SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
Van Kampen Merritt Series Trust
______________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Blazzard, Grodd & Hasenauer, P.C.
______________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
<PAGE>
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
_______________________________________________________________
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
<PAGE>
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
VAN KAMPEN MERRITT SERIES TRUST
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Telephone: (708) 684-6000
_________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held February 9, 1996
To the Shareholders of
VAN KAMPEN MERRITT SERIES TRUST:
NOTICE IS HEREBY GIVEN to the holders of shares of beneficial interest (the
"Shares") of Van Kampen Merritt Series Trust (the "Trust"), a Massachusetts
business trust, that a Special Meeting of the Shareholders of the Trust (the
"Meeting"), will be held at the offices of the Trust, One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, on Friday, February 9, 1996, at 9:00
a.m., local time, for the following purposes:
1. To elect five Trustees to serve until their respective successors
are duly elected and qualified;
2. To approve a proposed New Investment Advisory Agreement between the
Trust and Cova Investment Advisory Corporation, as described in the
accompanying Proxy Statement and attached as Exhibit B thereto;
3. To approve a proposed Sub-Advisory Agreement between Cova Investment
Advisory Corporation and Van Kampen American Capital Investment Advisory
Corp., as described in the accompanying Proxy Statement and attached as
Exhibit C thereto.
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Holders of record of the Shares at the close of business on December 26, 1995
are entitled to notice of and to vote at the Meeting and at any adjournment
thereof.
<PAGE>
By order of the Board of Trustees
RONALD A. NYBERG
Vice President and Secretary
Dated: January 10, 1996
THE PROXY IS SOLICITED BY COVA LIFE. COVA LIFE RECOMMENDS THAT YOU CAST YOUR
VOTE: IN FAVOR OF THE NOMINEES FOR THE BOARD OF TRUSTEES LISTED IN THE
PROXY STATEMENT; FOR THE APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT;
AND FOR THE APPROVAL OF THE SUB-ADVISORY AGREEMENT. THE CURRENT BOARD
EXPRESSES NO OPINION AND OFFERS NO RECOMMENDATION WITH RESPECT TO THE
APPROVAL.
PLEASE FILL IN, DATE AND SIGN YOUR PROXY
AND MAIL IT IN THE ENCLOSED ENVELOPE.
PROXY STATEMENT
VAN KAMPEN MERRITT SERIES TRUST
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Telephone: (708) 684-6000
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies to be voted at a Special Meeting of Shareholders of Van Kampen Merritt
Series Trust, a Massachusetts business trust (the "Trust"), and at any and all
adjournments thereof (the "Meeting"), to be held at the Trust's offices, One
Parkview Plaza, Oakbrook Terrace, Illinois 60181, on Friday, February 9,
1996, at 9:00 a.m., local time. The approximate mailing date of this Proxy
Statement and accompanying form of proxy is January 15, 1996.
The Board of Trustees of the Trust (the "Board" or the "Board of Trustees")
has fixed the close of business on December 26, 1995 as the record date (the
"Record Date") for the determination of holders of shares of beneficial
interest ("Shares") of the Trust entitled to vote at the Meeting.
Shareholders on the Record Date will be entitled to one vote for each full
Share held and a fractional vote for each fractional Share. THIS PROXY IS
SOLICITED BY COVA LIFE. This Proxy is not solicited by the Trust, the Board
of Trustees or VKAC.
As of the Record Date, there were 3,787,503.890 Shares of the Quality Income
Portfolio, 3,455,928.724 Shares of the High Yield Portfolio, 34,329,015.100
Shares of the Money Market Portfolio, 5,976,845.972 Shares of the Stock
Index Portfolio and 1,459,658.562 Shares of the Growth and Income Portfolio
<PAGE>
outstanding. As of the Record Date, the World Equity Portfolio and the
Utility Portfolio had not yet commenced investment operations. See page
14 for information concerning the substantial shareholders of the Shares
of the Trust.
The Meeting has been called by the Board pursuant to Article X, Section 10.1
of the Trust's Agreement and Declaration of Trust at the written request of
Cova Financial Services Life Insurance Company which, together with its
insurance company affiliates ("Cova Life"), owns one hundred percent (100%) of
the Shares of the Trust. As described further herein, Proposal 1 calls for
the election of new Trustees. THE CURRENT BOARD EXPRESSES NO OPINION AND
OFFERS NO RECOMMENDATION WITH RESPECT TO THE APPROVAL.
Voting
Shares which represent interests in a particular Portfolio of the Trust vote
separately on those matters which pertain only to that Portfolio. These
matters are Proposals 2 and 3 and, as appropriate, any other business which
may properly come before the Meeting. With respect to such matters, a vote of
all Shareholders of the Trust may not be binding on a Portfolio whose
Shareholders have not approved such matter. The voting requirement for
passage of a particular proposal depends on the nature of the particular
proposal. With respect to Proposals 2 and 3, a vote of the "majority of the
outstanding voting securities" of a Portfolio which shall mean the lesser of
(i) 67% or more of the Shares of the Portfolio entitled to vote thereon
present in person or by proxy at the Meeting if holders of more than 50% of
the outstanding Shares of the Portfolio are present in person or represented
by proxy, or (ii) more than 50% of the outstanding Shares of the Portfolio is
necessary to approve the New Investment Advisory Agreement (as defined below)
between the Trust, on behalf of each respective Portfolio, and Cova Investment
Advisory Corporation ("Cova Advisory") and to approve the proposed
Sub-Advisory Agreement between Cova Advisory and Van Kampen American Capital
Investment Advisory Corp. ("VKAC"). With respect to Proposal 1, an
affirmative vote of a majority of the Shares of the Trust present in person or
by proxy is required to elect the nominee Trustees of the Trust.
The Trust was established to be used exclusively as the underlying investment
for certain variable annuity contracts ("Variable Contracts") to be issued by
Cova Life. All shares of each Portfolio of the Trust are owned by Cova Life.
Pursuant to current interpretations of the Investment Company Act of 1940, as
amended (the "1940 Act"), Cova Life will solicit voting instructions from
owners of Variable Contracts with respect to matters to be acted upon at the
Meeting. All Shares of each Portfolio of the Trust will be voted by Cova Life
in accordance with voting instructions received from such Variable Contract
owners. Cova Life will vote all of the Shares which it is entitled to vote in
the same proportion as the voting instructions given by Variable Contract
owners, on the issues presented, including Shares which are attributable to
Cova Life's interest in the Trust. Cova Life has fixed the close of business
<PAGE>
on February 1, 1996, as the last day on which voting instructions will be
accepted.
The costs of the Meeting, including the solicitation of proxies, will be paid
by Cova Life. Cova Life will also assume the costs associated with the
solicitation of voting instructions from its Variable Contract owners. This
Proxy is solicited by Cova Life. This Proxy is not solicited by the Trust, the
Board of Trustees or VKAC.
Cova Life recommends that you cast your vote: IN FAVOR of the nominees for the
Board of Trustees listed in this Proxy Statement; FOR the approval of the New
Investment Advisory Agreement; and FOR the approval of the Sub-Advisory
Agreement. Any proxy may be revoked at any time prior to its exercise by a
written notice of revocation addressed to and received by the Secretary of the
Trust, by delivering a duly executed proxy bearing a later date, or by
attending the Meeting and voting in person.
The Trust knows of no business other than that mentioned in proposals one
through three of the Notice which will be presented for consideration at the
Meeting. If any other matters are properly presented, it is the intention of
the persons named as proxies to vote proxies in accordance with their best
judgment. In the event a quorum is present at the Meeting but sufficient
votes to approve any of the Proposals are not received, the persons named as
proxies may propose one or more adjournments of such Meeting to permit further
solicitation of proxies provided they determine that such an adjournment and
additional solicitation is reasonable and in the interest of shareholders
based on a consideration of all relevant factors, including the nature of the
relevant proposal, the percentage of votes then cast, the percentage of
negative votes then cast, the nature of the proposed solicitation activities
and the nature of the reasons for such further solicitation.
PROPOSAL (1):
ELECTION OF TRUSTEES
The Trustees
The Trust may, but is not required to, hold annual meetings of shareholders
for the election of Trustees. Cova Life has selected and nominated all
nominees for election as Trustees at this Special Meeting of Shareholders. The
five individuals named in the table below have been nominated for election as
Trustees, each to hold office until his or her successor is duly elected and
has qualified. Of the nominees, Mr. Myers is the only current Trustee of
the Board of Trustees. If reelected as a Trustee, Mr. Myers intends to
continue to serve on the Board for a one year period, after which he intends
to resign therefrom.
<PAGE>
An affirmative vote of a majority of the Shares of the Trust present in person
or by proxy is required to elect the nominees. It is the intention of the
persons named in the enclosed proxy to vote the Shares represented by them for
the election of the nominees listed below unless the proxy is marked
otherwise.
The Declaration of Trust provides that the Board shall consist of not less
than three nor more than eleven trustees. Following the Meeting, the Trust
does not contemplate holding regular meetings of Shareholders to elect
Trustees or otherwise. In the event a vacancy occurs on the Board by reason
of death, resignation or a reason other than removal by the Shareholders, the
remaining Trustees shall appoint a person to fill the vacancy for the entire
unexpired term. The Trust has no procedure to consider persons recommended by
Variable Contract owners for nomination to the Board of Trustees of the Trust.
When an investment company does not hold regular annual meetings, it is a
requirement under the 1940 Act and a policy of the Trust that holders of
record of not less than two-thirds of the outstanding shares of the investment
company may file a declaration in writing or may vote at a special meeting of
Shareholders for the purpose of removing a Trustee. The Board will be
required to promptly call a meeting of Shareholders for the purpose of voting
upon the question of removal of any such Trustee(s) when requested in writing
to do so by the record holders of not less than 10% of the total outstanding
Shares of the Trust. In addition, the Board will comply with the requirements
of Section 16(c) of the 1940 Act with respect to communications with
Shareholders.
Each of the nominees named below has agreed to serve as a Trustee if elected;
however, should any nominee become unable or unwilling to accept nomination or
election, the proxies will be voted for one or more substitute nominees
designated by Cova Life.
The following sets forth the names, ages, principal occupations and other
information respecting the Trustee nominees:
<TABLE>
<CAPTION>
<S> <C>
Principal Occupations or
Name and Age Employment in Past 5 Years
___________________ ___________________________________________
Stephen M. Alderman Partner in the law firm of Garfield & Merel
211 West Wacker Drive
Chicago, IL 60606
Age: 36
<PAGE>
William C. Mair* Vice President and Controller of Cova Life;
One Tower Lane, Suite 3000 Vice President, Treasurer, Controller and
Oakbrook Terrace, IL 60181-4644 Director of Cova Advisory
Age: 54
Theodore A. Myers Executive Vice President and Chief Financial
1940 East 6th Street Officer of Qualitech Steel Corporation, a
Cleveland, OH 44114 producer of high quality engineered steels
Age: 65 for automotive, transportation and capital
goods industries; Director of McClouth Steel
Co.; Prior to August, 1993, Senior Vice
President, Chief Financial Officer and a
Director of Doskocil Companies, Inc., a food
processing and distribution company; Trustee
of other investment companies advised by VKAC
Deborah A. Vohasek Principal, Vohasek Oetjen Marketing
601 South LaSalle Street
Chicago, IL 60605
Age: 32
R. Kevin Williams Partner in the law firm of O'Donnell, Byrne
20 North Wacker Drive & Williams from June 1993 through the
Chicago, IL 60606 present; Associate Attorney, Sonnenberg,
Age: 41 Anderson, O'Donnell & Rodriguez, September
1988 through May 1993
<FN>
* "Interested person" of the Trust (within the meaning of Section
2(a)(19) of the 1940 Act).
Each of the current Trustees, except for Mr. Myers, intends to
resign from office effective upon the election by shareholders of the
nominees listed above.
</TABLE>
The compensation of the officers and Trustees who are "interested persons" (as
defined in the 1940 Act) of VKAC is paid by VKAC. The Trust pays the
compensation of all other officers and Trustees of the Trust. Each Portfolio
compensates the Trustees who are not interested persons of VKAC as follows:
until the Portfolio has $25 Million in net assets each Trustee receives $2,000
per year and $200 per meeting of the Board of Trustees, plus expenses; in
excess of $25 Million, each Trustee receives $2,500 per year and $250 per
meeting of the Board of Trustees, plus expenses. The aggregate amount paid
during the fiscal year ended December 31, 1994 to Trustees who are not such
"interested persons" was $105,225. In that the proposed new Board, if
elected, will be comprised of fewer members, it is anticipated that there will
be a reduction in the aggregate amount of fees and expenses paid to the
nominee Trustees.
<PAGE>
The officers of the Trust serve for one year or until their respective
successors are chosen and qualified. The Trust's officers currently receive
no compensation from the Trust but are also officers of VKAC and certain of
its affiliates and receive compensation in such capacities. The following
table sets forth certain information concerning the current principal
executive officers of the Trust:
<TABLE>
<CAPTION>
<S> <C> <C>
Positions and Other Principal Occupations
Name and Age Offices with Trust in Past 5 Years
____________ ____________________ _________________________________________
Don G. Powell Chairman and Trustee President, Chief Executive Officer and a
2800 Post Oak Blvd. Director of VK/AC Holdings, Inc. and Van
Houston, TX 77056 Kampen American Capital, Inc.; Chairman,
Age: 56 Chief Executive Officer and a Director of
Van Kampen American Capital Distributors,
Inc., and Van Kampen American Capital
Management, Inc.; Chairman and a Trustee
of other investment companies advised by
VKAC.
Dennis J. McDonnell President, Chief President, Chief Operating Officer and a
Age: 53 Executive Officer Director of VKAC and Van Kampen American
and Trustee Capital Management, Inc.; Director of
VK/AC Holding, Inc., Van Kampen American
Capital, Inc., McCarthy, Crisanti &
Maffei, Inc. and Chairman and Director of
MCM Asia Pacific Company, Limited;
President, Chief Executive Officer and
Trustee of other investment companies
advised by VKAC. Prior to December, 1991,
Senior Vice President of Van Kampen
Merritt Inc.
Peter W. Hegel Vice President Senior Vice President and Portfolio
Age: 39 Manager of VKAC. Vice President of other
investment companies advised by VKAC.
Ronald A. Nyberg Vice President and Executive Vice President, General Counsel
Age: 42 Secretary and Secretary of Van Kampen American
Capital, Inc. and VK/AC Holding, Inc.;
Executive Vice President, General Counsel
and Director of VKAC, Van Kampen American
Capital Management, Inc. and Van Kampen
American Capital Distributors, Inc.;
General Counsel and Assistant Secretary
<PAGE>
of McCarthy, Crisanti & Maffei, Inc., a
financial credit research firm; Vice
President and Secretary of other
investment companies advised by VKAC.
Director of ICI Mutual Insurance Co., a
provider of insurance to members of the
Investment Company Institute. Prior to
March 1991, Secretary of Van Kampen
Merritt Inc. , VKAC and McCarthy,
Crisanti & Maffei, Inc.
Edward C. Wood III Vice President, Senior Vice President of VKAC. Vice
Age: 39 Treasurer and Chief President, Treasurer and Chief Financial
Financial Officer Officer of other investment companies
advised by VKAC.
Scott E. Martin Assistant Secretary Senior Vice President, Deputy General
Age: 39 Counsel and Assistant Secretary of Van
Kampen American Capital, Inc. and VK/AC
Holding, Inc.; First Vice President,
Deputy General Counsel and Secretary, Van
Kampen American Capital Distributors,
Inc., VKAC, Van Kampen American Capital
Asset Management, Inc., Van Kampen
American Capital Management, Inc.; Deputy
General Counsel and Secretary of
McCarthy, Crisanti & Maffei, Inc., a
financial credit research firm. Assistant
Secretary of other investment companies
advised by VKAC.
Weston B. Wetherell Assistant Secretary Vice President, Associate General Counsel
Age: 39 and Assistant Secretary of Van Kampen
American Capital, Inc., Van Kampen
American Capital Distributors, Inc., Van
Kampen American Capital Asset Management,
Inc. and VKAC and an Assistant Secretary
of McCarthy, Crisanti & Maffei, Inc., a
financial credit research firm.
Assistant Secretary of other investment
companies advised by VKAC.
Nicholas Dalmaso Assistant Assistant Vice President and Attorney
Age: 30 Secretary of Van Kampen American Capital.
Assistant Secretary of each of the Van
Kampen American Capital funds and
closed-end funds advised by VKAC.
<PAGE>
Prior to May, 1992, Attorney for
Cantwell & Cantwell, a Chicago law firm.
John L. Sullivan Controller First Vice President of VKAC. Controller
Age: 40 of other investment companies advised by
VKAC.
Steven M. Hill Assistant Treasurer Assistant Vice President of VKAC.
Age: 31
</TABLE>
Except as otherwise noted, the address of each of the above officers is One
Parkview Plaza, Oakbrook Terrace, Illinois 60181.
If the nominee Trustees are elected, the following individuals will be
recommended for election by Cova Advisory as officers of the Trust:
<TABLE>
<CAPTION>
<S> <C> <C>
Positions and Other Principal Occupations
Name and Age Offices with Trust In Past 5 Years
____________ ___________________ ___________________________
Jeffery K. Hoelzel President & Senior Vice President,
Age: 32 Secretary General Counsel, Secretary
and Director of Cova Life;
Secretary and Director of Cova
Advisory; prior to June, 1992,
Associate Attorney with the law
firm of Lord, Bissell & Brook
in Chicago.
William C. Mair Vice President, Senior Vice President,
Age: 54 Treasurer & Controller and a Director of
Controller Cova Life; Vice President,
Treasurer, Controller and
Director of Cova Advisory.
William H. Wilton Vice President Vice President and Associate
Age: 35 Investment Officer of Cova
Advisory; prior to August, 1992,
with Allstate Life Insurance Company.
</TABLE>
As of the Record Date, the Trustees and officers as a group owned no
outstanding Shares of the Trust.
<PAGE>
Vote Required
The affirmative vote of a majority of the Shares of the Trust present in
person or by proxy is required to elect the nominees. COVA LIFE RECOMMENDS
THAT CONTRACT OWNERS VOTE IN FAVOR OF THE NOMINEES FOR THE BOARD OF TRUSTEES
LISTED IN THIS PROXY STATEMENT. THE CURRENT BOARD EXPRESSES NO OPINION AND
OFFERS NO RECOMMENDATION WITH RESPECT TO THE APPROVAL.
PROPOSAL (2):
APPROVAL OF PROPOSED NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE TRUST AND
COVA INVESTMENT ADVISORY CORPORATION
Cova Life has requested that this Special Meeting of Shareholders be called
for the purpose, among others, of approving a proposed new Investment Advisory
Agreement between the Trust and Cova Advisory. A copy of the current
Investment Advisory Agreement ("Current Investment Advisory Agreement") dated
March 9, 1993 (and January 14, 1994 with respect to the World Equity Portfolio
and the Utility Portfolio) is attached hereto as Exhibit A. A copy of the
proposed new Investment Advisory Agreement ("New Investment Advisory
Agreement") between the Trust and Cova Advisory is attached hereto as Exhibit
B.
Background
VKAC currently manages the business and affairs of the Portfolios of the
Trust, subject to the control of the Board of Trustees, pursuant to the
Current Investment Advisory Agreement. VKAC, formerly known as Van Kampen
Merritt Investment Advisory Corp., has served as investment adviser to the
Trust since the Trust commenced its investment operations. VKAC is a
wholly-owned subsidiary of Van Kampen American Capital, Inc. which in turn is
a wholly-owned subsidiary of VKAC Holding, Inc. VKAC Holding, Inc. is
indirectly controlled by Clayton & Dubilier Associates IV Limited Partnership,
the general partners of which 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., a New York based private investment
partnership. VKAC's principal office is located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181.
Van Kampen American Capital, Inc. is a diversified asset management company
with more than two million retail investor accounts and nearly $50 billion
under management or supervision. Van Kampen American Capital, Inc.'s over 40
open-end and 38 closed-end funds and more than 2,700 unit investment trusts
are distributed by financial advisers nationwide. In connection with advising
the Trust, VKAC utilizes at its own expense credit analysis and research
services provided by its affiliate, McCarthy, Crisanti & Maffei, Inc.
<PAGE>
Cova Life has determined that it would be in its own best interest and in the
best interest of its Variable Contract owners to implement new investment
advisory arrangements for the Trust. Prior to February, 1993, VKAC and Cova
Life were affiliated entities. Because the entities are no longer affiliated,
Cova Life believes that it would be in the best interests of Cova Life and its
Variable Contract owners if an entity affiliated with Cova Life (i.e., Cova
Advisory) provides management and oversight of the investments of the
beneficial owners of the Trust's shares, Cova Life's Variable Contract owners.
These new arrangements, if approved by the shareholders of the Trust, would
result in the selection of Cova Advisory as the new investment adviser to each
of the Portfolios of the Trust. Cova Advisory would retain VKAC as
sub-adviser for the Portfolios of the Trust to assist it, among other things,
in managing the investment and reinvestment of the assets of each Portfolio of
the Trust (as described in further detail in Proposal 3 hereof).
Current Investment Advisory Agreement
Under the Current Investment Advisory Agreement between the Trust and VKAC,
VKAC supplies investment research and portfolio management, including the
selection of securities for the Trust to purchase, hold, or sell and selection
of brokers through whom the Trust's portfolio transactions are executed. VKAC
also administers the business affairs of the Trust, 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 Trust. The Trust pays VKAC a monthly fee at the annual
rate as set forth below for its services under the Current Investment Advisory
Agreement equal to a percentage of the average daily net assets of the
Portfolios of the Trust:
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Average Daily Net Assets % Per Annum
______________________ ________________________ ____________
Money Market Portfolio First $500 million .500 of 1%
Over $500 million .400 of 1%
Quality Income Portfolio First $500 million .500 of 1%
Over $500 million .450 of 1%
High Yield Portfolio First $500 million .750 of 1%
Over $500 million .650 of 1%
Growth and Income Portfolio First $500 million .600 of 1%
Over $500 million .500 of 1%
Stock Index Portfolio ______________ .500 of 1%
<PAGE>
World Equity Portfolio First $500 million .750 of 1%
Over $500 million .650 of 1%
Utility Portfolio First $500 million .650 of 1%
Over $500 million but less
than $1 billion .600 of 1%
Over $1 billion .550 of 1%
</TABLE>
For the year ended December 31, 1994, VKAC was paid advisory fees as follows:
$200,948 with respect to the Quality Income Portfolio, $153,084 with respect
to the High Yield Portfolio, $266,474 with respect to the Stock Index
Portfolio and $58,701 with respect to the Growth and Income Portfolio. VKAC
waived its advisory fee of $293,512 with respect to the Money Market
Portfolio. There were no advisory fees paid with respect to the World Equity
Portfolio or the Utility Portfolio in that they have not yet commenced
investment operations.
NO FEE INCREASE IS BEING PROPOSED HEREIN. THE TRUST IS OBLIGATED TO PAY THE
SAME ADVISORY FEES UNDER THE NEW INVESTMENT ADVISORY AGREEMENT AS IT IS
OBLIGATED TO PAY UNDER THE CURRENT INVESTMENT ADVISORY AGREEMENT.
If the New Investment Advisory Agreement and the proposed Sub-Advisory
Agreement had been in effect for the year ended December 31, 1994, Cova
Advisory and VKAC would have received the following fees, respectively,
assuming that no fees were waived:
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Cova Advisory VKAC
______________________ _____________ __________
Money Market Portfolio $146,756 $146,756
Quality Income Portfolio 100,474 100,474
High Yield Portfolio 51,038 102,046
Growth and Income Portfolio 24,459 34,242
Stock Index Portfolio 133,237 133,237
</TABLE>
The Current Investment Advisory Agreement also provides that VKAC shall not be
liable for any error of judgment or of law, or for any loss suffered by the
Trust in connection with the matters to which the agreement relates, except a
loss resulting from willful misfeasance, bad faith, or gross negligence on the
part of VKAC in the performance of its obligations and duties, or by reason of
its reckless disregard of its obligations and duties under the Current
Investment Advisory Agreement.
<PAGE>
The Trust pays all other expenses incurred in its operation including, but not
limited to, direct charges relating to the purchase and sale of its portfolio
securities, interest charges, fees and expenses of legal counsel and
independent auditors, taxes and governmental fees, expenses (including
clerical expenses) of issuance, sale or repurchase of its Shares, membership
fees in trade associations, expenses of registering its Shares for sale under
federal securities laws, expenses of printing and distributing reports,
notices and proxy materials to existing shareholders, expenses of filing
reports and other documents filed with governmental agencies, expenses of
annual and special Shareholders' meetings, fees and disbursements of the
transfer agents, custodians and sub-custodians, expenses of disbursing
dividends and distributions, fees, expenses and out-of-pocket costs of its
Trustees who are not affiliated with VKAC, insurance premiums, indemnification
and other expenses not expressly provided for in the Current Investment
Advisory Agreement, and any extraordinary expenses of a nonrecurring nature.
The Current Investment Advisory Agreement may be terminated without penalty by
vote of a majority of the Board, by vote of the outstanding shares of
beneficial interest of any Portfolio, or by VKAC on sixty (60) days written
notice to the other party. The Trust or any Portfolio of the Trust, may
effect termination by action of the Board of Trustees or by vote of a majority
of the outstanding shares of any Portfolio, accompanied by proper notice. The
Current Investment Advisory Agreement will terminate without penalty in the
event of its assignment.
The Current Investment Advisory Agreement provides that it will continue in
effect from year to year only so long as its continuance is approved in
accordance with the requirements of the 1940 Act.
The foregoing summary of the Current Investment Advisory Agreement between the
Trust and VKAC is qualified by reference to the Current Investment Advisory
Agreement, which is attached as Exhibit A to this Proxy Statement.
The Current Investment Advisory Agreement, dated March 9, 1993 (and amended as
of January 14, 1994 for purposes of the addition of the World Equity and
Utility Portfolios), was last approved by the Board of Trustees, including
those Trustees who are not parties to the Current Investment Advisory
Agreement or "interested persons" of any such party, on August 11, 1995. It
was last approved by the shareholders by a majority vote of the shareholders
of all Portfolios of the Trust (except the World Equity Portfolio and the
Utility Portfolio, each of which had not yet been formed) on January 14, 1993,
the approval of which was necessitated by the acquisition of VKAC's then
parent company which may have resulted in an assignment and thus a termination
of the then existing investment advisory agreement.
The Trust and each of the Van Kampen American Capital Funds advised by VKAC
and distributed by Van Kampen American Capital Distributors, Inc. have
entered into Legal Services Agreements pursuant to which Van
<PAGE>
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 Trust for such services
is made on a cost basis for the employment of personnel, as well as the
overhead and the equipment necessary to render such services. Other funds
distributed by Van Kampen American Capital Distributors, Inc. also receive
legal services from Van Kampen American Capital. Of the total costs for legal
services provided to funds distributed by Van Kampen American Capital
Distributors, Inc., one half of such costs is allocated equally to each
fund and the remaining one half of such costs is allocated to specific funds
based on monthly time records. It is anticipated that the Legal Services
Agreement will be terminated upon the approval of the proposed new advisory
arrangements described herein. COVA Advisory intends to provide, or secure
the provision of, such services for the Trust upon the implementation of the
proposed new advisory arrangements.
The Trust distributes its own shares.
Description of Cova Advisory
Cova Advisory, One Tower Lane, Suite 3000, Oakbrook Terrace, Illinois
60181-4644 is an Illinois corporation which was incorporated on August 31,
1993 under the name Oakbrook Investment Advisory Corporation and which is
registered with the Securities and Exchange Commission as an investment
adviser under the Investment Advisers Act of 1940. Cova Advisory is a
wholly-owned subsidiary of Cova Life Management Company, a Delaware
corporation, which in turn, is a wholly-owned subsidiary of Cova
Corporation, a Missouri corporation, which in turn, is a wholly-owned
subsidiary of General American Life Insurance Company ("General
American"), a St. Louis-based mutual company. General American has more
than $235 billion of life insurance in force and approximately $9.6
billion in assets.
The names and principal occupations of the officers and directors of Cova
Advisory are as follows:
<TABLE>
<CAPTION>
<S> <C>
Name and Address Principal Occupation
________________________ _______________________________________
Lorry J. Stensrud President and Director of Cova Advisory;
One Tower Lane, Suite 3000 President of Cova Life.
Oakbrook Terrace, IL 60181-4644
<PAGE>
William C. Mair Vice President, Treasurer, Controller
One Tower Lane, Suite 3000 and Director of Cova Advisory; Vice
Oakbrook Terrace, IL 60181-4644 President and Controller of Cova Life.
Jeffery K. Hoelzel Secretary and Director of Cova Advisory;
One Tower Lane, Suite 3000 Vice President, General Counsel and
Oakbrook Terrace, IL 60181-4644 Secretary of Cova Life.
Douglas R. Koester Chief Investment Officer and Director of
700 Market Street Cova Advisory; Vice President, General
St. Louis, MO 63101 American.
Leonard M. Rubenstein Director of Cova Advisory; Executive
700 Market Street Vice President - Investments, General
St. Louis, MO 63101 American; President, General American
Investment Management Company.
</TABLE>
Proposed New Investment Advisory Agreement
As described elsewhere above, Cova Life is proposing new investment advisory
arrangements for the Trust including the appointment of Cova Advisory as the
new investment adviser to all Portfolios of the Trust. The proposed New
Investment Advisory Agreement, attached as Exhibit B hereto, must be approved
(i) by a majority of the Trustees of the Trust who are not parties to the New
Investment Advisory Agreement or "interested persons" of any such party
("Disinterested Trustees") and (ii) as to each Portfolio, by holders of a
majority of the outstanding voting securities of each such Portfolio of the
Trust. The New Investment Advisory Agreement, if approved, will take effect
on May 1, 1996 and will continue in effect until May 1, 1998 and thereafter
for successive annual periods as long as such continuance is approved in
accordance with the 1940 Act.
As indicated elsewhere herein, Cova Life believes that it is in its own best
interests and the interests of its Variable Contract Owners for Cova Advisory
to become the new investment adviser to the Trust and thus exercise control of
the management and oversight of the Trust's investments. Cova Advisory
currently intends to retain VKAC as sub-adviser to supervise and implement
the investment activities of the Portfolios, including responsibility for
overall portfolio management. See Proposal (3) for a further description
of the terms of the proposed Sub-Advisory Agreement.
The terms of the New Investment Advisory Agreement are substantially the same
as the terms of the Current Investment Advisory Agreement. THE TRUST IS
OBLIGATED TO PAY THE SAME ADVISORY FEES UNDER THE NEW INVESTMENT ADVISORY
AGREEMENT AS IT IS OBLIGATED TO PAY UNDER THE CURRENT INVESTMENT ADVISORY
AGREEMENT. The advisory fees will be paid to Cova Advisory which, in turn,
will pay a portion of these fees to VKAC pursuant to the terms of the proposed
<PAGE>
Sub-Advisory Agreement. See Proposal (3) for additional information
concerning the terms of the proposed Sub-Advisory Agreement.
Consideration of New Investment Advisory Arrangements by Proposed New Trustees
As stated above, in addition to shareholder approval, the 1940 Act requires
that the proposed New Investment Advisory Agreement be approved by a majority
of the Disinterested Trustees of the Trust. If Proposal 1 hereof, described
elsewhere herein, is approved by the Shareholders at this Meeting, it is
intended that the newly constituted Board of Trustees will hold a special
meeting of the Board on February 9, 1996. At that meeting, the newly
constituted Board of Trustees will consider, among other things, the proposed
advisory and sub-advisory arrangements described herein, including the
proposed New Investment Advisory Agreement and the proposed Sub-Advisory
Agreement. In connection with its consideration of these proposed new advisory
and sub-advisory arrangements, the newly constituted Board of Trustees will be
provided in advance of the Board meeting with various materials for its
consideration including copies of the proposed New Investment Advisory
Agreement and Sub-Advisory Agreement; comparative data as to the performance
and advisory fee rates of the Portfolios and other like mutual funds; a
comparison with the expense ratios of other mutual funds; and copies of all
proxy soliciting materials including copies of the financial statements of
Cova Advisory and VKAC. If approved by the Shareholders at this Meeting and if
approved by the newly constituted Board of Trustees at its special meeting
scheduled for February 9, 1996, it is intended that the proposed new advisory
and sub-advisory arrangements described herein will take effect on May 1,
1996.
Brokerage and Research Services
Transactions on U.S. stock exchanges and other agency transactions involve the
payment by the Trust of negotiated brokerage commissions. Such commissions
vary among different brokers. Also, a particular broker may charge different
commissions according to such factors as the difficulty and size of the
transaction. Transactions in foreign securities often involve the payment of
fixed brokerage commissions, which are generally higher than those in the
United States. There is generally no stated commission in the case of
securities traded in the over-the-counter markets, but the price paid by the
Trust usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Trust includes a disclosed,
fixed commission or discount retained by the underwriter or dealer.
It is currently intended that VKAC, as sub-adviser, will place all orders for
the purchase and sale of portfolio securities for the Trust and buy and sell
securities for the Trust through a substantial number of brokers and dealers.
In so doing, VKAC will use its best efforts to obtain for the Trust the best
price and execution available. In seeking the best price and execution, VKAC,
<PAGE>
having in mind the Trust's best interests, will consider all factors it deems
relevant, including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account market prices
and trends, the reputation, experience, and financial stability of the
broker-dealer involved, and the quality of service rendered by the
broker-dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional
investors to receive research, statistical, and quotation services from
broker-dealers which execute portfolio transactions for the clients of such
advisers. Consistent with this practice, VKAC may receive research,
statistical, and quotation services from any broker-dealers with which it
places the Trust's portfolio transactions. These services, which in some
cases may also be purchased for cash, include such matters as general economic
and security market reviews, industry and company reviews, evaluations of
securities, and recommendations as to the purchase and sale of securities.
Some of these services may be of value to VKAC and/or its affiliates in
advising various of their clients (including the Trust), although not all of
these services are necessarily useful and of value in managing the Trust. The
management fees paid by the Trust are not reduced because VKAC and/or its
affiliates may receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, VKAC may
cause a Portfolio to pay a broker-dealer which provides brokerage and research
services to VKAC an amount of disclosed commission for effecting a securities
transaction for the Portfolio in excess of the commission which another
broker-dealer would have charged for effecting that transaction. VKAC's
authority to cause a Portfolio to pay any such greater commissions is also
subject to such policies as Cova Advisory or the Trustees may adopt from time
to time.
INVESTMENT DECISIONS. If purchases or sales of securities of the Trust
and of one or more other investment companies or clients advised by VKAC are
considered at or about the same time, transactions in such securities will be
allocated among the several investment companies and clients, in a manner
deemed equitable by VKAC, to each such investment company or client, taking
into account their respective sizes and the amount of securities to be
purchased or sold. Although it is possible that in some cases this procedure
could have a detrimental effect on the price paid for the security by the
Trust or the volume of the security purchased by the Trust, it is also
possible that the ability to participate in volume transactions and to
negotiate lower brokerage commissions will be beneficial to the Trust.
<PAGE>
Vote Required
Shareholders of each Portfolio will vote separately to approve or disapprove
the New Investment Advisory Agreement with respect to that Portfolio. As
provided in the 1940 Act, approval of the New Investment Advisory Agreement as
to a Portfolio requires the affirmative vote of a "majority of the outstanding
voting securities" of the Portfolio, which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares
of the Portfolio and (2) 67% or more of the shares of the Portfolio present at
the Meeting if more than 50% of the outstanding shares are present at the
Meeting in person or by proxy. COVA LIFE RECOMMENDS THAT CONTRACT OWNERS VOTE
TO APPROVE THE PROPOSED NEW INVESTMENT ADVISORY AGREEMENT. THE CURRENT BOARD
EXPRESSES NO OPINION AND OFFERS NO RECOMMENDATION WITH RESPECT TO THE APPROVAL.
PROPOSAL (3):
APPROVAL OF PROPOSED SUB-ADVISORY AGREEMENT BETWEEN COVA
INVESTMENT ADVISORY CORPORATION AND VAN KAMPEN
AMERICAN CAPITAL INVESTMENT ADVISORY CORP.
General
As described above, Cova Life has requested that this Special Meeting of
Shareholders be called for the purpose, among other things, of approving new
advisory arrangements. VKAC currently serves as the investment adviser to all
Portfolios of the Trust as described more fully in Proposal 2. It is now
proposed by Cova Life that Cova Advisory become the new investment adviser to
all Portfolios of the Trust. Cova Advisory will retain VKAC as sub-adviser
pursuant to the terms of the proposed Sub-Advisory Agreement, a copy of which
is attached hereto as Exhibit C.
Description of VKAC
A full description of VKAC is set forth in Proposal 2 above.
All the Portfolios (except the Utility Portfolio) of the Trust will be managed
by VKAC by a committee composed of persons who are officers or employees of
VKAC. Daniel Smith is an Assistant Vice President of VKAC and is primarily
responsible for the management of the Utility Portfolio. Mr. Smith has been
employed by VKAC for the past five years.
Proposed Sub-Advisory Agreement
The proposed Sub-Advisory Agreement between Cova Advisory and VKAC provides
that VKAC will manage the investment and reinvestment of the assets of the
Portfolios, subject to the supervision of Cova Advisory and the Board of
Trustees. VKAC will, under the Sub-Advisory Agreement, evaluate economic,
<PAGE>
statistical and financial information and undertake such investment research
as it shall deem advisable; purchase and sell securities and other investments
for the Portfolios; and provide such reports and data as are requested by Cova
Advisory and the Board of Trustees.
The Sub-Advisory Agreement may be terminated at any time without the payment
of any penalty, by a majority of the Board of Trustees of the Trust, by a vote
of the majority of the outstanding shares of beneficial interest of any
Portfolio or by VKAC on sixty (60) days' written notice to Cova Advisory. The
Agreement may be terminated by Cova Advisory only with the approval of a
majority of the Board of Trustees of the Trust. The Agreement will terminate
automatically in the event of its assignment or in the event of the
termination of the New Investment Advisory Agreement.
For the services to be provided by VKAC, Cova Advisory will pay VKAC a monthly
fee at the annual rate as set forth below as a percentage of the daily net
assets of the Portfolios.
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Average Daily Net Assets % Per Annum
______________________ ________________________ ___________
Money Market Portfolio First $500 million .250 of 1%
Over $500 million .150 of 1%
Quality Income Portfolio First $500 million .250 of 1%
Over $500 million .200 of 1%
High Yield Portfolio First $500 million .500 of 1%
Over $500 million .400 of 1%
Growth and Income Portfolio First $500 million .350 of 1%
Over $500 million .250 of 1%
Stock Index Portfolio ______________ .250 of 1%
World Equity Portfolio First $500 million .500 of 1%
Over $500 million .400 of 1%
Utility Portfolio First $500 million .400 of 1%
Over $500 million but less
than $1 billion .350 of 1%
Over $1 billion .300 of 1%
</TABLE>
<PAGE>
In the event that Cova Advisory elects to waive a portion of its advisory fee,
VKAC has agreed to waive the same amount of its sub-advisory fee.
COVA LIFE RECOMMENDS THAT CONTRACT OWNERS VOTE TO APPROVE THE PROPOSED
SUB-ADVISORY AGREEMENT. THE CURRENT BOARD EXPRESSES NO OPINION AND OFFERS
NO RECOMMENDATION WITH RESPECT TO THE APPROVAL.
ADDITIONAL INFORMATION
Substantial Shareholders
As of the Record Date, Cova Variable Annuity Account One, a separate account
of Cova Financial Services Life Insurance Company, and Cova Variable Annuity
Account Five, a separate account of Cova Financial Life Insurance Company,
were known to the Board of Trustees and the management of the Trust to own of
record 100% of the Shares. On that date, the officers and Trustees of the
Trust together owned no Variable Contracts.
Ownership by Certain Beneficial Owners
Cova Life has advised the Trust that as of the Record Date, there are no
persons who own Variable Contracts which will entitle them to
instruct Cova Life with respect to more than 5% of the Shares.
PROXY SOLICITATION EXPENSES
The expense of preparing, printing and mailing the enclosed form of proxy and
accompanying Notice and this Proxy Statement and solicitation of proxies will
be borne by Cova Life.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Trust's Annual Report to Shareholders, which includes audited financial
statements of the Trust as of December 31, 1994 and the Trust's Semi-Annual
Report to Shareholders which includes unaudited financial statements of the
Trust as of June 30, 1995, may be obtained without charge by calling (800)
831-LIFE or writing to Cova Life at One Tower Lane, Suite 3000, Oakbrook
Terrace, Illinois 60181-4644.
OTHER MATTERS
Cova Life does not intend to present and does not have reason to believe that
others will present any other items of business at the Meeting. However, if
other matters are properly presented to the Meeting for a vote, the proxies
will be voted upon such matters in accordance with the judgment of the persons
acting under the proxies.
<PAGE>
By Order of Cova Life
LORRY J. STENSRUD
President
Dated: January 10, 1996
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT dated as of March 9, 1993, by and
between VAN KAMPEN MERRITT SERIES TRUST (the "Trust"), a Massachusetts
business trust, and VAN KAMPEN MERRITT INVESTMENT ADVISORY CORP. (the
"Advisor"), a Delaware corporation.
1. (a) Retention of Advisor by Fund. The Trust hereby employs the Advisor
to act as the investment advisor for and to (i) manage the investment and
reinvestment of the assets of the Quality Portfolio, High Yield Portfolio,
Growth and Income Portfolio, Money Market Portfolio and Stock Index
Portfolio, each being a sub-trust of the Trust (hereinafter referred to
individually as the "Sub-Trust") in accordance with each such Sub-Trust's
investment objective and policies and limitations, or (ii) in the event
the Advisor shall retain a sub-advisor in accordance with the provisions of
the sub-paragraph (b) hereunder, to supervise and implement the investment
activities of any Sub-Trust for which such sub-advisor has been retained,
including responsibility for overall management and administrative support
including managing, providing for and compensating any sub-advisors; and to
administer its affairs to the extent requested by, and subject to the review
and supervision of, the Board of Trustees of the Trust 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 Trust
with respect to each Sub-Trust as may from time to time be in force and
delivered or made available to the Advisor.
(b) Advisor's Acceptance of Employment. The Advisor accepts such
employment and agrees during such period to render such services, to select,
retain and compensate any sub-advisors, to supply investment research and
portfolio management (including without limitation the selection of securities
for each Sub-Trust to purchase, hold or sell and the selection of brokers
through whom such Sub-Trust's portfolio transactions are executed, in
accordance with the policies adopted by the Sub-Trust and its Board
of Trustees), to administer the business affairs of each Sub-Trust, to furnish
offices and necessary facilities and equipment to each Sub-Trust, to provide
administrative services for each Sub-Trust, to render periodic reports to the
<PAGE>
Board of Trustees of the Trust with respect to each Sub-Trust, and to permit
any of its officers or employees, or those of any sub-advisor to serve without
compensation as trustees or officers of the Sub-Trust if elected to such
positions.
(c) Independent Contractor. The Advisor and any sub-advisors shall be
deemed to be independent contractors under this Agreement and any sub-advisory
agreements with the Advisor and, unless otherwise expressly provided or
authorized, shall have no authority to act for or represent the Trust
or any Sub-Trust in any way or otherwise be deemed as agent of the Trust or
any Sub-Trust.
(d) Non-Exclusive Agreement. The services of the Advisor to any Sub-Trust
under this Agreement are not to be deemed exclusive, and the Advisor shall be
free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
2. (a) Fee. For the services and facilities described in Section 1, each
Sub-Trust will pay to the Advisor at the end of each calendar month an
investment management fee equal to a percentage of the average daily net
assets of such Sub-Trust as set forth in Schedules A through E attached hereto
and incorporated by reference herein.
(b) Determination of Net Asset Value. The net asset value of each
Sub-Trust shall be calculated as of the close of the New York Stock Exchange
(the "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 Trust as from time to time in
force. For the purpose of the foregoing computations, on each day when net
asset value is not calculated, the net asset value of a share of beneficial
interest of each Sub-Trust 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.
(c) Proration. For the month and year in which this Agreement becomes
effective or terminates, there shall be an appropriate proration of the
Advisor'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 Advisor, the Sub-Trust shall
assume and pay any expenses for services rendered by a custodian for the
safekeeping of the such Sub-Trust'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 Sub-Trust as provided above. Neither
the Advisor or any sub-advisor shall be required to pay, and each Sub-Trust
shall assume and pay, the charges and expenses of its operations, including
compensation of the trustees of the Trust (other than those who are interested
<PAGE>
persons of the Advisor or any sub-advisor and other than those who are
interested persons of the principal underwriter of the Sub-Trust but not of
the Advisor or any sub-advisor, if the principal underwriter 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, interest (if any) on obligations
incurred by such Sub-Trust, 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 such Sub-Trust
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 such Sub-Trust, filing of corporate
documents or otherwise. Neither the Trust or any Sub-Trust shall pay or incur
any obligation for any management or administrative expenses for which the
Trust or such Sub-Trust intends to seek reimbursement from the Advisor without
first obtaining the written approval of the Advisor. The Advisor shall
arrange, if desired by the Trust, for officers or employees of the Advisor
or any sub-advisor to serve, without compensation from the Trust, as trustees,
officers or agents of the Trust 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 Trust or
any Sub-Trust are or may be interested in the Advisor or any sub-advisor as
trustees, directors, officers, shareholders, agents or otherwise and that the
trustees, directors, officers, shareholders and agents of the Advisor may be
interested in the Trust and any Sub-Trust as trustees, officers, shareholders,
agents or otherwise.
5. Liability. The Advisor shall not be liable for any error in judgment
or of law, or for any loss suffered by the Trust or any Sub-Trust in
connection with the matters to which this Agreement or any sub-advisory
agreement relates, except (1) a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Advisor in the performance of its
obligations and duties, (2) by reason of its reckless disregard of its
obligations and duties under this Agreement, or (3) from willful misfeasance,
bad faith or gross negligence on the part of any sub-advisor in the
performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under any sub-advisory agreement
between it and the Advisor.
6. (a) Term. This Agreement shall become effective on the date hereof and
shall remain in full force until December 31, 1994, unless sooner terminated
as hereinafter provided. This Agreement shall continue in force from year to
year thereafter, but only as long as such continuance is specifically approved
at least annually in the manner required by the Investment Company Act of
1940, as amended (the "Investment Company Act"). Any sub-advisory agreement
between the Advisor and any sub-advisor shall remain in full force and effect
<PAGE>
from its date of effectiveness until the second anniversary of such date
unless sooner terminated as hereinafter provided. Any such sub-advisory
agreement shall continue in force from year to year thereafter, but only as
long as such continuance is specifically approved at least annually in the
manner required by the Investment Company Act.
(b) Termination. This Agreement, and any sub-advisory agreement between
the Advisor and any sub-advisor, shall be submitted to the shareholders of the
Trust and each Sub-Trust for approval at the first shareholders meeting and
shall automatically terminate if not approved by a majority of the shares
of the Sub-Trust present and voting at such meeting. This Agreement, and any
sub-advisory agreement between the Advisor and any sub-advisor, shall
automatically terminate in the event of its assignment. This Agreement, and
any sub-advisory agreement between the Advisor and any sub-advisor, may be
terminated at any time without the payment of any penalty by a majority of the
Board of Trustees of the Trust, by vote of the outstanding shares of
beneficial interest of any Sub-Trust or, in the case of this Advisory
Agreement only, by the Advisor or, in the case of a sub-advisory agreement
between the Advisor and any sub-advisor, the sub-advisor, on sixty (60) days
written notice to the other party. The Trust or any Sub-Trust may effect
termination by action of the Board of Trustees or by vote of a majority of the
outstanding shares of beneficial interest of such Sub-Trust, accompanied by
appropriate notice. This Agreement, and any sub-advisory agreement between the
Advisor and any sub-advisor, 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 beneficial interest of the Trust or
any Sub-Trust in the event that it shall have been established by a court of
competent jurisdiction that (1) the Advisor or any officer or director of the
Advisor has taken any action which results in a breach of the covenants of the
Advisor set forth herein or (2) that any sub-advisor or any trustee, director
or officer of any sub-advisor has taken any action which results in a breach
of the covenants of such sub-advisor set forth in any sub-advisory agreement
between such sub-advisor and the Advisor. No sub-advisory agreement shall be
cancelable by the Advisor without the approval of a majority of the Board of
Trustees of the Trust.
(c) Payment upon Termination. Termination of this Agreement shall not
affect the right of the Advisor to receive payment on any unpaid balance of
the compensation described in Section 2 earned prior to such termination.
7. The Advisor shall not enter into any sub-advisory agreement with any
sub-advisor respecting the management of assets of any Sub-Trust which is
inconsistent with the terms hereof or with the Investment Company Act or the
Investment Advisers Act of 1940.
<PAGE>
8. 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 be thereby affected.
9. 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.
10. Disclaimer. The Advisor acknowledges and agrees that, as provided by
Section 5.5 of the Declaration of Trust of the Fund, the shareholders,
trustees, officers, employees and other agents of the Trust and any Sub-Trust
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.
IN WITNESS WHEREOF, the Fund and the Advisor have caused this Agreement
to be executed on the day and year first above written.
VAN KAMPEN MERRITT INVESTMENT ADVISORY CORP.
By /S/DENNIS J. MCDONNELL
_________________________________________________
President, Chief Operating Officer and Director
VAN KAMPEN MERRITT SERIES TRUST
By /S/DENNIS J. MCDONNELL
________________________________________________
President, Chief Operating Officer and Trustee
<PAGE>
SCHEDULE A
VAN KAMPEN MERRITT SERIES TRUST, QUALITY INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9 1993, the Quality Income Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the Quality Income Portfolio as
follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ _____________
First $500 Million .50 of 1%
Over $500 Million .45 of 1%
</TABLE>
<PAGE>
SCHEDULE B
VAN KAMPEN MERRITT SERIES TRUST, HIGH YIELD PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the High Yield Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to a percentage
of the average daily net assets of the High Yield Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ _____________
First $500 Million .75 of 1%
Over $500 Million .65 of 1%
</TABLE>
<PAGE>
SCHEDULE C
VAN KAMPEN MERRITT SERIES TRUST, GROWTH AND INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the Growth and Income Portfolio shall pay to the Advisor
at the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the Growth and Income Portfolio
as follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ ______________
First $500 Million .60 of 1%
Over $500 Million .50 of 1%
</TABLE>
<PAGE>
SCHEDULE D
VAN KAMPEN MERRITT SERIES TRUST, MONEY MARKET PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the Money Market Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the Money Market Portfolio as
follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ ______________
First $500 Million .50 of 1%
Over $500 Million .40 of 1%
</TABLE>
<PAGE>
SCHEDULE E
VAN KAMPEN MERRITT SERIES TRUST, STOCK INDEX PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the Stock Index Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to .50 of 1% of
the average daily net assets of the Stock Index Portfolio.
Amendment One
To The
Investment Advisory Agreement
THIS AMENDMENT dated as of January 14, 1994, to the Investment Advisory
Agreement dated as of March 9, 1993 (the "Agreement") by and between VAN
KAMPEN MERRITT SERIES TRUST (the "Trust"), a Massachusetts business trust, and
VAN KAMPEN MERRITT INVESTMENT ADVISORY CORP., a Delaware corporation (the
"Advisor").
WHEREAS, the Trust has established the World Equity Portfolio and the
Utility Portfolio, each being a separate sub-trust, and desires to retain the
Advisor to serve as investment adviser of each sub-trust: and
WHEREAS, the Advisor desires to serve as investment adviser for each of
the World Equity Portfolio and the Utility Portfolio; THEREFORE
1. Section 1 (a) of the Agreement is hereby amended so as to include the
World Equity Portfolio and the Utility Portfolio in the definition of a
"Sub-Trust"; and
2. Section 2(a) of the Agreement is hereby amended so as to include
Schedule F, attached hereto, relating to the investment management fee payable
by the World Equity Portfolio to the Advisor and Schedule G, attached hereto,
relating to the investment management fee payable by the Utility Portfolio to
the Advisor.
IN WITNESS WHEREOF, the Trust and the Advisor have caused this Amendment
to the Agreement to be executed on the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
VAN KAMPEN MERRITT SERIES TRUST VAN KAMPEN MERRITT
INVESTMENT ADVISORY CORP.
By:/S/DENNIS J. MCDONNELL By:/S/DENNIS J. MCDONNELL
_____________________ ______________________
President President
<PAGE>
Attest Attest
By:/S/RONALD A. NYBERG By:/S/RONALD A. NYBERG
___________________ ___________________
Secretary Secretary
</TABLE>
<PAGE>
SCHEDULE F
VAN KAMPEN MERRITT SERIES TRUST WORLD EQUITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the World Equity Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the World Equity Portfolio as
follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .75 of 1%
Over $500 Million .65 of 1%
</TABLE>
<PAGE>
SCHEDULE G
VAN KAMPEN MERRITT SERIES TRUST UTILITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement
dated March 9, 1993, the Utility Portfolio shall pay to the Advisor at the end
of each calendar month an investment management fee equal to a percentage of
the average daily net assets of the Utility Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .65 of 1%
Over $500 Million but less than $1 Billion .60 of 1%
Over $1 Billion .55 of 1%
</TABLE>
<PAGE>
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT dated as of ____________, 1996, by and
between VAN KAMPEN MERRITT SERIES TRUST (the "Trust"), a Massachusetts
business trust, and COVA INVESTMENT ADVISORY CORPORATION (the "Advisor"), an
Illinois corporation.
1. (a) Retention of Advisor by Trust. The Trust hereby employs the
Advisor to act as the investment advisor for and to (i) manage the investment
and reinvestment of the assets of the Quality Income Portfolio, High Yield
Portfolio, Growth and Income Portfolio, Money Market Portfolio, Stock Index
Portfolio, World Equity Portfolio and the Utility Portfolio, each being a
sub-trust of the Trust (hereinafter referred to individually as the
"Sub-Trust"), in accordance with each such Sub-Trust's investment objective
and policies and limitations, or (ii) in the event the Advisor shall retain a
sub-advisor in accordance with the provisions of sub-paragraph (b) hereunder,
to supervise and implement the investment activities of any Sub-Trust for
which such sub-advisor has been retained, including responsibility for overall
management and administrative support including managing, providing for and
compensating any sub-advisors; and to administer its affairs to the extent
requested by, and subject to the review and supervision of, the Board of
Trustees of the Trust for the period and upon the terms herein set forth. The
Advisor shall select the entities with or through which the purchase, sale or
loan of securities is to be effected; provided that the Advisor will place
orders pursuant to its investment determinations either directly with the
issuer or with a broker or dealer, and if with a broker or dealer, (a) will
attempt to obtain the best net price and most favorable execution of its
orders, and (b) may nevertheless in its discretion purchase and sell portfolio
securities from and to brokers and dealers who provide the Advisor with
research, analysis, advice and similar services and pay such brokers and
dealers in return a higher commission or spread than may be charged by other
brokers or dealers.
The Trust hereby authorizes any entity or person associated with the
Advisor or any sub-advisor retained by Advisor pursuant to this Agreement,
which is a member of a national securities exchange, to effect any transaction
on the exchange for the account of the Trust which is permitted by Section
11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder,
and the Trust hereby consents to the retention of compensation for such
transactions in accordance with Rule 11a2-2(T)(a)(iv).
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 Trust with respect to each
Sub-Trust as may from time to time be in force and delivered or made available
to the Advisor.
<PAGE>
(b) Advisor's Acceptance of Employment. The Advisor accepts such
employment and agrees during such period to render such services, to select,
retain and compensate any sub-advisors, to supply investment research and
portfolio management (including without limitation the selection of securities
for each Sub-Trust to purchase, hold or sell and the selection of brokers
through whom such Sub-Trust's portfolio transactions are executed, in
accordance with the policies adopted by the Sub-Trust and its Board of
Trustees), to administer the business affairs of each Sub-Trust, to furnish
offices and necessary facilities and equipment to each Sub-Trust, to provide
administrative services for each Sub-Trust, to render periodic reports to the
Board of Trustees of the Trust with respect to each Sub-Trust, and to permit
any of its officers or employees, or those of any sub-advisor to serve without
compensation as trustees or officers of the Sub-Trust if elected to such
positions.
(c) Independent Contractor. The Advisor and any sub-advisors shall
be deemed to be independent contractors under this Agreement and any
sub-advisory agreements with the Advisor and, unless otherwise expressly
provided or authorized, shall have no authority to act for or represent the
Trust or any Sub-Trust in any way or otherwise be deemed an agent of the Trust
or any Sub-Trust.
(d) Non-Exclusive Agreement. The services of the Advisor to any
Sub-Trust under this Agreement are not to be deemed exclusive, and the Advisor
shall be free to render similar services or other services to others so long
as its services hereunder are not impaired thereby.
2. (a) Fee. For the services and facilities described in Section 1,
each Sub-Trust will pay to the Advisor at the end of each calendar month an
investment management fee equal to a percentage of the average daily net
assets of such Sub-Trust as set forth in Schedules A through G attached hereto
and incorporated by reference herein.
(b) Determination of Net Asset Value. The net asset value of each
Sub-Trust shall be calculated as of the close of the New York Stock Exchange
(the "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 Trust as from time to time in
force. For the purpose of the foregoing computations, on each day when net
asset value is not calculated, the net asset value of a share of beneficial
interest of each Sub-Trust 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.
(c) Proration. For the month and year in which this Agreement
becomes effective or terminates, there shall be an appropriate proration of
the Advisor's fee on the basis of the number of days that the Agreement is in
effect during such month and year, respectively.
<PAGE>
3. Expenses. In addition to the fee of the Advisor, the Sub-Trust
shall assume and pay any expenses for services rendered by a custodian for the
safekeeping of such Sub-Trust'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 Sub-Trust as provided above. Neither the Advisor
nor any sub-advisor shall be required to pay, and each Sub-Trust shall assume
and pay, the charges and expenses of its operations, including compensation of
the trustees of the Trust (other than those who are interested persons of the
Advisor or any sub-advisor and other than those who are interested persons of
the principal underwriter of the Sub-Trust but not of the Advisor or any
sub-advisor, if the principal underwriter 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, interest (if any) on obligations
incurred by such Sub-Trust, 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 such Sub-Trust
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 such Sub-Trust, filing of corporate
documents or otherwise. Neither the Trust nor any Sub-Trust shall pay or
incur any obligation for any management or administrative expenses for which
the Trust or such Sub-Trust intends to seek reimbursement from the Advisor
without first obtaining the written approval of the Advisor. The Advisor
shall arrange, if desired by the Trust, for officers or employees of the
Advisor or any sub-advisor to serve, without compensation from the Trust, as
trustees, officers or agents of the Trust if duly elected or appointed to such
positions and subject to their individual consent 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 Trust
or any Sub-Trust are or may be interested in the Advisor or any sub-advisor as
trustees, directors, officers, shareholders, agents or otherwise and that the
trustees, directors, officers, shareholders and agents of the Advisor may be
interested in the Trust and any Sub-Trust as trustees, officers, shareholders,
agents or otherwise.
5. Liability. The Advisor shall not be liable for any error in judgment
or of law, or for any loss suffered by the Trust or any Sub-Trust in
connection with the matters to which this Agreement or any sub-advisory
agreement relates, except (1) a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Advisor in the performance of its
obligations and duties, or (2) by reason of its reckless disregard of its
obligations and duties under this Agreement.
<PAGE>
6. (a) Term. This Agreement shall become effective on the date hereof
and shall remain in full force until _________, 1998 unless sooner terminated
as hereinafter provided. This Agreement shall continue in force from year to
year thereafter, but only as long as such continuance is specifically approved
at least annually in the manner required by the Investment Company Act of
1940, as amended (the "Investment Company Act"). Any sub-advisory agreement
between the Advisor and any sub-advisor shall remain in full force and effect
from its date of effectiveness until the second anniversary of such date
unless sooner terminated as hereinafter provided. Any such sub-advisory
agreement shall continue in force from year to year thereafter, but only as
long as such continuance is specifically approved at least annually in the
manner required by the Investment Company Act.
(b) Termination. This Agreement, and any sub-advisory agreement
between the Advisor and any sub-advisor, shall be submitted to the
shareholders of the Trust and each Sub-Trust for approval at a shareholders'
meeting and shall automatically terminate if not approved by a majority of the
shares of the Sub-Trust present and voting at such meeting. This Agreement,
and any sub-advisory agreement between the Advisor and any sub-advisor, shall
automatically terminate in the event of its assignment. This Agreement, and
any sub-advisory agreement between the Advisor and any sub-advisor, may be
terminated at any time without the payment of any penalty by a majority of the
Board of Trustees of the Trust, by vote of the outstanding shares of
beneficial interest of any Sub-Trust or, in the case of this Advisory
Agreement only, by the Advisor or, in the case of a sub-advisory agreement
between the Advisor and any sub-advisor, the sub-advisor, on sixty (60) days
written notice to the other party. The Trust or any Sub-Trust may effect
termination by action of the Board of Trustees or by vote of a majority of the
outstanding shares of beneficial interest of such Sub-Trust, accompanied by
appropriate notice. No sub-advisory agreement shall be cancelable by the
Advisor without the approval of a majority of the Board of Trustees of the
Trust. Any sub-advisory agreement will terminate automatically in the event
of the termination of this Agreement.
(c) Payment upon Termination. Termination of this Agreement shall
not affect the right of the Advisor to receive payment on any unpaid balance
of the compensation described in Section 2 earned prior to such termination.
7. Consistency with Sub-Advisory Agreements. The Advisor shall not
enter into any sub-advisory agreement with any sub-advisor respecting the
management of assets of any Sub-Trust which is inconsistent with the terms
hereof or with the Investment Company Act or the Investment Advisers Act of
1940.
8. 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 be thereby affected.
<PAGE>
9. 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.
10. Disclaimer. The Advisor acknowledges and agrees that, as provided
by Section 5.5 of the Declaration of Trust of the Trust, the shareholders,
trustees, officers, employees and other agents of the Trust and any Sub-Trust
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.
IN WITNESS WHEREOF, the Trust and the Advisor have caused this Agreement
to be executed on the day and year first above written.
COVA INVESTMENT ADVISORY CORPORATION
By:____________________________________________
VAN KAMPEN MERRITT SERIES TRUST
By:____________________________________________
SCHEDULE A
VAN KAMPEN MERRITT SERIES TRUST, QUALITY INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
__________, 1996, the Quality Income Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to a percentage
of the average daily net assets of the Quality Income Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .500 of 1%
Over $500 Million .450 of 1%
</TABLE>
<PAGE>
SCHEDULE B
VAN KAMPEN MERRITT SERIES TRUST, HIGH YIELD PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
___________, 1996, the High Yield Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to a percentage
of the average daily net assets of the High Yield Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .750 of 1%
Over $500 Million .650 of 1%
</TABLE>
<PAGE>
SCHEDULE C
VAN KAMPEN MERRITT SERIES TRUST, GROWTH AND INCOME PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
___________, 1996, the Growth and Income Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the Growth and Income Portfolio
as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .600 of 1%
Over $500 Million .500 of 1%
</TABLE>
<PAGE>
SCHEDULE D
VAN KAMPEN MERRITT SERIES TRUST, MONEY MARKET PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
__________, 1996, the Money Market Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to a percentage
of the average daily net assets of the Money Market Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .500 of 1%
Over $500 Million .400 of 1%
</TABLE>
<PAGE>
SCHEDULE E
VAN KAMPEN MERRITT SERIES TRUST, STOCK INDEX PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
___________, 1996, the Stock Index Portfolio shall pay to the Advisor at the
end of each calendar month an investment management fee equal to .500 of 1% of
the average daily net assets of the Stock Index Portfolio.
<PAGE>
SCHEDULE F
VAN KAMPEN MERRITT SERIES TRUST, WORLD EQUITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
_____________, 1996, the World Equity Portfolio shall pay to the Advisor at
the end of each calendar month an investment management fee equal to a
percentage of the average daily net assets of the World Equity Portfolio as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .750 of 1%
Over $500 Million .650 of 1%
</TABLE>
<PAGE>
SCHEDULE G
VAN KAMPEN MERRITT SERIES TRUST, UTILITY PORTFOLIO
In accordance with Section 2(a) of the Investment Advisory Agreement dated
____________, 1996, the Utility Portfolio shall pay to the Advisor at the end
of each calendar month an investment management fee equal to a percentage of
the average daily net assets of the Utility Portfolio as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Average Daily Net Assets % Per Annum
________________________ ____________
First $500 Million .650 of 1%
Over $500 Million but
less than $1 Billion .600 of 1%
Over $1 Billion .550 of 1%
</TABLE>
<PAGE>
VAN KAMPEN MERRITT SERIES TRUST
SUB-ADVISORY AGREEMENT
This Agreement is made between COVA INVESTMENT ADVISORY CORPORATION, an
Illinois corporation, having its principal place of business in Oakbrook
Terrace, Illinois (hereinafter referred to as the "Advisor"), VAN KAMPEN
AMERICAN CAPITAL INVESTMENT ADVISORY CORP., a Delaware corporation, having its
principal place of business in Oakbrook Terrace, Illinois (hereinafter
referred to as the "Sub-Advisor") and VAN KAMPEN MERRITT SERIES TRUST, a
Massachusetts business trust (hereinafter referred to as the "Trust").
WHEREAS, the Trust, an open-end diversified management investment company, as
that term is defined in the Investment Company Act of 1940, as amended (the
"Act"), that is registered as such with the Securities and Exchange Commission
has appointed Advisor as investment adviser for and to the Quality Income
Portfolio, the High Yield Portfolio, the Growth and Income Portfolio, the
Money Market Portfolio, the Stock Index Portfolio, the World Equity Portfolio
and the Utility Portfolio, each being a sub-trust of the Trust (referred to
individually as the "Sub-Trust"), pursuant to the terms of an investment
advisory agreement between the Trust and Advisor ("Investment Advisory
Agreement");
WHEREAS, Sub-Advisor is engaged in the business of rendering investment
management services; and
WHEREAS, Advisor desires to retain Sub-Advisor to provide certain investment
management services for the Sub-Trusts as more fully described below;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Retention of Sub-Advisor. Advisor hereby retains Sub-Advisor to
assist Advisor in its capacity as investment adviser for the Sub-Trusts.
Subject to the oversight and review of Advisor and the Board of Trustees of
the Trust, Sub-Advisor shall manage the investment and reinvestment of the
assets of the Sub-Trusts. Sub-Advisor will determine in its discretion,
subject to the oversight and review of Advisor, the investments to be
purchased or sold, will provide Advisor with records concerning its activities
which Advisor or the Trust is required to maintain, and will render regular
reports to Advisor and to officers and Trustees of the Trust concerning its
discharge of the foregoing responsibilities.
Sub-Advisor, in its supervision of the investments of the Sub-Trusts,
will be guided by each Sub-Trust's investment objectives and policies and the
provisions and restrictions contained in the Declaration of Trust and By-Laws
of the Trust and as set forth in the Registration Statement and exhibits as
<PAGE>
may be on file with the Securities and Exchange Commission, all as
communicated by Advisor to Sub-Advisor.
Sub-Advisor 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 Trust or any Sub-Trust in any way or
otherwise be deemed an agent of the Trust or any Sub-Trust.
2. Fee. Advisor shall pay to Sub-Advisor, for all services rendered to
the Sub-Trusts by Sub-Advisor hereunder, the sub-advisory fees set forth in
Exhibit A attached hereto. During the term of this Agreement, Sub-Advisor
will bear all expenses incurred by it in the performance of its duties
hereunder.
3. Term. The term of this Agreement shall begin on the date of its
execution and shall remain in effect for two years from that date and from
year to year thereafter, subject to the provisions for termination and all of
the other terms and conditions hereof, if such continuation is specifically
approved at least annually in the manner required by the Act. This Agreement
shall be submitted to the shareholders of the Trust and each Sub-Trust for
approval at a shareholders' meeting and shall automatically terminate if not
approved by a majority of the shares of the Sub-Trust present and voting at
such meeting.
4. Termination. This Agreement may be terminated at any time without
the payment of any penalty, by a majority of the Board of Trustees of the
Trust, by a vote of the majority of the outstanding shares of beneficial
interest of any Sub-Trust or by the Sub-Advisor on sixty (60) days written
notice to the Advisor.
This Agreement will terminate automatically in the event of the
termination of the Investment Advisory Agreement.
Notwithstanding any provision of this Agreement, this Agreement may not
be canceled by the Advisor without the approval of a majority of the Board of
Trustees of the Trust.
This Agreement shall automatically terminate in the event of its
assignment. The Sub-Advisor may employ or contract with any other person,
persons, corporation, or corporations at its own cost and expense as it shall
determine in order to assist it in carrying out its obligations and duties
under this Agreement.
5. Sub-Advisor's Representations - Section 817(h). Sub-Advisor
represents and warrants that the Sub-Trusts will at all times be invested in
such a manner as to ensure compliance with Section 817(h) of the Internal
Revenue Code of 1986, as amended and Treasury Regulations Section 1.817-5,
relating to the diversification requirements for variable annuity, endowment,
<PAGE>
or life insurance contracts and any amendments or other modifications to such
Section or Regulations. Sub-Advisor will be relieved of this obligation and
shall be held harmless when direction from the Advisor or Trustees causes
non-compliance with Section 817(h) and/or Regulation Section 1.817-5.
Sub-Advisor agrees to provide quarterly reports to Advisor, executed by a duly
authorized officer of Sub-Advisor, within seven (7) days of the close of each
calendar quarter certifying as to compliance with said Section or Regulations.
In addition to the quarterly reports, Advisor may request and Sub-Advisor
agrees to provide Section 817 diversification compliance reports at more
frequent intervals, as reasonably requested by Advisor.
6. Liability. The Sub-Advisor shall not be liable for any error in
judgment or of law, or for any loss suffered by the Trust or any Sub-Trust in
connection with the matters to which this Agreement relates, except (1) a loss
resulting from willful misfeasance, bad faith or gross negligence on the part
of the Sub-Advisor in the performance of its obligations and duties or (2) by
reason of its reckless disregard of its obligations and duties under this
Agreement.
7. Brokerage. The Sub-Advisor shall place all orders for the purchase
and sale of portfolio securities for the accounts of the Sub-Trusts with
broker-dealers selected by the Sub-Advisor. In executing portfolio
transactions and selecting broker-dealers, the Sub-Advisor will use its best
efforts to seek best execution on behalf of the Sub-Trusts. In assessing the
best execution available for any transaction, the Sub-Advisor shall consider
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker-dealer, and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In
evaluating the best execution available, and in selecting the broker-dealer to
execute a particular transaction, the Sub-Advisor may also consider the
brokerage and research services (as those terms are used in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Sub-Trusts and/or other
accounts over which the Sub-Advisor or an affiliate of the Sub-Advisor (to the
extent permitted by law) exercises investment discretion. The Sub-Advisor is
authorized to cause the Sub-Trusts to pay a broker-dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Sub-Trusts which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction if,
but only if, the Sub-Advisor determines in good faith that such commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction
or in terms of all of the accounts over which investment discretion is so
exercised.
8. Amendment. This Agreement may be amended at any time by agreement of
the parties, provided that the amendment shall be approved in the manner
required by the Act.
<PAGE>
9. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Illinois.
10. Registration as Investment Adviser. The Advisor and Sub-Advisor
each hereby acknowledges that it is registered as an investment adviser under
the Investment Advisers Act of 1940, it will use its reasonable best efforts
to maintain such registration, and it will promptly notify the other if it
ceases to be so registered, if its registration is suspended for any reason,
or if it is notified by any regulatory organization or court of competent
jurisdiction that it should show cause why its registration should not be
suspended or terminated.
Witness the due execution hereof this ____ day of _________, 1996.
<TABLE>
<CAPTION>
<S> <C>
COVA INVESTMENT ADVISORY CORPORATION
Attest:
______________________ By:___________________________________________
VAN KAMPEN AMERICAN CAPITAL INVESTMENT
ADVISORY CORP.
Attest:
______________________ By:___________________________________________
VAN KAMPEN MERRITT SERIES TRUST
Attest:
__________________________ By:___________________________________________
</TABLE>
<PAGE>
EXHIBIT A
VAN KAMPEN MERRITT SERIES TRUST
SUB-ADVISORY COMPENSATION
For all services rendered by Sub-Advisor hereunder, Advisor shall pay to
Sub-Advisor and Sub-Advisor agrees to accept as full compensation for all
services rendered hereunder, fees at the end of each calendar month equal to a
percentage of the average daily net assets of the Sub-Trusts as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Average Daily Net Assets % Per Annum
__________________________ ________________________ ____________
Money Market Portfolio First $500 million .25 of 1%
Over $500 million .15 of 1%
Quality Income Portfolio First $500 million .25 of 1%
Over $500 million .20 of 1%
High Yield Portfolio First $500 million .50 of 1%
Over $500 million .40 of 1%
Growth and Income Portfolio First $500 million .35 of 1%
Over $500 million .25 of 1%
Stock Index Portfolio __________________ .25 of 1%
World Equity Portfolio First $500 million .50 of 1%
Over $500 million .40 of 1%
Utility Portfolio First $500 million .40 of 1%
Over $500 million but less
than $1 billion .35 of 1%
Over $1 billion .30 of 1%
</TABLE>
<PAGE>
PROXY
MONEY MARKET PORTFOLIO
OF
VAN KAMPEN MERRITT SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
Money Market Portfolio of Van Kampen Merritt Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them
true and lawful attorneys, with power of substitution of each, to vote all
shares which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on February 9, 1996 at the Offices of the
Trust, One Parkview Plaza, Oakbrook Terrace, Illinois at 9:00 a.m., local
time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect each of the following persons as a Trustee of the Trust to serve
until their respective successors are duly elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers, Deborah A. Vohasek and R. Kevin
Williams as Trustees of the Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR electing all ( ) WITHHOLDING AUTHORITY ( ) ABSTAIN FROM ( )
nominees listed except to vote for all nominees listed
as indicated below
</TABLE>
To withhold authority to vote for any individual nominee, please write his or
her name below and the number of shares withholding authority to vote for such
nominee:
<TABLE>
<CAPTION>
<S> <C>
Amount of Shares
Name of Nominee Withholding Authority
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
<PAGE>
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
</TABLE>
2. To approve an Investment Advisory Agreement between the Trust and Cova
Investment Advisory Corporation.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. To approve a Sub-Advisory Agreement between Cova Investment Advisory
Corporation and Van Kampen American Capital Investment Advisory Corp.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Cova Financial Services Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
<PAGE>
MONEY MARKET PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
Cova Variable Annuity Account One
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
<PAGE>
PROXY
QUALITY INCOME PORTFOLIO
OF
VAN KAMPEN MERRITT SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
Quality Income Portfolio of Van Kampen Merritt Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them
true and lawful attorneys, with power of substitution of each, to vote all
shares which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on February 9, 1996 at the Offices of the
Trust, One Parkview Plaza, Oakbrook Terrace, Illinois at 9:00 a.m., local
time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect each of the following persons as a Trustee of the Trust to serve
until their respective successors are duly elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers, Deborah A. Vohasek and R. Kevin
Williams as Trustees of the Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR electing all ( ) WITHHOLDING AUTHORITY ( ) ABSTAIN FROM ( )
nominees listed except to vote for all nominees listed
as indicated below
</TABLE>
To withhold authority to vote for any individual nominee, please write his or
her name below and the number of shares withholding authority to vote for such
nominee:
<TABLE>
<CAPTION>
<S> <C>
Amount of Shares
Name of Nominee Withholding Authority
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
<PAGE>
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
</TABLE>
2. To approve an Investment Advisory Agreement between the Trust and Cova
Investment Advisory Corporation.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. To approve a Sub-Advisory Agreement between Cova Investment Advisory
Corporation and Van Kampen American Capital Investment Advisory Corp.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Cova Financial Services Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
<PAGE>
QUALITY INCOME PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
Cova Variable Annuity Account One
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
<PAGE>
PROXY
HIGH YIELD PORTFOLIO
OF
VAN KAMPEN MERRITT SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
High Yield Portfolio of Van Kampen Merritt Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them
true and lawful attorneys, with power of substitution of each, to vote all
shares which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on February 9, 1996 at the Offices of the
Trust, One Parkview Plaza, Oakbrook Terrace, Illinois at 9:00 a.m., local
time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect each of the following persons as a Trustee of the Trust to serve
until their respective successors are duly elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers, Deborah A. Vohasek and R. Kevin
Williams as Trustees of the Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR electing all ( ) WITHHOLDING AUTHORITY ( ) ABSTAIN FROM ( )
nominees listed except to vote for all nominees listed
as indicated below
</TABLE>
To withhold authority to vote for any individual nominee, please write his or
her name below and the number of shares withholding authority to vote for such
nominee:
<TABLE>
<CAPTION>
<S> <C>
Amount of Shares
Name of Nominee Withholding Authority
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
<PAGE>
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
</TABLE>
2. To approve an Investment Advisory Agreement between the Trust and Cova
Investment Advisory Corporation.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. To approve a Sub-Advisory Agreement between Cova Investment Advisory
Corporation and Van Kampen American Capital Investment Advisory Corp.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Cova Financial Services Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
<PAGE>
HIGH YIELD PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
Cova Variable Annuity Account One
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
<PAGE>
PROXY
GROWTH AND INCOME PORTFOLIO
OF
VAN KAMPEN MERRITT SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
Growth and Income Portfolio of Van Kampen Merritt Series Trust ("Trust")
hereby appoints ______________________________________________, or any one of
them true and lawful attorneys, with power of substitution of each, to vote
all shares which the undersigned is entitled to vote, at the Special Meeting
of Shareholders of the Trust to be held on February 9, 1996 at the Offices of
the Trust, One Parkview Plaza, Oakbrook Terrace, Illinois at 9:00 a.m., local
time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect each of the following persons as a Trustee of the Trust to serve
until their respective successors are duly elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers, Deborah A. Vohasek and R. Kevin
Williams as Trustees of the Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR electing all ( ) WITHHOLDING AUTHORITY ( ) ABSTAIN FROM ( )
nominees listed except to vote for all nominees listed
as indicated below
</TABLE>
To withhold authority to vote for any individual nominee, please write his or
her name below and the number of shares withholding authority to vote for such
nominee:
<TABLE>
<CAPTION>
<S> <C>
Amount of Shares
Name of Nominee Withholding Authority
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
<PAGE>
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
</TABLE>
2. To approve an Investment Advisory Agreement between the Trust and Cova
Investment Advisory Corporation.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. To approve a Sub-Advisory Agreement between Cova Investment Advisory
Corporation and Van Kampen American Capital Investment Advisory Corp.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Cova Financial Services Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
<PAGE>
GROWTH AND INCOME PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
Cova Variable Annuity Account One
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
<PAGE>
PROXY
STOCK INDEX PORTFOLIO
OF
VAN KAMPEN MERRITT SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
February 9, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of the
Stock Index Portfolio of Van Kampen Merritt Series Trust ("Trust") hereby
appoints ______________________________________________, or any one of them
true and lawful attorneys, with power of substitution of each, to vote all
shares which the undersigned is entitled to vote, at the Special Meeting of
Shareholders of the Trust to be held on February 9, 1996 at the Offices of the
Trust, One Parkview Plaza, Oakbrook Terrace, Illinois at 9:00 a.m., local
time, and at any adjournment thereof ("Meeting"), as follows:
1. To elect each of the following persons as a Trustee of the Trust to serve
until their respective successors are duly elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers, Deborah A. Vohasek and R. Kevin
Williams as Trustees of the Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR electing all ( ) WITHHOLDING AUTHORITY ( ) ABSTAIN FROM ( )
nominees listed except to vote for all nominees listed
as indicated below
</TABLE>
To withhold authority to vote for any individual nominee, please write his or
her name below and the number of shares withholding authority to vote for such
nominee:
<TABLE>
<CAPTION>
<S> <C>
Amount of Shares
Name of Nominee Withholding Authority
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
<PAGE>
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
___________________________ ____________________________
</TABLE>
2. To approve an Investment Advisory Agreement between the Trust and Cova
Investment Advisory Corporation.
FOR ( ) AGAINST ( ) ABSTAIN ( )
3. To approve a Sub-Advisory Agreement between Cova Investment Advisory
Corporation and Van Kampen American Capital Investment Advisory Corp.
FOR ( ) AGAINST ( ) ABSTAIN ( )
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL
FOR WHICH NO CHOICE IS INDICATED.
Dated: ____________________, 1996
Cova Financial Services Life Insurance Company
___________________________________________________
Name of Insurance Company
___________________________________________________
Name and Title of Authorized Officer
___________________________________________________
Signature of Authorized Officer
<PAGE>
STOCK INDEX PORTFOLIO
Name(s) of Separate Account(s)
of the Insurance Company
Owning Shares in this Portfolio:
Cova Variable Annuity Account One
__________________________________
__________________________________
__________________________________
TOTAL SHARES OF THIS PORTFOLIO
OWNED AND BEING VOTED BY THE
INSURANCE COMPANY:
__________________________________
<PAGE>
Money Market Portfolio
INSTRUCTIONS TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Services Life Insurance
Company (the "Company") to vote all shares of the Money Market Portfolio of
VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ ____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY.
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Quality Income Portfolio
INSTRUCTIONS TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Services Life Insurance
Company (the "Company") to vote all shares of the Quality Income Portfolio of
VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY.
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
High Yield Portfolio
INSTRUCTIONS TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Services Life Insurance
Company (the "Company") to vote all shares of the High Yield Portfolio of VAN
KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by the
undersigned at a special meeting of shareholders of the Trust to be held at
9:00 a.m., local time, on February 9, 1996, at the offices of the Trust, One
Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof, as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
______ ___________ ____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY.
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Growth and Income Portfolio
INSTRUCTIONS TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Services Life Insurance
Company (the "Company") to vote all shares of the Growth and Income Portfolio
of VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
<PAGE>
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY.
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Stock Index Portfolio
INSTRUCTIONS TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Services Life Insurance
Company (the "Company") to vote all shares of the Stock Index Portfolio of VAN
KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by the
undersigned at a special meeting of shareholders of the Trust to be held at
9:00 a.m., local time, on February 9, 1996, at the offices of the Trust, One
Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof, as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY.
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Money Market Portfolio
INSTRUCTIONS TO COVA FINANCIAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Life Insurance Company
(the "Company") to vote all shares of the Money Market Portfolio of
VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ ____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL LIFE INSURANCE COMPANY.
COVA FINANCIAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF OF
THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Quality Income Portfolio
INSTRUCTIONS TO COVA FINANCIAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Life Insurance
Company (the "Company") to vote all shares of the Quality Income Portfolio of
VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL LIFE INSURANCE
COMPANY.
COVA FINANCIAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Growth and Income Portfolio
INSTRUCTIONS TO COVA FINANCIAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Life Insurance
Company (the "Company") to vote all shares of the Growth and Income Portfolio
of VAN KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by
the undersigned at a special meeting of shareholders of the Trust to be held
at 9:00 a.m., local time, on February 9, 1996, at the offices of the Trust,
One Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof,
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
<PAGE>
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL LIFE INSURANCE
COMPANY.
COVA FINANCIAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
Stock Index Portfolio
INSTRUCTIONS TO COVA FINANCIAL LIFE INSURANCE COMPANY
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
VAN KAMPEN MERRITT SERIES TRUST TO BE HELD ON FEBRUARY 9, 1996
INSTRUCTIONS SOLICITED ON BEHALF OF
COVA FINANCIAL LIFE INSURANCE COMPANY
The undersigned hereby instructs Cova Financial Life Insurance
Company (the "Company") to vote all shares of the Stock Index Portfolio of VAN
KAMPEN MERRITT SERIES TRUST (the "Trust") represented by shares held by the
undersigned at a special meeting of shareholders of the Trust to be held at
9:00 a.m., local time, on February 9, 1996, at the offices of the Trust, One
Parkview Plaza, Oakbrook Terrace, Illinois and at any adjournment thereof, as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR WITHHOLDING ABSTAIN FROM
AUTHORITY
_____ ____________ _____________
[ ] [ ] [ ] 1. To elect each of the following persons as
a Trustee of the Trust to serve until
their respective successors are duly
elected and qualified: Stephen M.
Alderman, William C. Mair, Theodore A. Myers,
Deborah A. Vohasek and R. Kevin Williams
as Trustees of the Trust.
All nominees listed above (except as
marked to the contrary below).
__________________________________________
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) ON THE LINE PROVIDED ABOVE.)
FOR AGAINST ABSTAIN FROM
[ ] [ ] [ ] 2. To approve an Investment Advisory
Agreement between the Trust and Cova
Investment Advisory Corporation.
<PAGE>
[ ] [ ] [ ] 3. To approve a Sub-Advisory Agreement
between Cova Investment Advisory
Corporation and Van Kampen American
Capital Investment Advisory Corp.
</TABLE>
IMPORTANT: Please sign on the reverse side.
INSTRUCTIONS SOLICITED ON BEHALF OF COVA FINANCIAL LIFE INSURANCE
COMPANY.
COVA FINANCIAL LIFE INSURANCE COMPANY WILL VOTE SHARES HELD ON BEHALF
OF THE CONTRACT OWNER AS INDICATED ON THE REVERSE SIDE OR FOR ANY PROPOSAL FOR
WHICH NO CHOICE IS INDICATED.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE ACCOMPANYING PROXY
STATEMENT IS HEREBY ACKNOWLEDGED.
IF THIS INSTRUCTION FORM IS SIGNED AND RETURNED AND NO SPECIFICATION IS MADE,
THE COMPANY SHALL VOTE FOR ALL PROPOSALS. IF THIS INSTRUCTION CARD IS NOT
RETURNED OR IS RETURNED UNSIGNED, THE COMPANY SHALL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES THE SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS.
Dated:______________________________________, 1996
__________________________________________________
Signature(s)
__________________________________________________
Signature (of joint owner, if any)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please
sign the partnership name and your name. Joint owners should each sign this
proxy. Please sign, date and return.
<PAGE>
[COVA LOGO]
Cova Financial Services Life Insurance Company
January 15, 1996
Re: Special Meeting of Shareholders
Van Kampen Merritt Series Trust
Dear Contract Owner:
Van Kampen Merritt Series Trust is holding a special meeting of shareholders
of the Trust on February 9, 1996, at the offices of the Trust, One Parkview
Plaza, Oakbrook Terrace, Illinois. As the owner of a Cova Variable Annuity
contract, you may instruct Cova to cast the number of votes to which you are
entitled as shown on the enclosed Voting Instructions Card(s). The Voting
Instructions Card(s) has your name as it appears on your contract and the
total number of shares you owned in each portfolio through Cova Variable
Annuity Account One or Cova Variable Annuity Account Five, in California, as
of December 26, 1995.
The items to be voted upon are listed on the Voting Instructions Card(s). You
may vote for or against, or abstain from voting on each separate item. You
also need to sign your name exactly as it appears on the Voting Instructions
Card(s) and return it (them) to Cova using the enclosed pre-paid envelope.
The Voting Instructions, if completed in proper form and not revoked, will be
voted by Cova as specified by you. If no choice is specified, each vote
entitled to be directed by you will be cast FOR election of the nominees
referred to in Item 1 of the Voting Instructions Card(s) and FOR each of the
proposals in the other items. Votes for which instructions have not been
received must be voted by Cova in the same proportion as votes for which
instructions have been received. On all other matters that may properly come
before the meeting, the proxies will be voted at the discretion of those
exercising the proxies. The voting instructions may be revoked at any time
before the votes evidenced thereby are voted as indicated in the enclosed
Proxy Statement.
<PAGE>
Cova will not accept any Voting Instructions received after the close of
business on February 1, 1996. As your vote is important, we encourage you to
take this opportunity to exercise your voting rights.
Sincerely,
COVA
Enclosures
One Tower Lane * Suite 3000 * Oakbrook Terrace, IL 60181-4644
800-523-1661 * 708-368-6215
<PAGE>
