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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1995
FILE NO. 811-6421
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 4 /X/
(Check appropriate box or boxes)
</TABLE>
VAN KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
2800 POST OAK BOULEVARD, HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 993-0500
RONALD A. NYBERG, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
VAN KAMPEN AMERICAN CAPITAL, INC.
ONE PARKVIEW PLAZA
OAKBROOK TERRACE, IL 60181
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------------
COPY TO:
GEORGE M. BARTLETT, ESQ.
O'MELVENY & MYERS
400 SOUTH HOPE STREET
LOS ANGELES, CA 90071
---------------------
It is proposed that this filing will become effective:
(check appropriate box)
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Exhibit Index required by Rule 483(a) under the Securities Act of 1933
is located at page of the manually signed copy of this Registration Statement.
PURSUANT TO A TRANSACTION SCHEDULED TO BE EFFECTIVE AUGUST 25, 1995, AMERICAN
CAPITAL SMALL CAPITALIZATION FUND, INC., A MARYLAND CORPORATION, WILL BE
COMBINED WITH VAN KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND, A DELAWARE
BUSINESS TRUST. UPON EFFECTIVENESS OF THE COMBINATION AND PURSUANT TO RULE 414
UNDER THE SECURITIES ACT OF 1933, VAN KAMPEN AMERICAN CAPITAL SMALL
CAPITALIZATION FUND ("SUCCESSOR REGISTRANT"), ADOPTS AND SUCCEEDS TO THE
REGISTRATION STATEMENT OF AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC. HAS IN THE PAST REGISTERED AN
INDEFINITE NUMBER OF SHARES OF COMMON STOCK UNDER THE SECURITIES ACT OF 1933
PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940. UPON THE
EFFECTIVE DATE OF THE COMBINATION, SUCCESSOR REGISTRANT HEREBY ADOPTS AND
SUCCEEDS TO ANY PRIOR RULE 24F-2 NOTICES OF AMERICAN CAPITAL SMALL
CAPITALIZATION FUND, INC. SUCCESSOR REGISTRANT PROPOSES TO FILE ANY NOTICE
REQUIRED BY RULE 24F-2.
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
Items 1, 2, 3 and 5A of Part A are omitted pursuant to Item F.4. of the General
Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
(a) (i) Van Kampen American Capital Small Capitalization Fund (the "Fund")
is a diversified, open-end management investment company
registered under the Investment Company Act of 1940 (the "1940
Act"). The Fund was originally incorporated in Maryland on August
28, 1991 and reorganized as a trust under the laws of Delaware on
August 25, 1995.
(ii) The Fund's investment objective is to approximate the performance
of the small capitalization sector of the equities market by
investment primarily in common stocks of small capitalization
companies. The Fund may also invest in money market obligations
such as government securities, certificates of deposit and
commercial paper and may enter into repurchase agreements. It may
also enter into futures contracts and options thereon.
The Fund has been created and is managed to provide a convenient
vehicle for the Publicly Offered Funds for which Van Kampen
American Capital Asset Management, Inc. (the "Adviser") serves as
investment adviser to participate conveniently and economically in
the "small capitalization" sector of the equity securities market.
To this end, it invests in a broadly diversified selection of
stocks of companies that have relatively small capitalization.
The Fund views companies with market capitalization smaller than
the 500 companies with the largest market capitalization as being
"small capitalization" companies; as of February 24, 1995,
companies with market capitalization of less than approximately
$1.87 billion would be included in that definition.
(b) INAPPLICABLE
(c) INAPPLICABLE
ITEM 5. MANAGEMENT OF THE FUND.
(a) The business of the Fund is managed under the direction of fourteen
Trustees. The Adviser determines the investment of the Fund's assets,
provides administrative services and manages the Fund's business and
affairs.
(b) Van Kampen American Capital Asset Management, Inc., 2800 Post Oak
Boulevard, Houston, Texas 77056 serves as investment adviser to the
Fund.
The Adviser, together with its predecessors, has been in the investment
advisory business since 1926 and has served as investment adviser to
the Fund since its inception. The Adviser is a wholly owned subsidiary
of Van Kampen American Capital, Inc. ("Van Kampen American Capital").
Van Kampen American Capital is a diversified asset management company
with more than two million retail investor accounts, extensive
capabilities for managing institutional portfolios, and nearly $50
billion under management or supervision. Van Kampen American Capital's
more than 40 open-end and 38 closed-end funds and more than 2,700 unit
investment trusts are professionally distributed by leading financial
advisers nationwide. Van Kampen is a wholly owned subsidiary of VK/AC
Holding, Inc. VK/AC Holding, Inc. is controlled, through the ownership
of a substantial majority of its common stock, by The Clayton &
Dubilier Private Equity Fund IV Limited Partnership ("C&D L.P."), a
Connecticut limited partnership. C&D L.P. is managed by Clayton,
Dubilier & Rice, Inc. a New York based private investment firm. The
General Partner of C&D L.P. is Clayton & Dubilier Associates IV Limited
Partnership ("C&D Associates L.P."). The general partners of C&D
Associates L.P. are Joseph L. Rice, III, B. Charles Ames, William A.
Barbe, Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard
C. Howe and Andrall E. Pearson, each of whom is a principal of Clayton,
Dubilier & Rice, Inc. In addition, certain officers, directors
2
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and employees of Van Kampen American Capital own, in the aggregate, not
more than seven percent of the common stock of VK/AC Holding, Inc. and
have the right to acquire, upon the exercise of options, approximately
an additional 11% of the common stock of VK/AC Holding, Inc. Presently,
and after giving effect to the exercise of such options, no officer or
trustee of the Fund owns or would own five percent or more of the
common stock of VK/AC Holding, Inc.
The Fund retains the Adviser to manage the investment of its assets and
to place orders for the purchase and sale of its portfolio securities.
Under an investment advisory agreement between the Adviser and the Fund
(the "Advisory Agreement"), the Adviser provides these services to the
Fund without cost, but the Fund pays its own expenses including
reimbursement of the Adviser for the cost of the Fund's accounting
services, which include maintaining its financial books and records and
calculating its daily net asset value.
(c) David Walker is primarily responsible for day-to-day management of the
Fund's portfolio. Mr. Walker has been employed by the Adviser as a
quantitative analyst for the past five years.
(d) INAPPLICABLE
(e) ACCESS Investor Services, Inc. ("ACCESS"), P.O. Box 418256, Kansas
City, Missouri 64141-9256, serves as shareholder service agent for the
Fund. ACCESS, a wholly owned subsidiary of the Adviser's parent,
provides these services at cost plus a profit.
(f) The Fund's total annualized expense ratio for its most recent fiscal
year as a percentage of net assets is .30%.
(g) INAPPLICABLE
ITEM 5A. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE.
Information contained in Annual Report.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
(a) The holders of Registrant's shares of beneficial interest will have
equal rights to participate in distributions made by the Fund, equal
rights to the Fund's assets upon dissolution and equal voting rights;
the Fund does not allow cumulative voting. Shares may be redeemed at
any time at net asset value with no charge.
(b) The Fund's shares are offered and sold only to Van Kampen American
Capital Comstock Fund, Van Kampen American Capital Enterprise Fund, Van
Kampen American Capital Equity Income Fund, Van Kampen American Capital
Growth and Income Fund, Van Kampen American Capital Life Investment
Trust -- Common Stock Fund, Van Kampen American Capital Life Investment
Trust -- Multiple Strategy Fund, Van Kampen American Capital Pace Fund,
Common Sense Growth Fund, Common Sense Growth and Income Fund, Common
Sense Growth II Fund, Common Sense Growth and Income II Fund and Common
Sense International Equity II Fund (the "Publicly Offered Funds"), for
all of which the Adviser serves as the investment adviser and to other
Funds for which the Adviser may become investment adviser or
subadviser. Since there are twelve such Publicly Offered Funds, at any
given time, one or more of such funds may own more than ten percent of
the outstanding shares of the Fund. In the event any of such Publicly
Offered Funds owned more than 25% of the outstanding shares of the
Fund, such Publicly Offered Fund would be deemed to control the Fund
within the meaning of the 1940 Act. As of August 11, 1995, Van Kampen
American Capital Pace Fund and Common Sense Growth Fund owned
beneficially and of record approximately 47% and 52%, respectively, of
the outstanding shares of the Fund, and therefore, may be deemed to
control the Fund.
(c) INAPPLICABLE
(d) INAPPLICABLE
3
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(e) Inquiries regarding the Fund or its shares should be made to the Fund
at 2800 Post Oak Boulevard, Houston, Texas 77056.
(f) The Fund makes annual distributions of net investment income. The Fund
distributes realized capital gains to shareholders annually.
(g) The Fund intends to qualify as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As such, the Fund will distribute all of its net income and
capital gains to its shareholders and such distributions will be
taxable as such to its shareholders; while shareholders may be
proportionately liable for taxes on income and gains of the Fund,
shareholders not subject to tax on their income will not be required to
pay tax on amounts distributed to them; the Fund will inform its
shareholders of the amount and nature of such income and gains
distributed.
ITEM 7. PURCHASE OF SECURITIES BEING OFFERED.
(a) INAPPLICABLE
(b) Shares of the Fund are offered to eligible purchasers at net asset
value, which is determined as described under Item 8(a) below. There is
no sales charge on the sale of Fund shares.
(c) INAPPLICABLE
(d) INAPPLICABLE
(e) There is no continuing fee paid out of Fund assets to any dealer or any
persons who may be advising shareholders regarding the purchase, sale
or retention of Fund shares.
(f) INAPPLICABLE
ITEM 8. REDEMPTION OR REPURCHASE.
(a) Shareholders may redeem shares at net asset value at any time without
charge by submitting a written request in proper form to ACCESS at P.O.
Box 418256, Kansas City, Missouri 64141-9256.
The net asset value per share is determined as of 2:00 p.m. eastern
time on each day on which the New York Stock Exchange (the "Exchange")
is open or such earlier time as determined by the Trustees when the
Exchange closes before 4:00 p.m. eastern time. The Exchange is
currently closed on weekends and on the following holidays: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share is determined using prices as of 2:00
p.m. eastern time and (i) valuing securities listed or traded on a
national securities exchange at the last reported sale price, or if
there has been no sale that day, at the last reported bid price, (ii)
valuing options at the last sale price, or if there has been no sale
that day, at the mean between the bid and asked prices, (iii) valuing
over-the-counter securities for which the last sale price is available
from the National Association of Securities Dealers Automated
Quotations ("NASDAQ") at that price, (iv) valuing all other over-
the-counter securities for which market quotations are available at the
most recent bid quotation supplied by NASDAQ or broker-dealers, and (v)
valuing any securities for which market quotations are not readily
available, and any other assets as fair value as determined in good
faith by the Trustees of the Fund; for these purposes "last price"
means the last price reported at or before 2:00 p.m. eastern time. The
Fund reserves the right to redeem in kind.
(b) INAPPLICABLE
(c) INAPPLICABLE
(d) INAPPLICABLE
ITEM 9. PENDING LEGAL PROCEEDINGS.
INAPPLICABLE
4
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PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
ITEM 10. COVER PAGE
Van Kampen American Capital Small Capitalization Fund (the "Fund") is a
diversified open-end management investment company.
This Statement of Additional Information is not a Prospectus but contains
information in addition to and more detailed than that set forth in Part A and
should be read in conjunction with Part A. This Statement of Additional
Information is dated August 25, 1995. Part A may be obtained without charge by
calling or writing Van Kampen American Capital Distributors, Inc. at One
Parkview Plaza, Oakbrook Terrace, Illinois 60181, at (800) 421-5666.
ITEM 11. TABLE OF CONTENTS.
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PAGE
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General Information and History............................................. 1
Investment Objectives and Policies.......................................... 1
Management of the Fund...................................................... 2
Control Persons and Principal Holders of Securities......................... 6
Investment Advisory and Other Services...................................... 6
Brokerage Allocation and Other Practices.................................... 8
Capital Stock and Other Securities.......................................... 9
Purchase, Redemption and Pricing of Securities Being Offered................ 9
Tax Status.................................................................. 9
Underwriters................................................................ 9
Fund Performance............................................................ 9
Financial Statements........................................................ 9
</TABLE>
ITEM 12. GENERAL INFORMATION AND HISTORY.
The Fund and Van Kampen American Capital Asset Management, Inc., (the
"Adviser") have adopted Codes of Ethics designed to recognize the fiduciary
relationship between the Fund and the Adviser and its employees. The Codes
permit directors/trustees, officers and employees to buy and sell securities for
their personal accounts subject to certain restrictions. Persons with access to
certain sensitive information are subject to preclearance and other procedures
designed to prevent conflicts of interest.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.
(a) See Item 4.
(b) The Fund has adopted certain investment restrictions which may be
altered or rescinded only with the approval of the holders of the
lesser of (i) 67% or more of the Fund's shares present or represented
by proxy at a meeting if the holders of more than 50% of its
outstanding shares are present or represented by proxy, or (ii) more
than 50% of the Fund's outstanding shares. These restrictions provide
that the Fund shall not:
(1) Issue senior securities within the meaning of the Investment
Company Act of 1940 (the "1940 Act");
(2) Purchase securities on margin, except that the Fund may obtain such
short term credits as may be necessary for the clearance of
purchases and sales of securities. The deposit or payment by
1
<PAGE> 6
the Fund of an initial or maintenance margin in connection with
futures contracts or related option transactions is not considered
the purchase of a security on margin;
(3) Sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional
cost securities identical to those sold short;
(4) Borrow money, except that the Fund may borrow from banks to meet
redemptions or for other temporary or emergency purposes, with such
borrowing not to exceed five percent of the total assets of the Fund
at market value at the time of the borrowing. Any such borrowing may
be secured provided that not more than ten percent of the total
assets of the Fund at market value at the time of the pledging may be
used as security for such borrowings;
(5) Underwrite the securities of other issuers, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933 by
virtue of disposing of portfolio securities;
(6) Purchase any securities which would cause more than 25% of the value
of the Fund's total assets at the time of purchase to be invested in
the securities of one or more issuers conducting their principal
business activities in the same industry, except that this
restriction shall not apply to securities issued by the United States
Government, its agencies or instrumentalities;
(7) Invest more than five percent of its total assets at market value at
the time of purchase in the securities of any one issuer (other than
obligations of the United States Government, its agencies or
instrumentalities) or purchase more than ten percent of the
outstanding voting securities of any one issuer;
(8) Invest in real estate or real estate mortgage loans, except that the
Fund may purchase securities secured by real estate or interests
therein;
(9) Purchase or sell commodities or commodity contracts, except that the
Fund may purchase, hold and sell listed futures contracts.
An additional fundamental policy provides that, under normal
circumstances, at least 80% of the Fund's total assets will be invested
in securities of companies with market capitalization no greater than
that of the company whose market capitalization ranks 500th among
publicly traded U.S. common stocks.
(c) INAPPLICABLE
(d) INAPPLICABLE
ITEM 14. MANAGEMENT OF THE FUND.
(a) The Fund's Trustees and Executive Officers and their principal
occupations for the past five years are listed below.
TRUSTEES
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PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
J. Miles Branagan.................. Co-founder, Chairman, Chief Executive Officer and
Strafford Hall President of MDT Corporation, a company which develops,
Suite 200 manufactures, markets and services medical and scientific
1009 Slater Road equipment. A Trustee of each of the Van Kampen American
Harrisville, NC 27560 Capital Funds.
Age: 63
</TABLE>
[/R]
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Richard E. Caruso.................. Founder, Chairman and Chief Executive Officer, Integra
Two Radnor Station, Suite 314 Life Sciences Corporation, a firm specializing in life
King of Prussia Road sciences. Trustee of Susquehanna University and First
Radnor, PA 19087 Vice President, The Baum School of Art. Founder and
Age: 52 Director of Uncommon Individual Foundation, a youth
development foundation. Director of International Board
of Business Performance Group, London School of
Economics. Formerly, Director of First Sterling Bank, and
Executive Vice President and a Director of LFC Financial
Corporation, a provider of lease and project financing. A
Trustee of each of the Van Kampen American Capital Funds.
Philip P. Gaughan.................. Prior to February, 1989, Managing Director and Manager of
9615 Torresdale Avenue Municipal Bond Department, W. H. Newbold's Sons & Co. A
Philadelphia, PA 19114 Trustee of each of the Van Kampen American Capital Funds.
Age: 66
Roger Hilsman...................... Professor of Government and International Affairs
251-1 Hamburg Cove Emeritus, Columbia University. A Trustee of each of the
Lyme, CT 06371 Van Kampen American Capital Funds.
Age: 75
R. Craig Kennedy................... President and Director, German Marshall Fund of the
1341 E. 50th Street United States. Formerly, advisor to the Dennis Trading
Chicago, IL 60615 Group Inc. Prior to 1992, President and Chief Executive
Age: 43 Officer, Director and member of the Investment Committee
of the Joyce Foundation, a private foundation. A Trustee
of each of the Van Kampen American Capital Funds.
Donald C. Miller................... Prior to 1992, Director of Royal Group, Inc., a company
415 North Adams in insurance related businesses. Formerly Vice Chairman
Hinsdale, IL 60521 and Director of Continental Illinois National Bank and
Age: 75 Trust Company of Chicago and Continental Illinois
Corporation. A Trustee of each of the Van Kampen American
Capital Funds and Chairman of each Van Kampen American
Capital Fund advised by Van Kampen American Capital
Investment Advisory Corp.
Jack E. Nelson..................... President of Nelson Investment Planning Services, Inc., a
423 Country Club Drive financial planning company and registered investment
Winter Park, FL 32789 adviser. President of Nelson Investment Brokerage
Age: 59 Services Inc., a member of the National Association of
Securities Dealers, Inc. and Securities Investors
Protection Corp. A Trustee of each of the Van Kampen
American Capital Funds.
Don G. Powell*..................... President, Chief Executive Officer and a Director of
2800 Post Oak Blvd. VK/AC Holding, Inc. and Van Kampen American Capital and
Houston, TX 77056 Chairman, Chief Executive Officer and a Director of the
Age: 55 Distributor, and the Adviser. Director and Executive Vice
President of ACCESS, Van Kampen American Capital
Services, Inc. and Van Kampen American Capital Trust
Company. Director, Trustee or Managing General Partner of
each of the Van Kampen American Capital Funds and other
open-end investment companies and closed-end investment
companies advised by the Adviser and its affiliates.
</TABLE>
3
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- -----------------------------
<S> <C>
David Rees......................... Contributing Columnist and, prior to 1995, Senior Editor
1601 Country Club Drive of Los Angeles Business Journal. A Director of Source
Glendale, CA 91208 Capital, Inc., an investment company unaffiliated with
Age: 71 Van Kampen American Capital. A Director and the Second
Vice President of International Institute of Los Angeles.
A Trustee of each of the Van Kampen American Capital
Funds.
Jerome L. Robinson................. President of Robinson Technical Products Corporation, a
115 River Road manufacturer and processor of welding alloys, supplies
Edgewater, NJ 07020 and equipment. Director of Pacesetter Software, a
Age: 72 software programming company specializing in white collar
productivity. Director of Panasia Bank. A Trustee of each
of the Van Kampen American Capital Funds.
Lawrence J. Sheehan*............... Of Counsel to and formerly Partner (from 1969 to 1994) of
1999 Avenue of the Stars the law firm of O'Melveny & Myers, legal counsel to the
Suite 700 Fund. Director, FPA Capital Fund, Inc.; FPA New Income
Los Angeles, CA 90067 Fund, Inc.; FPA Perennial Fund, Inc.; Source Capital,
Age: 63 Inc.; and TCW Convertible Security Fund, Inc., investment
companies unaffiliated with Van Kampen American Capital.
A Trustee of each of the Van Kampen American Capital
Funds.
Fernando Sisto..................... George M. Bond Chaired Professor and, prior to 1995, Dean
Stevens Institute of Graduate School and Chairman, Department of Mechanical
of Technology Engineering, Stevens Institute of Technology. Director of
Castle Point Station Dynalysis of Princeton, a firm engaged in engineering
Hoboken, NJ 07030 research. A Trustee of each of the Van Kampen American
Age: 71 Capital Funds and Chairman of the Van Kampen American
Capital Funds advised by the Adviser.
Wayne W. Whalen*................... Partner in the law firm of Skadden, Arps, Slate, Meagher
333 West Wacker Drive & Flom, legal counsel to certain of the Van Kampen
Chicago, IL 60606 American Capital Funds. A Trustee of each of the Van
Age: 56 Kampen American Capital Funds. He also is a Trustee of
the Van Kampen Merritt Series Trust and closed-end
investment companies advised by an affiliate of the
Adviser.
William S. Woodside................ Vice Chairman of the Board of LSG Sky Chefs, Inc., a
712 Fifth Avenue caterer of airline food. Formerly, Director of Primerica
40th Floor Corporation (currently known as The Traveler's Inc.).
New York, NY 10019 Formerly, Director of James River Corporation, a producer
Age: 73 of paper products. Trustee, and former President of
Whitney Museum of American Art. Formerly, Chairman of
Institute for Educational Leadership, Inc., Board of
Visitors, Graduate School of The City University of New
York, Academy of Political Science. Trustee of Committee
for Economic Development. Director of Public Education
Fund Network, Fund for New York City Public Education.
Trustee of Barnard College. Member of Dean's Council,
Harvard School of Public Health. Member of Mental Health
Task Force, Carter Center. A Trustee of each of the Van
Kampen American Capital Funds.
</TABLE>
* Such Trustees are "interested persons" (within the meaning of Section 2(a)(19)
of the 1940 Act). Mr. Powell is an interested person of the Adviser and the
Fund by reason of his position with the Adviser. Mr. Sheehan and Mr. Whalen
are interested persons of the Adviser and the Fund by reason of their firms
having acted as legal counsel to the Adviser or an affiliate thereof.
4
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The Fund's officers other than Messrs. McDonnell and Nyberg are located at
2800 Post Oak Blvd., Houston, TX 77056. Messrs. McDonnell and Nyberg are located
at One Parkview Plaza, Oakbrook Terrace, IL 60181.
OFFICERS
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
------------ ----------------- ---------------------
<S> <C> <C>
Nori L. Gabert........... Vice President and Vice President, Associate General Counsel
Age: 42 Secretary and Corporate Secretary of the Adviser.
Tanya M. Loden........... Vice President and Vice President and Controller of most of
Age: 35 Controller the investment companies advised by the
Adviser, formerly Tax Manager/Assistant
Controller.
Dennis J. McDonnell...... Vice President President, Chief Operating Officer and a
Age: 53 Director of the Adviser. Director of VK/AC
Holding, Inc. and Van Kampen American
Capital.
Curtis W. Morell......... Vice President and Vice President and Treasurer of most of the
Age: 49 Treasurer investment companies advised by the
Adviser.
Ronald A. Nyberg......... Vice President Executive Vice President, General Counsel
Age: 42 and Secretary of Van Kampen American
Capital; Executive Vice President and a
Director of the Distributor. Executive Vice
President of the Adviser. Director of ICI
Mutual Insurance Co., a provider of
insurance to members of the Investment
Company Institute.
Alan T. Sachtleben....... Vice President Executive Vice President and Director of
Age: 53 the Adviser, Executive Vice President of
VK/AC Holding, Inc. and Van Kampen American
Capital.
J. David Wise............ Vice President and Vice President, Associate General Counsel
Age: 51 Assistant Secretary and Assistant Corporate Secretary of the
Adviser.
Paul R. Wolkenberg....... Vice President Senior Vice President of the Adviser.
Age: 50 President, Chief Operating Officer and
Director of Van Kampen American Capital
Services, Inc.; Executive Vice President,
Chief Operating Officer and Director of Van
Kampen American Capital Trust Company.
Executive Vice President and Director of
ACCESS Investor Services, Inc. ("ACCESS").
</TABLE>
(b) See Item 14(a).
(c) The Trustees and Officers of the Fund as a group own less than one
percent of the outstanding shares of the Fund. Only Messrs. Branagan,
Caruso, Hilsman, Powell, Rees, Sheehan, Sisto and Woodside served as
Trustees of the Fund during its last fiscal year. During the fiscal
year ended October 31, 1994, the Trustees who were not affiliated with
the Adviser or its parent received as a group $2,633 in Trustees' fees
from the Fund in addition to certain out-of-pocket expenses. Such
Trustees also receive compensation for serving as trustees or directors
of other investment companies advised by the Adviser. For legal
services rendered during the fiscal year ended October 31, 1994, the
Fund paid legal fees of $3,583 to the law firm of O'Melveny & Myers of
which Mr. Sheehan is Of Counsel. The firm also serves as legal counsel
to other Van Kampen American Capital Funds.
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<PAGE> 10
Additional information regarding compensation paid by the Fund and the
related mutual funds for which the Trustees serve as trustees is set forth
below. The compensation shown for the Fund is for the most recent fiscal year
and the total compensation shown for the Fund and other related mutual funds is
for the calendar year ended December 31, 1994. Mr. Powell is not compensated for
his service as Trustee because of his affiliation with the Adviser.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT FROM REGISTRANT
COMPENSATION BENEFITS ACCRUED AND FUND
FROM AS PART OF FUND COMPLEX PAID TO
NAME OF PERSON REGISTRANT EXPENSES DIRECTORS(1)(5)
--------------------------------------------------- --------------- ---------------- ---------------
<S> <C> <C> <C>
J. Miles Branagan.................................. $ 335 -0- $64,000
Dr. Richard E. Caruso(3)........................... 610(2) -0- 64,000
Dr. Roger Hilsman.................................. 315 -0- 66,000
David Rees......................................... 335 -0- 64,000
Lawerence J. Sheehan............................... 335 -0- 67,000
Dr. Fernando Sisto(3).............................. 760(2) -0- 82,000
William S. Woodside(4)............................. 295 -0- 18,000
</TABLE>
---------------
(1) Represents 29 investment companies in the fund complex.
(2) Amount reflects deferred compensation of $570 and $265 for Messrs. Caruso
and Sisto, respectively.
(3) Messrs. Caruso and Sisto have deferred compensation in the past. The
cumulative deferred compensation paid by the Fund is as follows: Caruso,
$561; Sisto, $259.
(4) Prior to October 6, 1994, Mr. Woodside's compensation was paid by the
Adviser. As a result, with respect to the second and fourth columns, $250
and $36,000, respectively, was paid by the Adviser directly.
(5) Includes the following amounts for which the various Portfolios were
reimbursed by the Adviser -- Branagan, $2,000; Caruso, $2,000; Hilsman,
$1,000; Rees, $2,000; Sheehan, $2,000; Sisto, $2,000; Woodside, $1,000 (Mr.
Woodside was paid $36,000 directly by the Adviser as mentioned in footnote 4
above).
Beginning July 21, 1995, the Fund pays each trustee who is not affiliated
with the Adviser, the Distributor or VKAC an annual retainer of $729 and a
meeting fee of $21 per Board meeting plus expenses. No additional fees are paid
for committee meetings or to the chairman of the board. In order to alleviate an
additional expense that might be caused by the new compensation arrangement, the
trustees have approved a reduction in the compensation per trustee and have
agreed to an aggregate annual compensation cap with respect to the combined fund
complex of $84,000 per trustee until December 31, 1996, based upon the net
assets and the number of Van Kampen American Capital funds as of July 21, 1995
(except that Mr. Whalen, who is a trustee of 34 closed-end funds advised by an
affiliate of the Adviser, would receive an additional $119,000 for serving as a
trustee of such funds). In addition, the Adviser has agreed to reimburse the
Fund through December 31, 1996 for any increase in the aggregate trustees'
compensation paid by the Fund over their 1994 fiscal year aggregate
compensation.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
(a) See Item 6(b).
(b) See Item 6(b).
(c) None of the Fund's Officers or Trustees owns or is eligible to own
shares of beneficial interest of the Fund.
6
<PAGE> 11
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
(a) (i) The Adviser and ACCESS are wholly owned subsidiaries of Van Kampen
American Capital, Inc. ("VKAC"), which is a wholly owned
subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is
controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity Fund IV
Limited Partnership ("C&D L.P."), a Connecticut limited
partnership. C&D L.P. is managed by Clayton, Dubilier & Rice, Inc.
a New York based private investment firm. The General Partner of
C&D L.P. is Clayton & Dubilier Associates IV Limited Partnership
("C&D Associates L.P."). The general partners of C&D Associates
L.P. are Joseph L. Rice, III, B. Charles Ames, William A. Barbe,
Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard
C. Howe and Andrall E. Pearson, each of whom is a principal of
Clayton, Dubilier & Rice, Inc. In addition, certain officers,
directors and employees of VKAC own, in the aggregate, not more
than seven percent of the common stock of VK/AC Holding, Inc. and
have the right to acquire, upon the exercise of options,
approximately an additional 11% of the common stock of VK/AC
Holding, Inc.
(ii) See Item 14(a).
(iii) The Fund and the Adviser are parties to an investment advisory
agreement (the "Agreement"), which provides that the Adviser will
provide investment advisory services to the Fund at no fee. The
Fund is, however, required to reimburse the Adviser for the cost
of accounting services provided by the Adviser, which includes
maintaining its financial books and records and calculating its
daily net asset value. See Item 16(b).
The Agreement may be continued from year to year if specifically
approved at least annually (a)(i) by the Fund's Trustees or (ii)
by vote of a majority of the Fund's outstanding voting securities
and (b) by the affirmative vote of a majority of the Trustees who
are not parties to the agreement or interested persons of any
such party by votes cast in person at a meeting called for that
purpose. The Agreement provides that it may be terminated without
penalty by either party on 30 days' written notice.
(b) Under the Agreement, the Fund retains the Adviser to manage the
investment of its assets and to place orders for the purchase and sale
of its portfolio securities. The Adviser is responsible for obtaining
and evaluating economic, statistical and financial data and for
formulating and implementing investment programs in furtherance of the
Fund's investment objectives. The Adviser also furnishes at no cost to
the Fund (except as noted herein) the services of sufficient executive
and clerical personnel for the Fund as are necessary to prepare
registration statements, shareholder reports and notices and proxy
solicitation materials. In addition, the Adviser furnishes at no cost
to the Fund the services of a Chief Executive Officer and other
executive and clerical personnel as needed.
Under the Agreement, the Fund bears the cost of its accounting
services, which includes maintaining its financial books and records
and calculating its daily net asset value. The costs of such accounting
services include the salaries and overhead expenses of the Fund's
Principal Financial and Accounting Officer and personnel operating
under his direction. The Adviser receives no compensation for its
investment management services. During the fiscal year ended October
31, 1994, the Fund paid $6,422 for accounting services. A portion of
these amounts are paid to the Adviser in reimbursement of personnel,
facilities and equipment costs attributable to the provision of
accounting services to the Fund. The services provided by the Adviser
are at cost, which is allocated among the investment companies advised
by the Adviser. The Fund also pays shareholder service agency fees,
custodian fees, legal and auditing fees, the costs of reports to
shareholders and all other ordinary expenses not specifically assumed
by the Adviser.
The fee payable to the Adviser is reduced by any commissions, tender
solicitation and other fees, brokerage or similar payments received by
the Adviser or any other direct or indirect majority owned subsidiary
of VK/AC Holding, Inc. in connection with the purchase and sale of
portfolio
7
<PAGE> 12
investments of the Fund, less any direct expenses incurred by such
subsidiary of VK/AC Holding, Inc. in connection with obtaining such
commissions, fees, brokerage or similar payments. The Adviser agrees to
use its best efforts to recapture tender solicitation fees and exchange
offer fees for the Fund's benefit and to advise the Trustees of the
Fund of any other commissions, fees, brokerage or similar payments
which may be possible for the Adviser or any other direct or indirect
majority owned subsidiary of VK/AC Holding, Inc. to receive in
connection with the Fund's portfolio transactions or other arrangements
which may benefit the Fund.
(c) INAPPLICABLE
(d) INAPPLICABLE
(e) INAPPLICABLE
(f) INAPPLICABLE
(g) INAPPLICABLE
(h) The Custodian of all the Fund's assets is State Street Bank and Trust
Company located at 225 Franklin Street, Boston, Massachusetts 02110.
Price Waterhouse LLP, 1201 Louisiana, Houston, Texas 77002, are the
Independent Accountants for the Fund.
(i) During the fiscal year ended October 31, 1994, ACCESS, shareholder
service agent for the Fund, received fees aggregating $7,500. These
services are provided at cost plus a profit.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
(a) The Adviser is responsible for decisions to buy and sell securities for
the Registrant and for the placement of its portfolio business and the
negotiation of the commissions paid on such transactions. It is the
policy of the Adviser to seek the best security price available with
respect to each transaction. In over-the-counter transactions, orders
are placed directly with a principal market maker unless it is believed
that a better price and execution can be obtained by using a broker.
Except to the extent that the Fund may pay higher brokerage commissions
for brokerage and research services (as described below) on a portion
of its transactions executed on securities exchanges, the Adviser seeks
the best security price at the most favorable commission rate.
(b) Brokerage commissions paid by the Fund on portfolio transactions for
the fiscal year ended October 31, 1994 totalled $29,523. During this
same period, the Fund paid $14,363 in brokerage commissions on
transactions totalling $11,704,468 to brokers selected primarily on the
basis of research services provided to the Adviser.
(c) In selecting dealers and in negotiating commissions, the Adviser
considers the firm's reliability, the quality of its execution services
on a continuing basis and its financial condition. When more than one
firm is believed to meet these criteria, preference may be given to
firms which also provide research services to the Fund or the Adviser.
Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment adviser, under certain circumstances, to cause an
account to pay a broker or dealer who supplies brokerage and research
services, a commission for effecting a securities transaction in excess
of the amount of commission another broker or dealer would have charged
for effecting the transaction. Brokerage and research services include
(a) furnishing advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the availability
of securities or purchasers or sellers of securities, (b) furnishing
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts, and (c) effecting securities transactions and performing
functions incidental thereto (such as clearance, settlement and
custody).
8
<PAGE> 13
Pursuant to provisions of the investment advisory agreement, the Fund's
Trustees have authorized the Adviser to cause the Fund to incur
brokerage commissions in an amount higher than the lowest available
rate in return for research services provided to the Adviser. The
Adviser is of the opinion that the continued receipt of supplemental
investment research services from dealers is essential to its provision
of high quality portfolio management services to the Fund. The Adviser
undertakes that such higher commissions will not be paid by the Fund
unless (a) the Adviser determines in good faith that the amount is
reasonable in relation to the services in terms of the particular
transaction or in terms of the Adviser's overall responsibilities with
respect to the accounts as to which it exercises investment discretion,
(b) such payment is made in compliance with the provisions of Section
28(e) and other applicable state and federal laws, and (c) in the
opinion of the Adviser, the total commissions paid by the Fund are
reasonable in relation to the expected benefits to the Fund over the
long term. The investment advisory fee paid by the Fund under the
investment advisory agreement is not reduced as a result of the
Adviser's receipt of research services.
The Adviser places portfolio transactions for other advisory accounts
including other investment companies. Research services furnished by
firms through which the Fund effects its securities transactions may be
used by the Adviser in servicing all of its accounts; not all of such
services may be used by the Adviser in connection with the Fund. In the
opinion of the Adviser, the benefits from research services to each of
the accounts (including the Fund) managed by the Adviser cannot be
measured separately. Because the volume and nature of the trading
activities of the accounts are not uniform, the amount of commissions
in excess of the lowest available rate paid by each account for
brokerage and research services will vary. However, in the opinion of
the Adviser, such costs to the Fund will not be disproportionate to the
benefits received by the Fund on a continuing basis.
The Adviser seeks to allocate portfolio transactions equitably whenever
concurrent decisions are made to purchase or sell securities by the
Fund and another advisory account. In some cases, this procedure could
have an adverse effect on the price or the amount of securities
available to the Fund. In making such allocations among the Fund and
other advisory accounts, the main factors considered by the Adviser are
the respective investment objectives, the relative size of portfolio
holdings of the same or comparable securities, the availability of cash
for investment, the size of investment commitments generally held, and
opinions of the persons responsible for recommending the investment.
(d) INAPPLICABLE
(e) INAPPLICABLE
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
See Item 6.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED.
(a) See Item 7.
(b) See Item 8.
(c) INAPPLICABLE
ITEM 20. TAX STATUS.
See Item 6(g).
ITEM 21. UNDERWRITERS.
(a) INAPPLICABLE
(b) See Item 21(a).
9
<PAGE> 14
(c) INAPPLICABLE
ITEM 22. CALCULATION OF PERFORMANCE DATA.
INAPPLICABLE
ITEM 23. FINANCIAL STATEMENTS.
The attached financial statements in the form in which they appear in the
Annual and Semi-annual Reports to Shareholders including the related report of
Independent Accountants on the October 31, 1994 financial statements, are
included in the Statement of Additional Information.
10
<PAGE> 15
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 96.3%
CONSUMER DISTRIBUTION 12.5%
*2,000 Best Buy, Inc. $75,250
2,000 Big B, Inc. 24,500
*6,000 Burlington Coat Factory Corp. 78,000
*6,000 Caldor Corp. 171,000
14,000 Claire's Stores, Inc. 161,000
*5,000 Dress Bam, Inc. 48,750
30,000 Food Lion, Inc. 172,500
*16,000 Gymboree Corp. 516,000
3,000 Haggar Corp. 72,000
2,000 New England Business Service, Inc. 37,500
*4,000 Nine West Group, Inc. 113,000
*20,000 Revco, Inc. 452,500
*5,000 Rykoff-Sexton, Inc. 101,875
*5,000 Shoe Carnival, Inc. 31,250
*11,000 Value City Department Stores, Inc. 125,125
*13,000 Viking Office Products, Inc. 399,750
---------
TOTAL CONSUMER DISTRIBUTION 2,580,000
---------
CONSUMER DURABLES 4.1%
2,000 Armstrong World Industries, Inc. 82,750
3,000 Borg Warner Automotive, Inc. 68,250
5,000 Fleetwood Enterprises, Inc. 113,750
13,000 Gencorp, Inc. 157,625
3,000 Harman International Industries, Inc. 107,625
2,000 Leggett & Platt, Inc. 74,750
1,000 Maytag Co. 16,000
3,000 Smith (A.O.), Inc. 73,125
4,000 Sunbeam-Oster, Inc. 98,500
*5,000 Winnebago Industries, Inc. 45,000
---------
TOTAL CONSUMER DURABLES 837,375
---------
CONSUMER NON-DURABLES 3.7%
4,000 Dean Foods Co. 116,000
4,000 Dial Corp. 83,000
2,000 Kellwood Co. 39,750
*5,000 Nautica Enterprises, Inc. 145,000
*3,000 Scotts Co., Class A 46,125
3,000 Springs Industries, Inc. 123,000
4,000 Topps, Inc. 23,500
*4,000 Wamaco Group, Inc. 74,500
7,000 Whitman Corp. 118,125
---------
TOTAL CONSUMER NON-DURABLES 769,000
---------
</TABLE>
F-1
<PAGE> 16
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CONSUMER SERVICES 6.0%
4,000 Advo, Inc. $71,500
3,000 Banta Corp. 93,375
2,000 Belo (A.H.) Corp. 109,000
*6,000 Brinker International, Inc. 138,750
1,000 Lee Enterprises, Inc. 33,625
2,000 Merrill Corp. 37,500
3,000 PHH Corp. 112,500
*17,000 Players International, Inc. 381,438
3,000 Scripps (E.W.) Co., Class A 90,000
*2,000 SPS Transaction Services 108,750
5,000 Wendy's International, Inc. 73,750
---------
TOTAL CONSUMER SERVICES 1,250,188
---------
ENERGY 4.9%
*4,000 Columbia Gas System, Inc. 112,000
4,000 El Paso Natural Gas Co. 124,000
4,000 KCS Energy, Inc. 68,000
2,000 Mapco, Inc. 109,000
2,000 NACCO Industries, Inc., Class A 118,500
1,000 Nicor, Inc. 24,625
4,000 Oneok, Inc. 70,000
3,000 Pacific Enterprises 64,125
*3,000 Tesoro Petroleum Corp. 27,750
4,000 Tosco Corp. 126,500
1,000 Transco Energy Co. 14,375
*11,000 Varco International, Inc. 77,000
*7,000 Weatherford International, Inc. 79,625
---------
TOTAL ENERGY 1,015,500
---------
</TABLE>
F-2
<PAGE> 17
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FINANCE 9.5%
2,000 Advanta Corp., Class A $58,000
4,000 Alex Brown, Inc. 113,000
1,000 Banponce Corp. 30,375
1,000 CMAC Investment Corp. 27,125
5,000 Comdisco, Inc. 100,625
2,000 Duff & Phelps Corp. 35,250
1,000 First Communication Corp. 26,375
2,000 First USA, Inc. 71,500
5,000 Fremont General Corp. 122,500
3,000 GFC Financial Corp. 100,875
9,000 Hibernia Corp., Class A 73,125
3,000 Integra Financial Corp. 129,750
1,000 Kimco Realty Corp. 36,875
2,000 Mercantile Bancorporation, Inc. 69,500
4,000 MGIC Investment Corp. 126,000
3,000 Ohio Casualty Corp. 88,500
4,000 Old Kent Financial Corp. 128,500
7,000 Onbancorp., Inc. 182,875
3,000 Regions Financial Corp. 95,625
1,000 Southern National Corp. 20,625
10,000 Southtrust Corp. 191,250
2,000 Standard Federal Bank 52,500
1,000 TCF Financial Corp. 38,875
1,000 Zions Bancorporation 37,000
---------
TOTAL FINANCE 1,956,625
---------
HEALTH CARE 6.8%
10,000 Caremark International, Inc. 217,500
*4,000 Charter Medical Corp. 99,500
*10,000 Circa Pharmaceuticals, Inc. 150,000
*3,000 Copley Pharmaceutical, Inc. 52,500
*4,000 Dentsply International, Inc. 125,000
480 FHP International Corp. 14,040
*1,000 Haemonetics Corp. 20,125
*4,000 Healthsouth Rehabilitation 151,500
*1,000 Integrated Health Services, Inc. 40,875
*5,000 Lincare Holdings, Inc. 131,250
*6,000 Mariner Health Group, Inc. 135,000
4,000 Mylan Labs, Inc. 112,000
*1,000 Nellcor, Inc. 30,750
*1,000 Sierra Health Services, Inc. 33,250
*3,000 Target Therapeutics, Inc. 94,500
---------
TOTAL HEALTH CARE 1,407,790
---------
</TABLE>
F-3
<PAGE> 18
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
PRODUCER MANUFACTURING 6.1%
*6,000 American Power Conversion Corp. $109,500
5,000 Ametek, Inc. 92,500
3,000 Belden, Inc. 60,375
1,000 Briggs & Stratton Corp. 69,500
*5,000 Coltec Industries, Inc. 90,625
3,000 Danaher Corp. 148,500
*2,000 Idex Corp. 86,000
4,000 Juno Lighting, Inc. 75,500
3,000 Kaydon Corp. 69,750
4,000 National Service Industries, Inc. 107,000
*3,000 Sanifill, Inc. 68,625
1,294 Tyco International, Ltd. 62,112
*4,000 Varity Corp. 152,000
2,000 Wellman, Inc. 66,250
---------
TOTAL PRODUCER MANUFACTURING 1,258,237
---------
RAW MATERIALS/PROCESSING INDUSTRIES 11.0%
4,000 Ecolab, Inc. 87,000
6,000 First Mississippi Corp. 127,500
1,000 Handy & Harman 16,500
10,500 Hanna (M.A.) Co. 271,687
*8,000 Inland Steel Industries, Inc. 289,000
6,000 International Specialty Products, Inc. 44,250
*6,000 Kaiser Aluminum Corp. 67,500
3,000 Medusa Corp. 69,000
11,000 Mineral Technologies, Inc. 325,875
4,000 NCH Corp. 267,000
*18,000 Owens-Illinois, Inc. 202,500
2,000 Pentair, Inc. 84,000
4,000 Riverwood International Corp. 69,000
7,000 RPM, Inc. 131,250
1,000 Sequa Corp., Class A 24,000
15,000 Terra Industries, Inc. 163,125
1,333 Wausau Paper Mills Co. 31,242
---------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES 2,270,429
---------
</TABLE>
F-4
<PAGE> 19
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 13.5%
*6,000 3Com Corp. $241,500
*6,000 Chipcom Corp. 360,000
*3,000 Cirrus Logic, Inc. 86,250
*5,000 Conner Peripherals, Inc. 57,500
*2,000 Cyrix Corp. 82,000
*3,000 Filenet Corp. 76,500
* 400 Harris Computer Systems Corp. 5,600
8,000 Harris Corp. 343,000
*3,000 Kornag, Inc. 74,625
*12,000 National Semiconductor Corp. 210,000
3,000 Pioneer Standard Electronics, Inc. 54,000
*5,000 Quantum Corp. 76,250
*2,000 Seagate Technology 51,000
3,000 Smart & Final, Inc. 45,000
*1,000 Solectron Corp. 27,375
*8,000 Sybase, Inc. 418,000
*9,000 Synopsys, Inc. 412,875
*6,000 Tandem Computers, Inc. 105,750
*5,000 VLSI Technology, Inc. 64,375
---------
TOTAL TECHNOLOGY 2,791,600
---------
TRANSPORTATION 3.5%
11,000 Airborne Freight Corp. 213,125
15,000 Arkansas Best Corp. 194,062
2,000 Arnold Industries, Inc. 44,000
1,000 Harper Group, Inc. 13,750
9,000 Skywest, Inc. 186,750
3,000 Werner Enterprises, Inc. 75,000
---------
TOTAL TRANSPORTATION 726,687
---------
UTILITIES 14.7%
15,000 Atlantic Energy, Inc. 253,125
3,000 Black Hills Corp. 61,125
12,000 Boston Edison Co. 282,000
2,000 Central Hudson Gas & Electric Corp. 49,250
5,000 Central Louisiana Electric, Inc. 108,750
1,000 Central Vermont Public Service Corp. 13,250
2,000 CILCORP, Inc. 61,000
4,000 CIPSCO, Inc. 113,500
6,000 Citizens Utilities Co. 79,500
16,000 Delmarva Power & Lighting Co. 302,000
10,000 DQE, Inc. 301,250
</TABLE>
F-5
<PAGE> 20
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
-------------------------------------------------------------------------------
October 31, 1994
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
UTILITIES (continued)
8,000 Eastern Utilities Associates $175,000
5,000 IES Industries, Inc. 128,125
9,000 Kansas City Power & Light Co. 202,500
8,000 Oklahoma Gas & Electric Co. 269,000
3,000 Orange & Rockland Utilities, Inc. 91,125
1,000 Philadelphia Suburban Corp. 17,750
18,000 Portland General Corp. 317,250
6,000 Rochester Gas & Electric Co. 124,500
4,000 Sierra Pacific Resources 77,000
1,000 Southern California Water Co. 15,376
-----------
TOTAL UTILITIES 3,042,376
-----------
TOTAL COMMON STOCK (COST $19,961,209) 19,905,807
-----------
CONVERTIBLE PREFERRED STOCK 0.2%
1,600 FHP International, $1.25 (Cost $34,615) 43,800
-----------
Principal
Amount REPURCHASE AGREEMENT 2.5%
---------
$507,000 Saloman Brothers, Inc., dated 10/31/94, 4.85%, due 11/01/94,
(collateralized by U.S. Government obligations in a pooled cash
account) repurchase proceeds $507,068 (Cost $507,000) 507,000
-----------
TOTAL INVESTMENTS (Cost $20,502,824) 99.0% 20,456,607
Other assets and liabilities, net 1.0% 202,925
-----------
NET ASSETS 100% $20,659,532
===========
</TABLE>
*Non-income producing security
See Notes to Financial Statements.
F-6
<PAGE> 21
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
OCTOBER 31, 1994
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $20,502,824) $20,456,607
Cash 2,100
Receivable for investments sold 146,250
Dividends receivable 33,725
Other assets 51,647
-----------
TOTAL ASSETS 20,690,329
-----------
LIABILITIES
Accrued expenses 30,797
-----------
NET ASSETS, Equivalent to $9.82 Per Share $20,659,532
===========
NET ASSETS WERE COMPRISED OF:
Shares of capital stock, at par; 2,104,130 shares outstanding $21,041
Capital surplus 21,200,959
Accumulated net realized loss on securities (849,616)
Net unrealized depreciation of securities (46,217)
Undistributed net investment income 333,365
-----------
NET ASSETS at October 31, 1994 $20,659,532
===========
</TABLE>
See Notes to Financial Statements.
F-7
<PAGE> 22
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Operations
-------------------------------------------------------------------------------
NOVEMBER 23, 1993 * THROUGH OCTOBER 31, 1994
<TABLE>
<S> <C>
Investment Income
Dividends $365,369
Interest 66,871
----------
Investment income 432,240
----------
Expenses
Audit fees 18,000
Organization expenses 10,329
Shareholder service agent's fees and expenses 7,500
Registration and filing fees 7,184
Accounting services 6,422
Legal fees 4,114
Directors' fees and expenses 2,852
Miscellaneous 474
----------
Total expenses 56,875
----------
Net investment income 375,365
----------
Realized and Unrealized Loss on Securities
Net realized loss on securities (849,616)
Net unrealized depreciation of securities (46,217)
-----------
Net realized and unrealized loss on securities (895,833)
-----------
Decrease in net assets resulting from operations ($520,468)
===========
</TABLE>
* Commencement of operations
See Notes to Financial Statements.
F-8
<PAGE> 23
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Changes in Net Assets
NOVEMBER 23, 1993 * THROUGH OCTOBER 31, 1994
<TABLE>
<S> <C>
NET ASSETS, BEGINNING OF PERIOD $1,000,000
-----------
OPERATIONS
Net investment income 375,365
Net realized loss on securities (849,616)
Net unrealized depreciation of securities (46,217)
------------
Decrease in net assets resulting from operations (520,468)
------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (42,000)
-----------
FUND SHARE TRANSACTIONS
Proceeds from shares sold 20,180,000
Proceeds from shares issued for dividends reinvested 42,000
-----------
Increase in net assets resulting from Fund share transactions 20,222,000
-----------
INCREASE IN NET ASSETS 19,659,532
-----------
NET ASSETS, END OF PERIOD $20,659,532
===========
</TABLE>
* Commencement of operations
See Notes to Financial Statements.
F-9
<PAGE> 24
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
American Capital Small Capitalization Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940, as amended, as
a diversified open-end management investment company. Fund shares
are only available for purchase by publicly offered Funds for which
American Capital Asset Management, Inc. (the "Adviser") serves as
investment adviser or sub-adviser. The American Capital Pace Fund,
Inc. ("Pace") contributed the initial capital of $1,000,000 for
100,000 shares of the Fund on November 23, 1993. All outstanding
shares are currently owned by Pace. The following is a summary of
significant accounting policies consistently followed by the Fund
in the preparation of its financial statements.
A. INVESTMENT VALUATIONS
Securities listed or traded on a national securities exchange
are valued using prices as of 2:00 p.m. eastern time.
Unlisted and listed securities for which the last sale price
at 2:00 p.m. eastern time is not available are valued at the
last reported bid price.
Short-term investments with a maturity of 60 days or less when purchased
are valued at amortized cost, which approximates market value. Short-term
investments with a maturity of more than 60 days when purchased are valued
based on market quotations until the remaining days to maturity becomes
less than 61 days. From such time, until maturity, the investments are
valued at amortized cost.
B. REPURCHASE AGREEMENTS
A repurchase agreement is a short-term investment in which the
Fund acquires ownership of a debt security and the seller
agrees to repurchase the security at a future time and
specified price. The Fund may invest independently in
repurchase agreements, or transfer uninvested cash balances
into a pooled cash account along with other investment
companies advised or sub-advised by the Adviser, the daily
aggregate of which is invested in repurchase agreements.
Repurchase agreements are collateralized by the underlying
debt security. The Fund makes payment for such securities
F-10
<PAGE> 25
only upon physical delivery or evidence of book entry transfer to the
account of the custodian bank. The seller is required to maintain the
value of the underlying security at not less than the repurchase proceeds
due the Fund.
C. FEDERAL INCOME TAXES
No provision for federal income taxes is required because the
Fund intends to elect to be taxed as a "regulated investment
company" under the Internal Revenue Code and intends to
maintain this qualification by annually distributing all of
its taxable net investment income and taxable net realized
gains to its shareholders.
D. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME
Investment transactions are accounted for on the trade date.
Realized gains and losses on investments are determined on the
basis of identified cost. Dividend income is recorded on the
ex-dividend date. Interest income is accrued daily.
E. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on
the record date. The Fund distributes tax basis earnings in
accordance with the minimum distribution requirements of the
Internal Revenue code, which may differ from generally
accepted accounting principles. Such dividends and
distributions may exceed financial statement earnings.
F. ORGANIZATION COSTS
Organization expenses of approximately $62,000 were deferred
and are being amortized over a five year period ending October
1998.
NOTE 2 - MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager of the Fund. The Adviser
receives no compensation for its investment management services.
Accounting services include the salaries and overhead expenses of
the Fund's Treasurer and the personnel operating under his
direction. Charges are allocated among all investment companies
advised or sub-advised by the Adviser. For the period ended
October 31, 1994, these charges included $2,033 as the Fund's share
of the employee costs attributable to the Fund's accounting
officers. A portion of the accounting services expense was paid to
the Adviser in reimbursement of personnel, facilities and equipment
F-11
<PAGE> 26
costs attributable to the provision of accounting services to the
Fund. The services provided by the Adviser are at cost.
American Capital Companies Services, Inc., an affiliate of the
Adviser, serves as the Fund's shareholder service agent. These
services are provided at cost plus a profit. For the period ended
October 31, 1994, fees for such services were $7,500.
Legal fees of $3,583 were incurred for services rendered by
O'Melveny & Myers, counsel for the Fund. Lawrence J. Sheehan, of
counsel to that firm, is a director of the Fund.
Certain officers and directors of the Fund are officers and
directors of the Adviser and the shareholder service agent.
NOTE 3 - INVESTMENT ACTIVITY
During the period, the cost of purchases of investments and
proceeds from sales of investments, excluding short-term
investments, were $26,823,206 and $5,977,766 respectively.
The identified cost of investments owned at October 31, 1994 was
the same for Federal income tax and financial statement purposes.
Net unrealized depreciation of investments aggregated $46,217,
gross unrealized appreciation aggregated $1,578,278, and gross
unrealized depreciation aggregated $1,624,495.
The net realized capital loss carryforward of $849,616 for federal
income tax purposes at October 31, 1994 may be utilized to offset
future capital gains until expiration in 2002.
NOTE 4 - DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are
compensated by the Fund at the annual rate of $720 plus a fee of
$15 per day for the Board and Committee meetings attended. The
Chairman receives additional fees from the Fund at the annual rate
of $270. During the period, such fees aggregated $2,633.
The directors may participate in a voluntary Deferred Compensation
Plan (the "Plan"). The Plan is not funded, and obligations under
the Plan will be paid solely out of the Fund's general accounts.
The Fund will not reserve or set aside funds for the payment of its
obligations under the Plan by any form of trust or escrow. At
October 31, 1994, the liability for the Plan aggregated $555. Each
director covered under the Plan elects to be credited with an
earnings component on amounts deferred equal to the income earned
F-12
<PAGE> 27
by the Fund on its short-term investments or equal to the total
return of the Fund.
NOTE 5 - CAPITAL
The Fund has 200 million shares of $.01 par value of capital stock
authorized. Transactions in shares of capital stock for the period
ended October 31, 1994 were as follows:
<TABLE>
<S> <C>
Shares sold 2,100,000
Shares issued for dividends reinvested 4,130
---------
Fund shares outstanding 2,104,130
=========
</TABLE>
F-13
<PAGE> 28
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Financial Highlights
-------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the period
indicated.
NOVEMBER 23, 1993 (1) THROUGH OCTOBER 31, 1994
<TABLE>
<S> <C>
PER SHARE OPERATING PERFORMANCE (2)
Net asset value, beginning of the period $10.00
-------
Income from investment operations
Investment income .24
Expenses (.03)
-------
Net investment income .21
Net realized and unrealized losses on securities (.37)
-------
Total from investment operations (.16)
-------
DIVIDENDS FROM NET INVESTMENT INCOME (.02)
-------
Net asset value, end of the period $9.82
=======
TOTAL RETURN (3) (1.80%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of the period (millions) $20.7
Average net assets (millions) $20.1
Ratios to average net assets (annualized)
Expenses .30%
Net investment income .99%
Portfolio turnover rate 34%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider
sales charges.
See Notes to Financial Statements.
F-14
<PAGE> 29
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of American Capital Small
Capitalization Fund, Inc. (the "Fund") at October 31, 1994, the results of its
operations, the changes in its net assets and the selected per share data and
ratios for the period November 23, 1993 (commencement of operations) through
October 31, 1994, in conformity with generally accepted accounting principles.
These financial statements and selected per share data and ratios (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at October 31, 1994 by correspondence with the
custodian, provides a reasonable basis for the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
Houston, Texas
December 8, 1994
F-15
<PAGE> 30
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
COMMON STOCK 96.2%
CONSUMER DISTRIBUTION 8.1%
6,000 Arbor Drugs, Inc. $154,500
*29,000 Barnes & Noble, Inc. 833,750
13,000 Big B, Inc. 189,313
*5,000 Books-A-Million, Inc. 68,125
*3,000 Carson Pirie Scott & Co. 48,000
*4,000 CDW Computer Centers, Inc. 142,000
39,000 Circuit City Stores, Inc. 984,750
60,000 Claire's Stores, Inc. 832,500
*12,000 CompUSA, Inc. 295,500
26,000 Fingerhut Companies, Inc. 295,750
7,000 Food Lion, Inc. 38,938
*33,000 General Nutrition Companies, Inc. 810,563
*16,000 Gymboree Corp. 378,000
4,000 Haggar Corp. 82,000
*11,000 Health Management, Inc. 198,000
*2,000 Hills Stores Co. 40,250
*14,000 MacFrugals Bargains Closeouts 197,750
4,000 Medicine Shoppe International, Inc. 129,000
*6,000 Men's Wearhouse, Inc. 151,500
*7,900 Meyer (Fred), Inc. 245,888
*1,000 Michael's Stores, Inc. 28,750
*20,000 Micro Warehouse, Inc. 705,000
7,000 New England Business Service, Inc. 127,750
*4,000 Nine West Group, Inc. 129,500
39,900 Pier 1 Imports, Inc. 359,100
*5,000 Proffitts, Inc. 123,438
*5,000 Rex Stores Corp. 67,500
3,000 Richfood Holdings, Inc. 60,000
7,000 Ross Stores, Inc. 67,813
12,500 Rykoff-Sexton, Inc. 217,188
*5,000 Shoe Carnival, Inc. 30,000
*31,800 Stop & Shop Companies, Inc. 846,675
*31,000 Sunglass Hut International, Inc. 875,749
*3,000 Urban Outfitters, Inc. 63,000
*13,000 Viking Office Products, Inc. 354,250
*39,000 Waban, Inc. 648,375
*3,000 Younkers, Inc. 55,875
*12,000 Zale Corp. 140,250
----------
TOTAL CONSUMER DISTRIBUTION 11,016,290
----------
</TABLE>
F-16
<PAGE> 31
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CONSUMER DURABLES 5.2%
*11,000 Aldila, Inc. 68,750
2,000 Armstrong World Industries, Inc. 90,750
*11,000 Automotive Industries Holdings, Inc., Class A 290,125
3,000 Borg Warner Automotive, Inc. 75,750
10,000 Breed Technologies, Inc. 202,500
*4,000 Champion Enterprises, Inc. 118,500
35,000 Clayton Homes, Inc. 581,875
28,000 Echlin, Inc. 1,022,000
5,000 Fleetwood Enterprises, Inc. 111,875
8,000 Harman International Industries, Inc. 290,000
11,000 Leggett & Platt, Inc. 424,875
32,000 Lennar Corp. 524,000
7,000 Libbey, Inc. 136,500
32,000 Masland Corp. 428,000
46,000 Maytag Co. 793,500
30,000 Oakwood Homes Corp. 742,500
12,000 Outboard Marine Corp. 256,500
10,000 Pulte Corp. 215,000
7,000 Smith (A.O.) Corp. 166,250
*3,000 Strattec Security Corp. 34,500
12,000 Toro Co. 346,500
15,000 Winnebago Industries, Inc. 151,875
*14,000 Zenith Electronics Corp. 105,000
---------
TOTAL CONSUMER DURABLES 7,177,125
---------
CONSUMER NON-DURABLES 5.3%
22,000 American Greetings Corp., Class A 603,625
7,000 Armor All Products Corp. 140,000
6,000 Barefoot, Inc. 66,000
5,000 Cyrk, Inc. 71,250
4,000 Dean Foods Co. 113,000
4,000 Dial Corp. 96,000
*7,000 Fieldcrest Cannon, Inc. 155,750
*15,000 Griffon Corp. 118,125
5,000 Hormel (Geo. A.) & Co. 136,250
13,000 IBP, Inc. 477,750
*1,800 Jones Apparel Group, Inc. 47,025
2,000 Kellwood Co. 35,250
</TABLE>
F-17
<PAGE> 32
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
19,000 Lancaster Colony Corp. 665,000
*5,000 Nautica Enterprises, Inc. 140,000
*5,000 Nu-kote Holdings, Inc., Class A 139,063
*22,000 Paragon Trade Brands, Inc. 338,250
11,000 Phillips-Van Heusen Corp. 167,750
*3,000 Scotts Co., Class A 59,250
*9,000 Smithfield Foods, Inc. 204,750
18,000 Springs Industries, Inc. 693,000
*4,000 Starbucks Corp. 93,750
3,000 St. John Knits, Inc. 102,750
31,000 Topps, Inc. 186,000
17,000 Unifi, Inc. 431,375
9,000 Universal Foods Corp. 292,500
*10,000 Westpoint Stevens, Inc. 183,750
53,000 Whitman Corp. 960,625
6,000 WLR Foods, Inc. 138,000
12,000 Wolverine World Wide, Inc. 393,000
---------
TOTAL CONSUMER NON-DURABLES 7,248,838
---------
CONSUMER SERVICES 8.2%
4,000 Advo, Inc. 80,000
*4,000 American Media, Inc., Class A 24,500
*10,200 American Medical Response 261,375
5,000 Banta Corp. 166,250
6,000 Belo (A.H.) Corp. 361,500
25,000 Bowne & Co., Inc. 403,125
*6,000 Brinker International, Inc. 102,750
1,000 Central Newspapers, Inc., Class A 26,000
3,500 Club Med, Inc. 99,313
33,000 Equifax, Inc. 1,056,000
*1,000 Heritage Media Corp., Class A 25,500
*16,000 Hospitality Franchise Systems, Inc. 488,000
*3,000 Jones Intercable, Inc., Class A 43,125
11,000 Kelly Services, Inc. 375,375
1,000 Lee Enterprises, Inc. 35,750
*28,000 Lone Star Steakhouse & Saloon, Inc. 861,000
*27,000 Mirage Resorts, Inc. 803,250
35,760 Ogden Corp. 733,080
11,000 Olsten Corp. 374,000
5,200 PHH Corp. 207,350
</TABLE>
F-18
<PAGE> 33
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
*17,000 Players International, Inc. 503,625
*3,000 Regal Cinemas, Inc. 82,500
*33,000 Robert Half International, Inc. 870,375
26,000 Sbarro, Inc. 672,750
3,000 Scripps (E.W.) Co., Class A 86,625
10,000 Service Corp. International 278,750
13,500 Spelling Entertainment, Group I 138,374
*18,000 SPS Transaction Services 558,000
58,000 Wendy's International, Inc. 993,250
*32,000 Westcott Communications, Inc. 452,000
----------
TOTAL CONSUMER SERVICES 11,163,492
----------
ENERGY 6.8%
*5,000 Addington Resources, Inc. 58,125
21,000 Ashland, Inc. 769,125
*17,000 BJ Services Co. 391,000
*5,000 Chesapeake Energy Corp. 117,500
*4,000 Columbia Gas System, Inc. 118,000
14,000 Diamond Shamrock R & M, Inc. 383,250
27,000 Eastern Enterprises 806,625
19,000 El Paso Natural Gas Co. 553,375
19,000 KCS Energy, Inc. 339,625
2,000 MAPCO, Inc. 113,250
7,000 McDermott (J. Ray) & Co., Inc. 193,375
*102,000 Nabors Industries, Inc. 956,250
9,000 NACCO Industries, Inc., Class A 499,500
15,500 National Fuel Gas Co. 443,687
8,000 New Jersey Resources Corp. 183,000
35,000 NICOR, Inc. 866,250
*20,000 Offshore Logistics, Inc. 271,250
14,400 ONEOK, Inc. 273,600
*3,000 Oryx Energy Co. 41,625
39,000 Pacific Enterprises 960,375
3,000 Phoenix Resource Co. 85,500
7,000 Quaker State Corp. 99,750
*6,000 Smith International, Inc. 103,500
7,000 Southwestern Energy Co. 106,750
4,000 Tosco Corp. 136,500
301 Transco Energy Co. 6,095
*30,000 Varco International, Inc. 247,500
5,400 WICOR, Inc. 147,150
----------
TOTAL ENERGY 9,271,532
----------
</TABLE>
F-19
<PAGE> 34
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FINANCE 13.2%
8,000 Advanta Corp., Class A 274,000
15,000 Alex Brown, Inc. 605,625
*2,080 Alleghany Corp. 323,960
17,000 AMBAC, Inc. 688,500
29,000 Bankers Life Holdings Corp. 605,375
8,000 BanPonce Corp. 257,000
4,500 Capitol American Financial Corp. 97,875
6,000 Capital Re Corp. 138,750
6,000 Charter One Financial, Inc. 137,250
10,000 CMAC Investment Corp. 365,000
5,000 Comdisco, Inc. 140,625
*11,000 Commercial Federal Corp. 288,750
16,500 Compass Bancshares, Inc. 432,094
*81,960 Dime Bancorp, Inc. 778,620
2,000 Eaton Vance Corp. 63,250
13,000 Finova Group, Inc. 438,750
7,000 First American Corp. 241,500
1,000 First Commercial Corp. 27,500
2,000 First Financial Corp. 31,625
26,000 First USA, Inc. 1,111,500
15,000 Firstar Corp. 433,125
24,000 FirstFed Michigan Corp. 579,000
14,000 Foothill Group, Inc., Class A 306,250
13,000 Fremont General Corp. 287,625
4,000 GATX Corp. 180,000
79,000 Hibernia Corp., Class A 651,750
15,000 Integra Financial Corp. 654,375
5,000 Inter-Regional Financial Group, Inc. 126,875
7,000 Marshall & Ilsley Corp. 140,875
2,000 Mercantile Bancorporation, Inc. 72,750
20,000 Mercury Finance Co. 302,500
29,300 MGIC Investment Corp. 1,230,600
3,000 Ohio Casualty Corp. 87,375
4,000 Old Kent Financial Corp. 124,000
17,250 Orion Capital Corp. 605,906
15,000 Protective Life Corp. 680,625
29,000 Regions Financial Corp. 1,000,500
20,000 Reliastar Financial Corp. 715,000
3,000 Roosevelt Financial Group, Inc. 48,094
7,000 Southern National Corp. 142,625
54,000 SouthTrust Corp. 1,161,000
</TABLE>
F-20
<PAGE> 35
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
2,000 Standard Federal Bancorp 56,000
20,300 Star Banc Corp. 847,525
10,000 TCF Financial Corp. 427,500
*5,500 White River Corp. 180,125
----------
TOTAL FINANCE 18,089,549
----------
HEALTH CARE 8.4%
*8,000 Abbey Healthcare Group, Inc. 311,000
*24,000 AMSCO International, Inc. 303,000
*23,000 Calgene, Inc. 158,125
*14,000 Circa Pharmaceuticals, Inc. 341,250
*6,000 Cognex Corp. 178,500
*3,000 Cordis Corp. 219,750
4,000 Dentsply International, Inc. 141,000
*38,000 FoxMeyer Health Corp. 726,750
*14,000 Genetic Therapy, Inc. 133,000
*51,000 Gilead Sciences, Inc. 752,250
*8,000 Healthsouth Rehabilitation 157,000
*26,000 ICOS Corp. 117,000
9,000 Intergrated Health Services, Inc. 312,750
*21,000 Lincare Holdings, Inc. 630,000
1,000 Manor Care, Inc. 29,750
*6,000 Mariner Health Group, Inc. 87,750
11,000 Mentor Corp. 248,875
27,000 Mylan Laboratories, Inc. 833,625
*23,000 Nellcor, Inc. 943,000
*16,000 Oxford Health Plans, Inc. 672,000
*6,000 Pacific Physician Services, Inc. 110,250
*12,000 Pacificare Health Systems, Inc., Class A 750,000
*3,000 Quintiles Transnational 114,000
*7,000 Scios Nova, Inc. 46,375
*1,000 Sierra Health Services, Inc. 26,500
*18,000 Steris Corp. 711,000
*3,000 Target Therapeutics, Inc. 108,750
*26,000 Thermo Cardiosystems, Inc. 867,750
*2,000 United American Healthcare Corp. 34,000
4,000 United Wisconsin Services, Inc. 81,000
*3,000 Universal Health Services, Inc., Class B 78,750
*24,000 Vivra, Inc. 777,000
*15,000 Watsons Pharmaceuticals, Inc. 465,000
----------
TOTAL HEALTH CARE 11,466,750
----------
</TABLE>
F-21
<PAGE> 36
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
PRODUCER MANUFACTURING 7.8%
18,000 AGCO Corp. 639,000
*36,000 Allwaste, Inc. 220,500
5,000 Ametek, Inc. 81,250
9,600 Aptar Group, Inc. 283,200
3,000 Belden, Inc. 67,500
2,000 Blount, Inc., Class A 90,000
20,000 Briggs & Stratton Corp. 702,500
21,000 Cummins Engine Co., Inc. 929,250
30,000 Danaher Corp. 862,500
*10,000 Detroit Diesel Corp. 232,500
*2,000 Duracraft Corp. 64,500
4,000 Granite Construction, Inc. 80,250
24,500 IDEX Corp. 808,500
*7,000 Indresco, Inc. 95,375
20,000 Juno Lighting, Inc. 405,000
5,000 Kaydon Corp. 138,125
*2,000 Kent Electrics Corp. 58,750
*8,000 Kulicke & Soffa Industries, Inc. 343,000
*40,000 Manville Corp. 465,000
*12,000 Mueller Industries, Inc. 498,000
4,000 National Service Industries, Inc. 112,000
*1,000 Newpark Resources, Inc. 21,625
*5,500 PEC Israel Economic Corp. 151,938
8,000 Ruddick Corp. 166,000
*9,000 Southdown, Inc. 171,000
*11,000 SPS Technologies, Inc. 343,750
*16,000 Sterling Chemicals, Inc. 198,000
*42,000 Thermo Instrument Systems, Inc. 976,500
*5,000 United Waste Systems, Inc. 145,000
*14,000 Varity Corp. 586,250
6,000 Watts Industries, Inc., Class A 138,000
9,000 Wellman, Inc. 247,500
7,000 York International Corp. 288,750
----------
TOTAL PRODUCER MANUFACTURING 10,611,013
----------
</TABLE>
F-22
<PAGE> 37
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
RAW MATERIALS/PROCESSING INDUSTRIES 8.4%
9,900 Amcast Industrial Corp. 195,525
35,000 Ecolab, Inc. 796,250
6,000 First Mississippi Corp. 150,000
22,000 Georgia Gulf Corp. 723,250
24,000 Handy & Harman 357,000
8,000 Inland Steel Industries, Inc. 208,000
6,000 International Specialty Products, Inc. 47,250
*14,000 Jefferson Smurfit Corp. 190,750
2,000 Justin Industries, Inc. 22,000
*6,000 Kaiser Aluminum Corp. 67,500
22,000 Longview Fibre Co. 360,250
18,000 Lubrizol Corp. 627,750
29,000 Lyondell Petrochemical Co. 725,000
*20,000 Magma Copper Co., Class B 330,000
3,000 Medusa Corp. 67,875
22,000 Minerals Technologies, Inc. 731,500
2,000 NCH Corp. 127,000
12,000 Olin Corp. 670,500
*73,000 Owens-Illinois, Inc. 866,875
2,000 Pentair, Inc. 91,000
10,000 Potlatch Corp. 422,500
16,000 Rayonier, Inc. 530,000
9,000 Riverwood International Corp. 196,875
25,000 RPM, Inc. 490,625
*10,000 Sealed Air Corp. 427,500
15,000 Terra Industries, Inc. 165,000
*7,000 USG Corp. 163,625
21,000 Vigoro Corp. 840,000
4,000 Vulcan Materials Co. 232,500
37,500 Worthington Industries, Inc. 703,124
----------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES 11,527,024
----------
</TABLE>
F-23
<PAGE> 38
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
TECHNOLOGY 16.2%
*7,500 Altera Corp. 600,469
*13,950 Analog Devices, Inc. 371,419
*10,000 Aspect Telecommunications Corp. 416,250
*4,000 Atmel Corp. 171,000
3,000 Augat, Inc. 61,125
22,400 Avnet, Inc. 994,000
*16,000 BMC Software, Inc. 988,000
*13,000 Chipcom Corp. 419,250
*3,000 Cirrus Logic, Inc. 146,625
*5,000 Conner Peripherals, Inc. 53,750
*21,000 Credence Systems Corp. 771,750
*2,000 Cyrix Corp. 48,375
*21,000 Electroglas, Inc. 913,500
*20,000 Electronics For Imaging 920,000
*16,000 Exabyte Corp. 200,000
*21,000 Filenet Corp. 708,750
*22,000 Frame Technology Corp. 462,000
*4,000 FTP Software, Inc. 104,500
*48,000 Gateway 2000, Inc. 912,000
17,000 Harris Corp. 799,000
*4,200 Input/Output, Inc. 143,325
*10,000 Integrated Device Technology, Inc. 390,000
*14,000 International Rectifier Corp. 353,500
*51,000 Intervoice, Inc. 777,750
*3,000 Komag, Inc. 116,625
*21,000 Lam Research Corp. 1,050,000
*25,000 LEGENT Corp. 675,000
*1,000 Littelfuse, Inc. 33,750
*12,000 National Semiconductor Corp. 271,500
*15,500 Novellus Systems, Inc. 926,125
3,000 Pioneer Standard Electronics, Inc. 58,500
*5,000 Quantum Corp. 91,250
*4,000 Recoton Corp. 63,000
*19,000 S3, Inc. 444,125
*14,000 Seagate Technology 441,000
*33,000 Sequent Computer Systems, Inc. 548,624
*34,000 Solectron Corp. 994,500
*16,000 Sterling Software, Inc. 536,000
</TABLE>
F-24
<PAGE> 39
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
*1,000 Symbol Technologies, Inc. 32,875
*9,000 Synopsys, Inc. 488,250
*15,000 Tandem Computers, Inc. 193,125
*18,000 Teradyne, Inc. 893,250
*6,000 3Com Corp. 336,750
*5,737 U.S. Robotics Corp. 446,768
*5,000 VLSI Technology, Inc. 102,500
*6,000 Wall Data, Inc. 111,000
*49,000 Western Digital Corp. 784,000
*11,000 Xilinx, Inc. 838,750
-----------
TOTAL TECHNOLOGY 22,203,605
-----------
TRANSPORTATION 2.4%
45,000 Arkansas Best Corp. 450,000
8,000 Arnold Industries, Inc. 142,000
6,800 Consolidated Freightways, Inc. 173,400
28,000 Illinois Central Corp. 983,500
*2,000 M.S. Carriers, Inc. 47,750
*29,000 Northwest Airlines, Inc., Class A 866,375
19,000 Pittston Company Services Group 451,250
9,000 Skywest, Inc. 142,875
-----------
TOTAL TRANSPORTATION 3,257,150
-----------
UTILITIES 6.2%
8,000 Atlantic Energy, Inc. 145,000
37,100 Boston Edison Co. 890,400
*3,000 C-TEC Corp. 63,750
4,300 Central Hudson Gas & Electric Corp. 111,263
2,000 Cilcorp, Inc. 72,750
44,000 Delmarva Power & Lighting Co. 863,500
28,000 DQE, Inc. 941,500
8,000 Eastern Utilities Associates 191,000
42,000 Illinova Corp. 976,500
35,000 Lincoln Telecommunications Co. 542,500
33,500 Oklahoma Gas & Electric Co. 1,151,562
3,000 Orange & Rockland Utilities, Inc. 95,250
40,000 Pinnacle West Capital Corp. 855,000
47,000 Portland General Corp. 963,500
*16,000 Public Services Co. of New Mexico 202,000
14,200 Southern New England Telecommunications 466,825
-----------
TOTAL UTILITIES 8,532,300
-----------
TOTAL COMMON STOCK (COST $120,748,859) 131,564,668
-----------
</TABLE>
F-25
<PAGE> 40
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Investment Portfolio
--------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CONVERTIBLE PREFERRED STOCK 0.0%
1,600 FHP International, $1.25, Series A (Cost $34,615) 37,800
Principal
Amount REPURCHASE AGREEMENT 1.5%
----------
$2,045,000 SBC Capital Markets, Inc., dated 4/28/95, 5.92%, due 5/1/95, 2,045,000
(collaterized by U.S. Government obligations in a pooled cash
account) repurchase proceeds $2,046,009 (Cost $2,045,000)
TOTAL INVESTMENTS (Cost $122,828,474) 97.7% 133,647,468
Other assets and liabilities, net 2.3% 3,104,847
------------
NET ASSETS 100% $136,752,315
============
</TABLE>
*Non-income producing security
See Notes to Financial Statements.
F-26
<PAGE> 41
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $122,828,474) $133,647,468
Cash 2,803
Receivable for investments sold 3,504,668
Dividends and interest receivable 160,907
Other assets 45,449
------------
TOTAL ASSETS 137,361,295
------------
LIABILITIES
Investments purchased 548,270
Due to shareholder service agent 1,500
Deferred Director compensation 1,449
Accrued expenses and other liabilities 57,761
------------
TOTAL LIABILITIES 608,980
------------
NET ASSETS, equivalent to $10.27 per share $136,752,315
============
NET ASSETS WERE COMPRISED OF:
Capital stock, at par; 13,311,707 shares outstanding $133,117
Capital surplus 127,242,308
Accumulated net realized loss on securities (2,039,599)
Net unrealized appreciation of securities 10,818,994
Undistributed net investment income 597,495
------------
NET ASSETS $136,752,315
============
</TABLE>
See Notes to Financial Statements.
F-27
<PAGE> 42
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Operations
--------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<S> <C>
Investment Income
Dividends $762,326
Interest 88,813
-------------
Investment income 851,139
-------------
Expenses
Shareholder service agent's fees 9,000
Accounting services 12,483
Directors' fees and expenses 5,366
Audit fees 12,700
Legal fees 3,255
Registration and filing fees 36,557
Organization expenses 6,198
Miscellaneous 11
-------------
Total expenses 85,570
-------------
Net investment income 765,569
-------------
Realized and Unrealized Gain (Loss) on Securities
Net realized loss on securities (1,189,983)
Net unrealized appreciation of securities 10,865,211
-------------
Net realized and unrealized gain on securities 9,675,228
-------------
Increase in net assets resulting from operations $10,440,797
=============
</TABLE>
See Notes to Financial Statements.
F-28
<PAGE> 43
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months November 23, 1993*
Ended through
April 30, 1995 October 31, 1994
--------------- ------------------
<S> <C> <C>
NET ASSETS, BEGINNING OF PERIOD $20,659,532 $1,000,000
------------ -----------
OPERATIONS
Net investment income 765,569 375,365
Net realized loss on securities (1,189,983) (849,616)
Net unrealized appreciation (depreciation) of securities 10,865,211 (46,217)
------------ -----------
Increase (decrease) in net assets resulting from operations 10,440,797 (520,468)
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (501,439) (42,000)
------------ -----------
CAPITAL TRANSACTIONS
Proceeds from shares sold 105,651,986 20,180,000
Proceeds from shares issued for dividends reinvested 501,439 42,000
------------ -----------
Increase in net assets resulting from capital transactions 106,153,425 20,222,000
------------ -----------
INCREASE IN NET ASSETS 116,092,783 19,659,532
------------ -----------
NET ASSETS, END OF PERIOD $136,752,315 $20,659,532
============ ===========
</TABLE>
* Commencement of operations
See Notes to Financial Statements.
F-29
<PAGE> 44
AMERICAN CAPITAL SMALL CAPITALIZATION FUND, INC.
Financial Highlights
--------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the periods
indicated (Unaudited).
<TABLE>
<CAPTION>
Six Months November 23, 1993 (1)
Ended through
April 30, 1995 October 31, 1994
-------------- ----------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE (2)
Net asset value, beginning of the period $9.82 $10.00
------ -------
INCOME FROM INVESTMENT OPERATIONS
Investment income 0.09 .24
Expenses (0.01) (.03)
------ -------
Net investment income 0.08 .21
Net realized and unrealized gains (losses) on securities 0.45 (.37)
------ -------
Total from investment operations 0.53 (.16)
------ -------
DISTRIBUTIONS FROM NET INVESTMENT INCOME (.08) (.02)
------ -------
Net asset value, end of the period $10.27 $9.82
====== =======
TOTAL RETURN (3) 5.49% (1.80%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of the period (millions) $136.8 $20.7
Average net assets (millions) $93.5 $20.1
Ratios to average net assets (annualized)
Expenses .18% .30%
Net investment income 1.64% 1.99%
Portfolio turnover rate 31% 34%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized
See Notes to Financial Statements.
F-30
<PAGE> 45
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
American Capital Small Capitalization Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified open-end
management investment company. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements.
A. INVESTMENT VALUATIONS
Securities listed or traded on a national securities exchange are
valued using prices as of 2:00 p.m. eastern time. Unlisted and listed
securities for which the last sale price at 2:00 p.m. eastern time is
not available are valued at the last reported bid price.
Short-term investments with a maturity of 60 days or less when
purchased are valued at amortized cost, which approximates market
value. Short-term investments with a maturity of more than 60 days
when purchased are valued based on market quotations until the
remaining days to maturity becomes less than 61 days. From such time,
until maturity, the investments are valued at amortized cost.
B. REPURCHASE AGREEMENTS
A repurchase agreement is a short-term investment in which the Fund
acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The
Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other
investment companies advised by Van Kampen American Capital Asset
Management, Inc. (the "Adviser"), the daily aggregate of which is
invested in repurchase agreements. Repurchase agreements are
collateralized by the underlying debt security. The Fund will make
payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not
less than the repurchase proceeds due the Fund.
C. FEDERAL INCOME TAXES
No provision for federal income taxes is required because the Fund
intends to elect to be taxed as a "regulated investment company" under
the Internal Revenue Code and intends to maintain this qualification
by annually distributing all of its taxable net investment income and
taxable net realized gains on investments to its shareholders.
The net realized capital loss carryforward of $849,616 for federal
income tax purposes at October 31, 1994 may be utilized to offset
current or future capital gains until expiration in 2002.
F-31
<PAGE> 46
D. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized
gains and losses on investments are determined on the basis of
identified cost. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
E. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the record
date. The Fund distributes tax basis earnings in accordance with the
minimum distribution requirements of the Internal Revenue code, which
may differ from generally accepted accounting principles. Such
dividends and distributions may exceed financial statement earnings.
F. ORGANIZATION COSTS
Organization expenses of approximately $62,000 were deferred and are
being amortized over a five year period ending October 1998.
NOTE 2 - MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager of the Fund. The Adviser receives no
compensation for its investment management services.
Accounting services include the salaries and overhead expenses of the Fund's
Treasurer and the personnel operating under his direction. Charges are
allocated among investment companies advised by the Adviser. For the period,
these charges included $3,653 as the Fund's share of the employee costs
attributable to the Fund's accounting officers. A portion of the accounting
services expense was paid to the Adviser in reimbursement of personnel,
facilities and equipment cost attributable to the provision of accounting
services to the Fund. The accounting services provided by the Adviser are at
cost.
ACCESS Investor Services, Inc., an affiliate of the Adviser, serves as the
Fund's shareholder service agent. These services are provided at cost plus a
profit. For the period, fees for such services were $9,000.
At the end of the period, the Fund was owned by three investment companies
advised by the Adviser. American Capital Pace Fund, Inc., Common Sense Trust
Growth Fund, and Common Sense Trust II Growth Fund owned 50.22%, 49.32%, and
.46%, respectively, of the Fund.
Legal fees were incurred for services rendered by O'Melveny & Myers, counsel
for the Fund. Lawrence J. Sheehan, of counsel to that firm, is a director of
the Fund.
Certain officers and directors of the Fund are officers and directors of the
Adviser and the shareholder service agent.
F-32
<PAGE> 47
NOTE 3 - INVESTMENT ACTIVITY
During the period, the cost of purchases of investments and proceeds from sales
of investments, excluding short-term investments, were $129,945,714 and
$27,968,081 respectively.
The identified cost of investments owned at the end of the period was the same
for Federal income tax and financial statement purposes. Gross unrealized
appreciation aggregated $14,619,968 and gross unrealized depreciation
aggregated $3,800,974.
NOTE: 4 - DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $850 plus a fee of $20 per day for the Board and
Committee meetings attended. The Chairman receives additional fees form the
Fund at the annual rate of $320. During the period, such fees aggregated
$4,335.
The directors may participate in a voluntary Deferred Compensation Plan (the
"Plan"). The Plan is not funded, and obligations under the Plan will be paid
solely out of the Fund's general accounts. The Fund will not reserve or set
aside funds for the payment of its obligations under the Plan by any form of
trust or escrow. Each director covered under the Plan elects to be credited
with an earnings component on amounts deferred equal to the income earned by
the Fund on its short-term investments or equal to the total return of the
Fund.
NOTE 5 - CAPITAL
The Fund has 200 million shares of $.01 par value of capital stock authorized.
Fund shares are only available for purchase by publicly offered Funds for which
the Adviser serves as investment adviser. The American Capital Pace Fund, Inc.
contributed the initial capital of $1,000,000 for 100,000 shares of the Fund on
November 23, 1993. Transactions in shares for the period were as follows:
<TABLE>
<CAPTION>
Six Months Ended Period Ended
April 30, 1995 October 31, 1994
---------------- ----------------
<S> <C> <C>
Shares sold 11,153,426 2,100,000
Shares issued for distribution reinvested 54,151 4,130
------------- -----------
Increase in shares outstanding 11,207,577 2,104,130
============= ===========
</TABLE>
F-33
<PAGE> 48
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
<TABLE>
<CAPTION>
INCLUDED IN
PART B
-----------
<S> <C>
Investment Portfolio
October 31, 1994 *
April 30, 1995 (unaudited) *
Statement of Assets and Liabilities
October 31, 1994 *
April 30, 1995 (unaudited) *
Statement of Operations
November 23, 1993 through October 31, 1994 *
Six months ended April 30, 1995 (unaudited) *
Statement of Changes in Net Assets
November 23, 1993 through October 31, 1994 *
Six months ended April 30, 1995 (unaudited) *
Notes to Financial Statements *
Financial Highlights *
Report of Independent Accountants *
</TABLE>
---------------
* The Statement of Source of Net Assets and Schedules II and III are omitted
because the required information is included in the financial statements filed
herewith, or because the conditions requiring their filing do not exist.
(b) Exhibits
<TABLE>
<S> <C>
1.1 -- Form of First Amended and Restated Agreement and Declaration of
Trust.
2 -- Form of Amended and Restated Bylaws.
3 -- INAPPLICABLE.
4 -- Specimen Share Certificate.
5 -- Form of Investment Advisory Agreement.
6 -- INAPPLICABLE.
7 -- INAPPLICABLE.
8.1 -- Custodian Agreement dated December 2, 1993 incorporated herein by
reference (Exhibit 8 to Form N-1A of American Capital Global Managed
Assets Fund, Inc., Registration No. 33-74024, Pre-Effective Amendment
No. 2, filed on May 6, 1994).
8.2 -- Form of Transfer Agency and Servicing Agreement.
9 -- Data Access Services Agreement dated December 2, 1993 incorporated
herein by reference (Exhibit 9.2 to Form N-1A of American Capital
Utilities Income Fund, Inc., Registration No. 33-68452,
Post-Effective Amendment No. 1, filed on May 19, 1994).
10 -- INAPPLICABLE. (Omitted pursuant to Item 24(b).)
11 -- Consent of Independent Accountants.
12 -- INAPPLICABLE. (Omitted pursuant to Item 24(b).)
13 -- INAPPLICABLE.
14 -- INAPPLICABLE.
15 -- INAPPLICABLE.
16 -- INAPPLICABLE. (Omitted pursuant to Item 24(b).)
17 -- List of Certain Investment Companies in Response to Item 29(a).
</TABLE>
C-1
<PAGE> 49
<TABLE>
<S> <C>
19.1 -- Powers-of-Attorney for J. Miles Branagan, Richard E. Caruso, Roger
Hilsman, Don G. Powell, David Rees, Lawrence J. Sheehan, Fernando
Sisto and William S. Woodside.
19.2 -- Powers-of-Attorney for Philip P. Gaughan, R. Craig Kennedy, Donald C.
Miller, Jack E. Nelson, Jerome L. Robinson and Wayne W. Whalen.
27 -- Financial Data Schedule.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<CAPTION>
AS OF MAY 31, 1995:
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
--------------------------------------------- ------------------------
<S> <C>
Shares of Beneficial Interest, $0.01 par
value 10
</TABLE>
ITEM 27. INDEMNIFICATION.
Reference is made to Article 8, Section 8.4 of the Registrant's Agreement
and Declaration of Trust.
Article 8; Section 8.4 of the Agreement and Declaration of Trust provides
that each officer and trustee of the Registrant shall be indemnified by the
Registrant against all liabilities incurred in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which the officer or trustee may be or may have been involved by reason of
being or having been an officer or trustee, except that such indemnity shall not
protect any such person against a liability to the Registrant or any shareholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. Absent a court determination that
an officer or trustee seeking indemnification was not liable on the merits or
guilty of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, the decision by the
Registrant to indemnify such person must be based upon the reasonable
determination of independent counsel or non-party independent trustees, after
review of the facts, that such officer or trustee is not guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
The Registrant has purchased insurance on behalf of its officers and
trustees protecting such persons from liability arising from their activities as
officers or trustees of the Registrant. The insurance does not protect or
purport to protect such persons from liability to the Registrant or to its
shareholders to which such officer or trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their office.
Conditional advancing of indemnification monies may be made if the trustee
or officer undertakes to repay the advance unless it is ultimately determined
that he or she is entitled to the indemnification and only if the following
conditions are met: (1) the trustee or officer provides a security for the
undertaking; (2) the Registrant is insured against losses arising from lawful
advances; or (3) a majority of a quorum of the Registrant's disinterested,
non-party trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that a recipient of
the advance ultimately will be found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
C-2
<PAGE> 50
expenses incurred or paid by the trustee, officer, or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "Investment Advisory Services" in Part A and "Trustees and Executive
Officers" in the Statement of Additional Information for information regarding
the business of the Adviser. For information as to the business, profession,
vocation and employment of a substantial nature of directors and officers of the
Adviser, reference is made to the Adviser's current Form ADV (File No. 801-1669)
filed under the Investment Advisers Act of 1940, as amended, incorporated herein
by reference.
ITEM 29. PRINCIPAL UNDERWRITERS.
INAPPLICABLE
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Unless otherwise stated below, the books or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are in the physical possession of:
Fund Treasurer
Mutual Fund Accounting
2800 Post Oak Boulevard
Houston, Texas 77056
<TABLE>
<S> <C> <C>
31a-l (b)(2)(iii) Van Kampen American Capital Asset Management, Inc.
(b)(4)-(6) 2800 Post Oak Boulevard
(b)(9)-(11) Houston, Texas 77056
(b)(2)(iv) ACCESS Investor Services, Inc.
7501 Tiffany Springs Parkway
Kansas City, Missouri 64153
</TABLE>
ITEM 31. MANAGEMENT SERVICES.
INAPPLICABLE
ITEM 32. UNDERTAKINGS.
INAPPLICABLE
C-3
<PAGE> 51
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Houston,
State of Texas, on the 25th day of August, 1995.
VAN KAMPEN AMERICAN CAPITAL
SMALL CAPITALIZATION FUND
By /s/ NORI L. GABERT
------------------------------------
(Nori L. Gabert, Vice President)
<PAGE> 52
VAN KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND
INDEX TO EXHIBITS TO FORM N-1A
REGISTRATION STATEMENT
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
-------------------- --------------------------------------------------------------
<S> <C> <C>
1.1 -- Form of First Amended and Restated Agreement and
Declaration of Trust.
2 -- Form of Amended and Restated Bylaws.
4 -- Specimen Share Certificate.
5 -- Form of Investment Advisory Agreement.
8.2 -- Form of Transfer Agency and Servicing Agreement.
11 -- Consent of Independent Accountants.
17 -- List of Certain Investment Companies in Response to Item
29(a).
19.1 -- Powers-of-Attorney for J. Miles Branagan, Richard E.
Caruso, Roger Hilsman, Don G. Powell, David Rees, Lawrence
J. Sheehan, Fernando Sisto and William S. Woodside.
19.2 -- Powers-of-Attorney for Philip P. Gaughan, R. Craig Kennedy,
Donald C. Miller, Jack E. Nelson, Jerome L. Robinson and
Wayne W. Whalen.
27 -- Financial Data Schedule.
</TABLE>
<PAGE> 1
FORM OF AMERICAN CAPITAL FUNDS
FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
Dated: June __, 1995
<PAGE> 2
FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
Index
RECITALS ........................................................... 1
ARTICLE I THE TRUST ................................................. 2
SECTION 1.1 Name ...................................................... 2
SECTION 1.2. Location .................................................. 2
SECTION 1.3. Nature of Trust ........................................... 2
SECTION 1.4. Definitions ............................................... 2
SECTION 1.5. Real Property to be Converted into Personal Property ...... 5
ARTICLE 2 PURPOSE OF THE TRUST ...................................... 5
ARTICLE 3 POWERS OF THE TRUSTEES .................................... 6
SECTION 3.1. Powers in General ......................................... 6
(a) Investments ....................................................... 6
(b) Disposition of Assets ............................................. 7
(c) Ownership Powers .................................................. 7
(d) Form of Holding ................................................... 7
(e) Reorganization, etc. .............................................. 7
(f) Voting Trusts, etc. ............................................... 7
(g) Contracts, etc. ................................................... 7
(h) Guarantees, etc. .................................................. 7
(i) Partnerships, etc. ................................................ 8
(j) Insurance ......................................................... 8
(k) Pensions, etc. .................................................... 8
(I) Power of Collection and Litigation ................................ 8
(m) Issuance and Repurchase of Shares ................................. 8
(n) Offices ........................................................... 8
(o) Expenses .......................................................... 9
(p) Agents, etc. ...................................................... 9
(q) Accounts .......................................................... 9
(r) Valuation ......................................................... 9
(s) Indemnification ................................................... 9
(t) General ........................................................... 9
SECTION 3.2. Borrowings; Financings; Issuance of Securities ............ 9
i
<PAGE> 3
SECTION 3.3. Deposits ................................................... 9
SECTION 3.4. Allocations ................................................ 10
SECTION 3.5. Further Powers; Limitations ................................ 10
ARTICLE 4 TRUSTEES AND OFFICERS ...................................... 10
SECTION 4.1. Number, Designation, Election, Term, etc. .................. 10
(a) Initial Trustee .................................................... 10
(b) Number ............................................................. 10
(c) Election and Term .................................................. 11
(d) Resignation and Retirement ......................................... 11
(e) Removal ............................................................ 11
(f) Vacancies .......................................................... 11
(g) Acceptance of Trusts ............................................... 12
(h) Effect of Death, Resignation, etc. ................................. 12
(i) Conveyance ......................................................... 12
(j) No Accounting ...................................................... 12
SECTION 4.2. Trustees' Meetings; Participation by Telephone, etc. ....... 12
SECTION 4.3. Committees; Delegation ..................................... 13
SECTION 4.4. Officers ................................................... 13
SECTION 4.5. Compensation of Trustees and Officers ...................... 13
SECTION 4.6. Ownership of Shares and Securities of the Trust ............ 13
SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage
in Business; Authority of Trustees to Permit Others to Do
Likewise ................................................... 13
SECTION 4.8. Reliance on Experts ........................................ 14
SECTION 4.9. Surety Bonds ............................................... 14
SECTION 4.10. Apparent Authority of Trustees and Officers ................ 14
SECTION 4.11. Other Relationships Not Prohibited ......................... 14
SECTION 4.12. Payment of Trust Expenses .................................. 15
SECTION 4.13. 0wnership of the Trust Property ............................ 15
ii
<PAGE> 4
SECTION 4.14. By-Laws .................................................... 15
ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES .................. 15
SECTION 5.1. Appointment; Action by Less than All Trustees .............. 15
SECTION 5.2. Certain Contracts .......................................... 16
(a) Advisory ........................................................... 16
(b) Administration ..................................................... 16
(c) Underwriting ....................................................... 16
(d) Custodian .......................................................... 17
(e) Transfer and Dividend Disbursing Agent ............................. 17
(f) Shareholder Servicing .............................................. 17
(g) Accounting ......................................................... 17
Section 5.3. Distribution Arrangements .................................. 17
Section 5.4. Service Arrangements ....................................... 17
ARTICLE 6 SERIES AND SHARES .......................................... 18
SECTION 6.1. Description of Series and Shares ........................... 18
(a) General ............................................................ 18
(b) Establishment, etc. of Series; Authorization of Shares ............. 18
(c) Character of Separate Series and Shares Thereof .................... 18
(d) Consideration for Shares ........................................... 19
(e) Assets Belonging to Series ......................................... 19
(f) Liabilities of Series .............................................. 19
(g) Dividends .......................................................... 19
(h) Liquidation ........................................................ 20
(i) Voting ............................................................. 20
(j) Redemption by Shareholder .......................................... 20
(k) Redemption at the Option of the Trust .............................. 21
(I) Net Asset Value .................................................... 21
(m) Transfer ........................................................... 22
(n) Equality ........................................................... 22
(o) Rights of Fractional Shares ........................................ 22
(p) Conversion Rights .................................................. 22
SECTION 6.2. Ownership of Shares .......................................... 23
SECTION 6.3. Investments in the Trust ..................................... 23
SECTION 6.4. No Pre-emptive Rights ........................................ 23
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SECTION 6.5. Status of Shares ........................................... 23
ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS ................... 23
SECTION 7.1. Voting Powers .............................................. 23
SECTION 7.2. Number of Votes and Manner of Voting; Proxies .............. 24
SECTION 7.3. Meetings ................................................... 24
SECTION 7.4. Record Dates ............................................... 25
SECTION 7.5. Quorum and Required Vote ................................... 25
SECTION 7.6. Action by Written Consent .................................. 25
SECTION 7.7. Inspection of Records ...................................... 25
SECTION 7.8. Additional Provisions ...................................... 25
ARTICLE 8 LIMITATION OF LIABILITY; INDEMNIFICATION ................... 26
SECTION 8.1. Trustees, Shareholders, etc. Not Personally Liable; Notice.. 26
SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No Bond
or Surety ................................................. 26
SECTION 8.3. Indemnification of Shareholders ............................ 27
SECTION 8.4. Indemnification of Trustees, Officers, etc. ................ 27
SECTION 8.5. Compromise Payment ......................................... 28
SECTION 8.6. Indemnification Not Exclusive, etc. ........................ 28
SECTION 8.7. Liability of Third Persons Dealing with Trustees ........... 28
ARTICLE 9 DURATION; REORGANIZATION; INCORPORATION; AMENDMENTS ........ 28
SECTION 9.1. Duration of Trust .......................................... 28
SECTION 9.2. Termination of Trust ....................................... 28
SECTION 9.3. Reorganization ............................................. 29
SECTION 9.4. Incorporation ............................................. 29
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SECTION 9.5. Amendments; etc. ............................................. 30
SECTION 9.6. Filing of Copies of Declaration and Amendments ............... 30
ARTICLE 10 MISCELLANEOUS ................................................ 30
SECTION 10.1. Notices ...................................................... 30
SECTION 10.2. Governing Law ................................................ 30
SECTION 10.3. Counterparts ................................................ 30
SECTION 10.4. Reliance by Third Parties .................................... 31
SECTION 10.5. References; Headings ......................................... 31
SECTION 10.6. Provisions in Conflict With Law or Regulation ................ 31
SECTION 10.7. Use of the Name "Van Kampen American Capital" ................ 31
Signature ................................................................. 32
Acknowledgments ........................................................... 33
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FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
_____________________ FUND
As amended and restated as of June __, 1995
This CONSENT TO AMENDMENT AND RESTATMENT, made as of this __ day of
June, 1995, by the Trustees whose signatures are set forth below:
W I T N E S S E T H T H A T:
WHEREAS, the AGREEMENT AND DECLARATION OF TRUST of
____________________, a trust organized as a business trust under Delaware law
(the "Trust"), was signed and delivered on May 10, 1995, by Van Kampen American
Capital, Inc. as Settlor (the "Settlor"), and Ronald A. Nyberg as trustee (the
"Initial Trustee"), in the city of Oakbrook Terrace, Illinois; and
WHEREAS, a Certificate of Trust relating to the Trust was thereafter
filed in the offices of the Secretary of State of the State of Delaware; and
WHEREAS, Article IX, Sections 9.5 and 9.6 of the Declaration provide
certain procedures for the amendment and restatement thereof; and
WHEREAS, the Trustees have determined that it is desirable and in the
best interests of the Trust and the Shareholders that the Declaration be
amended and restated as herein provided.
NOW, THEREFORE, the undersigned, being at least a Majority of the
Trustees, do hereby consent, pursuant to Section 9.5 of the Declaration, to the
first amendment and restatement of the Agreement and Declaration of Trust, and
hereby declare, for the benefit of all Persons who shall hereafter become
holders of Shares of the Trust (or of any Series thereof), that the Trustees
will hold the sum delivered to the Initial Trustee upon his execution of the
Declaration, and all other and further cash, securities and other property of
every type and description which they may in any way acquire in their capacity
as such Trustees, together with the income therefrom and the proceeds thereof,
IN TRUST NEVERTHELESS, to manage and dispose of the same for the benefit of the
holders from time to time of the Shares being issued and to be issued hereunder
and in the manner and subject to the provisions hereof, to wit:
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ARTICLE I
THE TRUST
SECTION 1.1 Name. The name of the Trust shall be
"____________________________________________"
and so far as may be practicable, the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued under that name,
which name (and the word "Trust" wherever used in this Agreement and
Declaration of Trust, except where the context otherwise requires) shall refer
to the Trustees in their capacity as Trustees, and not individually or
personally, and shall not refer to the officers, agents or employees of the
Trust or of such Trustees, or to the holders of the Shares of the Trust or any
Series. If the Trustees determine that the use of such name is not practicable,
legal or convenient at any time or in any jurisdiction, or if the Trust is
required to discontinue the use of such name pursuant to Section 10.7 hereof,
then subject to that Section, the Trustees may use such other designation, or
they may adopt such other name for the Trust as they deem proper, and the Trust
may hold property and conduct its activities under such designation or name.
SECTION 1.2. Location. The Trust shall maintain a registered office in
the State of Delaware and may have such other offices or places of business as
the Trustees may from time to time determine to be necessary or expedient.
SECTION 1.3. Nature of Trust. The Trust shall be a trust with
transferable shares under the laws of The State of Delaware, of the type
defined in Title 12, Chapter 38, Section 3801 of the Delaware Code as a
business trust. The Trust is not intended to be, shall not be deemed to be, and
shall not be treated as, a general partnership, limited partnership, joint
venture, corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder.
SECTION 1.4. Definitions. As used in this Agreement and Declaration of
Trust, the following terms shall have the meanings set forth below unless the
context thereof otherwise requires:
"Accounting Agent" shall have the meaning designated in Section 5.2(g)
hereof.
"Administrator" shall have the meaning designated in Section 5.2(b)
hereof.
"Affiliated Person" shall have the meaning assigned to it in the 1940
Act.
"By-Laws" shall mean the By-Laws of the Trust, as amended from time to
time.
"Certificate of Designation" shall have the meaning designated in
Section 6.1 hereof.
"Certificate of Termination" shall have the meaning designated in
Section 6.1 hereof.
"Class" or "Classes" shall mean, with respect to the Trust (of any
Series thereof), any unissued Shares of the Trust (or such Series) in respect
of which the Trustees shall from time to time fix and determine any special
provisions relating to sales charges, any rights of redemption and the price,
terms and manner of redemption, special and relative rights as to dividends and
other distributions and on
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liquidation, sinking or purchase fund provisions, conversion rights,
and conditions under which the Shareholders of such Class shall have separate
voting rights or no voting rights.
"Commission" shall have the same meaning as in the 1940 Act.
"Contracting Party" shall have the meaning designated in the preamble
to Section 5.2 hereof.
"Conversion Date" shall mean with respect to Shares of any Class that
are convertible automatically into Shares of any other Class of the Trust (or
Series thereof) the date fixed by the Trustees for such conversion.
"Covered Person" shall have the meaning designated in Section 8.4
hereof.
"Custodian" shall have the meaning designated in Section 5.2(d) hereof.
"Declaration" and "Declaration of Trust" shall mean this Agreement and
Declaration of Trust and all amendments or modifications thereof as from time
to time in effect. This Agreement and Declaration of Trust is the "governing
instrument" of the Trust within the meaning of the laws of the State of
Delaware with respect to Delaware Business Trusts. References in this
Agreement and Declaration of Trust to "hereof", "herein" and "hereunder" shall
be deemed to refer to the Declaration of Trust generally, and shall not be
limited to the particular text, Article or Section in which such words appear.
"Disabling Conduct" shall have the meaning designated in Section 8.4
hereof.
"Distributor" shall have the meaning designated in Section 5.2(c)
hereof.
"Dividend Disbursing Agent" shall have the meaning designated in
Section 5.2(e) hereof.
"General Items" shall have the meaning defined in Section 6.2(a)
hereof.
"Initial Trustee" shall have the meaning defined in the preamble
hereto.
"Investment Advisor" shall have the meaning defined in Section 5.2(a)
hereof.
"Majority of the Trustees" shall mean a majority of the Trustees in
office at the time in question. At any time at which there shall be only one
(1) Trustee in office, such term shall mean such Trustee.
"Majority Shareholder Vote," as used with respect to (a) the election
of any Trustee at a meeting of Shareholders, shall mean the vote for the
election of such Trustee of a plurality of all outstanding Shares of the Trust,
without regard to Series, represented in person or by proxy and entitled to
vote thereon, provided that a quorum (as determined in accordance with the
By-Laws) is present, (b) any other action required or permitted to be taken by
Shareholders, shall mean the vote for such action of the holders of that
majority of all outstanding Shares (or, where a separate vote of Shares of any
particular Series is to be taken, the affirmative vote of that majority of the
outstanding Shares of that Series) of the Trust which consists of: (i) a
majority of all Shares (or of Shares of the particular Series) represented in
person or by proxy and entitled to vote on such action at the meeting of
Shareholders at which such action is to be taken, provided that a quorum (as
determined in accordance with the By-Laws) is present; or (ii) if such action
is to be taken by written consent of Shareholders, a majority of all Shares (or
of Shares of the particular Series) issued and outstanding and entitled to vote
on such action; provided that (iii) as used
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<PAGE> 10
with respect to any action requiring the affirmative vote of "a
majority of the outstanding voting securities," as the quoted phrase is defined
in the 1940 Act, of the Trust or of any Series, "Majority Shareholder Vote"
means the vote for such action at a meeting of Shareholders of the smallest
majority of all outstanding Shares of the Trust (or of Shares of the particular
Series) entitled to vote on such action which satisfies such 1940 Act voting
requirement.
"1940 Act" shall mean the provisions of the Investment Company Act of
1940 and the rules and regulations thereunder, both as amended from time to
time, and any order or orders thereunder which may from time to time be
applicable to the Trust.
"Person" shall mean and include individuals, as well as corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, banks, trust companies, land trusts, business trusts or
other organizations established under the laws of any jurisdiction, whether or
not considered to be legal entities, and governments and agencies and political
subdivisions thereof.
"Principal Underwriter" shall have the meaning designated in Section
5.2(c) hereof.
"Prospectus," as used with respect to the Trust (or the Shares of a
particular Series), shall mean the prospectus relating to the Trust (or such
Series) which constitutes part of the currently effective Registration
Statement of the Trust under the Securities Act of 1933, as such prospectus may
be amended or supplemented from time to time.
"Securities" shall have the same meaning ascribed to that term in the
Securities Act of 1993.
"Series" shall mean one or more of the series of Shares authorized by
the Trustees to represent the beneficial interest in one or more separate
components of the assets of the Trust which are now or hereafter established
and designated under or in accordance with the provisions of Article 6 hereof.
"Settlor" shall have the meaning defined in the preamble hereto.
"Shareholder" shall mean as of any particular time any Person shown of
record at such time on the books of the Trust as a holder of outstanding Shares
of any Series, and shall include a pledgee into whose name any such Shares are
transferred in pledge.
"Shareholder Servicing Agent" shall have the meaning designated in
Section 5.2(f) hereof.
"Shares" shall mean the transferable units into which the beneficial
interest in the Trust and each Series of the Trust (as the context may require)
shall be divided from time to time, and includes fractions of Shares as well as
whole Shares. All references herein to "Shares" which are not accompanied by a
reference to any particular Series or Class shall be deemed to apply to
outstanding Shares without regard to Series or Class.
"Single Class Voting," as used with respect to any matter to be acted
upon at a meeting or by written consent of Shareholders, shall mean a style of
voting in which each holder of one or more Shares shall be entitled to one vote
on the matter in question for each Share standing in his name on the records of
the Trust, irrespective of Series or Class of a Series, and all outstanding
Shares of all Series vote as a single class.
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"Statement of Additional Information," as used with respect to the
Trust (or any Series), shall mean the statement of additional information
relating to the Trust (or such Series) which constitutes part of the currently
effective Registration Statement of the Trust under the Securities Act of 1933,
as such statement of additional information may be amended or supplemented from
time to time.
"Transfer Agent" shall have the meaning defined in Section 5.2(e)
hereof.
"Trust" shall mean the trust named in Section 1.1 hereof.
"Trust Property" shall mean, as of any particular time, any and all
property which shall have been transferred, conveyed or paid to the Trust or
the Trustees, and all interest, dividends, income, earnings, profits and gains
therefrom, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and which at
such time is owned or held by, or for the account of, the Trust or the
Trustees, without regard to the Series to which such property is allocated.
"Trustees" shall mean, collectively, the Initial Trustee, so long as he
shall continue in office, and all other individuals who at the time in question
have been duly elected or appointed as Trustees of the Trust in accordance with
the provisions hereof and who have qualified and are then in office. At any
time at which there shall be only one (I) Trustee in office, such term shall
mean such single Trustee.
SECTION 1.5. Real Property to be Converted into Personal Property.
Notwithstanding any other provision hereof, any real property at any time
forming part of the Trust Property shall be held in trust for sale and
conversion into personal property at such time or times and in such manner and
upon such terms as the Trustees shall approve, but the Trustees shall have
power until the termination of this Trust to postpone such conversion as long
as they in their uncontrolled discretion shall think fit, and for the purpose
of determining the nature of the interest of the Shareholders therein, all such
real property shall at all times be considered as personal property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to (a) manage, conduct, operate and
carry on the business of an investment company; (b) subscribe for, invest in,
reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose of any and all
sorts of property, tangible or intangible, including but not limited to
Securities of any type whatsoever, whether equity or nonequity, of any issuer,
evidences of indebtedness of any person and any other rights, interest,
instruments or property of any sort to exercise any and all rights, powers and
privileges of ownership or interest in respect of any and all such investment
of every kind and description, including without limitation, the right to
consent and otherwise act with respect thereto, with power to designate one or
more Persons to exercise any of said rights, powers and privileges in respect
of any of said investments. The Trustees shall not be limited by any law
limiting the investments which may be made by fiduciaries.
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ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1. Powers in General. The Trustees shall have, without other
or further authorization, full, entire, exclusive and absolute power, control
and authority over, and management of, the business of the Trust and over the
Trust Property, to the same extent as if the Trustees were the sole owners of
the business and property of the Trust in their own right, and with such powers
of delegation as may be permitted by this Declaration, subject only to such
limitations as may be expressly imposed by this Declaration of Trust or by
applicable law. The enumeration of any specific power or authority herein shall
not be construed as limiting the aforesaid power or authority or any specific
power or authority. Without limiting the foregoing; they may select, and from
time to time change, the fiscal year of the Trust; they may adopt and use a
seal for the Trust, provided that unless otherwise required by the Trustees, it
shall not be necessary to place the seal upon, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust; they may from time to time in accordance with the
provisions of Section 6.1 hereof establish one or more Series to which they may
allocate such of the Trust Property, subject to such liabilities, as they shall
deem appropriate, each such Series to be operated by the Trustees as a separate
and distinct investment medium and with separately defined investment
objectives and policies and distinct investment purposes, all as established by
the Trustees, or from time to time changed by them; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the foregoing
of whom may be a Trustee; they may appoint from their own number, and
terminate, any one or more committees consisting of one or more Trustees,
including without implied limitation an Executive Committee, which may, when
the Trustees are not in session and subject to the 1940 Act, exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
in accordance with Section 5.2 they may employ one or more Investment Advisers,
Administrators and Custodians and may authorize any such service provider to
employ one or more other or service providers and to deposit all or any part of
such assets in a system or systems for the central handling of Securities,
retain Transfer, Dividend Disbursing, Accounting or Shareholder Servicing
Agents or any of the foregoing, provide for the distribution of Shares by the
Trust through one or more Distributors, Principal Underwriters or otherwise,
set record dates or times for the determination of Shareholders entitled to
participate in, benefit from or act with respect to various matters; and in
general they may delegate to any officer of the Trust, to any Committee of the
Trustees and to any employee, Investment Adviser, Administrator, Distributor,
Custodian, Transfer Agent, Dividend Disbursing Agent, or any other agent or
consultant of the Trust, such authority, powers, functions and duties as they
consider desirable or appropriate for the conduct of the business and affairs
of the Trust, including without implied limitation the power and authority to
act in the name of the Trust and of the Trustees, to sign documents and to act
as attorney-in-fact for the Trustees. Without limiting the foregoing and to the
extent not inconsistent with the 1940 Act or other applicable law, the Trustees
shall have power and authority:
(a) Investments. To subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute
or otherwise deal in or dispose of any and all sorts of property, tangible or
intangible, including but not limited to Securities of any type whatsoever,
whether equity or nonequity, of any issuer, evidences of indebtedness of any
person and any other rights, interest, instruments or property of any sort, to
exercise any and all rights, powers and privileges of ownership or
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interest in respect of any and all such investments of every kind and
description, including without limitation the right to consent and otherwise
act with respect thereto, with power to designate one or more Persons to
exercise any of said rights, powers and privileges in respect of any of said
investments, in every case without being limited by any law limiting the
investments which may be made by fiduciaries;
(b) Disposition of Assets. Upon such terms and conditions as they deem
best, to lend, sell, exchange, mortgage, pledge, hypothecate, grant security
interests in, encumber, negotiate, convey, transfer or otherwise dispose of,
and to trade in, any and all of the Trust Property, free and clear of all
trusts, for cash or on terms, with or without advertisement, and on such terms
as to payment, security or otherwise, all as they shall deem necessary or
expedient;
(c) Ownership Powers. To vote or give assent, or exercise any and all
other rights, powers and privileges of ownership with respect to, and to
perform any and all duties and obligations as owners of, any Securities or
other property forming part of the Trust Property, the same as any individual
might do; to exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of Securities, and to receive powers of
attorney from, and to execute and deliver proxies or powers of attorney to,
such Person or Persons as the Trustees shall deem proper, receiving from or
granting to such Person or Persons such power and discretion with relation to
Securities or other property of the Trust, all as the Trustees shall deem
proper;
(d) Form of Holding. To hold any Security or other property in a form
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the Trustees or of the Trust, or of the Series to which
such Securities or property belong, or in the name of a Custodian, subcustodian
or other nominee or nominees, or otherwise, upon such terms, in such manner or
with such powers, as the Trustees may determine, and with or without indicating
any trust or the interest of the Trustees therein;
(e) Reorganizations etc. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust or any Series; to consent to any
contract, lease, mortgage, purchase or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to any Security forming
part of the Trust Property;
(f) Voting Trusts, etc. To join with other holders of any Securities in
acting through a committee, depository, voting trustee or otherwise, and in
that connection to deposit any Security with, or transfer any Security to, any
such committee, depository or trustee, and to delegate to them such power and
authority with relation to any Security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depository or trustee as the Trustees shall deem proper;
(g) Contracts. etc. To enter into, make and perform all such
obligations, contracts, agreements and undertakings of every kind and
description, with any Person or Persons, as the Trustees shall in their
discretion deem expedient in the conduct of the business of the Trust, for such
terms as they shall see fit, whether or not extending beyond the term of office
of the Trustees, or beyond the possible expiration of the Trust; to amend,
extend, release or cancel any such obligations, contracts, agreements or
understandings; and to execute, acknowledge, deliver and record all written
instruments which they may deem necessary or expedient in the exercise of their
powers;
(h) Guarantees. etc. To endorse or guarantee the payment of any notes
or other obligations of any Person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
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and to mortgage and pledge the Trust Property or any part thereof to secure any
of or all such obligations;
(i) Partnerships, etc. To enter into joint ventures, general or limited
partnerships and any other combinations or association;
(j) Insurance. To purchase and pay for entirely out of Trust Property
such insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, Investment Advisers, managers,
Administrators, Distributors, Principal Underwriters, or other independent
contractors, or any thereof (or any Person connected therewith), of the Trust,
individually, against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such Person
in any such capacity, whether or not the Trust would have the power to
indemnify such Person against such liability;
(k) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit sharing, share bonus, share purchase, savings, thrift, deferred
compensation and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust;
(I) Power of Collection and Litigation. To collect, sue for and receive
all sums of money coming due to the Trust, to employ counsel, and to commence,
engage in, prosecute, intervene in, join, defend, compound, compromise, adjust
or abandon, in the name of the Trust, any and all actions, suits, proceedings,
disputes, claims, controversies, demands or other litigation or legal
proceedings relating to the Trust, the business of the Trust, the Trust
Property, or the Trustees, officers, employees, agents and other independent
contractors of the Trust, in their capacity as such, at law or in equity, or
before any other bodies or tribunals, and to compromise, arbitrate or otherwise
adjust any dispute to which the Trust may be a party, whether or not any suit
is commenced or any claim shall have been made or asserted. Except to the
extent required for a Delaware Business Trust, the Shareholders shall have no
power to vote as to whether or not a court action, legal proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders.
(m) Issuance and Repurchase of Shares. To authorize, issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of,
transfer, and otherwise deal in Shares of any Series, and, subject to Article 6
hereof, to apply to any such repurchase, redemption, retirement, cancellation
or acquisition of Shares of any Series, any of the assets belonging to the
Series to which such Shares relate, whether constituting capital or surplus or
otherwise, to the full extent now or hereafter permitted by applicable law;
provided that any Shares belonging to the Trust shall not be voted, directly or
indirectly;
(n) Offices. To have one or more offices, and to carry on all or any of
the operations and business of the Trust, in any of the States, Districts or
Territories of the United States, and in any and all foreign countries, subject
to the laws of such State, District, Territory or country;
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(o) Expenses. To incur and pay any and all such expenses and charges as
they may deem advisable (including without limitation appropriate fees to
themselves as Trustees), and to pay all such sums of money for which they may
be held liable by way of damages, penalty, fine or otherwise;
(p) Agents, etc. To retain and employ any and all such servants,
agents, employees, attorneys, brokers, Investment Advisers, accountants,
architects, engineers, builders, escrow agents, depositories, consultants,
ancillary trustees, custodians, agents for collection, insurers, banks and
officers, as they think best for the business of the Trust or any Series, to
supervise and direct the acts of any of the same, and to fix and pay their
compensation and define their duties;
(q) Accounts. To determine, and from time to time change, the method or
form in which the accounts of the Trust or any Series shall be kept;
(r) Valuation. Subject to the requirements of the 1940 Act, to
determine from time to time the value of all or any part of the Trust Property
and of any services, Securities, property or other consideration to be
furnished to or acquired by the Trust, and from time to time to revalue all or
any part of the Trust Property in accordance with such appraisals or other
information as is, in the Trustees' sole judgment, necessary and satisfactory;
(s) Indemnification. In addition to the mandatory indemnification
provided for in Article 8 hereof and to the extent permitted by law, to
indemnify or enter into agreements with respect to indemnification with any
Person with whom this Trust has dealings, including, without limitation, any
independent contractor, to such extent as the Trustees shall determine; and
(t) General. Subject to the fundamental policies in effect from time to
time with respect to the Trust, to do all such other acts and things and to
conduct, operate, carry on and engage in such other lawful businesses or
business activities as they shall in their sole and absolute discretion
consider to be incidental to the business of the Trust or any Series as an
investment company, and to exercise all powers which they shall in their
discretion consider necessary, useful or appropriate to carry on the business
of the Trust or any Series, to promote any of the purposes for which the Trust
is formed, whether or not such things are specifically mentioned herein, in
order to protect or promote the interests of the Trust or any Series, or
otherwise to carry out the provisions of this Declaration.
SECTION 3.2. Borrowings; Financings: Issuance of Securities. The
Trustees have power, subject to the fundamental policies in effect from time to
time with respect to the Trust, to borrow or in any other manner raise such sum
or sums of money, and to incur such other indebtedness for goods or services,
or for or in connection with the purchase or other acquisition of property, as
they shall deem advisable for the purposes of the Trust, in any manner and on
any terms, and to evidence the same by negotiable or nonnegotiable Securities
which may mature at any time or times, even beyond the possible date of
termination of the Trust; to issue Securities of any type for such cash,
property, services or other considerations, and at such time or times and upon
such terms, as they may deem advisable; and to reacquire any such Securities.
Any such Securities of the Trust may, at the discretion of the Trustees, be
made convertible into Shares of any Series, or may evidence the right to
purchase, subscribe for or otherwise acquire Shares of any Series, at such
times and on such terms as the Trustees may prescribe.
SECTION 3.3. Deposits. Subject to the requirements of the 1940 Act, the
Trustees shall have power to deposit any moneys or Securities included in the
Trust Property with any one or more banks, trust companies or other banking
institutions, whether or not such deposits will draw interest. Such deposits
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are to be subject to withdrawal in such manner as the Trustees may
determine, and the Trustees shall have no responsibility for any loss which may
occur by reason of the failure of the bank, trust company or other banking
institution with which any such moneys or Securities have been deposited,
except as provided in Section 8.2 hereof.
SECTION 3.4. Allocations. The Trustees shall have power to determine
whether moneys or other assets received by the Trust shall be charged or
credited to income or capital, or allocated between income and capital,
including the power to amortize or fail to amortize any part or all of any
premium or discount, to treat any part or all of the profit resulting from the
maturity or sale of any asset, whether purchased at a premium or at a discount,
as income or capital, or to apportion the same between income and capital, to
apportion the sale price of any asset between income and capital, and to
determine in what manner any expenses or disbursements are to be borne as
between income and capital, whether or not in the absence of the power and
authority conferred by this Section 3.4 such assets would be regarded as income
or as capital or such expense or disbursement would be charged to income or to
capital; to treat any dividend or other distribution on any investment as
income or capital, or to apportion the same between income and capital; to
provide or fail to provide reserves, including reserves for depreciation,
amortization or obsolescence in respect of any Trust Property in such amounts
and by such methods as they shall determine; to allocate less than all of the
consideration paid for Shares of any Series to surplus with respect to the
Series to which such Shares relate and to allocate the balance thereof to
paid-in capital of that Series, and to reallocate such amounts from time to
time; all as the Trustees may reasonably deem proper.
SECTION 3.5. Further Powers: Limitations. The Trustees shall have power
to do all such other matters and things, and to execute all such instruments,
as they deem necessary, proper or desirable in order to carry out, promote or
advance the interests of the Trust, although such matters or things are not
herein specifically mentioned. Any determination as to what is in the interests
of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Declaration of Trust, the presumption shall
be in favor of a grant of power to the Trustees. The Trustees shall not be
required to obtain any court order to deal with the Trust Property. The
Trustees may limit their right to exercise any of their powers through express
restrictive provisions in the instruments evidencing or providing the terms for
any Securities of the Trust or in other contractual instruments adopted on
behalf of the Trust.
ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1. Number. Designation, Election. Term, etc.
(a) Initial Trustee. Upon his execution of this Agreement and
Declaration of Trust dated May 10, 1995 or a counterpart hereof or some other
writing in which he accepted such Trusteeship and agreed to the provisions
hereof, the individual whose signature is affixed thereto as Initial Trustee
became the Initial Trustee thereof.
(b) Number. The Trustees serving as such, whether named above or
hereafter becoming Trustees, may increase (to not more than fourteen (14)) or
decrease the number of Trustees to a number other than the number theretofore
determined by a written instrument signed by a Majority
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(or a supermajority if required by the By-Laws) of the Trustees). No
decrease in the number of Trustees shall have the effect of removing any
Trustee from office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a Trustee pursuant
to subsection (e) of this Section 4.1.
(c) Election and Term. The Trustees shall be elected by the
Shareholders of the Trust at the first meeting of Shareholders immediately
prior to the initial issuance of shares of the Trust in a public offering and
the term of office of any Trustees in office before such election shall
terminate at the time of such election. Subject to Section 16(a) of the 1940
Act and to the preceding sentence of this subsection (c) and to any
requirements specified in the By-Laws, the Trustees shall have the power to set
and alter the terms of office of the Trustees, and at any time to lengthen or
shorten their own terms or make their terms of unlimited duration, to elect
their own successors and, pursuant to subsection (f) of this Section 4.1, to
appoint Trustees to fill vacancies; provided that Trustees shall be elected by
a Majority Shareholder Vote at any such time or times as the Trustees shall
determine that such action is required under Section 16(a) of the 1940 Act or,
if not so required, that such action is advisable; and further provided that,
after the initial election of Trustees by the Shareholders, the term of office
of any incumbent Trustee shall continue until the termination of this Trust or
his earlier death, resignation, retirement, bankruptcy, adjudicated
incompetency or other incapacity or removal, or if not so terminated, until the
election of such Trustee's successor in office has become effective in
accordance with this subsection (c).
(d) Resignation and Retirement. Any Trustee may resign his trust or
retire as a Trustee, by a written instrument signed by him and delivered to the
other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument.
(e) Removal. Any Trustee may be removed: (i) with cause at any time by
written instrument, signed by at least two thirds (2/3) of the number of
Trustees prior to such removal, specifying the date upon which such removal
shall become effective; or (ii) by vote of Shareholders holding a majority of
the Shares of the Trust then outstanding, cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than a majority of the Shares of the Trust then
outstanding. Notwithstanding any other provisions set forth in this Declaration
of Trust, this Section 4.1(e) may not be amended (either directly or indirectly
through a reorganization) without the approval of (i) 80% of the Trustees then
in office or (ii) by vote of Shareholders holding a majority of the Shares of
the Trust then outstanding.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
reason, including an increase in the number of Trustees, may (but need not
unless required by the 1940 Act) be filled by a Majority (or a supermajority if
required by the By-Laws) of the Trustees, subject to the provisions of Section
16(a) of the 1940 Act, through the appointment in writing of such other
individual as such remaining Trustees in their discretion shall determine;
provided that if there shall be no Trustees in office, such vacancy or
vacancies shall be filled by Majority Shareholders Vote. Any such appointment
or election shall be effective upon such individual's written acceptance of his
appointment as a Trustee and his agreement to be bound by the provisions of
this Declaration of Trust, except that any such appointment in anticipation of
a vacancy to occur by reason of retirement, resignation or increase in the
number of Trustees to be effective at a later date shall become effective only
at or after the effective date of said retirement, resignation or increase in
the number of Trustees.
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(g) Acceptance of Trusts. Whenever any conditions to the appointment or
election of any individual as a Trustee hereunder who was not, immediately
prior to such appointment or election, acting as a Trustee shall have been
satisfied, such individual shall become a Trustee and the Trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance. Such new Trustee shall accept such appointment or
election in writing and agree in such writing to be bound by the provisions
hereof, but the execution of such writing shall not be requisite to the
effectiveness of the appointment or election of a new Trustee.
(h) Effect of Death. Resignation, etc. No vacancy, whether resulting
from the death, resignation, retirement, bankruptcy, adjudicated incompetency,
incapacity, or removal of any Trustee, an increase in the number of Trustees or
otherwise, shall operate to annul or terminate the Trust hereunder or to revoke
or terminate any existing agency or contract created or entered into pursuant
to the terms of this Declaration of Trust. Until such vacancy is filled as
provided in this Section 4.1, the Trustees in office (if any), regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration. Upon
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require in
order to effect the purpose of this Paragraph.
(i) Convevance. In the event of the resignation or removal of a
Trustee or his otherwise ceasing to be a Trustee, such former Trustee or his
legal representative shall, upon request of the continuing Trustees, execute
and deliver such documents as may be required for the purpose of consummating
or evidencing the conveyance to the Trust or the remaining Trustees of any
Trust Property held in such former Trustee's name, but the execution and
delivery of such documents shall not be requisite to the vesting of title to
the Trust Property in the remaining Trustees, as provided in subsection (g) of
this Section 4.1 and in Section 4.13 hereof.
(j) No Accounting. Except to the extent required by the 1940 Act or
under circumstances which would justify his removal for cause, no Person
ceasing to be a Trustee (nor the estate of any such Person) shall be required
to make an accounting to the Shareholders or remaining Trustees upon such
cessation.
SECTION 4.2. Trustees' Meetings: Participation by Telephone. etc.
Annual and special meetings may be held from time to time, in each case, upon
the call of such officers as may be thereunto authorized by the By-Laws or vote
of the Trustees, or by any three (3) Trustees, or pursuant to a vote of the
Trustees adopted at a duly constituted meeting of the Trustees, and upon such
notice as shall be provided in the By-Laws. Any such meeting may be held within
or without the state of Delaware. The Trustees may act with or without a
meeting, and a written consent to any matter, signed by all of the Trustees,
shall be equivalent to action duly taken at a meeting of the Trustees, duly
called and held. Except as otherwise provided by the 1940 Act or other
applicable law, or by this Declaration of Trust or the By-Laws, any action to
be taken by the Trustees may be taken by a majority of the Trustees present at
a meeting of Trustees (a quorum, consisting of at least a Majority of the
Trustees, being present), within or without Delaware. If authorized by the
By-Laws, all or any one or more Trustees may participate in a meeting of the
Trustees or any Committee thereof by means of conference telephone or similar
means of communication by means of which all Persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
means of communication shall constitute presence in person at such meeting. The
minutes of any meeting thus held shall be prepared in the same manner as a
meeting at which all participants were present in person.
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SECTION 4.3. Committees; Delegation. The Trustees shall have power,
consistent with their ultimate responsibility to supervise the affairs of the
Trust, to delegate from time to time to one or more other Committees, or to any
single Trustee, the doing of such things and the execution of such deeds or
other instruments, either in the name of the Trust or the names of the Trustees
or as their attorney or attorneys in fact, or otherwise as the Trustees may
from time to time deem expedient, and any agreement, deed, mortgage, lease or
other instrument or writing executed by the Trustee or Trustees or other Person
to whom such delegation was made shall be valid and binding upon the Trustees
and upon the Trust.
SECTION 4.4. Officers. The Trustees shall annually elect such officers
or agents, who shall have such powers, duties and responsibilities as the
Trustees may deem to be advisable, and as they shall specify by resolution or
in the By-Laws. Except as may be provided in the By-Laws, any officer elected
by the Trustees may be removed at any time with or without cause. Any two (2)
or more offices may be held by the same individual.
SECTION 4.5. Compensation of Trustees and Officers. The Trustees shall
fix the compensation of all officers and Trustees. Without limiting the
generality of any of the provisions hereof, the Trustees shall be entitled to
receive reasonable compensation for their general services as such, and to fix
the amount of such compensation, and to pay themselves or any one or more of
themselves such compensation for special services, including legal, accounting,
or other professional services, as they in good faith may deem reasonable. No
Trustee or officer resigning (except where a right to receive compensation for
a definite future period shall be expressly provided in a written agreement
with the Trust, duly approved by the Trustees) and no Trustee or officer
removed shall have any right to any compensation as such Trustee or officer for
any period following his resignation or removal, or any right to damages on
account of his removal, whether his compensation be by the month, or the year
or otherwise.
SECTION 4.6. Ownership of Shares and Securities of the Trust. Any
Trustee, and any officer, employee or agent of the Trust, and any organization
in which any such Person is interested, may acquire, own, hold and dispose of
Shares of any Series and other Securities of the Trust for his or its
individual account, and may exercise all rights of a holder of such Shares or
Securities to the same extent and in the same manner as if such Person were not
such a Trustee, officer, employee or agent of the Trust; subject, in the case
of Trustees and officers, to the same limitations as directors or officers (as
the case may be) of a Delaware business corporation; and the Trust may issue
and sell or cause to be issued and sold and may purchase any such Shares or
other Securities from any such Person or any such organization, subject only to
the general limitations, restrictions or other provisions applicable to the
sale or purchase of Shares of such Series or other Securities of the Trust
generally.
SECTION 4.7. Right of Trustees and Officers to Own Property or to
Engage in Business; Authority of Trustees to Permit Others to Do Likewise. The
Trustees, in their capacity as Trustees, and (unless otherwise specifically
directed by vote of the Trustees) the officers of the Trust in their capacity
as such, shall not be required to devote their entire time to the business and
affairs of the Trust. Except as otherwise specifically provided by vote of the
Trustees, or by agreement in any particular case, any Trustee or officer of the
Trust may acquire, own, hold and dispose of, for his own individual account,
any property, and acquire, own, hold, carry on and dispose of, for his own
individual account, any business entity or business activity, whether similar
or dissimilar to any property or business entity or business activity invested
in or carried on by the Trust, and without first offering the same as an
investment opportunity to the Trust, and may exercise all rights in respect
thereof as if he were not a Trustee or officer of the Trust. The Trustees shall
also have power, generally or in specific cases, to permit
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employees or agents of the Trust to have the same rights (or lesser
rights) to acquire, hold, own and dispose of property and businesses, to carry
on businesses, and to accept investment opportunities without offering them to
the Trust, as the Trustees have by virtue of this Section 4.7.
SECTION 4.8. Reliance on Experts. The Trustees and officers may consult
with counsel, engineers, brokers, appraisers, auctioneers, accountants,
investment bankers, securities analysts or other Persons (any of which may be a
firm in which one or more of the Trustees or officers is or are members or
otherwise interested) whose profession gives authority to a statement made by
them on the subject in question, and who are reasonably deemed by the Trustees
or officers in question to be competent, and the advice or opinion of such
Persons shall be full and complete personal protection to all of the Trustees
and officers in respect of any action taken or suffered by them in good faith
and in reliance on or in accordance with such advice or opinion. In discharging
their duties, Trustees and officers, when acting in good faith, may rely upon
financial statements of the Trust represented to them to be correct by any
officer of the Trust having charge of its books of account, or stated in a
written report by an independent certified public accountant fairly to present
the financial position of the Trust. The Trustees and officers may rely, and
shall be personally protected in acting, upon any instrument or other document
believed by them to be genuine.
SECTION 4.9. Surety Bonds. No Trustee, officer, employee or agent of
the Trust shall, as such, be obligated to give any bond or surety or other
security for the performance of any of his duties, unless required by
applicable law or regulation, or unless the Trustees shall otherwise determine
in any particular case.
SECTION 4.10. Apparent Authority of Trustees and Officers. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer of the Trust shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by such
officer, or to make inquiry concerning or be liable for the application of
money or property paid, loaned or delivered to or on the order of the Trustees
or of such officer.
SECTION 4.11. Other Relationships Not Prohibited. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party (as defined in Section 5.2 hereof), or of or
for any parent or affiliate of any Contracting Party, or that the
Contracting Party or any parent or affiliate thereof is a Shareholder
or has an interest in the Trust or any Series, or that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited partnerships
or other organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and
assumption of services, duties and responsibilities to, for or of the Trust
and/or the Trustees or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability or
accountability to the Trust or to the holders of Shares of any Series; provided
that, in the case of any relationship or interest referred to in the preceding
clause (i) on the part of any Trustee or officer of the Trust, either (x) the
material facts as to such relationship or interest have been disclosed to or
are known by the Trustees not having any such relationship or interest and the
contract involved is approved in good faith by a majority
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of such Trustees not having any such relationship or interest (even
though such unrelated or disinterested Trustees are less than a quorum of all
of the Trustees), (y) the material facts as to such relationship or interest
and as to the contract have been disclosed to or are known by the Shareholders
entitled to vote thereon and the contract involved is specifically approved in
good faith by vote of the Shareholders, or (z) the specific contract involved
is fair to the Trust as of the time it is authorized, approved or ratified by
the Trustees or by the Shareholders.
SECTION 4.12. Payment of Trust Expenses. The Trustees are authorized to
pay or to cause to be paid out of the principal or income of the Trust, or
partly out of principal and partly out of income, and according to any
allocation to a particular Series and Class made by them pursuant to Section
6.1(f) hereof, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the business and affairs of the Trust or in
connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, Investment Adviser, Administrator, Distributor,
Principal Underwriter, auditor, counsel, Custodian, Transfer Agent, Dividend
Disbursing Agent, Accounting Agent, Shareholder Servicing Agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur.
SECTION 4.13. Ownership of the Trust Property. Legal title to all the
Trust Property shall be vested in the Trustees as joint tenants, except that
the Trustees shall have power to cause legal title to any Trust Property to be
held by or in the name of one or more of the Trustees, or in the name of the
Trust, or of any particular Series, or in the name of any other Person as
nominee, on such terms as the Trustees may determine; provided that the
interest of the Trust and of the respective Series therein is appropriately
protected. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee.
Upon the termination of the term of office of a Trustee as provided in Section
4.1(c), (d) or (e) hereof, such Trustee shall automatically cease to have any
right, title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to Section 4.1(i) hereof.
SECTION 4.14. By-Laws. The Trustees may adopt and from time to time
amend or repeal By-Laws for the conduct of the business of the Trust.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1. Appointment; Action by Less than All Trustees. The
Trustees shall be responsible for the general operating policy of the Trust and
for the general supervision of the business of the Trust conducted by officers,
agents, employees or advisers of the Trust or by independent contractors, but
the Trustees shall not be required personally to conduct all the business of
the Trust and, consistent with their ultimate responsibility as stated herein,
the Trustees may appoint, employ or contract with one or more officers,
employees and agents to conduct, manage and/or supervise the operations of the
Trust, and may grant or delegate such authority to such officers, employees
and/or agents as the Trustees may, in their sole discretion, deem to be
necessary or desirable, without regard to whether such authority is normally
granted or delegated by trustees. With respect to those matters of the
operation and business of
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the Trust which they shall elect to conduct themselves, except as
otherwise provided by this Declaration or the By-Laws, if any, the Trustees may
authorize any single Trustee or defined group of Trustees, or any committee
consisting of a number of Trustees less than the whole number of Trustees then
in office without specification of the particular Trustees required to be
included therein, to act for and to bind the Trust, to the same extent as the
whole number of Trustees could do, either with respect to one or more
particular matters or classes of matters, or generally.
SECTION 5.2. Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time in their discretion and
without limiting the generality of their powers and authority otherwise set
forth herein, enter into one or more contracts with any one or more
corporations, trusts, associations, partnerships, limited partnerships or other
types of organizations, or individuals ("Contracting Party"), to provide for
the performance and assumption of some or all of the following services, duties
and responsibilities to, for or on behalf of the Trust and/or any Series,
and/or the Trustees, and to provide for the performance and assumption of such
other services, duties and responsibilities in addition to those set forth
below, as the Trustees may deem appropriate:
(a) Advisory. An investment advisory or management agreement whereby
the agent shall undertake to furnish the Trust (or any Series thereof) such
management, investment advisory or supervisory, statistical and research
facilities and services, and such other facilities and services, if any, as the
Trustees shall from time to time consider desirable, all upon such terms and
conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the 1940 Act
or any applicable provisions of the By-Laws (any such agent being herein
referred to as an "Investment Adviser"). To the extent required by the 1940
Act, any such advisory or management agreement and any amendment thereto shall
be subject to approval by a Majority Shareholder Vote at a meeting of the
Shareholders of the Trust (or applicable Series). Notwithstanding any
provisions of this Declaration, the Trustees may authorize the Investment
Adviser (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
securities of the Trust on behalf of the Trustees or may authorize any officer
or employee of the Trust or any Trustee to effect such purchases, sales, loans
or exchanges pursuant to recommendations of the Investment Adviser (and all
without further action by the Trustees). Any such purchases, sales, loans and
exchanges shall be deemed to have been authorized by all of the Trustees. The
Trustees may, in their sole discretion, call a meeting of Shareholders in order
to submit to a vote of Shareholders of the Trust (or applicable Series) at such
meeting the approval of continuance of any such investment advisory or
management agreement.
(b) Administration. An agreement whereby the agent, subject to the
general supervision of the Trustees and in conformity with any policies of the
Trustees with respect to the operations of the Trust and each Series thereof,
will supervise all or any part of the operations of the Trust (or any Series
thereof), and will provide all or any part of the administrative and clerical
personnel, office space and office equipment and services appropriate for the
efficient administration and operations of the Trust (or any Series thereof)
(any such agent being herein referred to as an "Administrator").
(c) Underwriting. An agreement providing for the sale of Shares of the
Trust (or any Series thereof) to net the Trust not less than the net asset
value per Share (as described in Section 6.1(l) hereof) and pursuant to which
the Trust may appoint the other party to such agreement as its principal
underwriter or sales agent for the distribution of such Shares. The agreement
shall contain such terms and
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conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the 1940 Act
and any applicable provisions of the By-Laws (any such agent being herein
referred to as a "Distributor" or a "Principal Underwriter," as the case may
be).
(d) Custodian. The appointment of an agent meeting the requirements for
a custodian for the assets of Investment Companies contained in the 1940 Act
as custodian of the Securities and cash of the Trust (or any Series thereof)
and of the accounting records in connection therewith (any such agent being
herein referred to as a "Custodian").
(e) Transfer and Dividend Disbursing Agent. An agreement with an agent
to maintain records of the ownership of outstanding Shares, the issuance and
redemption and the transfer thereof (any such agent being herein referred to
as a "Transfer Agent"), and to disburse any dividends declared by the
Trustees and in accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any such dividends
(any such agent being herein referred to as a "Dividend Disbursing Agent").
(f) Shareholder Servicing. An agreement with an agent to provide
service with respect to the relationship of the Trust and its Shareholders,
records with respect to Shareholders and their Shares, and similar matters
(any such agent being herein referred to as a "Shareholder Servicing Agent").
(g) Accounting. An agreement with an agent to handle all or any part of
the accounting responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise (any such agent being herein referred
to as an "Accounting Agent").
In addition, the Trustees may from time to time cause the Trust (or any
Series thereof) to enter into agreements with respect to such other services
and upon such other terms and conditions as they may deem necessary,
appropriate or desirable. The same Person may be the Contracting Party for
some or all of the services, duties and responsibilities to, for and of the
Trust and/or the Trustees, and the contracts with respect thereto may contain
such terms interpretive of or in addition to the delineation of the services,
duties and responsibilities provided for, including provisions that are not
inconsistent with the 1940 Act relating to the standard of duty of and the
rights to indemnification of the Contracting Party and others, as the Trustees
may determine. Nothing herein shall preclude, prevent or limit the Trust or a
Contracting Party from entering into subcontractual arrangements relative to
any of the matters referred to in subsections (a) through (g) of this Section
5.2.
Section 5.3. Distribution Arrangements. Subject to compliance with the
1940 Act, the Trustees may adopt and amend or repeal from time to time and
implement one or more plans of distribution pursuant to Rule 12b-1 of the 1940
Act which plan(s) will provide for the payment of specified marketing,
distribution and shareholder relations expenses of the Trust and any or all
Series and their agents and the agents of such agents.
Section 5.4. Service Arrangements. Subject to compliance with the
1940 Act, the Trustees may adopt and amend or repeal from time to time and
implement one or more service plans which plans will provide for the payment of
ongoing services to holders of the shares of such Trust (or any Series thereof)
and in connection with the maintenance of such shareholders' accounts.
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ARTICLE 6
SERIES AND SHARES
SECTION 6.1. Description of Series and Shares.
(a) General. The beneficial interest in the Trust shall be divided into
Shares (either full or fractional) with $.01 par value per Share, of which an
unlimited number may be issued. The Trustees shall have the authority from time
to time to establish and designate one or more separate, distinct and
independent Series of Shares (each of which Series shall represent interests
only in the asset attributed by the Trustees to such Series), and to authorize
separate Classes of Shares of the Trust (or any such Series), as they deem
necessary or desirable. All Shares shall be of one class, provided that the
Trustees shall have the power to classify or reclassify any unissued Shares of
any Series into any number of additional Classes of such Series.
(b) Establishment. etc. of Series; Authorization of Shares. The
establishment and designation of any Series and the authorization of the Shares
thereof shall be effective upon the execution by a Majority of the Trustees (or
by an officer of the Trust pursuant to the vote of a Majority of the Trustees)
of an instrument setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series and the manner in
which the same may be amended (a "Certificate of Designation"), and may provide
that the number of Shares of such Series which may be issued is unlimited, or
may limit the number issuable. At any time that there are no Shares outstanding
of any particular Series previously established and designated, the Trustees
may by an instrument executed by a Majority of the Trustees (or by an officer
of the Trust pursuant to the vote of a Majority of the Trustees) terminate such
Series and the establishment and designation thereof and the authorization of
its Shares (a "Certificate of Termination"). Each Certificate of Designation,
Certificate of Termination and any instrument amending a Certificate of
Designation shall have the status of an amendment to this Declaration of Trust.
(c) Character of Separate Series and Shares Thereof. Each Series
established hereunder shall represent beneficial interests in a separate
component of the assets of the Trust. Holders of Shares of a Series shall be
considered Shareholders of such Series, but such Shareholders shall also be
considered Shareholders of the Trust for purposes of receiving reports and
notices and, except as otherwise provided herein or in the Certificate of
Designation of a particular Series, or as required by the 1940 Act or other
applicable law, the right to vote, all without distinction by Series. The
Trustees shall have exclusive power without the requirement of Shareholder
approval to establish and designate such separate and distinct Series, and to
fix and determine the relative rights and preferences as between the shares of
the respective Series, and as between the Classes of the Trust (or any Series
thereof), as to rights of redemption and the price, terms and manner of
redemption, special and relative rights as to dividends and other distributions
and on liquidation, sinking or purchase fund provisions, conversion rights, and
conditions under which the Shareholders of the several Series or the several
Classes of any Series of Shares shall have separate voting rights or no voting
rights. Except as otherwise provided as to a particular Series herein, or in
the Certificate of Designation therefor, the Trustees shall have all the rights
and powers, and be subject to all the duties and obligations, with respect to
each such Series and the assets and affairs thereof as they have under this
Declaration with respect to the Trust and the Trust Property in general.
Separate and distinct records shall be maintained for each Series of Shares and
the assets and liabilities attributable thereto.
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(d) Consideration for Shares. The Trustees may issue Shares of the
Trust (or any Series thereof) for such consideration (which may include
property subject to, or acquired in connection with the assumption of,
liabilities) and on such terms as they may determine (or for no consideration
if pursuant to a Share dividend or split-up), all without action or approval of
the Shareholders. All Shares when so issued on the terms determined by the
Trustees shall be fully paid and nonassessable (but may be subject to mandatory
contribution back to the Trust (or applicable Series) as provided in Section
6.1(l) hereof. The Trustees may classify or reclassify any unissued Shares, or
any Shares of the Trust (or any Series thereof) previously issued and
reacquired by the Trust, into Shares of the Trust or one or more other Series
that may be established and designated from time to time.
(e) Assets Belonging to Series. Any portion of the Trust Property
allocated to a particular Series, and all consideration received by the Trust
for the issue or sale of Shares of such Series, together with all assets in
which such consideration is invested or reinvested, all interest, dividends,
income, earnings, profits and gains therefrom, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that Series and shall irrevocably belong to
that Series for all purposes, and shall be so recorded upon the books of
account of the Trust, and the Shareholders of such Series shall not have, and
shall be conclusively deemed to have waived, any claims to the assets of any
Series of which they are not Shareholders. Such consideration, assets,
interest, dividends, income, earnings, profits, gains and proceeds, together
with any General Items allocated to that Series as provided in the following
sentence, are herein referred to collectively as assets "belonging to" that
Series. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series (collectively, "General Items"), the
Trustees shall allocate such General Items to and among any one or more of the
Series established and designated from time to time in such manner and on such
basis as they, in their sole discretion, deem fair and equitable; and any
General Items so allocated to a particular Series shall belong to and be part
of the assets belonging to that Series. Each such allocation by the Trustees
shall be conclusive and binding upon the Shareholders of all Series for all
purposes.
(f) Liabilities of Series. The assets belonging to each particular
Series shall be charged with the liabilities in respect of that Series and all
expenses, costs, charges and reserves attributable to that Series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as pertaining to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the
Series established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. The
indebtedness, expenses, costs, charges and reserves allocated and so charged to
a particular Series are herein referred to as "liabilities of" that Series.
Each allocation of liabilities, expenses, costs, charges and reserves by the
Trustees shall be conclusive and binding upon the Shareholders of all Series
for all purposes. Any creditor of any Series may look only to the assets
belonging to that Series to satisfy such creditor's debt.
(g) Dividends. Dividends and distributions on Shares of a particular
Series may be paid with such frequency as the Trustees may determine, which may
be daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, to the
Shareholders of that Series, from such of the income, accrued or realized, and
capital gains,
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realized or unrealized, and out of the assets belonging to that Series,
as the Trustees may determine, after providing for actual and accrued
liabilities of that Series. All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the Shareholders of that
Series in proportion to the number of such Shares held by such holders at the
date and time of record established for the payment of such dividends or
distributions, except that the dividends and distributions of investment income
and capital gains with respect to each Class of Shares of a particular Series
shall be in such amount as may be declared from time to time by the Trustees,
and such dividends and distributions may vary as between such Classes to
reflect differing allocations of the expenses of the Series between the
Shareholders of such several Classes and any resultant differences between the
net asset value of such several Classes to such extent and for such purposes as
the Trustees may deem appropriate and further except that, in connection with
any dividend or distribution program or procedure, the Trustees may determine
that no dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Trustees under such program or procedure, or that
dividends or distributions shall be payable on Shares which have been tendered
by the holder thereof for redemption or repurchase, but the redemption or
repurchase proceeds of which have not yet been paid to such Shareholder. Such
dividends and distributions may be made in cash, property or Shares of any
Class of that Series or a combination thereof as determined by the Trustees, or
pursuant to any program that the Trustees may have in effect at the time for
the election by each Shareholder of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or distribution paid in
Shares will be paid at the net asset value thereof as determined in accordance
with subsection (l) of this Section 6.1.
(h) Liquidation. In the event of the liquidation or dissolution of the
Trust (or any particular Series), the Shareholders of the Trust (or that
Series) shall be entitled to receive, when and as declared by the Trustees, the
excess of the assets belonging to the Trust (or that Series) over the
liabilities of such Series. The assets so distributable to the Shareholders of
the Trust (or that Series) shall be distributed among such Shareholders in
proportion to the number of Shares of the Trust (or that Series) held by them
and recorded on the books of the Trust. The liquidation of the Trust (or any
particular Series) may be authorized by vote of a Majority of the Trustees,
subject to the affirmative vote of "a majority of the outstanding voting
securities" of that Series, as the quoted phrase is defined in the 1940 Act,
determined in accordance with clause (iii) of the definition of "Majority
Shareholder Vote" in Section 1.4 hereof.
(i) Voting. The Shareholders shall have the voting rights set forth in
or determined under Article 7 hereof.
(j) Redemption by Shareholder. Each holder of Shares of the Trust (or a
particular Series thereof) shall have the right at such times as may be
permitted by the Trust, but no less frequently than required by the 1940 Act,
to require the Trust (or such Series) to redeem all or any part of his Shares of
the Trust (or such Series) at a redemption price equal to the net asset value
per Share of the Trust (or Series) next determined in accordance with
subsection (l) of this Section 6.1 after the Shares are properly tendered for
redemption; provided, that the Trustees may from time to time, in their
discretion, determine and impose a fee for such redemption and that the
proceeds of the redemption of Shares (including a fractional Share) of any
Class of the Trust (or any Series thereof) shall be reduced by the amount of
any applicable contingent deferred sales charge or other sales charge, if any,
payable on such redemption to the distributor of Shares of such Class pursuant
to the terms of
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the initial issuance of the Shares of such Class (to the extent
consistent with the 1940 Act or regulations or exemptions thereunder) and the
Trust shall promptly pay to such distributor the amount of such deferred sales
charge. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in Securities or other assets belonging
to such Series at the value of such Securities or assets used in such
determination of net asset value. Notwithstanding the foregoing, the Trust may
postpone payment of the redemption price and may suspend the right of the
holders of Shares of the Trust (or any Series thereof) to require the Trust to
redeem Shares of the Trust (or such Series) during any period or at any time
when and to the extent permissible under the 1940 Act.
(k) Redemption at the Option of the Trust. The Trustees shall have the
power to redeem Shares of the Trust (or any Series thereof) at a redemption
price determined in accordance with Section 6.1(j), if at any time (i) the
total investment in such account does not have a value of at least such minimum
amount as may be specified in the Prospectus for the Trust (or such Series)
from time to time (ii) the number of Shares held in such account is equal to or
in excess of a specified percentage of Shares of the Trust or any Series as set
forth from time to time in the applicable Prospectus. In the event the Trustees
determine to exercise their power to redeem Shares provided in this Section
6.1(k), the Shareholder shall be notified that the value of his account is less
than the applicable minimum amount and shall be allowed 30 days to make an
appropriate investment before redemption is processed.
(I) Net Asset Value. The net asset value per Share of the Trust (or any
Series or Class) at any time shall be the quotient obtained by dividing the
value of the net assets of the Trust (or such Series or Class) at such time
(being the current value of the assets belonging to the Trust (or such Series
or Class), less its then existing liabilities) by the total number of Shares of
the Trust (or such Series or Class) then outstanding, all determined in
accordance with the methods and procedures, including without limitation those
with respect to rounding, established by the Trustees from time to time in
accordance with the requirements of the 1940 Act. The net asset value of the
several Classes of the Trust (or a particular Series) shall be separately
computed, and may vary from one another. The Trustees shall establish
procedures for the allocation of investment income or capital gains and
expenses and liabilities of a particular Series between the several Classes of
the Trust (or such Series). The Trustees may determine to maintain the net
asset value per Share of the Trust or any Series or Class at a designated
constant dollar amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declaration of income
attributable to the Trust or such Series or Class as dividends payable in
additional Shares of the Trust or such Series or Class at the designated
constant dollar amount and for the handling of any losses attributable to the
Trust or such Series or Class. Such procedures may provide that in the event of
any loss each Shareholder shall be deemed to have contributed to the shares of
beneficial interest account of the Trust or such Series or Class his pro rata
portion of the total number of Shares required to be canceled in order to
permit the net asset value per Share of the Trust or such Series or Class to be
maintained, after reflecting such loss, at the designated constant dollar
amount. Each Shareholder of the Trust shall be deemed to have expressly agreed,
by his investment in the Trust (or any Series thereof) with respect to which
the Trustees shall have adopted any such procedure, to make the contribution
referred to in the preceding sentence in the event of any such loss.
(m) Transfer. All Shares of the Trust and each Series shall be
transferable, but transfers of Shares of the Trust or a particular Series will
be recorded on the Share transfer records of the Trust
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applicable to the Trust or such Series only at such times as
Shareholders shall have the right to require the Trust to redeem Shares of the
Trust or such Series and at such other times as may be permitted by the
Trustees.
(n) Equality. All Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that Series (subject to
the liabilities of that Series), and each Share of any particular Series shall
be equal to each other Share thereof; but the provisions of this sentence shall
not restrict any distinctions between the several Classes of a Series
permissible under this Section 6.1 or under Section 7. 1 hereof nor any
distinctions permissible under subsection (g) of this Section 6.1 that may
exist with respect to dividends and distributions on Shares of the same Series.
The Trustees may from time to time divide or combine the Shares of any class of
particular Series into a greater or lesser number of Shares of that class of a
Series without thereby changing the proportionate beneficial interest in the
assets belonging to that Series or in any way affecting the rights of the
holders of Shares of any other Series.
(o) Rights of Fractional Shares. Any fractional Share of the Trust (or
any Series thereof) shall carry proportionately all the rights and obligations
of a whole Share of the Trust (or such Series), including rights and
obligations with respect to voting, receipt of dividends and distributions,
redemption of Shares, and liquidation of the Trust or of the Series to which
they pertain.
(p) Conversion Rights. (i) Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that holders
of Shares of any Series shall have the right to convert said Shares into Shares
of one or more other Series, that holders of any Class of the Trust or a Series
of Shares shall have the right to convert said Shares of such Class into Shares
of one or more other Classes of the Trust or such Series, and that Shares of
any Class of the Trust or a Series shall be automatically converted into Shares
of another Class of the Trust or such Series, in each case in accordance with
such requirements and procedures as the Trustees may establish.
(ii) The number of Shares of into which a convertible Share shall
convert shall equal the number (including for this purpose fractions of a
Share) obtained by dividing the net asset value per Share for purposes of sales
and redemptions of the converting Share on the Conversion Date by the net asset
value per Share for purposes of sales and redemptions of the Class of Shares
into which it is converting on the Conversion Date.
(iii) On the Conversion Date, the Share converting into another
share will cease to accrue dividends and will no longer be deemed
outstanding and the rights of the holders thereof (except the right to receive
the number of target Shares into which the converting Shares have been
converted and declared but unpaid dividends to the Conversion Date) will cease.
Certificates representing Shares resulting from the conversion need not be
issued until certificates representing Shares converted, if issued, have been
received by the Trust or its agent duly endorsed for transfer.
(vi) The Trust will appropriately reflect the conversion of Shares
of one Class of the Trust (or a Series thereof) into Shares of another
Class of the Trust (or such Series) on the first periodic statements of account
sent to Shareholders of record affected which provide account information with
respect to a reporting period which includes the date such conversion occurred.
SECTION 6.2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a Transfer Agent or similar agent for
the Trust, which books shall be maintained
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separately for the Shares of each Series that has been authorized.
Certificates evidencing the ownership of Shares need not be issued except as
the Trustees may otherwise determine from time to time, and the Trustees shall
have power to call outstanding Share certificates and to replace them with book
entries. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the use of facsimile signatures, the transfer
of Shares and similar matters. The record books of the Trust as kept by the
Trust or any Transfer Agent or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders and as to the number of Shares of the
Trust and, if designated, each Series thereof held from time to time by each
such Shareholder.
The holders of Shares of the Trust and, if designated, each Series
thereof shall upon demand disclose to the Trustees in writing such information
with respect to their direct and indirect ownership of Shares of the Trust or,
if designated, such Series as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code, or to comply with the requirements of
any other authority.
SECTION 6.3. Investments in the Trust. The Trustees may accept
investments in any Series of the Trust from such Persons and on such terms and
for such consideration, not inconsistent with the provisions of the 1940 Act,
as they from time to time authorize. The Trustees may authorize any
Distributor, Principal Underwriter, Custodian, Transfer Agent or other Person
to accept orders for the purchase of Shares that conform to such authorized
terms and to reject any purchase orders for Shares, whether or not conforming
to such authorized terms.
SECTION 6.4. No Preemptive Rights. No Shareholder, by virtue of holding
Shares of the Trust or, if designated, any Series thereof, shall have any
preemptive or other right to subscribe to any additional Shares of the Trust or
such Series, or to any shares of any other Series, or any other Securities
issued by the Trust.
SECTION 6.5. Status of Shares. Every Shareholder, by virtue of having
become a Shareholder, shall be held to have expressly assented and agreed to
the terms hereof and to have become a party hereto. Shares shall be deemed to
be personal property, giving only the rights provided herein. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or any
part of the Trust Property or right to call for a partition or division of the
same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Series, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Declaration of Trust.
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1. Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Sections 4.1(c)
and (e) hereof, (ii) with respect to the approval or termination in accordance
with the 1940 Act of any contract with a Contracting Party as provided in
Section 5.2 hereof as to which Shareholder approval is required by the 1940
Act, (iii) with respect to any termination or reorganization of the Trust or
any Series to the extent and as provided in Sections 9.2, 9.3 and 9.4 hereof,
(iv) with respect to any amendment of this Declaration of Trust to the extent
and as provided in Section 9.5 hereof, (v) to the same extent as the
stockholders of a Delaware business
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corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or any Series, or the Shareholders of any of them
(provided. however, that a Shareholder of a particular Series shall not in any
event be entitled to maintain a derivative or class action on behalf of any
other Series or the Shareholders thereof), and (vi) with respect to such
additional matters relating to the Trust as may be required by the 1940 Act,
this Declaration of Trust, the By-Laws or any registration of the Trust with
the Commission (or any successor agency) or any State, or as the Trustees may
consider necessary or desirable. If and to the extent that the Trustees shall
determine that such action is required by law or by this Declaration, they
shall cause each matter required or permitted to be voted upon at a meeting or
by written consent of Shareholders to be submitted to a separate vote of the
outstanding Shares of each Series entitled to vote thereon; provided, that (i)
when expressly required by the 1940 Act or by other law, actions of
Shareholders shall be taken by Single Class Voting of all outstanding Shares
whose holders are entitled to vote thereon; and (ii) when the Trustees
determine that any matter to be submitted to a vote of Shareholders affects
only the rights or interests of Shareholders of one or more but not all Series
or of one or more but not all Classes of the Trust or a single Series
(including without limitation any distribution plan pursuant to Rule 12b-1 of
the 1940 Act applicable to such Class), then only the Shareholders of the
Series or Classes so affected shall be entitled to vote thereon. Any matter
required to be submitted to shareholders and affecting one or more Series shall
require separate approval by the required vote of Shareholders of the Trust or
each affected Series; provided, however, that to the extent required by the
1940 Act, there shall be no separate Series votes on the election or removal of
Trustees, the selection of auditors for the Trust and its Series or approval of
any agreement or contract entered into by the Trust or any Series. Shareholders
of a particular Series shall not be entitled to vote on any matter that affects
only one or more other Series.
SECTION 7.2. Number of Votes and Manner of Voting: Proxies. On each
matter submitted to a vote of the Shareholders, each holder of Shares of the
Trust or, if applicable, any Series shall be entitled to a number of votes
equal to the number of Shares of the Trust or such Series standing in his name
on the books of the Trust. There shall be no cumulative voting in the election
or removal of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two (2) or more Persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them.
A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
SECTION 7.3. Meetings. Meetings of Shareholders may be called by the
Trustees from time to time for the purpose of taking action upon any matter
requiring the vote or authority of the Shareholders as herein provided, or upon
any other matter deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given or caused to be given by
the Trustees by mailing such notice at least seven (7) days before such
meeting, postage prepaid, stating the time, place and purpose of the meeting,
to each Shareholder at the Shareholder's address as it appears on the records
of the Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not less than ten
percent (10%) of the Shares then outstanding. If the Trustees shall fail to
call or give notice of any meeting of Shareholders for a period of thirty (30)
days after written application by Shareholders holding at least ten percent
(10%) of the Shares then outstanding requesting that a
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meeting be called for any other purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding at
least ten percent (10%) of the Shares then outstanding may call and give notice
of such meeting, and thereupon the meeting shall be held in the manner provided
for herein in case of call thereof by the Trustees. Any meetings may be held
within or without The State of Delaware. Shareholders may only act with
respect to matters set forth in the notice to Shareholders.
SECTION 7.4. Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding thirty (30) days (except at
or in connection with the termination of the Trust), as the Trustees may
determine; or without closing the transfer books the Trustees may fix a date
and time not more than ninety (90) days prior to the date of any meeting of
Shareholders or other action as the date and time of record for the
determination of Shareholders entitled to vote at such meeting or any
adjournment thereof or to be treated as Shareholders of record for purposes of
such other action, and any Shareholder who was a Shareholder at the date and
time so fixed shall be entitled to vote at such meeting or any adjournment
thereof or to be treated as a Shareholder of record for purposes of such other
action, even though he has since that date and time disposed of his Shares, and
no Shareholder becoming such after that date and time shall be so entitled to
vote at such meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action.
SECTION 7.5. Quorum and Required Vote. A majority of the Shares
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice. A Majority Shareholder Vote at a meeting of which a quorum is
present shall decide any question, except when a different vote is required or
permitted by any provision of the 1940 Act or other applicable law or by this
Declaration of Trust or the By-Laws, or when the Trustees shall in their
discretion require a larger vote or the vote of a majority or larger fraction
of the Shares of one or more particular Series.
SECTION 7.6. Action By Written Consent. Subject to the provisions of
the 1940 Act and other applicable law, any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof or of the Shares of any particular
Series as shall be required by the 1940 Act or by any express provision of this
Declaration of Trust or the By-Laws or as shall be permitted by the Trustees)
consent to the action in writing and if the writings in which such consent is
given are filed with the records of the meetings of Shareholders, to the same
extent and for the same period as proxies given in connection with a
Shareholders' meeting. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.
SECTION 7.7. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of a Delaware business corporation under the Delaware business
corporation law.
SECTION 7.8. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
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ARTICLE 8
LIMITATION OF LIABILITY: INDEMNIFICATION
SECTION 8.1. Trustees. Shareholders. etc. Not Personally Liable;
Notice. The Trustees, officers, employees and agents of the Trust, in incurring
any debts, liabilities or obligations, or in limiting or omitting any other
actions for or in connection with the Trust, are or shall be deemed to be
acting as Trustees, officers, employees or agents of the Trust and not in their
own capacities. No Shareholder shall be subject to any personal liability
whatsoever in tort, contract or otherwise to any other Person or Persons in
connection with the assets or the affairs of the Trust or of any Series, and
subject to Section 8.4 hereof, no Trustee, officer, employee or agent of the
Trust shall be subject to any personal liability whatsoever in tort, contract,
or otherwise, to any other Person or Persons in connection with the assets or
affairs of the Trust or of any Series, save only that arising from his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office or the discharge of his functions.
The Trust (or if the matter relates only to a particular Series, that Series)
shall be solely liable for any and all debts, claims, demands, judgments,
decrees, liabilities or obligations of any and every kind, against or with
respect to the Trust or such Series in tort, contract or otherwise in
connection with the assets or the affairs of the Trust or such Series, and all
Persons dealing with the Trust or any Series shall be deemed to have agreed
that resort shall be had solely to the Trust Property of the Trust or the
Series Assets of such Series, as the case may be, for the payment or
performance thereof.
The Trustees shall use their best efforts to ensure that every note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer shall give notice that a Certificate of
Trust in respect of the Trust is on file with the Secretary of the state of
Delaware and shall recite to the effect that the same was executed or made by
or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer, and not individually, and that the obligations of such instrument are
not binding upon any of them or the Shareholders individually but are binding
only upon the assets and property of the Trust, or the particular Series in
question, as the case may be, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually, or to subject the Series Assets of any Series to the
obligations of any other Series.
SECTION 8.2. Trustees' Good Faith Action; Expert Advice: No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. Subject to Section 8.4 hereof, a
Trustee shall be liable for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law. Subject to the foregoing, (i) the Trustees
shall not be responsible or liable in any event for any neglect or wrongdoing
of any officer, agent, employee, consultant, Investment Adviser, Administrator,
Distributor or Principal Underwriter, Custodian or Transfer Agent, Dividend
Disbursing Agent, Shareholder Servicing Agent or Accounting Agent of the Trust,
nor shall any Trustee be responsible for the act or omission of any other
Trustee; (ii) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust and their
duties as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and (iii) in
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written
reports made to the Trustees by any officer appointed by them, any independent
public accountant, and (with respect to the subject matter of the contract
involved) any officer, partner or
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responsible employee of a Contracting Party appointed by the Trustees
pursuant to Section 5.2 hereof. The Trustees as such shall not be required to
give any bond or surety or any other security for the performance of their
duties.
SECTION 8.3. Indemnification of Shareholders. If any Shareholder (or
former Shareholder) of the Trust shall be charged or held to be personally
liable for any obligation or liability of the Trust solely by reason of being
or having been a Shareholder and not because of such Shareholder's acts or
omissions or for some other reason, the Trust (upon proper and timely request
by the Shareholder) may assume the defense against such charge and satisfy any
judgment thereon or may reimburse the Shareholders for expenses, and the
Shareholder or former Shareholder (or the heirs, executors, administrators or
other legal representatives thereof, or in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled (but solely
out of the assets of the Series of which such Shareholder or former Shareholder
is or was the holder of Shares) to be held harmless from and indemnified
against all loss and expense arising from such liability.
SECTION 8.4. Indemnification of Trustees. Officers, etc. Subject to the
limitations, if applicable, hereinafter set forth in this Section 8.4, the
Trust shall indemnify (from the assets of one or more Series to which the
conduct in question relates) each of its Trustees, officers, employees and
agents (including Persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise (hereinafter, together with
such Person's heirs, executors, administrators or personal representative,
referred to as a "Covered Person")) against all liabilities, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and expenses, including reasonable accountants' and counsel
fees, incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Trustee or officer,
director or trustee, except with respect to any matter as to which it has been
determined that such Covered Person (i) did not act in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to
the best interests of the Trust; (ii) had acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (iii) for a criminal proceeding, had
reasonable cause to believe that his conduct was unlawful (the conduct
described in (i), (ii) and (iii) being referred to hereafter as "Disabling
Conduct"). A determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on the merits by a court or
other body before whom the proceeding was brought that the Covered Person to be
indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a
court action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum
of Trustees who are neither "interested persons" of the Trust as defined in
Section 2(a)(19) of the 1940 Act nor parties to the proceeding (the
"Disinterested Trustees"), or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments,
in compromise or as fines or penalties), may be paid from time to time by one
or more Series to which the conduct in question related in advance of the final
disposition of any such action, suit or proceeding; provided that the Covered
Person shall have undertaken to repay the amounts so paid to such Series if it
is ultimately determined that indemnification of such expenses is not
authorized under this Article 8 and (i) the Covered Person shall
27
<PAGE> 34
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of a quorum of the Disinterested Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a review of
readily available facts (as opposed to a full trial type inquiry), that there
is reason to believe that the Covered Person ultimately will be found entitled
to indemnification.
SECTION 8.5. Compromise Payment. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 8.4
hereof, pursuant to a consent decree or otherwise, no such indemnification
either for said payment or for any other expenses shall be provided unless such
indemnification shall be approved (i) by a majority of a quorum of the
Disinterested Trustees or (ii) by an independent legal counsel in a written
opinion. Approval by the Trustees pursuant to clause (i) or by independent
legal counsel pursuant to clause (ii) shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with
either of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
Covered Person's office.
SECTION 8.6. Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article 8 shall not be exclusive of or affect
any other rights to which any such Covered Person or shareholder may be
entitled. As used in this Article 8, a "disinterested" Person is one against
whom none of the actions, suits or other proceedings in question, and no other
action, suit or other proceeding on the same or similar grounds is then or has
been pending or threatened. Nothing contained in this Article 8 shall affect
any rights to indemnification to which personnel of the Trust, other than
Trustees and officers, and other Persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such Person.
SECTION 8.7. Liability of Third Persons Dealing with Trustees. No
person dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
ARTICLE 9
DURATION: REORGANIZATION: INCORPORATION; AMENDMENTS
SECTION 9.1. Duration of Trust. Unless terminated as provided herein,
the Trust shall have perpetual existence.
SECTION 9.2. Termination of Trust. The Trust may be terminated at any
time by a Majority of the Trustees, subject to the favorable vote of the
holders of not less than a majority of the Shares outstanding and entitled to
vote of each Series of the Trust, or by an instrument or instruments in writing
without a meeting, consented to by the holders of not less than a majority of
such Shares, or by such greater or different vote of Shareholders of any Series
as may be established by the Certificate of Designation by which such Series
was authorized. Upon termination, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be
28
<PAGE> 35
determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, Securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with
the provisions of Section 6.1(h) hereof. After termination of the Trust or any
Series and distribution to the Shareholders as herein provided, a majority of
the Trustees shall execute and lodge among the records of the Trust an
instrument in writing setting forth the fact of such termination. Upon
termination of the Trust, the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease. Upon termination of any Series, the
Trustees shall thereupon be discharged from all further liabilities and duties
with respect to such Series, and the rights and interests of all Shareholders
of such Series shall thereupon cease.
SECTION 9.3. Reorganization. The Trustees may sell, convey and transfer
all or substantially all of the assets of the Trust, or the assets belonging to
any one or more Series, to another trust, partnership, association, corporation
or other entity organized under the laws of any state of the United States, or
may transfer such assets to another Series of the Trust, in exchange for cash,
Shares or other Securities (including, in the case of a transfer to another
Series of the Trust, Shares of such other Series), or to the extent permitted
by law then in effect may merge or consolidate the Trust or any Series with any
other Trust or any corporation, partnership, or association organized under the
laws of any state of the United States, all upon such terms and conditions and
for such consideration when and as authorized by vote or written consent of a
Majority of the Trustees and approved by the affirmative vote of the holders of
not less than a majority of the Shares outstanding and entitled to vote of each
Series whose assets are affected by such transaction, or by an instrument or
instruments in writing without a meeting, consented to by the holders of not
less than a majority of such Shares, and/or by such other vote of any Series as
may be established by the Certificate of Designation with respect to such
Series. Following such transfer, the Trustees shall distribute the cash, Shares
or other Securities or other consideration received in such transaction (giving
due effect to the assets belonging to and indebtedness of, and any other
differences among, the various Series of which the assets have so been
transferred) among the Shareholders of the Series of which the assets have been
so transferred; and if all of the assets of the Trust have been so transferred,
the Trust shall be terminated. Nothing in this Section 9.3 shall be construed
as requiring approval of Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or
other organizations, and to sell, convey or transfer less than substantially
all of the Trust Property or the assets belonging to any Series to such
organizations or entities.
SECTION 9.4. Incorporation. Upon approval by Majority Shareholder
Vote, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, association or organization, in
exchange for the shares or securities thereof, or otherwise, and to lend money
to, subscribe for the shares of securities of, and enter into any contracts
with any such corporation, trust, partnership, association or organization in
which the Trust holds or is about to acquire shares or any other interests. The
Trustees may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership, association or
other organization if and to the extent permitted by law, as provided under the
law then in effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in organizing
one or more corporation, trusts,
29
<PAGE> 36
partnerships, associations or other organizations and selling, conveying or
transferring a portion of the Trust Property to such organizations or entities.
SECTION 9.5. Amendments; etc. All rights granted to the Shareholders
under this Declaration of Trust are granted subject to the reservation of the
right to amend this Declaration of Trust as herein provided, except that no
amendment shall repeal the limitations on personal liability of any Shareholder
or Trustee or the prohibition of assessment upon the Shareholders (otherwise
than as permitted under Section 6.1(l)) without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the provisions of
this Declaration of Trust (whether or not related to the rights of
Shareholders) may be amended at any time, so long as such amendment does not
adversely affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such amendment is not
in contravention of applicable law, including the 1940 Act, by an instrument in
writing signed by a Majority of the Trustees (or by an officer of the Trust
pursuant to the vote of a Majority of the Trustees). Any amendment to this
Declaration of Trust that adversely affects the rights of all Shareholders may
be adopted at any time by an instrument in writing signed by a Majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a Majority of the
Trustees) when authorized to do so by the vote in accordance with Section 7.I
hereof of Shareholders holding a majority of all the Shares outstanding and
entitled to vote, without regard to Series, or if said amendment adversely
affects the rights of the Shareholders of less than all of the Series, by the
vote of the holders of a majority of all the Shares entitled to vote of each
Series so affected. Notwithstanding any other provisions set forth in this
Declaration of Trust, a provision in this Declaration of Trust requiring
shareholder approval of any action may be amended only with like shareholder
approval.
SECTION 9.6. Filing of Copies of Declaration and Amendments. The
original or a copy of this Declaration and of each amendment hereto (including
each Certificate of Designation and Certificate of Termination) shall be kept
at the office of the Trust where it may be inspected by any Shareholder. A
restated Declaration, integrating into a single instrument all of the
provisions of this Declaration which are then in effect and operative, may be
executed from time to time by a Majority of the Trustees and shall, upon
execution, be conclusive evidence of all amendments contained therein and may
thereafter be referred to in lieu of the original Declaration and the various
amendments thereto. A Certificate of Trust shall be filed in the office of the
Secretary of State of the State of Delaware.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the applicable register of the
Trust.
SECTION 10.2. Governing Law. This Declaration of Trust is, with
reference to the laws thereof, and the rights of all parties and the
construction and effect of every provision hereof shall be, subject to and
construed according to the laws of said The State of Delaware.
SECTION 10.3. Counterparts. This Declaration of Trust and any amendment
thereto may be simultaneously executed in several counterparts, each of which
so executed shall be deemed to be an
30
<PAGE> 37
original, and such counterparts, together, shall constitute but one and
the same instrument, which shall be sufficiently evidenced by any such original
counterpart.
SECTION 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust is a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Shareholders, (b) the
due authorization of the execution of any instrument or writing, (c) the form
of any vote passed at a meeting of Trustees or Shareholders, (d) the fact that
the number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration of Trust, (e)
the form of any By-Law adopted, or the identity of any officers elected, by the
Trustees, (f) the existence or nonexistence of any fact or facts which in any
manner relate to the affairs of the Trust, or (g) the name of the Trust or the
establishment of a Series shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees, or any of them, and
the successors of such Person.
SECTION 10.5. References; Headings. The masculine gender shall include
the feminine and neuter genders. Headings are placed herein for convenience of
reference only and shall not be taken as a part of this Declaration or control
or affect the meaning, construction or effect hereof.
SECTION 10.6. Provisions in Conflict With Law or Regulation. (a)
The provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986 or with other applicable laws and regulations,
the conflicting provision shall be deemed never to have constituted a part of
this Declaration; provided, however, that such determination shall not affect
any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
SECTION 10.7. Use of the Name "Van Kampen American Capital". Van Kampen
American Capital, Inc. ("Van Kampen American Capital") has consented to the use
by the Trust and by each Series and each Series thereof to the identifying
words "Van Kampen" or "Van Kampen Merritt" or any combination thereof in the
name of the Trust and of each Series and Series thereof. Such consent is
conditioned upon the Trust's employment of Van Kampen American Capital, its
successors or a subsidiary or affiliate thereof as investment adviser to the
Trust and to each Series and each Series thereof. As between Van Kampen
American Capital and the Trust, Van Kampen American Capital shall control the
use of such name insofar as such name contains the identifying words "Van
Kampen" or "Van Kampen Merritt". Van Kampen American Capital may from time to
time use the identifying words "American Capital," "Van Kampen" or "Van Kampen
Merritt" in other connections and for other purposes, including without
limitation in the names of other investment companies, corporations or
businesses that it may manage, advise, sponsor or own or in which it may have a
financial interest. Van Kampen American Capital may require the Trust or any
Series or Series thereof to cease using the identifying words "Van Kampen" or
"Van Kampen Merritt" in the name of the Trust or any Series or any Series
thereof if the Trust or any Series or Series thereof ceases to employ Van
Kampen American Capital, its successors or a subsidiary or affiliate thereof as
investment adviser.
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<PAGE> 38
IN WITNESS WHEREOF, the undersigned, being at least a majority of the
Trustees of the Trust, have set their hands and seal, for themselves and their
assigns, unto this First Amended and Restated Agreement and Declaration of
Trust of Van Kampen American Capital ___________, as of the day and year first
above written.
___________________________________ ___________________________________
J. Miles Branagan Richard E. Caruso
___________________________________ ___________________________________
Roger Hilsman Don G. Powell
___________________________________ ___________________________________
David Rees Lawrence J. Sheehan
___________________________________ ___________________________________
Fernando Sisto William S. Woodside
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<PAGE> 39
A C K N O W L E D G M E N T
STATE OF )
) ss
COUNTY OF )
______________________
(Date)
Then personally appeared the above named [ ] and acknowledged the
foregoing instrument to be his free act and deed.
Before me,
_______________________________
(Notary Public)
My commission expires:___________
33
<PAGE> 1
EXHIBIT 2
DRAFT FORM OF AMERICAN CAPITAL FUNDS DELAWARE TRUST
AMENDED AND RESTATED BYLAWS
VAN KAMPEN AMERICAN CAPITAL
[TRUST]
AMENDED AND RESTATED BYLAWS
<PAGE> 2
[TRUST]
Bylaws
Index
<TABLE>
<S> <C> <C>
ARTICLE 1 SHAREHOLDERS AND SHAREHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Presiding Officer; Secretary . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Authority of Chairman of Meeting to Interpret Declaration and Bylaws . . 1
Section 1.4. Voting; Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.5. Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Records at Shareholder Meetings . . . . . . . . . . . . . . . . . . . . 2
Section 1.7. Shareholders Action in Writing . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Regular Meetings of Trustees . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3. Special Meetings of Trustees . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.4. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.5. Quorum; Presiding Trustee . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.6. Participation by Telephone . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.7. Location of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.8. Actions by Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.9. Rulings of Presiding Trustee . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.10. Trustees' Action in Writing . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.11. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.12. Tenure of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE 3 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1. Officers of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2. Time and Terms of Election . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3. Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4. Fidelity Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.5. President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.6. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.7. Treasurer and Assistant Treasurers . . . . . . . . . . . . . . . . . . . 5
Section 3.8. Controller and Assistant Controllers . . . . . . . . . . . . . . . . . . 6
Section 3.9. Secretary and Assistant Secretaries . . . . . . . . . . . . . . . . . . 6
Section 3.10. Substitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.11. Execution of Deeds, etc. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.12. Power to Vote Securities . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 4 COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Power of Trustees to Designate Committees . . . . . . . . . . . . . . . 7
Section 4.2. Rules for Conduct of Committee Affairs . . . . . . . . . . . . . . . . 7
Section 4.3. Trustees May Alter, Abolish, etc., Committees . . . . . . . . . . . . . 7
Section 4.4. Minutes; Review by Trustees . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 5 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 6 SHARES .......................................... . . . . . . . . . . . . . . . . . 7
Section 6.1. Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6.2. Uncertificated Shares . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.3. Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6.4. Lost, Stolen, etc., Certificates . . . . . . . . . . . . . . . . . . . 8
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 7 STOCK TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7.1. Transfer Agents, Registrars, etc. . . . . . . . . . . . . . . . . . . . 8
Section 7.2. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7.3. Registered Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 8 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8.1. Bylaws Subject to Amendment . . . . . . . . . . . . . . . . . . . . . 9
Section 8.2. Notice of Proposal to Amend Bylaws Required . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 5
[TRUST]
BYLAWS
These are the Bylaws of [TRUST], a trust with transferable shares
established under the laws of The State of Delaware (the "Trust"), pursuant to
an Agreement and Declaration of Trust of the Trust (the "Declaration") made the
10th day of May, 1995, and a Certificate of Trust filed in the office of the
Secretary of State pursuant to Section 3810 of The Delaware Business Trust Act,
Title 12, Chapter 38 of the Delaware Code. These Bylaws have been adopted by
the Trustees pursuant to the authority granted by Section 4.14 of the
Declaration.
All words and terms capitalized in these Bylaws, unless
otherwise defined herein, shall have the same meanings as they have in the
Declaration.
ARTICLE 1
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
SECTION 1.1. Meetings. A meeting of the Shareholders of the Trust
shall be held whenever called by the Chairman, the President or a majority of
the Trustees and whenever election of a Trustee or Trustees by Shareholders is
required by the provisions of the 1940 Act. Meetings of Shareholders shall
also be called by the Trustees when requested in writing by Shareholders
holding at least ten percent (10%) of the Shares then outstanding for the
purpose of voting upon removal of any Trustee, or if the Trustees shall fail to
call or give notice of any such meeting of Shareholders for a period of thirty
(30) days after such application, then Shareholders holding at least ten
percent (10%) of the Shares then outstanding may call and give notice of such
meeting. Notice of Shareholders' meetings shall be given as provided in the
Declaration.
SECTION 1.2. Presiding Officer; Secretary. The President shall
preside at each Shareholders' meeting as chairman of the meeting, or in the
absence of the President, the Trustees present at the meeting shall elect one
of their number as chairman of the meeting. Unless otherwise provided for by
the Trustees, the Secretary of the Trust shall be the secretary of all meetings
of Shareholders and shall record the minutes thereof.
SECTION 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws. At any Shareholders' meeting the chairman of the
meeting shall be empowered to determine the construction or interpretation
of the Declaration or these Bylaws, or any part thereof or hereof, and their
ruling shall be final.
SECTION 1.4. Voting; Quorum. At each meeting of Shareholders, except
as otherwise provided by the Declaration, every holder of record of Shares
entitled to vote shall be entitled to a number of votes equal to the number of
Shares standing in his name on the Share register of the Trust on the record
date of the meeting. Shareholders may vote by proxy and the form of any such
proxy may be prescribed from time to time by the Trustees. A quorum shall
exist if the holders of a majority of the outstanding Shares of the Trust
entitled to vote are present in person or by proxy, but any lesser
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<PAGE> 6
number shall be sufficient for adjournments. At all meetings of the
Shareholders, votes shall be taken by ballot for all matters which may be
binding upon the Trustees pursuant to Section 7.1 of the Declaration. On other
matters, votes of Shareholders need not be taken by ballot unless otherwise
provided for by the Declaration or by vote of the Trustees, or as required by
the 1940 Act, but the chairman of the meeting may in his discretion authorize
any matter to be voted upon by ballot.
SECTION 1.5. Inspectors. At any meeting of Shareholders, the chairman
of the meeting may appoint one or more Inspectors of Election or Balloting to
supervise the voting at such meeting or any adjournment thereof. If Inspectors
are not so appointed, the chairman of the meeting may, and on the request of
any Shareholder present or represented and entitled to vote shall, appoint one
or more Inspectors for such purpose. Each Inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of Inspector of Election or Balloting, as the case may be, at such
meeting with strict impartiality and according to the best of his
ability. If appointed, Inspectors shall take charge of the polls and, when the
vote is completed, shall make a certificate of the result of the vote taken and
of such other facts as may be required by law.
SECTION 1.6. Records at Shareholder Meetings. At each meeting of the
Shareholders there shall be open for inspection the minutes of the last
previous Meeting of Shareholders of the Trust and a list of the Shareholders of
the Trust, certified to be true and correct by the Secretary or other proper
agent of the Trust, as of the record date of the meeting or the date of closing
of transfer books, as the case may be. Such list of Shareholders shall contain
the name of each Shareholder. Shareholders shall have such other rights and
procedures of inspection of the books and records of the Trust as are granted
to shareholders of a Delaware corporation.
SECTION 1.7. Shareholders' Action in Writing. Nothing in this Article
1 shall limit the power of the Shareholders to take any action by means of
written instruments without a meeting, as permitted by Section 7.6 of the
Declaration.
ARTICLE 2
TRUSTEES AND TRUSTEES' MEETINGS
SECTION 2.1. Number of Trustees. The number of Trustees shall be
eight (8) until such time as additional trustees are elected by the
Shareholders pursuant to Section 4.1(e) hereof and the meeting of shareholders
called for July 21, 1995 of the Trust's predecessor. Thereafter, the number of
Trustees shall be fourteen (14), provided that such number shall be
automatically reduced upon the death, resignation or retirement of any Trustee
until the number of Trustees is eight (8). The number of Trustees shall
thereafter be such number, authorized by the Declaration, as from time to time
shall be fixed by a vote of the Trustees in accordance with Section 2.8 hereof.
SECTION 2.2. Regular Meetings of Trustees. Regular meetings of the
Trustees may be held without call or notice at such places and at such times as
the Trustees may from time to time determine; provided, that notice of such
determination, and of the time and place of the first regular meeting
thereafter, shall be given to each absent Trustee in accordance with Section
2.4 hereof.
SECTION 2.3. Special Meetings of Trustees. Special meetings of the
Trustees may be held at any time and at any place when called by the President
or the Treasurer or by three (3) or more
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<PAGE> 7
Trustees, or if there shall be less than three (3) Trustees, by any Trustee;
provided, that notice of the time and place thereof is given to each Trustee
in accordance with Section 2.4 hereof by the Secretary or an Assistant
Secretary or by the officer or the Trustees calling the meeting.
SECTION 2.4. Notice of Meetings. Notice of any regular or special
meeting of the Trustees shall be sufficient if given in writing to each
Trustee, and if sent by mail at least five (5) days, by a nationally recognized
overnight delivery service at least two (2) days or by facsimile at least
twenty-four (24) hours, before the meeting, addressed to his usual or last
known business or residence address, or if delivered to him in person at least
twenty-four (24) hours before the meeting. Notice of a special meeting need
not be given to any Trustee who was present at an earlier meeting, not more
than thirty-one (31) days prior to the subsequent meeting, at which the
subsequent meeting was called. Unless statute, these bylaws or a resolution of
the Trustees might otherwise dictate, notice need not state the business to be
transacted at or the purpose of any meeting of the Board of Trustees. Notice
of a meeting may be waived by any Trustee by written waiver of notice, executed
by him or her before or after the meeting, and such waiver shall be filed with
the records of the meeting. Attendance by a Trustee at a meeting shall
constitute a waiver of notice, except where a Trustee attends a meeting for the
purpose of protesting prior thereto or at its commencement the lack of notice.
No notice need be given of action proposed to be taken by unanimous written
consent.
SECTION 2.5. Quorum: Presiding Trustee. At any meeting of the
Trustees, a Majority of the Trustees shall constitute a quorum. Any meeting may
be adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Unless the Trustees shall otherwise elect,
generally or in a particular case, the Chairman shall be the presiding Trustee
at each meeting of the Trustees or in the absence of the Chairman, the
President shall preside over the meeting. In the absence of both the Chairman
and the President, the Trustees present at the meeting shall elect one of their
number as presiding Trustee of the meeting.
SECTION 2.6. Participation by Telephone. One or more of the Trustees
may participate in a meeting thereof or of any Committee of the Trustees by
means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
SECTION 2.7. Location of Meetings. Trustees' meetings may be held at
any place, within or without the State of Delaware.
SECTION 2.8. Actions by Trustees. Unless statute, the declaration
or these bylaws requires a greater proportion, action of a majority of the
Trustees present at a meeting at which a quorum is present is action of the
Board of Trustees. Notwithstanding the preceding sentence, a vote of not less
than two-thirds (2/3) of the Trustees then in office shall be required to
(directly or indirectly through a reorganization or an amendment to the
Declaration) (i) amend Section 2.1, 2.12 or 2.13 of these By-Laws, (ii)
nominate or elect a new Trustee, (iii) adopt a retirement plan other than a
deferred compensation plan or (iv) amend this supermajority provision of the
By-Laws. Voting at Trustees' meetings may be conducted orally, by show of
hands, or, if requested by any Trustee, by written ballot. The results of
all voting shall be recorded by the Secretary in the minute book.
3
<PAGE> 8
SECTION 2.9. Rulings of Presiding Trustee. All other rules of conduct
adopted and used at any Trustees' meeting shall be determined by the presiding
Trustee of such meeting, whose ruling on all procedural matters shall be
final.
SECTION 2.10. Trustees' Action in Writing. Nothing in this Article 2
shall limit the power of the Trustees to take action by means of a written
instrument without a meeting, as provided in Section 4.2 of the Declaration.
SECTION 2.11. Resignations. Any Trustee may resign at any time by
written instrument signed by him and delivered to the Chairman, the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
SECTION 2.12. Tenure of Trustees. Notwithstanding any other
provision herein to the contrary, through June 30, 1996, the term of office of
each Trustee shall end at the time such Trustee reaches the age of seventy-six
and one-half years (76 1/2) or seventy-four and one-half years (74 1/2) for
each person who had not been elected before January 1, 1986 as a trustee or
director of any open end investment company managed by Van Kampen American
Capital Asset Management, Inc. (formerly American Capital Asset Management,
Inc. and, prior thereto, American General Capital Management, Inc.) and on and
after July 1, 1996, the term of office of each Trustee shall end at the time
such Trustee reaches the age of seventy-six and one-half years (76 1/2) or
seventy-two and one-half years (72 1/2) for each person who had not been
elected before January 1, 1986 as a trustee or director of any open end
investment company managed by Van Kampen American Capital Asset Management,
Inc.; provided that the term of office of each Trustee shall end on December
31st of the year in which such Trustee reaches the age of seventy-five years
(75) for each person first elected on or after July 1, 1995 and prior to
December 1, 1995 as a Trustee who was over the age of seventy-two and one half
(72 1/2) and under the age of seventy-five (75) at the time of such election;
and further provided that the term of office of each Trustee first elected on
or after July 1, 1995 and prior to December 1, 1995 who is seventy-five years
(75) of age at the time of such election shall expire as of the date such
Trustees reaches the age of seventy-six years (76).
SECTION 2.13. Chairman of the Board. The Trustees shall from time to
time elect one of the Trustees to serve as Chairman of the Board of Trustees,
provided that the chairman shall be a Trustee who is not an "interested person"
of the Trust or the Trust's investment adviser, within the meaning of the 1940
Act.
ARTICLE 3
OFFICERS
SECTION 3.1. Officers of the Trust. The officers of the Trust shall
consist of a President, a Treasurer and a Secretary, and may include a
Controller and one or more Vice Presidents, Assistant Treasurers and Assistant
Secretaries, and such other officers as the Trustees may designate. Any person
may hold more than one office.
SECTION 3.2. Time and Terms of Election. The President, the Treasurer
and the Secretary shall be elected by the Trustees at their first meeting and
thereafter at the annual meeting of the Trustees, as provided in Section 4.2 of
the Declaration. Such officers shall hold office until the next
4
<PAGE> 9
annual meeting of the Trustees and until their successors shall have been duly
elected and qualified, and may be removed at any meeting by the affirmative
vote of a Majority of the Trustees. All other officers of the Trust may be
elected or appointed at any meeting of the Trustees. Such officers shall hold
office for any term, or indefinitely, as determined by the Trustees, and shall
be subject to removal, with or without cause, at any time by the Trustees.
SECTION 3.3. Resignation and Removal. Any officer may resign at any
time by giving written notice to the Trustees. Such resignation shall take
effect at the time specified therein, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make
it effective. If the office of any officer or agent becomes vacant by reason
of death, resignation, retirement, disqualification, removal from office or
otherwise, the Trustees may choose a successor, who shall hold office for the
unexpired term in respect of which such vacancy occurred. Except to the extent
expressly provided in a written agreement with the Trust, no officer resigning
or removed shall have any right to any compensation for any period following
such resignation or removal, or any right to damage on account of such removal.
SECTION 3.4. Fidelity Bond. The Trustees may, in their discretion,
direct any officer appointed by them to furnish at the expense of the Trust a
fidelity bond approved by the Trustees, in such amount as the Trustees may
prescribe.
SECTION 3.5. President. The President shall be the chief executive
officer of the Trust and, subject to the supervision of the Trustees, shall
have general charge and supervision of the business, property and affairs of
the Trust and such other powers and duties as the Trustees may prescribe.
SECTION 3.6. Vice Presidents. In the absence or disability of the
President, the Vice President or, if there shall be more than one, the Vice
Presidents in the order of their seniority or as otherwise designated by the
Trustees, shall exercise all of the powers and duties of the President. The
Vice Presidents shall have the power to execute bonds, notes, mortgages and
other contracts, agreements and instruments in the name of the Trust, and shall
do and perform such other duties as the Trustees or the President shall direct.
SECTION 3.7. Treasurer and Assistant Treasurers. The Treasurer shall
be the chief financial officer of the Trust, and shall have the custody of the
Trust's funds and Securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit
all moneys, and other valuable effects in the name and to the credit of the
Trust, in such depositories as may be designated by the Trustees, taking
proper vouchers for such disbursements, shall have such other duties and
powers as may be prescribed from time to time by the Trustees, and shall
render to the Trustees, whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the Trust. If no
Controller is elected, the Treasurer shall also have the duties and powers
of the Controller, as provided in these Bylaws. Any Assistant Treasurer shall
have such duties and powers as shall be prescribed from time to time by the
Trustees or the Treasurer, and shall be responsible to and shall report to the
Treasurer. In the absence or disability of the Treasurer, the Controller shall
have the powers and duties of the Treasurer. If no Controller is elected, the
Assistant Treasurer or, if there shall be more than one, the Assistant
Treasurers in the order of their seniority or as otherwise designated by the
Trustees or the Chairman, shall have the powers and duties of the Treasurer.
5
<PAGE> 10
SECTION 3.8. Controller and Assistant Controllers. If a Controller
is elected, the Controller shall be the chief accounting officer of the Trust
and shall be in charge of its books of account and accounting records and of
its accounting procedures, and shall have such duties and powers as are
commonly incident to the office of a controller, and such other duties and
powers as may be prescribed from time to time by the Trustees. The Controller
shall be responsible to and shall report to the Trustees, but in the
ordinary conduct of the Trust's business, shall be under the supervision of
the Treasurer. Any Assistant Controller shall have such duties and powers as
shall be prescribed from time to time by the Trustees or the Controller, and
shall be responsible to and shall report to the Controller. In the absence or
disability of the Controller, the Assistant Controller or, if there shall be
more than one, the Assistant Controllers in the order of their seniority or as
otherwise designated by the Trustees, shall have the powers and duties of the
Controller.
SECTION 3.9. Secretary and Assistant Secretaries. The
Secretary shall, if and to the extent requested by the Trustees, attend all
meetings of the Trustees, any Committee of the Trustees and/or the Shareholders
and record all votes and the minutes of proceedings in a book to be kept for
that purpose, shall give or cause to be given notice of all meetings of the
Trustees, any Committee of the Trustees, and of the Shareholders and shall
perform such other duties as may be prescribed by the Trustees. The Secretary,
or in his absence any Assistant Secretary, shall affix the Trust's seal to any
instrument requiring it, and when so affixed, it shall be attested by the
signature of the Secretary or an Assistant Secretary. The Secretary shall be
the custodian of the Share records and all other books, records and papers of
the Trust (other than financial) and shall see that all books, reports,
statements, certificates and other documents and records required by law are
properly kept and filed. In the absence or disability of the Secretary, the
Assistant Secretary or, if there shall be more than one, the Assistant
Secretaries in the order of their seniority or as otherwise designated by the
Trustees, shall have the powers and duties of the Secretary.
SECTION 3.10. Substitutions. In case of the absence or disability
of any officer of the Trust, or for any other reason that the Trustees may deem
sufficient, the Trustees may delegate, for the time being, the powers or
duties, or any of them, of such officer to any other officer, or to any
Trustee.
SECTION 3.11. Execution of Deeds, etc. Except as the Trustees may
generally or in particular cases otherwise authorize or direct, all deeds,
leases, transfers, contracts, proposals, bonds, notes, checks, drafts and other
obligations made, accepted or endorsed by the Trust shall be signed or endorsed
on behalf of the Trust by its properly authorized officers or agents as
provided in the Declaration.
SECTION 3.12. Power to Vote Securities. Unless otherwise ordered by
the Trustees, the Treasurer shall have full power and authority on behalf of
the Trust to give proxies for, and/or to attend and to act and to vote at, any
meeting of stockholders of any corporation in which the Trust may hold stock,
and at any such meeting the Treasurer or his proxy shall possess and may
exercise any and all rights and powers incident to the ownership of such stock
which, as the owner thereof, the Trust might have possessed and exercised if
present. The Trustees, by resolution from time to time, or, in the absence
thereof, the Treasurer, may confer like powers upon any other person or persons
as attorneys and proxies of the Trust.
6
<PAGE> 11
ARTICLE 4
COMMITTEES
SECTION 4.1. Power of Trustees to Designate Committees. The Trustees,
by vote of a Majority of the Trustees, may elect from their number an Executive
Committee and any other Committees and may delegate thereto some or all of
their powers except those which by law, by the Declaration or by these
Bylaws may not be delegated; provided, that an Executive Committee shall not
be empowered to elect the President, the Treasurer or the Secretary, to amend
the Bylaws, to exercise the powers of the Trustees under this Section 4.1 or
under Section 4.3 hereof, or to perform any act for which the action of a
Majority of the Trustees is required by law, by the Declaration or by these
Bylaws. The members of any such Committee shall serve at the pleasure of the
Trustees.
SECTION 4.2. Rules for Conduct of Committee Affairs. Except as
otherwise provided by the Trustees, each Committee elected or appointed
pursuant to this Article 4 may adopt such standing rules and regulations for
the conduct of its affairs as it may deem desirable, subject to review and
approval of such rules and regulations by the Trustees at the next succeeding
meeting of the Trustees, but in the absence of any such action or any contrary
provisions by the Trustees, the business of each Committee shall be conducted,
so far as practicable, in the same manner as provided herein and in the
Declaration for the Trustees.
SECTION 4.3. Trustees May Alter, Abolish, etc., Committees Trustees
may at any time alter or abolish any Committee, change membership of any
Committee, or revoke, rescind, waive or modify action of any Committee or the
authority of any Committee with respect to any matter or class of matters;
provided, that no such action shall impair the rights of any third parties.
SECTION 4.4. Minutes: Review by Trustees. Any Committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees.
ARTICLE 5
SEAL
The seal of the Trust, if any, may be affixed to any instrument, and
the seal and its attestation may be lithographed, engraved or otherwise printed
on any document with the same force and effect as if had been imprinted and
affixed manually in the same manner and with the same force and effect as if
done by a Delaware corporation. Unless otherwise required by the Trustees,
the seal shall not be necessary to be placed on, and its absence shall not
impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 6
SHARES
SECTION 6.1. Issuance of Shares. The Trustees may issue an unlimited
number of Classes of Shares of any or all Series either in certificated or
uncertificated form, they may issue certificates to the
7
<PAGE> 12
holders of a Class of Shares of a Series which was originally issued in
uncertificated form, and if they have issued Shares of any Series in
certificated form, they may at any time discontinue the issuance of Share
certificates for such Series and may, by written notice to such Shareholders of
such Series require the surrender of their Share certificates to the Trust for
cancellation, which surrender and cancellation shall not affect the ownership
of Shares for such Series.
SECTION 6.2. Uncertificated Shares. For any Class of Shares for which
the Trustees issue Shares without certificates, the Trust or the Transfer Agent
may either issue receipts therefor or may keep accounts upon the books of the
Trust for the record holders of such Shares, who shall in either case be
deemed, for all purposes hereunder, to be the holders of such Shares as if they
had received certificates therefor and shall be held to have expressly assented
and agreed to the terms hereof and of the Declaration.
SECTION 6.3. Share Certificates. For any Class of Shares for which
the Trustees shall issue Share certificates, each Shareholder of such Class
shall be entitled to a certificate stating the number of Shares owned by him in
such form as shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Trust. Such signatures may be facsimiles if the certificate
is countersigned by a Transfer Agent, or by a Registrar, other than a
Trustee, officer or employee of the Trust. In case any officer who has signed
or whose facsimile signature has been placed on such certificate shall cease to
be such officer before such certificate is issued, it may be issued by the
Trust with the same effect as if he were such officer at the time of its issue.
SECTION 6.4. Lost, Stolen, etc., Certificates. If any
certificate for certificated Shares shall be lost, stolen, destroyed or
mutilated, the Trustees may authorize the issuance of a new certificate of the
same tenor and for the same number of Shares in lieu thereof. The Trustees
shall require the surrender of any mutilated certificate in respect of which a
new certificate is issued, and may, in their discretion, before the issuance of
a new certificate, require the owner of a lost, stolen or destroyed
certificate, or the owner's legal representative, to make an affidavit or
affirmation setting forth such facts as to the loss, theft or destruction as
they deem necessary, and to give the Trust a bond in such reasonable sum as the
Trustees direct, in order to indemnify the Trust.
ARTICLE 7
TRANSFER OF SHARES
SECTION 7.1. Transfer Agents, Registrars, etc. As approved in Section
5.2(e) of the Declaration, the Trustees shall have the authority to employ and
compensate such transfer agents and registrars with respect to the Shares of
the Trust as the Trustees shall deem necessary or desirable. In addition, the
Trustees shall have the power to employ and compensate such dividend dispersing
agents, warrant agents and agents for reinvestment of dividends as they shall
deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.
SECTION 7.2 Transfer of Shares. The Shares of the Trust shall be
transferable on the books of the Trust only upon delivery to the Trustees or a
transfer agent of the Trust of proper documentation as provided in Section
6.1(m) of the Declaration. The Trust, or its transfer agents, shall be
authorized to
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<PAGE> 13
refuse any transfer unless and until presentation of such evidence as may be
reasonably required to show that the requested transfer is proper.
SECTION 7.3 Registered Shareholders. The Trust may deem and treat
the holder of record of any Shares the absolute owner thereof for all purposes
and shall not be required to take any notice of any right or claim of right of
any other person.
ARTICLE 8
AMENDMENTS
SECTION 8.1. Bylaws Subject to Amendment. These Bylaws may be
altered, amended or repealed, in whole or in part, at any time by vote of the
holders of a majority of the Shares issued, outstanding and entitled to vote.
The Trustees, by vote of a Majority of the Trustees (unless a greater vote is
required by Section 2.8 hereof), may alter, amend or repeal these Bylaws, in
whole or in part, including Bylaws adopted by the Shareholders, except with
respect to any provision hereof which by law, the Declaration or these Bylaws
requires action by the Shareholders. Bylaws adopted by the Trustees may be
altered, amended or repealed by the Shareholders.
SECTION 8.2. Notice of Proposal to Amend Bylaws Required. No proposal
to amend or repeal these Bylaws or to adopt new Bylaws shall be acted upon at a
meeting unless either (i) such proposal is stated in the notice or in the
waiver of notice, as the case may be, of the meeting of the Trustees or
Shareholders at which such action is taken, or (ii) all of the Trustees or
Shareholders, as the case may be, are present at such meeting and all agree to
consider such proposal without protesting the lack of notice.
9
<PAGE> 1
EXHIBIT 4
NUMBER SHARES
__________ __________
VAN KAMPEN AMERICAN CAPITAL ________ FUND
ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES that is the owner of
*SEE REVERSE FOR CERTAIN DEFINITIONS
_________________
CUSIP 024904 30 2
_________________
fully paid and nonassessable shares of beneficial interest of the par value of
$0.01 per share of Van Kampen American Capital ________ Fund, transferable on
the books of the Fund by the holder thereof in person or by duly authorized
attorney upon surrender of this certificate properly endorsed. This certificate
is not valid unless countersigned by the Transfer Agent.
WITNESS THE FACSIMILE SEAL OF THE FUND AND THE FACSIMILE SIGNATURES OF
ITS DULY AUTHORIZED OFFICERS.
Dated
[VAN KAMPEN AMERICAN CAPITAL
________ FUND
DELAWARE SEAL]
NORI L. GABERT DON G. POWELL
SECRETARY PRESIDENT
KC 002717
--------------------------------------------------------------------------------
COUNTERSIGNED by ACCESS INVESTOR SERVICES, INC.
P.O. BOX 418256, KANSAS CITY, MO 64141-9256
TRANSFER AGENT
By
----------------------------------------------------
AUTHORIZED OFFICER
--------------------------------------------------------------------------------
PLEASE DETACH AND DISCARD UNLESS CHANGES ARE REQUIRED
VAN KAMPEN AMERICAN CAPITAL ________ FUND
NUMBER SHARES
KC
ACCOUNT NO. ALPHA CODE DEALER NO. CONFIRM NO.
TRADE DATE CONFIRM DATE BATCH I.D. NO.
CHANGE NOTICE: IF THE ABOVE INFORMATION
IS INCORRECT OR MISSING, PLEASE PRINT
THE CORRECT INFORMATION BELOW, AND RETURN
TO:
ACCESS
P.O. BOX 418256
KANSAS CITY, MISSOURI 64141-9256
----------------------------------------
----------------------------------------
----------------------------------------
<PAGE> 2
--------------------------------------------------------------------------------
REQUIREMENTS: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED BY ONE OF THE FOLLOWING:
A BANK OR TRUST COMPANY; A BROKER/DEALER; A CREDIT UNION; A NATIONAL SECURITIES
EXCHANGE, REGISTERED SECURITIES ASSOCIATION OR CLEARING AGENCY; A SAVINGS AND
LOAN ASSOCIATION; OR A FEDERAL SAVINGS BANK.
--------------------------------------------------------------------------------
For value received, hereby sell, assign and transfer unto
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
________________________________________________________________________________
_________________________________________________________________________ Shares
of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
_______________________________________________________________________ Attorney
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.
Dated, _________________________________________ 19 ______
__________________________________________________________________
Owner
__________________________________________________________________
Signature of Co-Owner, if any
IMPORTANT { BEFORE SIGNING, READ AND COMPLY CAREFULLY
{ WITH REQUIREMENTS PRINTED ABOVE.
SIGNATURE(S) guaranteed by:
________________________________________________________________________________
--------------------------------------------------------------------------------
*The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants UNIF GIFT MIN. ACT - ________ Custodian _________
in common (Cust) (Minor)
under Uniform Gifts to
TEN ENT - as tenants by Minors Act
the entireties
____________________________
JT TEN - as joint tenants (State)
with right of sur-
vivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list
--------------------------------------------------------------------------------
________________________________________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
<PAGE> 1
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the _____ day of _______________, 1995, by and between VAN
KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND, a Delaware business trust,
hereinafter referred to as the "FUND," and VAN KAMPEN AMERICAN CAPITAL ASSET
MANAGEMENT, INC., a Delaware corporation, hereinafter referred to as the
"ADVISER".
The FUND and the ADVISER agree as follows:
l. Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the FUND's
Trustees and in conformity with applicable laws, the FUND's Agreement and
Declaration of Trust ("Declaration of Trust"), By-laws, registration statements,
prospectus and stated investment objectives, policies and restrictions, shall:
a. manage the investment and reinvestment of the FUND's assets including, by
way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in the FUND's portfolio, and formulation and implementation of
investment programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the FUND's account with brokers or dealers selected by
the ADVISER;
c. conduct and manage the day-to-day operations of the FUND including, by way
of illustration, the preparation of registration statement and amendments
thereto, the furnishing of routine legal services except for services provided
by outside counsel to the FUND selected by the Trustees, and the supervision of
the FUND's Treasurer and the personnel working under his direction; and
d. furnish to the FUND office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each FUND trustee and FUND officer who is an
affiliated person of the ADVISER, except the compensation of the FUND's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the FUND the most favorable price and
execution available and shall maintain records adequate to demonstrate
compliance with this requirement. Subject to prior authorization by the FUND's
Trustees of appropriate policies and procedures, the ADVISER may, to the extent
authorized by law, cause the FUND to pay a broker or dealer that provides
brokerage and research services to the ADVISER an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction. In the event of such
<PAGE> 2
authorization and to the extent authorized by law the ADVISER shall not be
deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of such action.
Except as otherwise agreed, or as otherwise provided herein, the FUND shall pay,
or arrange for others to pay, all its expenses other than those expressly stated
to be payable by the ADVISER hereunder, which expenses payable by the FUND shall
include (i) interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase and sale of portfolio investments; (iii)
compensation of its trustees and officers other than those who are affiliated
persons of the ADVISER; (iv) compensation of its Treasurer, compensation of
personnel working under the Treasurer's direction, and expenses of office space,
facilities, and equipment used by the Treasurer and such personnel in the
performance of their normal duties for the FUND which consist of maintenance of
the accounts, books and other documents which constitute the record forming the
basis for the FUND's financial statements, preparation of such financial
statements and other FUND documents and reports of a financial nature required
by federal and state laws, and participation in the production of the FUND's
registration statement, prospectuses, proxy solicitation materials and reports
to stockholders; (v) fees of outside counsel to and of independent accountants
of the FUND selected by the Trustees; (vi) custodian, registrar and transfer
agent fees and expenses; (vii) expenses related to the repurchase or redemption
of its shares including expenses related to a program of periodic repurchases or
redemptions; (viii) expenses related to the issuance of its shares against
payment therefor by or on behalf of the subscribers thereto; (ix) fees and
related expenses of registering and qualifying the FUND and its shares for
distribution under state and federal securities laws, if any; (x) expenses for
servicing stockholder accounts; (xi) insurance premiums for fidelity coverage
and errors and omissions insurance; (xii) dues for the FUND's membership in
trade associations approved by the Trustees; and (xiii) such nonrecurring
expenses as may arise, including those associated with actions, suits, or
proceedings to which the FUND is a party and the legal obligation which the FUND
may have to indemnify its officers and trustees with respect thereto. To the
extent that any of the foregoing expenses are allocated between the FUND and any
other party, such allocations shall be pursuant to methods approved by the
Trustees.
2. Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in other
activities, so long as the services rendered to the FUND are not impaired.
Except as otherwise required by the Investment Company Act of 1940 any of the
shareholders, trustees, officers and employees of the FUND may be a shareholder,
director, officer or employee of, or be otherwise interested in, the ADVISER,
and in any person controlled
2
<PAGE> 3
by or under common control with the ADVISER, and the ADVISER, and any person
controlled by or under common control with the ADVISER, may have an interest in
the FUND.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the part
of the ADVISER, the ADVISER shall not be subject to liability to the FUND, or to
any stockholder of the FUND, for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
3. Compensation Payable to ADVISER
The ADVISER shall provide to the FUND the services provided for herein without
charge.
The FUND's obligation to reimburse the ADVISER for certain expenses as described
in Section 1 shall be reduced by any commissions, tender solicitation and other
fees, brokerage or similar payments received by the ADVISER, or any other direct
or indirect majority owned subsidiary of VK/AC Holding, Inc., in connection with
the purchase and sale of portfolio investments of the FUND, less any direct
expenses incurred by such person, in connection with obtaining such commissions,
fees, brokerage or similar payments. The ADVISER shall use its best efforts to
recapture all available tender offer solicitation fees and exchange offer fees
in connection with the FUND's portfolio transactions and shall advise the Board
of Trustees of any other commissions, fees, brokerage or similar payments which
may be possible for the ADVISER or any other direct or indirect majority owned
subsidiary of VK/AC Holding, Inc. to receive in connection with the FUND's
portfolio transactions or other arrangements which may benefit the FUND.
4. Duration of Agreement
This Agreement shall have an initial term of two years and shall continue in
force from year to year thereafter, but only so long as such continuance is
approved at least annually by the vote of a majority of the FUND's trustees who
are not parties to this Agreement or interested persons of any such parties,
cast in person at a meeting called for the purpose of voting on such approval,
and by a vote of a majority of the FUND's Trustees or a majority of the FUND's
outstanding voting securities.
This Agreement shall terminate automatically in the event of its assignment. The
Agreement may be terminated at any time by the FUND's Trustees, by vote of a
majority of the FUND's outstanding voting securities, or by the ADVISER, on not
more than 60 days', nor less than 30 days' written notice, or upon such shorter
notice as may be mutually agreed upon. Such termination shall be without payment
of any penalty.
3
<PAGE> 4
5. Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person," "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have their respective meanings defined in the Investment Company Act of 1940 and
the Rules and Regulations thereunder, subject, however, to such exemptions as
may be granted to either the ADVISER or the FUND by the Securities and Exchange
Commission, or such interpretive positions as may be taken by the Securities and
Exchange Commission or its staff, under said Act, and the term "brokerage and
research services" shall have the meaning given in the Securities Exchange Act
of 1934 and the Rules and Regulations thereunder.
The execution of this Agreement has been authorized by the FUND's Trustees and
by the sole shareholder. This Agreement is executed on behalf of the Fund or
the Trustees of the FUND as Trustees and not individually and that the
obligations of this Agreement are not binding upon any of the Trustees, officers
or shareholders of the FUND individually but are binding only upon the assets
and property of the FUND. A Certificate of Trust in respect of the Fund is on
file with the Secretary of State of Delaware.
The parties hereto each have caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer as of the above date.
VAN KAMPEN AMERICAN CAPITAL SMALL CAPITALIZATION FUND
By:
-------------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
VAN KAMPEN AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By:
-------------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
4
<PAGE> 1
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the ___ day of _______, 1995 by and between each
of the VAN KAMPEN AMERICAN CAPITAL OPEN END FUNDS set forth on Schedule "A"
hereto, which are organized under the laws of the state and as the entities set
forth in Schedule "A" hereto, having their principal office and place of
business at Houston, Texas (collectively, the "Funds"), and ACCESS INVESTOR
SERVICES, INC., a Delaware corporation, having its principal office at Houston,
Texas, and its principal place of business at Kansas City, Missouri ("ACCESS").
R E C I T A L:
WHEREAS, each of the Funds desires to appoint ACCESS as its transfer
agent, dividend disbursing agent and shareholder service agent and ACCESS
desires to accept such appointments;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1. TERMS OF APPOINTMENT; DUTIES OF ACCESS.
1.01 Subject to the terms and conditions set forth in this
Agreement, each of the Funds hereby employs and appoints ACCESS as its transfer
agent, dividend disbursing agent and shareholder service agent.
1.02 ACCESS hereby accepts such employment and appointments and
agrees that on and after the effective date of this Agreement it will act as
the transfer agent, dividend disbursing agent and shareholder service agent for
each of the Funds on the terms and conditions set forth herein.
1.03 ACCESS agrees that its duties and obligations hereunder will
be performed in a competent, efficient and workmanlike manner with due
diligence in accordance with reasonable industry practice, and that the
necessary facilities, equipment and personnel for such performance will be
provided.
1.04 In order to assure compliance with section 1.03 and to
implement a cooperative effort to improve the quality of transfer agency and
shareholder services received by each of the Funds and its shareholders,
1
<PAGE> 2
ACCESS agrees to provide and maintain quantitative performance objectives,
including maximum target turn-around times and maximum target error rates, for
the various services provided hereunder. ACCESS also agrees to provide a
reporting system designed to provide the Board of Trustees or Board of
Directors of each of the Funds (the "Board") on a quarterly basis with
quantitative data comparing actual performance for the period with the
performance objectives. The foregoing procedures are designed to provide a
basis for continuing monitoring by the Board of the quality of services
rendered hereunder.
ARTICLE 2. FEES AND EXPENSES.
2.01 For the services to be performed by ACCESS pursuant to this
Agreement, each of the Funds agrees to pay ACCESS the fees provided in the fee
schedules agreed upon from time to time by each of the Funds and ACCESS.
2.02 In addition to the amounts paid under section 2.01 above, each
of the Funds agrees to reimburse ACCESS promptly for such Fund's reasonable
out-of-pocket expenses or advances paid on its behalf by ACCESS in connection
with its performance under this Agreement for postage, freight, envelopes,
checks, drafts, continuous forms, reports and statements, telephone, telegraph,
costs of outside mailing firms, necessary outside record storage costs, media
for storage of records (e.g., microfilm, microfiche and computer tapes) and
printing costs incurred due to special requirements of such Fund. In addition,
any other special out-of-pocket expenses paid by ACCESS at the specific request
of any of the Funds will be promptly reimbursed by the requesting Fund.
Postage for mailings of dividends, proxies, Fund reports and other mailings to
all shareholder accounts shall be advanced to ACCESS by the concerned Fund
three business days prior to the mailing date of such materials.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF ACCESS.
ACCESS represents and warrants to each of the Funds that:
3.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware.
3.02 It is duly qualified to carry on its business in the states of
Texas and Missouri.
3.03 It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement.
2
<PAGE> 3
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have during the term of this
Agreement access to the necessary facilities, equipment and personnel to
perform its duties and obligations hereunder.
3.06 It will maintain a system regarding "as of" transactions as
follows:
(a) Each "as of" transaction effected at a price other
than that in effect on the day of processing for which an estimate has
not been given to any of the affected Funds and which is necessitated
by ACCESS' error, or delay for which ACCESS is responsible or which
could have been avoided through the exercise of reasonable care, will
be identified, and the net effect of such transactions determined, on
a daily basis for each such Fund.
(b) The cumulative net effect of the transactions
included in paragraph (a) above will be determined each day throughout
each month. If, on any day during the month, the cumulative net
effect upon any Fund is negative and exceeds an amount equivalent to
1/2 of 1 cent per share of such Fund, ACCESS shall promptly make a
payment to such Fund (in cash or through use of a credit as described
in paragraph (c) below) in such amount as necessary to reduce the
negative cumulative net effect to less than 1/2 of 1 cent per share of
such Fund. If on the last business day of the month the cumulative
net effect (adjusted by the amount of any payments pursuant to the
preceding sentence) upon any Fund is negative, such Fund shall be
entitled to a reduction in the monthly transfer agency fee next
payable by an equivalent amount, except as provided in paragraph (c)
below. If on the last business day of the month the cumulative net
effect (similarly adjusted) upon any Fund is positive, ACCESS shall be
entitled to recover certain past payments and reductions in fees, and
to a credit against all future payments and fee reductions made under
this paragraph to such Fund, as described in paragraph (c) below.
(c) At the end of each month, any positive cumulative net
effect upon any Fund shall be deemed to be a credit to ACCESS which
shall first be applied to recover any payments and fee reductions made
by ACCESS to such Fund under paragraph (b) above during the calendar
year by increasing the amount of the monthly transfer agency fee next
payable in an amount equal to prior payments and fee
3
<PAGE> 4
reductions made during such year, but not exceeding the sum of that
month's credit and credits arising in prior months during such year to
the extent such prior credits have not previously been utilized as
contemplated by this paragraph (c). Any portion of a credit to ACCESS
not so used shall remain as a credit to be used as payment against the
amount of any future negative cumulative net effects that would
otherwise require a payment or fee reduction to such Fund pursuant to
paragraph (b) above.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE FUNDS.
Each of the Funds hereby represents and warrants on behalf of
itself only and not any other Funds that are a party to this Agreement that:
4.01 It is duly organized and existing and in good standing under
the laws of the commonwealth or state set forth in Schedule "A" hereto.
4.02 It is empowered under applicable laws and regulations and by
its Declaration of Trust or Articles of Incorporation and by-laws to enter into
and perform this Agreement.
4.03 All requisite proceedings have been taken by its Board to
authorize it to enter into and perform this Agreement.
4.04 It is an open-end, diversified, management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended, is currently effective and will remain effective, and appropriate
state securities laws filings have been made and will continue to be made, with
respect to all of its shares being offered for sale.
ARTICLE 5. INDEMNIFICATION.
5.01 ACCESS shall not be responsible for and each of the Funds
shall indemnify and hold ACCESS harmless from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liabilities arising out of or attributable to:
4
<PAGE> 5
(a) All actions of ACCESS required to be taken by ACCESS
for the benefit of such Fund pursuant to this Agreement, provided
ACCESS has acted in good faith with due diligence and without
negligence or willful misconduct.
(b) The reasonable reliance by ACCESS on, or reasonable
use by ACCESS of, information, records and documents which have been
prepared or maintained by or on behalf of such Fund or have been
furnished to ACCESS by or on behalf of such Fund.
(c) The reasonable reliance by ACCESS on, or the carrying
out by ACCESS of, any instructions or requests of such Fund.
(d) The offer or sale of such Fund's shares in violation
of any requirement under the federal securities laws or regulations or
the securities laws or regulations of any state or in violation of any
stop order or other determination or ruling by any federal agency or
any state with respect to the offer or sale of such shares in such
state unless such violation results from any failure by ACCESS to
comply with written instructions of such Fund that no offers or sales
of such Fund's shares be made in general or to the residents of a
particular state.
(e) Such Fund's refusal or failure to comply with the
terms of this Agreement, or such Fund's lack of good faith, negligence
or willful misconduct or the breach of any representation or warranty
of such Fund hereunder.
5.02 ACCESS shall indemnify and hold each of the Funds harmless
from and against any and all losses, damages, costs, charges, reasonable
counsel fees, payments, expenses and liability arising out of or attributable
to ACCESS' refusal or failure to comply with the terms of this Agreement, or
ACCESS' lack of good faith, negligence or willful misconduct, or the breach of
any representation or warranty of ACCESS hereunder.
5.03 At any time ACCESS may apply to any authorized officer of any
of the Funds for instructions, and may consult with any of the Funds' legal
counsel, at the expense of such concerned Fund, with respect to any matter
arising in connection with the services to be performed by ACCESS under this
Agreement, and ACCESS shall not be liable and shall be indemnified by such
concerned Fund for any action taken or omitted by it in good faith in
reasonable reliance upon such instructions or upon the opinion of such counsel.
ACCESS shall be protected and
5
<PAGE> 6
indemnified in acting upon any paper or document reasonably believed by ACCESS
to be genuine and to have been signed by the proper person or persons and shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the concerned Fund. ACCESS shall also
be protected and indemnified in recognizing stock certificates which ACCESS
reasonably believes to bear the proper manual or facsimile signatures of the
officers of the concerned Fund, and the proper countersignature of any former
transfer agent or registrar, or of a co-transfer agent or co-registrar.
5.04 In the event any party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
5.05 In no event and under no circumstances shall any party to this
Agreement be liable to another party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which one party may be
required to indemnify another, the party seeking indemnification shall promptly
notify the other party of such assertion, and shall keep the other party
advised with respect to all developments concerning such claim. The party who
may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in
any case in which the other party may be required to indemnify it except with
the other party's prior written consent.
ARTICLE 6. COVENANTS OF EACH OF THE FUNDS AND ACCESS.
6.01 Each of the Funds shall promptly furnish to ACCESS the
following:
(a) Certified copies of the resolution of its Board
authorizing the appointment of ACCESS and the execution and delivery
of this Agreement.
(b) Certified copies of its Declaration of Trust or
Articles of Incorporation and by-laws and all amendments thereto.
6
<PAGE> 7
6.02 ACCESS hereby agrees to maintain facilities and procedures
reasonably acceptable to each of the Funds for safekeeping of share
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 ACCESS shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable; provided,
however, that all accounts, books and other records of each of the Funds
(hereinafter referred to as "Fund Records") prepared or maintained by ACCESS
hereunder shall be maintained and kept current in compliance with Section 31 of
the Investment Company Act of 1940 and the Rules thereunder (such Section and
Rules being hereinafter referred to as the "1940 Act Requirements"). To the
extent required by the 1940 Act Requirements, ACCESS agrees that all Fund
Records prepared or maintained by ACCESS hereunder are the property of the
concerned Fund and shall be preserved and made available in accordance with the
1940 Act Requirements, and shall be surrendered promptly to the concerned Fund
on its request. ACCESS agrees at such reasonable times as may be requested by
the Board and at least quarterly to provide (i) written confirmation to the
Board that all Fund Records are maintained and kept current in accordance with
the 1940 Act Requirements, and (ii) such other reports regarding its
performance hereunder as may be reasonably requested by the Board.
6.04 ACCESS and each of the Funds agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
6.05 In case of any requests or demands for the inspection of any
of the Fund Records, ACCESS will endeavor to notify each of the concerned Funds
and to secure instructions from an authorized officer of each of the concerned
Funds as to such inspection. ACCESS reserves the right, however, to exhibit
such Fund Records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit such Fund Records to such person.
ARTICLE 7. TERM AND TERMINATION OF AGREEMENT.
7.01 This Agreement shall remain in effect from the date hereof
through June 30, 1995; provided, however, that this Agreement may be terminated
by any party with respect to that party for good and reasonable
7
<PAGE> 8
cause at any time by giving written notice to the other party at least 120 days
prior to the date on which such termination is to be effective. Any unpaid
fees or reimbursable expenses payable to ACCESS shall be due on any such
termination date. ACCESS agrees to use its best efforts to cooperate with each
of the Funds and the successor transfer agent or agents in accomplishing an
orderly transition.
7.02 Subject to the prior approval of the Board, this Agreement
shall be renewed and extended for periods of not more than one year each,
unless and until this Agreement is terminated in accordance with section 7.01
above.
ARTICLE 8. MISCELLANEOUS.
8.01 Except as provided in section 8.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by any party
without the written consent of ACCESS or the concerned Fund, as the case may
be; provided, however, that no consent shall be required for any merger of any
of the Funds with, or any sale of all or substantially all the assets of any of
the Funds to, another investment company.
8.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
8.03 ACCESS may, without further consent on the part of any of the
Funds, subcontract with DST, Inc., a Missouri corporation, or any other
qualified servicer, for the performance of data processing activities;
provided, however, that ACCESS shall be as fully responsible to each of the
Funds for the acts and omissions of DST, Inc., or other qualified servicer as
it is for its own acts and omissions.
8.04 ACCESS may, without further consent on the part of any of the
Funds, provide services to its affiliated companies. Such services may be
provided at cost.
8.05 This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes any
prior agreement with respect thereto, whether oral or written, and this
Agreement may not be modified except by written instrument executed by the
affected parties.
8.06 The execution of this Agreement has been authorized by the
Funds' Trustees. This Plan is executed on
behalf of the Funds or the Trustees of the Funds as Trustees and not
individually and that the obligations of this Agreement are not binding upon
any of
8
<PAGE> 9
the Trustees, officers or shareholders of the Funds individually but are
binding only upon the assets and property of the Funds. A Certificate of Trust
in respect of each of the Funds is on file with the Secretary of the State of
Delaware.
8.07 For each of those Funds that have one or more portfolios as
set forth in Schedule "A" hereto, all obligations of those Funds under this
Agreement shall apply only on a portfolio-by-portfolio basis and the assets of
one portfolio shall not be liable for the obligations of any other.
8.08 In the event of a change in the business or regulatory
environment affecting all or any portion of this Agreement, the parties hereto
agree to renegotiate such affected portions in good faith.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf and through their duly
authorized officers, as of the date first above written.
EACH OF THE VAN KAMPEN AMERICAN
CAPITAL OPEN END FUNDS LISTED ON
SCHEDULE "A" HERETO
BY:____________________________________
Vice President
ATTEST:
____________________________
Secretary
ACCESS INVESTOR SERVICES, INC.
BY:____________________________________
President
ATTEST:
____________________________
Secretary
10
<PAGE> 11
SCHEDULE "A"
VAN KAMPEN AMERICAN CAPITAL OPEN END FUNDS
<TABLE>
<CAPTION>
Type
[Corporation "C"/
Fund Name State of Business Trust "T"/
(including Portfolios) Organization Partnership "P"]
===============================================================================================================
<S> <C> <C>
[TO BE PROVIDED]
</TABLE>
11
<PAGE> 12
PRICING SCHEDULE
PRICE PER ACCOUNT PLUS OUT-OF-POCKET
______________, 1995
[TO BE PROVIDED]
12
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Amendment No. 4 to the registration statement on Form
N-1A (the "Registration Statement") of our report dated December 8, 1994,
relating to the financial statements of American Capital Small Capitalization
Fund, Inc., the predecessor of the registrant under the Registration Statement,
which appears in such Statement of Additional Information. We also consent to
the reference to us under the heading "Independent Accountants" in Item 16(h) in
such Statement of Additional Information.
/s/ PRICE WATERHOUSE LLP
Houston, Texas
August 25, 1995
<PAGE> 1
EXHIBIT 17.1
INVESTMENT COMPANIES FOR WHICH
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
ACTS AS PRINCIPAL UNDERWRITER OR DEPOSITOR
JULY 13, 1995
Van Kampen Merritt U.S. Government Trust
Van Kampen Merritt Tax Free Fund
Van Kampen Merritt Insured Tax Free Income Fund
Van Kampen Merritt Tax Free High Income Fund
Van Kampen Merritt California Insured Tax Free Fund
Van Kampen Merritt Municipal Income Fund
Van Kampen Merritt Limited Term Municipal Income Fund
Van Kampen Merritt Florida Insured Tax Free Income Fund
Van Kampen Merritt New Jersey Tax Free Income Fund
Van Kampen Merritt New York Tax Free Income Fund
Van Kampen Merritt Trust
Van Kampen Merritt High Yield Fund
Van Kampen Merritt Short-Term Global Income Fund
Van Kampen Merritt Adjustable Rate U.S. Government Fund
Van Kampen Merritt Strategic Income Fund
Van Kampen Merritt Emerging Markets Income Fund
Van Kampen Merritt Growth Fund
Van Kampen Merritt Equity Trust
Van Kampen Merritt Growth and Income Fund
Van Kampen Merritt Utility Fund
Van Kampen Merritt Balanced Fund
Van Kampen Merritt Total Return Fund
Van Kampen Merritt Pennsylvania Tax Free Income Fund
Van Kampen Merritt Money Market Trust
Van Kampen Merritt Money Market Fund
Van Kampen Merritt Tax Free Money Fund
Van Kampen Merritt Prime Rate Income Trust
Van Kampen Merritt Series Trust
American Capital Comstock Fund, Inc.
American Capital Corporate Bond Fund, Inc.
American Capital Emerging Growth Fund, Inc.
American Capital Enterprise Fund, Inc.
American Capital Equity Income Fund, Inc.
American Capital Federal Mortgage Trust
American Capital Global Managed Assets Fund, Inc.
American Capital Government Securities, Inc.
American Capital Government Target Series
American Capital Growth and Income Fund, Inc.
American Capital Harbor Fund, Inc.
American Capital High Yield Investments, Inc.
American Capital Life Investment Trust
American Capital Municipal Bond Fund, Inc.
American Capital Pace Fund, Inc.
American Capital Real Estate Securities Fund, Inc..
American Capital Reserve Fund, Inc.
American Capital Tax -Exempt Trust
American Capital Texas Municipal Securities, Inc.
American Capital U.S. Government Trust for Income
American Capital Utilities Income Fund, Inc.
American Capital World Portfolio Series, Inc.
The Govett Funds, Inc.
<PAGE> 2
<TABLE>
<S> <C>
Emerging Markets Municipal Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1
Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 352
Insured Municipals Income Trust (Discount) . . . . . . . . . . . . . . . . . . . . Series 5 through 13
Insured Municipals Income Trust (Short Intermediate Term) . . . . . . . . . . . . . Series 1 through
1009 Insured Municipals Income Trust (Intermediate Term) . . . . . . . . . . . . . . Series 5 through 84
Insured Municipals Income Trust (Limited Term) . . . . . . . . . . . . . . . . . . . Series 9 through 80
Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . . . . . . . Series 1 through 3
Insured Municipals Income Trust (Intermediate Laddered Maturity) . . . . . . . . . . Series 1 and 2
Insured Tax Free Bond Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 6
Insured Tax Free Bond Trust (Limited Term) . . . . . . . . . . . . . . . . . . . . . Series 1
Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through
Investors' Quality Tax-Exempt Trust-Intermediate . . . . . . . . . . . . . . . . . . Series 1
Investors' Corporate Income Trust . . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 12
Investors' Governmental Securities Income Trust . . . . . . . . . . . . . . . . . . Series 1 through 7
Van Kampen Merritt International Bond Income Trust . . . . . . . . . . . . . . . . . Series 1 through 21
Alabama Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1
Alabama Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 9
Arizona Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 16
Arizona Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 12
Arkansas Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 2
Arkansas Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1
California Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 142
California Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . . Series 1
California Insured Municipals Income Trust (1st Intermediate Series) . . . . . . . . Series 1 through 3
California Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . Series 1 through 21
California Insured Municipals Income Trust (Intermediate Laddered) . . . . . . . . . Series 1 through 20
Colorado Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 74
Colorado Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 18
Connecticut Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 27
Connecticut Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . Series 1
Delaware Investor's Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 and 2
Florida Insured Municipal Income Trust - Intermediate . . . . . . . . . . . . . . . . Series 1 and 2
Florida Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 95
Florida Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 and 2
Florida Insured Municipals Income Trust (Intermediate Laddered) . . . . . . . . . . . Series 1 through 12
Georgia Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 76
Georgia Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 16
Hawaii Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . Series 1
Investors' Quality Municipals Trust (AMT) . . . . . . . . . . . . . . . . . . . . . . Series 1 through 9
Kansas Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 11
Kentucky Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . Series 1 through 55
Louisiana Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 13
Maine Investor's Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . . Series 1
Maryland Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 72
Massachusetts Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . Series 1 through 31
Massachusetts Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . Series 1
Michigan Financial Institutions Trust . . . . . . . . . . . . . . . . . . . . . . . . Series 1
Michigan Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 130
Michigan Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . . . Series 1
Michigan Insured Municipals Income Trust (1st Intermediate Series) . . . . . . . . . Series 1 through 3
Michigan Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 30
Minnesota Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 55
Minnesota Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . Series 1 through 21
Missouri Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 90
Missouri Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . . . Series 1
Missouri Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 15
Missouri Insured Municipals Income Trust
(Intermediate Laddered Maturity) . . . . . . . . . . . . . . . . . . . . . . . . . Series 1
Nebraska Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 9
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
New Mexico Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 17
New Jersey Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 104
New Jersey Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . Series 1 through 22
New Jersey Insured Municipals Income Trust
(Intermediate Laddered Maturity) . . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 and 4
New York Insured Municipals Income Trust-Intermediate . . . . . . . . . . . . . . . . Series 1 through 6
New York Insured Municipals Income Trust (Limited Term) . . . . . . . . . . . . . . . Series 1
New York Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 127
New York Insured Tax-Free Bond Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1
New York Insured Municipals Income Trust
(Intermediate Laddered Maturity) . . . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 15
New York Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1
North Carolina Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . Series 1 through 81
Ohio Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 97
Ohio Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . . . . . Series 1 and 2
Ohio Insured Municipals Income Trust (Intermediate Term) . . . . . . . . . . . . . . Series 1
Ohio Insured Municipals Income Trust
(Intermediate Laddered Maturity) . . . . . . . . . . . . . . . . . . . . . . . . . . Series 3 through 6
Ohio Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 16
Oklahoma Insured Municipal Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 16
Oregon Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . . Series 1 through 53
Pennsylvania Insured Municipals Income Trust - Intermediate . . . . . . . . . . . . . Series 1 through 6
Pennsylvania Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 204
Pennsylvania Insured Municipals Income Trust (Premium Bond Series) . . . . . . . . . Series 1
Pennsylvania Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . Series 1 through 14
South Carolina Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . Series 1 through 79
Tennessee Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1-3 and 5-31
Texas Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1 through 40
Texas Insured Municipal Income Trust (Intermediate Ladder) . . . . . . . . . . . . . Series 1
Virginia Investors' Quality Tax-Exempt Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 65
Van Kampen Merritt Utility Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 6
Van Kampen Merritt Insured Income Trust . . . . . . . . . . . . . . . . . . . . . . Series 1 through 45
Van Kampen Merritt Insured Income Trust (Intermediate Term) . . . . . . . . . . . . . Series 1 through 44
Van Kampen Merritt Select Equity Trust . . . . . . . . . . . . . . . . . . . . . . . Series 1
Van Kampen Merritt Select Equity and Treasury Trust . . . . . . . . . . . . . . . . . Series 1
Washington Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . . Series 1
West Virginia Insured Municipals Income Trust . . . . . . . . . . . . . . . . . . . . Series 1 through 5
</TABLE>
<PAGE> 1
EXHIBIT 19.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ J. Miles Branagan Trustee June 21, 1995
-----------------------------------------------
J. Miles Branagan
</TABLE>
<PAGE> 2
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard E. Caruso Trustee June 21, 1995
-----------------------------------------------
Richard E. Caruso
</TABLE>
<PAGE> 4
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Roger Hilsman Trustee June 21, 1995
----------------------------------------------
Roger Hilsman
</TABLE>
<PAGE> 6
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
either of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Don G. Powell Trustee June 22, 1995
-----------------------------------------------
Don G. Powell
</TABLE>
<PAGE> 8
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David Rees Trustee June 21, 1995
----------------------------------------------
David Rees
</TABLE>
<PAGE> 10
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence J. Sheehan Trustee June 21, 1995
-----------------------------------------------
Lawrence J. Sheehan
</TABLE>
<PAGE> 12
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Fernando Sisto Trustee June 21, 1995
-----------------------------------------------
Fernando Sisto
</TABLE>
<PAGE> 14
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William S. Woodside Trustee June 21, 1995
-----------------------------------------------
William S. Woodside
</TABLE>
<PAGE> 16
Exhibit A
Van Kampen American Capital Comstock Trust
Van Kampen American Capital Corporate Bond Trust
Van Kampen American Capital Emerging Growth Trust
Van Kampen American Capital Enterprise Trust
Van Kampen American Capital Equity Income Trust
Van Kampen American Capital Global Managed Assets Trust
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Series
Van Kampen American Capital Growth and Income Trust
Van Kampen American Capital Harbor Trust
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Van Kampen American Capital Limited Maturity Government Trust
Van Kampen American Capital Municipal Bond Trust
Van Kampen American Capital Pace Trust
Van Kampen American Capital Real Estate Securities Trust
Van Kampen American Capital Reserve Trust
Van Kampen American Capital Small Capitalization Trust
Van Kampen American Capital Tax-Exempt Trust
Van Kampen American Capital Texas Municipal Securities Trust
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Trust
Van Kampen American Capital World Portfolio Series Trust
<PAGE> 1
EXHIBIT 19.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Philip G. Gaughan Trustee July 8, 1995
-----------------------------------------------
Philip G. Gaughan
</TABLE>
<PAGE> 2
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ R. Craig Kennedy Trustee July 8, 1995
-----------------------------------------------
R. Craig Kennedy
</TABLE>
<PAGE> 4
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald C. Miller Trustee July 8, 1995
----------------------------------------------
Donald C. Miller
</TABLE>
<PAGE> 6
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
either of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jack E. Nelson Trustee July 10, 1995
-----------------------------------------------
Jack E. Nelson
</TABLE>
<PAGE> 8
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jerome L. Robinson Trustee July 8, 1995
----------------------------------------------
Jerome C. Robinson
</TABLE>
<PAGE> 10
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Trustee of each
of the investment companies listed on Exhibit A hereto does hereby severally
constitute and appoint Don G. Powell, Nori L. Gabert and Ronald A. Nyberg, or
any of them, the true and lawful agents and attorneys-in-fact of the
undersigned with respect to any Registration Statements and any and all
amendments (including post-effective amendments) thereto, with full power and
authority to execute said Registration Statements for and on behalf of the
undersigned, in the undersigned's name and in the capacity indicated below, and
to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby gives to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacity set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Wayne W. Whalen Trustee July 8, 1995
-----------------------------------------------
Wayne W. Whalen
</TABLE>
<PAGE> 12
Exhibit A
Van Kampen American Capital Comstock Fund
Van Kampen American Capital Corporate Bond Fund
Van Kampen American Capital Emerging Growth Fund
Van Kampen American Capital Enterprise Fund
Van Kampen American Capital Equity Income Fund
Van Kampen American Capital Global Managed Assets Fund
Van Kampen American Capital Government Securities Trust
Van Kampen American Capital Government Target Fund
Van Kampen American Capital Growth and Income Fund
Van Kampen American Capital Harbor Fund
Van Kampen American Capital High Yield Investments Trust
Van Kampen American Capital Life Investment Trust
Common Stock Fund
Domestic Strategic Income Fund
Emerging Growth Fund
Global Equity Fund
Government Fund
Money Market Fund
Multiple Strategy Fund
Real Estate Fund
Van Kampen American Capital Limited Maturity Government Fund
Van Kampen American Capital Municipal Bond Fund
Van Kampen American Capital Pace Fund
Van Kampen American Capital Real Estate Securities Fund
Van Kampen American Capital Reserve Fund
Van Kampen American Capital Small Capitalization Fund
Van Kampen American Capital Tax-Exempt Trust
High Yield Municipal Fund
Insured Municipal Fund
Van Kampen American Capital Texas Municipal Securities Fund
Van Kampen American Capital U.S. Government Trust for Income
Van Kampen American Capital Utilities Income Fund
Van Kampen American Capital World Portfolio Series Trust
Van Kampen American Capital
Global Equity Fund
Van Kampen American Capital
Global Government Securities Fund
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000879636
<NAME> AC SMALL CAPITALIZATION, FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 122,828,474
<INVESTMENTS-AT-VALUE> 133,647,468
<RECEIVABLES> 3,665,575
<ASSETS-OTHER> 45,449
<OTHER-ITEMS-ASSETS> 2,803
<TOTAL-ASSETS> 137,361,295
<PAYABLE-FOR-SECURITIES> 548,270
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 60,710
<TOTAL-LIABILITIES> 608,980
<SENIOR-EQUITY> 133,117
<PAID-IN-CAPITAL-COMMON> 127,242,308
<SHARES-COMMON-STOCK> 13,311,707
<SHARES-COMMON-PRIOR> 2,104,130
<ACCUMULATED-NII-CURRENT> 597,495
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,039,599)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,818,994
<NET-ASSETS> 136,752,315
<DIVIDEND-INCOME> 762,326
<INTEREST-INCOME> 88,813
<OTHER-INCOME> 0
<EXPENSES-NET> 85,570
<NET-INVESTMENT-INCOME> 765,569
<REALIZED-GAINS-CURRENT> (1,189,983)
<APPREC-INCREASE-CURRENT> 10,865,211
<NET-CHANGE-FROM-OPS> 10,440,797
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 501,439
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,153,426
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 54,151
<NET-CHANGE-IN-ASSETS> 116,092,783
<ACCUMULATED-NII-PRIOR> 333,365
<ACCUMULATED-GAINS-PRIOR> (849,616)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 85,570
<AVERAGE-NET-ASSETS> 93,476,023
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> .45
<PER-SHARE-DIVIDEND> .08
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.27
<EXPENSE-RATIO> .18<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>EXPENSE RATIO IS ANNUALIZED
</FN>
</TABLE>
