJ
Loren Burket Vice President Plymouth, MN
Thomas M. Byron Vice President Oakbrook Terrace, IL
Glenn M. Cackovic Vice President Laguna Niguel, CA
Joseph N. Caggiano Vice President New York, NY
Richard J. Charlino Vice President Houston, TX
Eleanor M. Cloud Vice President Oakbrook Terrace, IL
Dominick Cogliandro Vice President & Asst. Treasurer New York, NY
Michael Colston Vice President Louisville, KY
Suzanne Cummings Vice President Houston, TX
Tracey M. DeLusant Vice President Lynbrook, NY
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
David B. Dibo Vice President Oakbrook Terrace, IL
Howard A. Doss Vice President Tampa, FL
Charles Edward Fisher Vice President Oakbrook Terrace, IL
William J. Fow Vice President Redding, CT
Nicholas J. Foxhaven Vice President Denver, CO
Charles Friday Vice President Gibsonia, PA
Nori L. Gabert Vice President, Assoc. General Houston, TX
Counsel & Asst. Secretary
Erich P. Gerth Vice President Dallas, TX
Daniel Hamilton Vice President Houston, TX
John A. Hanhauser Vice President Philadelphia, PA
Eric J. Hargens Vice President Orlando, FL
Gregory Heffington Vice President Oakbrook Terrace, IL
Susan J. Hill Vice President Oakbrook Terrace, IL
Robert S. Hunt Vice President Baltimore, MD
Lowell Jackson Vice President Norcross, GA
Dana R. Klein Vice President Oakbrook Terrace, IL
Ann Marie Klingenhagen Vice President Oakbrook Terrace, IL
Frederick Kohly Vice President Miami, FL
David R. Kowalski Vice President & Director Oakbrook Terrace, IL
of Compliance
S. William Lehew III Vice President Charlotte, NC
Robert C. Lodge Vice President Philadelphia, PA
Walter Lynn Vice President Flower Mound, TX
Richard M. Lundgren Vice President Oakbrook Terrace, IL
Kevin S. Marsh Vice President Bellevue, WA
Carl Mayfield Vice President Lakewood, CO
Ruth L. McKeel Vice President Oakbrook Terrace, IL
John Mills Vice President Kenner, LA
Robert Muller, Jr. Vice President Houston, TX
Ronald E. Pratt Vice President Marietta, GA
Craig S. Prichard Vice President Oakbrook Terrace, IL
Walter E. Rein Vice President Oakbrook Terrace, IL
Michael W. Rohr Vice President Oakbrook Terrace, IL
James B. Ross Vice President Oakbrook Terrace, IL
Heather R. Sabo Vice President Richmond, VA
Stephanie Scarlata Vice President Lynbrook, NY
Lisa A. Schomer Vice President Oakbrook Terrace, IL
Ronald J. Schuster Vice President Tampa, FL
Jeffrey C. Shirk Vice President Boston, MA
Kimberly M. Spangler Vice President Atlanta, GA
Darren D. Stabler Vice President Phoenix, AZ
Christopher J. Staniforth Vice President Leawood, KS
James D. Stevens Vice President Boston, MA
William C. Strafford Vice President Granger, IN
David A. Tabone Vice President Phoenix, AZ
James C. Taylor Vice President Oakbrook Terrace, IL
John F. Tierney Vice President Oakbrook Terrace, IL
Curtis L. Ulvestad Vice President Red Wing, MN
Jeff Warland Vice President Oakbrook Terrace, IL
Sandra A. Waterworth Vice President and Assistant Oakbrook Terrace, IL
Secretary
Weston B. Wetherell Vice President, Assoc. General Oakbrook Terrace, IL
Counsel & Asst. Secretary
James R. Yount Vice President Seattle, WA
Patrick M. Zacchea Vice President New York, NY
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Brian P. Arcara Asst. Vice President Philadelphia, PA
Christopher M. Bisaillon Asst. Vice President Oakbrook Terrace, IL
Eric J. Bridges Asst. Vice President Oakbrook Terrace, IL
Billie J. Bronaugh Asst. Vice President Houston, TX
Robert C. Brooks Asst. Vice President Manchester, MA
Richard B. Callaghan Asst. Vice President Oakbrook Terrace, IL
Deanna Margaret Chiaro Asst. Vice President San Jose, CA
Stephen M. Cutka Asst. Vice President Oakbrook Terrace, IL
Nicholas Dalmaso Asst. Vice President & Asst. Oakbrook Terrace, IL
Secretary
Daniel R. DeJong Asst. Vice President Oakbrook Terrace, IL
Melissa B. Epstein Asst. Vice President Houston, TX
Huey P. Falgout, Jr. Asst. Vice President & Asst. Secretary Houston, TX
Walter C. Gray Asst. Vice President Oakbrook Terrace, IL
Joseph Hays Asst. Vice President Philadelphia, PA
Scott F. Heyer Asst. Vice President Tampa, FL
Jeffrey S. Kinney Asst. Vice President Oakbrook Terrace, IL
Michael B. Kollins Asst. Vice President Oakbrook Terrace, IL
Natalie N. Hurdle Asst. Vice President New York, NY
Laurie L. Jones Asst. Vice President Houston, TX
Patricia D. Lathrop Asst. Vice President Tampa, FL
Tony E. Leal Asst. Vice President Houston, TX
Ivan R. Lowe Asst. Vice President Houston, TX
Linda S. MacAyeal Asst. Vice President Oakbrook Terrace, IL
Ann Therese McGrath Asst. Vice President Laguna, CA
Stuart R. Moehlman Asst. Vice President Houston, TX
Peggy E. Moro Asst. Vice President Oakbrook Terrace, IL
Gregory S. Parker Asst. Vice President Houston, TX
David B. Partain Asst. Vice President Oakbrook Terrace, IL
Christine K. Putong Asst. Vice President & Asst. Secretary Oakbrook Terrace, IL
Michael Quinn Asst. Vice President Oakbrook Terrace, IL
David P. Robbins Asst. Vice President Oakbrook Terrace, IL
Jeffrey S. Rourke Asst. Vice President Oakbrook Terrace, IL
Thomas J. Sauerborn Asst. Vice President New York, NY
Bruce Saxon Asst. Vice President Oakbrook Terrace, IL
Andrew J. Scherer Asst. Vice President Oakbrook Terrace, IL
Traci T. Sorensen Asst. Vice President Oakbrook Terrace, IL
Gary Steele Asst. Vice President Philadelphia, PA
David H. Villarreal Asst. Vice President Oakbrook Terrace, IL
Robert A. Watson Asst. Vice President Oakbrook Terrace, IL
Barbara A. Withers Asst. Vice President Oakbrook Terrace, IL
David C. Goodwin Asst. Secretary Oakbrook Terrace, IL
Gina M. Scumaci Asst. Secretary Oakbrook Terrace, IL
Elizabeth M. Brown Officer Houston, TX
John Browning Officer Oakbrook Terrace, IL
Leticia George Officer Houston, TX
Gina Grippo Officer Houston, TX
Sarah Kessler Officer Oakbrook Terrace, IL
Francis McGarvey Officer Houston, TX
William D. McLaughlin Officer Houston, TX
Becky Newman Officer Houston, TX
Rosemary Pretty Officer Houston, TX
Colette Saucedo Officer Houston, TX
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
Frederick Shepherd Officer Houston, TX
Larry Vickrey Officer Houston, TX
John Yovanovic Officer Houston, TX
</TABLE>
<PAGE> 5
DIRECTORS
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
<TABLE>
<CAPTION>
NAME OFFICE LOCATION
- ---- ------ --------
<S> <C> <C>
Don G. Powell Chairman & CEO 2800 Post Oak Blvd.
Houston, TX 77056
William R. Molinari President & COO One Parkview Plaza
Oakbrook Terrace, IL 60181
Ronald A. Nyberg Executive Vice President One Parkview Plaza
& General Counsel Oakbrook Terrace, IL 60181
William R. Rybak Executive Vice President One Parkview Plaza
& CFO Oakbrook Terrace, IL 60181
</TABLE>
<PAGE> 1
POWER OF ATTORNEY EXHIBIT 24
The undersigned, being officers and trustees of each of the Van Kampen
American Capital Open-End Trusts, as indicated on Schedule 1 attached hereto
and incorporated by reference, each a Delaware business trust, except for the
Van Kampen American Capital Pennsylvania Tax Free Income Fund, being a
Pennsylvania business trust (individually, a "Trust"), do hereby, in the
capacities shown below, individually appoint Dennis J. McDonnell and Ronald A.
Nyberg, each of Oakbrook Terrace, Illinois, and each of them, as the agents and
attorneys-in-fact with full power of substitution and resubstitution, for each
of the undersigned, to execute and deliver, for and on behalf of the
undersigned, any and all amendments to the Registration Statement filed by each
Trust with the Securities and Exchange Commission pursuant to the provisions of
the Securities Act of 1933 and the Investment Company Act of 1940.
This Power of Attorney may be executed in multiple counterparts, each
of which shall be deemed an original, but which taken together shall constitute
one instrument.
Dated: March 1, 1996
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/ s / Fernando Sisto, Sc.D Trustee
- ----------------------------------------------
Fernando Sisto, Sc.D.
/ s / Donald C. Miller Trustee
- ----------------------------------------------
Donald C. Miller
/ s / Don G. Powell Trustee
- ----------------------------------------------
Don G. Powell
/ s / Dennis J. McDonnell Trustee
- ----------------------------------------------
Dennis J. McDonnell
/ s / J. Miles Branagan Trustee
- ----------------------------------------------
J. Miles Branagan
/ s / Linda Hutton Heagy Trustee
- ----------------------------------------------
Linda Hutton Heagy
/ s / Roger Hilsman, Ph.D. Trustee
- ----------------------------------------------
Roger Hilsman, Ph.D.
/ s / William Stewart Woodside Trustee
- ----------------------------------------------
William Stewart Woodside
/ s / R. Craig Kennedy Trustee
- ----------------------------------------------
R. Craig Kennedy
/ s / Jack E. Nelson Trustee
- ----------------------------------------------
Jack E. Nelson
/ s / Wayne W. Whalen Trustee
- ----------------------------------------------
Wayne W. Whalen
/ s / Jerome L. Robinson Trustee
- ----------------------------------------------
Jerome L. Robinson
/ s / Edward C. Wood III Vice President and
- ----------------------------------------------
Edward C. Wood III Chief Financial Officer
</TABLE>
<PAGE> 2
SCHEDULE 1
1. VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST
2. VAN KAMPEN AMERICAN CAPITAL TAX FREE TRUST
3. VAN KAMPEN AMERICAN CAPITAL TRUST
4. VAN KAMPEN AMERICAN CAPITAL EQUITY TRUST
5. VAN KAMPEN AMERICAN CAPITAL PENNSYLVANIA TAX FREE INCOME FUND
6. VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
7. VAN KAMPEN AMERICAN CAPITAL COMSTOCK FUND
8. VAN KAMPEN AMERICAN CAPITAL CORPORATE BOND FUND
9. VAN KAMPEN AMERICAN CAPITAL EMERGING GROWTH FUND
10. VAN KAMPEN AMERICAN CAPITAL ENTERPRISE FUND
11. VAN KAMPEN AMERICAN CAPITAL EQUITY INCOME FUND
12. VAN KAMPEN AMERICAN CAPITAL LIMITED MATURITY GOVERNMENT FUND
13. VAN KAMPEN AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND
14. VAN KAMPEN AMERICAN CAPITAL GOVERNMENT SECURITIES FUND
15. VAN KAMPEN AMERICAN CAPITAL GOVERNMENT TARGET FUND
16. VAN KAMPEN AMERICAN CAPITAL GROWTH AND INCOME FUND
17. VAN KAMPEN AMERICAN CAPITAL HARBOR FUND
18. VAN KAMPEN AMERICAN CAPITAL HIGH INCOME CORPORATE BOND FUND
19. VAN KAMPEN AMERICAN CAPITAL LIFE INVESTMENT TRUST
20. VAN KAMPEN AMERICAN CAPITAL PACE FUND
21. VAN KAMPEN AMERICAN CAPITAL REAL ESTATE SECURITIES FUND
22. VAN KAMPEN AMERICAN CAPITAL RESERVE FUND
23. VAN KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND
24. VAN KAMPEN AMERICAN CAPITAL TAX-EXEMPT TRUST
25. VAN KAMPEN AMERICAN CAPITAL TEXAS TAX FREE INCOME FUND
26. VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
27. VAN KAMPEN AMERICAN CAPITAL WORLD PORTFOLIO SERIES TRUST
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 35540550
<INVESTMENTS-AT-VALUE> 35540550
<RECEIVABLES> 250913
<ASSETS-OTHER> 5993
<OTHER-ITEMS-ASSETS> 46478
<TOTAL-ASSETS> 35843934
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 211057
<TOTAL-LIABILITIES> 211057
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35657455
<SHARES-COMMON-STOCK> 35657455
<SHARES-COMMON-PRIOR> 33199618
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24578)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 35632877
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1318881
<OTHER-INCOME> 0
<EXPENSES-NET> (299482)
<NET-INVESTMENT-INCOME> 1019399
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1019399
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1019399)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 67200916
<NUMBER-OF-SHARES-REDEEMED> (65505643)
<SHARES-REINVESTED> 762564
<NET-CHANGE-IN-ASSETS> 2457837
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (24578)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 176240
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 538230
<AVERAGE-NET-ASSETS> 35256832
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .029
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.029)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
