0000950124-95-002297.txt : 19950802 0000950124-95-002297.hdr.sgml : 19950802 ACCESSION NUMBER: 0000950124-95-002297 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 21 FILED AS OF DATE: 19950801 EFFECTIVENESS DATE: 19950801 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN MERRITT MONEY MARKET TRUST /IL CENTRAL INDEX KEY: 0000704169 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-78401 FILM NUMBER: 95558117 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03514 FILM NUMBER: 95558118 BUSINESS ADDRESS: STREET 1: ONE PARKVIEW PLAZA CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 BUSINESS PHONE: 7086846000 FORMER COMPANY: FORMER CONFORMED NAME: INDEPENDENT CASHFLOW TRUST DATE OF NAME CHANGE: 19860325 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN MONETARY RESERVE FUND INC DATE OF NAME CHANGE: 19841225 485BPOS 1 POST EFFECTIVE AMENDMENT NO. 20 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1995 REGISTRATION NOS. 2-78401 811-3514 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ Post-Effective Amendment No. 20 /X/ and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/ Amendment No. 20 /X/ VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST (Exact Name of Registrant as Specified in Agreement and Declaration of Trust) One Parkview Plaza, Oakbrook Terrace, Illinois 60181 (Address of Principal Executive Offices) (708) 684-6000 (Registrant's Telephone Number) Ronald A. Nyberg, Esq. Executive Vice President, General Counsel and Secretary Van Kampen American Capital, Inc. One Parkview Plaza Oakbrook Terrace, Illinois 60181 (Name and Address of Agent for Service) Copy to: Wayne W. Whalen, Esq. Thomas A. Hale, Esq. Skadden, Arps, Slate, Meagher & Flom 333 West Wacker Drive Chicago, Illinois 60606 (312) 407-0700 ------------------------ Approximate Date of Proposed Public Offering: As soon as practicable following effectiveness of this Registration Statement. It is proposed that this filing will become effective: (check appropriate box) /X/ immediately upon filing pursuant to paragraph (b) / / on (date) pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(1) / / on (date) pursuant to paragraph (a)(1) of Rule 485 / / 75 days after filing pursuant to paragraph (a)(2) / / on (date) pursuant to paragraph (a)(2) of Rule 485 If appropriate check the following: / / this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Declaration Pursuant to Rule 24f-2 Registrant has registered an indefinite number of shares and will file with the Securities and Exchange Commission a Rule 24f-2 notice for its fiscal year ending June 30, 1995 on or before August 31, 1995. Pursuant to a merger effective as of July 31, 1995, Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Registrant"), is the successor of Van Kampen Merritt Money Market Trust, a Massachusetts business trust. Upon effectiveness of the merger and pursuant to Rule 414 under the Securities Act of 1933, Registrant adopts and succeeds to the registration statement of Van Kampen Merritt Money Market Trust and to any prior Rule 24f-2 Notices of Van Kampen Merritt Money Market Trust. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2 VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST CROSS REFERENCE SHEET (AS REQUIRED BY ITEM 501(B) OF REGULATION S-K)
ITEM NUMBER OF FORM N-1A LOCATION OR CAPTION ----------------------------------------------------------
PART A Item 1. Cover Page............ Cover Page Item 2. Synopsis.............. SHAREHOLDER TRANSACTION EXPENSES; ANNUAL FUND OPERATING EXPENSES AND EXAMPLE Item 3. Condensed Financial Information......... SHAREHOLDER TRANSACTION EXPENSES; ANNUAL FUND OPERATING EXPENSES AND EXAMPLE; FINANCIAL HIGHLIGHTS; ADDITIONAL INFORMATION Item 4. General Description of Registrant.......... THE FUND; INVESTMENT OBJECTIVE AND POLICIES; INVESTMENT PRACTICES; DESCRIPTION OF SHARES OF THE FUND Item 5. Management of the Fund................ ANNUAL FUND OPERATING EXPENSES AND EXAMPLE; INVESTMENT PRACTICES; INVESTMENT ADVISORY SERVICES; SHAREHOLDER SERVICES; ADDITIONAL INFORMATION Item 6. Capital Stock and Other Securities.... DIVIDENDS FROM THE FUND; REDEMPTION OF SHARES; THE DISTRIBUTION AND SERVICE PLANS; TAX STATUS; SHAREHOLDER SERVICES; DESCRIPTION OF SHARES OF THE FUND; ADDITIONAL INFORMATION Item 7. Purchase of Securities Being Offered....... SHAREHOLDER TRANSACTION EXPENSES; PURCHASE OF SHARES; REDEMPTION OF SHARES; THE DISTRIBUTION AND SERVICE PLANS Item 8. Redemption or Repurchase.......... PURCHASE OF SHARES; REDEMPTION OF SHARES Item 9. Pending Legal Proceedings......... Not Applicable PART B Item 10. Cover Page............ Cover Page Item 11. Table of Contents..... Table of Contents Item 12. General Information and History......... The Fund and the Trust Item 13. Investment Objectives and Policies........ Investment Policies and Restrictions; Appendix Item 14. Management of the Fund................ Officers and Trustees
(i.) 3
ITEM NUMBER OF FORM N-1A LOCATION OR CAPTION -----------------------------------------------------
Item 15. Control Persons and Principal Holders of Securities.......... Officers and Trustees Item 16. Investment Advisory and Other Services.............. Contained in Prospectus under captions: PURCHASE OF SHARES; INVESTMENT ADVISORY SERVICES; THE DISTRIBUTION AND SERVICE PLANS; Officers and Trustees; Legal Counsel; Investment Advisory and Other Services; The Distributor Item 17. Brokerage Allocation............ Portfolio Transactions Item 18. Capital Stock and Other Securities.... Contained in Prospectus under captions: THE FUND; DESCRIPTION OF SHARES OF THE FUND; SHAREHOLDER SERVICES; The Fund and the Trust Item 19. Purchase, Redemption and Pricing of Securities Being Offered............. Contained in Prospectus under captions: PURCHASE OF SHARES; THE DISTRIBUTION AND SERVICE PLANS; REDEMPTION OF SHARES Item 20. Tax Status............ Contained in Prospectus under caption: TAX STATUS Item 21. Underwriters.......... The Distributor Item 22. Calculations of Yield Quotations of Money Market Funds........ Yield Information; Dividends Item 23. Financial Statements............ Contained in Prospectus under caption: FINANCIAL HIGHLIGHTS; Unaudited Financial Statements; Notes to Unaudited Financial Statements; Independent Auditors' Report; Audited Financial Statements; Notes to Audited Financial Statements; Officers and Trustees PART C
Information required to be included in Part C is set forth under the appropriate Item, so numbered, in Part C of this Registration Statement. (ii.) 4 -------------------------------------------------------------------------------- VAN KAMPEN AMERICAN CAPITAL MONEY MARKET FUND -------------------------------------------------------------------------------- Van Kampen American Capital Money Market Fund, formerly known as Van Kampen Merritt Money Market Fund (the "Money Fund"), is a money market mutual fund whose investment objective is to provide high current income consistent with the preservation of capital and liquidity through investments in a broad range of money market instruments that will mature within 12 months of the date of purchase. The Money Fund is a separate series of the Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Trust"). The portfolio of the Money Fund is managed by Van Kampen American Capital Investment Advisory Corp. (the "Adviser"). An investment in the Money Fund is neither insured nor guaranteed by the U.S. government. There can be no assurance that the Money Fund will be able to maintain a stable net asset value of $1.00 per share. The Money Fund offers two classes of shares designated Class A Shares and Class B Shares. Class A Shares are available at their net asset value per share without a sales charge. Class B Shares are offered at net asset value, but are subject to a contingent deferred sales charge, and therefore are subject to expenses higher than expenses normally applicable to shares of money market funds that are not subject to a contingent deferred sales charge. Class B Shares may be acquired only by exchange of Class B Shares of other funds in the Van Kampen American Capital family of funds and are offered for temporary investment purposes between investments in such other funds. The Money Fund's shareholders are considering a proposal to reorganize the Money Fund into the Van Kampen American Capital Reserve Fund. See "The Fund." This Prospectus concisely sets forth the information about the Money Fund and the Trust that a prospective investor should know before investing in the Money Fund. Please read and retain this Prospectus for future reference. The address of the Money Fund is One Parkview Plaza, Oakbrook Terrace, Illinois 60181, and its telephone number is (800) 421-5666. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ SHARES OF THE MONEY FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED BY, ANY BANK OR DEPOSITORY INSTITUTION; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE MONEY FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information, dated August 1, 1995 containing additional information about the Money Fund and the Trust, has been filed with the Securities and Exchange Commission and is hereby incorporated by reference in its entirety into this Prospectus. A copy of the Money Fund's Statement of Additional Information may be obtained without charge by calling (800) 421-5666 or for Telecommunication Device for the Deaf at (800) 772-8889. ------------------ VAN KAMPEN AMERICAN CAPITAL SM ------------------ THIS PROSPECTUS IS DATED AUGUST 1, 1995. 5 -------------------------------------------------------------------------------- TABLE OF CONTENTS --------------------------------------------------------------------------------
PAGE ---- Shareholder Transaction Expenses.......................................................... 3 Annual Fund Operating Expenses and Example................................................ 3 Financial Highlights...................................................................... 5 The Fund.................................................................................. 6 Investment Objective and Policies......................................................... 7 Investment Practices...................................................................... 7 Investment Advisory Services.............................................................. 8 Purchase of Shares........................................................................ 9 Distributions from the Fund............................................................... 14 Shareholder Services...................................................................... 15 Redemption of Shares...................................................................... 15 The Distribution and Service Plans........................................................ 20 Tax Status................................................................................ 21 Description of Shares of the Fund......................................................... 22 Additional Information.................................................................... 23
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, THE ADVISER, OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUND OR BY THE DISTRIBUTOR TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO MAKE SUCH AN OFFER IN SUCH JURISDICTION. 2 6 -------------------------------------------------------------------------------- SHAREHOLDER TRANSACTION EXPENSES --------------------------------------------------------------------------------
CLASS A CLASS B SHARES SHARES ------- --------------- Maximum sales charge imposed on purchases (as a percentage of the offering price)......................................... None None Maximum sales charge imposed on reinvested dividends (as a percentage of the offering price)........................... None None(1) Deferred sales charge (as a percentage of the lesser of the original purchase price or redemption proceeds)............. None Year 1--3.00%(2) Year 2--2.00% Year 3--1.00% After--None Redemption fees (as a percentage of amount redeemed).......... None None Exchange fees................................................. None None
--------------- (1) Class B Shares received as reinvested dividends are subject to a 12b-1 fee, a portion of which may indirectly pay for the initial sales commission incurred on behalf of the investor. See "The Distribution and Service Plans." (2) Class B Shares acquired through use of the exchange privilege are subject to the higher of the Money Fund's contingent deferred sales charge schedule or the highest contingent deferred sales charge schedule previously applicable to the investor's Class B Shares. -------------------------------------------------------------------------------- ANNUAL FUND OPERATING EXPENSES AND EXAMPLE --------------------------------------------------------------------------------
CLASS A CLASS B SHARES SHARES ---------- ------------- Management Fees(1) (as a percentage of average daily net assets net of waiver)................................................. 0.01% 0.01% 12b-1 Fees(2) (as a percentage of average daily net assets)...... 0.25% 1.00% Other Expenses (as a percentage of average daily net assets)..... 0.82% 0.88% Total Expenses (as a percentage of average daily net assets net of waiver)..................................................... 1.08% 1.89%
--------------- (1) The Adviser waived its "Management Fees" of the Money Fund for the Money Fund's six-month period ended December 31, 1994. Absent the Adviser's waiver of its fee of the Money Fund, "Management Fees" would have been 0.50% for each class of shares and "Total Expenses" would have been 1.57% for Class A Shares and 2.38% for Class B Shares, respectively. (2) Such fees include a service fee of up to 0.25% paid by the Money Fund to investors' broker-dealers as compensation for ongoing services rendered to investors. 3 7 EXAMPLE:
ONE THREE FIVE TEN YEAR YEARS YEARS YEARS ---- ----- ----- ----- You would pay the following expenses on a $1,000 investment, assuming (i) an operating expense ratio of 1.08% for Class A Shares and 1.89% for Class B Shares, (ii) 5% annual return and (iii) redemption at the end of each time period: Class A Shares............................................. $11 $34 $ 60 $ 132 Class B Shares............................................. $49 $69 $ 102 $ 190* An investor would pay the following expenses on the same $1,000 investment assuming no redemption at the end of each period: Class A Shares............................................. $11 $34 $ 60 $ 132 Class B Shares............................................. $19 $59 $ 102 $ 190*
--------------- * Based on conversion to Class A Shares after six years. The purpose of the foregoing tables is to assist an investor in understanding the various costs and expenses that an investor in the Money Fund will bear directly or indirectly. The "Example" reflects expenses based on the "Annual Fund Operating Expenses" table as shown above carried out to future years. It is expected that as Money Fund assets increase, the fees waived or expenses reimbursed by the Adviser will decrease. Accordingly, it is unlikely that future expenses as projected will remain consistent with those determined based on the table of the "Annual Fund Operating Expenses." Class B Shares acquired through the exchange privilege are subject to the higher of the Money Fund's contingent deferred sales charge or the highest contingent deferred sales charge schedule previously applicable to the investor's Class B Shares. Accordingly, future expenses as projected could be higher than those determined in the above table if the investor's Class B Shares were exchanged from a fund with a higher contingent deferred sales charge. THE INFORMATION CONTAINED IN THE ABOVE TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. For more complete description of such costs and expenses, see "Investment Advisory Services" and "The Distribution and Service Plans." 4 8 -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (for one share outstanding throughout the period) -------------------------------------------------------------------------------- The following schedule presents financial highlights for one Class A Share and one Class B Share of the Money Fund or its predecessor fund outstanding throughout the periods indicated. The information for the nine years ended June 30, 1994 has been audited by KPMG Peat Marwick LLP, independent certified public accountants unless otherwise indicated. The information for the year ended June 30, 1985, was audited by other independent certified public accountants whose report thereon was unqualified. This information should be read in conjunction with the financial statements and related notes thereto included in the Statement of Additional Information.
CLASS A SHARES(2) ------------------------------------------------------------- SIX MONTHS YEAR ENDED JUNE 30, ENDED ------------------------------------------------------------- DECEMBER 31, 1994 1993 1992 1991 1990 1989 1988 1987 1994 ----- ----- ----- ----- ----- ----- ----- ----- ------------ UNAUDITED Net Asset Value, Beginning of Period................. $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Investment Income.............................. .019 .025 .023 .041 .065 .078 .078 .066 .056 ----- ----- ----- ----- ----- ----- ----- ----- ----- Total from Investment Operations..................... .019 .025 .023 .041 .065 .078 .078 .066 .056 ----- ----- ----- ----- ----- ----- ----- ----- ----- Less Distributions from Net Investment Income........ .019 .025 .023 .041 .065 .078 .078 .066 .056 ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Asset Value, End of Period....................... $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ========== ===== ===== ===== ===== ===== ===== ===== ===== Total Return(1) (annualized)......................... 1.96% 2.50% 2.31% 4.21% 6.72% 8.11% 8.07% 6.60% 5.94% Net Assets at End of Period (in millions)...................................... $ 32.3 $27.5 $21.7 $24.9 $35.0 $45.0 $44.1 $51.5 $17.1 Ratio of Expenses to Average Net Assets(1) (annualized)....................................... 1.03% 1.13% 1.16% 1.14% .99% .90% .98% .78% .58% Ratio of Net Investment Income to Average Net Assets(1) (annualized)......................... 3.91% 2.44% 2.31% 4.21% 6.57% 7.81% 7.79% 6.56% 5.65% --------------- (1) If certain expenses had not been assumed by the investment adviser, total return would have been lower and the ratios would have been as follows: Ratio of Expenses to Average Net Assets (annualized)....................................... 1.50% 1.54% 1.31% 1.55% 1.39% 1.31% 1.31% 1.22% 1.48% Ratio of Net Investment Income to Average Net Assets (annualized)............................ 3.44% 2.03% 2.16% 3.80% 6.17% 7.40% 7.46% 6.13% 4.74% CLASS B SHARES JULY 11, 1994 (COMMENCEMENT 1986 1985 OF ----- ----- DISTRIBUTION) TO DECEMBER ------------- Net Asset Value, Beginning of Period................. $1.00 $1.00 $1.00 ----- ----- ----- Net Investment Income.............................. .068 .092 .015 ----- ----- ----- Total from Investment Operations..................... .068 .092 .015 ----- ----- ----- Less Distributions from Net Investment Income........ .068 .092 .015 ----- ----- ----- Net Asset Value, End of Period....................... $1.00 $1.00 $1.00 ===== ===== ============= Total Return(1) (annualized)......................... 6.96% 9.60% 1.49% Net Assets at End of Period (in millions)...................................... $ 6.3 $ 1.5 $ 9.9 Ratio of Expenses to Average Net Assets(1) (annualized)....................................... .88% 1.01% 1.80% Ratio of Net Investment Income to Average Net Assets(1) (annualized)......................... 6.78% 8.39% 3.41% --------------- (1) If certain expenses had not been assumed by the investment adviser, total return would have been lower and the ratios would have been as follows: Ratio of Expenses to Average Net Assets (annualized)....................................... 1.85% 1.94% 2.28% Ratio of Net Investment Income to Average Net Assets (annualized)............................ 5.81% 7.46% 2.93%
(2) Shares of the Money Fund outstanding prior to July 11, 1994 have been redesignated Class A Shares. See Financial Statements and Notes Thereto. --------------- The "current yield" of the Money Fund for the seven days ended June 30, 1994 was 3.26% and its "compounded effective yield" for that period was 3.31%. The method of calculating these yields is described in the Statement of Additional Information. 5 9 -------------------------------------------------------------------------------- THE FUND -------------------------------------------------------------------------------- Van Kampen American Capital Money Market Fund (the "Money Fund") is a diversified, open-end management investment company, commonly known as a "mutual fund," and is organized as a series of the Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Trust"). Mutual funds sell their shares to investors and invest the proceeds in a portfolio of securities. A mutual fund allows investors to pool their money with that of other investors in order to obtain professional investment management. Mutual funds generally make it possible for investors to obtain greater diversification of their investments and to simplify their recordkeeping. Van Kampen American Capital Investment Advisory Corp. (the "Adviser") provides investment advisory and administrative services to the Money Fund. The Adviser and its affiliates also manage other mutual funds distributed by Van Kampen American Capital Distributors Inc. (the "Distributor"). To obtain prospectuses and other information on any of these other funds, please call the telephone number on the cover page of this Prospectus. Prior to the date of this Prospectus, the Money Fund was known as Van Kampen Merritt Money Market Fund. Prior to June 1986, the Money Fund was known as Independent CashFlow Trust, Money Market Series. Independent CashFlow Trust became the successor to American Monetary Reserve Fund Inc. in September 1984. The Adviser has been the Money Fund's investment adviser since January 31, 1986. Independent CashFlow Advisors, Ltd. was the investment adviser for the period from December 7, 1984 to January 31, 1986. Anglo-American Investors Service Inc. was the investment adviser for the period from April 22, 1983 to December 7, 1984. On May 11, 1995, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization between the Money Fund and the Van Kampen American Capital Reserve Fund (the "AC Fund"), a fund advised by Van Kampen American Capital Asset Management, Inc., providing for the transfer of assets and liabilities of the Money Fund to the AC Fund in exchange for shares of beneficial interest of the AC Fund at its net asset value per share (the "Reorganization"). Van Kampen American Capital Asset Management, Inc. and the Adviser are wholly owned subsidiaries of Van Kampen American Capital, Inc. which is a wholly owned subsidiary of VK/AC Holding, Inc. The Reorganization is subject to approval by the holders of a majority of the outstanding shares of the Money Fund. Further details of the proposed Reorganization will be contained in the proxy statement/prospectus expected to be mailed to shareholders in August, 1995. The Money Fund's investment objective is to provide high current income consistent with the preservation of capital and liquidity through investments in a broad range of money market instruments that will mature within 12 months of the date of purchase. The Money Fund had net assets of $34.7 million on March 31, 1995. The AC Fund had net assets of $362.0 as of March 31, 1995. Its investment objective is to seek protection of capital and high current income through investments in U.S. dollar denominated money market securities. Both the Money Fund and the AC Fund invest principally in a diversified portfolio of United States agency and government obligations, commercial paper and repurchase agreements. The Money Fund will continue its normal operations prior to the Reorganization. 6 10 -------------------------------------------------------------------------------- INVESTMENT OBJECTIVE AND POLICIES -------------------------------------------------------------------------------- The Money Fund's investment objective is to provide investors with high current income consistent with the preservation of capital and liquidity through investments in a broad range of money market instruments that will mature within 12 months of the date of purchase. There can be no assurance that the Money Fund will attain its investment objective. The Money Fund seeks to achieve its investment objective by investing only in the following securities and instruments: (a) obligations of or guaranteed by the U.S. government, its agencies or instrumentalities ("U.S. Government Securities"), (b) obligations of banks subject to U.S. government regulation as well as such other bank obligations as are insured by a U.S. government agency ("Bank Obligations"), (c) commercial paper (including variable amount master demand notes) rated, at the time of investment, at least A-2 by Standard & Poor's Ratings Group ("S&P") or Prime-2 by Moody's Investors Service, Inc. ("Moody's"), or, if not so rated, issued by a corporation which has outstanding debt obligations rated, at the time of investment, at least AA by S&P or Aa by Moody's and (d) debt obligations (other than commercial paper) of corporate issuers which obligations are rated, at the time of investment, at least AA by S&P or Aa by Moody's. All of the Money Fund's investments are subject to the limitation that they mature within one year of the date of their purchase or are subject to repurchase agreements maturing within one year. U.S. Government Securities in which the Money Fund may invest include Treasury Bills, Notes and Bonds issued by the U.S. government and backed by the full faith and credit of the U.S., as well as securities issued or guaranteed as to principal and interest by agencies and instrumentalities of the U.S. government. Bank Obligations include certificates of deposit and banker's acceptances of domestic banks (or Euro-dollar obligations of foreign branches of such domestic banks) subject to U.S. government regulation and time deposits of federal and state banks whose accounts are insured by a government agency as well as such accounts themselves. An investment in the Money Fund, however, is neither insured nor guaranteed by the U.S. government. -------------------------------------------------------------------------------- INVESTMENT PRACTICES -------------------------------------------------------------------------------- The Money Fund may enter into repurchase agreements with banks and broker-dealers, under which the Money Fund purchases securities and agrees to resell the securities at an agreed upon time and at an agreed upon price. Under the Investment Company Act of 1940, as amended (the "1940 Act"), repurchase agreements may be considered collateralized loans by the Money Fund, and the difference between the amount the Money Fund pays for the securities and the amount it receives upon resale is accrued as interest and reflected in the Money Fund's net income. When the Money Fund enters into repurchase agreements, it relies on the seller to repurchase the securities. Failure to do so may result in a loss for the Money Fund if the market value of the securities is less than the repurchase price. At the time the Money Fund enters into a repurchase agreement, the value of the underlying security including accrued interest will be equal to or exceed the value of the repurchase agreement and, for repurchase agreements that mature in more than one day, the seller will agree that the value of the underlying security including accrued interest will continue to be at least equal to the value of the repurchase agreement. In determining whether to enter into a repurchase agreement with a bank or broker-dealer, the Money Fund will take into account the creditworthiness of such party. In the event of default by 7 11 such party, the Money Fund may not have a right to the underlying security and there may be possible delays and expenses in liquidating the security purchased, resulting in a decline in its value and loss of interest. The Money Fund will use repurchase agreements as a means of making short-term investments, and may invest in repurchase agreements of duration of seven days or less without limitation. The Money Fund's ability to invest in repurchase agreements that mature in more than seven days is subject to an investment restriction that limits the Money Fund's investment in "illiquid" securities, including such repurchase agreements, to 10% of the Money Fund's net assets. The Money Fund may lend its portfolio securities to brokers, dealers, banks or other recognized institutional borrowers of securities, provided that the borrower at all times maintains cash or equivalent collateral or secures a letter of credit in favor of the Money Fund in an amount equal to at least 100% of the market value of the securities loaned. During the time portfolio securities are on loan, the borrower will pay the Money Fund an amount equivalent to any dividend or interest paid on such securities and the Money Fund may invest the cash collateral and earn additional income, or it may receive an agreed-upon amount of interest income from the borrower who has delivered equivalent collateral or secured a letter of credit. Loans are subject to termination at the option of the Money Fund or the borrower. The Money Fund may pay reasonable administration and custodial fees in connection with a loan. As with any extensions of credit, there are risks of delay in recovery and in some cases even loss of rights in the collateral should the borrower of the securities fail financially. However, these loans of portfolio securities will only be made to firms deemed by the Adviser to be creditworthy and when the income which can be earned from such loans justifies the attendant risks. The Money Fund will not loan securities having an aggregate value of more than 20% of the market value of its assets. Although the securities in which the Money Fund invests are of high quality and the transactions which it enters into entail low risk, there is still the possibility of loss of principal. Corporate issuers may default on their obligations. Repurchase agreements may be deemed to be collateralized loans and the Money Fund could experience delay and expenses in liquidating such collateral in the event of the failure of the repurchasing party to honor its agreement to repurchase. Agencies or instrumentalities of the U.S. government could also default on their securities which may not be guaranteed by or be backed by the full faith and credit of the U.S. The Money Fund may borrow up to 10% of its net assets in order to pay for redemptions when liquidation of portfolio securities is considered disadvantageous or inconvenient and may pledge up to 10% of its net assets to secure such borrowings. The Money Fund has not used this power to date and does not expect to in the future. The Money Fund is subject to certain investment restrictions which constitute fundamental policies. Fundamental policies cannot be changed without the approval of the holders of a majority of the Money Fund's outstanding voting securities, as defined in the 1940 Act. See "Investment Policy and Restrictions" in the Statement of Additional Information. -------------------------------------------------------------------------------- INVESTMENT ADVISORY SERVICES -------------------------------------------------------------------------------- THE ADVISER. Van Kampen American Capital Investment Advisory Corp. (the "Adviser") is the investment adviser for the Money Fund. The Adviser is a wholly-owned subsidiary of Van Kampen American Capital, Inc. ("Van Kampen American Capital"). Van Kampen American Capital is a diversified asset management company with more than two million retail investor accounts, extensive 8 12 capabilities for managing institutional portfolios, and over $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 American Capital is a wholly-owned subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is controlled, through the ownership of a substantial majority of its common stock, by The Clayton & Dubilier Private Equity Fund IV Limited Partnership ("C&D L.P."), a Connecticut limited partnership. C&D L.P. is managed by Clayton, Dubilier & Rice, Inc., a New York based private investment firm. The General Partner of C&D L.P. is Clayton & Dubilier Associates IV Limited Partnership ("C&D Associates L.P."). The general partners of C&D Associates L.P. are Joseph L. Rice, III, B. Charles Ames, William A. Barbe, Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe and Andrall E. Pearson, each of whom is a principal of Clayton, Dubilier & Rice, Inc. In addition, certain officers, directors and employees of Van Kampen American Capital own, in the aggregate, not more than 7% 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 Money Fund owns or would own 5% or more of the common stock of VK/AC Holding, Inc. ADVISORY AGREEMENT. The business and affairs of the Money Fund will be managed under the direction of the Trustees of the Trust. Subject to the Trustees' authority, the Adviser and the Trust's officers will supervise and implement the Money Fund's investment activities and will be responsible for overall management of the Money Fund's business affairs. The Money Fund will pay the Adviser a fee (accrued daily and paid monthly) equal to a percentage of the average daily net assets of the Money Fund as follows: AVERAGE DAILY NET ASSETS % PER ANNUM ----------- First $250 million.............. 0.500 of 1% Next $250 million............... 0.475 of 1% Next $250 million............... 0.425 of 1% Over $750 million............... 0.275 of 1% Under its investment advisory agreement with the Adviser, the Money Fund has agreed to assume and pay the charges and expenses of the Money Fund's operation, including the compensation of the Trustees of the Trust (other than those who are affiliated persons, as defined in the 1940 Act, of the Adviser, the Distributor or Van Kampen American Capital), the charges and expenses of independent accountants, legal counsel, any transfer or dividend disbursing agent and the custodian (including fees for safekeeping of securities), costs of calculating net asset value, costs of acquiring and disposing of portfolio securities, interest (if any) on obligations incurred by the Money Fund, costs of share certificates, membership dues in the Investment Company Institute or any similar organization, reports and notices to shareholders, costs of registering shares of the Money Fund under the federal securities laws, miscellaneous expenses and all taxes and fees to federal, state or other governmental agencies, excluding state securities registration expenses. -------------------------------------------------------------------------------- PURCHASE OF SHARES -------------------------------------------------------------------------------- The Money Fund currently offers two classes of shares, designated Class A Shares and Class B Shares, through Van Kampen American Capital Distributors, Inc., (the "Distributor"), as principal underwriter, which is located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. Shares also are offered through members of the National Association of Securities Dealers, Inc. ("NASD") who are 9 13 acting as securities dealers ("dealers") and through NASD members acting as brokers for investors ("brokers") or eligible non-NASD members who are acting as agents for investors ("financial intermediaries"). The Money Fund reserves the right to suspend or terminate the continuous offering at any time and without prior notice. Class A Shares of the Money Fund are available through the Distributor at their net asset value per share without a sales charge. Class B Shares may be acquired only by exchange of Class B Shares of other funds distributed by the Distributor. Class B Shares are acquired at net asset value, but are subject to a contingent deferred sales charge. The Money Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act and a service plan which permit the Money Fund through Van Kampen American Capital to compensate brokers, dealers and financial intermediaries out of the assets of the Money Fund for their sales of Class A Shares and Class B Shares of the Money Fund and for shareholder services, respectively. The minimum initial investment with respect to each class of shares is $500. The minimum subsequent investment with respect to each class of shares is $25, except as discussed under "Unit Trust Reinvestment Programs" hereunder and under the heading "Investments by Tax-Sheltered Retirement Plans." Share certificates will not be issued. ALTERNATIVE SALES ARRANGEMENTS Each class of shares represents an interest in the same portfolio of investments of the Money Fund and has the same rights, except each class of shares (i) bears those distribution fees, service fees and administrative expenses applicable to the respective class of shares as a result of its sales arrangements, (ii) has exclusive voting rights with respect to those provisions of the Money Fund's Rule 12b-1 distribution plan which relate only to such class and (iii) has a different exchange privilege. Only the Class B Shares are subject to a conversion feature (discussed below). Generally, Class B Shares will have a higher expense ratio and pay lower dividends than Class A Shares and are offered for temporary investment purposes between investments in other funds distributed by the Distributor. The per share net asset values of the different classes of shares are expected to remain at $1.00 per share, except in unusual circumstances. The net asset value per share of each class of shares will be determined as described in this Prospectus under "Purchase of Shares -- Net Asset Value." The administrative expenses that may be allocated to a specific class of shares may consist of (i) transfer agency expenses attributable to a specific class of shares, which expenses typically will be higher with respect to Class B Shares; (ii) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses and proxy statements to current shareholders of a specific class; (iii) Securities and Exchange Commission (the "SEC") registration fees incurred by a class of shares; (iv) the expense of administrative personnel and services as required to support the shareholders of a specific class; (v) Trustees' fees or expense incurred as a result of issues relating to one class of shares; (vi) accounting expenses relating solely to one class of shares; and (vii) any other incremental expenses subsequently identified that should be properly allocated to one or more classes of shares that shall be approved by the SEC pursuant to an amended exemptive order. All such expenses incurred by a class will be borne on a pro rata basis by the outstanding shares of such class. All allocations of administrative expenses to a particular class of shares will be limited to the extent necessary to preserve the Money Fund's qualification as a regulated investment company under 10 14 the Code. Sales personnel or brokers, dealers and financial intermediaries distributing the Money Fund's shares may receive different compensation for selling different classes of shares. CLASS A SHARES The public offering price of Class A Shares is equal to the net asset value per Class A Share, without the imposition of a sales charge. The Money Fund anticipates that the net asset value per Class A Share normally will remain fixed at $1.00 per share, except in extraordinary circumstances. CLASS B SHARES Class B Shares may be acquired only by exchange of Class B Shares of other funds distributed by the Distributor. Class B Shares are acquired at net asset value, but are subject to a contingent deferred sales charge. The Money Fund anticipates that the net asset value per Class B Share normally will remain fixed at $1.00 per share, except in extraordinary circumstances. Class B Shares are offered for temporary investment purposes between investments in other funds distributed by the Distributor. Class B Shares are redeemed at net asset value. By acquiring Class B Shares of the Money Fund through use of the exchange privilege, an investor agrees that the Money Fund, or the Distributor on behalf of the Money Fund, may deduct a contingent deferred sales charge from the proceeds of such redemption, as set forth from time to time in this Prospectus. Class B Shares of the Money Fund acquired through use of the exchange privilege will be subject to the higher of the Money Fund's contingent deferred sales charge schedule or the highest contingent deferred sales charge previously applicable to the investor's Class B Shares exchanged into the Money Fund. The contingent deferred sales charge schedule of the Money Fund is as follows:
CONTINGENT DEFERRED SALES CHARGE AS A PERCENTAGE OF DOLLAR AMOUNT YEAR SINCE PURCHASE SUBJECT TO CHARGE ------------------- ------------------- First..................................................... 3.00% Second.................................................... 2.00% Third..................................................... 1.00% Fourth and after.......................................... 0.00%
The contingent deferred sales charge will be assessed on an amount equal to the lesser of the then current market value or the original purchase price of the Class B Shares being redeemed. Accordingly, although the Money Fund anticipates that the net asset value of the Class B Shares will remain at $1.00 per share, no sales charge will be imposed on increases in net asset value, if any, above the initial purchase price. In addition, no contingent deferred sales charge will be assessed on Class B Shares derived from reinvestment of dividends or capital gains distributions. Solely for purposes of determining the number of years from the time of any payment for the purchases of Class B Shares distributed by the Distributor, all payments during a month will be aggregated and deemed to have been made on the last day of the month. 11 15 In determining whether a contingent deferred sales charge is applicable to a redemption of Class B Shares, it will be assumed that the redemption is made first of any Class B Shares acquired pursuant to reinvestment of dividends or distributions, second of Class B Shares that have been held for a sufficient period of time such that the contingent deferred sales charge no longer is applicable to such shares, third of Class A Shares in the shareholder's Money Fund account, if any, and fourth of Class B Shares held longest during the period of time that a contingent deferred sales charge is applicable to such Class B Shares. Conversion Feature. A Class B Share of the Money Fund automatically converts to a Class A Share of the Money Fund seven years after the end of the month in which a shareholder's order to purchase such Class B Share in one of the funds in the Van Kampen American Capital Family of Funds is accepted, and thereafter will no longer be subject to the higher aggregate distribution and service fees applicable to Class B Shares. The purpose of the conversion feature is to relieve the holders of Class B Shares that have been outstanding for a period of time sufficient for the Distributor to have been compensated for distribution expenses related to the Class B Shares from most of the burden of such distribution-related expenses. The Money Fund does not expect to issue any stock certificates upon conversion. For purposes of conversion of Class A Shares, Class B Shares purchased through the reinvestment of dividends and distributions paid in respect of Class B Shares in a shareholder's account will be considered to be held in a separate sub-account. Each time any Class B Shares in the shareholder's account (other than those in the sub-account) convert to Class A Shares, an equal pro rata portion of the Class B Shares in the sub-account also will convert to Class A Shares. The holding period applicable to a Class B Share acquired through the use of the exchange privilege (discussed below) shall be the holding period applicable to a Class B Share of such fund acquired other than through use of the exchange privilege. For purposes of calculating the holding period applicable to a Class B Share of the Money Fund prior to conversion, a Class B Share of the Money Fund issued in connection with an exercise of the exchange privilege, or a series of exchanges, shall be deemed to have been issued on the date on which the investor's order to purchase the exchanged Class B Share was accepted or, in the case of a series of exchanges, when the investor's order to purchase the original Class B Share was accepted. The conversion of Class B Shares to Class A Shares is subject to the continuing availability of an opinion of counsel to the effect that (i) the assessment of the higher distribution services fee and transfer agency costs with respect to Class B Shares does not result in the Money Fund's dividends or distributions constituting "preferential dividends" under the Code and (ii) that the conversion of Class B Shares does not constitute a taxable event under federal income tax law. The conversion of Class B Shares to Class A Shares may be suspended if such an opinion is no longer available. In that event, no further conversions of Class B Shares would occur, and Class B Shares might continue to be subject to the higher aggregate distribution and service fees for an indefinite period. Waiver of Contingent Deferred Sales Charge. The contingent deferred sales charge is waived on redemptions of Class B Shares (i) following the death or disability (as defined in the Code) of a shareholder, (ii) in connection with certain distributions from an IRA or other retirement plan, (iii) pursuant to the Money Fund's systematic withdrawal plan but limited to 12% annually of the initial value of the account, and (iv) effected pursuant to the right of the Money Fund to liquidate a shareholder's account as described herein under "Redemption of Shares." See "Shareholder Services" and "Redemption of Shares" for further discussion of the waiver provisions. 12 16 GENERAL Investments in Class A Shares may be made as follows: 1. By Mail. For initial investments send a check payable to "Van Kampen American Capital Money Market Fund" along with a completed account application to the transfer agent of the Money Fund, ACCESS Investor Services, Inc., P.O. Box 418256, Kansas City, Missouri 64141-9256 ("ACCESS"). Subsequent investments by mail may be made directly to the Money Fund in which such initial investment was made accompanied by either the detachable form which is part of the account statement or by a letter indicating the dollar amount of the investment, the account number, and registration. Investments made by check will begin receiving dividends on the next business day after the Money Fund receives good funds. For checks drawn on foreign banks, monies must be collected before shares will be purchased. 2. By Wire. The Money Fund will also accept investments by wire. An investor must first telephone the Money Fund at (800) 421-5666 and provide the account registration, address, tax identification number, and the amount being wired. Investors will then be assigned an account number and should instruct their bank or broker to wire federal funds to State Street Bank and Trust Company, Custody, ABA-011000028, Re: Van Kampen American Capital Money Market Fund for further credit to Account Name , Account Number . Investors will be responsible for the charges, if any, that the bank, broker, dealer or financial intermediary may require to handle the wire transfer. A completed account application must then be forwarded to the Money Fund. Subsequent investments by wire may be made by instructing a bank or broker to wire the specified amount in accordance with the above instructions. Please call to advise the Money Fund before wiring monies. Investments made by federal funds wire (up to $1 million, without approval by the Money Fund) received prior to 12:00 p.m. Eastern time will be invested at the next determined net asset value and begin receiving dividends on that day. Investments made by federal funds wire received after 12:00 p.m. Eastern time will be invested at the next determined net asset value and begin receiving dividends on the next business day. 3. Through Financial Services Representatives. Brokers, dealers or financial intermediaries may purchase, on behalf of investors, shares of the Money Fund using either the By Mail or By Wire procedures outlined above. The Money Fund does not charge for this transaction. 4. Unit Trust Reinvestment Programs. The Money Fund will permit unitholders of unit investment trusts to reinvest distributions from such trusts in Class A Shares of the Money Fund and other eligible mutual funds distributed by the Distributor with no minimum or subsequent investment requirement. In order to qualify for this privilege, the administrator of an investor's unit investment trust must have an agreement with the Distributor pursuant to which the administrator will (1) submit a single bulk order and make payment with a single remittance for all investments in the Money Fund during each distribution period by all investors who choose to invest in the Money Fund through the program and (2) provide the Money Fund's transfer agent with appropriate backup data for each participating investor in a computerized format fully compatible with the transfer agent's processing system. In addition, the Money Fund also requires that all dividends and other distributions by the Money Fund be reinvested in additional shares without any systematic withdrawal program. There will be no minimum for reinvestments from unit investment trusts. The Money Fund will send account activity statements to 13 17 investors on a quarterly basis only, even if an investor's investment period is more frequent. Persons desiring more information with respect to this program, including the applicable terms and conditions thereof, should contact their securities broker, dealer, financial intermediary or the Distributor. The Money Fund reserves the right to modify or terminate this program at any time. The Money Fund and the Distributor reserve the right to reject any order for the purchase of shares. In addition, the offering of shares may be suspended and resumed at any time thereafter. Shares will not be offered in certificate form. Account statements are prepared and mailed to you monthly, quarterly in the case of an Individual Account. Account statements are not mailed to shareholders as a result of individual redemptions by check. NET ASSET VALUE The net asset value per share of the Money Fund will be determined separately for each class of shares. The net asset value per share of a class of shares of the Money Fund is determined by calculating the total value of the Money Fund's assets attributable to such class of shares, deducting the total liabilities attributable to such class of shares and dividing the result by the number of shares of such class outstanding. The net asset value per share for each class of shares normally will remain fixed at $1.00 per share except in extraordinary circumstances. The net asset value for the Money Fund is computed twice daily as of 12:00 p.m. and 4:00 p.m. Eastern time, Monday through Friday, except on customary business holidays, or except on any day on which no purchase or redemption orders are received, or there is not a sufficient degree of trading in the Money Fund's portfolio securities such that the Money Fund's net asset value per share might be materially affected. The Money Fund reserves the right to calculate the net asset value more or less frequently than daily if deemed desirable. The Money Fund values its portfolio on the basis of amortized cost, which means that securities are valued at their acquisition cost to reflect a constant amortization rate to maturity of any premium or discount, rather than at current market value. Calculations are made to compare the amortized cost valuation of the portfolio with current market values. Money market valuations are obtained by using market quotations provided by market makers, estimates of market values, or values obtained from published yield data of money market instruments. If a deviation of 1/2 of 1.00% or more were to occur between the net asset value calculated by reference to market values and the Money Fund's $1.00 per share net asset value, or if there were any other deviation which the Trustees believe would result in a material dilution to investors or purchasers, the Trustees would promptly consider what action, if any, should be initiated. Other assets are valued at fair value as determined in good faith by the Trustees of the Trust, of which the Money Fund is a series. The method of calculating yields is described in the Statement of Additional Information. There can be no assurance that the Money Fund will be able to maintain a net asset value of $1.00 per share. -------------------------------------------------------------------------------- DISTRIBUTIONS FROM THE FUND -------------------------------------------------------------------------------- The Money Fund's present policy, which may be changed at any time by the Board of Trustees, is to declare and pay dividends from net investment income on a daily basis to each respective class of shares. Investments will begin earning dividends on the day federal funds are received by the Money Fund prior to 12:00 p.m. Eastern time. Any investments for which federal funds are received after 12:00 p.m. will 14 18 begin receiving dividends on the next business day. Dividends are automatically reinvested in additional shares of the Money Fund and credited to the investors' accounts daily. If investors request, they may redeem dividends paid on their shares on a monthly basis. Investors may make such a request by checking the appropriate box on the account application. Distributions with respect to each class of shares will be calculated in the same manner on the same day and will be in the same amount, except that the different distribution and service fees and any incremental administrative expenses relating to each class of shares will be borne exclusively by the respective class and may cause the distributions relating to the different classes of shares to differ. Generally, distributions with respect to a class of shares subject to a higher distribution fee will be lower than distributions with respect to a class of shares subject to a lower distribution fee. -------------------------------------------------------------------------------- SHAREHOLDER SERVICES -------------------------------------------------------------------------------- ACCESS Investor Services, Inc., P.O. Box 418256, Kansas City, Missouri 64141-9256, transfer agent for the Money Fund and a wholly-owned subsidiary of Van Kampen American Capital, performs bookkeeping, data processing and administrative services related to the maintenance of shareholder accounts. When an initial investment is made in the Money Fund, an account will be opened for each investor on the Money Fund's books and investors will receive a confirmation of the opening of the account. Investors will receive monthly statements giving details of all activity in their account during the month and will also receive a statement whenever an investment or withdrawal is made in or from their account (except for reinvestment of distributions, systematic withdrawals and investments through special programs). Information for federal income tax purposes will be provided at the end of the year. -------------------------------------------------------------------------------- REDEMPTION OF SHARES -------------------------------------------------------------------------------- Investors may redeem shares by phone, by writing a check, by mail or, if they qualify, by establishing a Systematic Withdrawal Plan. The Money Fund does not charge for redemptions. Shares purchased by check may not be redeemed until the check has cleared, which may take 15 days or more. In addition, a completed account application must have been received by the transfer agent for the Money Fund before any redemption request can be honored. TELEPHONE REDEMPTIONS. Shareholders may sell shares by calling the Money Fund at (800) 421-5666 before 4:00 p.m. Central Time to request a redemption by the Money Fund. For inquiries through Telecommunications Device for the Deaf (TDD), dial (800) 772-8889. There is a $500 minimum per request if the redemption proceeds are to be mailed to the shareholder. If the redemption proceeds are to be wired to a bank, there is a minimum of $1,000 per request. Prior to redeeming shares by telephone the appropriate section of the account application or an Expedited Telephone Redemption and Exchange Request Form (the "Authorization") must be completed by the shareholder and be on file with ACCESS. The signature(s) on the Authorization must be guaranteed by a member firm of a principal stock exchange, a commercial bank or trust company which is a member of the Federal Deposit Insurance Corporation, a credit union or a savings association unless the Authorization is completed at the time an account is originally established. The guarantee must state the words "Signature Guaranteed" along with the name of the granting institution. Shareholders should verify with the institution that it is an eligible guarantor prior to signing. A guarantee from a notary public is not acceptable. A redemption requested by telephone will be processed at the net asset value next 15 19 determined after the request is received. Any applicable CDSC with respect to Class B Shares redeemed will be deducted from the redemption proceeds prior to transmittal of such proceeds to the shareholder. The proceeds would then be made payable to the registered shareowner(s) and mailed to the address registered on the account or wired to a bank, as requested on the Authorization. These privileges are available for all accounts other than retirement accounts. This service is not available with respect to shares purchased by check until 15 days after purchase. By establishing the telephone redemption service, a shareholder authorizes the Money Fund or ACCESS to act upon the instructions of any person by telephone to redeem shares for any account for which such service has been authorized to the address of record of such account or such other address as is listed in the Authorization. The Money Fund, Van Kampen American Capital and ACCESS employ procedures reasonably believed to confirm that instructions communicated by telephone are genuine. Such procedures include requiring a person attempting to redeem shares by telephone to provide, on a recorded line, the name on the account, a social security number or tax identification number and such additional information as may be included in the Authorization. An investor agrees that no such person will be liable for any loss, liability, cost or expense arising out of any request, including any fraudulent or unauthorized request. However, if the Money Fund Van Kampen American Capital or ACCESS fails to employ such reasonable procedures, such person may be liable for any losses due to unauthorized or fraudulent telephone transactions. This service may be amended or terminated at any time by the Money Fund or ACCESS. If an investor is unable to reach the Money Fund by telephone, he or she may redeem shares pursuant to the procedures set forth below under the caption "Written Redemption Request." During periods of extreme economic or market changes, it may be difficult for investors to reach the Money Fund by telephone and to effect telephone redemptions. BY CHECK. By completing the appropriate section of the account application, investors in Class A Shares of the Money Fund may effect redemptions by writing checks drawn on their share account with the Money Fund payable in any amount not less than $100. Presently there is no charge for this service. When a check is presented for payment, the Money Fund will redeem a sufficient number of full and fractional Class A Shares from the investors's account to cover the amount of the check. If a check is presented against an account in which there are insufficient funds, if shares to be redeemed were purchased by check and have been on the books of the Money Fund for less than 15 days, if a check is presented with an improper signature or if the amount of the check is less than $100, the check will be returned and there will be a $5 service charge deducted from the account. A service charge of $10 will be deducted from the account for each stop payment order requested by an investor. The Money Fund reserves the right to terminate or modify this service at any time with respect to a particular investor or all investors in general. WRITTEN REDEMPTION REQUEST. Shareholders may sell shares without charge (other than, with respect to the Class B Shares, any applicable contingent deferred sales charge) at any time by mailing a written redemption request in proper form to ACCESS. This request should be sent to ACCESS Investor Services, Inc., Van Kampen American Capital Funds, P.O. Box 418256, Kansas City, MO 64141-9256. The request should indicate the number of shares to be redeemed of a particular fund and the class designation of such shares and identify the account number and be signed exactly as the shares are registered. If the amount being redeemed is in excess of $50,000 or if the redemption proceeds will be sent to an address other than the address of record, the signature(s) must be guaranteed by a member firm of a principal stock exchange, a commercial bank or trust company which is a member of the Federal Deposit Insurance Corporation, a credit union or a savings association. The guarantee must state 16 20 the words "Signature Guaranteed" along with the name of the granting institution. Shareholders should verify with the institution that it is an eligible guarantor prior to signing. A guarantee from a notary public is not acceptable. Shareholders will receive the net asset value per share next computed after ACCESS receives the redemption request in proper form. Any applicable contingent deferred sales charge with respect to Class B Shares redeemed will be deducted from the redemption proceeds prior to transmittal of such proceeds to the shareholder. SYSTEMATIC WITHDRAWAL PROGRAM. If a shareholder's account is valued at $10,000 or more, a requested dollar amount may be paid from such account to any person monthly, quarterly, semiannually or annually. The minimum amount that may be withdrawn each period is $25. Depending upon the size of the payments requested and the fluctuations in the net asset value of the shares redeemed, redemptions for the purpose of making such payments may reduce or even exhaust the amounts in such account. Holders of Class B Shares who establish a withdrawal plan may redeem up to 12% annually of the shareholder's initial account balance without incurring a contingent deferred sales charge. Initial account balance means the amount of the shareholder's investment in the Fund at the time the election to participate in the plan is made. Under the plan, sufficient shares of the Money Fund are redeemed to provide the amount of the periodic withdrawal payment. Distributions on shares held under the plan are reinvested in additional shares at the next determined net asset value. If periodic withdrawals continuously exceed reinvested distributions, the shareholder's original investment will be correspondingly reduced and ultimately exhausted. Withdrawals made concurrently with purchases of additional shares ordinarily will be disadvantageous to the shareholder because of the duplication of sales charges. The Fund reserves the right to amend or terminate the systematic withdrawal program on thirty days' notice to its shareholders. It will ordinarily be disadvantageous to purchase shares (except through reinvestment of distributions) while participating in a systematic withdrawal program because a shareholder will be paying a sales charge, or will become subject to a contingent deferred sales charge, in order to purchase shares at the same time that shares are being redeemed upon which a sales charge may already have been paid. Therefore, the Money Fund will not knowingly permit a shareholder to make additional investments in shares of less than $5,000 if at the same time such shareholder is making systematic withdrawals at a rate greater than the distribution being paid on such shareholder's shares. The Money Fund reserves the right to amend or terminate the systematic withdrawal program on thirty days notice, and a shareholder may withdraw from the program at any time. EXCHANGE PRIVILEGE. Shares of the Money Fund may be exchanged with shares of any other eligible mutual fund distributed by the Distributor, subject to certain limitations herein or in such other fund's prospectus. Before effecting an exchange, shareholders in the Money Fund should obtain and read a current prospectus of the fund into which the exchange is to be made. SHAREHOLDERS MAY ONLY EXCHANGE INTO SUCH OTHER FUNDS AS ARE LEGALLY AVAILABLE FOR SALE IN THEIR STATE. In general, shares of the Money Fund must have been registered in the shareholder's name for at least 15 days prior to an exchange. Shares of the Money Fund registered in a shareholder's name for less than 15 days may only be exchanged upon receipt of prior approval of the Adviser; however, under normal circumstances, it is the policy of the Adviser not to approve such requests. Upon 60 days after the date of this prospectus, the Money Fund will increase the number of days shares must be registered in a shareholder's name prior to an exchange to 30 days. 17 21 Exchanges of Class A Shares of the Money Fund that have not previously been charged a sales charge (except for shares purchased via the reinvestment option) or have previously been subject to a sales charge lower than the sales charge applicable to the other fund will have the sales charge differential imposed upon the exchange into such fund. No sales charge is imposed upon the exchange of Class B Shares. Upon redemption of Class B Shares from the Van Kampen American Capital family of funds, Class B Shares which have been exchanged are subject to the contingent deferred sales charge imposed by the initial Van Kampen American Capital fund purchased by the investor prior to any exchanges. The holding period requirements for the contingent deferred sales charge, and the conversion privilege for Class B Shares of the Money Fund, are determined by the date of purchase into the initial Van Kampen American Capital fund purchased by the investor prior to any exchanges. Exchanges of shares are sales and may result in a gain or loss for federal income tax purposes. If the shares exchanged have been held for less than 91 days, the sales charge paid on such shares is not included in the tax basis of the exchanged shares, but is carried over and included in the tax basis of the shares acquired. A shareholder wishing to make an exchange may do so by sending a written request to ACCESS or by contacting the telephone transaction line at (800) 421-5684 ((800) 772-8889 for the hearing impaired). A shareholder automatically has telephone exchange privileges unless otherwise designated in the application form accompanied by this Prospectus. The exchange will take place at the relative net asset values of the shares next determined after receipt of such request with adjustment for any additional sales charge. Any shares exchanged begin earning dividends on the next business day after the exchange is affected. Van Kampen American Capital and its subsidiaries, including ACCESS (collectively, "VKAC"), and the Money Fund employ procedures considered by them to be reasonable to confirm that instructions communicated by telephone are genuine. Such procedures include requiring certain personal identification information prior to acting upon telephone instructions, tape recording telephone communications, and providing written confirmation of instructions communicated by telephone. If reasonable procedures are employed, a shareholder agrees that neither VKAC nor the Money Fund will be liable for following telephone instructions which it reasonably believes to be genuine. VKAC and the Money Fund may be liable for any losses due to unauthorized or fraudulent instructions if reasonable procedures are not followed. If the exchanging shareholder does not have an account in the fund whose shares are being acquired, a new account will be established with the same registration, dividend and capital gains options (except dividend diversification options) and broker, dealer or financial intermediary of record as the account from which shares are exchanged, unless otherwise specified by the shareholder. In order to establish a systematic plan for the new account or dividend diversification options for the new account, an exchanging shareholder must file a specific written request. The Money Fund reserves the right to reject any order to acquire its shares through exchange. In addition the Fund may restrict or terminate the exchange privilege at any time on 60 days notice to its shareholders of any termination or material amendment. AUTOMATED MULTIPLE ACCOUNT SHAREHOLDER SERVICES 1. Automated Clearing House ("ACH") Deposits. Holders of Class A Shares can use ACH to have redemption proceeds deposited electronically into their bank accounts. Redemptions transferred to a bank account via the ACH plan are available to be credited to the account on the second business day following normal payment. In order to utilize this option, the shareholder's bank must be a member of 18 22 Automated Clearing House. In addition, the shareholder must fill out the appropriate section of the application attached to this Prospectus. The shareholder must also include a voided check or deposit slip from the bank account into which redemptions are to be deposited together with the completed application. Once ACCESS has received the application and the voided check or deposit slip, such shareholder's designated bank account, following any redemption, will be credited with the proceeds of such redemption. Once enrolled in the ACH plan, a shareholder may terminate participation at any time by writing the ACCESS. 2. Automated Dividend Programs. The Money Fund will, upon the election of a shareholder, automatically invest distributions from a shareholder's account directly into a shareholder's bank account. 3. Dividend Diversification. Monthly distributions and any net long-term capital gain distributions to a shareholder's account may be invested in the same class of shares of any other mutual fund distributed by Van Kampen American Capital at the then current net asset value, WITHOUT A SALES CHARGE, upon election by a shareholder. This election may be made on the account application bound in this prospectus, by written notice to ACCESS or by calling the Money Fund directly at (800) 421-5666. For inquiries through Telecommunications Device for the Deaf (TDD), dial (800) 772-8889. In order to qualify for this privilege, a shareholder must have established an account in the other mutual fund prior to electing this privilege. This privilege may be modified or terminated by the Money Fund at any time. 4. Easy Account Savings Enhancement Plan. Once a shareholder has opened a Class A Share account with the required minimum investment, the automatic investment option may be utilized to make regular electronic monthly investments into such shareholder's Class A Share account. In order to utilize this option, a shareholder must fill out and sign the appropriate section of the application attached to this Prospectus or the application available from ACCESS, the Money Fund, such shareholder's broker or dealer or Van Kampen American Capital. Once the Transfer Agent has received this application, such shareholder's checking account at his or her designated local bank will be debited each month in the amount authorized by such shareholder to purchase Class A Shares of the Money Fund. By electing to utilize any of the foregoing services, a shareholder authorizes ACCESS or its agent to act upon the instructions indicated in the appropriate section of the application in performing such services by either withdrawing funds for deposit in the Money Fund or depositing distributions and redemptions in the bank account indicated by the voided check or deposit slip accompanying the shareholder's election and/or by depositing the shareholder's distributions in the Van Kampen American Capital fund account indicated. A shareholder also agrees that neither the Money Fund, Van Kampen American Capital or ACCESS will be liable for any loss, liability, cost or expense arising out of any request, including any fraudulent request. This service may be amended or terminated at any time by the Money Fund or ACCESS. GENERAL. Whether shares are redeemed by the Money Fund or sold through a securities dealer, a check for the proceeds (net of any required tax withholding and, with respect to Class B Shares, any applicable contingent deferred sales charge) ordinarily will be mailed to shareholders or their dealer, as the case may be, within three business days after a redemption request or repurchase order received in proper form as set forth above. Wire transfers from the Money Fund of redemption proceeds, in the manner described above, ordinarily will be transmitted to the shareholder within one business day. If any shares are redeemed or repurchased shortly after purchase, the Money Fund will not mail the proceeds until checks received for the purchase of shares have cleared, which may take 10 days or more. The proceeds, of course, may be more or less than the cost of the shares. 19 23 The right of redemption or resale to the Money Fund may be suspended or the date of payment postponed during any period when the New York Stock Exchange is closed (other than customary weekend and holiday closings), when an emergency exists as defined by rules and regulations of the SEC, or during any period when the SEC has by order permitted such suspension or postponement. -------------------------------------------------------------------------------- THE DISTRIBUTION AND SERVICE PLANS -------------------------------------------------------------------------------- The Money Fund has adopted a distribution plan (the "Distribution Plan") with respect to each class of its shares pursuant to Rule 12b-1 under the Investment Company Act. The Money Fund also has adopted a service plan (the "Service Plan") with respect to each class of its shares. The Distribution Plan and the Service Plan provide that the Money Fund may spend a portion of its average daily net assets attributable to each class of shares in connection with distribution of the respective class of shares and in connection with the provision of ongoing services to shareholders of each class. The Distribution Plan and the Service Plan are being implemented through an agreement with Van Kampen American Capital, distributor of each class of the Money Fund's shares, sub-agreements between Van Kampen American Capital and members of the NASD acting as securities dealers ("dealers"), NASD members or eligible non-members acting as brokers ("brokers") or agents and similar agreements between the Money Fund and financial intermediaries acting as brokers ("financial intermediaries") (collectively, "Selling Agreements") that may provide for their customers or clients certain services or assistance. CLASS A SHARES. The Money Fund may spend an aggregate amount up to 0.25% per year of the average daily net assets attributable to the Class A Shares of the Money Fund pursuant to the Distribution Plan and Service Plan. From such amount, the Money Fund may spend up to the full 0.25% per year of its average daily net assets attributable to the Class A Shares pursuant to the Service Plan in connection with the ongoing provision of services to holders of such shares by Van Kampen American Capital and by brokers, dealers or financial intermediaries and in connection with the maintenance of such shareholders' accounts. The Money Fund pays Van Kampen American Capital the lesser of the balance, if any, of the 0.25% not paid to such brokers, dealers or financial intermediaries or the amount of Van Kampen American Capital's actual distribution related expense. CLASS B SHARES. The Money Fund may spend up to 0.75% per year of the average daily net assets attributable to the Class B Shares of the Money Fund pursuant to the Distribution Plan. In addition, the Money Fund may spend up to 0.25% per year of its average daily net assets attributable to the Class B Shares pursuant to the Service Plan in connection with the ongoing provision of services to holders of such shares by Van Kampen American Capital and by brokers, dealers or financial intermediaries and in connection with the maintenance of such shareholders' accounts. OTHER INFORMATION. Amounts payable to Van Kampen American Capital with respect to the Class A Shares under the Distribution Plan in a given year may not fully reimburse Van Kampen American Capital for its actual distribution-related expenses during such year. In such event, with respect to the Class A Shares, there is no carryover of such reimbursement obligations to succeeding years. Van Kampen American Capital's actual expenses with respect to Class B Shares for any given year may exceed the amounts payable to Van Kampen American Capital with respect to such Class B Shares under the Distribution Plan, the Service Plan and payments received pursuant to the contingent deferred sales charge. In such event, any unreimbursed expenses will be carried forward and paid by the Money 20 24 Fund (up to the amount of the actual expenses incurred) in future years so long as such Distribution Plan is in effect. Except as mandated by applicable law, the Money Fund does not impose any limit with respect to the number of years into the future that such unreimbursed expenses may be carried forward (on a fund level basis). Because such expenses are accounted on a fund level basis, in periods of extreme net asset value fluctuation such amounts with respect to a particular Class B Share may be greater or less than the amount of the initial commission (including carrying cost) paid by Van Kampen American Capital with respect to such Class B Share. In such circumstances, a shareholder of such Class B Share may be deemed to incur expenses attributable to other shareholders of such class. The Money Fund will disclose in its prospectus from time to time the then current amount of any such unreimbursed expenses with respect to each class of Class B Shares expressed as a dollar amount and as a percent of the Money Fund's total net assets. If the Distribution Plan was terminated or not continued, the Money Fund would not be contractually obligated to pay Van Kampen American Capital for any expenses not previously reimbursed by the Money Fund or recovered through contingent deferred sales charges. Various federal and state laws prohibit national banks and some state-chartered commercial banks from underwriting or dealing in the Money Fund's shares. In addition, state securities laws on this issue may differ from the interpretations of federal law, and banks and financial institutions may be required to register as dealers pursuant to state law. In the unlikely event that a court were to find that these laws prevent such banks from providing such services described above, the Money Fund would seek alternate providers and expects that shareholders would not experience any disadvantage. -------------------------------------------------------------------------------- TAX STATUS -------------------------------------------------------------------------------- The Money Fund has qualified and intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a regulated investment company, the Money Fund must comply with certain requirements of the Code relating to, among other things, the source of its income and the diversification of its assets. If the Money Fund so qualifies and if it distributes at least 90% of its net investment income (which includes net short-term capital gains, but not net capital gains, which is the excess of net long-term capital gains over net short-term capital losses) in each year, the Money Fund will not be required to pay federal income taxes on any income distributed to shareholders. The Money Fund intends to distribute at least the minimum amount of net investment income necessary to satisfy the 90% distribution requirement. The Money Fund will not be subject to federal income tax on any net capital gains distributed to its shareholders. Distributions of the Money Fund's net investment income are taxable to shareholders as ordinary income whether received in shares or in cash. Shareholders who receive distributions in the form of additional shares will have a basis for federal income tax purposes in each such share equal to the value thereof on the reinvestment date. Distributions in excess of the Money Fund's earnings and profits will first reduce the adjusted tax basis of the shares held by the shareholders and, after such adjusted tax basis is reduced to zero, will constitute capital gains to such shareholder (assuming such shares are held as a capital asset). The Money Fund will inform shareholders of the source and tax status of such distributions promptly after the close of each taxable year. Distributions by the Money Fund generally will not be eligible for the dividends received deduction for corporations. In order to avoid a 4% excise tax the Money Fund will be required to distribute by December 31 of each year at least 98% of its net investment income for such year and at least 98% of its capital gain net 21 25 income (computed on the basis of the one-year period ending on October 31 of such year), plus any amounts that were not distributed in previous taxable years. For purposes of the excise tax, any net investment income or capital gain net income retained by, and subject to federal income tax in the hands of, the Money Fund will be treated as having been distributed. Redemption or resale of shares of the Money Fund will be a taxable transaction for federal income tax purposes. Redeeming shareholders will recognize gain or loss in an amount equal to the difference between their basis in such redeemed shares of the Money Fund and the amount received. Assuming that such shares are held as capital assets, the gain or loss will be a capital gain or loss and will generally be long- term if such shareholders have held their shares for more than one year. Although dividends generally will be treated as distributed when paid, dividends declared in October, November or December, payable to shareholders of record on a specified date in such months and paid in January of the following year will be treated as having been distributed by the Money Fund (and received by the shareholders) on the December 31 of the year in which the dividends were declared. In addition, certain other distributions made after the close of a taxable year of the Money Fund may be "spilled back" and treated as paid by the Money Fund (except for purposes of the 4% excise tax) during such taxable year. In such case, shareholders will be treated as having received such dividends in the taxable year in which the distribution is actually made. The Money Fund is required, in certain circumstances, to withhold 31% of dividends and certain other payments, including redemptions, paid to shareholders who do not furnish to the Money Fund their correct taxpayer identification number (in the case of individuals, their social security number) or who are otherwise subject to backup withholding. Foreign shareholders, including shareholders who are nonresident aliens, may be subject to U.S. withholding tax on certain distributions (whether received in cash or in shares) at a rate of 30% or such lower rate as prescribed by any applicable treaty. The federal income tax discussion set forth above is for general information only. Prospective investors should consult their own advisors regarding the specific federal income tax consequences of holding and disposing of shares, as well as the effects of state, local and foreign tax laws and any proposed tax law changes. -------------------------------------------------------------------------------- DESCRIPTION OF SHARES OF THE FUND -------------------------------------------------------------------------------- The Money Fund is a series of the Van Kampen American Capital Money Market Trust, a Delaware business trust organized as of May 10, 1995 (the "Trust"). The Money Fund originally organized as the American Monetary Reserve Fund, Inc., a Maryland corporation, incorporated in July 1982 and subsequently reorganized as the Independent CashFlow Trust, Money Market Series, which was then renamed as Van Kampen Merritt Money Market Trust. Van Kampen Merritt Money Market Fund, a separate series of Van Kampen Merritt Money Market Trust was again reorganized as a series of the Trust as of July 31, 1995. The only series currently designated is the Money Fund although the Trustees of the Trust are also empowered to designate additional series. The authorized capitalization of the Money Fund consists of an unlimited number of shares of beneficial interest, par value $0.01, divided into two classes, designated Class A Shares and Class B Shares. Each class of shares represents an interest in the assets of the Money Fund and are identical in all respects except that each class bears certain distribution expenses, has exclusive voting rights with respect to its distribution fee and has different exchange privileges. See "The Distribution and Service Plans." The Declaration of Trust provides that shareholders are not liable for any liabilities of the Trust or any series, requires inclusion of 22 26 a clause to that effect in every agreement entered into by the Trust or any of its series and indemnifies shareholders against any such liability. Shares of the Trust entitle their holders to one vote per share; however, separate votes are taken by each series on matters affecting an individual series. The Trust does not contemplate holding regular meetings of shareholders to elect Trustees or otherwise. However, the holders of 10% or more of the outstanding shares may by written request require a meeting to consider the removal of Trustees by a vote of a majority of the shares present and voting at such meeting. The Trust will assist such holders in communicating with other shareholders of the Money Fund to the extent required by the Investment Company Act. More detailed information concerning the Trust is set forth in the Statement of Additional Information. -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- This prospectus and the Statement of Additional Information do not contain all the information set forth in the Registration Statement filed by the Money Fund with the SEC under the Securities Act of 1933. Copies of the Registration Statement may be obtained at a reasonable charge from the SEC, or may be examined, without charge, at the office of the SEC in Washington, D.C. The Money Fund's fiscal year ends on June 30. The Money Fund sends to its shareholders at least semi-annually reports showing the Money Fund's portfolio and other information. An annual report, containing financial statements audited by independent auditors, is sent to shareholders each year. After the end of each year, shareholders will receive federal income tax information regarding dividends and capital gains distributions. Shareholder inquiries should be directed to the Van Kampen American Capital Money Market Fund, One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attn: Correspondence. For Automated Telephone Service which provides 24-hour direct dial access to Fund facts and Shareholder account information, dial (800) 421-5666. For inquiries through Telecommunications Device for the Deaf (TDD) dial (800) 772-8889. 23 27 VAN KAMPEN AMERICAN CAPITAL MONEY MARKET FUND One Parkview Plaza Oakbrook Terrace, Illinois 60181 ------------------------------------------------------------------- Investment Adviser VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP. One Parkview Plaza Oakbrook Terrace, Illinois 60181 Distributor VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. One Parkview Plaza Oakbrook Terrace, Illinois 60181 Transfer Agent ACCESS INVESTOR SERVICES, INC. P.O. Box 418256 EXISTING SHAREHOLDERS--FOR Kansas City, MO 64141-9256 INFORMATION ON YOUR EXISTING Attn: Van Kampen American Capital Funds ACCOUNT PLEASE CALL THE FUND'S TOLL-FREE NUMBER--(800) 421-5666. Custodian STATE STREET BANK AND TRUST PROSPECTIVE INVESTORS--CALL COMPANY YOUR BROKER OR (800) 421-5666. 225 Franklin Street, P.O. Box 1713 Boston, MA 02105-1713 DEALERS--FOR DEALER INFORMAAttn: Van Kampen American Capital Funds TION, SELLING AGREEMENTS, WIRE ORDERS, OR REDEMPTIONS CALL Legal Counsel THE DISTRIBUTOR'S TOLL-FREE SKADDEN, ARPS, SLATE, MEAGHER & NUMBER--(800) 421-5666. FLOM 333 West Wacker Drive FOR SHAREHOLDER AND DEALER Chicago, IL 60606 INQUIRIES THROUGH TELECOMMUNICATIONS DEVICE Independent Auditors FOR THE DEAF (TDD) DIAL (800) 772-8889. KPMG PEAT MARWICK LLP Peat Marwick Plaza 303 East Wacker Drive FOR AUTOMATED TELEPHONE Chicago, IL 60601 SERVICES DIAL (800) 421-5666. 28 MONEY MARKET FUND -------------------------------------------------------------------------------- PROSPECTUS AUGUST 1, 1995 ------ A WEALTH OF KNOWLEDGE - A KNOWLEDGE OF WEALTH ------ VAN KAMPEN AMERICAN CAPITAL ------------------------------------------------------------------------ 29 STATEMENT OF ADDITIONAL INFORMATION VAN KAMPEN AMERICAN CAPITAL MONEY MARKET FUND Van Kampen American Capital Money Market Fund, formerly known as Van Kampen Merritt Money Market Fund (the "Fund"), is a money market mutual fund whose investment objective is to provide a high level of current income, liquidity and safety of principal through investment in a diversified portfolio of money market securities. There can be no assurance that the Fund will achieve its objective. The Fund is a separate series of Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Trust"). The Fund is a mutual fund whose portfolio is advised by Van Kampen American Capital Investment Advisory Corp. (the "Adviser"). This Statement of Additional Information is not a prospectus but should be read in conjunction with the Prospectus for the Fund dated August 1, 1995 (the "Prospectus"). This Statement of Additional Information does not include all information that a prospective investor should consider before purchasing shares of the Fund, and investors should obtain and read the Prospectus prior to purchasing shares. A copy of the Prospectus may be obtained without charge by calling the Fund at (800) 421-5666. This Statement of Additional Information incorporates by reference the entire Prospectus. The Prospectus and this Statement of Additional Information omit certain information contained in the registration statement filed with the Securities and Exchange Commission (the "Commission"), Washington, D.C. This omitted information may be obtained from the Commission upon payment of the fee prescribed or inspected at the Commission's office at no charge. TABLE OF CONTENTS The Fund and the Trust............................................................ 2 Investment Policies and Restrictions.............................................. 2 Officers and Trustees............................................................. 5 Legal Counsel..................................................................... 11 Investment Advisory and Other Services............................................ 11 Portfolio Transactions............................................................ 13 The Distributor................................................................... 14 Yield Information................................................................. 15 Dividends......................................................................... 16 Unaudited Financial Statements.................................................... 17 Notes to Unaudited Financial Statements........................................... 25 Independent Auditors' Report...................................................... 28 Audited Financial Statements...................................................... 29 Notes to Audited Financial Statements............................................. 35 Appendix.......................................................................... 38
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED AUGUST 1, 1995. 30 THE FUND AND THE TRUST The Fund is an open-end diversified management investment company. The Fund is a series of Van Kampen American Capital Money Market Trust (the "Trust"). At present, the Fund is the only series of the Trust although other series may be organized and offered in the future. The Trust and each of its series, including the Fund, will be treated as separate corporations for Federal income tax purposes. The Trust is an unincorporated business trust established under the laws of the state of Delaware by an Agreement and Declaration of Trust dated as of May 10, 1995, (the "Declaration of Trust"). The Declaration of Trust permits the Trustees to create one or more separate investment portfolios and issue a series of shares for each portfolio. The Trustees can further sub-divide each series of shares into one or more classes of shares for each portfolio. Each share represents an equal proportionate interest in the assets of the series with each other share in such series and no interest in any other series. No series is subject to the liabilities of any other series. The Declaration of Trust provides that shareholders are not liable for any liabilities of the Trust or any of its series, requires inclusion of a clause to that effect in every agreement entered into by the Trust or any of its series and indemnifies shareholders against any such liability. Each Class A Share and Class B Share represents an equal proportionate interest in the assets of the respective class of the series, with each other share of the respective class, and no interest in any other series. No series is subject to the liabilities of any other series. The Declaration of Trust provides that shareholders are not liable for any liabilities of the Trust or any of its series, requires inclusion of a clause to that effect in every agreement entered into by the Trust or any of its series and indemnifies shareholders against any such liability. Shares of the Trust entitle their holders to one vote per share. However, separate votes are taken by each series on matters affecting an individual series or, with respect to a class of shares, on the respective class' distribution plan. For example, a change in investment policy for a series would be voted upon by shareholders of only the series involved. Shares do not have cumulative voting rights, preemptive rights or any conversion or exchange rights. The Trust does not contemplate holding regular meetings of shareholders to elect Trustees or otherwise. However, the holders of 10% or more of the outstanding shares may by written request require a meeting to consider the removal of Trustees by a vote of a majority of the shares present and voting at such meeting. The Trustees may amend the Declaration of Trust if authorized by a vote of the Trustees and a favorable vote of the holders of more than 50% of the outstanding shares entitled to vote (or such higher vote as may be required by the Investment Company Act of 1940 (the "Investment Company Act") or other applicable law). Statements contained in this Statement of Additional Information as to the contents of any contract or other document referred to are not necessarily complete, and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement of which this Statement of Additional Information forms as part, each such statement being qualified in all respects by such reference. INVESTMENT POLICIES AND RESTRICTIONS The investment objective of the Fund is to provide high current income, liquidity and safety of principal through investment in a diversified portfolio of money market securities. The Fund will invest 2 31 only in the securities listed below. These securities must be denominated in U.S. dollars and must either (i) mature or have been called for redemption within one year of the date purchased or (ii) be subject to repurchase agreements maturing within one year. There can be no assurance that the Fund will achieve its objective. The foregoing is a fundamental policy and cannot be changed without approval of the shareholders of the Fund. 1. U.S. Government Securities. The Fund may invest in obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities. 2. Bank Obligations. The Fund may invest in time deposits of federal and state banks whose accounts are insured by a government agency; certificates of deposit, bankers' acceptances and other bank obligations if they are obligations of a domestic bank (or foreign branch thereof) subject to regulation by the U.S. Government. 3. Commercial Paper Obligations. The Fund may invest in commercial paper, including variable amount master demand notes, rated at least A-3 by Standard & Poor's Ratings Group ("S&P") or Prime-3 by Moody's Investors Service, Inc. ("MIS") or, if not rated, issued by a corporation in whose debt obligations the Fund may invest (see 4 below) see Appendix A to this Statement of Additional Information for a description of the factors considered by S&P and MIS. 4. Corporate Debt Obligations. The Fund may invest in corporate debt obligations (for example, bonds and debentures) if they are rated at least AA by S&P or Aa by MIS see Appendix A to this Statement of Additional Information for bond ratings. Fundamental investment restrictions limiting the investments of the Fund provide that the Money Fund may not: 1. Purchase any securities (other than obligations issued or guaranteed by the United States Government or by its agencies or instrumentalities) if, as a result, more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer or if, as a result, the Fund would hold more than 10% of the outstanding voting securities of an issuer. (There is no limit on the amount of the Fund's assets which may be invested in any single issue of U.S. Government Securities.) 2. Borrow money, except from banks for temporary or emergency purposes and then not in amounts in excess of 10% of its net assets at the time of borrowing. It can mortgage or pledge its assets only in connection with such borrowing and in amounts not in excess of 10% of the value of its net assets at the time of such borrowing. Interest on borrowing would reduce the Fund's income. The Fund will not purchase any securities while it has any outstanding borrowings and will not engage in reverse repurchase transactions. 3. Buy any securities "on margin" or sell any securities "short." 4. Make investments for the purpose of exercising control or management. 5. Write, purchase or sell puts, calls or combinations thereof, or purchase or sell interest rate futures contracts or related options. 6. Purchase any security which is restricted as to disposition under federal securities laws or by contract or which are not readily marketable, or enter into a repurchase agreement maturing in more than seven days with respect to any security if, as a result, more than 10% of the Fund's total assets would be invested in such securities. 3 32 7. Invest in securities of other investment companies, except as part of a merger, consolidation or other acquisition. 8. Invest in interests in oil, gas or other mineral exploration or development programs. 9. Purchase or retain securities of any company if, to the knowledge of the Fund, its officers and directors and the officers and directors of the Fund's investment advisor who individually own more than 1/2 of 1% of the securities of such company together own beneficially more than 5% of such securities. 10. Make loans, except that the Fund can purchase and hold those publicly distributed debt securities which it is permitted to buy, lend its portfolio securities, and enter into repurchase agreements. 11. Act as an underwriter of securities, except to the extent the Fund may be deemed to be an underwriter in connection with the sale of securities held in its portfolio. 12. Purchase or sell real estate, commodities or commodity contracts, except that the Fund may purchase marketable debt securities issued by companies which invest in interests in real estate. 13. Purchase or retain securities of issuers having a record, together with predecessors, of less than three years continuous operations if at the time of purchase more than 5% of the Fund's total assets would be invested in such securities. 14. Invest more than 25% of its assets in a single industry, except that such limitation shall not apply to U.S. Government Securities or domestic bank obligations (excluding foreign branches thereof). 15. Invest in FHA or VA pooled mortgages, or obligations of the Asian Development Bank, the Inter-American Development Bank or the International Bank for Reconstruction and Development (World Bank) or in foreign securities or more than 10% of its assets in bank obligations payable in Eurodollars; also, the Fund may not purchase or sell forward foreign currency exchange contracts, invest in bank time deposits maturing in more than seven days, or invest more than 10% of its assets in bank time deposits maturing between two business days and seven calendar days. The Fund may not change any of these investment restrictions without the approval of the lesser of (i) more than 50% of the Fund's outstanding shares or (ii) 67% of the Fund's shares present at a meeting at which the holders of more than 50% of such outstanding shares are present in person or by proxy. As long as the percentage restrictions described above are satisfied at the time of the investment or borrowing, the Fund will be considered to have abided by those restrictions even if, at a later time, a change in values or net assets causes an increase or decrease in percentage. From time to time, the Fund may adopt more stringent investment restrictions in order to satisfy rules and regulations promulgated by the Commission or to be able to offer its shares to residents in particular states. In order to offer its shares to residents in particular states, the Fund presently will not invest in warrants. 4 33 OFFICERS AND TRUSTEES The tables below list the trustees and officers of the Trust (of which the Fund is a separate series) and their principal occupations for the last five years and their affiliations, if any, with Van Kampen American Capital Investment Advisory Corp. (the "VK Adviser" or "Adviser"), Van Kampen American Capital Asset Management, Inc., (the "AC Adviser"), Van Kampen American Capital Management, Inc., McCarthy, Crisanti & Maffei, Inc., MCM Asia Pacific Company, Limited, Van Kampen American Capital Distributors, Inc. (the "Distributor"), Van Kampen American Capital, Inc. ("Van Kampen American Capital") or VK/AC Holding, Inc. For purposes hereof, the term "Van Kampen American Capital Funds" includes each of the open-end investment companies advised by the VK Adviser (excluding the Van Kampen Merritt Series Trust) and each of the open-end investment companies advised by the AC Adviser. TRUSTEES
PRINCIPAL OCCUPATIONS OR NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS ----------------------------------- ----------------------------------------------------
J. Miles Branagan.................. Co-founder, Chairman, Chief Executive Officer and 2300 205th Street President of MDT Corporation, a company which Torrance, CA 90501 develops manufactures, markets and services medical Age: 63 and scientific equipment. Trustee of each of the Van Kampen American Capital Funds. Richard E. Caruso.................. Founder, Chairman and Chief Executive Officer, Two Randor Station, Suite 314 Integra Life Sciences Corporation, a firm King of Prussia Road specializing in life sciences. Trustee of Radnor, PA 19087 Susquehanna University and First Vice President, The Age: 52 Baum School of Art; Founder and Director of Uncom- mon 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. Trustee of each of the Van Kampen American Capital Funds. Philip P. Gaughan.................. Prior to February, 1989, Managing Director and 9615 Torresdale Avenue Manager of Municipal Bond Department, W. H. Philadelphia, PA 19114 Newbold's Sons & Co. Trustee of each of the Van Age: 66 Kampen American Capital Funds. Roger Hilsman...................... Professor of Government and International Affairs 251-1 Hamburg Cove Emeritus, Columbia University. Trustee of each of Lyme, CT 06371 the Van Kampen American Capital Funds. Age: 75
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PRINCIPAL OCCUPATIONS OR NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS ----------------------------------- ---------------------------------------------------- R. Craig Kennedy................... President and Director, German Marshall Fund of the 1341 E. 50th Street United States. Formerly, advisor to the Dennis Chicago, IL 60615 Trading Group Inc. Prior to 1992, President and Age: 43 Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. Trustee of each of the Van Kampen American Capital Funds. Dennis J. McDonnell*............... President, Chief Operating Officer and a Director of One Parkview Plaza the VK Adviser, the AC Adviser and Van Kampen Oakbrook Terrace, IL 60181 American Capital Management, Inc. Director of VK/AC Age: 53 Holding, Inc, Van Kampen American Capital, and McCarthy, Crisanti & Maffei, Inc. Chairman and a Director of MCM Asia Pacific Company, Ltd. President, Chief Executive Officer and Trustee of each of the funds advised by the VK Adviser. Prior to December, 1991, Senior Vice President of Van Kampen Merritt Inc. Donald C. Miller................... Prior to 1992, Director of Royal Group, Inc., a 415 North Adams company in insurance related businesses. Formerly Hinsdale, IL 60521 Vice Chairman and Director of Continental Illinois Age: 75 National Bank and Trust Company of Chicago and Continental Illinois Corporation. Trustee of each of the Van Kampen American Capital Funds and Chairman of the Board of each of the open-end funds (except the Van Kampen Merritt Series Trust) advised by the VK Adviser. Jack E. Nelson..................... President of Nelson Investment Planning Services, 423 Country Club Drive Inc., a financial planning company and registered Winter Park, FL 32789 investment adviser. President of Nelson Investment Age: 59 Brokerage Services Inc., a member of the National Association of Securities Dealers, Inc. (NASD) and Securities Investors Protection Corp. (SIPC). Trustee of each of the Van Kampen American Capital Funds.
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PRINCIPAL OCCUPATIONS OR NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS ----------------------------------- ---------------------------------------------------- Don G. Powell*..................... President, Chief Executive Officer and a Director of 2800 Post Oak Blvd. VK/AC Holding, Inc. and Van Kampen American Capital. Houston, TX 77056 Chairman, Chief Executive Officer and a Director of Age: 55 the Distributor, the VK Adviser, the AC Adviser and Van Kampen American Capital Management, Inc. Director, President and Chief Executive Officer of Van Kampen American Capital Advisers, Inc. and Van Kampen American Capital Exchange Corp. Director and Executive Vice President of Advantage Capital Corporation, ACCESS Investor Services, Inc., Van Kampen American Capital Services, Inc. and Van Kampen American Capital Trust Company. Director of McCarthy, Crisanti & Maffei, Inc. President and Director, Trustee or Managing General Partner of each of the funds advised by the AC Adviser and Trustee of each of the funds advised by the VK Ad- viser. He is also Chairman of the Board of the Van Kampen Merritt Series Trust and closed-end investment companies advised by the VK Adviser. David Rees......................... Contributing Columnist and, prior to 1995, Senior 1601 Country Club Drive Editor of Los Angeles Business Journal. A director Glendale, CA 91208 of Source Capital, Inc., a closed-end investment Age: 71 company unaffiliated with Van Kampen American Capital, a director and the second vice president of International Institute of Los Angeles. Trustee of each of the Van Kampen American Capital Funds. Jerome L. Robinson................. President of Robinson Technical Products 115 River Road Corporation, a manufacturer and processor of welding Edgewater, NJ 07020 alloys, supplies and equipment. Director of Age: 72 Pacesetter Software, a software programming company specializing in white collar productivity. Director of Panasia Bank. Trustee of each of the Van Kampen American Capital Funds. Lawrence J. Sheehan*............... Of Counsel to and formerly Partner (from 1969 to 1999 Avenue of the Stars 1994) of the law firm of O'Melveny & Myers, legal Suite 700 counsel to the funds advised by the AC Adviser. Los Angeles, CA 90067 Director, FPA Capital Fund, Inc.; FPA New Income Age: 63 Fund, Inc.; FPA Perennial Fund, Inc.; Source Capital, Inc.; and TCW Convertible Security Fund, Inc. Trustee of each of the Van Kampen American Capital Funds. Fernando Sisto..................... George M. Bond Chaired Professor and, prior to 1995, Stevens Institute Dean of Graduate School and Chairman, Department of of Technology Mechanical Engineering, Stevens Institute of Castle Point Station Technology. Director of Dynalysis of Princeton, a Hoboken, NJ 07030 firm engaged in engineering research. Trustee of Age: 70 each of the Van Kampen American Capital Funds and Chairman of the Board of each of the open-end funds advised by the AC Adviser.
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PRINCIPAL OCCUPATIONS OR NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS ----------------------------------- ---------------------------------------------------- Wayne W. Whalen*................... Partner in the law firm of Skadden, Arps, Slate, 333 West Wacker Drive Meagher & Flom, legal counsel to funds advised by Chicago, IL 60606 the VK Adviser. Trustee of each of the Van Kampen Age: 55 American Capital Funds. He also is a Trustee of the Van Kampen Merritt Series Trust and closed-end investment companies advised by the VK Adviser. William S. Woodside................ Vice Chairman of the Board of LSG Sky Chefs, Inc., a 712 Fifth Avenue caterer of airline food. Formerly, Director of 40th Floor Primerica Corporation (currently known as The New York, NY 10019 Traveler's Inc.). Formerly, Director of James River Age: 73 Corporation, a producer of paper products. Trustee, and former President of Whitney Museum of American Art. Formerly, Chairman of Institute for Educational Leadership, Inc., Board of Visitors, Graduate School of The City University of New York, Academy of Political Science. Trustee of Committee for Economic Development. Director of Public Education Fund Network, Fund for New York City Public Education. Trustee of Barnard College. Member of Dean's Council, Harvard School of Public Health. Member of Mental Health Task Force, Carter Center. Trustee of each of the Van Kampen American Capital Funds.
OFFICERS
POSITIONS AND OTHER PRINCIPAL OCCUPATIONS NAME AND AGE OFFICES WITH FUND IN PAST 5 YEARS --------------------- -------------------------- ---------------------------------------- Peter W. Hegel....... Vice President Executive Vice President and Portfolio Age: 39 Manager of the Adviser. Executive Vice President of the AC Adviser. Vice President of each of the Van Kampen American Capital Funds and closed- end funds advised by the VK Adviser. Ronald A. Nyberg..... Vice President and Executive Vice President, General Age: 41 Secretary Counsel and Secretary of Van Kampen American Capital. Executive Vice President and a Director of the VK Adviser and the Distributor. Executive Vice President of the AC Adviser. Vice President and Secretary of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. Director of ICI Mutual Insurance Co., a provider of insurance to members of the Investment Company Institute. Prior to March 1990, Secretary of Van Kampen Merritt Inc., the VK Adviser and McCarthy, Crisanti & Maffei, Inc.
8 37
POSITIONS AND OTHER PRINCIPAL OCCUPATIONS NAME AND AGE OFFICES WITH FUND IN PAST 5 YEARS --------------------- -------------------------- ---------------------------------------- Edward C. Wood III... Vice President, Treasurer Senior Vice President of the VK Adviser. Age: 39 and Chief Financial Vice President, Treasurer and Chief Officer Financial Officer of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. Nicholas Dalmaso..... Assistant Secretary Assistant Vice President and Attorney of Age: 30 Van Kampen American Capital. Assistant Secretary of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. Prior to May 1992, attorney for Cantwell & Cantwell, a Chicago law firm. Scott E. Martin...... Assistant Secretary Senior Vice President, Deputy General Age: 38 Counsel and Assistant Secretary of Van Kampen American Capital. Senior Vice President, Deputy General Counsel and Secretary of the VK Adviser and the Distributor. Assistant Secretary of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. Weston B. Assistant Secretary Vice President, Associate General Wetherell.......... Counsel and Assistant Secretary of Van Age: 39 Kampen American Capital, the VK Adviser and the Distributor. Assistant Secretary of McCarthy, Crisanti & Maffei, Inc. Assistant Secretary of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. John L. Sullivan..... Controller First Vice President of the VK Adviser. Age: 39 Controller of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser. Steven M. Hill....... Assistant Treasurer Assistant Vice President of the VK Age: 30 Adviser. Assistant Treasurer of each of the Van Kampen American Capital Funds and closed-end funds advised by the VK Adviser.
--------------- * Such Trustees are "interested persons" (within the meaning of Section 2(a)(19) of the 1940 Act). Messrs. Powell and McDonnell are interested persons of the VK Adviser and the Fund by reason of their positions with the VK Adviser. Mr. Sheehan is an interested person of the VK Adviser and the Fund by reason of his firm having acted as legal counsel to the VK Adviser. Mr. Whalen is an interested person of the Fund by reason of his firm acting as legal counsel for the Fund. 9 38 Messrs. Powell and McDonnell own, or have the opportunity to purchase, an equity interest in VK/ AC Holding, Inc., the parent company of Van Kampen American Capital, and have entered into employment contracts (for a term of five years) with Van Kampen American Capital. The Fund will pay trustees who are not affiliated persons of the VK Adviser, the Distributor or Van Kampen American Capital an annual retainer of $2,500 per year and $125 per regular quarterly meeting of the Fund, plus expenses. No additional fees are proposed at the present time to be paid for special meetings, committee meetings or to the chairman of the board. The trustees have approved an aggregate annual compensation cap from the combined fund complex of $84,000 per trustee (excluding any retirement benefits) until December 31, 1996, based upon the current net assets and the current number of Van Kampen American Capital funds (except that Mr. Whalen, who is also a trustee of the closed-end funds advised by the VK Adviser would receive additional compensation for serving as a trustee of such funds). In addition, the VK Adviser has agreed to reimburse the Fund through December 31, 1996, for any increase in the aggregate trustees' compensation over the aggregate compensation paid by the Fund in its 1994 fiscal year. COMPENSATION TABLE(1)
TOTAL PENSION OR COMPENSATION RETIREMENT FROM REGISTRANT AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL AND FUND COMPENSATION AS PART OF BENEFITS UPON COMPLEX PAID TO NAME FROM REGISTRANT(2) FUND EXPENSES(3) RETIREMENT(4) TRUSTEE(5) -------------------------- -------------------- ------------------ ---------------- --------------- R. Craig Kennedy.......... $3,783 $0 $2,500 $62,362 Philip G. Gaughan......... 3,783 0 2,500 63,250 Donald C. Miller.......... 3,783 0 2,500 62,178 Jack A. Nelson............ 3,783 0 2,500 62,362 Jerome L. Robinson........ 3,786 0 2,500 58,475 Wayne W. Whalen........... 891 0 2,500 49,875
--------------- (1) Messrs. McDonnell and Powell, trustees of the Registrant, are affiliated persons of the VK Adviser and are not eligible for compensation or retirement benefits from the Trust. Messrs. Branagan, Caruso, Hilsman, Rees, Sheehan, Sisto and Woodside were elected as trustees of the Trust at a shareholders meeting held July 21, 1995 and thus received no compensation or retirement benefits from the Registrant during its 1994 fiscal year. (2) The Registrant is Van Kampen American Capital Money Market Trust (the "Trust") which currently is comprised of 1 operating series. The amounts shown in this column are accumulated from the Aggregate Compensation of the Registrant's year ended December 31, 1994. Beginning in October 1994 each Trustee, except Messrs. Gaughan and Whalen, began deferring his entire aggregate compensation. The total combined amount of deferred compensation (including interest) accrued with respect to each trustee from the Fund Complex (as defined herein) as of December 31, 1994 is as follows: Mr. Kennedy $14,737; Mr. Miller $14,553; Mr. Nelson $14,737 and Mr. Robinson $13,725. (3) The Registrant's last completed fiscal year for which audited financial statements are available ended on June 30, 1994. The Retirement Plan commenced as of August 1, 1994 for the Fund. 10 39 (4) This is the estimated annual benefits payable per year for the 10-year period commencing in the year of such Trustee's retirement by a Fund assuming: the Trustee has 10 or more years of service on the Board of the Fund and retires at or after attaining the age of 60. Trustees retiring prior to the age of 60 or with fewer than 10 years of service for the Fund may receive reduced retirement benefits from such Fund. (5) As of December 31, 1994, the Fund Complex consisted of 20 mutual funds advised by the VK Adviser which had the same members on each funds' Board of Trustees. The amounts shown in this column are accumulated from the Aggregate Compensation of each of these 20 mutual funds in the Fund Complex during the calendar year ended December 31, 1994. The VK Adviser also serves as investment adviser for other investment companies; however, with the exception of Messrs. Powell, McDonnell and Whalen, such investment companies do not have the same trustees as the Fund Complex. Combining the Fund Complex with other investment companies advised by the VK Adviser, Mr. Whalen received Total Compensation of $161,850. As of July 17, 1995, the Trustees and officers as a group owned less than 1% of the Fund's shares. To the knowledge of the Fund, as of July 17, 1995, no person owned of record or beneficially 5% or more of the Fund's Class A Shares or Class B Shares. LEGAL COUNSEL Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom, Chicago, Illinois. INVESTMENT ADVISORY AND OTHER SERVICES Van Kampen American Capital Investment Advisory Corp. (the "Adviser") is the Fund's investment adviser. The Adviser was incorporated as a Delaware corporation in 1982 (and through December 31, 1987 transacted business under the name of American Portfolio Advisory Service Inc.). The Adviser's principal office is located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. The Adviser is a wholly-owned subsidiary of Van Kampen American Capital, Inc., which in turn is a wholly-owned subsidiary of VK/AC Holding, Inc. VK/AC Holding, Inc. is controlled, through the ownership of a substantial majority of its common stock by The Clayton & Dubilier Private Equity Fund IV Limited Partnership ("C&D L.P."), a Connecticut limited partnership. C&D L.P. is managed by Clayton, Dubilier & Rice, Inc., a New York based private investment firm. The General Partner of C&D L.P. is Clayton & Dubilier Associates IV Limited Partnership ("C&D Associates L.P."). The general partners of C&D Associates L.P. are Joseph L. Rice, III, B. Charles Ames, William A. Barbe, Alberto Cribiore, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe and Andrall E. Pearson, each of whom is a principal of Clayton, Dubilier & Rice, Inc. In addition, certain officers, directors and employees of Van Kampen American Capital, Inc. own, in the aggregate, not more than 7% 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 owns or would own 5% or more of VK/AC Holding, Inc. The investment advisory agreement between the Adviser and the Fund provides that the Adviser will supply investment research and portfolio management, including the selection of securities for the Fund 11 40 to purchase, hold or sell and the selection of brokers through whom the Fund's portfolio transactions are executed. The Adviser also administers the business affairs of the Fund, furnishes offices, necessary facilities and equipment, provides administrative services, and permits its officers and employees to serve without compensation as trustees and officers of the Trust if duly elected to such positions. The Adviser's activities are subject to the review and supervision of the Trustees, to whom the Adviser renders periodic reports of the Fund's investment activities. The investment advisory agreement with the Fund will remain in effect from year to year if specifically approved by the Trustees of the Fund or the shareholders, as the case may be, and by the disinterested Trustees in compliance with the requirements of the Investment Company Act. The agreement may be terminated without penalty upon 60 days written notice by either party and will automatically terminate in the event of assignment. The Adviser has undertaken to reimburse the Fund for annual expenses which exceed the most stringent limit prescribed by any State in which the Fund's shares are offered for sale. Currently, the most stringent limit in any State would require such reimbursement to the extent that aggregate operating expenses of the Fund (excluding interest, taxes and other expenses which may be excludable under applicable state law) exceed in any fiscal year 2 1/2% of the average annual net assets of the Fund up to $30 million. 2% of the average annual net assets of the Fund of the next $70 million, and 1 1/2% of the remaining average annual net assets of the Fund. In addition to making any required reimbursements, the Adviser may in its discretion, but is not obligated to, waive all or any portion of its fee or assume all or any portion of the expenses of the Fund. OTHER AGREEMENTS SUPPORT SERVICES AGREEMENT. Under a support services agreement with the Distributor and Van Kampen American Capital which terminated concurrent with the Fund's change in transfer agent, the Fund received support services for shareholders, including the handling of all written and telephonic communications, including any other distribution related communications. Payment by the Fund for such services is made on a cost basis for the employment of the personnel and the equipment necessary to render the support services. The Fund, and the other mutual funds distributed by the Distributor and advised by the Adviser, share such costs proportionately among themselves based upon their respective net asset values. ACCOUNTING SERVICES AGREEMENT. The Fund has also entered into an accounting services agreement pursuant to which the Adviser provides accounting services supplementary to those provided by the Custodian. Such services are expected to enable the Fund to more closely monitor and maintain its accounts and records. The Fund shares together with the other mutual funds distributed by the Distributor and advised by the Adviser in the cost of employment of persons to provide such services, with 25% of such costs shared proportionately based on the number of outstanding classes of securities per fund and with the remaining 75% of such cost being paid by the Fund and such other funds based proportionally on their respective net assets. LEGAL SERVICES AGREEMENT. The Fund and each of the other Van Kampen American Capital funds advised by the VK Adviser and distributed by the Distributor have entered into Legal Services Agreements pursuant to which Van Kampen American Capital provides legal services, including without limitation: accurate maintenance of the funds' minute books and records, preparation and oversight of the funds' regulatory reports, and other information provided to shareholders, as well as 12 41 responding to day-to-day legal issues on behalf of the funds. Payment by the Fund for such services is made on a cost basis for the employment of personnel as well as the overhead and the equipment necessary to render such services. Other funds distributed by the Distributor also receive legal services from Van Kampen American Capital. Of the total costs for legal services provided to funds distributed by the Distributor, one half of such costs are allocated equally to each fund and the remaining one half of such costs are allocated to specific funds based on specific funds based on monthly time records. CUSTODIAN AND INDEPENDENT AUDITORS State Street Bank and Trust Company, 225 Franklin Street, P.O. Box 1713, Boston, MA 02105-1713, is the custodian of the Fund and has custody of all securities and cash of the Fund. The custodian, among other things, attends to the collection of principal and income, and payment for and collection of proceeds of securities bought and sold by the Fund. The independent auditors for the Fund are KPMG Peat Marwick LLP, Chicago, Illinois. The selection of independent auditors will be subject to ratification by the shareholders of the Fund at any annual meeting of shareholders. PORTFOLIO TRANSACTIONS The Adviser is responsible for decisions to buy and sell securities for the Fund and broker-dealer selection. The primary consideration in effecting a securities transaction will be execution at the most favorable securities price. A substantial majority of the Fund's portfolio transactions may be transacted with primary market makers acting as principal on a net basis, with no brokerage commissions being paid by the Fund. Such principal transactions may, however, result in a profit to the market makers. In certain instances the Adviser may make purchases of underwritten issues at prices which include underwriting fees. In selecting a broker-dealer to execute each particular transaction, the Adviser will take the following into consideration: the best securities price available; the reliability, integrity and financial condition of the broker-dealer; the size of and difficulty in executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Fund on a continuing basis. Accordingly, the price to the Fund in any transaction may be less favorable than that available from another broker-dealer if the difference is reasonably justified by other aspects of the portfolio execution services offered. Subject to such policies as the Trustees of the Trust may determine, the Adviser may cause the Fund to pay a broker-dealer that provides brokerage and research services an amount of commission for effecting a portfolio investment transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the Adviser determines in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker-dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Fund. The Adviser may also allocate the orders placed by it on behalf of the Fund to such broker-dealers who provide research or statistical material, or other services to the Fund or the Adviser. Such allocation shall be in such amounts and proportions as the Adviser shall determine, and the Adviser will report on said allocations regularly to the Trustees, indicating the brokers to whom such allocations have been made and the basis therefor. 13 42 While the Adviser will be primarily responsible for the placement of the Fund's business, the policies and practices in this regard must be consistent with the foregoing and will at all times be subject to review by the Trustees of the Trust. THE DISTRIBUTOR The Distributor offers one of the industry's broadest lines of investments -- encompassing mutual funds, closed-end funds and unit investment trusts -- and is currently the nation's 5th largest broker-sold mutual fund group according to Strategic Insight. Van Kampen American Capital's roots in money management extend back to 1926. Today, Van Kampen American Capital manages or supervises more than $50 billion in mutual funds, closed-end funds and unit investment trusts -- assets which have been entrusted to Van Kampen American Capital in more than 2 million investor accounts. Van Kampen American Capital has one of the largest research teams (outside of the rating agencies) in the country, with 86 analysts devoted to various specializations. Shares of the Fund are offered on a continuous basis through the Distributor, One Parkview Plaza, Oakbrook Terrace, Illinois 60181. The Distributor is a wholly-owned subsidiary of Van Kampen American Capital, which is a subsidiary of VK/AC Holding, Inc., a Delaware corporation that is controlled through an 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. In addition, certain officers, directors and employees of Van Kampen American Capital and its subsidiaries own, in the aggregate not more than 7% 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. C&D L.P. is managed by Clayton, Dubilier & Rice, Inc. Clayton & Dubilier Associates IV Limited Partnership ("C&D Associates L.P.") is the general partner of C&D L.P. Pursuant to a distribution agreement, Van Kampen American Capital will purchase shares of the Fund for resale to the public, either directly or through securities dealers and brokers, and is obligated to purchase only those shares for which it has received purchase orders. A discussion of how to purchase and redeem the Fund's shares and how the Fund's shares are priced is contained in the Prospectus. The Fund has adopted a distribution plan (the "Distribution Plan") with respect to each class of its shares pursuant to Rule 12b-1 under the Investment Company Act. The Fund also has adopted a service plan (the "Service Plan") with respect to each class of its shares. The Distribution Plan and the Service Plan sometimes are referred to herein as the "Plans." The Plans provide that the Fund may spend a portion of the Fund's average daily net assets attributable to each class of its shares in connection with the distribution of the shares and in connection with the provision of ongoing services to shareholders. The Plans are being implemented through an agreement (the "Distribution and Service Agreement") with the Distributor of each class of the Fund's shares, sub-agreements between the Distributor and members of the NASD who are acting as securities dealers and NASD members or eligible non-members who are acting as brokers or agents and similar agreements between the Fund and banks who are acting as brokers (collectively, "Selling Agreements") that may provide for their customers or clients certain services or assistance, which may include, but not be limited to, processing purchase and redemption transactions, establishing and maintaining shareholder accounts regarding the Fund, and such other services as may be agreed to from time to time and as may be permitted by applicable statute, rule or regulation. Brokers, dealers and banks that have entered into sub-agreements with the Distributor and sell shares of the Fund are referred to herein as "financial intermediaries." 14 43 Under the Distribution and Service Agreement and the Selling Agreements, financial intermediaries that sold shares prior to July 1, 1987, or prior to the beginning of the calendar quarter in which the Selling Agreement between the Fund and such financial intermediary was approved by the Money Fund's Board of Trustees (an "Implementation Date") are not eligible to receive compensation pursuant to such Distribution and Service Agreement and/or Selling Agreement. To the extent that there remain outstanding shares of the Fund that were purchased prior to all Implementation Dates, the percentage of the total average daily net asset value that may be utilized pursuant to the Distribution and Service Agreement will be less than the maximum percentage amount permissible under the Distribution and Service Agreement. The Distributor must submit quarterly reports to the Board of Trustees of the Trust, of which the Fund is a series, setting forth separately by class all amounts paid under the Plans and the purposes for which such expenditures were made, together with such other information as from time to time is reasonably requested by the Trustees. The Plans provide that they will continue in full force and effect from year to year so long as such continuance is specifically approved by a vote of the Trustees, and also by a vote of the disinterested Trustees, cast in person at a meeting called for the purpose of voting on the Plans. Each of the Plans may not be amended to increase materially the amount to be spent for the services described therein with respect to a class of shares without approval by a vote of a majority of the outstanding voting shares of such class and all material amendments to either of the Plans must be approved by the Trustees and also by the disinterested Trustees. Each of the Plans may be terminated with respect to a class of shares at any time by a vote of a majority of the disinterested Trustees or by a vote of a majority of the outstanding voting shares of such class. YIELD INFORMATION There are two methods by which the Fund's yield for a specified period of time is calculated. Normally a seven day period will be used in determining yields in published or mailed advertisements. The first method, which results in an amount referred to as the "current yield," assumes an account containing exactly one share at the beginning of the period. (The net asset value of this share will be $1.00 except under extraordinary circumstances.) The net change in the value of the account during the period is then determined by subtracting this beginning value from the value of the account at the end of the period; however, capital changes and unrealized appreciation or depreciation of the Fund's portfolio are excluded from this calculation. This net change in the account value is then divided by the value of the account at the beginning of the period (i.e., normally $1.00 as discussed above) and the resulting figure (referred to as the "base period return") is then annualized by multiplying it by 365 and dividing by the seven days of the period; the result is the "current yield," usually expressed to the nearest one- hundredth of one percent. The second method results in an amount referred to as the "compounded effective yield." This represents an annualization of the current yield with dividends reinvested daily. This compounded effective yield, calculated again for a seven day period, would be computed by compounding the unannualized base period return by adding one to the base period return, raising the sum to a power equal to 365 divided by seven and subtracting one from the result. In addition to using the yields in advertisements or information furnished to present or prospective stockholders, the Fund also may quote rankings, yields or returns as published by recognized statistical 15 44 services or publishers, such as Lipper Analytical Services, Inc., Weisenberger Investment Companies, Donoghues Money Fund Report, or others. Yield information may be useful to investors in reviewing the performance of the Fund. However, a number of factors should be taken into account before using yield information as a basis for comparison with alternative investments. An investment in the Fund is not insured and its yields are not guaranteed. They normally will fluctuate on a daily basis. Accordingly they cannot be compared to yields on those savings accounts or other investment alternatives which provide a guaranteed fixed yield for a stated period of time and which may be insured by a government agency. The yields for any given past period are not an indication or representation by the Trust of future yields or rates of return on the Fund's shares. For the fiscal year ended June 30, 1994 the Adviser waived a portion of its fee, and the Adviser may in its discretion elect to discontinue waiving all or any portion of its fee. In the event that the Adviser elects to discontinue waiving its fee, the Fund's yield will be less than it otherwise would have been. In comparing the yields of one money market fund to another, consideration should be given to each fund's investment policy, portfolio quality, portfolio maturity, type of instruments held and operating expenses. DIVIDENDS On each day, including a Saturday, Sunday or other holiday, a dividend of all of the Fund's net income since the last declaration is declared. The Fund's net income for dividend purposes consists of all interest income accrued on the Fund's portfolio, less the Fund's expenses. Under the procedures which the Trust's Board of Trustees have adopted relating to amortized cost valuation, the calculation of the Fund's daily dividends for each respective class of shares will change from that indicated above in certain circumstances. If on any date the deviation between the net asset value for a class of shares determined on an amortized cost basis and that determined using market quotations is 0.5% or more, the amount of such deviation will be added to or subtracted from the daily dividend for such class of shares to the extent necessary to reduce such deviation to within 0.5%. 16 45 VAN KAMPEN MERRITT MONEY MARKET FUND PORTFOLIO OF INVESTMENTS December 31, 1994 (Unaudited) --------------------------------------------------------------------------------
DISCOUNT PAR YIELD ON AMOUNT MATURITY DATE OF AMORTIZED (000) SECURITY DESCRIPTION DATE PURCHASE COST -----------------------------------------------------------------------------------------------
AGENCY 9.1% $ 869 Small Business Administration................... 1/03/95 5.750% $ 868,761 1,000 Federal Farm Credit Bank........................ 1/05/95 5.300 999,411 1,000 Federal Home Loan Mortgage Corp.(b)............. 1/05/95 5.900 999,344 1,000 Federal Home Loan Bank.......................... 1/10/95 5.780 998,555 ----------- TOTAL AGENCY.......................................................... 3,866,071 ----------- BANKERS ACCEPTANCES 13.0% 1,000 Bank of New York................................ 1/06/95 5.480 999,239 1,000 Nationsbank Corp. .............................. 1/06/95 5.880 999,183 1,000 Sanwa Bank...................................... 1/19/95 5.870 997,065 1,500 National Bank of Detroit........................ 1/23/95 5.870 1,500,000 1,000 Northern Trust Co. ............................. 2/17/95 5.980 992,193 ----------- TOTAL BANKERS ACCEPTANCES............................................. 5,487,680 ----------- CERTIFICATES OF DEPOSIT 4.7% 1,000 Dresdner Bank................................... 1/26/95 5.530 999,947 1,000 Societe Generale Bank Yankee.................... 2/03/95 6.150 1,000,000 ----------- TOTAL CERTIFICATES OF DEPOSIT......................................... 1,999,947 ----------- COMMERCIAL PAPER 52.0% 1,000 AT & T Capital Corp. ........................... 1/03/95 5.850 999,645 1,500 J. P. Morgan & Co. Inc. ........................ 1/03/95 6.000 1,499,500 1,500 Exxon Asset Management.......................... 1/04/95 5.600 1,499,300 1,500 Southern California Edison Co. ................. 1/05/95 5.930 1,499,012 1,000 Credit Suisse First Boston Inc. ................ 1/09/95 5.030 998,883 1,500 Rabobank USA Financial Corp. ................... 1/09/95 5.910 1,498,030 1,500 IBM Credit Corp. ............................... 1/10/95 6.000 1,497,750 1,000 State Street Boston Corp. ...................... 1/12/95 5.138 1,000,000 1,500 Ford Motor Credit Co. .......................... 1/17/95 5.950 1,496,033 1,000 Merrill Lynch & Co. Inc. ....................... 1/19/95 5.100 1,000,000 1,000 Commercial Credit Corp. ........................ 1/23/95 5.450 1,000,000 1,000 American General Finance Corp. ................. 1/25/95 5.750 1,000,000 1,500 Associates Corp. ............................... 1/27/95 6.120 1,493,370 1,000 CIT Group Holdings Inc. ........................ 1/27/95 5.750 1,000,000 1,500 American Express Credit Corp. .................. 1/30/95 5.850 1,492,931 1,500 Norwest Financial Inc. ......................... 2/07/95 6.050 1,490,673 1,500 John Deere Capital Corp. ....................... 2/09/95 6.000 1,490,250 ----------- TOTAL COMMERCIAL PAPER................................................ 21,955,377 -----------
See Notes to Financial Statements. 17 46 VAN KAMPEN MERRITT MONEY MARKET FUND PORTFOLIO OF INVESTMENTS -- (CONTINUED) December 31, 1994 (Unaudited) --------------------------------------------------------------------------------
DISCOUNT PAR YIELD ON AMOUNT MATURITY DATE OF AMORTIZED (000) SECURITY DESCRIPTION DATE PURCHASE COST ----------------------------------------------------------------------------------------------- VARIABLE RATE DEMAND OBLIGATIONS 13.0% $1,500 Virginia St Housing Development Authority....... 1/03/95 6.000% $ 1,500,000 1,400 Catholic Healthcare West (Gtd: Toronto Dominion Bank)........................................... 1/04/95 7.000 1,400,000 500 Florida Housing Finance Agency (L.O.C. Credit Suisse)......................................... 1/04/95 6.100 500,000 900 Health Insurance Plan Greater New York (L.O.C. Morgan Gty)..................................... 1/04/95 6.450 900,000 500 Illinois Student Assistance Commission (L.O.C. Sumitomo Bank).................................. 1/04/95 6.170 500,000 700 Mississippi Business Finance Corp. ............. 1/04/95 6.400 700,000 ----------- TOTAL VARIABLE RATE DEMAND OBLIGATIONS................................ 5,500,000 ----------- REPURCHASE AGREEMENT 7.2% UBS Securities, U.S. T-Note, $3,165,000 par, 3.875% coupon, due 10/31/95, dated 12/30/94, to be sold on 01/03/95 at $3,041,942........ 3,040,000 ----------- TOTAL INVESTMENTS (a) 99.0%........................................... 41,849,075 Other Assets in Excess of Liabilities 1.0%............................ 408,518 ----------- NET ASSETS 100.0%..................................................... $42,257,593 ==========
(a) At December 31, 1994, cost is identical for both book and federal income tax purposes. (b) This is a Mortgage Backed Security (MBS) which is a pass-through instrument created by pooling mortgages and selling participations in the principal and interest payments received from borrowers. This security is guaranteed by Federal Home Loan Mortgage Corporation (FHLMC), a federally sponsored agency. See Notes to Financial Statements. 18 47 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF OPERATIONS For the Six Months Ended December 31, 1994 (Unaudited) INVESTMENT INCOME: Interest................................................................... $ 842,639 Amortization of Premium.................................................... (10,988) ----------- Total Income............................................................... 831,651 ----------- EXPENSES: Investment Advisory Fee (Note 2)........................................... 83,571 Shareholder Services....................................................... 60,277 Distribution (12b-1) and Service Fees (Allocated to Classes A and B of $35,230 and $21,742, respectively)(Note 4)............................... 56,972 Printing................................................................... 18,400 Audit...................................................................... 15,088 Custody.................................................................... 14,107 Trustees Fees and Expenses (Note 2)........................................ 11,040 Legal (Note 2)............................................................. 6,440 Other...................................................................... 1,844 ----------- Total Expenses............................................................. 267,739 Less Fees Deferred......................................................... 79,108 ----------- Net Expenses............................................................... 188,631 ----------- NET INVESTMENT INCOME...................................................... $ 643,020 ========== REALIZED GAIN/LOSS ON INVESTMENTS: Proceeds from Sales........................................................ $ 1,531,038 Cost of Securities Sold.................................................... (1,550,018) ----------- NET REALIZED LOSS ON INVESTMENTS........................................... $ (18,980) ========== NET INCREASE IN NET ASSETS FROM OPERATIONS................................. $ 624,040 ==========
See Notes to Financial Statements. 19 48 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES December 31, 1994 (Unaudited) ASSETS: Investments, at Amortized Cost which Approximates Market (Note 1)......... $41,849,075 Cash...................................................................... 180,760 RECEIVABLES: Fund Shares Sold.......................................................... 544,455 Interest.................................................................. 118,772 Other..................................................................... 4,883 ----------- Total Assets.............................................................. 42,695,945 ----------- LIABILITIES: PAYABLES: Fund Shares Repurchased................................................... 346,906 Income Distributions...................................................... 24,412 Investment Advisory Fee (Note 2).......................................... 1,791 Accrued Expenses.......................................................... 55,243 ----------- Total Liabilities......................................................... 438,352 ----------- NET ASSETS................................................................ $42,257,593 ========== NET ASSETS CONSIST OF: Paid in Surplus: Class A Shares............................................................ $32,412,705 Class B Shares............................................................ 9,918,443 Accumulated Net Realized Loss on Investments.............................. (73,555) ----------- NET ASSETS................................................................ $42,257,593 ========== MAXIMUM OFFERING PRICE PER SHARE: Class A Shares: Net Asset Value per share (Based on net assets of $32,339,762 and 32,412,706 shares of beneficial interest issued and outstanding)........ $ 1.00 ========== Class B Shares: Net Asset Value per share (Based on net assets of $9,917,831 and 9,918,443 shares of beneficial interest issued and outstanding)................... $ 1.00 ==========
See Notes to Financial Statements. 20 49 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS For the Six Months Ended December 31, 1994 and the Year Ended June 30, 1994 (Unaudited)
----------------------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED DECEMBER 31, 1994 JUNE 30, 1994 ----------------------------------------------------------------------------------------------- FROM INVESTMENT ACTIVITIES: OPERATIONS: Net Investment Income................................... $ 643,020 $ 499,064 Net Realized Loss on Investments........................ (18,980) (26,427) ----------------- ------------- Change in Net Assets from Operations.................... 624,040 472,637 ----------------- ------------- DISTRIBUTIONS FROM NET INVESTMENT INCOME: Class A Shares.......................................... (568,757) (499,064) Class B Shares.......................................... (74,263) -0- ----------------- ------------- Total Distributions.................................. (643,020) (499,064) ----------------- ------------- Net Change in Net Assets from Investment Activities..... (18,980) (26,427) ----------------- ------------- FROM CAPITAL TRANSACTIONS (NOTE 3): PROCEEDS FROM SHARES SOLD: Class A Shares.......................................... 40,881,989 79,908,069 Class B Shares.......................................... 15,887,574 -0- ----------------- ------------- 56,769,563 79,908,069 ----------------- ------------- NET ASSET VALUE OF SHARES ISSUED THROUGH DIVIDEND REINVESTMENT: Class A Shares.......................................... 479,626 445,332 Class B Shares.......................................... 50,549 -0- ----------------- ------------- 530,175 445,332 ----------------- ------------- COST OF SHARES REPURCHASED: Class A Shares.......................................... (36,550,200) (74,519,684) Class B Shares.......................................... (6,019,680) -0- ----------------- ------------- (42,569,880) (74,519,684) ----------------- ------------- Net Change in Net Assets from Capital Transactions........ 14,729,858 5,833,717 ----------------- ------------- Total Increase in Net Assets......................... 14,710,878 5,807,290 NET ASSETS: Beginning of the Period................................. 27,546,715 21,739,425 ----------------- ------------- End of the Period....................................... $ 42,257,593 $ 27,546,715 ============= ===========
See Notes to Financial Statements. 21 50 VAN KAMPEN MERRITT MONEY MARKET FUND FINANCIAL HIGHLIGHTS The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated. (Unaudited) --------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30, DEC. 31, -------------------------------- CLASS A SHARES 1994 1994 1993 1992 1991 -------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period............. $ 1.00 $1.00 $1.00 $1.00 $1.00 ---------- ----- ----- ----- ----- Net Investment Income.......................... .019 .025 .023 .041 .065 Less Distributions from Net Investment Income...................................... .019 .025 .023 .041 .065 ---------- ----- ----- ----- ----- Net Asset Value, End of Period................... $ 1.00 $1.00 $1.00 $1.00 $1.00 ---------- ----- ----- ----- ----- TOTAL RETURN (Non-Annualized)*................... 1.96% 2.50% 2.31% 4.21% 6.72% Net Assets at End of Period (In millions)........ $ 32.3 $27.5 $21.7 $24.9 $35.0 Ratio of Expenses to Average Net Assets*......... 1.03% 1.13% 1.16% 1.14% .99% Ratio of Net Investment Income to Average Net Assets*........................................ 3.91% 2.44% 2.31% 4.21% 6.57%
------------------------- * If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: Ratio of Expenses to Average Net Assets.......... 1.50% 1.54% 1.31% 1.55% 1.39% Ratio of Net Investment Income to Average Net Assets......................................... 3.44% 2.03% 2.16% 3.80% 6.17%
See Notes to Financial Statements. 22 51 VAN KAMPEN MERRITT MONEY MARKET FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated. (Unaudited) --------------------------------------------------------------------------------
YEAR ENDED JUNE 30, CLASS A SHARES 1990 1989 1988 1987 1986 ------------------------------------------------------------------------------------------------ Net Asset Value, Beginning of Period................ $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- Net Investment Income............................. .078 .078 .066 .056 .068 Less Distributions from Net Investment Income..... .078 .078 .066 .056 .068 ----- ----- ----- ----- ----- Net Asset Value, End of Period...................... $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- TOTAL RETURN (Non-Annualized)*...................... 8.11% 8.07% 6.60% 5.94% 6.96% Net Assets at End of Period (in millions)........... $45.0 $44.1 $51.5 $17.1 $ 6.3 Ratio of Expenses to Average Net Assets*............ .90% .98% .78% .58% .88% Ratio of Net Investment Income to Average Net Assets*........................................... 7.81% 7.79% 6.56% 5.65% 6.78%
------------------------- * If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: Ratio of Expenses to Average Net Assets............. 1.31% 1.31% 1.22% 1.48% 1.85% Ratio of Net Investment Income to Average Net Assets............................................ 7.40% 7.46% 6.13% 4.74% 5.81%
See Notes to Financial Statements. 23 52 VAN KAMPEN MERRITT MONEY MARKET FUND FINANCIAL HIGHLIGHTS -- (CONTINUED) The following schedule presents financial highlights for one share of the Fund outstanding throughout the period indicated. (Unaudited)
------------------------------------------------------------------------------------------ JULY 11, 1994 (COMMENCEMENT OF DISTRIBUTION) TO DECEMBER 31, CLASS B SHARES 1994 ------------------------------------------------------------------------------------------ Net Asset Value, Beginning of Period................................... $ 1.00 ------ Net Investment Income................................................ .015 Less Distributions from Net Investment Income........................ .015 ------ Net Asset Value, End of Period......................................... $ 1.00 ============== TOTAL RETURN (Non-Annualized)*......................................... 1.49% Net Assets at End of Period (in millions).............................. $ 9.9 Ratio of Expenses to Average Net Assets*............................... 1.80% Ratio of Net Investment Income to Average Net Assets*.................. 3.41%
--------------- * If certain expenses had not been assumed by the Adviser, total return would have been lower and the ratios would have been as follows: Ratio of expenses to average net assets................................ 2.28% Ratio of net investment income to average net assets................... 2.93%
See Notes to Financial Statements. 24 53 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS December 31, 1994 (Unaudited) NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES Van Kampen Merritt Money Market Fund (the "Fund") is a separate series of Van Kampen Merritt Money Market Trust (the "Trust"). The Fund is an open-end diversified management investment company registered under the Investment Company Act of 1940, as amended. The distribution of the Fund's second class of shares, Class B shares, commenced on July 11, 1994. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. A. Security Valuation Investments are valued at amortized cost, which approximates market. Under this valuation method, a portfolio instrument is valued at cost and any discount or premium is amortized on a straight-line basis to the maturity of the instrument. B. Security Transactions Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. Interest income is recorded on an accrual basis. C. Federal Income Taxes It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset such losses against any future realized capital gains. At June 30, 1994, the Fund had an accumulated capital loss carryforward for tax purposes of $39,559. Of this amount, $26,110, $2,038 and $11,411 will expire on June 30, 1998, 1999 and 2000, respectively. Net realized gains or losses differ for financial statement and tax reporting purposes primarily because of the deferral of post October 31 losses which are not recognized for tax purposes until the first day of the following fiscal year. D. Distribution of Income and Gains The Fund declares dividends from net investment income daily and automatically reinvests such dividends daily. Net realized gains, if any, are distributed annually. Shareholders can elect to receive the cash equivalent of their daily dividends at each month end. 25 54 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) December 31, 1994 (Unaudited) NOTE 2 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Fund's Investment Advisory Agreement, Van Kampen American Capital Investment Advisory Corp. (the "Adviser") will provide investment advice and facilities to the Fund for an annual fee payable monthly as follows:
AVERAGE NET ASSETS % PER ANNUM --------------------------------------------------- ------------ First $250 million................................. .500 of 1% Next $250 million.................................. .475 of 1% Next $250 million.................................. .425 of 1% Over $750 million.................................. .275 of 1%
Certain legal expenses were paid to Skadden, Arps, Slate, Meagher & Flom, counsel to the Fund, of which a trustee of the Fund is an affiliated person. For the six months ended December 31, 1994, the Fund recognized expenses of approximately $9,700 representing Van Kampen American Capital Distributors, Inc.'s or its affiliates' ("VKAC") cost of providing accounting, legal and certain shareholder services to the Fund. Certain officers and trustees of the Fund are also officers and directors of VKAC. The Fund does not compensate its officers or trustees who are officers of VKAC. The Fund has implemented deferred compensation and retirement plans for its Trustees. Under the deferred compensation plan, Trustees may elect to defer all or a portion of their compensation to a later date. The retirement plan covers those Trustees who are not officers of VKAC. At December 31, 1994, VKAC owned 611,383 and 100 shares of Classes A and B, respectively. 26 55 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) December 31, 1994 (Unaudited) NOTE 3 -- CAPITAL TRANSACTIONS The Fund has outstanding two classes of common shares, Classes A and B. There are an unlimited number of shares of each class without par value authorized. At June 30, 1994, paid in surplus for Class A shares aggregated $27,601,290. Transactions in shares were as follows:
YEAR ENDED SIX MONTHS ENDED JUNE 30, DECEMBER 31, 1994 1994 ----------------- ----------- SALES: Class A.................................................... 40,881,989 79,908,069 Class B.................................................... 15,887,574 -0- ----------------- ----------- Total Sales................................................ 56,769,563 79,908,069 ============= ========== DIVIDEND REINVESTMENT: Class A.................................................... 479,626 445,332 Class B.................................................... 50,549 -0- ----------------- ----------- Total Dividend Reinvestment................................ 530,175 445,332 ============= ========== REPURCHASES: Class A.................................................... (36,550,200) (74,519,684) Class B.................................................... (6,019,680) -0- ----------------- ----------- Total Repurchases.......................................... (42,569,880) (74,519,684) ============= ==========
NOTE 4 -- DISTRIBUTION AND SERVICE PLANS The Fund and its shareholders have adopted a distribution plan (the "Distribution Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a Service Plan (the "Service Plan," collectively the "Plans"). The Plans govern payments for the distribution of the Fund's shares, ongoing shareholder services and maintenance of shareholder accounts. Annual fees under the Plans of up to .25% of Class A shares and 1.00% of Class B shares are accrued daily. Included in these fees for the six months ended December 31, 1994, are payments to VKAC of approximately $16,300. 27 56 VAN KAMPEN MERRITT MONEY MARKET FUND INDEPENDENT AUDITOR'S REPORT The Board of Trustees and Shareholders of Van Kampen Merritt Money Market Fund: We have audited the accompanying statement of assets and liabilities of Van Kampen Merritt Money Market Fund (the "Fund"), including the portfolio of investments, as of June 30, 1994, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 1994, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Van Kampen Merritt Money Market Fund as of June 30, 1994, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Chicago, Illinois August 4, 1994 28 57 VAN KAMPEN MERRITT MONEY MARKET FUND PORTFOLIO OF INVESTMENTS June 30, 1994 --------------------------------------------------------------------------------
DISCOUNT PAR YIELD ON AMOUNT MATURITY DATE OF AMORTIZED (000) DESCRIPTION DATE PURCHASE COST ---------------------------------------------------------------------------------------------- AGENCY 9.7% $ 877 Small Business Administration................... 07/01/94 5.250% $ 876,598 800 Student Loan Marketing Association.............. 07/06/94 4.325 800,000 1,000 Federal Home Loan Bank.......................... 08/22/94 4.270 993,832 ----------- TOTAL AGENCY......................................................... 2,670,430 ----------- COMMERCIAL PAPER 25.4% 1,000 American General Finance Corp................... 07/15/94 4.245 1,000,000 1,000 Ford Motor Credit Co............................ 07/15/94 4.245 1,000,000 1,000 John Deere Capital Corp......................... 07/15/94 4.245 1,000,000 1,000 Associates Corp................................. 07/20/94 4.290 1,000,000 1,000 State Street Bank & Trust....................... 07/20/94 4.311 1,000,000 1,000 American Express Credit Corp.................... 08/01/94 4.367 1,000,000 1,000 General Electric Capital Corp................... 08/01/94 4.387 1,000,000 ----------- TOTAL COMMERCIAL PAPER............................................... 7,000,000 ----------- MEDIUM TERM NOTES 14.8% 500 CIT Group Hldgs Inc............................. 07/01/94 4.600 500,027 1,000 Purdue University Indiana Rev................... 07/01/94 4.000 1,000,000 1,000 Kent County, MI Gen Oblig Limited Tax Notes..... 11/01/94 4.547 1,009,598 750 San Diego, CA Taxable Anticipation Notes........ 12/14/94 4.000 750,493 800 Cuyahoga County, OH Taxable Anticipation Notes........................................... 12/30/94 4.170 800,845 ----------- TOTAL MEDIUM TERM NOTES.............................................. 4,060,963 ----------- VARIABLE RATE DEMAND OBLIGATIONS 15.6% 500 AT & T Capital Corp............................. 07/01/94 4.750 500,000 700 Catholic Healthcare West (Gtd: Toronto Dominion Bank)........................................... 07/06/94 4.600 700,000 500 Florida Housing Finance Agency (L.O.C. Credit Suisse)......................................... 07/06/94 4.460 500,000 700 Health Insurance Plan Greater New York (L.O.C. Morgan Gty)..................................... 07/06/94 4.500 700,000 500 Illinois Student Assistance Commission (L.O.C. Sumitomo Bank).................................. 07/06/94 4.820 500,000 700 Mississippi Business Finance Corp............... 07/06/94 4.400 700,000 700 Virginia St Housing Development Authority....... 07/06/94 4.500 700,000 ----------- TOTAL VARIABLE RATE DEMAND OBLIGATIONS............................... 4,300,000 -----------
29 58 VAN KAMPEN MERRITT MONEY MARKET FUND PORTFOLIO OF INVESTMENTS -- (CONTINUED) June 30, 1994 --------------------------------------------------------------------------------
DISCOUNT PAR YIELD ON AMOUNT MATURITY DATE OF AMORTIZED (000) DESCRIPTION DATE PURCHASE COST ---------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT 16.1% 4,440 UBS Securities, U.S. T-Note, $4,190,000 par, 9.500% coupon, due 11/15/95, dated 06/30/94, to be sold on 07/01/94 at $4,440,518............... 07/01/94 4.200 4,440,000 ----------- TOTAL INVESTMENTS (A) 81.6%.......................................... 22,471,393 OTHER ASSETS IN EXCESS OF LIABILITIES 18.4%.......................... 5,075,322 ----------- NET ASSETS 100.0%.................................................... $27,546,715 ==========
(a) At June 30, 1994, cost is identical for both book and federal income tax purposes. See Notes to Financial Statements 30 59 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES June 30, 1994 ASSETS: Investments, at Amortized Cost which Approximates Market (Note 1)......... $22,471,393 Cash...................................................................... 36,251 RECEIVABLES: Fund Shares Sold.......................................................... 5,002,968 Interest.................................................................. 119,753 Other..................................................................... 5,070 ----------- Total Assets.............................................................. 27,635,435 ----------- LIABILITIES: PAYABLES: Fund Shares Repurchased................................................... 33,514 Income Distributions...................................................... 4,018 Investment Advisory Fee (Note 2).......................................... 3,400 Accrued Expenses.......................................................... 47,788 ----------- Total Liabilities......................................................... 88,720 ----------- NET ASSETS................................................................ $27,546,715 ========== NET ASSETS CONSIST OF: Paid in Surplus........................................................... $27,601,290 Accumulated Net Realized Loss on Investments.............................. (54,575) ----------- NET ASSETS (equivalent to $1.00 per share on 27,601,290 shares outstanding)............................................................ $27,546,715 ==========
See Notes to Financial Statements 31 60 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF OPERATIONS For the Year Ended June 30, 1994 INVESTMENT INCOME: Interest................................................................... $ 727,456 Amortization of Discount (Premium) -- Net.................................. 3,996 ----------- Total Income............................................................... 731,452 ----------- EXPENSES: Investment Advisory Fee (Note 2)........................................... 97,029 Shareholder Services....................................................... 58,932 Distribution (12b-1) and Service Fees (Note 4)............................. 49,893 Printing................................................................... 31,130 Audit...................................................................... 28,430 Trustees Fees and Expenses (Note 2)........................................ 18,855 Custody.................................................................... 17,760 Legal (Note 2)............................................................. 10,950 Other...................................................................... 3,170 ----------- Total Expenses............................................................. 316,149 Less Fees Waived........................................................... 83,761 ----------- Net Expenses............................................................... 232,388 ----------- Net Investment Income...................................................... $ 499,064 ========== REALIZED GAIN/LOSS ON INVESTMENTS: Proceeds from Sales........................................................ $ 8,035,919 Cost of Securities Sold.................................................... (8,062,346) ----------- NET REALIZED LOSS ON INVESTMENTS (including $85,500 reimbursement by the Adviser for realized losses incurred on variable rate instruments)....... $ (26,427) ========== Net Increase in Net Assets from Operations................................. $ 472,637 ==========
See Notes to Financial Statements 32 61 VAN KAMPEN MERRITT MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS For the Years Ended June 30, 1994 and 1993
--------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED JUNE 30, 1994 JUNE 30, 1993 --------------------------------------------------------------------------------------------- FROM INVESTMENT ACTIVITIES: OPERATIONS: Net Investment Income..................................... $ 499,064 $ 541,128 Net Realized Gain/Loss on Investments..................... (26,427) 695 ------------- ------------- Change in Net Assets from Operations...................... 472,637 541,823 Distributions from Net Investment Income.................. (499,064) (541,128) ------------- ------------- NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES......... (26,427) 695 ------------- ------------- FROM CAPITAL TRANSACTIONS (NOTE 3): Proceeds from Shares Sold................................. 79,908,069 86,871,367 Net Asset Value of Shares Issued Through Dividend Reinvestment........................................... 445,332 500,012 Cost of Shares Repurchased................................ (74,519,684) (90,537,141) ------------- ------------- NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.......... 5,833,717 (3,165,762) ------------- ------------- TOTAL INCREASE/DECREASE IN NET ASSETS....................... 5,807,290 (3,165,067) NET ASSETS: Beginning of the Period................................... 21,739,425 24,904,492 ------------- ------------- End of the Period......................................... $ 27,546,715 $ 21,739,425 =========== ===========
See Notes to Financial Statements 33 62 VAN KAMPEN MERRITT MONEY MARKET FUND FINANCIAL HIGHLIGHTS The following schedule presents selected per share data and related ratios for one share of the Fund outstanding throughout the periods indicated. --------------------------------------------------------------------------------
YEAR ENDED JUNE 30 -------------------------------------------------------------------------------------- 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 ------------------------------------------------------------------------ Net Asset Value, Beginning of Period......................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Investment Income............ .025 .023 .041 .065 .078 .078 .066 .056 .068 .092 Less Distribution from Net Investment Income.............. .025 .023 .041 .065 .078 .078 .066 .056 .068 .092 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net Asset Value, End of Period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Total Return*.................... 2.50% 2.31% 4.21% 6.72% 8.11% 8.07% 6.60% 5.94% 6.96% 9.60% Net Assets at End of Period (in millions)...................... $27.5 $21.7 $24.9 $35.0 $45.0 $44.1 $51.5 $17.1 $ 6.3 $ 1.5 Ratio of Expenses to Average Net Assets*........................ 1.13% 1.16% 1.14% .99% .90% .98% .78% .58% .88% 1.01% Ratio of Net Investment Income to Average Net Assets*............ 2.44% 2.31% 4.21% 6.57% 7.81% 7.79% 6.56% 5.65% 6.78% 8.39% * If certain expenses had not been assumed by the investment adviser, total return would have been lower and the ratios would have been as follows: Ratio of Expenses to Average Net Assets......................... 1.54% 1.31% 1.55% 1.39% 1.31% 1.31% 1.22% 1.48% 1.85% 1.94% Ratio of Net Investment Income to Average Net Assets............. 2.03% 2.16% 3.80% 6.17% 7.40% 7.46% 6.13% 4.74% 5.81% 7.46%
See Notes to Financial Statements 34 63 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS June 30, 1994 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Merritt Money Market Fund (the "Fund") is a separate series of Van Kampen Merritt Money Market Trust (the "Trust"). The Fund is an open-end diversified management investment company registered under the Investment Company Act of 1940, as amended. The distribution of the Fund's second class of shares, Class B shares, commenced on July 11, 1994. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. A. Security Valuation Investments are valued at amortized cost, which approximates market. Under this valuation method, a portfolio instrument is valued at cost and any discount or premium is amortized on a straight-line basis to the maturity of the instrument. B. Security Transactions Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. Interest income is recorded on an accrual basis. C. Federal Income Taxes It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset such losses against any future realized capital gains. At June 30, 1994, the Fund had an accumulated capital loss carryforward for tax purposes of $39,559. Of this amount, $26,110, $2,038 and $11,411 will expire on June 30, 1998, 1999 and 2000, respectively. Net realized gains or losses differ for financial statement and tax reporting purposes primarily because of the deferral of post October 31 losses which are not recognized for tax purposes until the first day of the following fiscal year. D. Distribution of Income and Gains The Fund declares dividends from net investment income daily and automatically reinvests such dividends daily. Net realized gains, if any, are distributed annually. Shareholders can elect to receive the cash equivalent of their daily dividends at each month end. 35 64 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) June 30, 1994 2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Merritt Investment Advisory Corp. (the "Adviser") will provide investment advice and facilities to the Fund for an annual fee payable monthly as follows:
AVERAGE NET ASSETS % PER ANNUM --------------------------------------------------- ----------- First $250 million................................. .500 of 1% Next $250 million.................................. .475 of 1% Next $250 million.................................. .425 of 1% Over $750 million.................................. .275 of 1%
Certain legal expenses were paid to Skadden, Arps, Slate, Meagher & Flom, counsel to the Fund, of which a trustee of the Fund is an affiliated person. For the year ended June 30, 1994, the Fund recognized expenses of approximately $20,250 representing Van Kampen Merritt Inc.'s ("Van Kampen Merritt") or the Adviser's cost of providing accounting, legal and certain shareholder services to the Fund. Certain officers and trustees of the Fund are also officers and directors of the Adviser and Van Kampen Merritt. The Fund does not compensate its officers or trustees who are officers of the Adviser or Van Kampen Merritt. At June 30, 1994, Van Kampen Merritt owned 743,833 shares of the Fund. 3. CAPITAL TRANSACTIONS The Fund is authorized to issue an unlimited number of shares of beneficial interest without par value. At June 30, 1994, and 1993, paid in surplus aggregated $27,601,290 and $21,767,573, respectively. Transactions in shares were as follows:
YEAR ENDED YEAR ENDED JUNE 30, 1994 JUNE 30, 1993 ------------- ------------- Beginning Shares............................................... 21,767,573 24,933,335 ------------- ------------- Shares Sold.................................................... 79,908,069 86,871,367 Shares Issued Through Dividend Reinvestment.................... 445,332 500,012 Shares Repurchased............................................. (74,519,684) (90,537,141) ------------- ------------- Net Change in Shares Outstanding............................... 5,833,717 (3,165,762) ------------- ------------- Ending Shares.................................................. 27,601,290 21,767,573 ========== ==========
36 65 VAN KAMPEN MERRITT MONEY MARKET FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) June 30, 1994 4. DISTRIBUTION AND SERVICE PLANS The Fund and its shareholders have adopted a distribution plan (the "Distribution Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 and a Service Plan (the "Service Plan," collectively the "Plans"). The Plans govern payments for the distribution of the Fund's shares, ongoing shareholder services and maintenance of shareholder accounts. Annual fees under the Plans of up to .25% of the Fund's average net assets are accrued daily. 37 66 APPENDIX STANDARD & POORS RATINGS DEBT RATINGS A Standard & Poor's corporate or municipal debt rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation. This assessment may take into consideration obligors such as guarantors, insurers, or lessees. The debt rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment as to market price or suitability for a particular investor. The ratings are based on current information furnished by the issuer or obtained by S&P from other sources it considers reliable. S&P does not perform any audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or based on other circumstances. The ratings are based in varying degrees, on the following considerations: 1. Likelihood of default -- capacity and willingness of the obligor as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation; 2. Nature of and provisions of the obligation; 3. Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. INVESTMENT GRADE AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the higher rated issues only in small degree. A Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major categories. c The letter "c" indicates that the holder's option to tender the security for purchase may be canceled under certain prestated conditions enumerated in the tender option documents. L The letter "L" indicates that the rating pertains to the principal amount of those bonds to the extent that the underlying deposit collateral is federally insured and interest in adequately collateralized. In the case of certificates of deposit, the letter "L" indicates that the deposit, combined with other deposits being held in the same right and capacity, will be honored for principal and accrued per-default interest up to the federal insurance limits within 30 days
38 67 after closing of the insured institution or, in the event that the deposit is assumed by a successor insured institution, upon maturity. p The letter "p" indicates that the rating is provisional. A provisional rating assumes the successful completion of the project being financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely dependent upon the successful and timely completion of the project. This rating, however, while addressing credit quality subsequent to completion of the project, makes no comment on the likelihood of, or the risk of default upon failure of, such completion. The investor should exercise his own judgment with respect to such likelihood and risk. * Continuance of the rating is contingent upon S&P's receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows.
COMMERCIAL PAPER RATINGS Standard & Poor's commercial paper rating is a current assessment of the likelihood of timely payment of debt considered short-term in the relevant market. Ratings are graded into several categories, ranging from "A-1" for the highest quality obligations to "D" for the lowest. These categories are as follows: A-1 This highest category indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are denoted with a plus (+) sign designation. A-2 Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated "A-1". A commercial paper rating is not a recommendation to purchase, sell or hold a security inasmuch as it does not comment as to market price or suitability for a particular investor. The ratings are based on current information furnished to S&P by the issuer or obtained by S&P from other sources it considers reliable. S&P does not perform an audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of , such information, or based on other circumstances.
39 68 MOODY'S RATINGS DEBT RATINGS Aaa Bonds which are rated AAA are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa Bonds which are rated AA are judged to be of high quality by all standards. Together with the AAA group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in AAA securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the AAA securities. A Bonds which are rated A possess many favorable investment attributes and are to be considered as upper-medium-grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future. Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification of Aa and A. The modifier 1 indicates that the company ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the company ranks in the lower end of its generic rating category.
COMMERCIAL PAPER RATINGS Moody's Commercial Paper ratings are opinions of the ability of issues to repay punctually promissory obligations not having an original maturity in excess of nine months. Moody's employs the following designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers: Issuers rated Prime-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: - Leading market positions in well established industries. - High rates of return on funds employed. - Conservative capitalization structures with moderate reliance on debt and ample asset protection. - Broad margins in earnings coverage of fixed financial charges and high internal cash generation. - Well established access to a range of financial markets and assured sources of alternative liquidity. Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternative liquidity is maintained. 40 69 PART C: OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. List all financial statements and exhibits as part of the Registration Statement. (A) FINANCIAL STATEMENTS: Included in Part A of the Registration Statement: Financial Highlights Included in Part B of the Registration Statement: Unaudited Financial Statements Notes to Unaudited Financial Statements Audited Financial Statements Notes to Audited Financial Statements (B) EXHIBITS: (1)(a) Form of Agreement and Declaration of Trust+ (b) Form of Certificate of Declaration+ (2) Form of By-Laws+ (5) Form of Investment Advisory Agreement+ (6)(a) Form of Distribution and Service Agreement+ (b) Form of Dealer Agreement, as amended+ (c) Form of Broker Agreement, as amended+ (d) Form of Bank Agreement, as amended+ (8)(a) Form of Custodian Agreement(4) (b) Form of Transfer Agency Agreement+ (9)(a) Form of Fund Accounting Agreement+ (b) Form of Legal Services Agreement+ (10) Opinion and Consent of (a) Consent of Oppenheim, Appel, Dixon & Co.(7) (b) Consent of McGladrey, Hendrickson & Pullen(7) (c) Skadden, Arps, Slate, Meagher & Flom+ (11) Consent of KPMG Peat Marwick LLP+ (13) Letter of Understanding relating to initial capital(1) (15)(a) Form of Distribution Plan Pursuant to Rule 12b-1, as amended+ (b) Form of Shareholder Assistance Agreement, as amended+ (c) Form of Administrative Services Agreement, as amended+ (d) Form of Service Plan+ (16) Computation of Performance Quotations (a) Calculation of Current Yield(19) (b) Calculation of Compound Effective Yield(19) (17)(a) List of certain investment companies in response to Item 29(a)* (b) List of officers and directors of Van Kampen American Capital Distributors, Inc. in response to Item 29(b)* (24) Power of Attorney+ (27) Financial Data Schedules+ --------------- (4) Incorporated herein by reference to Post-Effective Amendment No. 4 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed December 17, 1984. (7) Incorporated herein by reference to Post-Effective Amendment No. 7 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed August 14, 1986. (19) Incorporated herein by reference to Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed August 19, 1995. + Filed herewith. ++ To be filed by amendment. * Incorporated herein by reference from Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A of Van Kampen American Capital Utilities Income Fund, File Number 33-68452, filed July 14, 1995. C-1 70 ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. To the best knowledge of Registrant, no person is controlled by or under common control with the Registrant. ITEM 26. NUMBER OF HOLDERS OF SECURITIES. As of July 17, 1994:
(2) NUMBER (1) OF RECORD TITLE OF CLASS HOLDERS ----- Shares of Beneficial Interest without par value....................................... Class A Shares.............................. 1,640 Class B Shares.............................. 314
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 officers or trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their office. Conditional advancing of indemnification monies may be made if the trustee or officer undertakes to repay the advance unless it is ultimately determined that he or she is entitled to the indemnification and only if the following conditions are met: (1) the trustee or officer provides 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 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. C-2 71 ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER. See "Investment Advisory Services" in the Prospectus and "Officers and Trustees" in the Statement of Additional Information for information regarding the business of the Adviser. For information as to the business, profession, vocation or employment of a substantial nature of each of the officers and Directors of Van Kampen American Capital Investment Advisory Corp. reference is made to the Adviser's current Form ADV filed under the Investment Advisers Act of 1940, incorporated herein by reference. ITEM 29. PRINCIPAL UNDERWRITERS. (a) List of certain investment companies response to Item 29(a), set forth in Exhibit (17)(a) hereto. (b) List of officers and directors of Van Kampen American Capital Distributors, Inc. in response to Item 29(b), set forth in Exhibit (17)(b) hereto. (c) Not applicable. ITEM 30. LOCATION OF ACCOUNTS AND RECORDS. All accounts, books and other documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder to be maintained (i) by Registrant will be maintained at its offices located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, ACCESS Investor Services, Inc., 7501 Tiffany Springs Parkway, Kansas City, Missouri 64153, or at the State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts; (ii) by the Adviser, will be maintained at its offices, located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181; and (iii) by Van Kampen American Capital Distributors, Inc., the principal underwriter, will be maintained at its offices located at One Parkview Plaza, Oakbrook Terrace, Illinois 60181. ITEM 31. MANAGEMENT SERVICES. Not applicable. ITEM 32. UNDERTAKINGS. (a) Not applicable. (b) Not applicable. C-3 72 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT, VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST, CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS AMENDMENT TO THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THERETO DULY AUTHORIZED IN THE CITY OF OAKBROOK TERRACE, AND THE STATE OF ILLINOIS, ON THE 25TH DAY OF JULY, 1995. VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST By: /s/ RONALD A. NYBERG -------------------------------------- Ronald A. Nyberg Vice President and Secretary PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO THIS REGISTRATION STATEMENT HAS BEEN SIGNED ON JULY 25, 1995 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
SIGNATURES TITLE ---------------------------------------------
/s/ DONALD C. MILLER * Chairman of the Board and Trustee --------------------------------------------- Donald C. Miller Chief Executive Officer: /s/ DENNIS J. McDONNELL* President and Trustee --------------------------------------------- Dennis J. McDonnell Chief Financial and Accounting Officer: /s/ EDWARD C. WOOD, III * Vice President and Treasurer --------------------------------------------- Edward C. Wood, III Trustees: Trustee --------------------------------------------- J. Miles Branagan /s/ RICHARD E. CARUSO * Trustee --------------------------------------------- Richard E. Caruso /s/ PHILIP P. GAUGHAN * Trustee --------------------------------------------- Philip P. Gaughan /s/ ROGER HILSMAN * Trustee --------------------------------------------- Roger Hilsman Trustee --------------------------------------------- R. Craig Kennedy /s/ JACK E. NELSON * Trustee --------------------------------------------- Jack E. Nelson Trustee --------------------------------------------- Don G. Powell
C-4 73
SIGNATURES TITLE --------------------------------------------- /s/ DAVID REES * Trustee --------------------------------------------- David Rees /s/ JEROME L. ROBINSON * Trustee --------------------------------------------- Jerome L. Robinson /s/ LAWRENCE J. SHEEHAN * Trustee --------------------------------------------- Lawrence J. Sheehan Trustee --------------------------------------------- Fernando Sisto /s/ WAYNE W. WHALEN * Trustee --------------------------------------------- Wayne W. Whalen Trustee --------------------------------------------- William S. Woodside --------------- *Signed by Ronald A. Nyberg pursuant to a power of attorney. /s/ RONALD A. NYBERG July 25, 1995 --------------------------------------------- Ronald A. Nyberg Attorney-in-Fact
C-5 74 SCHEDULE OF EXHIBITS TO FORM N-1A POST-EFFECTIVE AMENDMENT NUMBER 20 TO BE SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1995
EXHIBIT NUMBER EXHIBIT PAGE NUMBER ------ ------- ----------- (1) (a) Form of Agreement and Declaration of Trust+ (b) Form of Certificate of Declaration+ (2) Form of By-Laws+ (5) Form of Investment Advisory Agreement+ (6) (a) Form of Distribution and Service Agreement+ (b) Form of Dealer Agreement+ (c) Form of Broker Agreement+ (d) Form of Bank Agreement+ (8) (a) Form of Custodian Agreement(4) (b) Form of Transfer Agency Agreement+ (9) (a) Form of Fund Accounting Agreement+ (b) Form of Legal Services Agreement+ (10) Opinion and Consent of (a) Oppenheim, Appel, Dixon & Co.(7) (b) McGladrey, Hendrickson & Pullen(7) (c) Skadden, Arps, Slate, Meagher & Flom+ (11) Consent of KPMG Peat Marwick LLP+ (13) Letter of Understanding relating to initial capital(1) (15) (a) Form of Distribution Plan Pursuant to Rule 12b-1+ (b) Form of Shareholder Assistance Agreement+ (c) Form of Administrative Services Agreement+ (d) Form of Service Plan+ (16) Computation of Performance Quotations (a) Calculation of Current Yield(19) (b) Calculation of Compound Effective Yield(19) (17) (a) List of certain investment companies response to Item 29(a)* (b) List of Officers and directors of Van Kampen American Capital Distributors, Inc. in response to Item 29(b)* (24) Power of Attorney+ (27) Financial Data Schedules+
--------------- (4) Incorporated herein by reference to Post-Effective Amendment No. 4 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed December 17, 1984. (7) Incorporated herein by reference to Post-Effective Amendment No. 7 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed August 14, 1986. (19) Incorporated herein by reference to Post-Effective Amendment No. 19 to Registrant's Registration Statement on Form N-1A, file number 2-78401, filed August 19, 1995. + Filed herewith. ++ To be filed by amendment. * Incorporated herein by reference from Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A of Van Kampen American Capital Utilities Income Fund, File Number 33-68452, filed July 14, 1995. C-6 EX-99.B1(A) 2 AGREEMENT AND DECLARATION OF TRUST 1 EXHIBIT 1(a) VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST AGREEMENT AND DECLARATION OF TRUST May 10, 1995 2 VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST 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 3 (g) Contracts, etc. 7 (h) Guarantees, etc. 7 (i) Partnerships, etc. 8 (j) Insurance 8 (k) Pensions, etc 8 (I) Power of Collection and Litigation 8 (m) Issuance and Repurchase of Shares 8 (n) Offices 8 (o) Expenses 8 (p) Agents, etc. 9 (q) Accounts 9 (r) Valuation 9 (s) Indemnification 9 (t) General 9 SECTION 3.2. Borrowings; Financings; Issuance of Securities 9 i 4 SECTION 3.3. Deposits 9 SECTION 3.4. Allocations 10 SECTION 3.5. Further Powers; Limitations 10 ARTICLE 4 TRUSTEES AND OFFICERS 10 SECTION 4.1. Number, Designation, Election, Term, etc 10 (a) Initial Trustee 10 (b) Number 10 (c) Election and Term 11 (d) Resignation and Retirement 11 (e) Removal 11 (f) Vacancies 11 (g) Acceptance of Trusts 11 (h) Effect of Death, Resignation, etc. 12 (i) Conveyance 12 (j) No Accounting 12 SECTION 4.2. Trustees' Meetings; Participation by Telephone, etc. 12 SECTION 4.3. Committees; Delegation 12 SECTION 4.4. Officers 13 SECTION 4.5. Compensation of Trustees and Officers 13 SECTION 4.6. Ownership of Shares and Securities of the Trust 13 5 SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage in Business; Authority of Trustees to Permit Others to Do Likewise 13 SECTION 4.8. Reliance on Experts 13 SECTION 4.9. Surety Bonds 14 SECTION 4.10. Apparent Authority of Trustees and Officers 14 SECTION 4.11. Other Relationships Not Prohibited 14 SECTION 4.12. Payment of Trust Expenses 14 SECTION 4.13. 0wnership of the Trust Property 15 ii 6 SECTION 4.14. By-Laws 15 ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES 15 SECTION 5.1. Appointment; Action by Less than All Trustees 15 SECTION 5.2. Certain Contracts 15 (a) Advisory 16 (b) Administration 16 (c) Underwriting 16 (d) Custodian 16 (e) Transfer and Dividend Disbursing Agent 17 (f) Shareholder Servicing 17 (g) Accounting 17 Section 5.3. Distribution Arrangements 17 Section 5.4. Service Arrangements 17 ARTICLE 6 SERIES AND SHARES 17 SECTION 6.1. Description of Series and Shares 17 (a) General 17 (b) Establishment, etc. of Series; Authorization of Shares 18 (c) Character of Separate Series and Shares Thereof 18 (d) Consideration for Shares 18 (e) Assets Belonging to Series 19 (f) Liabilities of Series 19 (g) Dividends 19 (h) Liquidation 20 (i) Voting 20 7 (j) Redemption by Shareholder 20 (k) Redemption at the Option of the Trust 21 (I) Net Asset Value 21 (m) Transfer 21 (n) Equality 21 (o) Rights of Fractional Shares 22 (p) Conversion Rights 22 SECTION 6.2. Ownership of Shares 22 SECTION 6.3. Investments in the Trust 23 SECTION 6.4. No Pre-emptive Rights 23 iii 8 SECTION 6.5. Status of Shares 23 ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS 23 SECTION 7.1. Voting Powers 23 SECTION 7.2. Number of Votes and Manner of Voting; Proxies 24 SECTION 7.3. Meetings 24 SECTION 7.4. Record Dates 24 SECTION 7.5. Quorum and Required Vote 25 SECTION 7.6. Action by Written Consent 25 SECTION 7.7. Inspection of Records 25 SECTION 7.8. Additional Provisions 25 ARTICLE 8 LIMITATION OF LIABILITY; INDEMNIFICATION 25 SECTION 8.1. Trustees, Shareholders, etc. Not Personally Liable; Notice 25 SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No Bond or Surety 26 SECTION 8.3. Indemnification of Shareholders 26 SECTION 8.4. Indemnification of Trustees, Officers, etc. 27 9 SECTION 8.5. Compromise Payment 27 SECTION 8.6. Indemnification Not Exclusive, etc. 28 SECTION 8.7. Liability of Third Persons Dealing with Trustees 28 ARTICLE 9 DURATION; REORGANIZATION; INCORPORATION; AMENDMENTS 28 SECTION 9.1. Duration of Trust 28 SECTION 9.2. Termination of Trust 28 SECTION 9.3. Reorganization 29 SECTION 9.4. Incorporation 29 iv 10 SECTION 9.5. Amendments; etc. 29 SECTION 9.6. Filing of Copies of Declaration and Amendments 30 ARTICLE 10 MISCELLANEOUS 30 SECTION 10.1. Notices 30 SECTION 10.2. Governing Law 30 SECTION 10.3. Counterparts 30 SECTION 10.4. Reliance by Third Parties 30 SECTION 10.5. References; Headings 31 SECTION 10.6. Provisions in Conflict With Law or Regulation 31 SECTION 10.7. Use of the Name "Van Kampen American Capital" 31 Signature 32 Acknowledgments 33 11 AGREEMENT AND DECLARATION OF TRUST OF VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST This AGREEMENT AND DECLARATION OF TRUST, made at this 10th day of May, 1995, by and between Ronald A. Nyberg, an individual residing in Naperville, Illinois (the "Settlor"), and the Trustee whose signature is set forth below (the "Initial Trustee"), W I T N E S S E T H T H A T: WHEREAS, the Settlor proposes to deliver to the Initial Trustee the sum of one hundred dollars ($100.00) lawful money of the United States of America in trust hereunder and to authorize the Initial Trustee and all other individuals acting as Trustees hereunder to employ such funds, and any other funds coming into their hands or the hands of their successor or successors as such Trustees, to carry on the business of an investment company and as such of buying, selling, investing or otherwise dealing in and with stocks, bonds, debentures, warrants and other securities and interests therein, financial futures contracts, or options with respect to securities or financial futures contracts, and such other and further investment media and other property as the Trustees may deem advisable, which are not prohibited by law or the terms of this Declaration; and WHEREAS, the Initial Trustee is willing to accept such sum, together with any and all additions thereto and the income or increments thereof, upon the terms, conditions and trusts hereinafter set forth; and WHEREAS, the beneficial interest in the assets held by the Trustees shall be divided into transferable Shares, all in accordance with the provisions hereinafter set forth; and WHEREAS, it is desired that the trust established hereby be managed and operated as a trust with transferable shares under the laws of Delaware with respect to Delaware business trusts in accordance with the provisions hereinafter set forth; 1 12 NOW, THEREFORE, the Initial Trustee, for himself and his successors as Trustees, hereby declares and agrees with the Settlor, for himself and for all Persons who shall hereafter become holders of Shares that the Trustees will hold the sum delivered to them upon the execution hereof, and all other and further cash, securities and other property of every type and description which they may in any way acquire in their capacity as such Trustees, together with the income therefrom and the proceeds thereof, IN TRUST NEVERTHELESS, to manage and dispose of the same for the benefit of the holders from time to time of the Shares being issued and to be issued hereunder and in the manner and subject to the provisions hereof, to wit: 13 ARTICLE I THE TRUST SECTION 1.1 Name. The name of the Trust shall be "VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST" and so far as may be practicable, the Trustees shall conduct the Trust's activities, execute all documents and sue or be sued under that name, which name (and the word "Trust" wherever used in this Agreement and Declaration of Trust, except where the context otherwise requires) shall refer to the Trustees in their capacity as Trustees, and not individually or personally, and shall not refer to the officers, agents or employees of the Trust or of such Trustees, or to the holders of the Shares of Beneficial Interest of the Trust or any Series. If the Trustees determine that the use of such name is not practicable, legal or convenient at any time or in any jurisdiction, or if the Trust is required to discontinue the use of such name pursuant to Section 10.7 hereof, then subject to that Section, the Trustees may use such other designation, or they may adopt such other name for the Trust as they deem proper, and the Trust may hold property and conduct its activities under such designation or name. SECTION 1.2. Location. The Trust shall maintain a registered office in the State of Delaware and may have such other offices or places of business as the Trustees may from time to time determine to be necessary or expedient. SECTION 1.3. Nature of Trust. The Trust shall be a trust with transferable shares under the laws of The State of Delaware, of the type defined in Title 12, Chapter 38, Section 3801 of the Delaware Code as a business trust. The Trust is not intended to be, shall not be deemed to be, and shall not be treated as, a general partnership, limited partnership, joint venture, corporation or joint stock company. The Shareholders shall be beneficiaries and their relationship to the Trustees shall be solely in that capacity in accordance with the rights conferred upon them hereunder. SECTION 1.4. Definitions. As used in this Agreement and Declaration of Trust, the following terms shall have the meanings set forth below unless the context thereof otherwise requires: 14 "Accounting Agent" shall have the meaning designated in Section 5.2(g) hereof. "Administrator" shall have the meaning designated in Section 5.2(b) hereof. "Affiliated Person" shall have the meaning assigned to it in the 1940 Act. "By-Laws" shall mean the By-Laws of the Trust, as amended from time to time. "Certificate of Designation" shall have the meaning designated in Section 6.1 hereof. "Certificate of Termination" shall have the meaning designated in Section 6.1 hereof. "Class" or "Classes" shall mean, with respect to any Series, any unissued Shares of such Series in respect of which the Trustees shall from time to time fix and determine any special provisions relating to sales charges, any rights of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions, conversion rights, and conditions under which the Shareholders of such Class shall have separate voting rights or no voting rights. "Commission" shall have the same meaning as in the 1940 Act. "Contracting Party" shall have the meaning designated in the preamble to Section 5.2 hereof. "Conversion Date" shall mean with respect to Shares of any Class that are convertible automatically into Shares of any other Class of a Series the date fixed by the Trustees for such conversion. "Covered Person" shall have the meaning designated in Section 8.4 hereof. 15 "Custodian" shall have the meaning designated in Section 5.2(d) hereof. "Declaration" and "Declaration of Trust" shall mean this Agreement and Declaration of Trust and all amendments or modifications thereof as from time to time in effect. This Agreement and Declaration of Trust is the "governing instrument" of the Trust within the meaning of the laws of the State of Delaware with respect to Delaware business trusts. References in this Agreement and Declaration of Trust to "hereof", "herein" and "hereunder" shall be deemed to refer to the Declaration of Trust generally, and shall not be limited to the particular text, Article or Section in which such words appear. "Disabling Conduct" shall have the meaning designated in Section 8.4 hereof. "Distributor" shall have the meaning designated in Section 5.2(c) hereof. "Dividend Disbursing Agent" shall have the meaning designated in Section 5.2(e) hereof. "General Items" shall have the meaning defined in Section 6.2(a) hereof. "Initial Trustee" shall have the meaning defined in the preamble hereto. "Investment Advisor" shall have the meaning defined in Section 5.2(a) hereof. "Majority of the Trustees" shall mean a majority of the Trustees in office at the time in question. At any time at which there shall be only one (1) Trustee in office, such term shall mean such Trustee. "Majority Shareholder Vote," as used with respect to (a) the election of any Trustee at a meeting of Shareholders, shall mean the vote for the election of such Trustee of a plurality of all outstanding Shares of the Trust, without regard to Series, represented in person or by proxy and entitled to vote thereon, provided that a quorum (as determined in accordance with the 16 By-Laws) is present, (b) any other action required or permitted to be taken by Shareholders, shall mean the vote for such action of the holders of that majority of all outstanding Shares (or, where a separate vote of Shares of any particular Series is to be taken, the affirmative vote of that majority of the outstanding Shares of that Series) of the Trust which consists of: (i) a majority of all Shares (or of Shares of the particular Series) represented in person or by proxy and entitled to vote on such action at the meeting of Shareholders at which such action is to be taken, provided that a quorum (as determined in accordance with the By-Laws) is present; or (ii) if such action is to be taken by written consent of Shareholders, a majority of all Shares (or of Shares of the particular Series) issued and outstanding and entitled to vote on such action; provided that (iii) as used with respect to any action requiring the affirmative vote of "a majority of the outstanding voting securities," as the quoted phrase is defined in the 1940 Act, of the Trust or of any Series, "Majority Shareholder Vote" means the vote for such action at a meeting of Shareholders of the smallest majority of all outstanding Shares of the Trust (or of Shares of the particular Series) entitled to vote on such action which satisfies such 1940 Act voting requirement. "1940 Act" shall mean the provisions of the Investment Company Act of 1940 and the rules and regulations thereunder, both as amended from time to time, and any order or orders thereunder which may from time to time be applicable to the Trust. "Person" shall mean and include individuals, as well as corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, banks, trust companies, land trusts, business trusts or other organizations established under the laws of any jurisdiction, whether or not considered to be legal entities, and governments and agencies and political subdivisions thereof. "Principal Underwriter" shall have the meaning designated in Section 5.2(c) hereof. "Prospectus," as used with respect to the Trust (or the Shares of a particular Series), shall mean the prospectus relating to the Trust (or such Series) which constitutes part of the currently effective Registration Statement of the Trust under the Securities Act of 1933, as such prospectus may be amended or supplemented from time to time. "Securities" shall have the same meaning ascribed to that term in the Securities Act of 1993. "Series" shall mean one or more of the series of Shares authorized by the Trustees to represent the beneficial interest 17 in one or more separate components of the assets of the Trust which are now or hereafter established and designated under or in accordance with the provisions of Article 6 hereof. "Settlor" shall have the meaning defined in the preamble hereto. "Shareholder" shall mean as of any particular time any Person shown of record at such time on the books of the Trust as a holder of outstanding Shares of any Series, and shall include a pledgee into whose name any such Shares are transferred in pledge. "Shareholder Servicing Agent" shall have the meaning designated in Section 5.2(f) hereof. "Shares" shall mean the transferable units into which the beneficial interest in the Trust and each Series of the Trust (as the context may require) shall be divided from time to time, and includes fractions of Shares as well as whole Shares. All references herein to "Shares" which are not accompanied by a reference to any particular Series or Class shall be deemed to apply to outstanding Shares without regard to Series or Class. "Single Class Voting," as used with respect to any matter to be acted upon at a meeting or by written consent of Shareholders, shall mean a style of voting in which each holder of one or more Shares shall be entitled to one vote on the matter in question for each Share standing in his name on the records of the Trust, irrespective of Series or Class of a Series, and all outstanding Shares of all Series vote as a single class. "Statement of Additional Information," as used with respect to the Trust (or any Series), shall mean the statement of additional information relating to the Trust (or such Series) which constitutes part of the currently effective Registration Statement of the Trust under the Securities Act of 1933, as such statement of additional information may be amended or supplemented from time to time. "Transfer Agent" shall have the meaning defined in Section 5.2(e) hereof. "Trust" shall mean the trust named in Section 1.1 hereof. 18 "Trust Property" shall mean, as of any particular time, any and all property which shall have been transferred, conveyed or paid to the Trust or the Trustees, and all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation thereof, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, and which at such time is owned or held by, or for the account of, the Trust or the Trustees, without regard to the Series to which such property is allocated. "Trustees" shall mean, collectively, the Initial Trustee, so long as he shall continue in office, and all other individuals who at the time in question have been duly elected or appointed as Trustees of the Trust in accordance with the provisions hereof and who have qualified and are then in office. At any time at which there shall be only one (I) Trustee in office, such term shall mean such single Trustee. SECTION 1.5. Real Property to be Converted into Personal Property. Notwithstanding any other provision hereof, any real property at any time forming part of the Trust Property shall be held in trust for sale and conversion into personal property at such time or times and in such manner and upon such terms as the Trustees shall approve, but the Trustees shall have power until the termination of this Trust to postpone such conversion as long as they in their uncontrolled discretion shall think fit, and for the purpose of determining the nature of the interest of the Shareholders therein, all such real property shall at all times be considered as personal property. ARTICLE 2 PURPOSE OF THE TRUST The purpose of the Trust shall be to (a) manage, conduct, operate and carry on the business of an investment company; (b) subscribe for, invest in, reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise deal in or dispose of any and all sorts of property, tangible or intangible, including but not limited to Securities of any type whatsoever, whether equity or nonequity, of any issuer, evidences of indebtedness of any person and any other rights, interest, instruments or property of any sort to exercise any and all rights, powers and privileges of ownership or interest in respect of any and all such investment of every kind and description, including without limitation, the right to consent and otherwise act with respect thereto, with power to designate one or more Persons to exercise any of said rights, powers and privileges in respect of any of said investments. The Trustees shall not be limited by any law 19 limiting the investments which may be made by fiduciaries. ARTICLE 3 POWERS OF THE TRUSTEES SECTION 3.1. Powers in General. The Trustees shall have, without other or further authorization, full, entire, exclusive and absolute power, control and authority over, and management of, the business of the Trust and over the Trust Property, to the same extent as if the Trustees were the sole owners of the business and property of the Trust in their own right, and with such powers of delegation as may be permitted by this Declaration, subject only to such limitations as may be expressly imposed by this Declaration of Trust or by applicable law. The enumeration of any specific power or authority herein shall not be construed as limiting the aforesaid power or authority or any specific power or authority. Without limiting the foregoing; they may select, and from time to time change, the fiscal year of the Trust; they may adopt and use a seal for the Trust, provided that unless otherwise required by the Trustees, it shall not be necessary to place the seal upon, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust; they may from time to time in accordance with the provisions of Section 6.1 hereof establish one or more Series to which they may allocate such of the Trust Property, subject to such liabilities, as they shall deem appropriate, each such Series to be operated by the Trustees as a separate and distinct investment medium and with separately defined investment objectives and policies and distinct investment purposes, all as established by the Trustees, or from time to time changed by them; they may as they consider appropriate elect and remove officers and appoint and terminate agents and consultants and hire and terminate employees, any one or more of the foregoing of whom may be a Trustee; they may appoint from their own number, and terminate, any one or more committees consisting of one or more Trustees, including without implied limitation an Executive Committee, which may, when the Trustees are not in session and subject to the 1940 Act, exercise some or all of the power and authority of the Trustees as the Trustees may determine; in accordance with Section 5.2 they may employ one or more Investment Advisers, Administrators and Custodians and may authorize any such service provider to employ one or more other service providers and to deposit all or any part of such assets in a system or systems for the central handling of Securities, retain Transfer, Dividend Disbursing, Accounting or Shareholder 20 Servicing Agents or any of the foregoing, provide for the distribution of Shares by the Trust through one or more Distributors, Principal Underwriters or otherwise, set record dates or times for the determination of Shareholders entitled to participate in, benefit from or act with respect to various matters; and in general they may delegate to any officer of the Trust, to any Committee of the Trustees and to any employee, Investment Adviser, Administrator, Distributor, Custodian, Transfer Agent, Dividend Disbursing Agent, or any other agent or consultant of the Trust, such authority, powers, functions and duties as they consider desirable or appropriate for the conduct of the business and affairs of the Trust, including without implied limitation the power and authority to act in the name of the Trust and of the Trustees, to sign documents and to act as attorney-in-fact for the Trustees. Without limiting the foregoing and to the extent not inconsistent with the 1940 Act or other applicable law, the Trustees shall have power and authority: (a) Investments. To subscribe for, invest in, reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise deal in or dispose of any and all sorts of property, tangible or intangible, including but not limited to Securities of any type whatsoever, whether equity or nonequity, of any issuer, evidences of indebtedness of any person and any other rights, interest, instruments or property of any sort, to exercise any and all rights, powers and privileges of ownership or interest in respect of any and all such investments of every kind and description, including without limitation the right to consent and otherwise act with respect thereto, with power to designate one or more Persons to exercise any of said rights, powers and privileges in respect of any of said investments, in every case without being limited by any law limiting the investments which may be made by fiduciaries; (b) Disposition of Assets. Upon such terms and conditions as they deem best, to lend, sell, exchange, mortgage, pledge, hypothecate, grant security interests in, encumber, negotiate, convey, transfer or otherwise dispose of, and to trade in, any and all of the Trust Property, free and clear of all trusts, for cash or on terms, with or without advertisement, and on such terms as to payment, security or otherwise, all as they shall deem necessary or expedient; (c) Ownership Powers. To vote or give assent, or exercise any and all other rights, powers and privileges of ownership with respect to, and to perform any and all duties and obligations as owners of, any Securities or other property forming part of the Trust Property, the same as any individual might do; to exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of Securities, and to receive powers of attorney from, and to execute and deliver proxies or powers of attorney to, such Person or Persons as the Trustees shall deem proper, receiving from or granting to such Person or Persons such power and discretion with relation to Securities or other property of the 21 Trust, all as the Trustees shall deem proper; (d) Form of Holding. To hold any Security or other property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form, or in the name of the Trustees or of the Trust, or of the Series to which such Securities or property belong, or in the name of a Custodian, subcustodian or other nominee or nominees, or otherwise, upon such terms, in such manner or with such powers, as the Trustees may determine, and with or without indicating any trust or the interest of the Trustees therein; (e) Reorganizations etc. To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or issuer, any Security of which is or was held in the Trust or any Series; to consent to any contract, lease, mortgage, purchase or sale of property by such corporation or issuer, and to pay calls or subscriptions with respect to any Security forming part of the Trust Property; (f) Voting Trusts, etc. To join with other holders of any Securities in acting through a committee, depository, voting trustee or otherwise, and in that connection to deposit any Security with, or transfer any Security to, any such committee, depository or trustee, and to delegate to them such power and authority with relation to any Security (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depository or trustee as the Trustees shall deem proper; (g) Contracts. etc. To enter into, make and perform all such obligations, contracts, agreements and undertakings of every kind and description, with any Person or Persons, as the Trustees shall in their discretion deem expedient in the conduct of the business of the Trust, for such terms as they shall see fit, whether or not extending beyond the term of office of the Trustees, or beyond the possible expiration of the Trust; to amend, extend, release or cancel any such obligations, contracts, agreements or understandings; and to execute, acknowledge, deliver and record all written instruments which they may deem necessary or expedient in the exercise of their powers; (h) Guarantees. etc. To endorse or guarantee the payment of any notes or other obligations of any Person; to make contracts of guaranty or suretyship, or otherwise assume liability for payment thereof; and to mortgage and pledge the Trust Property or any part thereof to secure any of or all such obligations; 22 (i) Partnerships, etc. To enter into joint ventures, general or limited partnerships and any other combinations or association; (j) Insurance. To purchase and pay for entirely out of Trust Property such insurance as they may deem necessary or appropriate for the conduct of the business, including, without limitation, insurance policies insuring the assets of the Trust and payment of distributions and principal on its portfolio investments, and insurance policies insuring the Shareholders, Trustees, officers, employees, agents, consultants, Investment Advisers, managers, Administrators, Distributors, Principal Underwriters, or other independent contractors, or any thereof (or any Person connected therewith), of the Trust, individually, against all claims and liabilities of every nature arising by reason of holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such Person in any such capacity, whether or not the Trust would have the power to indemnify such Person against such liability; (k) Pensions, etc. To pay pensions for faithful service, as deemed appropriate by the Trustees, and to adopt, establish and carry out pension, profit sharing, share bonus, share purchase, savings, thrift, deferred compensation and other retirement, incentive and benefit plans, trusts and provisions, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees and agents of the Trust; (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 23 acquisition of Shares of any Series, any of the assets belonging to the Series to which such Shares relate, whether constituting capital or surplus or otherwise, to the full extent now or hereafter permitted by applicable law; provided that any Shares belonging to the Trust shall not be voted, directly or indirectly; (n) Offices. To have one or more offices, and to carry on all or any of the operations and business of the Trust, in any of the States, Districts or Territories of the United States, and in any and all foreign countries, subject to the laws of such State, District, Territory or country; (o) Expenses. To incur and pay any and all such expenses and charges as they may deem advisable (including without limitation appropriate fees to themselves as Trustees), and to pay all such sums of money for which they may be held liable by way of damages, penalty, fine or otherwise; (p) Agents, etc. To retain and employ any and all such servants, agents, employees, attorneys, brokers, Investment Advisers, accountants, architects, engineers, builders, escrow agents, depositories, consultants, ancillary trustees, custodians, agents for collection, insurers, banks and officers, as they think best for the business of the Trust or any Series, to supervise and direct the acts of any of the same, and to fix and pay their compensation and define their duties; (q) Accounts. To determine, and from time to time change, the method or form in which the accounts of the Trust or any Series shall be kept; (r) Valuation. Subject to the requirements of the 1940 Act, to determine from time to time the value of all or any part of the Trust Property and of any services, Securities, property or other consideration to be furnished to or acquired by the Trust, and from time to time to revalue all or any part of the Trust Property in accordance with such appraisals or other information as is, in the Trustees' sole judgment, necessary and satisfactory; (s) Indemnification. In addition to the mandatory indemnification provided for in Article 8 hereof and to the extent permitted by law, to indemnify or enter into agreements with respect to indemnification with any Person with whom this Trust has dealings, including, without limitation, any independent contractor, to such extent as the Trustees shall determine; and 24 (t) General. Subject to the fundamental policies in effect from time to time with respect to the Trust, to do all such other acts and things and to conduct, operate, carry on and engage in such other lawful businesses or business activities as they shall in their sole and absolute discretion consider to be incidental to the business of the Trust or any Series as an investment company, and to exercise all powers which they shall in their discretion consider necessary, useful or appropriate to carry on the business of the Trust or any Series, to promote any of the purposes for which the Trust is formed, whether or not such things are specifically mentioned herein, in order to protect or promote the interests of the Trust or any Series, or otherwise to carry out the provisions of this Declaration. SECTION 3.2. Borrowings; Financings: Issuance of Securities. The Trustees have power, subject to the fundamental policies in effect from time to time with respect to the Trust, to borrow or in any other manner raise such sum or sums of money, and to incur such other indebtedness for goods or services, or for or in connection with the purchase or other acquisition of property, as they shall deem advisable for the purposes of the Trust, in any manner and on any terms, and to evidence the same by negotiable or nonnegotiable Securities which may mature at any time or times, even beyond the possible date of termination of the Trust; to issue Securities of any type for such cash, property, services or other considerations, and at such time or times and upon such terms, as they may deem advisable; and to reacquire any such Securities. Any such Securities of the Trust may, at the discretion of the Trustees, be made convertible into Shares of any Series, or may evidence the right to purchase, subscribe for or otherwise acquire Shares of any Series, at such times and on such terms as the Trustees may prescribe. SECTION 3.3. Deposits. Subject to the requirements of the 1940 Act, the Trustees shall have power to deposit any moneys or Securities included in the Trust Property with any one or more banks, trust companies or other banking institutions, whether or not such deposits will draw interest. Such deposits are to be subject to withdrawal in such manner as the Trustees may determine, and the Trustees shall have no responsibility for any loss which may occur by reason of the failure of the bank, trust company or other banking institution with which any such moneys or Securities have been deposited, except as provided in Section 8.2 hereof. SECTION 3.4. Allocations. The Trustees shall have power to determine whether moneys or other assets received by the Trust shall be charged or credited to income or capital, or allocated between income and capital, including the power to amortize or fail to amortize any part or all of any premium or discount, to treat any part or all of the profit resulting from the maturity or sale of any asset, whether purchased at a premium or at a discount, as income or capital, or to apportion the same between income and capital, to apportion the sale price of any asset between income and capital, and to determine in what manner any expenses or disbursements are to be borne as between income and 25 capital, whether or not in the absence of the power and authority conferred by this Section 3.4 such assets would be regarded as income or as capital or such expense or disbursement would be charged to income or to capital; to treat any dividend or other distribution on any investment as income or capital, or to apportion the same between income and capital; to provide or fail to provide reserves, including reserves for depreciation, amortization or obsolescence in respect of any Trust Property in such amounts and by such methods as they shall determine; to allocate less than all of the consideration paid for Shares of any Series to surplus with respect to the Series to which such Shares relate and to allocate the balance thereof to paid-in capital of that Series, and to reallocate such amounts from time to time; all as the Trustees may reasonably deem proper. SECTION 3.5. Further Powers: Limitations. The Trustees shall have power to do all such other matters and things, and to execute all such instruments, as they deem necessary, proper or desirable in order to carry out, promote or advance the interests of the Trust, although such matters or things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing the provisions of this Declaration of Trust, the presumption shall be in favor of a grant of power to the Trustees. The Trustees shall not be required to obtain any court order to deal with the Trust Property. The Trustees may limit their right to exercise any of their powers through express restrictive provisions in the instruments evidencing or providing the terms for any Securities of the Trust or in other contractual instruments adopted on behalf of the Trust. ARTICLE 4 TRUSTEES AND OFFICERS SECTION 4.1. Number. Designation, Election. Term, etc. (a) Initial Trustee. Upon his execution of this Declaration of Trust or a counterpart hereof or some other writing in which he accepts such Trusteeship and agrees to the provisions hereof, the individual whose signature is affixed hereto as Initial Trustee shall become the Initial Trustee hereof. (b) Number. The Trustees serving as such, whether named above or hereafter becoming Trustees, may increase (to not more than twenty (20)) or decrease the number of Trustees to a number other than the number theretofore determined by a written 26 instrument signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees). No decrease in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his term, but the number of Trustees may be decreased in conjunction with the removal of a Trustee pursuant to subsection (e) of this Section 4.1. (c) Election and Term. The Trustees shall be elected by the Shareholders of the Trust at the first meeting of Shareholders immediately prior to the initial public offering of Shares of the Trust, and the term of office of any Trustees in office before such election shall terminate at the time of such election. Subject to Section 16(a) of the 1940 Act and to the preceding sentence of this subsection (c), the Trustees shall have the power to set and alter the terms of office of the Trustees, and at any time to lengthen or shorten their own terms or make their terms of unlimited duration, to elect their own successors and, pursuant to subsection (f) of this Section 4.1, to appoint Trustees to fill vacancies; provided that Trustees shall be elected by a Majority Shareholder Vote at any such time or times as the Trustees shall determine that such action is required under Section 16(a) of the 1940 Act or, if not so required, that such action is advisable; and further provided that, after the initial election of Trustees by the Shareholders, the term of office of any incumbent Trustee shall continue until the termination of this Trust or his earlier death, resignation, retirement, bankruptcy, adjudicated incompetency or other incapacity or removal, or if not so terminated, until the election of such Trustee's successor in office has become effective in accordance with this subsection (c). (d) Resignation and Retirement. Any Trustee may resign his trust or retire as a Trustee, by a written instrument signed by him and delivered to the other Trustees or to any officer of the Trust, and such resignation or retirement shall take effect upon such delivery or upon such later date as is specified in such instrument. (e) Removal. Any Trustee may be removed with or without cause at any time: (i) by written instrument, signed by at least two thirds (2/3) of the number of Trustees prior to such removal, specifying the date upon which such removal shall become effective; or (ii) by vote of Shareholders holding not less than two thirds (2/3) of the Shares of each Series then outstanding, cast in person or by proxy at any meeting called for the purpose; or (iii) by a written declaration signed by Shareholders holding not less than two thirds (2/3) of the Shares of each Series then outstanding. Upon incapacity or death of any Trustee, his legal representative shall execute and deliver on his behalf such documents as the remaining Trustees shall require in order to effect the purpose of this Paragraph. (f) Vacancies. Any vacancy or anticipated vacancy 27 resulting from any reason, including an increase in the number of Trustees, may (but need not unless required by the 1940 Act) be filled by a Majority of the Trustees, subject to the provisions of Section 16(a) of the 1940 Act, through the appointment in writing of such other individual as such remaining Trustees in their discretion shall determine; provided that if there shall be no Trustees in office, such vacancy or vacancies shall be filled by Majority Shareholders Vote. Any such appointment or election shall be effective upon such individual's written acceptance of his appointment as a Trustee and his agreement to be bound by the provisions of this Declaration of Trust, except that any such appointment in anticipation of a vacancy to occur by reason of retirement, resignation or increase in the number of Trustees to be effective at a later date shall become effective only at or after the effective date of said retirement, resignation or increase in the number of Trustees. (g) Acceptance of Trusts. Whenever any conditions to the appointment or election of any individual as a Trustee hereunder who was not, immediately prior to such appointment or election, acting as a Trustee shall have been satisfied, such individual shall become a Trustee and the Trust estate shall vest in the new Trustee, together with the continuing Trustees, without any further act or conveyance. Such new Trustee shall accept such appointment or election in writing and agree in such writing to be bound by the provisions hereof, but the execution of such writing shall not be requisite to the effectiveness of the appointment or election of a new Trustee. (h) Effect of Death. Resignation, etc. No vacancy, whether resulting from the death, resignation, retirement, bankruptcy, adjudicated incompetency, incapacity, or removal of any Trustee, an increase in the number of Trustees or otherwise, shall operate to annul or terminate the Trust hereunder or to revoke or terminate any existing agency or contract created or entered into pursuant to the terms of this Declaration of Trust. Until such vacancy is filled as provided in this Section 4.1, the Trustees in office (if any), regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration. (i) Convevance. In the event of the resignation or removal of a Trustee or his otherwise ceasing to be a Trustee, such former Trustee or his legal representative shall, upon request of the continuing Trustees, execute and deliver such documents as may be required for the purpose of consummating or evidencing the conveyance to the Trust or the remaining Trustees of any Trust Property held in such former Trustee's name, but the execution and delivery of such documents shall not be requisite to the vesting of title to the Trust Property in the remaining Trustees, as provided in subsection (g) of this Section 4.1 and in Section 4.13 hereof. (j) No Accounting. Except to the extent required by the 28 1940 Act or under circumstances which would justify his removal for cause, no Person ceasing to be a Trustee (nor the estate of any such Person) shall be required to make an accounting to the Shareholders or remaining Trustees upon such cessation. SECTION 4.2. Trustees' Meetings: Participation by Telephone. etc. Annual and special meetings may be held from time to time, in each case, upon the call of such officers as may be thereunto authorized by the By-Laws or vote of the Trustees, or by any three (3) Trustees, or pursuant to a vote of the Trustees adopted at a duly constituted meeting of the Trustees, and upon such notice as shall be provided in the By-Laws. Any such meeting may be held within or without the state of Delaware. The Trustees may act with or without a meeting, and a written consent to any matter, signed by a Majority of the Trustees, shall be equivalent to action duly taken at a meeting of the Trustees, duly called and held. Except as otherwise provided by the 1940 Act or other applicable law, or by this Declaration of Trust or the By-Laws, any action to be taken by the Trustees may be taken by a majority of the Trustees present at a meeting of Trustees (a quorum, consisting of at least a Majority of the Trustees, being present), within or without Delaware. If authorized by the By-Laws, all or any one or more Trustees may participate in a meeting of the Trustees or any Committee thereof by means of conference telephone or similar means of communication by means of which all Persons participating in the meeting can hear each other, and participation in a meeting pursuant to such means of communication shall constitute presence in person at such meeting. The minutes of any meeting thus held shall be prepared in the same manner as a meeting at which all participants were present in person. SECTION 4.3. Committees; Delegation. The Trustees shall have power, consistent with their ultimate responsibility to supervise the affairs of the Trust, to delegate from time to time to one or more other Committees, or to any single Trustee, the doing of such things and the execution of such deeds or other instruments, either in the name of the Trust or the names of the Trustees or as their attorney or attorneys in fact, or otherwise as the Trustees may from time to time deem expedient, and any agreement, deed, mortgage, lease or other instrument or writing executed by the Trustee or Trustees or other Person to whom such delegation was made shall be valid and binding upon the Trustees and upon the Trust. SECTION 4.4. Officers. The Trustees shall annually elect such officers or agents, who shall have such powers, duties and responsibilities as the Trustees may deem to be advisable, and as they shall specify by resolution or in the By-Laws. Except as may be provided in the By-Laws, any officer elected by the Trustees may be removed at any time with or without cause. Any two (2) or more offices may be held by the same individual. SECTION 4.5. Compensation of Trustees and Officers. The 29 Trustees shall fix the compensation of all officers and Trustees. Without limiting the generality of any of the provisions hereof, the Trustees shall be entitled to receive reasonable compensation for their general services as such, and to fix the amount of such compensation, and to pay themselves or any one or more of themselves such compensation for special services, including legal, accounting, or other professional services, as they in good faith may deem reasonable. No Trustee or officer resigning (except where a right to receive compensation for a definite future period shall be expressly provided in a written agreement with the Trust, duly approved by the Trustees) and no Trustee or officer removed shall have any right to any compensation as such Trustee or officer for any period following his resignation or removal, or any right to damages on account of his removal, whether his compensation be by the month, or the year or otherwise. SECTION 4.6. Ownership of Shares and Securities of the Trust. Any Trustee, and any officer, employee or agent of the Trust, and any organization in which any such Person is interested, may acquire, own, hold and dispose of Shares of any Series and other Securities of the Trust for his or its individual account, and may exercise all rights of a holder of such Shares or Securities to the same extent and in the same manner as if such Person were not such a Trustee, officer, employee or agent of the Trust; subject, in the case of Trustees and officers, to the same limitations as directors or officers (as the case may be) of a Delaware business corporation; and the Trust may issue and sell or cause to be issued and sold and may purchase any such Shares or other Securities from any such Person or any such organization, subject only to the general limitations, restrictions or other provisions applicable to the sale or purchase of Shares of such Series or other Securities of the Trust generally. SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage in Business; Authority of Trustees to Permit Others to Do Likewise. The Trustees, in their capacity as Trustees, and (unless otherwise specifically directed by vote of the Trustees) the officers of the Trust in their capacity as such, shall not be required to devote their entire time to the business and affairs of the Trust. Except as otherwise specifically provided by vote of the Trustees, or by agreement in any particular case, any Trustee or officer of the Trust may acquire, own, hold and dispose of, for his own individual account, any property, and acquire, own, hold, carry on and dispose of, for his own individual account, any business entity or business activity, whether similar or dissimilar to any property or business entity or business activity invested in or carried on by the Trust, and without first offering the same as an investment opportunity to the Trust, and may exercise all rights in respect thereof as if he were not a Trustee or officer of the Trust. The Trustees shall also have power, generally or in specific cases, to permit employees or agents of the Trust to have the same rights (or lesser rights) to acquire, hold, own and dispose of property and businesses, to carry on businesses, and to accept investment opportunities without offering them to the Trust, as the Trustees have by virtue of this Section 4.7. 30 SECTION 4.8. Reliance on Experts. The Trustees and officers may consult with counsel, engineers, brokers, appraisers, auctioneers, accountants, investment bankers, securities analysts or other Persons (any of which may be a firm in which one or more of the Trustees or officers is or are members or otherwise interested) whose profession gives authority to a statement made by them on the subject in question, and who are reasonably deemed by the Trustees or officers in question to be competent, and the advice or opinion of such Persons shall be full and complete personal protection to all of the Trustees and officers in respect of any action taken or suffered by them in good faith and in reliance on or in accordance with such advice or opinion. In discharging their duties, Trustees and officers, when acting in good faith, may rely upon financial statements of the Trust represented to them to be correct by any officer of the Trust having charge of its books of account, or stated in a written report by an independent certified public accountant fairly to present the financial position of the Trust. The Trustees and officers may rely, and shall be personally protected in acting, upon any instrument or other document believed by them to be genuine. SECTION 4.9. Surety Bonds. No Trustee, officer, employee or agent of the Trust shall, as such, be obligated to give any bond or surety or other security for the performance of any of his duties, unless required by applicable law or regulation, or unless the Trustees shall otherwise determine in any particular case. SECTION 4.10. Apparent Authority of Trustees and Officers. No purchaser, lender, transfer agent or other Person dealing with the Trustees or any officer of the Trust shall be bound to make any inquiry concerning the validity of any transaction purporting to be made by the Trustees or by such officer, or to make inquiry concerning or be liable for the application of money or property paid, loaned or delivered to or on the order of the Trustees or of such officer. SECTION 4.11. Other Relationships Not Prohibited. The fact that: (i) any of the Shareholders, Trustees or officers of the Trust is a shareholder, director, officer, partner, trustee, employee, manager, adviser, principal underwriter or distributor or agent of or for any Contracting Party (as defined in Section 5.2 hereof), or of or for any parent or affiliate of any Contracting Party, or that the Contracting Party or any parent or affiliate thereof is a Shareholder or has an interest in the Trust or any Series, or that (ii) any Contracting Party may have a contract providing for the rendering of any similar services to one or more other 31 corporations, trusts, associations, partnerships, limited partnerships or other organizations, or have other business or interests, shall not affect the validity of any contract for the performance and assumption of services, duties and responsibilities to, for or of the Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same or create any liability or accountability to the Trust or to the holders of Shares of any Series; provided that, in the case of any relationship or interest referred to in the preceding clause (i) on the part of any Trustee or officer of the Trust, either (x) the material facts as to such relationship or interest have been disclosed to or are known by the Trustees not having any such relationship or interest and the contract involved is approved in good faith by a majority of such Trustees not having any such relationship or interest (even though such unrelated or disinterested Trustees are less than a quorum of all of the Trustees), (y) the material facts as to such relationship or interest and as to the contract have been disclosed to or are known by the Shareholders entitled to vote thereon and the contract involved is specifically approved in good faith by vote of the Shareholders, or (z) the specific contract involved is fair to the Trust as of the time it is authorized, approved or ratified by the Trustees or by the Shareholders. SECTION 4.12. Payment of Trust Expenses. The Trustees are authorized to pay or to cause to be paid out of the principal or income of the Trust, or partly out of principal and partly out of income, and according to any allocation to a particular Series and Class made by them pursuant to Section 6.1(f) hereof, all expenses, fees, charges, taxes and liabilities incurred or arising in connection with the business and affairs of the Trust or in connection with the management thereof, including, but not limited to, the Trustees' compensation and such expenses and charges for the services of the Trust's officers, employees, Investment Adviser, Administrator, Distributor, Principal Underwriter, auditor, counsel, Custodian, Transfer Agent, Dividend Disbursing Agent, Accounting Agent, Shareholder Servicing Agent, and such other agents, consultants, and independent contractors and such other expenses and charges as the Trustees may deem necessary or proper to incur. SECTION 4.13. Ownership of the Trust Property. Legal title to all the Trust Property shall be vested in the Trustees as joint tenants, except that the Trustees shall have power to cause legal title to any Trust Property to be held by or in the name of one or more of the Trustees, or in the name of the Trust, or of any particular Series, or in the name of any other Person as nominee, on such terms as the Trustees may determine; provided that the interest of the Trust and of the respective Series therein is appropriately protected. The right, title and interest of the Trustees in the Trust Property shall vest automatically in each Person who may hereafter become a Trustee. Upon the termination of the term of office of a Trustee as provided in Section 4.1(c), (d) or (e) hereof, such Trustee shall automatically cease to have any right, title or interest in any of the Trust Property, and the right, title and interest of such Trustee in the Trust Property shall vest automatically in the remaining Trustees. Such vesting and cessation of title 32 shall be effective whether or not conveyancing documents have been executed and delivered pursuant to Section 4.1(i) hereof. SECTION 4.14. By-Laws. The Trustees may adopt and from time to time amend or repeal By-Laws for the conduct of the business of the Trust. ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES SECTION 5.1. Appointment; Action by Less than All Trustees. The Trustees shall be responsible for the general operating policy of the Trust and for the general supervision of the business of the Trust conducted by officers, agents, employees or advisers of the Trust or by independent contractors, but the Trustees shall not be required personally to conduct all the business of the Trust and, consistent with their ultimate responsibility as stated herein, the Trustees may appoint, employ or contract with one or more officers, employees and agents to conduct, manage and/or supervise the operations of the Trust, and may grant or delegate such authority to such officers, employees and/or agents as the Trustees may, in their sole discretion, deem to be necessary or desirable, without regard to whether such authority is normally granted or delegated by trustees. With respect to those matters of the operation and business of the Trust which they shall elect to conduct themselves, except as otherwise provided by this Declaration or the By-Laws, if any, the Trustees may authorize any single Trustee or defined group of Trustees, or any committee consisting of a number of Trustees less than the whole number of Trustees then in office without specification of the particular Trustees required to be included therein, to act for and to bind the Trust, to the same extent as the whole number of Trustees could do, either with respect to one or more particular matters or classes of matters, or generally. SECTION 5.2. Certain Contracts. Subject to compliance with the provisions of the 1940 Act, but notwithstanding any limitations of present and future law or custom in regard to delegation of powers by trustees generally, the Trustees may, at any time and from time to time in their discretion and without limiting the generality of their powers and authority otherwise set forth herein, enter into one or more contracts with any one or more corporations, trusts, associations, partnerships, limited partnerships or other types of organizations, or individuals ("Contracting Party"), to provide for the performance and assumption of some or all of the following services, duties and responsibilities to, for or on behalf of the Trust and/or any Series, and/or the Trustees, and to provide for the performance and assumption of such other services, 33 duties and responsibilities in addition to those set forth below, as the Trustees may deem appropriate: (a) Advisory. An investment advisory or management agreement whereby the agent shall undertake to furnish each Series of the Trust such management, investment advisory or supervisory, statistical and research facilities and services, and such other facilities and services, if any, as the Trustees shall from time to time consider desirable, all upon such terms and conditions as the Trustees may in their discretion determine to be not inconsistent with this Declaration, the applicable provisions of the 1940 Act or any applicable provisions of the By-Laws (any such agent being herein referred to as an "Investment Adviser"). To the extent required by the 1940 Act, any such advisory or management agreement and any amendment thereto shall be subject to approval by a Majority Shareholder Vote at a meeting of the Shareholders of the applicable Series of the Trust. Notwithstanding any provisions of this Declaration, the Trustees may authorize the Investment Adviser (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales, loans or exchanges of securities of the Trust on behalf of the Trustees or may authorize any officer or employee of the Trust or any Trustee to effect such purchases, sales, loans or exchanges pursuant to recommendations of the Investment Adviser (and all without further action by the Trustees). Any such purchases, sales, loans and exchanges shall be deemed to have been authorized by all of the Trustees. The Trustees may, in their sole discretion, call a meeting of Shareholders in order to submit to a vote of Shareholders of the applicable Series of Trust at such meeting the approval of continuance of any such investment advisory or management agreement. (b) Administration. An agreement whereby the agent, subject to the general supervision of the Trustees and in conformity with any policies of the Trustees with respect to the operations of the Trust and each Series, will supervise all or any part of the operations of the Trust and each Series, and will provide all or any part of the administrative and clerical personnel, office space and office equipment and services appropriate for the efficient administration and operations of the Trust and each Series (any such agent being herein referred to as an "Administrator"). (c) Underwriting. An agreement providing for the sale of Shares of any one or more Series to net the Trust not less than the net asset value per Share (as described in Section 6.2(l) hereof) and pursuant to which the Trust may appoint the other party to such agreement as its principal underwriter or sales agent for the distribution of such Shares. The agreement shall contain such terms and conditions as the Trustees may in their discretion determine to be not inconsistent with this Declaration, the applicable provisions of the 1940 Act and any applicable provisions of the By-Laws (any such agent being herein referred to as a "Distributor" or a "Principal Underwriter," as the case may be). 34 (d) Custodian. The appointment of an agent meeting the requirements for a custodian for the assets of Investment Companies contained in the 1940 Act as custodian of the Securities and cash of the Trust and of each Series and of the accounting records in connection therewith (any such agent being herein referred to as a "Custodian"). (e) Transfer and Dividend Disbursing Agent. An agreement with an agent to maintain records of the ownership of outstanding Shares, the issuance and redemption and the transfer thereof (any such agent being herein referred to as a "Transfer Agent"), and to disburse any dividends declared by the Trustees and in accordance with the policies of the Trustees and/or the instructions of any particular Shareholder to reinvest any such dividends (any such agent being herein referred to as a "Dividend Disbursing Agent"). (f) Shareholder Servicing. An agreement with an agent to provide service with respect to the relationship of the Trust and its Shareholders, records with respect to Shareholders and their Shares, and similar matters (any such agent being herein referred to as a "Shareholder Servicing Agent"). (g) Accounting. An agreement with an agent to handle all or any part of the accounting responsibilities, whether with respect to the Trust's properties, Shareholders or otherwise (any such agent being herein referred to as an "Accounting Agent"). In addition, the Trustees may from time to time cause the Trust or any Series thereof to enter into agreements with respect to such other services and upon such other terms and conditions as they may deem necessary, appropriate or desirable. The same Person may be the Contracting Party for some or all of the services, duties and responsibilities to, for and of the Trust and/or the Trustees, and the contracts with respect thereto may contain such terms interpretive of or in addition to the delineation of the services, duties and responsibilities provided for, including provisions that are not inconsistent with the 1940 Act relating to the standard of duty of and the rights to indemnification of the Contracting Party and others, as the Trustees may determine. Nothing herein shall preclude, prevent or limit the Trust or a Contracting Party from entering into subcontractual arrangements relative to any of the matters referred to in subsections (a) through (g) of this Section 5.2. Section 5.3. Distribution Arrangements. Subject to compliance with the 1940 Act, the Trustees may adopt and amend or repeal from time to time and implement one or more plans of distribution pursuant to Rule 12b-1 of the 1940 Act which plan(s) will provide for the payment of specified marketing, distribution and shareholder relations expenses of the Trust and 35 any or all Series and their agents and the agents of such agents. Section 5.4. Service Arrangements. Subject to compliance with the 1940 Act, the Trustees may adopt and amend or repeal from time to time and implement one or more service plans which plans will provide for the payment of ongoing services to holders of the shares of such Trust or any Series thereof and in connection with the maintanence of such shareholders' accounts. ARTICLE 6 SERIES AND SHARES SECTION 6.1. Description of Series and Shares. (a) General. The beneficial interest in the Trust shall be divided into Shares (either full or fractional) having $ 0.01 par value per Share, of which an unlimited number may be issued. The Trustees shall have the authority from time to time to establish and designate one or more separate, distinct and independent Series of Shares (each of which Series, including without limitation each Series authorized in Section 6.2 hereof, shall represent interests only in the asset attributed by the Trustees to such Series), and to authorize separate Classes of Shares of any such Series, as they deem necessary or desirable. All Shares shall be of one class, provided that the Trustees shall have the power to classify or reclassify any unissued Shares of any Series into any number of additional Classes of such Series as set forth in Section 6.2. (b) Establishment. etc. of Series; Authorization of Shares. The establishment and designation of any Series and the authorization of the Shares thereof shall be effective upon the execution by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) of an instrument setting forth such establishment and designation and the relative rights and preferences of the Shares of such Series and the manner in which the same may be amended (a "Certificate of Designation"), and may provide that the number of Shares of such Series which may be issued is unlimited, or may limit the number issuable. At any time that there are no Shares outstanding of any particular Series previously established and designated, the Trustees may by an instrument executed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees) terminate such Series and the establishment and designation thereof and the authorization of its Shares (a "Certificate of Termination"). Each Certificate of Designation, Certificate of Termination and 36 any instrument amending a Certificate of Designation shall have the status of an amendment to this Declaration of Trust. (c) Character of Separate Series and Shares Thereof. Each Series established hereunder shall represent beneficial interests in a separate component of the assets of the Trust. Holders of Shares of a Series shall be considered Shareholders of such Series, but such Shareholders shall also be considered Shareholders of the Trust for purposes of receiving reports and notices and, except as otherwise provided herein or in the Certificate of Designation of a particular Series, or as required by the 1940 Act or other applicable law, the right to vote, all without distinction by Series. The Trustees shall have exclusive power without the requirement of Shareholder approval to establish and designate such separate and distinct Series, and to fix and determine the relative rights and preferences as between the shares of the respective Series, and as between the Classes of any Series, as to rights of redemption and the price, terms and manner of redemption, special and relative rights as to dividends and other distributions and on liquidation, sinking or purchase fund provisions, conversion rights, and conditions under which the Shareholders of the several Series or the several Classes of any Series of Shares shall have separate voting rights or no voting rights. Except as otherwise provided as to a particular Series herein, or in the Certificate of Designation therefor, the Trustees shall have all the rights and powers, and be subject to all the duties and obligations, with respect to each such Series and the assets and affairs thereof as they have under this Declaration with respect to the Trust and the Trust Property in general. Separate and distinct records shall be maintained for each Series of Shares and the assets and liabilities attributable thereto. (d) Consideration for Shares. The Trustees may issue Shares of any Series for such consideration (which may include property subject to, or acquired in connection with the assumption of, liabilities) and on such terms as they may determine (or for no consideration if pursuant to a Share dividend or split-up), all without action or approval of the Shareholders. All Shares when so issued on the terms determined by the Trustees shall be fully paid and nonassessable (but may be subject to mandatory contribution back to the Trust as provided in Section 6.1(l) hereof. The Trustees may classify or reclassify any unissued Shares, or any Shares of any Series previously issued and reacquired by the Trust, into Shares of one or more other Series that may be established and designated from time to time. (e) Assets Belonging to Series. Any portion of the Trust Property allocated to a particular Series, and all consideration received by the Trust for the issue or sale of Shares of such Series, together with all assets in which such consideration is invested or reinvested, all interest, dividends, income, earnings, profits and gains therefrom, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same 37 may be, shall be held by the Trustees in trust for the benefit of the holders of Shares of that Series and shall irrevocably belong to that Series for all purposes, and shall be so recorded upon the books of account of the Trust, and the Shareholders of such Series shall not have, and shall be conclusively deemed to have waived, any claims to the assets of any Series of which they are not Shareholders. Such consideration, assets, interest, dividends, income, earnings, profits, gains and proceeds, together with any General Items allocated to that Series as provided in the following sentence, are herein referred to collectively as assets "belonging to" that Series. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series (collectively, "General Items"), the Trustees shall allocate such General Items to and among any one or more of the Series established and designated from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items so allocated to a particular Series shall belong to and be part of the assets belonging to that Series. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all Series for all purposes. (f) Liabilities of Series. The assets belonging to each particular Series shall be charged with the liabilities in respect of that Series and all expenses, costs, charges and reserves attributable to that Series, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as pertaining to any particular Series shall be allocated and charged by the Trustees to and among any one or more of the Series established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. The indebtedness, expenses, costs, charges and reserves allocated and so charged to a particular Series are herein referred to as "liabilities of" that Series. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the Shareholders of all Series for all purposes. Any creditor of any Series may look only to the assets belonging to that Series to satisfy such creditor's debt. (g) Dividends. Dividends and distributions on Shares of a particular Series may be paid with such frequency as the Trustees may determine, which may be daily or otherwise pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the Shareholders of that Series, from such of the income, accrued or realized, and capital gains, realized or unrealized, and out of the assets belonging to that Series, as the Trustees may determine, after providing for actual and accrued liabilities of that Series. All dividends and distributions on Shares of a particular Series shall be distributed pro rata to the Shareholders of that Series in proportion to the number of such Shares held by such holders at the date and time of record established for the payment of such dividends or distributions, except that the dividends and distributions of investment income and capital gains with respect to each Class of Shares of a 38 particular Series shall be in such amount as may be declared from time to time by the Trustees, and such dividends and distributions may vary as between such Classes to reflect differing allocations of the expenses of the Series between the Shareholders of such several Classes and any resultant differences between the net asset value of such several Classes to such extent and for such purposes as the Trustees may deem appropriate and further except that, in connection with any dividend or distribution program or procedure, the Trustees may determine that no dividend or distribution shall be payable on Shares as to which the Shareholder's purchase order and/or payment have not been received by the time or times established by the Trustees under such program or procedure, or that dividends or distributions shall be payable on Shares which have been tendered by the holder thereof for redemption or repurchase, but the redemption or repurchase proceeds of which have not yet been paid to such Shareholder. Such dividends and distributions may be made in cash, property or Shares of any Class of that Series or a combination thereof as determined by the Trustees, or pursuant to any program that the Trustees may have in effect at the time for the election by each Shareholder of the mode of the making of such dividend or distribution to that Shareholder. Any such dividend or distribution paid in Shares will be paid at the net asset value thereof as determined in accordance with subsection (l) of this Section 6.1. (h) Liquidation. In the event of the liquidation or dissolution of the Trust, the Shareholders of each Series of which Shares are outstanding shall be entitled to receive, when and as declared by the Trustees, the excess of the assets belonging to that Series over the liabilities of such Series. The assets so distributable to the Shareholders of any particular Series shall be distributed among such Shareholders in proportion to the number of Shares of that Series held by them and recorded on the books of the Trust. The liquidation of any particular Series may be authorized by vote of a Majority of the Trustees, subject to the affirmative vote of "a majority of the outstanding voting securities" of that Series, as the quoted phrase is defined in the 1940 Act, determined in accordance with clause (iii) of the definition of "Majority Shareholder Vote" in Section 1.4 hereof. (i) Voting. The Shareholders shall have the voting rights set forth in or determined under Article 7 hereof. (j) Redemption by Shareholder. Each holder of Shares of a particular Series shall have the right at such times as may be permitted by the Trust, but no less frequently than required by the 1940 Act, to require the Series to redeem all or any part of his Shares of that Series at a redemption price equal to the net asset value per Share of that Series next determined in accordance with subsection (l) of this Section 6.1 after the Shares are properly tendered for redemption; provided, that the Trustees may from time to time, in their discretion, determine and impose a fee for such redemption and that the proceeds of the redemption of Shares (including a fractional Share) of any Class of a particular Series shall be reduced by the amount of 39 any applicable contingent deferred sales charge or other sales charge, if any, payable on such redemption to the distributor of Shares of such Class pursuant to the terms of the initial issuance of the Shares of such Class (to the extent consistent with the 1940 Act or regulations or exemptions thereunder) and the Trust shall promptly pay to such distributor the amount of such deferred sales charge. Payment of the redemption price shall be in cash; provided, however, that if the Trustees determine, which determination shall be conclusive, that conditions exist which make payment wholly in cash unwise or undesirable, the Trust may make payment wholly or partly in Securities or other assets belonging to such Series at the value of such Securities or assets used in such determination of net asset value. Notwithstanding the foregoing, the Trust may postpone payment of the redemption price and may suspend the right of the holders of Shares of any Series to require the Trust to redeem Shares of that Series during any period or at any time when and to the extent permissible under the 1940 Act. (k) Redemption at the Option of the Trust. The Trustees shall have the power to redeem Shares of any Series at a redemption price determined in accordance with Section 6.1(j), if at any time (i) the total investment in such account does not have a value of at least such minimum amount as may be specified in the Prospectus for such Series from time to time (ii) the number of Shares held in such account is equal to or in excess of a specified percentage of Shares of the Trust or any Series as set forth from time to time in the applicable Prospectus. In the event the Trustees determine to exercise their power to redeem Shares provided in this Section 6.1(k), the Shareholder shall be notified that the value of his account is less than the applicable minimum amount and shall be allowed 30 days to make an appropriate investment before redemption is processed. (I) Net Asset Value. The net asset value per Share of any Series at any time shall be the quotient obtained by dividing the value of the net assets of such Series at such time (being the current value of the assets belonging to such Series, less its then existing liabilities) by the total number of Shares of that Series then outstanding, all determined in accordance with the methods and procedures, including without limitation those with respect to rounding, established by the Trustees from time to time in accordance with the requirements of the 1940 Act. The net asset value of the several Classes of a particular Series shall be separately computed, and may vary from one another. The Trustees shall establish procedures for the allocation of investment income or capital gains and expenses and liabilities of a particular Series between the several Classes of such Series. The Trustees may determine to maintain the net asset value per Share of any Series at a designated constant dollar amount and in connection therewith may adopt procedures not inconsistent with the 1940 Act for the continuing declaration of income attributable to that Series as dividends payable in additional Shares of that Series at the designated constant dollar amount and for the handling of any losses attributable to that Series. Such procedures may provide that in the event of any loss each Shareholder shall be deemed to have contributed to the shares of beneficial interest account of that Series his pro rata portion of the total number of Shares required to be 40 canceled in order to permit the net asset value per Share of that Series to be maintained, after reflecting such loss, at the designated constant dollar amount. Each Shareholder of the Trust shall be deemed to have expressly agreed, by his investment in any Series with respect to which the Trustees shall have adopted any such procedure, to make the contribution referred to in the preceding sentence in the event of any such loss. (m) Transfer. All Shares of each particular Series shall be transferable, but transfers of Shares of a particular Series will be recorded on the Share transfer records of the Trust applicable to that Series only at such times as Shareholders shall have the right to require the Trust to redeem Shares of that Series and at such other times as may be permitted by the Trustees. (n) Equality. All Shares of each particular Series shall represent an equal proportionate interest in the assets belonging to that Series (subject to the liabilities of that Series), and each Share of any particular Series shall be equal to each other Share thereof; but the provisions of this sentence shall not restrict any distinctions between the several Classes of a Series permissible under this Section 6.1 or under Section 7.1 hereof nor any distinctions permissible under subsection (g) of this Section 6.1 that may exist with respect to dividends and distributions on Shares of the same Series. The Trustees may from time to time divide or combine the Shares of any class of particular Series into a greater or lesser number of Shares of that class of a Series without thereby changing the proportionate beneficial interest in the assets belonging to that Series or in any way affecting the rights of the holders of Shares of any other Series. (o) Rights of Fractional Shares. Any fractional Share of any Series shall carry proportionately all the rights and obligations of a whole Share of that Series, including rights and obligations with respect to voting, receipt of dividends and distributions, redemption of Shares, and liquidation of the Trust or of the Series to which they pertain. (p) Conversion Rights. (i) Subject to compliance with the requirements of the 1940 Act, the Trustees shall have the authority to provide that holders of Shares of any Series shall have the right to convert said Shares into Shares of one or more other Series, that holders of any Class of a Series of Shares shall have the right to convert said Shares of such Class into Shares of one or more other Classes of such Series, and that Shares of any Class of a Series shall be automatically converted into Shares of another Class of such Series, in each case in accordance with such requirements and procedures as the Trustees may establish. (ii) The number of Shares of into which a convertible Share 41 shall convert shall equal the number (including for this purpose fractions of a Share) obtained by dividing the net asset value per Share for purposes of sales and redemptions of the converting Share on the Conversion Date by the net asset value per Share for purposes of sales and redemptions of the Class of Shares into which it is converting on the Conversion Date. (iii) On the Conversion Date, the Share converting into another share will cease to accrue dividends and will no longer be deemed outstanding and the rights of the holders thereof (except the right to receive the number of target Shares into which the converting Shares have been converted and declared but unpaid dividends to the Conversion Date) will cease. Certificates representing Shares resulting from the conversion need not be issued until certificates representing Shares converted, if issued, have been received by the Trust or its agent duly endorsed for transfer. (vi) The Trust will appropriately reflect the conversion of Shares of one Class of a Series into Shares of another Class of such Series on the first periodic statements of account sent to Shareholders of record affected which provide account information with respect to a reporting period which includes the date such conversion occured. SECTION 6.2. Ownership of Shares. The ownership of Shares shall be recorded on the books of the Trust or of a Transfer Agent or similar agent for the Trust, which books shall be maintained separately for the Shares of each Series that has been authorized. Certificates evidencing the ownership of Shares need not be issued except as the Trustees may otherwise determine from time to time, and the Trustees shall have power to call outstanding Share certificates and to replace them with book entries. The Trustees may make such rules as they consider appropriate for the issuance of Share certificates, the use of facsimile signatures, the transfer of Shares and similar matters. The record books of the Trust as kept by the Trust or any Transfer Agent or similar agent, as the case may be, shall be conclusive as to who are the Shareholders and as to the number of Shares of each Series held from time to time by each such Shareholder. The holders of Shares of each Series shall upon demand disclose to the Trustees in writing such information with respect to their direct and indirect ownership of Shares of such Series as the Trustees deem necessary to comply with the provisions of the Internal Revenue Code, or to comply with the requirements of any other authority. SECTION 6.3. Investments in the Trust. The Trustees may accept investments in any Series of the Trust from such Persons and on such terms and for such consideration, not inconsistent with the provisions of the 1940 Act, as they from time to time 42 authorize. The Trustees may authorize any Distributor, Principal Underwriter, Custodian, Transfer Agent or other Person to accept orders for the purchase of Shares that conform to such authorized terms and to reject any purchase orders for Shares, whether or not conforming to such authorized terms. SECTION 6.4. No Preemptive Rights. No Shareholder, by virtue of holding Shares of any Series, shall have any preemptive or other right to subscribe to any additional Shares of that Series, or to any shares of any other Series, or any other Securities issued by the Trust. SECTION 6.5. Status of Shares. Every Shareholder, by virtue of having become a Shareholder, shall be held to have expressly assented and agreed to the terms hereof and to have become a party hereto. Shares shall be deemed to be personal property, giving only the rights provided herein. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust Property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders partners. The death of a Shareholder during the continuance of the Trust shall not operate to terminate the Trust or any Series, nor entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but only to the rights of said decedent under this Declaration of Trust. ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS SECTION 7.1. Voting Powers. The Shareholders shall have power to vote only (i) for the election or removal of Trustees as provided in Sections 4.1(c) and (e) hereof, (ii) with respect to the approval or termination in accordance with the 1940 Act of any contract with a Contracting Party as provided in Section 5.2 hereof as to which Shareholder approval is required by the 1940 Act, (iii) with respect to any termination or reorganization of the Trust or any Series to the extent and as provided in Sections 9.2, 9.3 and 9.4 hereof, (iv) with respect to any amendment of this Declaration of Trust to the extent and as provided in Section 9.5 hereof, (v) to the same extent as the stockholders of a Delaware business corporation as to whether or not a court action, proceeding or claim should or should not be brought or maintained derivatively or as a class action on behalf of the Trust or any Series, or the Shareholders of any of them (provided. however, that a Shareholder of a particular Series shall not in any event be entitled to maintain a derivative or class action on behalf of any other Series or the Shareholders thereof), and (vi) with respect to such additional 43 matters relating to the Trust as may be required by the 1940 Act, this Declaration of Trust, the By-Laws or any registration of the Trust with the Commission (or any successor agency) or any State, or as the Trustees may consider necessary or desirable. If and to the extent that the Trustees shall determine that such action is required by law or by this Declaration, they shall cause each matter required or permitted to be voted upon at a meeting or by written consent of Shareholders to be submitted to a separate vote of the outstanding Shares of each Series entitled to vote thereon; provided, that (i) when expressly required by the 1940 Act or by other law, actions of Shareholders shall be taken by Single Class Voting of all outstanding Shares whose holders are entitled to vote thereon; and (ii) when the Trustees determine that any matter to be submitted to a vote of Shareholders affects only the rights or interests of Shareholders of one or more but not all Series or of one or more but not all Classes of a single Series (including without limitation any distribution plan pursuant to Rule 12b-1 of the 1940 Act applicable to such Class), then only the Shareholders of the Series or Classes so affected shall be entitled to vote thereon. Any matter required to be submitted to shareholders and affecting one or more Series shall require separate approval by the required vote of Shareholders of each affected Series; provided, however, that to the extent required by the 1940 Act, there shall be no separate Series votes on the election or removal of Trustees, the selection of auditors for the Trust and its Series or approval of any agreement or contract entered into by the Trust or any Series. Shareholders of a particular Series shall not be entitled to vote on any matter that affects only one or more other Series. SECTION 7.2. Number of Votes and Manner of Voting: Proxies. On each matter submitted to a vote of the Shareholders, each holder of Shares of any Series shall be entitled to a number of votes equal to the number of Shares of such Series standing in his name on the books of the Trust. There shall be no cumulative voting in the election or removal of Trustees. Shares may be voted in person or by proxy. A proxy with respect to Shares held in the name of two (2) or more Persons shall be valid if executed by any one of them unless at or prior to exercise of the proxy the Trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any action required by law, this Declaration of Trust or the By-Laws to be taken by Shareholders. SECTION 7.3. Meetings. Meetings of Shareholders may be called by the Trustees from time to time for the purpose of taking action upon any matter requiring the vote or authority of the Shareholders as herein provided, or upon any other matter deemed by the Trustees to be necessary or desirable. Written notice of any meeting of Shareholders shall be given or caused to be given by the Trustees by mailing such notice at least seven (7) days before such meeting, postage prepaid, stating the time, place and purpose of the meeting, to each Shareholder at 44 the Shareholder's address as it appears on the records of the Trust. The Trustees shall promptly call and give notice of a meeting of Shareholders for the purpose of voting upon removal of any Trustee of the Trust when requested to do so in writing by Shareholders holding not less than ten percent (10%) of the Shares then outstanding. If the Trustees shall fail to call or give notice of any meeting of Shareholders for a period of thirty (30) days after written application by Shareholders holding at least ten percent (10%) of the Shares then outstanding requesting that a meeting be called for any other purpose requiring action by the Shareholders as provided herein or in the By-Laws, then Shareholders holding at least ten percent (10%) of the Shares then outstanding may call and give notice of such meeting, and thereupon the meeting shall be held in the manner provided for herein in case of call thereof by the Trustees. Any meetings may be held within or without The State of Delaware. Shareholders may only act with respect to matters set forth in the notice to Shareholders. SECTION 7.4. Record Dates. For the purpose of determining the Shareholders who are entitled to vote or act at any meeting or any adjournment thereof, or who are entitled to participate in any dividend or distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding thirty (30) days (except at or in connection with the termination of the Trust), as the Trustees may determine; or without closing the transfer books the Trustees may fix a date and time not more than ninety (90) days prior to the date of any meeting of Shareholders or other action as the date and time of record for the determination of Shareholders entitled to vote at such meeting or any adjournment thereof or to be treated as Shareholders of record for purposes of such other action, and any Shareholder who was a Shareholder at the date and time so fixed shall be entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action, even though he has since that date and time disposed of his Shares, and no Shareholder becoming such after that date and time shall be so entitled to vote at such meeting or any adjournment thereof or to be treated as a Shareholder of record for purposes of such other action. SECTION 7.5. Quorum and Required Vote. A majority of the Shares entitled to vote shall be a quorum for the transaction of business at a Shareholders' meeting, but any lesser number shall be sufficient for adjournments. Any adjourned session or sessions may be held within a reasonable time after the date set for the original meeting without the necessity of further notice. A Majority Shareholder Vote at a meeting of which a quorum is present shall decide any question, except when a different vote is required or permitted by any provision of the 1940 Act or other applicable law or by this Declaration of Trust or the By-Laws, or when the Trustees shall in their discretion require a larger vote or the vote of a majority or larger fraction of the Shares of one or more particular Series. SECTION 7.6. Action By Written Consent. Subject to the 45 provisions of the 1940 Act and other applicable law, any action taken by Shareholders may be taken without a meeting if a majority of Shareholders entitled to vote on the matter (or such larger proportion thereof or of the Shares of any particular Series as shall be required by the 1940 Act or by any express provision of this Declaration of Trust or the By-Laws or as shall be permitted by the Trustees) consent to the action in writing and if the writings in which such consent is given are filed with the records of the meetings of Shareholders, to the same extent and for the same period as proxies given in connection with a Shareholders' meeting. Such consent shall be treated for all purposes as a vote taken at a meeting of Shareholders. SECTION 7.7. Inspection of Records. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted stockholders of a Delaware business corporation under the Delaware business corporation law. SECTION 7.8. Additional Provisions. The By-Laws may include further provisions for Shareholders' votes and meetings and related matters not inconsistent with the provisions hereof. ARTICLE 8 LIMITATION OF LIABILITY: INDEMNIFICATION SECTION 8.1. Trustees. Shareholders. etc. Not Personally Liable; Notice. The Trustees, officers, employees and agents of the Trust, in incurring any debts, liabilities or obligations, or in limiting or omitting any other actions for or in connection with the Trust, are or shall be deemed to be acting as Trustees, officers, employees or agents of the Trust and not in their own capacities. No Shareholder shall be subject to any personal liability whatsoever in tort, contract or otherwise to any other Person or Persons in connection with the assets or the affairs of the Trust or of any Series, and subject to Section 8.4 hereof, no Trustee, officer, employee or agent of the Trust shall be subject to any personal liability whatsoever in tort, contract, or otherwise, to any other Person or Persons in connection with the assets or affairs of the Trust or of any Series, save only that arising from his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office or the discharge of his functions. The Trust (or if the matter relates only to a particular Series, that Series) shall be solely liable for any and all debts, claims, demands, judgments, decrees, liabilities or obligations of any and every kind, against or with respect to the Trust or such Series in tort, contract or otherwise in connection with the assets or the affairs of the Trust or such Series, and all Persons dealing with the Trust or any Series 46 shall be deemed to have agreed that resort shall be had solely to the Trust Property of the Trust or the Series Assets of such Series, as the case may be, for the payment or performance thereof. The Trustees shall use their best efforts to ensure that every note, bond, contract, instrument, certificate or undertaking made or issued by the Trustees or by any officers or officer shall give notice that a Certificate of Trust, referring to the Declaration of Trust, is on file with the Secretary of the state of Delaware and shall recite to the effect that the same was executed or made by or on behalf of the Trust or by them as Trustees or Trustee or as officers or officer, and not individually, and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, or the particular Series in question, as the case may be, but the omission thereof shall not operate to bind any Trustees or Trustee or officers or officer or Shareholders or Shareholder individually, or to subject the Series Assets of any Series to the obligations of any other Series. SECTION 8.2. Trustees' Good Faith Action; Expert Advice: No Bond or Surety. The exercise by the Trustees of their powers and discretions hereunder shall be binding upon everyone interested. Subject to Section 8.4 hereof, a Trustee shall be liable for his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. Subject to the foregoing, (i) the Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, consultant, Investment Adviser, Administrator, Distributor or Principal Underwriter, Custodian or Transfer Agent, Dividend Disbursing Agent, Shareholder Servicing Agent or Accounting Agent of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee; (ii) the Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust and their duties as Trustees, and shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice; and (iii) in discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any independent public accountant, and (with respect to the subject matter of the contract involved) any officer, partner or responsible employee of a Contracting Party appointed by the Trustees pursuant to Section 5.2 hereof. The Trustees as such shall not be required to give any bond or surety or any other security for the performance of their duties. SECTION 8.3. Indemnification of Shareholders. If any Shareholder (or former Shareholder) of the Trust shall be charged or held to be personally liable for any obligation or liability of the Trust solely by reason of being or having been 47 a Shareholder and not because of such Shareholder's acts or omissions or for some other reason, the Trust (upon proper and timely request by the Shareholder) may assume the defense against such charge and satisfy any judgment thereon or may reimburse the Shareholders for expenses, and the Shareholder or former Shareholder (or the heirs, executors, administrators or other legal representatives thereof, or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled (but solely out of the assets of the Series of which such Shareholder or former Shareholder is or was the holder of Shares) to be held harmless from and indemnified against all loss and expense arising from such liability. SECTION 8.4. Indemnification of Trustees. Officers, etc. Subject to the limitations, if applicable, hereinafter set forth in this Section 8.4, the Trust shall indemnify (from the assets of the Series or Series to which the conduct in question relates) each of its Trustees, officers, employees and agents (including Persons who serve at the Trust's request as directors, officers or trustees of another organization in which the Trust has any interest as a shareholder, creditor or otherwise (hereinafter, together with such Person's heirs, executors, administrators or personal representative, referred to as a "Covered Person")) against all liabilities, including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and expenses, including reasonable accountants' and counsel fees, incurred by any Covered Person in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or legislative body, in which such Covered Person may be or may have been involved as a party or otherwise or with which such Covered Person may be or may have been threatened, while in office or thereafter, by reason of being or having been such a Trustee or officer, director or trustee, except with respect to any matter as to which it has been determined that such Covered Person (i) did not act in good faith in the reasonable belief that such Covered Person's action was in or not opposed to the best interests of the Trust; (ii) had acted with willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office (iii) for a criminal proceeding, had reasonable cause to believe that his conduct was unlawful (the conduct described in (i), (ii) and (iii) being referred to hereafter as "Disabling Conduct"). A determination that the Covered Person is entitled to indemnification may be made by (i) a final decision on the merits by a court or other body before whom the proceeding was brought that the Covered Person to be indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a court action or an administrative proceeding against a Covered Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of Trustees who are neither "interested persons" of the Trust as defined in Section 2(a)(19) of the 1940 Act nor parties to the proceeding (the "Disinterested Trustees"), or (b) an independent legal counsel in a written opinion. Expenses, including accountants' and counsel fees so incurred by any such Covered Person (but excluding amounts paid in satisfaction of judgments, in compromise or as fines or penalties), may be paid 48 from time to time by one or more Series to which the conduct in question related in advance of the final disposition of any such action, suit or proceeding; provided that the Covered Person shall have undertaken to repay the amounts so paid to such Series if it is ultimately determined that indemnification of such expenses is not authorized under this Article 8 and (i) the Covered Person shall have provided security for such undertaking, (ii) the Trust shall be insured against losses arising by reason of any lawful advances, or (iii) a majority of a quorum of the disinterested Trustees, or an independent legal counsel in a written opinion, shall have determined, based on a review of readily available facts (as opposed to a full trial type inquiry), that there is reason to believe that the Covered Person ultimately will be found entitled to indemnification. SECTION 8.5. Compromise Payment. As to any matter disposed of by a compromise payment by any such Covered Person referred to in Section 8.4 hereof, pursuant to a consent decree or otherwise, no such indemnification either for said payment or for any other expenses shall be provided unless such indemnification shall be approved (i) by a majority of a quorum of the disinterested Trustees or (ii) by an independent legal counsel in a written opinion. Approval by the Trustees pursuant to clause (i) or by independent legal counsel pursuant to clause (ii) shall not prevent the recovery from any Covered Person of any amount paid to such Covered Person in accordance with either of such clauses as indemnification if such Covered Person is subsequently adjudicated by a court of competent jurisdiction not to have acted in good faith in the reasonable belief that such Covered Person's action was in or not opposed to the best interests of the Trust or to have been liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the Covered Person's office. SECTION 8.6. Indemnification Not Exclusive, etc. The right of indemnification provided by this Article 8 shall not be exclusive of or affect any other rights to which any such Covered Person or shareholder may be entitled. As used in this Article 8, a "disinterested" Person is one against whom none of the actions, suits or other proceedings in question, and no other action, suit or other proceeding on the same or similar grounds is then or has been pending or threatened. Nothing contained in this Article 8 shall affect any rights to indemnification to which personnel of the Trust, other than Trustees and officers, and other Persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and maintain liability insurance on behalf of any such Person. SECTION 8.7. Liability of Third Persons Dealing with Trustees. No person dealing with the Trustees shall be bound to make any inquiry concerning the validity of any transaction made or to be made by the Trustees or to see to the application of any payments made or property transferred to the Trust or upon its order. 49 ARTICLE 9 DURATION: REORGANIZATION: INCORPORATION; AMENDMENTS SECTION 9.1. Duration of Trust. Unless terminated as provided herein, the Trust shall have perpetual existence. SECTION 9.2. Termination of Trust. The Trust may be terminated at any time by a Majority of the Trustees, subject to the favorable vote of the holders of not less than a majority of the Shares outstanding and entitled to vote of each Series of the Trust, or by an instrument or instruments in writing without a meeting, consented to by the holders of not less than a majority of such Shares, or by such greater or different vote of Shareholders of any Series as may be established by the Certificate of Designation by which such Series was authorized. Upon termination, after paying or otherwise providing for all charges, taxes, expenses and liabilities, whether due or accrued or anticipated as may be determined by the Trustees, the Trust shall in accordance with such procedures as the Trustees consider appropriate reduce the remaining assets to distributable form in cash, Securities or other property, or any combination thereof, and distribute the proceeds to the Shareholders, in conformity with the provisions of Section 6.1(h) hereof. After termination of the Trust or any Series and distribution to the Shareholders as herein provided, a majority of the Trustees shall execute and lodge among the records of the Trust an instrument in writing setting forth the fact of such termination. Upon termination of the Trust, the Trustees shall thereupon, be discharged from all further liabilities and duties hereunder, and the rights and interests of all Shareholders shall thereupon cease. Upon termination of any Series, the Trustees shall thereupon be discharged from all further liabilities and duties with respect to such Series, and the rights and interests of all Shareholders of such Series shall thereupon cease. SECTION 9.3. Reorganization. The Trustees may sell, convey and transfer all or substantially all of the assets of the Trust, or the assets belonging to any one or more Series, to another trust, partnership, association, corporation or other entity organized under the laws of any state of the United States, or may transfer such assets to another Series of the Trust, in exchange for cash, Shares or other Securities (including, in the case of a transfer to another Series of the Trust, Shares of such other Series), or to the extent permitted by law then in effect may merge or consolidate the Trust or any Series with any other Trust or any corporation, partnership, or association organized under the laws of any state of the United States, all upon such terms and conditions and for such consideration when and as authorized by vote or written consent of a Majority of the Trustees and approved by the affirmative 50 vote of the holders of not less than a majority of the Shares outstanding and entitled to vote of each Series whose assets are affected by such transaction, or by an instrument or instruments in writing without a meeting, consented to by the holders of not less than a majority of such Shares, and/or by such other vote of any Series as may be established by the Certificate of Designation with respect to such Series. Following such transfer, the Trustees shall distribute the cash, Shares or other Securities or other consideration received in such transaction (giving due effect to the assets belonging to and indebtedness of, and any other differences among, the various Series of which the assets have so been transferred) among the Shareholders of the Series of which the assets have been so transferred; and if all of the assets of the Trust have been so transferred, the Trust shall be terminated. Nothing in this Section 9.3 shall be construed as requiring approval of Shareholders for the Trustees to organize or assist in organizing one or more corporations, trusts, partnerships, associations or other organizations, and to sell, convey or transfer less than substantially all of the Trust Property or the assets belonging to any Series to such organizations or entities. SECTION 9.4. Incorporation. Upon approval by Majority Shareholder Vote, the Trustees may cause to be organized or assist in organizing a corporation or corporations under the laws of any jurisdiction or any other trust, partnership, association or other organization to take over all of the Trust Property or to carry on any business in which the Trust shall directly or indirectly have any interest, and to sell, convey and transfer the Trust Property to any such corporation, trust, association or organization, in exchange for the shares or securities thereof, or otherwise, and to lend money to, subscribe for the shares of securities of, and enter into any contracts with any such corporation, trust, partnership, association or organization in which the Trust holds or is about to acquire shares or any other interests. The Trustees may also cause a merger or consolidation between the Trust or any successor thereto and any such corporation, trust, partnership, association or other organization if and to the extent permitted by law, as provided under the law then in effect. Nothing contained herein shall be construed as requiring approval of Shareholders for the Trustees to organize or assist in organizing one or more corporation, trusts, partnerships, associations or other organizations and selling, conveying or transferring a portion of the Trust Property to such organizations or entities. SECTION 9.5. Amendments; etc. All rights granted to the Shareholders under this Declaration of Trust are granted subject to the reservation of the right to amend this Declaration of Trust as herein provided, except that no amendment shall repeal the limitations on personal liability of any Shareholder or Trustee or the prohibition of assessment upon the Shareholders (otherwise than as permitted under Section 6.1(l)) without the express consent of each Shareholder or Trustee involved. Subject to the foregoing, the provisions of this Declaration of Trust (whether or not related to the rights of Shareholders) may be amended at any time, so long as such amendment does not 51 adversely affect the rights of any Shareholder with respect to which such amendment is or purports to be applicable and so long as such amendment is not in contravention of applicable law, including the 1940 Act, by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to the vote of a Majority of the Trustees). Any amendment to this Declaration of Trust that adversely affects the rights of all Shareholders may be adopted at any time by an instrument in writing signed by a Majority of the Trustees (or by an officer of the Trust pursuant to a vote of a Majority of the Trustees) when authorized to do so by the vote in accordance with Section 7.1 hereof of Shareholders holding a majority of all the Shares outstanding and entitled to vote, without regard to Series, or if said amendment adversely affects the rights of the Shareholders of less than all of the Series, by the vote of the holders of a majority of all the Shares entitled to vote of each Series so affected. SECTION 9.6. Filing of Copies of Declaration and Amendments. The original or a copy of this Declaration and of each amendment hereto (including each Certificate of Designation and Certificate of Termination) shall be kept at the office of the Trust where it may be inspected by any Shareholder. A restated Declaration, integrating into a single instrument all of the provisions of this Declaration which are then in effect and operative, may be executed from time to time by a Majority of the Trustees and shall, upon execution, be conclusive evidence of all amendments contained therein and may thereafter be referred to in lieu of the original Declaration and the various amendments thereto. A Certificate of Trust shall be filed in the office of the Secretary of State of the State of Delaware. ARTICLE 10 MISCELLANEOUS SECTION 10.1. Notices. Any and all notices to which any Shareholder hereunder may be entitled and any and all communications shall be deemed duly served or given if mailed, postage prepaid, addressed to any Shareholder of record at his last known address as recorded on the applicable register of the Trust. SECTION 10.2. Governing Law. This Declaration of Trust is, with reference to the laws thereof, and the rights of all parties and the construction and effect of every provision hereof shall be, subject to and construed according to the laws of said The State of Delaware. 52 SECTION 10.3. Counterparts. This Declaration of Trust and any amendment thereto may be simultaneously executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts, together, shall constitute but one and the same instrument, which shall be sufficiently evidenced by any such original counterpart. SECTION 10.4. Reliance by Third Parties. Any certificate executed by an individual who, according to the records of the Trust is a Trustee hereunder, certifying to: (a) the number or identity of Trustees or Shareholders, (b) the due authorization of the execution of any instrument or writing, (c) the form of any vote passed at a meeting of Trustees or Shareholders, (d) the fact that the number of Trustees or Shareholders present at any meeting or executing any written instrument satisfies the requirements of this Declaration of Trust, (e) the form of any By-Law adopted, or the identity of any officers elected, by the Trustees, (f) the existence or nonexistence of any fact or facts which in any manner relate to the affairs of the Trust, or (g) the name of the Trust or the establishment of a Series shall be conclusive evidence as to the matters so certified in favor of any Person dealing with the Trustees, or any of them, and the successors of such Person. SECTION 10.5. References; Headings. The masculine gender shall include the feminine and neuter genders. Headings are placed herein for convenience of reference only and shall not be taken as a part of this Declaration or control or affect the meaning, construction or effect hereof. SECTION 10.6. Provisions in Conflict With Law or Regulation. (a) The provisions of this Declaration are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code of 1986 or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration or render invalid or improper any action taken or omitted prior to such determination. (b) If any provision of this Declaration shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provision in any other jurisdiction or any other provision of this Declaration in any jurisdiction. SECTION 10.7. Use of the Name "Van Kampen American Capital". Van Kampen American Capital, Inc. ("Van Kampen American Capital") has consented to the use by the Trust and by each Series and each Series thereof to the identifying words 53 "Van Kampen" or "Van Kampen Merritt" or any combination thereof in the name of the Trust and of each Series and Series thereof. Such consent is conditioned upon the Trust's employment of Van Kampen American Capital, its successors or a subsidiary or affiliate thereof as investment adviser to the Trust and to each Series and each Series thereof. As between Van Kampen American Capital and the Trust, Van Kampen American Capital shall control the use of such name insofar as such name contains the identifying words "Van Kampen" or "Van Kampen Merritt". Van Kampen American Capital may from time to time use the identifying words "American Capital," "Van Kampen" or "Van Kampen Merritt" in other connections and for other purposes, including without limitation in the names of other investment companies, corporations or businesses that it may manage, advise, sponsor or own or in which it may have a financial interest. Van Kampen American Capital may require the Trust or any Series or Series thereof to cease using the identifying words "Van Kampen" or "Van Kampen Merritt" in the name of the Trust or any Series or any Series thereof if the Trust or any Series or Series thereof ceases to employ Van Kampen American Capital, its successors or a subsidiary or affiliate thereof as investment adviser. 54 IN WITNESS WHEREOF, the undersigned, being the initial Trustee, has set his hand and seal, for himself and his assigns, unto this Declaration of Trust of Van Kampen American Capital Money Market Trust, all as of the day and year first above written. ------------------------ Initial Trustee 55 A C K N O W L E D G M E N T STATE OF ILLINOIS) ) ss COUNTY OF DUPAGE) ______________________ May 10, 1995 Then personally appeared the above named Ronald A. Nyberg and acknowledged the foregoing instrument to be his free act and deed. Before me, _______________________________ (Notary Public) My commission expires:___________ EX-99.B1(B) 3 CERTIFICATE OF DECLARATION 1 EXHIBIT 1(b) VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST Certificate of Designation of Van Kampen American Capital Money Market Fund The undersigned, being the Secretary of Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Trust"), pursuant to the authority conferred upon the Trustees of the Trust by Section 6.1 of the Trust's Agreement and Declaration of Trust ("Declaration"), and by the affirmative vote of a Majority of the Trustees does hereby establish and designate as a Series of the Trust the Van Kampen American Capital Money Market Fund (the "Fund") with following the rights, preferences and characteristics: 1. Shares. The beneficial interest in the Fund shall be divided into Shares having a nominal or par value of $0.01 per Share, of which an unlimited number may be issued, which Shares shall represent interests only in the Fund. The Trustees shall have the authority from time to time to authorize separate Series of Shares for the Trust as they deem necessary or desirable. 2. Classes of Shares. The Shares of the Fund shall be initially divided into three classes--Class A, Class B and Class C. The Trustees shall have the authority from time to time to authorize additional Classes of Shares of the Fund 3. Sales Charges. Each Class A, Class B and Class C Share shall be subject to such sales charges, if any, as may be established from time to time by the Trustees in accordance with the Investment Company Act of 1940 (the "1940 Act") and applicable rules and regulations of the National Association of Securities Dealers, Inc., all as set forth in the Fund's prospectus. 4. Conversion. Each Class B Share of the Fund shall be converted automatically, and without any action or choice on the part of the Shareholder thereof, into Class A Shares of the Fund at such times and pursuant to such terms, conditions and restrictions as may be established by the Trustees and as set forth in the Fund's Prospectus. 5. Allocation of Expenses Among Classes. Expenses related solely to a particular Class (including, without limitation, distribution expenses under an administrative or service agreement, plan or other arrangement, however designated) shall be borne by that Class and shall be appropriately reflected (in a manner determined by the Trustees) in the net asset value, dividends, distribution and liquidation rights of the Shares of that Class. 6. Special Meetings. A special meeting of Shareholders of a Class of the Fund may be called with respect to the Rule 12b-1 distribution plan applicable to such Class or with respect to any other proper purpose affecting only holders of shares of such Class 1 2 at any time by a Majority of the Trustees. 7. Other Rights Governed by Declaration. All other rights, preferences, qualifications, limitations and restrictions with respect to Shares of any Series of the Trust or with respect to any Class of Shares set forth in the Declaration shall apply to Shares of the Fund unless otherwise specified in this Certificate of Designation, in which case this Certificate of Designation shall govern. 8. Amendments, etc. Subject to the provisions and limitations of Section 9.5 of the Declaration and applicable law, this Certificate of Designation may be amended by an instrument signed in writing by a Majority of the Trustees (or by and officer of the Trust pursuant to the vote of a Majority of the Trustees) or when authorized to do so by the vote in accordance with the Declaration of the holders of a majority of all the Shares of the Fund outstanding and entitled to vote or, if such amendment affects the Shares of one or more but not all of the Classes of the Fund, the holders of a majority of all the Shares of the affected Classes outstanding and entitled to vote. 9. Incorporation of Defined Terms. All capitalized terms which are not defined herein shall have the same meaning as ascribed to those terms in the Declaration. May 10, 1995 ---------------------- Ronald A. Nyberg, Secretary 2 EX-99.B2 4 BYLAWS 1 EXHIBIT 2 FORM OF VAN KAMPEN FUNDS DELAWARE TRUST BYLAWS VAN KAMPEN AMERICAN CAPITAL [TRUST] BYLAWS 2 [TRUST] Bylaws Index ARTICLE 1 SHAREHOLDERS AND SHAREHOLDERS' MEETINGS 1 Section 1.1. Meetings 1 Section 1.2. Presiding Officer; Secretary 1 Section 1.3. Authority of Chairman of Meeting to Interpret Declaration and Bylaws 1 Section 1.4. Voting; Quorum 1 Section 1.5. Inspectors 2 Section 1.6 Records at Shareholder Meetings 2 Section 1.7. Shareholders Action in Writing 2 ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS 2 Section 2.1. Number of Trustees 2 Section 2.2. Regular Meetings of Trustees 2 Section 2.3. Special Meetings of Trustees 2 Section 2.4. Notice of Meetings 3 3 Section 2.5. Quorum; Presiding Trustee 3 Section 2.6. Participation by Telephone 3 Section 2.7. Location of Meetings 3 Section 2.8. Actions by Trustees 3 Section 2.9. Rulings of Presiding Trustee 3 Section 2.10. Trustees' Action in Writing 3 Section 2.11. Resignations 4 Section 2.12. Tenure of Trustees 4 4 ARTICLE 3 OFFICERS 4 Section 3.1. Officers of the Trust 4 Section 3.2. Time and Terms of Election 4 Section 3.3. Resignation and Removal 4 Section 3.4. Fidelity Bond 4 Section 3.5. President 4 Section 3.6. Vice Presidents 4 Section 3.7. Treasurer and Assistant Treasurers 5 Section 3.8. Controller and Assistant Controllers 5 Section 3.9. Secretary and Assistant Secretaries 5 Section 3.10. Substitutions 5 Section 3.11. Execution of Deeds, etc. 6 Section 3.12. Power to Vote Securities 6 ARTICLE 4 COMMITTEES 6 Section 4.1. Power of Trustees to Designate Committees 6 Section 4.2. Rules for Conduct of Committee Affairs 6 Section 4.3. Trustees May Alter, Abolish, etc., Committees 6 5 Section 4.4. Minutes; Review by Trustees 6 ARTICLE 5 SEAL 7 ARTICLE 6 SHARES .......................................... 7 Section 6.1. Issuance of Shares 7 Section 6.2. Uncertificated Shares 7 Section 6.3. Share Certificates 7 Section 6.4. Lost, Stolen, etc., Certificates 7 6 ARTICLE 7 STOCK TRANSFERS 8 Section 7.1. Transfer Agents, Registrars, etc. 8 Section 7.2. Transfer of Shares 8 Section 7.3. Registered Shareholders 8 ARTICLE 8 AMENDMENTS 8 Section 8.1. Bylaws Subject to Amendment 8 Section 8.2. Notice of Proposal to Amend Bylaws Required 8 7 [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 8 thereof. SECTION 1.3. Authority of Chairman of Meeting to Interpret_Declaration and Bylaws. At any Shareholders' meeting the chairman of the meeting shall be empowered to determine the construction or interpretation of the Declaration or these Bylaws, or any part thereof or hereof, and his ruling shall be final. SECTION 1.4. Voting; Quorum. At each meeting of Shareholders, except as otherwise provided by the Declaration, every holder of record of Shares entitled to vote shall be entitled to a number of votes equal to the number of Shares standing in his name on the Share register of the Trust on the record date of the meeting. Shareholders may vote by proxy and the form of any such proxy may be prescribed from time to time by the Trustees. A quorum shall exist if the holders of a majority of the outstanding Shares of the Trust entitled to vote are present in person or by proxy, but any lesser number shall be sufficient for adjournments. At all meetings of the Shareholders, votes shall be taken by ballot for all matters which may be binding upon the Trustees pursuant to Section 7.1 of the Declaration. On other matters, votes of Shareholders need not be taken by ballot unless otherwise provided for by the Declaration or by vote of the Trustees, or as required by the 1940 Act, but the chairman of the meeting may in his discretion authorize any matter to be voted upon by ballot. SECTION 1.5. Inspectors. At any meeting of Shareholders, the chairman of the meeting may appoint one or more Inspectors of Election or Balloting to supervise the voting at such meeting or any adjournment thereof. If Inspectors are not so appointed, the chairman of the meeting may, and on the request of any Shareholder present or represented and entitled to vote shall, appoint one or more Inspectors for such purpose. Each Inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of Inspector of Election or Balloting, as the case may be, at such meeting with strict impartiality and according to the best of his ability. If appointed, Inspectors shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. SECTION 1.6. Records at Shareholder Meetings. At each meeting of the Shareholders there shall be open for inspection the minutes of the last previous Meeting of Shareholders of the Trust and a list of the Shareholders of the Trust, certified to be true and correct by the Secretary or other proper agent of the Trust, as of the record date of the meeting or the date of closing of transfer books, as the case may be. Such list of Shareholders shall contain the name of each Shareholder. Shareholders shall have such other rights and procedures of inspection of the books and records of the Trust as are granted to shareholders of a Delaware corporation. 9 SECTION 1.7. Shareholders' Action in Writing. Nothing in this Article 1 shall limit the power of the Shareholders to take any action by means of written instruments without a meeting, as permitted by Section 7.6 of the Declaration. ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS SECTION 2.1. Number of Trustees. There shall initially be one (1) Trustee, and the number of Trustees shall thereafter be such number, authorized by the Declaration, as from time to time shall be fixed by a vote adopted by a Majority of the Trustees. SECTION 2.2. Regular Meetings of Trustees. Regular meetings of the Trustees may be held without call or notice at such places and at such times as the Trustees may from time to time determine; provided, that notice of such determination, and of the time and place of the first regular meeting thereafter, shall be given to each absent Trustee in accordance with Section 2.4 hereof. SECTION 2.3. Special Meetings of Trustees. Special meetings of the Trustees may be held at any time and at any place when called by the President or the Treasurer or by three (3) or more Trustees, or if there shall be less than three (3) Trustees, by any Trustee; provided, that notice of the time and place thereof is given to each Trustee in accordance with Section 2.4 hereof by the Secretary or an Assistant Secretary or by the officer or the Trustees calling the meeting. SECTION 2.4. Notice of Meetings. Notice of any regular or special meeting of the Trustees shall be sufficient if given in writing to each Trustee, and if sent by mail at least five (5) days, by a nationally recognized overnigh delivery service at least two (2) days or by facsimile at least twenty-four (24) hours, before the meeting, addressed to his usual or last known business or residence address, or if delivered to him in person at least twenty-four (24) hours before the meeting. Notice of a special meeting need not be given to any Trustee who was present at an earlier meeting, not more than thirty-one (31) days prior to the subsequent meeting, at which the subsequent meeting was called. Unless statute, these bylaws or a resolution of the Trustees might otherwise dictate, notice need not state the business to be transacted at or the purpose of any meeting of the Board of Trustees. Notice of a meeting may be waived by any Trustee by written waiver of notice, executed by him before or after the meeting, and such waiver shall be filed with the records of the meeting. Attendance by a Trustee at a meeting shall constitute a waiver of notice, except where a Trustee attends a meeting for the purpose of protesting prior thereto or at its commencement the lack of notice. No notice need be given 10 of action proposed to be taken by unanimous written consent. SECTION 2.5. Quorum: Presiding Trustee. At any meeting of the Trustees, a Majority of the Trustees shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. Unless the Trustees shall otherwise elect, generally or in a particular case, the Chairman shall be the presiding Trustee at each meeting of the Trustees or in the absence of the Chairman, the President shall preside over the meeting. In the absence of both the Chairman and the President, the Trustees present at the meeting shall elect one of their number as presiding Trustee of the meeting. SECTION 2.6. Participation by Telephone. One or more of the Trustees may participate in a meeting thereof or of any Committee of the Trustees by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. SECTION 2.7. Location of Meetings. Trustees' meetings may be held at any place, within or without the State of Delaware. SECTION 2.8. Actions by Trustees. Unless statute, the charter or bylaws requires a greater proportion, action of a majority of the Trustees present at a meeting at which a quorum is present is action of the Board of Trustees. Voting at Trustees' meetings may be conducted orally, by show of hands, or, if requested by any Trustee, by written ballot. The results of all voting shall be recorded by the Secretary in the minute book. SECTION 2.9. Rulings of Presiding Trustee. All other rules of conduct adopted and used at any Trustees' meeting shall be determined by the presiding Trustee of such meeting, whose ruling on all procedural matters shall be final. SECTION 2.10. Trustees' Action in Writing. Nothing in this Article 2 shall limit the power of the Trustees to take action by means of a written instrument without a meeting, as provided in Section 4.2 of the Declaration. SECTION 2.11. Resignations. Any Trustee may resign at any time by written instrument signed by him and delivered to the Chairman, the President or the Secretary or to a meeting of the Trustees. Such resignation shall be effective upon receipt unless specified to be effective at some other time. 11 SECTION 2.12. Chairman of the Board. The Trustees may from time to time elect on of the Trustees to serve as Chairman of the Board of Trustees. ARTICLE 3 OFFICERS SECTION 3.1. Officers of the Trust. The officers of the Trust shall consist of a President, a Treasurer and a Secretary, and may include one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries, and such other officers as the Trustees may designate. Any person may hold more than one office. SECTION 3.2. Time and Terms of Election. The President, the Treasurer and the Secretary shall be elected by the Trustees at their first meeting and thereafter at the annual meeting of the Trustees, as provided in Section 4.2 of the Declaration. Such officers shall hold office until the next annual meeting of the Trustees and until their successors shall have been duly elected and qualified, and may be removed at any meeting by the affirmative vote of a Majority of the Trustees. All other officers of the Trust may be elected or appointed at any meeting of the Trustees. Such officers shall hold office for any term, or indefinitely, as determined by the Trustees, and shall be subject to removal, with or without cause, at any time by the Trustees. SECTION 3.3. Resignation and Removal. Any officer may resign at any time by giving written notice to the Trustees. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If the office of any officer or agent becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the Trustees may choose a successor, who shall hold office for the unexpired term in respect of which such vacancy occurred. Except to the extent expressly provided in a written agreement with the Trust, no officer resigning or removed shall have any right to any compensation for any period following such resignation or removal, or any right to damage on account of such removal. SECTION 3.4. Fidelity Bond. The Trustees may, in their discretion, direct any officer appointed by them to furnish at the expense of the Trust a fidelity bond approved by the Trustees, in such amount as the Trustees may prescribe. 12 SECTION 3.5. President. The President shall be the chief executive officer of the Trust and, subject to the supervision of the Trustees, shall have general charge and supervision of the business, property and affairs of the Trust and such other powers and duties as the Trustees may prescribe. SECTION 3.6. Vice Presidents. In the absence or disability of the President, the Vice President or, if there shall be more than one, the Vice Presidents in the order of their seniority or as otherwise designated by the Trustees, shall exercise all of the powers and duties of the President. The Vice Presidents shall have the power to execute bonds, notes, mortgages and other contracts, agreements and instruments in the name of the Trust, and shall do and perform such other duties as the Trustees or the President shall direct. SECTION 3.7. Treasurer and Assistant Treasurers. The Treasurer shall be the chief financial officer of the Trust, and shall have the custody of the Trust's funds and Securities, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Trust and shall deposit all moneys, and other valuable effects in the name and to the credit of the Trust, in such depositories as may be designated by the Trustees, taking proper vouchers for such disbursements, shall have such other duties and powers as may be prescribed from time to time by the Trustees, and shall render to the Trustees, whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Trust. If no Controller is elected, the Treasurer shall also have the duties and powers of the Controller, as provided in these Bylaws. Any Assistant Treasurer shall have such duties and powers as shall be prescribed from time to time by the Trustees or the Treasurer, and shall be responsible to and shall report to the Treasurer. In the absence or disability of the Treasurer, the Assistant Treasurer or, if there shall be more than one, the Assistant Treasurers in the order of their seniority or as otherwise designated by the Trustees or the Chairman, shall have the powers and duties of the Treasurer. SECTION 3.8. Controller and Assistant Controllers. If a Controller is elected, he shall be the chief accounting officer of the Trust and shall be in charge of its books of account and accounting records and of its accounting procedures, and shall have such duties and powers as are commonly incident to the office of a controller, and such other duties and powers as may be prescribed from time to time by the Trustees. The Controller shall be responsible to and shall report to the Trustees, but in the ordinary conduct of the Trust's business, shall be under the supervision of the Treasurer. Any Assistant Controller shall have such duties and powers as shall be prescribed from time to time by the Trustees or the Controller, and shall be responsible to and shall report to the Controller. In the absence or disability of the Controller, the Assistant Controller or, if there shall be more than one, the Assistant Controllers in the order of their seniority or as otherwise designated by the Trustees, shall have the powers and duties of the Controller. 13 SECTION 3.9. Secretary and Assistant Secretaries. The Secretary shall, if and to the extent requested by the Trustees, attend all meetings of the Trustees, any Committee of the Trustees and/or the Shareholders and record all votes and the minutes of proceedings in a book to be kept for that purpose, shall give or cause to be given notice of all meetings of the Trustees, any Committee of the Trustees, and of the Shareholders and shall perform such other duties as may be prescribed by the Trustees. The Secretary, or in his absence any Assistant Secretary, shall affix the Trust's seal to any instrument requiring it, and when so affixed, it shall be attested by the signature of the Secretary or an Assistant Secretary. The Secretary shall be the custodian of the Share records and all other books, records and papers of the Trust (other than financial) and shall see that all books, reports, statements, certificates and other documents and records required by law are properly kept and filed. In the absence or disability of the Secretary, the Assistant Secretary or, if there shall be more than one, the Assistant Secretaries in the order of their seniority or as otherwise designated by the Trustees, shall have the powers and duties of the Secretary. SECTION 3.10. Substitutions. In case of the absence or disability of any officer of the Trust, or for any other reason that the Trustees may deem sufficient, the Trustees may delegate, for the time being, the powers or duties, or any of them, of such officer to any other officer, or to any Trustee. SECTION 3.11. Execution of Deeds, etc. Except as the Trustees may generally or in particular cases otherwise authorize or direct, all deeds, leases, transfers, contracts, proposals, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the Trust shall be signed or endorsed on behalf of the Trust by its properly authorized officers or agents as provided in the Declaration. SECTION 3.12. Power to Vote Securities. Unless otherwise ordered by the Trustees, the Treasurer shall have full power and authority on behalf of the Trust to give proxies for, and/or to attend and to act and to vote at, any meeting of stockholders of any corporation in which the Trust may hold stock, and at any such meeting the Treasurer or his proxy shall possess and may exercise any and all rights and powers incident to the ownership of such stock which, as the owner thereof, the Trust might have possessed and exercised if present. The Trustees, by resolution from time to time, or, in the absence thereof, the Treasurer, may confer like powers upon any other person or persons as attorneys and proxies of the Trust. ARTICLE 4 COMMITTEES 14 SECTION 4.1. Power of Trustees to Designate Committees. The Trustees, by vote of a Majority of the Trustees, may elect from their number an Executive Committee and any other Committees and may delegate thereto some or all of their powers except those which by law, by the Declaration or by these Bylaws may not be delegated; provided, that an Executive Committee shall not be empowered to elect the President, the Treasurer or the Secretary, to amend the Bylaws, to exercise the powers of the Trustees under this Section 4.1 or under Section 4.3 hereof, or to perform any act for which the action of a Majority of the Trustees is required by law, by the Declaration or by these Bylaws. The members of any such Committee shall serve at the pleasure of the Trustees. SECTION 4.2. Rules for Conduct of Committee Affairs. Except as otherwise provided by the Trustees, each Committee elected or appointed pursuant to this Article 4 may adopt such standing rules and regulations for the conduct of its affairs as it may deem desirable, subject to review and approval of such rules and regulations by the Trustees at the next succeeding meeting of the Trustees, but in the absence of any such action or any contrary provisions by the Trustees, the business of each Committee shall be conducted, so far as practicable, in the same manner as provided herein and in the Declaration for the Trustees. SECTION 4.3. Trustees May Alter, Abolish, etc., Committees Trustees may at any time alter or abolish any Committee, change membership of any Committee, or revoke, rescind, waive or modify action of any Committee or the authority of any Committee with respect to any matter or class of matters; provided, that no such action shall impair the rights of any third parties. SECTION 4.4. Minutes: Review by Trustees. Any Committee to which the Trustees delegate any of their powers or duties shall keep records of its meetings and shall report its actions to the Trustees. 15 ARTICLE 5 SEAL The seal of the Trust, if any, may be affixed to any instrument, and the seal and its attestation may be lithographed, engraved or otherwise printed on any document with the same force and effect as if had been imprinted and affixed manually in the same manner and with the same force and effect as if done by a Delaware corporation. Unless otherwise required by the Trustees, the seal shall not be necessary to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust. ARTICLE 6 SHARES SECTION 6.1. Issuance of Shares. The Trustees may issue an unlimited number of Classes of Shares of any or all Series either in certificated or uncertificated form, they may issue certificates to the holders of a Class of Shares of a Series which was originally issued in uncertificated form, and if they have issued Shares of any Series in certificated form, they may at any time discontinue the issuance of Share certificates for such Series and may, by written notice to such Shareholders of such Series require the surrender of their Share certificates to the Trust for cancellation, which surrender and cancellation shall not affect the ownership of Shares for such Series. SECTION 6.2. Uncertificated Shares. For any Class of Shares for which the Trustees issue Shares without certificates, the Trust or the Transfer Agent may either issue receipts therefor or may keep accounts upon the books of the Trust for the record holders of such Shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of such Shares as if they had received certificates therefor and shall be held to have expressly assented and agreed to the terms hereof and of the Declaration. SECTION 6.3. Share Certificates. For any Class of Shares for which the Trustees shall issue Share certificates, each Shareholder of such Class shall be entitled to a certificate stating the number of Shares owned by him in such form as shall be prescribed from time to time by the Trustees. Such 16 certificate shall be signed by the President or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Trust. Such signatures may be facsimiles if the certificate is countersigned by a Transfer Agent, or by a Registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall cease to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he were such officer at the time of its issue. SECTION 6.4. Lost, Stolen, etc., Certificates. If any certificate for certificated Shares shall be lost, stolen, destroyed or mutilated, the Trustees may authorize the issuance of a new certificate of the same tenor and for the same number of Shares in lieu thereof. The Trustees shall require the surrender of any mutilated certificate in respect of which a new certificate is issued, and may, in their discretion, before the issuance of a new certificate, require the owner of a lost, stolen or destroyed certificate, or the owner's legal representative, to make an affidavit or affirmation setting forth such facts as to the loss, theft or destruction as they deem necessary, and to give the Trust a bond in such reasonable sum as the Trustees direct, in order to indemnify the Trust. ARTICLE 7 TRANSFER OF SHARES SECTION 7.1. Transfer Agents, Registrars, etc. As approved in Section 5.2(e) of the Declaration, the Trustees shall have the authority to employ and compensate such transfer agents and registrars with respect to the Shares of the Trust as the Trustees shall deem necessary or desirable. In addition, the Trustees shall have the power to employ and compensate such dividend dispersing agents, warrant agents and agents for reinvestment of dividends as they shall deem necessary or desirable. Any of such agents shall have such power and authority as is delegated to any of them by the Trustees. SECTION 7.2 Transfer of Shares. The Shares of the Trust shall be transferable on the books of the Trust only upon delivery to the Trustees or a transfer agent of the Trust of proper documentation as provided in Section 6.1(m) of the Declaration. The Trust, or its transfer agents, shall be authorized to refuse any transfer unless and until presentation of such evidence as may be reasonably required to show that the requested transfer is proper. SECTION 7.3 Registered Shareholders. The Trust may deem and treat the holder of record of any Shares the absolute owner 17 thereof for all purposes and shall not be required to take any notice of any right or claim of right of any other person. ARTICLE 8 AMENDMENTS SECTION 8.1. Bylaws Subject to Amendment. These Bylaws may be altered, amended or repealed, in whole or in part, at any time by vote of the holders of a majority of the Shares issued, outstanding and entitled to vote. The Trustees, by vote of a Majority of the Trustees, may alter, amend or repeal these Bylaws, in whole or in part, including Bylaws adopted by the Shareholders, except with respect to any provision hereof which by law, the Declaration or these Bylaws requires action by the Shareholders. Bylaws adopted by the Trustees may be altered, amended or repealed by the Shareholders. SECTION 8.2. Notice of Proposal to Amend Bylaws Required. No proposal to amend or repeal these Bylaws or to adopt new Bylaws shall be acted upon at a meeting unless either (i) such proposal is stated in the notice or in the waiver of notice, as the case may be, of the meeting of the Trustees or Shareholders at which such action is taken, or (ii) all of the Trustees or Shareholders, as the case may be, are present at such meeting and all agree to consider such proposal without protesting the lack of notice. EX-99.B5 5 INVESTMENT ADVISORY AGREEMENT 1 EXHIBIT 5 FORM OF INVESTMENT ADVISORY AGREEMENT THIS INVESTMENT ADVISORY AGREEMENT dated as of _________, 199_, by and between VAN KAMPEN AMERICAN CAPITAL MONEY MARKET FUND (the "Fund"), a series of VAN KAMPEN AMERICAN CAPITAL MONEY MARKT TRUST, a Delaware business trust (the "Trust"), and VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP. (the "Adviser"), a Delaware corporation. 1. (a) Retention of Adviser by Fund. The Fund hereby employs the Adviser to act as the investment adviser for and to manage the investment and reinvestment of the assets of the Fund in accordance with the Fund's investment objective and policies and limitations, and to administer its affairs to the extent requested by, and subject to the review and supervision of, the Board of Trustees of the Fund for the period and upon the terms herein set forth. The investment of funds shall be subject to all applicable restrictions of applicable law and of the Declaration of Trust and By-Laws of the Trust, and resolutions of the Board of Trustees of the Fund as may from time to time be in force and delivered or made available to the Adviser. (b) Adviser's Acceptance of Employment. The Adviser accepts such employment and agrees during such period to render such services, to supply investment research and portfolio management (including without limitation the selection of securities for the Fund to purchase, hold or sell and the selection of brokers through whom the Fund's portfolio transactions are executed, in accordance with the policies adopted by the Fund and its Board of Trustees), to administer the business affairs of the Fund, to furnish offices and necessary facilities and equipment to the Fund, to provide administrative services for the Fund, to render periodic reports to the Board of Trustees of the Fund, and to permit any of its officers or employees to serve without compensation as trustees or officers of the Fund if elected to such positions. (c) Independent Contractor. The Adviser shall be deemed to be an independent contractor under this Agreement and, unless otherwise expressly provided or authorized, shall have no authority to act for or represent the Fund in any way or otherwise be deemed as agent of the Fund. (d) Non-Exclusive Agreement. The services of the Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Adviser shall be free to render similar services or other services to others so long as its services hereunder are not impaired thereby. 1 2 2. (a) Fee. For the services and facilities described in Section 1, the Fund will accrue daily and pay to the Adviser at the end of each calendar month an investment management fee equal to a percentage of the average daily net assets of the Fund as follows: FEE PERCENT OF AVERAGE DAILY AVERAGE DAILY NET ASSETS NET ASSETS ____________________ ____________________ ____________________ ____________________ (b) Expense Limitation. The Adviser's compensation for any fiscal year of the Fund shall be reduced by the amount, if any, by which the Fund's expense for such fiscal year exceeds the most restrictive applicable expense jurisdiction in which the Fund's shares are qualified for offer and sale, as such limitations set forth in the most recent notice thereof furnished by the Adviser to the Fund. For purposes of this paragraph there shall be excluded from computation of the Fund's expenses any amount borne directly or indirectly by the Fund which is permitted to be excluded from the computation of such limitation by such statute or regulatory authority. If for any month expenses of the Fund properly included in such calculation exceed 1/12 of the amount permitted annually by the most restrictive applicable expense limitation, the payment to the Adviser for that month shall be reduced, and, if necessary, the Adviser shall make a refund payment to the Fund, so that the total net expense for the month will not exceed 1/12 of such amount. As of the end of the Fund's fiscal year, however, the computations and payments shall be readjusted so that the aggregate compensation payable to the Adviser for the year is equal to the fee set forth in subsection (a) of this Section 2, diminished to the extent necessary so that the expenses for the year do not exceed those permitted by the applicable expense limitation. (c) Determination of Net Asset Value. The net asset value of the Fund shall be calculated as of the close of the New York Stock Exchange on each day the Exchange is open for trading or such other time or times as the trustees may determine in accordance with the provisions of applicable law and of the Declaration of Trust and By-Laws of the Trust, and resolutions of the Board of Trustees of the Fund as from time to time in force. For the purpose of the foregoing computations, on each such day when net asset value is not calculated, the net asset value of a share of beneficial interest of the Fund shall be deemed to be the net asset value of such share as of the close of business of the last day on which such calculation was made. 2 3 (d) Proration. For the month and year in which this Agreement becomes effective or terminates, there shall be an appropriate proration of the Adviser's fee on the basis of the number of days that the Agreement is in effect during such month and year, respectively. 3. Expenses. In addition to the fee of the Adviser, the Fund shall assume and pay any expenses for services rendered by a custodian for the safekeeping of the Fund's securities or other property, for keeping its books of account, for any other charges of the custodian and for calculating the net asset value of the Fund as provided above. The Adviser shall not be required to pay, and the Fund shall assume and pay, the charges and expenses of its operations, including compensation of the trustees (other than those who are interested persons of the Adviser and other than those who are interested persons of the distributor of the Fund but not of the Adviser, if the distributor has agreed to pay such compensation), charges and expenses of independent accountants, of legal counsel and of any transfer or dividend disbursing agent, costs of acquiring and disposing of portfolio securities, cost of listing shares of the New York Stock Exchange or other exchange interest (if any) on obligations incurred by the Fund, costs of share certificates, membership dues in the Investment Company Institute or any similar organization, costs of reports and notices to shareholders, costs of registering shares of the Fund under the federal securities laws, miscellaneous expenses and all taxes and fees to federal, state or other governmental agencies on account of the registration of securities issued by the Fund, filing of corporate documents or otherwise. The Fund shall not pay or incur any obligation for any management or administrative expenses for which the Fund intends to seek reimbursement from the Adviser without first obtaining the written approval of the Adviser. The Adviser shall arrange, if desired by the Fund, for officers or employees of the Adviser to serve, without compensation from the Fund, as trustees, officers or agents of the Fund if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law. 4. Interested Persons. Subject to applicable statutes and regulations, it is understood that trustees, officers, shareholders and agents of the Fund are or may be interested in the Adviser as directors, officers, shareholders, agents or otherwise and that the directors, officers, shareholders and agents of the Adviser may be interest in the Fund as trustees, officers, shareholders, agents or otherwise. 5. Liability. The Adviser shall not be liable for any error of judgment or of law, or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Adviser in the performance of its obligations and duties, or by reason of its reckless disregard of its obligations and duties under this Agreement. 6. (a) Term. This Agreement shall become effective on the date hereof and shall remain in full force until the second anniversary of the date hereof unless sooner terminated as hereinafter provided. This Agreement shall continue in force 3 4 from year to year thereafter, but only as long as such continuance is specifically approved as least annually in the manner required by the Investment Company Act of 1940, as amended. (b) Termination. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated at any time without the payment of any penalty by the Fund or by the Adviser on sixty (60) days written notice to the other party. The Fund may effect termination by action of the Board of Trustees or by vote of a majority of the outstanding shares of stock of the Fund, accompanied by appropriate notice. This Agreement may be terminated at any time without the payment of any penalty and without advance notice by the Board of Trustees or by vote of a majority of the outstanding shares of the Fund in the event that it shall have been established by a court of competent jurisdiction that the Adviser or any officer or director of the Adviser has taken any action which results in a breach of the covenants of the Adviser set forth herein. (c) Payment upon Termination. Termination of this Agreement shall not affect the right of the Adviser to receive payment on any unpaid balance of the compensation described in Section 2 earned prior to such termination. 7. Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder shall not thereby affected. 8. Notices. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notice. 9. Disclaimer. The Adviser acknowledges and agrees that, as provided by Article 8, Section 8.1 of the Agreement and Declaration of Trust of the Trust, the shareholders, trustees, officers, employees and other agents of the Trust and the Fund shall not personally be bound by or liable hereunder, nor shall resort be had to their private property for the satisfaction of any obligation or claim hereunder. 10. Governing Law. All questions concerning the validity, meaning and effect of this Agreement shall be determined in accordance with the laws (without giving effect to the conflict-of-law principles thereof) of the State of Delaware applicable to contracts made and to be performed in that state. 4 5 IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be executed on the day and year first above written. VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP. By:_____________________________________________ Dennis J. McDonnell, President VAN KAMPEN AMERICAN CAPITAL MONEY MARKET FUND, a series of VAN KAMPEN AMERICAN CAPITAL MONEY MARKET TRUST By:_____________________________________________ Dennis J. McDonnell, President 5 EX-99.B6(A) 6 DISTRIBUTION AND SERVICE AGREEMENT 1 EXHIBIT 6(a) FORM OF DISTRIBUTION AND SERVICE AGREEMENT THIS DISTRIBUTION AND SERVICE AGREEMENT dated as of , 199_ (the "Agreement") by and between VAN KAMPEN AMERICAN CAPITAL__________ TRUST, a Delaware business trust (the "Trust"), on behalf of its series VAN KAMPEN AMERICAN CAPITAL__________________ FUND (the "Fund"), and VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC., a Delaware corporation (the "Distributor"). 1. Appointment of Distributor. The Fund appoints the Distributor as a principal underwriter and exclusive distributor of each class of its shares of beneficial interest (the "Shares") offered for sale from time to time pursuant to the then current prospectus of the Fund, subject to different combinations of front-end sales charges, distribution fees, service fees and contingent deferred sales charges. Classes of shares, if any, subject to a front-end sales charge and a distribution and/or service fee are referred to herein as "FESC Classes" and the Shares of such classes are referred to herein as "FESC Shares." Classes of shares, if any, subject to a contingent-deferred sales charge and a distribution and/or a service fee are referred to herein as "CDSC Classes" and Shares of such classes are referred to herein as "CDSC Shares." Classes of shares, if any, subject to a front-end sales charge, a contingent-deferred sales charge and a distribution and/or service fee are referred to herein as "Combination Classes" and Shares of such class are referred to herein as "Combination Shares." The Fund reserves the right to refuse at any time or times to sell Shares hereunder for any reason deemed adequate by the Board of Trustees of the Fund. The Distributor will use its best efforts to sell, through its organization and through other dealers and agents, the Shares which the Distributor has the right to purchase under Section 2 hereof, but the Distributor does not undertake to sell any specific number of Shares. The Distributor agrees that it will not take any long or short positions in the Shares, except for long positions in those Shares purchased by the Distributor in accordance with any systematic sales plan described in the then current Prospectus of the Fund and except as permitted by Section 2 hereof, and that so far as it can control the situation, it will prevent any of its trustees, officers or shareholders from taking any long or short positions in the Shares, except for legitimate investment purposes. 1 2 2. Sale of Shares to Distributor. The Fund hereby grants to the Distributor the exclusive right, except as herein otherwise provided, to purchase Shares directly from the Fund upon the terms herein set forth. Such exclusive right hereby granted shall not apply to Shares issued or transferred or sold at net asset value: (a) in connection with the merger or consolidation of the Fund with any other investment company or the acquisition by the Fund of all or substantially all of the assets of or the outstanding Shares of any investment company; (b) in connection with a pro rata distribution directly to the holders of Fund Shares in the nature of a stock dividend or stock split or in connection with any other recapitalization approved by the Board of Trustees; (c) upon the exercise of purchase or subscription rights granted to the holders of Shares on a pro rata basis; (d) in connection with the automatic reinvestment of dividends and distributions from the Fund; or (e) in connection with the issue and sale of Shares to trustees, officers and employees of the Fund; to directors, officers and employees of the investment adviser of the Fund or any principal underwriter (including the Distributor) of the Fund; to retirees of the Distributor that purchased shares of any mutual fund distributed by the Distributor prior to retirement; to directors, officers and employees of Van Kampen American Capital, Inc. (formerly The Van Kampen Merritt Companies, Inc.) (the parent of the Distributor), VK/AC Holding, Inc. (formerly VKM Holdings, Inc.)(the parent of The Van Kampen Merritt Companies, Inc.) and to the subsidiaries of VK/AC Holding, Inc.; and to any trust, pension, profit-sharing or other benefit plan for any of the aforesaid persons as permitted by Rule 22d-1 under the Investment Company Act of 1940 (the "1940 Act"). The Distributor shall have the right to buy from the Fund the Shares needed, but not more than the Shares needed (except for reasonable allowances for clerical errors, delays and errors of transmission and cancellation of orders) to fill unconditional orders for Shares received by the Distributor from dealers, agents and investors during each period when particular net asset values and public offering prices are in effect as provided in Section 3 hereof; and the price which the Distributor shall pay for the Shares so purchased shall be the respective net asset value used in determining the public offering price on which such orders were based. The Distributor shall notify the Fund at the end of each such period, or as soon thereafter on that business day as the orders received in such period have been compiled, of the number of Shares of each class that the Distributor elects to purchase hereunder. 3. Public Offering Price. The public offering price per Share shall be determined in accordance with the then current Prospectus of the Fund. In no event shall the public offering price exceed the net asset value per Share, plus, with respect to the FESC Shares, a front-end sales charge not in excess of the applicable maximum sales charge permitted under the Rules of Fair Practice of the National Association of Securities Dealers, Inc., as in effect from time to time. The net asset value per share for each class of Shares, respectively, shall be determined in the manner provided in the Declaration of Trust and By-Laws of the Trust as then amended, the Designation of Sub-trust with respect to the Fund, as amended, and in accordance with the then current Prospectus of the Fund consistent with the terms and conditions of the exemptive order with respect to the Fund (Release No. IC- ) issued 2 3 by the Securities and Exchange Commission on , 1993, as it may be amended from time to time or succeeded by other exemptive orders or rules promulgated by the Securities and Exchange Commission under the 1940 Act. The Fund will cause immediate notice to be given to the Distributor of each change in net asset value as soon as it is determined. Discounts to dealers purchasing FESC Shares from the Distributor for resale and to brokers and other eligible agents making sales of FESC Shares to investors and compensation payable from the Distributor to dealers, brokers and other eligible agents making sales of CDSC Shares and Combination Shares shall be set forth in the selling agreements between the Distributor and such dealers or agents, respectively, as from time to time amended, and, if such discounts and compensation are described in the then current Prospectus for the Fund, shall be as so set forth. 4. Compliance with NASD Rules, SEC Orders, etc. In selling Fund Shares, the Distributor will in all respects duly comply with all state and federal laws relating to the sale of such securities and with all applicable rules and regulations of all regulatory bodies, including without limitation the Rules of Fair Practice of the National Association of Securities Dealers, Inc., and all applicable rules and regulations of the Securities and Exchange Commission under the 1940 Act, and will indemnify and save the Fund harmless from any damage or expense on account of any unlawful act by the Distributor or its agents or employees. The Distributor is not, however, to be responsible for the acts of other dealers or agents, except to the extent that they shall be acting for the Distributor or under its direction or authority. None of the Distributor, any dealer, any agent or any other person is authorized by the Fund to give any information or to make any representations, other than those contained in the Registration Statement or Prospectus heretofore or hereafter filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "1933 Act") (as any such Registration Statement and Prospectus may have been or may be amended from time to time), covering the Shares, and in any supplemental information to any such Prospectus approved by the Fund in connection with the offer or sale of Shares. None of the Distributor, any dealer, any broker or any other person is authorized to act as agent for the Fund in connection with the offering or sale of Shares to the public or otherwise. All such sales shall be made by the Distributor as principal for its own account. In selling Shares to investors, the Distributor will adopt and comply with certain standards, as set forth in Exhibit III attached hereto as to when each respective class of Shares may appropriately be sold to particular investors. The Distributor will require every broker, dealer and other eligible agent participating in the offering of the Shares to agree to adopt and comply with such standards as a condition precedent to their participation in the offering. 3 4 5. Expenses. (a) The Fund will pay or cause to be paid: (i) all expenses in connection with the registration of Shares under the federal securities laws, and the Fund will exercise its best efforts to obtain said registration and qualification; (ii) all expenses in connection with the printing of any notices of shareholders' meetings, proxy and proxy statements and enclosures therewith, as well as any other notice or communication sent to shareholders in connection with any meeting of the shareholders or otherwise, any annual, semiannual or other reports or communications sent to the shareholders, and the expenses of sending prospectuses relating to the Shares to existing shareholders; (iii) all expenses of any federal or state original-issue tax or transfer tax payable upon the issuance, transfer or delivery of Shares from the Fund to the Distributor; and (iv) the cost of preparing and issuing any Share certificates which may be issued to represent Shares. (b) The Distributor will pay the costs and expenses of qualifying and maintaining qualification of the Shares for sale under the securities laws of the various states. The Distributor will also permit its officers and employees to serve without compensation as trustees and officers of the Fund if duly elected to such positions. (c) The Fund shall reimburse the Distributor for out-of-pocket costs and expenses actually incurred by it in connection with distribution of each class of Shares respectively in accordance with the terms of a plan (the "12b-1 Plan") adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as such 12b-1 Plan may be in effect from time to time; provided, however, that no payments shall be due or paid to the Distributor hereunder with respect to a class of Shares unless and until this Agreement shall have been approved for each such class by a majority of the Board of Trustees of the Fund and by a majority of the "Disinterested Trustees" (as such term is defined in such 12b-1 Plan) by vote cast in person at a meeting called for the purpose of voting on this Agreement. A copy of such 12b-1 Plan as in effect on the date of this Agreement is attached as Exhibit I hereto. The Fund reserves the right to terminate such 12b-1 Plan with respect to a class of Shares at any time, as specified in the Plan. The persons authorized to direct the payment of funds pursuant to this Agreement and the 12b-1 Plan shall provide to the Fund's Board of Trustees, and the Trustees shall review, at least quarterly, a written report with respect to each of the classes of Shares of the amounts so 4 5 paid and the purposes for which such expenditures were made for each such class of Shares. (d) The Fund shall compensate the Distributor for providing services to, and the maintenance of, shareholder accounts in the Fund (including prepaying service fees to eligible brokers, dealers and financial intermediaries and expenses incurred in connection therewith) and the Distributor may pay as agent for and on behalf of the Fund a service fee with respect to each class of Shares to brokers, dealers and financial intermediaries for the provision of shareholder services and the maintenance of shareholder accounts in the Fund in the amount with respect to each class of Shares set forth from time to time in the Fund's prospectus. The Fund shall compensate the Distributor for such expenses in accordance with the terms of a service plan (the "Service Plan"), as such Service Plan may be in effect from time to time; provided, however, that no service fee payments shall be due or paid to the Distributor hereunder with respect to a class of Shares unless and until this Agreement shall have been approved for each such class by a majority of the Board of Trustees of the Fund and by a majority of the Disinterested Trustees by vote cast in person at a meeting called for the purpose of voting on this Agreement. A copy of such Service Plan as in effect on the date of this Agreement is attached as Exhibit II hereto. The Fund reserves the right to terminate such Service Plan with respect to a class of Shares at any time, as specified in the Plan. The persons authorized to direct the payment of funds pursuant to this Agreement and the Service Plan shall provide to the Fund's Board of Trustees, and the Trustees shall review, at least quarterly, a written report with respect to each of the classes of Shares of the amounts paid as service fees for each such class of Shares. 6. Redemption of Shares. In connection with the Fund's redemption of its Shares, the Fund hereby authorizes the Distributor to repurchase, upon the terms and conditions hereinafter set forth, as the Fund's agent and for the Fund's account, such Shares as may be offered for sale to the Fund from time to time by holders of such Shares or their agents. (a) Subject to and in conformity with all applicable federal and state legislation, any applicable rules of the National Association of Securities Dealers, Inc., and any applicable rules and regulations of the Securities and Exchange Commission under the 1940 Act, the Distributor may accept offers of holders of Shares to resell such Shares to the Fund on such terms and conditions and at such prices as described and provided for in the then current Prospectus of the Fund. (b) The Distributor agrees to notify the Fund at such times as the Fund may specify of the number of each class of Shares, respectively, repurchased for the Fund's account and the time or times of such repurchases, and the Fund shall notify the Distributor of the prices and, in the case of a class of CDSC Shares or Combination Shares, of the deferred sales charge as described below, if any, applicable to repurchases of Shares of such class. 5 6 (c) The Fund shall have the right to suspend or revoke the foregoing authorization at any time; unless otherwise stated, any such suspension or revocation shall be effective forthwith upon receipt of notice thereof by telegraph or by written instrument from any of the Fund's officers. In the event that the Distributor's authorization is, by the terms of such notice, suspended for more than twenty-four hours or until further notice, the authorization given by this Section 6 shall not be revived except by vote of the Board of Trustees of the Fund. (d) The Distributor agrees that all repurchases of Shares made by the Distributor shall be made only as agent for the Fund's account and pursuant to the terms and conditions herein set forth. (e) The Fund agrees to authorize and direct its Custodian to pay, for the Fund's account, the repurchase price (together with any applicable contingent deferred sales charge) of any Shares so repurchased for the Fund against the authorized transfer of book shares from an open account and against delivery of any other documentation required by the Board of Trustees of the Fund or, in the case of certificated Shares, against delivery of the certificates representing such Shares in proper form for transfer to the Fund. (f) The Distributor shall receive no commissions or other compensation in respect of any repurchases of FESC Shares for the Fund under the foregoing authorization and appointment as agent. With respect to any repurchase of CDSC Shares or Combination Shares, the Distributor shall receive the deferred sales charge, if any, applicable to the respective class of Shares that have been held for less than a specified period of time with respect to such class as set forth from time to time in the Fund's Prospectus. The Distributor shall receive no other commission or other compensation in respect of any repurchases of CDSC Shares or Combination Shares for the Fund under the foregoing authorization and appointment as agent. (g) If any FESC Shares sold to the Distributor under the terms of this Agreement are redeemed or repurchased by the Fund or by the Distributor as agent or are tendered for redemption within seven business days after the date of the Distributor's confirmation of the original purchase by the Distributor, the Distributor shall forfeit the amount above the net asset value received by it in respect of such Shares, provided that the portion, if any, of such amount re-allowed by the Distributor to dealers or agents shall be repayable to the Fund only to the extent recovered by the Distributor from the dealer or agent concerned. The Distributor shall include in agreements with such dealers and agents a corresponding provision for the forfeiture by them of their concession with respect to FESC Shares purchased by them or their principals and redeemed or repurchased by the Fund or by the Distributor as agent within seven business days after the date of the Distributor's confirmation of such initial purchases. 6 7 7. Indemnification. The Fund agrees to indemnify and hold harmless the Distributor and each of its trustees and officers and each person, if any, who controls the Distributor within the meaning of Section 15 of the 1933 Act against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage, or expense and reasonable counsel fees incurred in connection therewith), arising by reason of any person acquiring any Shares, based upon the ground that the registration statement, Prospectus, shareholder reports or other information filed or made public by the Fund (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading under the 1933 Act or any other statute or the common law. However, the Fund does not agree to indemnify the Distributor or hold it harmless to the extent that the statement or omission was made in reliance upon, and in conformity with, information furnished to the Fund by or on behalf of the Distributor. In no case (i) is the indemnity of the Fund in favor of the Distributor or any person indemnified to be deemed to protect the Distributor or any person against any liability to the Fund or its securityholders to which the Distributor or such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement, or (ii) is the Fund to be liable under its indemnity agreement contained in this Section with respect to any claim made against the Distributor or any person indemnified unless the Distributor or any such person shall have notified the Fund in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon the Distributor or any such person (or after the Distributor or the person shall have received notice of service on any designated agent). However, failure to notify the Fund of any claim shall not relieve the Fund from any liability which it may have to the Distributor or any person against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph. The Fund shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense, of any suit brought to enforce any claims, but if the Fund elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Distributor or person or persons, defendant or defendants in the suit. In the event the Fund elects to assume the defense of any suit and retain counsel, the Distributor, officers or trustees or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If the Fund does not elect to assume the defense of any suit, it will reimburse the Distributor, officers or trustees or controlling person or persons, defendant or defendants in the suit for the reasonable fees and expenses of any counsel retained by them. The Fund agrees to notify the Distributor promptly of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of any of the Shares. The Distributor also covenants and agrees that it will indemnify and hold harmless the Fund and each of its trustees 7 8 and officers and each person, if any, who controls the Fund within the meaning of Section 15 of the 1933 Act against any loss, liability, damage, claim or expense (including the reasonable cost of investigating or defending any alleged loss, liability, damage, claim or expense and reasonable counsel fees incurred in connection therewith) arising by reason of any person acquiring any Shares, based upon the 1933 Act or any other statute or common law, alleging any wrongful act of the Distributor or any of its employees or alleging that the registration statement, Prospectus, shareholder reports or other information filed or made public by the Fund (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, insofar as the statement or omission was made in reliance upon, and in conformity with, information furnished to the Fund by or on behalf of the Distributor. In no case (i) is the indemnity of the Distributor in favor of the Fund or any person indemnified to be deemed to protect the Fund or any such person against any liability to which the Fund or such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligation and duties under this Amended Agreement, or (ii) is the Distributor to be liable under its indemnity agreement contained in this paragraph with respect to any claim made against the Fund or any person indemnified unless the Fund or person, as the case may be, shall have notified the Distributor in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon the Fund or person (or after the Fund or such person shall have received notice of service on any designated agent). However, failure to notify the Distributor of any claim shall not relieve the Distributor from any liability which it may have to the Fund or any person against whom the action is brought otherwise than on account of its indemnity agreement contained in this paragraph. In the case of any notice to the Distributor, it shall be entitled to participate, at its own expense, in the defense, or, if it so elects, to assume the defense, of any suit brought to enforce the claim, but if the Distributor elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Fund, to its officers and trustees and to any controlling person or persons, defendant or defendants in the suit. In the event that the Distributor elects to assume the defense of any suit and retain counsel, the Fund or controlling persons, defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If the Distributor does not elect to assume the defense of any suit, it will reimburse the Fund, officers and trustees or controlling person or persons, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them. The Distributor agrees to notify the Fund promptly of the commencement of any litigation or proceedings against it in connection with the issue and sale of any of the Shares. 8. Continuation, Amendment or Termination of This Agreement. This Agreement shall become effective on the Effective Date and thereafter shall continue in full force and effect year to year with respect to each class of Shares so long as such continuance is approved at least annually (i) by the Board of Trustees of the Fund or by a vote of a majority of the outstanding voting securities of the respective class of Shares of the Fund, and 8 9 (ii) by vote of a majority of the Trustees who are not parties to this Agreement or interested persons in any such party (the "Independent Trustee") cast in person at a meeting called for the purpose of voting on such approval, provided, however, that (a) this Agreement may at any time be terminated with respect to either class of Shares of the Fund without the payment of any penalty either by vote of a majority of the Disinterested Trustees, or by vote of a majority of the outstanding voting securities of the respective class of Shares of the Fund, on written notice to the Distributor; (b) this Agreement shall immediately terminate in the event of its assignment; and (c) this Agreement may be terminated by the Distributor on ninety (90) days' written notice to the Fund. Upon termination of this Agreement with respect to either class of Shares of the Fund, the obligations of the parties hereunder shall cease and terminate with respect to such class of Shares as of the date of such termination, except for any obligation to respond for a breach of this Agreement committed prior to such termination. This Agreement may be amended with respect to either class of Shares at any time by mutual consent of the parties, provided that such consent on the part of the Fund shall have been approved (i) by the Board of Trustees of the Fund, or by a vote of the majority of the outstanding voting securities of the respective class of Shares of the Fund, and (ii) by vote of a majority of the Independent Trustees cast in person at a meeting called for the purpose of voting on such amendment. For the purpose of this section, the terms "vote of a majority of the outstanding voting securities", "interested persons" and "assignment" shall have the meanings defined in the 1940 Act, as amended. 9. Limited Liability of Shareholder. Notwithstanding anything to the contrary contained in this Agreement, you acknowledge and agree that, as provided by Article 8, Section 8.1 of the Agreement and Declaration of Trust of the Trust, this Agreement is executed by the Trustees of the Trust and/or Officers of the Fund by them not individually but as such Trustees and/or Officers, and the obligations of the Fund hereunder are not binding upon any of the Trustees, Officers or Shareholders individually, but bind only the trust estate. 10. Notice. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party or at such other address as such party shall have designated in writing. 11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS. IN WITNESS WHEREOF, the parties hereto have caused this 9 10 Agreement to be executed by their officers designated below on the day and year first above written. VAN KAMPEN AMERICAN CAPITAL ____________ TRUST, on behalf of its series, VAN KAMPEN AMERICAN CAPITAL __________________ FUND By: Name: Title: VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. By: Name: Title: 10 EX-99.B6(B) 7 DEALER AGREEMENT 1 EXHIBIT 6(b) DEALER AGREEMENT WITH VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. REGARDING VAN KAMPEN AMERICAN CAPITAL OPEN-END AND CLOSED-END INVESTMENT COMPANIES Ladies and Gentlemen: As dealer for our own account, we offer to sell to you shares of any of the Van Kampen American Capital open-end investment companies (the "Open-End Funds" or, individually, an "Open-End Fund") and Van Kampen American Capital closed-end investment companies (the "Closed-End Funds" or, individually, a "Closed-End Fund") distributed by Van Kampen American Capital Distributors, Inc. ("VKAC") pursuant to the terms and conditions contained herein. Collectively, the Open-End Funds and Closed-End Funds sometimes are referred to herein as the "Funds" or, individually, as a "Fund". VKAC acts as the principal underwriter (as such term is defined in the Investment Company Act of 1940, as amended) for each Fund with respect to its offering of one or more classes of shares as described in each Fund's Prospectus. Pursuant to this Agreement, VKAC offers to sell to you shares of each Open-End Fund and each Closed-End Fund prior to the Effective Date (as defined herein) of each Fund's Registration Statement (as defined herein) (the "Initial Offering Period") and after the Effective Date of each Fund's Registration Statement (the "Continuous Offering Period") (if any) as described in each respective Fund's Prospectus. As used herein unless otherwise indicated, the term "Prospectus" means the final prospectus and Statement of Additional Information included in the registration statement for the fund on the effective date and as from time to time thereafter amended or supplemented. As used herein unless otherwise indicated, the term "Preliminary Prospectus" means any preliminary prospectus and any preliminary Statement of Additional Information included at any time as a part of the registration statement for any Fund prior to the effective date and which is authorized by VKAC for use in connection with the offering of shares. In consideration of the mutual obligations contained herein, 1 2 the sufficiency of which is hereby acknowledged by you, the terms of the Agreement are as follows: GENERAL TERMS AND CONDITIONS 1. Your acceptance of this Agreement constitutes a representation that you are a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD") or, in the alternative, that you are a foreign dealer or bank, not required to be registered as a broker-dealer with the SEC and not required or eligible for membership in the NASD. If you are such an NASD member, you agree that in making sales of shares of the one or more classes of shares of each Fund you will comply with all applicable rules of the NASD, including without limitation rules pertaining to the opening, approval, supervision and monitoring of customer accounts, the NASD's Interpretation with Respect to Free-Riding and Withholding and Sections 8, 24 and 36 of Article III of the NASD's Rules of Fair Practice. If you are such an unregistered foreign dealer or bank, you agree not to offer or sell, or to agree to offer or sell, directly or indirectly, except through VKAC, any shares to any party to whom such shares may not be sold unless you are so registered and a member of the NASD, and in making sales of such shares you agree to comply with the NASD's Interpretation with Respect to Free-Riding and Withholding and Sections 8, 24 and 36 of Article III of the NASD's Rules of Fair Practice as though you were a member in good standing of the NASD and to comply with Section 25 of such Article III as it applies to a nonmember broker or dealer in a foreign country. You and we agree to abide by all other Rules and Regulations of the NASD, including Section 26 of its Rules of Fair Practice, and all applicable state and Federal laws, rules and regulations. Your acceptance also constitutes a representation that you have been duly authorized by proper corporate or partnership action to enter into this Agreement and to perform your obligations hereunder. You will not accept any orders from any broker, dealer or financial institution who is purchasing from you with a view toward distribution unless you have obtained such person's or entity's written consent to be bound by the terms of this Agreement. 2. In all sales of shares of the Funds to the public you shall act as dealer for your own account, and you shall have no authority in any transaction to act as agent for the Fund or for VKAC. 3. Each Fund has filed with the SEC and the securities commissions of one or more states a Registration Statement (the "Registration Statement") on the SEC Form applicable to the respective Fund. The date on which the Registration Statement is declared effective by the SEC is referred to herein as the "Effective Date". Prior to the Effective Date of the Registration Statement with respect to a particular Fund, you expressly acknowledge and understand that with respect to such Fund: 2 3 (a) Shares of such Fund may not be sold, nor may offers to buy be accepted, (i) in any state prior to the Effective Date of the Registration Statement with respect thereto or (ii) in any state in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such state. (b) The Fund's Preliminary Prospectus, together with any sales material distributed for use in connection with the offering of shares of such Fund, does not constitute an offer to sell or the solicitation of an offer to buy shares of such Fund and is subject to completion and modification by the Prospectus. You agree that you will distribute to the public only (a) the Preliminary Prospectus, the Prospectus and any amendment or supplement thereto and (b) sales literature or other documents expressly authorized for such distribution by VKAC. (c) In the event that you transmit indications of interest to VKAC for accumulation prior to the Effective Date, you will be responsible for confirming such indications of interest with your customers following the Effective Date. Indications of interest with respect to shares of a class of a Fund's shares transmitted to VKAC prior to the Effective Date will be conditioned upon the occurrence of the Effective Date and the registration or qualification of the respective class of shares in the respective state. (d) Indications of interest with respect to shares of a class of a Fund's shares which are not canceled by you prior to the latter of the Effective Date and the registration or qualification of the respective class of the Fund's shares in the respective state, and accepted by VKAC will be deemed by VKAC to be orders for shares of such class of shares of the Fund. (e) All indications of interest and orders transmitted to VKAC are subject to the terms and conditions of the Prospectus and this Agreement. 4. After the Effective Date, you will not offer shares of a class of the Fund's shares for sale in any state where they are not qualified for sale under the "blue sky" laws and regulations of such state or where you are not qualified to act as a dealer, except for states in which they are exempt from qualification. 5. In the event that you offer shares of the Fund for sale outside the United States, you agree to comply with the applicable laws, rules and regulations of the foreign government having jurisdiction over such sales, including any regulations of the United States military authorities applicable to solicitations to military personnel. 3 4 6. Upon application to VKAC, VKAC will inform you as to the jurisdictions in which VKAC believes shares of a Fund have been qualified for sale under the respective securities or "blue sky" laws of such jurisdictions. VKAC understands and agrees that qualification of any shares of a Fund for sale in such jurisdictions shall be solely VKAC's responsibility and that you assume no responsibility or obligation with respect to such eligibility. You understand and agree that your compliance with the requirements of the securities or "blue sky" laws in each jurisdiction with respect to your right to sell the shares in such jurisdiction shall be solely your responsibility. 7. No person is authorized to make any representations concerning any class of shares of a Fund except those contained in the Fund's current Preliminary Prospectus or Prospectus, as the case may be. In purchasing shares from us you shall rely solely on the representations contained in such Prospectus. VKAC will furnish additional copies of a Fund's current Prospectus and sales literature issued by VKAC in reasonable quantities upon request. 8. Orders received from you will be accepted by VKAC only at the public offering price applicable to each order as specified in the then-current Fund Prospectus. The minimum dollar purchase of any shares of each Fund by any person shall be the applicable minimum dollar amount described in the then-current Fund Prospectus for that class of shares, and no order for less than such amount will be accepted hereunder. The procedures relating to the handling of orders shall be subject to instructions that VKAC shall communicate from time to time to you. All orders are subject to acceptance or rejection by VKAC in its sole discretion. 9. Payment for Fund shares shall be made on or before the settlement date specified in the VKAC confirmation at the office of VKAC's clearing agent, by check payable to the order of the Fund which reserves VKAC's right to delay issuance or transfer of shares until such check has cleared. If such payment is not received by VKAC, VKAC reserves the right, without notice, forthwith either to cancel the sale or, at its option, to sell the shares ordered back to the Fund, and in either case, VKAC may hold you responsible for any loss suffered by the Fund. You agree that in transmitting investors' funds, you will comply with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended. 10. You shall not withhold placing orders with VKAC from your customers so as to profit yourself as a result of such withholding; e.g., by a change in the net asset value from that used in determining the public offering price to your customers. 11. VKAC will not accept from you any conditioned orders for shares, except at a definite, specified price. 4 5 12. You represent that you are familiar with Release No. 4968 under the Securities Act of 1933, as amended, and Rule 15c2-8 under the Securities Exchange Act of 1934, as amended, as it relates to the distribution of Preliminary Prospectuses (and not Statements of Additional Information) and Prospectuses (and not Statements of Additional Information) for each Fund and agree that you will comply therewith. You agree that if an investor or potential investor places a request with you to receive a Statement of Additional Information, you will (i) provide such person with a Statement of Additional Information without charge and notify the Fund that you have done so, (ii) notify the Fund of the request so that the Fund can fulfill the request or (iii) tell such person to request a Statement of Additional Information by telephoning the Fund at the number set forth on the cover of the current Prospectus or Preliminary Prospectus. You also agree to keep an accurate record of your distribution (including dates, number of copies and persons to whom sent) of copies of any Preliminary Prospectus (and any Statement of Additional Information) and/or Prospectus (and any Statement of Additional Information) for each Fund (or any amendment or supplement to either) and, promptly upon request by VKAC, to bring all subsequent changes to such Preliminary Prospectus or Prospectus to the attention of anyone to whom such material shall have been distributed. You further agree to furnish to persons who receive a confirmation of sale of shares of any Fund a copy of the Prospectus (and not the Statement of Additional Information) for such Fund filed pursuant to Rule 497 under the Securities Act of 1933, as amended. 13. Unless otherwise indicated in a Fund's Prospectus, stock certificates for shares of Funds sold to you shall be issued only if specifically requested. 14. VKAC will have no liability to you, except for lack of good faith and for obligations expressly assumed by VKAC in this Agreement. 15. All communications to VKAC shall be sent to One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: Mutual Fund Department. Any notice to you shall be duly given if sent to you at the address specified by you below or such other address as you may designate to VKAC in writing. 16. Neither this Agreement nor the performance of the services hereunder shall be considered to create a joint venture or partnership between VKAC and you. 17. This Agreement shall be construed in accordance with the laws of the State of Illinois without reference to the choice-of-law principles thereof. 18. The Fund reserves the right in its discretion and VKAC reserves the right in its discretion, without notice, to suspend or withdraw the offering of any shares of a Fund entirely. VKAC 5 6 reserves the right, without notice, to amend, modify or cancel the Agreement. The Agreement may not be assigned by either party without prior written consent of the other party. 19. This Agreement may be terminated at any time by either party. TERMS AND CONDITIONS APPLICABLE ONLY TO OPEN-END FUNDS 20. Each of the Open-End Fund's is subject to an alternative distribution plan (the "Alternative Distribution Plan") as described in such Fund's then-current Prospectus pursuant to which the Open-End Fund may sell multiple classes of its shares with varying combinations of front-end service charges (each a "FESC"), distributions fees, service fees, contingent deferred sales charges (each a "CDSC"), exchange features, conversion rights, voting rights, expenses allocations and investment requirements. As used herein, classes of shares of a Fund subject to a FESC will be referred to as FESC Shares, and classes of shares of a Fund subject to a CDSC will be referred to as CDSC Shares. 21.(a) With respect to any shares of a class of FESC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share plus a FESC, expressed as a percentage of the applicable public offering price, as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. The dealer discount applicable to any sale of shares of a class of FESC Shares of an Open-End Fund shall be a percentage of the applicable public offering price for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. (b) With respect to any shares of a class of CDSC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. The dealer sales compensation payable by VKAC applicable to any sale of shares of a class of CDSC Shares of an Open-End Fund shall be the percentage of the applicable public offering price for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. 22. Should you wish to participate in the Distribution Plan with respect to a class of shares adopted by an Open-End Fund pursuant to Rule 12b-1 ("Rule 12b-1 Plan") under the Investment Company Act of 1940, as amended, or the Service Plan with respect to a class of shares, it is understood that you must be approved by the Board of Directors of such Open-End Fund and execute a Distribution Assistance Agreement. 6 7 23. With respect to the Open-End Funds, your acceptance of this Agreement constitutes a representation that you will adopt policies and procedures in the form of the policies and procedures attached hereto as Exhibit A with respect to when you may appropriately sell the various classes of shares of the Open-End Funds to investors and that you will sell such shares only in accordance therewith. 24.(a) You agree to purchase shares of an Open-End Fund only from VKAC or from your customers. If you purchase shares of an Open-End Fund from VKAC, you agree that all such purchases shall be made only: (i) to cover orders already received by you from your customers or (ii) for your own bona fide investment. If you purchase shares of an Open-End Fund from your customers, you agree to pay such customers not less than the applicable repurchase price for such shares as established by the then-current Prospectus for such Open-End Fund. VKAC in turn agrees that it will not purchase any shares from an Open-End Fund except for the purpose of covering purchase orders that it has already received. (b) With respect to shares of a class of CDSC Shares of an Open-End Fund purchased from your customers, you additionally agree to resell such shares only to VKAC as agent for the Fund at the repurchase price for such shares as established by the then-current Prospectus of such Open-End Fund. You acknowledge and understand that shares of a class of CDSC Shares of an Open-End Fund may be subject to a CDSC payable to VKAC as set forth in the Prospectus for such Open-End Fund in effect at the time of the original purchase of such shares from the Open-End Fund and that the repurchase price for such shares that will be paid by VKAC will reflect the imposition of any applicable CDSC. 25.(a) You shall sell shares of a class of shares of an Open-End Fund only: (i) to customers at the applicable public offering price or (ii) to VKAC as agent for the Open-End Fund at the repurchase price in the then-current Prospectus of such Open-End Fund. In such a sale to VKAC, you may act either as principal for your own account or as agent for your customer. If you act as principal for your own account in purchasing shares of a class of shares of an Open-End Fund for resale to VKAC, you agree to pay your customer not less than the price that you receive from VKAC. If you act as agent for your customer in selling shares of a class of shares of an Open-End Fund to VKAC, you agree not to charge your customer more than a fair commission for handling the transaction. You acknowledge and understand that CDSC Shares of an Open-End Fund may be subject to a CDSC payable to VKAC as set forth in the Prospectus of such Open-End Fund in effect at the time of the original purchase of such CDSC Shares and that the repurchase price that will be paid by VKAC for such CDSC Shares will reflect the imposition of any such CDSC. 26. If any shares of a class of FESC Shares of an Open-End Fund sold to or by you under the terms of this Agreement are 7 8 repurchased by the Fund or by VKAC as agent for the Fund or are tendered for redemption within seven business days after the date of VKAC's confirmation of the original purchase, it is agreed that you shall forfeit your right to any dealer discount received by you on such FESC Shares. VKAC will notify you of any such repurchase or redemption within ten business days from the date on which the repurchase or redemption order in proper form is delivered to VKAC or to the Fund, and you shall forthwith refund to VKAC the full dealer discount allowed to you on such sale. VKAC agrees, in the event of any such repurchase or redemption, to refund to the Fund its share of any discount allowed to VKAC and, upon receipt from you of the refund of the discount allowed to you, to pay such refund forthwith to the Fund. TERMS AND CONDITIONS APPLICABLE TO CLOSED END-FUNDS 27. No Closed-End Fund will issue fractional shares. 28. VKAC may, in its sole discretion, allocate shares of a Closed-End Fund among brokers and dealers participating in the Initial Offering Period or among brokers, dealers and banks in the Continuous Offering Period, as the case may be, on other than a pro rata basis, which may result in certain brokers, dealers and banks not being allocated the full amount of shares of such fund sold by them while certain other brokers, dealers and banks may receive their full allocation. 29. You agree that with respect to orders for shares of a Closed-End Fund, you will transmit such orders received during the Initial Offering Period to VKAC within the time period as specified in such Closed-End Fund's Prospectus (or in the time period as extended by VKAC in writing). You also agree to transmit any customer order received during the Continuous Offering Period to VKAC prior to the time that the public offering price for such Closed-End Fund is next determined after your receipt of such order as set forth in the Closed-End Fund's Prospectus. There is no assurance that each Closed-End Fund will engage in a continuous offering of shares. 30. On each order accepted by VKAC for shares of a Closed-End Fund, you will be entitled to receive a concession paid out of VKAC's own assets as set forth in the then-current Prospectus of such Closed-End Fund (exclusive of additional compensation that may be payable pursuant to sales programs, if any, that may be established from time to time as described in the Prospectus for such Closed-End Fund, which will be payable only as and to the extent the requirements of such programs are satisfied). In no event will any Closed-End Fund reimburse VKAC for any such sales concessions or other additional compensation or pay any such concession or other additional compensation or allowance directly to you. VKAC will specify for each Closed-End Fund a period after the date that the shares of such Closed-End Fund are listed on the New York Stock Exchange, the American Stock Exchange or another national securities market system (which period will end no later that the first dividend payment date 8 9 with respect to such Closed-End Fund) during which sales concessions and other additional compensation are subject to forfeiture as provided in the following sentence (the "Forfeiture Period"). During the Forfeiture Period for any Closed-End Fund, physical delivery of certificates representing shares will be required to transfer ownership of such shares. In the event that any shares of a Closed-End Fund sold through an order received from you in the Initial Offering Period or the Continuous Offering Period are resold in the open market or otherwise during the Forfeiture Period, VKAC reserves the right to require you to forfeit any sales concessions and other additional compensation with respect to such shares. In the event of a forfeiture, VKAC may withhold any forfeited sales concessions and other additional compensation that has not yet been paid or from other amounts yet to be paid to you (whether or not payable with respect to such shares) and you agree to repay to VKAC, promptly upon demand, any forfeited sales concessions and other compensation that has been paid. Determinations of the amounts to be paid to you or by you to VKAC shall be made by VKAC and shall be conclusive. 31. During the Initial Offering Period and any Continuous Offering Period for any Closed-End Fund, you agree to supply VKAC, not less frequently than once a week by Friday, 5:00 p.m. Eastern Time, during such Closed-End Fund's Initial Offering Period, a list setting forth by state and in the aggregate all indications of interest and, during any Continuous Offering Period, all shares sold by you of such Closed-End Fund during such week (or lesser period of time), and a list setting forth by name and location each registered representative making said sales and indicating the amount of all sales per Closed-End Fund to date. 32. You expressly acknowledge and understand that there is no Rule 12b-1 Plan for the Closed-End Funds. 33. You expressly acknowledge and understand that shares of the Closed-End Funds will not be repurchased by either the Closed-End Funds (other than through tender offers from time to time, if any) or by VKAC and that no secondary market for such shares is expected to develop until the shares have begun trading on a national exchange or national market system. You hereby covenant that, until notified by VKAC that the distribution of such shares has been completed or that the Forfeiture Period has ended, you (a) will not make a secondary market in any shares of such a Closed-End Fund, (b) will not purchase or hold shares of such Closed-End Fund in inventory for the purpose of resale in the open market or to your customers and (c) without VKAC's consent, will not repurchase shares of such Closed-End Fund in the open market or from your customers for any account in which you have a beneficial interest. 34. Unlike the other Closed-End Funds, the Continuous Offering period with respect to the Van Kampen Merritt Prime Rate Income Trust (the "Prime Rate Fund") may continue indefinitely. The offer to sell shares of the Prime Rate Fund is subject to further terms and conditions in addition to those set forth above as follows: 9 10 (a) You expressly acknowledge and understand that shares of the Prime Rate Fund will not be repurchased by either the Prime Rate Fund (other than through tender offers from time to time, if any) or VKAC, and that no secondary market for the shares of the Prime Rate Fund exists currently, or is expected to develop. You also expressly acknowledge and agree that, in the event your customer cancels their order for shares after confirmation, such shares may not be repurchased, remarketed or otherwise disposed of by or through VKAC. (b) You acknowledge and understand that, while the Board of Trustees of the Prime Rate Fund intends to consider tendering for all or a portion of the Prime Rate Fund's shares on a quarterly basis, there is no assurance the Prime Rate Fund will tender for shares at any time or, following such a tender offer, that shares so tendered will be repurchased by the Prime Rate Fund. You acknowledge and understand that an early withdrawal charge payable to VKAC will be imposed on most shares accepted for tender by the Prime Rate Fund which have been held for less than five years, as set forth in the Prime Rate Fund's Prospectus. ANY REPRESENTATION AS TO A TENDER OFFER BY THE PRIME RATE FUND, OTHER THAN THAT WHICH IS SET FORTH IN THE PRIME RATE FUND'S CURRENT PROSPECTUS IS EXPRESSLY PROHIBITED. Please accept the foregoing by signing this Dealer Agreement, keeping a copy for your files and returning the original to us. Accepted and Agreed to: (PRINT OR TYPE) Dated: By: Keith K. Furlong Its: Senior Vice President Broker-Dealer Name Broker-Dealer Taxpayer ID Number 10 11 Address City, State, Zip By: Signature Name Title Phone 11 12 EXHIBIT A Policies and Procedures with Respect to Sales under the Alternative Distribution Plan As certain Van Kampen American Capital open-end investment companies (the "Funds") offer multiple classes of shares subject to either front-end sales charges ("FESC Shares") or contingent deferred sales charges ("CDSC Shares"), it is important for an investor not only to choose the Fund that best suits his or her investment objectives, but also to choose the alternative distribution method that best suits his or her particular situation. To assist investors in these decisions, we (the selling firm) are instituting the following policy: 1. Any purchase order for $1 million or more must be for Class A Shares. 2. Any purchase order for $100,000 but less than $1 million is subject to approval by [appropriate selling firm supervisor], who must approve the purchase order ticket for the appropriate class of shares in light of the relevant facts and circumstances, including: (a) the specific purchase order dollar amount; (b) the length of time the investor expects to hold his shares; and (c) any other relevant circumstances, such as the availability of purchase price discounts under a Letter of Intent or a Quantity Discount. There are instances when one financing method may be more appropriate than the other. For example, investors who would qualify for a significant purchase price discount from the maximum sales charge on shares of a class of FESC Shares that has such purchase price discounts may determine that payment of such a reduced front-end sales charge is superior to electing to purchase shares of a class of CDSC Shares with no front-end service charge but subject to a higher aggregate distribution and service fee. On the other hand, an investor whose order would not qualify for such purchase price discounts and intends to remain invested until after the expiration of the applicable CDSC may wish to defer the sales charge and have all his funds 13 invested in Class B Shares initially. In addition, if such an investor anticipates that he or she will redeem such shares prior to the expiration of the CDSC period applicable to Class B Shares the investor may, depending on the amount of his purchase, wish to acquire Class C Shares. However, investors who intend to hold their shares for a significantly long time may not wish to continue to bear the ongoing distribution and service expenses of shares of Class C Shares, irrespective of the fact that a contingent deferred sales charge would eventually not apply to a redemption of such shares. [The appropriate selling firm supervisor] must ensure that all employees receiving investor inquiries about the purchase of shares from funds subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan advise the investor of the available alternative distribution methods offered by such funds and the impact of choosing one method over another. It may be appropriate for [the appropriate selling firm supervisor] to discuss the purchase with the investor. This policy is effective immediately with respect to any order for the purchase of shares from a fund subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan. Questions relating to this policy should be directed to [appropriate selling firm supervisor]. Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, Illinois 60181 2 3 4 5 6 7 5/95 VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. 8 EX-99.B6(C) 8 BROKER AGREEMENT 1 EXHIBIT 6(c) BROKER FULLY DISCLOSED CLEARING AGREEMENT WITH VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. REGARDING VAN KAMPEN AMERICAN CAPITAL OPEN-END AND CLOSED-END INVESTMENT COMPANIES Ladies and Gentlemen: As dealer for our own account, we offer to make available to you shares of any of the Van Kampen American Capital open-end investment companies (the "Open-End Funds" or, individually, an "Open-End Fund") and Van Kampen American Capital closed-end investment companies (the "Closed-End Funds" or, individually, a "Closed-End Fund") distributed by Van Kampen American Capital Distributors, Inc. ("VKAC") pursuant to the terms and conditions contained herein. Collectively, the Open-End Funds and Closed-End Funds sometimes are referred to herein as the "Funds" or, individually, as a "Fund". You are a broker-dealer that desires to make available shares of such Funds to your customers on a fully disclosed basis wherein VKAC would confirm transactions of your customers in a Fund directly to them. VKAC acts as the principal underwriter (as such term is defined in the Investment Company Act of 1940, as amended) for each Fund with respect to its offering of one or more classes of shares as described in each Fund's Prospectus. Pursuant to this Agreement, VKAC offers to make available to you shares of each Open-End Fund and each Closed-End Fund, prior to the Effective Date (as defined herein) of each Fund's Registration Statement (the "Initial Offering Period") and after the Effective Date of each Fund's Registration Statement (as defined herein) (the "Continuous Offering Period") (if any) as described in each respective Fund's Prospectus. As used herein unless otherwise indicated, the term "Prospectus" means the final prospectus and Statement of Additional Information included in the registration statement for the fund on the effective date and as from time to time thereafter amended or supplemented. As used herein unless otherwise indicated, the term "Preliminary Prospectus" means any preliminary prospectus and any preliminary Statement of Additional Information included at any time as a part of the registration statement for any Fund prior to the effective date and that is authorized by VKAC for use in connection with the offering of shares. 2 In consideration of the mutual obligations contained herein, the sufficiency of which is hereby acknowledged by you, the terms of the Agreement are as follows: GENERAL TERMS AND CONDITIONS 1. Your acceptance of this Agreement constitutes a representation that you are a securities broker-dealer registered with the Securities and Exchange Commission (the "SEC") and a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"). You agree to abide by the laws, rules and regulations of the SEC and NASD, including without limitation rules pertaining to the opening, approval, supervision and monitoring of customer accounts, the NASD's Interpretation with Respect to Free-Riding and Withholding and Sections 8, 24 and 36 of Article III of the NASD's Rules of Fair Practice. You and we agree to abide by all other Rules and Regulations of the NASD, including Section 26 of its Rules of Fair Practice. Your acceptance also constitutes a representation that you have been duly authorized by proper corporate or partnership action to enter into this Agreement and to perform your obligations hereunder. You will not accept any orders from any broker, dealer or financial institution who is purchasing from you with a view toward distribution unless you have obtained such person's or entity's written consent to be bound by the terms of this Agreement. 2. For the purposes of the Securities and Exchange Commission's Financial Responsibility Rules and the Securities Investor's Protection Act, your customers will be considered customers of VKAC and not of your firm. VKAC has been granted an exemption from the NASD rules of Fair Practice, Article III Section 45 requirements to send customer statements and thus will not due so. Customer statements showing account activity and balances will be mailed to the customer by the Funds each time a financial transaction occurs in their account and on a monthly basis. Nothing herein shall cause your firm's customers to be interpreted as customers of VKAC for any other purpose, or to negate the intent of any other section of this agreement, including, but not limited to, the delineation of responsibilities as set forth elsewhere in this agreement. 3. In transactions where you make available shares of the Funds to the public, you shall have no authority to act as agent for the Fund or for VKAC. 4. Each Fund has filed with the SEC and the securities commissions of one or more states a Registration Statement (the "Registration Statement") on the SEC form applicable to the respective Fund. The date on which the Registration Statement is declared effective by the SEC is referred to herein as the "Effective Date". Prior to the Effective Date of the Registration Statement with respect to a particular Fund, you expressly acknowledge and understand that with respect to such 2 3 Fund: (a) Shares of such Fund may not be sold, nor may offers to buy be accepted, (i) prior to the Effective Date of the Registration Statement or (ii) in any state in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such state. (b) The Fund's Preliminary Prospectus, together with any sales material distributed for use in connection with the offering of shares of such Fund, does not constitute an offer to sell or the solicitation of an offer to buy shares of such Fund and is subject to completion and modification by the Prospectus. (c) In the event that you transmit indications of interest to VKAC for accumulation prior to the Effective Date, upon your instruction VKAC will send confirmation of such indications of interest directly to your customers in writing, together with copies of the Preliminary Prospectus for the Fund, and send copies of the confirmations to you. Indications of interest with respect to shares of a class of a Fund's shares transmitted to VKAC prior to the Effective Date are subject to acceptance or rejection by VKAC in its sole discretion and are conditioned upon the occurrence of (i) the Effective Date and (ii) the registration or qualification of the respective class of shares in the respective state. (d) Indications of interest with respect to shares of a class of a Fund's shares not cancelled by you prior to or on the later of (i) the Effective Date and (ii) the registration or qualification of the respective class of shares in the respective state, and accepted by VKAC will be deemed by VKAC to be orders for Shares. (e) Upon your instruction, VKAC will send confirmations of orders accepted by VKAC (including indications of interest deemed orders) directly to your customers in writing, together with copies of the Prospectus for the Fund, and send copies of the confirmations to you. (f) Upon receipt of duplicate confirmations you will examine the same and promptly notify VKAC of any errors or discrepancies that you discover and will promptly bring to VKAC's attention any errors in such confirmations claimed by your customers. All confirmations to your customers will indicate that orders were placed on a fully disclosed basis. (g) All indications of interest and orders transmitted to VKAC are subject to the terms and conditions of the Fund's Prospectus and this Agreement and are subject to acceptance or rejection by VKAC in its sole discretion. 3 4 5. After the Effective Date, you will not make shares of a class of the Fund's shares available in any state where they are not qualified for sale under the "blue sky" laws and regulations of such state, except for states in which they are exempt from qualification. 6. In the event that you make shares of the Fund available outside the United States, you agree to comply with the applicable laws, rules and regulations of the foreign government having jurisdiction over such sales, including any regulations of the United States military authorities applicable to solicitations to military personnel. 7. Upon application to VKAC, VKAC will inform you as to the jurisdictions in which VKAC believes shares of a Fund have been qualified for sale under the respective securities or "blue sky" laws of such jurisdictions. VKAC understands and agrees that qualification of any shares of a Fund for sale in such jurisdictions shall be solely VKAC's responsibility and that you assume no responsibility or obligation with respect to such eligibility. You understand and agree that your compliance with the requirements of the securities or "blue sky" laws in each jurisdiction with respect to your right to make the shares available in such jurisdiction shall be solely your responsibility. 8. No person is authorized to make any representations concerning any class of shares of a Fund except those contained in the Fund's current Preliminary Prospectus or Prospectus, as the case may be. In purchasing shares from us you shall rely solely on the representations contained in such Prospectus. VKAC will furnish additional copies of a Fund's current Prospectus and sales literature issued by VKAC in reasonable quantities upon request. 9. You agree that you will distribute to the public only (a) the Preliminary Prospectus, the Prospectus and any amendment or supplement thereto and (b) sales literature or other documents expressly authorized for such distribution by VKAC. 10. Orders received from you will be accepted by VKAC only at the public offering price applicable to each order as specified in the then-current Fund Prospectus. The minimum dollar purchase of any shares of each Fund by any person shall be the applicable minimum dollar amount described in the then-current Fund Prospectus for that class of shares, and no order for less than such amount will be accepted hereunder. The procedures relating to the handling of orders shall be subject to instructions that VKAC shall communicate from time to time to you. All orders are subject to acceptance or rejection by VKAC in its sole discretion. Upon acceptance of an order, we shall confirm directly to the customer in writing upon your instruction and send a copy of the confirmation to you. In addition, we will send a Fund Prospectus with the confirmation. 4 5 You agree that upon receipt of duplicate confirmations you will examine the same and promptly notify VKAC of any errors or discrepancies that you discover and shall promptly bring to VKAC's attention any errors in such confirmations claimed by your customers. All confirmations to your customers will indicate that orders were placed on a fully disclosed basis. 11. Payment for Fund shares shall be made on or before the settlement date specified in the VKAC confirmation at the office of VKAC's clearing agent, by check payable to the order of the Fund which reserves VKAC's right to delay issuance of transfer of shares until such check has cleared. If such payment is not received by VKAC, VKAC reserves the right, without notice, forthwith either to cancel the trade at our option or as required by the provisions of Regulation T, and in either case, VKAC may hold you responsible for any loss suffered by the Fund. You agree that in transmitting investors' funds, you will comply with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended. 12. You shall not withhold placing orders with VKAC from your customers so as to profit yourself as a result of such withholding; e.g., by a change in the net asset value from that used in determining the public offering price to your customers. 13. VKAC will not accept from you any conditioned orders for shares, except at a definite, specified price. 14. You represent that you are familiar with Release No. 4968 under the Securities Act of 1933, as amended, and Rule 15c2-8 under the Securities Exchange Act of 1934, as amended, as it relates to the distribution of Preliminary Prospectuses (and not Statements of Additional Information) and Prospectuses (and not Statements of Additional Information) for each Fund and agree that you will comply therewith. You agree that if an investor or potential investor places a request with you to receive a Statement of Additional Information, you will (i) provide such person with a Statement of Additional Information without charge and notify the Fund that you have done so, (ii) notify the Fund of the request so that the Fund can fulfill the request or (iii) tell such person to request a Statement of Additional Information by telephoning the Fund at the number set forth on the cover of the current Prospectus or Preliminary Prospectus. You also agree to keep an accurate record of your distribution (including dates, number of copies and persons to whom sent) of copies of any Preliminary Prospectus (and any Statement of Additional Information) and/or Prospectus (and any Statement of Additional Information) for each Fund (or any amendment or supplement to either) and, promptly upon request by VKAC, to bring all subsequent changes to such Preliminary Prospectus or Prospectus to the attention of anyone to whom such material shall have been distributed. You further agree to furnish to persons who receive a confirmation of sale of shares of any Fund a copy of the Prospectus for such Fund filed pursuant to Rule 497 under the Securities Act of 1933, as amended. Upon your request, VKAC will furnish to such persons a copy of the Prospectus for such Fund filed pursuant to Rule 497 Under the Securities Act of 1993, as amended. 5 6 15. The names of your customers shall remain your sole property and shall not be used by VKAC for any purpose except for servicing and informational mailings in the normal course of business to Fund shareholders. 16. Unless otherwise indicated in a Fund's Prospectus, stock certificates for shares sold will be issued to your customers only if specifically requested. 17. VKAC will have no liability to you, except for lack of good faith and for obligations expressly assumed by VKAC in this Agreement. 18. All communications to VKAC shall be sent to One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: Mutual Fund Department. Any notice to you shall be duly given if sent to you at the address specified by you below or such other address as you may designate to VKAC in writing. 19. Neither this Agreement nor the performance of the services hereunder shall be considered to create a joint venture or partnership between VKAC and you. 20. This Agreement shall be construed in accordance with the laws of the State of Illinois without reference to the choice-of-law principles thereof. 21. The Fund reserves the right in its discretion and VKAC reserves the right in its discretion, without notice, to suspend or withdraw the offering of any shares of a Fund entirely. VKAC reserves the right, without notice, to amend, modify or cancel the Agreement. The Agreement may not be assigned by either party without prior written consent of the other party. 22. This Agreement may be terminated at any time by either party. TERMS AND CONDITIONS APPLICABLE TO OPEN-END FUNDS 23. Each of the Open-End Funds is subject to an alternative distribution plan (the "Alternative Distribution Plan") as described in such Fund's then-current Prospectus pursuant to which the Open-End Fund may sell multiple classes of its shares with varying combinations of front-end service charges (each a "FESC"), distributions fees, service fees, contingent deferred sales charges (each a "CDSC"), exchange features, conversion rights, voting rights, expenses allocations and investment 6 7 requirements. As used herein, classes of shares of a Fund subject to a FESC will be referred to as FESC Shares, and classes of shares of a Fund subject to a CDSC will be referred to as CDSC Shares. 24.(a) With respect to any shares of a class of FESC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share plus a FESC, expressed as a percentage of the applicable public offering price, as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. On each order for shares of a class of FESC Shares of an Open-End Fund accepted by us, you will be entitled to receive the applicable agency commission for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. (b) With respect to any shares of a class of CDSC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. You will remit payment of the aggregate public offering price to VKAC for the CDSC Shares sold, and on each order accepted by us, you will be entitled to receive the applicable selling compensation for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. 25. Should you wish to participate in the Distribution Plan with respect to a class of shares adopted by an Open-End Fund pursuant to Rule 12b-1 ("Rule 12b-1 Plan") under the Investment Company Act of 1940, as amended, or the Service Plan with respect to a class of shares, it is understood that you must be approved by the Board of Directors of such Open-End Fund and execute a Distribution Assistance Agreement. 26. With respect to the Open-End Funds, your acceptance of this Agreement constitutes a representation that you will adopt policies and procedures in the form of the policies and procedures attached hereto as Exhibit A with respect to when you may appropriately make available the various classes of shares of the Open-End Funds to investors and that you will make available such shares only in accordance therewith. 27. You agree to make shares of an Open-End Fund available to your customers only: (i) at the applicable public offering price, (ii) from VKAC and (iii) to cover orders already received by you from your customers. VKAC in turn agrees that it will not purchase any shares from an Open-End Fund except for the purpose of covering purchase orders that it has already received. 28.(a) If any shares of a class of FESC Shares of an Open-End Fund sold to your customers under the terms of this Agreement are repurchased by the Fund or by VKAC as agent for the Fund or 7 8 are tendered for redemption within seven business days after the date of VKAC's confirmation of the original purchase, it is agreed that you shall forfeit your right to any agency commission received by you on such FESC Shares. VKAC will notify you of any such repurchase or redemption within ten business days from the date on which the repurchase or redemption order in proper form is delivered to VKAC or to the Fund, and you shall forthwith refund to VKAC the full agency commission allowed to you on such sale. VKAC agrees, in the event of any such repurchase or redemption, to refund to the Fund its share of any discount allowed to VKAC and, upon receipt from you of the refund of the agency commission allowed to you, to pay such refund forthwith to the Fund. (b) If any shares of a class of CDSC Shares sold to your customers under the terms of this Agreement are repurchased by the Fund or by VKAC as agent for the Fund or are tendered for redemption within seven business days after the date of VKAC's confirmation of the original purchase, it is agreed that you shall forfeit your right to any sales compensation received by you on such CDSC Shares. We will notify you of any such repurchase or redemption within ten business days from the date on which the repurchase or redemption order in proper form is delivered to VKAC or to the Fund, and you shall forthwith refund to VKAC the full sales compensation paid to you. TERMS AND CONDITIONS APPLICABLE TO CLOSED END-FUNDS 29. No Closed-End Fund will issue fractional shares. 30. VKAC may, in its sole discretion, allocate shares of a Closed-End Fund among brokers, dealers and, if permitted by applicable laws, banks participating in the Initial Offering Period or among brokers, dealers and banks in the Continuous Offering Period, as the case may be, on other than a pro rata basis, which may result in certain brokers, dealers and banks not being allocated the full amount of shares of such Fund sold by them while certain other brokers, dealers and banks may receive their full allocation. 31. You agree that with respect to orders for shares of a Closed-End Fund, you will transmit such orders received during the Initial Offering Period to VKAC within the time period as specified in such Closed-End Fund's Prospectus (or in the time period as extended by VKAC in writing). You also agree to transmit any customer order received during the Continuous Offering Period to VKAC prior to the time that the public offering price for such Closed-End Fund is next determined after your receipt of such order, as set forth in the Closed-End Fund's Prospectus. There is no assurance that each Closed-End Fund will engage in a continuous offering of shares. 32. On each order accepted by VKAC for shares of a Closed-End Fund, you will be entitled to receive a concession paid out of 8 9 VKAC's own assets as set forth in the then-current Prospectus of such Closed-End Fund (exclusive of additional compensation that may be payable pursuant to sales programs, if any, that may be established from time to time as described in the Prospectus for such Closed-End Fund, which will be payable only as and to the extent the requirements of such programs are satisfied). In no event will any Closed-End Fund reimburse VKAC for any such sales concessions or other additional compensation or pay any such concession or other additional compensation or allowance directly to you. VKAC will specify for each Closed-End Fund a period after the date that the shares of such Closed-End Fund are listed on the New York Stock Exchange, the American Stock Exchange or another national securities market system (which period will end no later than the first dividend payment date with respect to such Closed-End Fund) during which sales concessions and other additional compensation are subject to forfeiture as provided in the following sentence (the "Forfeiture Period"). During the Forfeiture Period for any Closed-End Fund, physical delivery of certificates representing shares will be required to transfer ownership of such shares. In the event that any shares of a Closed-End Fund sold through an order received from you in the Initial Offering Period or the Continuous Offering Period are resold in the open market or otherwise during the Forfeiture Period, VKAC reserves the right to require you to forfeit any sales concessions and other additional compensation with respect to such shares. In the event of a forfeiture, VKAC may withhold any forfeited sales concessions and other additional compensation that has not yet been paid or from other amounts yet to be paid to you (whether or not payable with respect to such shares), and you agree to repay to VKAC, promptly upon demand, any forfeited sales concessions and other compensation that has been paid. Determinations of the amounts to be paid to you or by you to VKAC shall be made by VKAC and shall be conclusive. 33. During the Initial Offering Period and any Continuous Offering Period for any Closed-End Fund, you agree to supply VKAC, not less frequently than once a week by Friday, 5:00 p.m. Eastern Time, during such Closed-End Fund's Initial Offering Period, a list setting forth by state and in the aggregate all indications of interest and, during any Continuous Offering Period, all shares sold by you of such Closed-End Fund during such week (or lesser period of time) and a list setting forth by name and location each registered representative making said sales and indicating the amount of all sales per Closed-End Fund to date. 34. You expressly acknowledge and understand that there is no Rule 12b-1 Plan for the Closed-End Funds. 35. You expressly acknowledge and understand that shares of the Closed-End Funds will not be repurchased by either the Closed-End Funds (other than through tender offers from time to time, if any) or by VKAC and that no secondary market for such shares is expected to develop until the shares have begun trading on a national exchange or national market system. You hereby covenant that, until notified by VKAC that the distribution of such shares has been completed or that the Forfeiture Period has ended, you (a) will not make a secondary market in any shares of such a Closed-End Fund, (b) will not 9 10 purchase or hold shares of such Closed-End Fund in inventory for the purpose of resale in the open market or to your customers and, (c) without VKAC's consent, will not repurchase shares of such Closed-End Fund in the open market or from your customers for any account in which you have a beneficial interest. 36. Unlike the other Closed-End Funds, the Continuous Offering period with respect to the Van Kampen Merritt Prime Rate Income Trust (the "Prime Rate Fund") may continue indefinitely. The offer to make available to you shares of the Prime Rate Fund is subject to further terms and conditions in addition to those set out above, as follows: (a) You expressly acknowledge and understand that shares of the Prime Rate Fund will not be repurchased by either the Prime Rate Fund (other than through tender offers from time to time, if any) or VKAC and that no secondary market for the shares of the Prime Rate Fund exists currently or is expected to develop. You also expressly acknowledge and agree that, in the event your customer cancels their order for shares after confirmation, such shares may not be repurchased, remarketed or otherwise disposed of by or through VKAC. (b) You acknowledge and understand that, while the Board of Trustees of the Prime Rate Fund intends to consider tendering for all or a portion of the Prime Rate Fund's shares on a quarterly basis, there is no assurance the Prime Rate Fund will tender for shares at any time or, following such a tender offer, that shares so tendered will be repurchased by the Prime Rate Fund. You acknowledge and understand that an early withdrawal charge payable to VKAC will be imposed on most shares accepted for tender by the Prime Rate Fund that have been held for less than five years, as set forth in the Prime Rate Fund's Prospectus. ANY REPRESENTATION AS TO A TENDER OFFER BY THE PRIME RATE FUND, OTHER THAN THAT WHICH IS SET FORTH IN THE PRIME RATE FUND'S CURRENT PROSPECTUS, IS EXPRESSLY PROHIBITED. Please accept the foregoing by signing this Broker Fully Disclosed Clearing Agreement, keeping a copy for your files and returning the original to us. Accepted and Agreed to: (PRINT OR TYPE) Dated: By: Keith K. Furlong Its: Senior Vice President 10 11 Broker-Dealer Name Broker-Dealer Taxpayer ID Number Address City, State, Zip By: Signature Name Title Phone 11 12 EXHIBIT A Policies and Procedures with Respect to Sales under the Alternative Distribution Plan As certain Van Kampen American Capital open-end investment companies (the "Funds") offer multiple classes of shares subject to either front-end sales charges ("FESC Shares") or contingent deferred sales charges ("CDSC Shares"), it is important for an investor not only to choose the Fund that best suits his or her investment objectives, but also to choose the alternative distribution method that best suits his or her particular situation. To assist investors in these decisions, we (the selling firm) are instituting the following policy: 1. Any purchase order for $1 million or more must be for Class A Shares. 2. Any purchase order for $100,000 but less than $1 million is subject to approval by [appropriate selling firm supervisor], who must approve the purchase order ticket for the appropriate class of shares in light of the relevant facts and circumstances, including: (a) the specific purchase order dollar amount; (b) the length of time the investor expects to hold his shares; and (c) any other relevant circumstances, such as the availability of purchase price discounts under a Letter of Intent or a Quantity Discount. There are instances when one financing method may be more appropriate than the other. For example, investors who would qualify for a significant purchase price discount from the maximum sales charge on shares of a class of FESC Shares that has such purchase price discounts may determine that payment of such a reduced front-end sales charge is superior to electing to purchase shares of a class of CDSC Shares with no front-end service charge but subject to a higher aggregate distribution and service fee. On the other hand, an investor whose order would not qualify for such purchase price discounts and intends to remain invested until after the expiration of the applicable CDSC may wish to defer the sales charge and have all his funds invested in Class B Shares initially. In addition, if such an investor anticipates that he or she will redeem such shares prior to the expiration of the CDSC period applicable to Class B Shares the investor may, depending on the amount of his 13 purchase, wish to acquire Class C Shares. However, investors who intend to hold their shares for a significantly long time may not wish to continue to bear the ongoing distribution and service expenses of shares of Class C Shares, irrespective of the fact that a contingent deferred sales charge would eventually not apply to a redemption of such shares. [The appropriate selling firm supervisor] must ensure that all employees receiving investor inquiries about the purchase of shares from funds subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan advise the investor of the available alternative distribution methods offered by such funds and the impact of choosing one method over another. It may be appropriate for [the appropriate selling firm supervisor] to discuss the purchase with the investor. This policy is effective immediately with respect to any order for the purchase of shares from a fund subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan. Questions relating to this policy should be directed to [appropriate selling firm supervisor]. Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, Illinois 60181 2 3 4 5 6 7 5/94 VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. 8 EX-99.B6(D) 9 BANK AGREEMENT 1 EXHIBIT 6(d) BANK FULLY DISCLOSED CLEARING AGREEMENT WITH VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. REGARDING VAN KAMPEN AMERICAN CAPITAL OPEN-END AND CLOSED-END INVESTMENT COMPANIES Ladies and Gentlemen: As dealer for our own account, we offer to make available to you shares of any of the Van Kampen American Capital open-end investment companies (the "Open-End Funds" or, individually, an "Open-End Fund") and Van Kampen American Capital closed-end investment companies (the "Closed-End Funds" or, individually, a "Closed-End Fund") distributed by Van Kampen American Capital Distributors, Inc. ("VKAC") pursuant to the terms and conditions contained herein. Collectively, the Open-End Funds and Closed-End Funds sometimes are referred to herein as the "Funds" or, individually, as a "Fund". You are a bank that desires to make available shares of such Funds to your customers on a fully disclosed basis wherein VKAC would confirm transactions of your customers in a Fund directly to them. You agree not to make available shares of such Funds during any fixed price offering of such shares. VKAC acts as the principal underwriter (as such term is defined in the Investment Company Act of 1940, as amended) for each Fund with respect to its offering of one or more classes of shares as described in each Fund's Prospectus. Pursuant to this Agreement, VKAC offers to make available to you shares of each Open-End Fund and each Closed-End Fund prior to the Effective Date (as defined herein) of each Fund's Registration Statement (as defined herein) (the "Initial Offering Period"), to the extent permitted by applicable law, and after the Effective Date of each Fund's Registration Statement (the "Continuous Offering Period") (if any) as described in such Closed-End Fund's Prospectus. As used herein unless otherwise indicated, the term "Prospectus" means the final prospectus and Statement of Additional Information included in the Registration Statement for the Fund on the Effective Date and as from time to time thereafter amended or supplemented. As used herein unless otherwise indicated, the term "Preliminary Prospectus" means any preliminary prospectus and any Statement of Additional Information included at any time as a part of the Registration Statement for any Fund prior to the Effective Date and that is authorized by VKAC for use in connection with the offering of shares. 1 2 In consideration of the mutual obligations contained herein, the sufficiency of which is hereby acknowledged by you, the terms of the Agreement are as follows: GENERAL TERMS AND CONDITIONS 1. Your acceptance of this Agreement constitutes a representation that you are a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, as amended, and have been duly authorized to enter into this Agreement and perform your obligations hereunder. This Agreement as well as your authority to make shares available to your customers will automatically terminate if you shall cease to be a bank as defined above. You agree not to offer or sell shares of any Fund except through VKAC. You will not accept any orders from any broker, dealer or financial institution who is purchasing from you with a view toward distribution unless you have obtained such person's or entity's written consent to be bound by the terms of this Agreement. 2. For the purposes of the Securities and Exchange Commission's Financial Responsibility Rules and the Securities Investor's Protection Act, your customers will be considered customers of VKAC and not of your firm. VKAC has been granted an exemption from the NASD rules of Fair Practice, Article III Section 45 requirements to send customer statements and thus will not due so. Customer statements showing account activity and balances will be mailed to the customer by the Funds each time a financial transaction occurs in their account and on a monthly basis. Nothing herein shall cause your firm's customers to be interpreted as customers of VKAC for any other purpose, or to negate the intent of any other section of this agreement, including, but not limited to, the delineation of responsibilities as set forth elsewhere in this agreement. 3. In transactions where you make available shares of the Funds to the public, you shall have no authority to act as agent for the Fund or for VKAC. The customers in question are for all purposes your customers and not customers of VKAC. We will clear transactions for each of your customers only upon your authorization, it being understood in all cases that (a) you are acting as the agent for the customer; (b) the transactions are without recourse against you by the customer except to the extent that your failure to transmit orders in a timely fashion results in a loss to your customer; (c) as between you and the customer, the customer will have full beneficial ownership of the Fund shares; (d) each transaction is initiated solely upon the order of the customer; and (e) each transaction is for the account of the customer and not for your account. 4. Each Fund has filed with the Securities and Exchange Commission (the "SEC") and the securities commissions of one or more states a Registration Statement (the "Registration Statement") on the SEC form applicable to the respective Fund. 2 3 The date on which the Registration Statement is declared effective by the SEC is hereinafter referred to as the "Effective Date". Prior to the Effective Date of the Registration Statement with respect to a particular Fund, you expressly acknowledge and understand that with respect to such Fund: (a) Shares of such Fund may not be sold, nor may offers to buy be accepted, (i) prior to the Effective Date of the Registration Statement or (ii) in any state in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such state. (b) Except to the extent permitted by law, you will not solicit or transmit to VKAC any indications of interest to purchase shares during any fixed-price offering. (c) The Fund's Preliminary Prospectus, together with any sales material distributed for use in connection with the offering of shares of such Fund, does not constitute an offer to sell or the solicitation of an offer to buy shares of such Fund and is subject to completion and modification by the Prospectus. (d) In the event and to the extent permitted by applicable law you transmit indications of interest to VKAC for accumulation prior to the Effective Date, upon your instruction VKAC will send confirmation of such indications of interest directly to your customers in writing, together with copies of the Preliminary Prospectus for the Fund, and send copies of the confirmations to you. Indications of interest with respect to shares of a class of a Fund's shares transmitted to VKAC prior to the Effective Date are subject to acceptance or rejection by VKAC in its sole discretion and are conditioned upon the occurrence of (i) the Effective Date and (ii) the registration or qualification of the respective class of shares in the respective state. (e) Indications of interest with respect to shares of a class of a Fund's shares not canceled by you prior to or on the later of (i) the Effective Date and (ii) the registration or qualification of the respective class of shares in the respective state, and accepted by VKAC will be deemed by VKAC to be orders for Shares solely to the extent permitted by applicable law. (f) Upon your instruction, VKAC will send confirmations of orders accepted by VKAC (including indications of interest deemed orders) directly to your customers in writing, together with copies of the Prospectus for the Fund, and send copies of the confirmations to you. (g) Upon receipt of duplicate confirmations you will examine 3 4 the same and promptly notify VKAC of any errors or discrepancies that you discover and will promptly bring to VKAC's attention any errors in such confirmations claimed by your customers. All confirmations to your customers will indicate that orders were placed on a fully disclosed basis. (h) All indications of interest and orders transmitted to VKAC are subject to the terms and conditions of the Fund's Prospectus and this Agreement and are subject to acceptance or rejection by VKAC in its sole discretion. 5. After the Effective Date, you will not make shares of a class of the Fund's shares available in any state where they are not qualified for sale under the "blue sky" laws and regulations of such state, except for states in which they are exempt from qualification. 6. In the event that you make shares of the Fund available outside the United States, you agree to comply with the applicable laws, rules and regulations of the foreign government having jurisdiction over such sales, including any regulations of the United States military authorities applicable to solicitations to military personnel. 7. Upon application to VKAC, VKAC will inform you as to the jurisdictions in which VKAC believes shares of a Fund have been qualified for sale under the respective securities or "blue sky" laws of such jurisdictions. VKAC understands and agrees that qualification of any shares of a Fund for sale in such jurisdictions shall be solely VKAC's responsibility and that you assume no responsibility or obligation with respect to such eligibility. You understand and agree that your compliance with the requirements of the securities or "blue sky" laws in each jurisdiction with respect to your right to make the shares available in such jurisdiction shall be solely your responsibility. 8. No person is authorized to make any representations concerning any class of shares of a Fund except those contained in the Fund's current Preliminary Prospectus or Prospectus, as the case may be. In purchasing shares from us you shall rely solely on the representations contained in such Prospectus. VKAC will furnish additional copies of a Fund's current Prospectus and sales literature issued by VKAC in reasonable quantities upon request. 9. You agree that you will distribute to the public only (i) the Prospectus and any amendment or supplement thereto and (ii) sales literature or other documents expressly authorized for such distribution by VKAC. 10. Orders received from you will be accepted by VKAC only at the public offering price applicable to each order as specified in the then-current Fund Prospectus. The minimum dollar 4 5 purchase of any shares of each Fund by any person shall be the applicable minimum dollar amount described in the then-current Fund Prospectus for that class of shares, and no order for less than such amount will be accepted hereunder. The procedures relating to the handling of orders shall be subject to instructions that VKAC shall communicate from time to time to you. All orders are subject to acceptance or rejection by VKAC in its sole discretion. Upon acceptance of an order, we shall confirm directly to the customer in writing upon your instruction and send a copy of the confirmation to you. In addition, we will send a Fund Prospectus with the confirmation. You agree that upon receipt of duplicate confirmations you will examine the same and promptly notify VKAC of any errors or discrepancies that you discover and shall promptly bring to VKAC's attention any errors in such confirmations claimed by your customers. All confirmations to your customers will indicate that orders were placed on a fully disclosed basis. 11. Payment for Fund shares shall be made on or before the settlement date specified in the VKAC confirmation at the office of VKAC's clearing agent, by check payable to the order of the Fund which reserves VKAC's right to delay issuance or transfer of shares until such check has cleared. If such payment is not received by VKAC, VKAC reserves the right, without notice, forthwith either to cancel the trade at our option or as required by the provisions of Regulation T, and in either case, VKAC may hold you responsible for any loss suffered by the Fund. You agree that in transmitting investors' funds, you will comply with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended. 12. You shall not withhold placing orders with VKAC from your customers so as to profit yourself as a result of such withholding; e.g., by a change in the net asset value from that used in determining the public offering price to your customers. 13. VKAC will not accept from you any conditioned orders for shares, except at a definite, specified price. 14. You represent that you are familiar with Release No. 4968 under the Securities Act of 1933, as amended, and Rule 15c2-8 under the Securities Exchange Act of 1934, as amended, as it relates to the distribution of Preliminary Prospectuses (and not Statements of Additional Information) and Prospectuses (and not Statements of Additional Information) for each Fund and agree that you will comply therewith. You agree that if an investor or potential investor places a request with you to receive a Statement of Additional Information, you will (i) provide such person with a Statement of Additional Information without charge and notify the Fund that you have done so, (ii) notify the Fund of the request so that the Fund can fulfill the request or (iii) tell such person to request a Statement of Additional Information by telephoning the Fund at the number set forth on the cover of the current Prospectus or Preliminary Prospectus. You also agree to keep an accurate record of your distribution (including dates, number of copies and persons to whom sent) of copies of any Preliminary Prospectus (and any Statement of Additional Information) and/or Prospectus (and any Statement of 5 6 Additional Information) for each Fund (or any amendment or supplement to either) and, promptly upon request by VKAC, to bring all subsequent changes to such Preliminary Prospectus or Prospectus to the attention of anyone to whom such material shall have been distributed. You further agree to furnish to persons who receive a confirmation of sale of shares of any Fund a copy of the Prospectus for such Fund filed pursuant to Rule 497 under the Securities Act of 1933, as amended. Upon your request, VKAC will furnish to such persons a copy of the Prospectus for such Fund filed pursuant to Rule 497 Under the Securities Act of 1993, as amended. 15. The names of your customers shall remain your sole property and shall not be used by VKAC for any purpose except for servicing and informational mailings in the normal course of business to Fund shareholders. 16. Unless otherwise indicated in a Fund's Prospectus, stock certificates for shares sold will be issued to your customers only if specifically requested. 17. VKAC will have no liability to you, except for lack of good faith and for obligations expressly assumed by VKAC in this Agreement. 18. All communications to VKAC shall be sent to One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: Mutual Fund Department. Any notice to you shall be duly given if sent to you at the address specified by you below or such other address as you may designate to VKAC in writing. 19. Neither this Agreement nor the performance of the services hereunder shall be considered to create a joint venture or partnership between VKAC and you. 20. This Agreement shall be construed in accordance with the laws of the State of Illinois without reference to the choice-of-law principles thereof. 21. The Fund reserves the right in its discretion and VKAC reserves the right in its discretion, without notice, to suspend or withdraw the offering of any shares of a Fund entirely. VKAC reserves the right, without notice, to amend, modify or cancel the Agreement. The Agreement may not be assigned by either party without prior written consent of the other party. 22. This Agreement may be terminated at any time by either party. 6 7 TERMS AND CONDITIONS APPLICABLE TO OPEN-END FUNDS 23. Each of the Open-End Funds is subject to an alternative distribution plan (the "Alternative Distribution Plan") as described in such Fund's then-current Prospectus pursuant to which the Open-End Fund may sell multiple classes of its shares with varying combinations of front-end service charges (each a "FESC"), distributions fees, service fees, contingent deferred sales charges (each a "CDSC"), exchange features, conversion rights, voting rights, expenses allocations and investment requirements. As used herein, classes of shares of a Fund subject to a FESC will be referred to as FESC Shares, and classes of shares of a Fund subject to a CDSC will be referred to as CDSC Shares. 24. (a) With respect to any shares of a class of FESC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share plus a FESC, expressed as a percentage of the applicable public offering price, as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. On each order for shares of a class of FESC Shares of an Open-End Fund accepted by us, you will be entitled to receive the applicable agency commission for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. (b) With respect to any shares of a class of CDSC Shares of an Open-End Fund, the public offering price for such shares shall be the net asset value per share as determined and effective as of the time specified in the then-current Prospectus of such Open-End Fund. You will remit payment of the aggregate public offering price to VKAC for the CDSC Shares sold, and on each order accepted by us, you will be entitled to receive the applicable selling compensation for such shares as provided for in the then-current Prospectus of such Open-End Fund or, if not so provided, as provided to you from time to time in writing by VKAC. 25. Should you wish to participate in the Distribution Plan with respect to a class of shares adopted by an Open-End Fund pursuant to Rule 12b-1 ("Rule 12b-1 Plan") under the Investment Company Act of 1940, as amended, or the Service Plan with respect to a class of shares, it is understood that you must be approved by the Board of Directors of such Open-End Fund and execute an Administrative Service Agreement. 26. With respect to the Open-End Funds, your acceptance of this Agreement constitutes a representation that you will adopt policies and procedures in the form of the policies and procedures attached hereto as Exhibit A with respect to when you may appropriately make available the various classes of shares of the Open-End Funds to investors and that you will make available such shares only in accordance therewith. 7 8 27. You agree to make shares of an Open-End Fund available to your customers only: (i) at the applicable public offering price, (ii) from VKAC and (iii) to cover orders already received by you from your customers. VKAC in turn agrees that it will not purchase any shares from an Open-End Fund except for the purpose of covering purchase orders that it has already received. 28. (a) If any shares of a class of FESC Shares of an Open-End Fund sold to your customers under the terms of this Agreement are repurchased by the Fund or by VKAC as agent for the Fund or are tendered for redemption within seven business days after the date of VKAC's confirmation of the original purchase, it is agreed that you shall forfeit your right to any agency commission received by you on such FESC Shares. VKAC will notify you of any such repurchase or redemption within ten business days from the date on which the repurchase or redemption order in proper form is delivered to VKAC or to the Fund, and you shall forthwith refund to VKAC the full agency commission allowed to you on such sale. VKAC agrees, in the event of any such repurchase or redemption, to refund to the Fund its share of any discount allowed to VKAC and, upon receipt from you of the refund of the agency commission allowed to you, to pay such refund forthwith to the Fund. (b) If any shares of a class of CDSC Shares sold to your customers under the terms of this Agreement are repurchased by the Fund or by VKAC as agent for the Fund or are tendered for redemption within seven business days after the date of VKAC's confirmation of the original purchase, it is agreed that you shall forfeit your right to any sales compensation received by you on such CDSC Shares. We will notify you of any such repurchase or redemption within ten business days from the date on which the repurchase or redemption order in proper form is delivered to VKAC or to the Fund, and you shall forthwith refund to VKAC the full sales compensation paid to you. TERMS AND CONDITIONS APPLICABLE TO CLOSED END-FUNDS 29. No Closed-End Fund will issue fractional shares. 30. VKAC may, in its sole discretion, allocate shares of a Closed-End Fund among brokers, dealers and, to the extent permitted by applicable law, banks participating in the Initial Offering Period or among brokers, dealers and banks participating in the Continuous Offering Period, as the case may be, on other than a pro rata basis, which may result in certain brokers, dealers and banks not being allocated the full amount of shares of such Fund sold by them while certain other brokers, dealers and banks may receive their full allocation. 31. You agree that with respect to orders for shares of a 8 9 Closed-End Fund, you will transmit such orders received, to the extent permitted by applicable law, during the Initial Offering Period to VKAC within the time period as specified in such Closed-End Fund's Prospectus (or in the time period as extended by VKAC in writing). You also agree to transmit any customer order received during the Continuous Offering Period to VKAC prior to the time that the public offering price for such Closed-End Fund is next determined after your receipt of such order, as set forth in the Closed-End Fund's Prospectus. There is no assurance that each Closed-End Fund will engage in a continuous offering of shares. 32. On each order accepted by VKAC for shares of a Closed-End Fund, you will be entitled to receive a concession paid out of VKAC's own assets as set forth in the then-current Prospectus of such Closed-End Fund (exclusive of additional compensation that may be payable pursuant to sales programs, if any, that may be established from time to time as described in the Prospectus for such Closed-End Fund, which will be payable only as and to the extent the requirements of such programs are satisfied). In no event will any Closed-End Fund reimburse VKAC for any such sales concessions or other additional compensation or pay any such concession or other additional compensation or allowance directly to you. VKAC will specify for each Closed-End Fund a period after the date that the shares of such Closed-End Fund are listed on the New York Stock Exchange, the American Stock Exchange or another national securities market system (which period will end no later than the first dividend payment date with respect to such Closed-End Fund) during which sales concessions and other additional compensation are subject to forfeiture as provided in the following sentence (the "Forfeiture Period"). During the Forfeiture Period for any Closed-End Fund, physical delivery of certificates representing shares will be required to transfer ownership of such shares. In the event that any shares of a Closed-End Fund sold through an order received from you, to the extent permitted by applicable law, in the Initial Offering Period or the Continuous Offering Period are resold in the open market or otherwise during the Forfeiture Period, VKAC reserves the right to require you to forfeit any sales concessions and other additional compensation with respect to such shares. In the event of a forfeiture, VKAC may withhold any forfeited sales concessions and other additional compensation that has not yet been paid or from other amounts yet to be paid to you (whether or not payable with respect to such shares), and you agree to repay to VKAC, promptly upon demand, any forfeited sales concessions and other compensation that has been paid. Determinations of the amounts to be paid to you or by you to VKAC shall be made by VKAC and shall be conclusive. 33. During the Initial Offering Period or any Continuous Offering Period for any Closed-End Fund, you agree to supply VKAC, not less frequently than once a week by Friday, 5:00 p.m. Eastern Time, during such Closed-End Fund's Initial Offering Period, a list setting forth by state and in the aggregate all indications of interest and, during any Continuous Offering Period, all shares sold by you of such Closed-End Fund during such week (or lesser period of time) and a list setting forth by name and location each registered representative making said sales and indicating the amount of all sales per Closed-End Fund to date. 9 10 34. You expressly acknowledge and understand that there is no Rule 12b-1 Plan for the Closed-End Funds. 35. You expressly acknowledge and understand that shares of the Closed-End Funds will not be repurchased by either the Closed-End Funds (other than through tender offers from time to time, if any) or by VKAC and that no secondary market for such shares is expected to develop until the shares have begun trading on a national exchange or national market system. You hereby covenant that, until notified by VKAC that the distribution of such shares has been completed or that the Forfeiture Period has ended, you (a) will not make a secondary market in any shares of such a Closed-End Fund, (b) will not purchase or hold shares of such Closed-End Fund in inventory for the purpose of resale in the open market or to your customers and, (c) without VKAC's consent, will not repurchase shares of such Closed-End Fund in the open market or from your customers for any account in which you have a beneficial interest. 36. Unlike the other Closed-End Funds, the Continuous Offering period with respect to the Van Kampen Merritt Prime Rate Income Trust (the "Prime Rate Fund") may continue indefinitely. The offer to make available to you shares of the Prime Rate Fund is subject to further terms and conditions in addition to those set out above, as follows: (a) You expressly acknowledge and understand that shares of the Prime Rate Fund will not be repurchased by either the Prime Rate Fund (other than through tender offers from time to time, if any) or VKAC and that no secondary market for the shares of the Prime Rate Fund exists currently or is expected to develop. You also expressly acknowledge and agree that, in the event your customer cancels their order for shares after confirmation, such shares may not be repurchased, remarketed or otherwise disposed of by or through VKAC. (b) You acknowledge and understand that, while the Board of Trustees of the Prime Rate Fund intends to consider tendering for all or a portion of the Prime Rate Fund's shares on a quarterly basis, there is no assurance the Prime Rate Fund will tender for shares at any time or, following such a tender offer, that shares so tendered will be repurchased by the Prime Rate Fund. You acknowledge and understand that an early withdrawal charge payable to VKAC will be imposed on most shares accepted for tender by the Prime Rate Fund that have been held for less than five years, as set forth in the Prime Rate Fund's Prospectus. ANY REPRESENTATION AS TO A TENDER OFFER BY THE PRIME RATE FUND, OTHER THAN THAT WHICH IS SET FORTH IN THE PRIME RATE FUND'S CURRENT PROSPECTUS, IS EXPRESSLY PROHIBITED. Please accept the foregoing by signing this Bank Fully Disclosed Clearing Agreement, keeping a copy for your files and returning the original to us. 10 11 Accepted and Agreed to: (PRINT OR TYPE) Dated: By: Keith K. Furlong Its: Senior Vice President Bank Name Bank Taxpayer ID Number Address 12 EXHIBIT A Policies and Procedures with Respect to Sales under the Alternative Distribution Plan As certain Van Kampen American Capital open-end investment companies (the "Funds") offer multiple classes of shares subject to either front-end sales charges ("FESC Shares") or contingent deferred sales charges ("CDSC Shares"), it is important for an investor not only to choose the Fund that best suits his or her investment objectives, but also to choose the alternative distribution method that best suits his or her particular situation. To assist investors in these decisions, we (the selling firm) are instituting the following policy: 1. Any purchase order for $1 million or more must be for class A Shares 2. Any purchase order for $100,000 but less than $1 million is subject to approval by [appropriate selling firm supervisor], who must approve the purchase order ticket for the appropriate class of shares in light of the relevant facts and circumstances, including: (a) the specific purchase order dollar amount; (b) the length of time the investor expects to hold his shares; and (c) any other relevant circumstances, such as the availability of purchase price discounts under a Letter of Intent or a Quantity Discount. There are instances when one financing method may be more appropriate than the other. For example, investors who would qualify for a significant purchase price discount from the maximum sales charge on shares of a class of FESC Shares that has such purchase price discounts may determine that payment of such a reduced front-end sales charge is superior to electing to purchase shares of a class of CDSC Shares with no front-end service charge but subject to a higher aggregate distribution and service fee. On the other hand, an investor whose order would not qualify for such purchase price discounts and intends to remain invested until after the expiration of the applicable CDSC may wish to defer the sales charge and have all his funds invested in Class B Shares initially. In addition, if such an investor anticipates that he or she will redeem such shares prior to the expiration of the CDSC period applicable to Class B Shares the investor may, depending on the amount of his 13 purchase, wish to acquire Class C Shares. However, investors who intend to hold their shares for a significantly long time may not wish to continue to bear the ongoing distribution and service expenses of shares of Class C Shares, irrespective of the fact that a contingent deferred sales charge would eventually not apply to a redemption of such shares. [The appropriate selling firm supervisor] must ensure that all employees receiving investor inquiries about the purchase of shares from funds subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan advise the investor of the available alternative distribution methods offered by such funds and the impact of choosing one method over another. It may be appropriate for [the appropriate selling firm supervisor] to discuss the purchase with the investor. This policy is effective immediately with respect to any order for the purchase of shares from a fund subject to Van Kampen American Capital Distributors, Inc.'s alternative distribution plan. Questions relating to this policy should be directed to [appropriate selling firm supervisor]. Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, Illinois 60181 2 3 4 5 6 7 5/95 City, State, Zip Phone Signature 14 Name Title VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. 8 EX-99.B8(B) 10 TRANSFER AGENCY AND SERVICE AGREEMENT 1 EXHIBIT 8(b) 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 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 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 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 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 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 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 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 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 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 11 SCHEDULE "A" VAN KAMPEN AMERICAN CAPITAL OPEN END FUNDS
Type [Corporation "C"/ Fund Name State of Business Trust "T"/ (including Portfolios) Organization Partnership "P"] =============================================================================================================== [TO BE PROVIDED]
11 12 PRICING SCHEDULE PRICE PER ACCOUNT PLUS OUT-OF-POCKET ______________, 1995 [TO BE PROVIDED] 12 EX-99.B9(A) 11 FUND ACCOUNTING AGREEMENT 1 EXHIBIT 9(a) FORM OF FUND ACCOUNTING AGREEMENT THIS AGREEMENT, dated _________, 199__, by and between the parties set forth in Schedule A hereto (designated collectively hereafter as the "Funds") and VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP., a Delaware corporation ("Advisory Corp."). W I T N E S S E T H: WHEREAS, each of the Funds is registered as a management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, Advisory Corp. has the capability of providing certain accounting services to the Funds; and WHEREAS, each desires to utilized Advisory Corp. in the provision of such accounting services; and WHEREAS, Advisory Corp. intends to maintain its staff in order to accommodate the provision of all such services. NOW, THEREFORE, in consideration of the premises and the mutual covenants spelled out herein, it is agreed between the parties hereto as follows: 1. Appointment of Advisory Corp.. As agent, Advisory Corp. shall provide each of the Funds the accounting services ("Accounting Services") as set forth in Paragraph 2 of this Agreement. Advisory Corp. accepts such appointment and agrees to furnish the Accounting Services in return for the compensation provided in Paragraph 3 of this Agreement. 1 2 2. Accounting Services to be Provided. Advisory Corp. will provide to the Funds the following accounting related services, including without limitation, accurate maintenance of the specific Fund's books and records such as are within the scope of control of Advisory Corp. and are required by the applicable securities statutes and regulations, preparation of each Fund's financial reports and other accounting and tax related notice information to shareholders, the assimilation and interpretation of accounting data for meaningful management review. Advisory Corp. shall hire persons (collectively the "Accounting Service Group") as needed to provide such Accounting Services and in such numbers as the parties to this Agreement may agree from time to time. 3. Expenses and Reimbursements. The Accounting Service expenses (the "Accounting Service Expenses") for which Advisory Corp. may be reimbursed are salary and salary related benefits, including but not limited to bonuses, group insurances and other regular wages ("Salaries") paid to the personnel of the Accounting Service Group as discussed from time to time with the Board of Trustees of each of the Funds. 2 3 The Accounting Services Expenses will be paid by Advisory Corp. and reimbursed by the Funds. Advisory Corp. will tender to each Fund a monthly invoice as of the last business day of each month which shall certify the total support service expenses expended. Except as provided herein, Advisory Corp. will receive no other compensation in connection with Accounting Services rendered in accordance with this Agreement, and Advisory Corp. will be responsible for all other expenses relating to the providing of Accounting Services. 4. Payment for Accounting Service Expenses Among the Funds. As to one quarter (25%) of the Accounting Service Expenses incurred under the Agreement, the expense shall be allocated between all Funds based on the number of classes of shares of beneficial interest that each respective Fund has issued. 5. Maintenance of Records. All records maintained by Advisory Corp. in connection with the performance of its duties under this agreement will remain the property of each respective Fund and will be preserved by Advisory Corp. for the periods prescribed in Section 31 of the 1940 Act and the rules thereunder or such other applicable rules that may be adopted from time to time under the act. In the event of termination of the Agreement, such records will be promptly delivered to the respective Funds. Such records may be inspected by the respective Funds at reasonable times. 6. Liability of Advisory Corp. Advisory Corp. shall not be liable to any Fund for any action taken or thing done by it or its agents or contractors on behalf of the fund in carrying out the terms and provisions of the Agreement if done in good faith and without negligence or misconduct on the part of Advisory Corp., its agents or contractors. 7. Indemnification By Funds. Each Fund will indemnify and hold Advisory Corp. harmless from all lost, cost, damage and expense, including reasonable expenses for legal counsel, incurred by Advisory Corp. resulting from: (a) any claim, demand, action or suit in connection with Advisory Corp.'s acceptance of this Agreement; (b) any action or omission by advisory Corp. in the performance of its duties hereunder; (c) Advisory Corp.'s acting upon instructions believed by it to have been executed by a duly authorized officer of the Fund; or (d) Advisory Corp.'s acting upon information provided by the Fund in form and under policies agreed to by Advisory Corp. and the Fund. Advisory Corp. shall not be entitled to such indemnification in respect of actions or omissions constituting negligence or willful misconduct of Advisory Corp. or its agents or contractors. Prior to confessing any claim against it which may be subject to this indemnification, Advisory Corp. shall give the Fund reasonable opportunity to defend against said claim in its own name or in the name of Advisory Corp. 8. Indemnification By Advisory Corp. Advisory Corp. will indemnify and hold harmless each Fund from all loss, cost, damage and expense, including reasonable expenses for legal 3 4 counsel, incurred by the Fund resulting from any claim, demand, action or suit arising out of Advisory Corp.'s failure to comply with the terms of this Agreement or which arises out of the negligence or willful misconduct of Advisory Corp. or its agents or contractors; provided that such negligence or misconduct is not attributable to the Funds, their agents or contractors. Prior to confessing any claim against it which may be subject to this indemnification, the Fund shall give Advisory Corp. reasonable opportunity to defend against said claim in its own name or in the name of such Fund. 9. Further Assurances. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 10. Dual Interests. It is understood that some person or persons may be directors, trustees, officers or shareholders of both the Funds and Advisory Corp. (including Advisory Corp.'s affiliates), and that the existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided by a specific provision of applicable law. 4 5 11. Execution, Amendment and Termination. The term of this Agreement shall begin as of the date first above written, and unless sooner terminated as herein provided, this Agreement shall remain in effect through _______, 199___, and thereafter from year to year, if such continuation is specifically approved at least annually by the Board of Trustees of each Fund, including a majority of the independent Trustees of each Fund. This Agreement may be modified or amended from time to time by mutual agreement between the parties hereto and may be terminated after _______, 199___, by at least sixty (60) days' written notice given by one party to the others. Upon termination hereof, each Fund shall pay to Advisory Corp. such compensation as may be due as of the date of such termination and shall likewise reimburse Advisory Corp. for its costs, expenses and disbursements payable under this Agreement to such date. This Agreement may be amended in the future to include as additional parties to the Agreement other investment companies for with Advisory Corp., any subsidiary or affiliate serves as investment advisor or distributor if such amendment is approved by the President of each Fund. 12. Assignment. Any interest of Advisory Corp. under this Agreement shall not be assigned or transferred, either voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of the Funds. This agreement shall automatically and immediately terminate in the event of its assignment without the prior written consent of the Funds. 13. Notice. Any notice under this Agreement shall be in writing, addressed and delivered or sent by registered or certified mail, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other parties, it is agreed that for this purpose the address of each Fund is One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: President and that of Advisory Corp. for this purpose is One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: President. 14. Personal Liability. As provided for in Article 8, Section 8.1 of the Agreement and Declaration of Trust of the various Funds, under which the Funds are organized as unincorporated trusts, the shareholders, trustees, officers, employees and other agents of the Fund shall not personally be found by or liable for the matters set forth hereto, nor shall resort be had to their private property for the satisfaction of any obligation or claim hereunder. 15. Interpretive Provisions. In connection with the operation of this Agreement, Advisory Corp. and the Funds may agree from time to time on such provisions interpretative of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. 16. State Law. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Illinois. 5 6 17. Captions. The captions in this Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. 6 7 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written. ALL OF THE PARTIES SET FORTH IN SCHEDULE A By:__________________________________________________ Dennis J. McDonnell, President VAN KAMPEN AMERICAN CAPITAL INVESTMENT ADVISORY CORP. By:__________________________________________________ Dennis J. McDonnell, President 7 EX-99.B9(B) 12 LEGAL SERVICES AGREEMENT 1 EXHIBIT 9(b) LEGAL SERVICES AGREEMENT THIS AGREEMENT, dated as of January 1, 1995, by and between the parties hereto (designated collectively hereafter as the "Funds") and VAN KAMPEN AMERICAN CAPITAL, INC., (formerly Van Kampen Merritt Holdings Corp., a Delaware corporation ("Van Kampen"). W I T N E S S E T H: WHEREAS, each of the Funds is registered as a management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, Van Kampen has the capability of providing certain legal services to the Funds; and WHEREAS, each Fund desires to utilize Van Kampen in the provision of such legal services; and WHEREAS, Van Kampen intends to increase its staff in order to accommodate the provision of all such services. NOW, THEREFORE, in consideration of the premises and the mutual covenants spelled out herein, it is agreed between the parties hereto as follows: 1. Appointment of Van Kampen. As agent, Van Kampen shall provide each of the Funds the legal services (the "Legal Services") as set forth in Paragraph 2 of this Agreement. Van Kampen accepts such appointments and agrees to furnish the Legal Services in return for the compensation provided in Paragraph 3 of this Agreement. 2. Legal Services to be Provided. Van Kampen will provide to the Funds the following legal services, including without limitation: accurate maintenance of the Funds' Corporate Minute books and records, preparation and oversight of each Fund's regulatory reports and other information provided to shareholders as well as responding to day-to-day legal issues on behalf of the Funds. Van Kampen shall hire persons (collectively the "Legal Services Group") as needed to provide such Legal Services and in such numbers as may be agreed from time to time. 1 2 3. Expenses and Reimbursement. The Legal Services expenses (the "Legal Services Expenses") for which Van Kampen may be reimbursed are salary and salary related benefits, including but not limited to bonuses, group insurance and other regular wages paid to the personnel of the Legal Services Group, as well as overhead and expenses related to office space and necessary equipment. The Legal Services Expenses will be paid by Van Kampen and reimbursed by the Funds. Van Kampen will tender to each Fund a monthly invoice as of the last business day of each month which shall certify the total Legal Service Expenses expended. Except as provided herein, Van Kampen will receive no other compensation in connection with Legal Services rendered in accordance with this Agreement, and Van Kampen will be responsible for all other expenses relating to the providing of Legal Services. 4. Payment for Legal Services Expense Among the Funds. One half (50%) of the Legal Services Expenses incurred under the Agreement shall be attributable equally to each respective Fund and all other funds to whom Van Kampen provides Legal Services, including all other Funds for which Van Kampen serves as investment adviser and distributor and the Govett Funds (the Non-Participating Funds"). Van Kampen shall assume the costs of Legal Services for the Non-Participating Funds for which reimbursement is not received. The remaining one half (50%) of the Legal Services Expenses shall be in allocated (a) in the event services are attributable to specific funds (including the Non-Participating Funds) based on such specific time allocations; and (b) in the event services are attributable only to types of funds (i.e. closed-end and open-end funds), the relative amount of time spent on each type of fund and then further allocated between funds of that type on the basis of relative net assets at the end of the period. 5. Maintenance of Records. All records maintained by Van Kampen in connection with the performance of its duties under this Agreement will remain the property of each respective Fund and will be preserved by Van Kampen for the periods prescribed in Section 31 of the 1940 Act and the rules thereunder or such other applicable rules that may be adopted from time to time under the Act. In the event of termination of the Agreement, such records will be promptly delivered to the respective Funds. Such records may be inspected by the respective Funds at reasonable times. 6. Liability of Van Kampen. Van Kampen shall not be liable to any Fund for any action taken or thing done by it or its agents or contractors on behalf of the Fund in carrying out the terms and provisions of the Agreement if done in good faith and without negligence or misconduct on the part of Van Kampen, its agents or contractors. 7. Indemnification By Funds. Each Fund will indemnify and hold Van Kampen harmless from all loss, cost, damage and expense, including reasonable expenses for legal counsel, incurred by Van 2 3 Kampen resulting from (a) any claim, demand, action or suit in connection with Van Kampen's acceptance of this Agreement; (b) an action or omission by Van Kampen in the performance of its duties hereunder; (c) Van Kampen's acting upon instructions believed by it to have been executed by a duly authorized office of the Fund; or (d) Van Kampen's acting upon information provided by the Fund in form and under policies agreed to by Van Kampen and the Fund. Van Kampen shall not be entitled to such indemnification in respect of action or omissions constituting negligence or willful misconduct of Van Kampen or its agents or contractors. Prior to confessing any claim against it which may be subject to this indemnification, Van Kampen shall give the Fund reasonable opportunity to defend against said claim on its own name or in the name of Van Kampen. 8. Indemnification By Van Kampen. Van Kampen will indemnify and hold harmless each Fund from all loss, cost, damage and expense, including reasonable expenses for legal counsel, incurred by the Fund resulting from any claim, demand, action or suit arising out of Van Kampen's failure to comply with the terms of this Agreement or which arises out of the negligence or willful misconduct of Van Kampen or its agents or contractors; provided, that such negligence or misconduct is not attributable to the Funds, their agents or contractors. Prior to confessing any claim against it which may be subject to this indemnification, the Fund shall give Van Kampen reasonable opportunity to defend against said claim in its own name or in the name of such Fund. 9. Further Assurances. Each party agrees to perform such further acts and execute such further documents as necessary to effectuate the purposes hereof. 10. Dual Interests. It is understood that some person or persons may be directors, trustees, officers, or shareholders of both the Funds and Van Kampen (including Van Kampen's affiliates), and that the existence of any such dual interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided by a specific provision of applicable law. 11. Execution, Amendment and Termination. The term of this Agreement shall begin as of the date first above written, and unless sooner terminated as herein provided, this Agreement shall remain in effect through May 31, 1996, and thereafter from year to year if such continuation is specifically approved at least annually by the Board of Trustees of each Fund, including a majority of the independent Trustees of each Fund. The Agreement may be modified or amended from time to time by mutual agreement between the and shall likewise reimburse Van Kampen for its costs, expenses and disbursements payable under this Agreement to such date. This Agreement may be amended in the future to include as additional parties to the Agreement other investment companies for which Van Kampen, any subsidiary or affiliate serves as investment advisor or distributor. 12. Assignment. Any interest of Van Kampen under this Agreement 3 4 shall not be assigned or transferred, either voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of the Fund. This Agreement shall automatically and immediately terminate in the event of its assignment without the prior written consent of the Fund. 13. Notice. Any notice under this agreement shall be in writing, addressed and delivered or sent by registered or certified mail, postage prepaid, to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other parties, it is agreed that for this purpose the address of each Fund is One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: President and the address of Van Kampen. for this purpose is One Parkview Plaza, Oakbrook Terrace, Illinois 60181, Attention: General Counsel. 14. Personal Liability. As provided for in the Declaration of Trust of the various Funds, under which the Funds are organized as unincorporated trust under the laws of the State of Delaware and Pennsylvania, as the case may be, the shareholders, trustees, officers, employees and other agents of the Fund shall not personally be found by or liable for the matters set forth hereunder, nor shall resort be had to their private property for the satisfaction of any obligation or claim hereunder. 15. Interpretative Provisions. In connection with the operation of this agreement, Van Kampen and the Funds may agree from time to time on such provisions interpretative of or in addition to the provisions of this Agreement as may in their opinion be consistent with the general tenor of this Agreement. 16. State Law. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Illinois. 17. Captions. The captions in the Agreement are included for convenience of reference only and in no way define or limit any of the provisions hereof or otherwise affect their construction effect. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written. 4 EX-99.B10(C) 13 OPINION OF COUNSEL 1 EXHIBIT 10(c) July 31, 1995 Van Kampen American Capital Money Market Trust One Parkview Plaza Oakbrook Terrace, Illinois 60181 Re: Van Kampen American Capital Money Market Trust -- Registration Statement on Form N-1A (File Nos. 2-78401 and 811-3514) Ladies and Gentlemen: We have acted as counsel to Van Kampen American Capital Money Market Fund (the "Fund"), a series of Van Kampen American Capital Money Market Trust (the "Trust"), a voluntary association with transferable shares formed and existing under and by virtue of the laws of the State of Delaware, in connection with the preparation of Post-Effective Amendment No. 20 to the Trust's Registration Statement on Form N-1A (as so amended, the "Registration Statement") to be filed under the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended (the "1940 Act") with the Securities and Exchange Commission (the "Commission") on August 1, 1995. The Registration Statement relates to the registration under the 1933 Act and 1940 Act of an indefinite number of each of Class A Shares of beneficial interest, $.01 par value per share, and Class B Shares of beneficial interest, $.01 par value per share, of the Fund (collectively, the "Shares"). The Trust has stated in Post-Effective Amendment No. 20 to the Registration Statement that it is thereby adopting the Registration Statement of Van Kampen Merritt Money Market Trust, a Massachusetts business trust (the "Old Trust"), reorganized into the Trust as of July 31, 1995. 2 Van Kampen American Capital Money Market Trust July 31, 1995 Page 2 The Shares will be sold pursuant to a distribution and service agreement to be entered into among the Trust, on behalf of the Fund, and Van Kampen American Capital Distributors, Inc. (the "Distribution Agreement"). The Old Trust is a party to an "Order Pursuant to Section 6(c) of the Investment Company Act for an Exemption from the Provisions of Sections 2(a)(32), 2(a)(35), 18(f), 18(g), 18(i), 22(c) and 22(d) of such Act and Rule 22c-1 thereunder" (the "Exemptive Order"), issued by the Commission on July 28, 1993, allowing registered investment companies party thereto to issue an unlimited number of classes of securities (including the Class A Shares and Class B Shares) with varying combinations of sales charges, distribution fees and service fees, the application for which Exemptive Order requested that such order apply to entities organized for the purpose of changing the state of domicile of the original parties to such order. This opinion is delivered in accordance with the requirements of Item 24(b)(10) of Form N-1A under the 1933 Act and the 1940 Act. In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the Agreement and Declaration of Trust and By-Laws of the Trust, each as amended to date (the "Declaration of Trust" and "By-Laws", respectively), (iii) the designation of series with respect to the Fund, (iv) copies of the resolutions adopted by the Board of Trustees of the Trust relating to the authorization, issuance and sale of the Shares, the filing of the Registration Statement and any amendments or supplements thereto and related matters, (v) the form of Distribution Agreement, which is included as an exhibit to the Registration Statement, (vi) the Exemptive Order and (vii) such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submited to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or 3 Van Kampen American Capital Money Market Trust July 31, 1995 Page 3 photostatic copies and the authenticity of the originals of such copies. We have also assumed that the Distribution Agreement, when executed and delivered by the parties thereto, will be in the form reviewed by us in connection with this opinion and that the Fund will be entitled to rely on the Exemptive Order as if it were a party thereto. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Trust and others. Members of our firm are admitted to the practice of law in the State of Delaware, and we express no opinion as to the laws of any other jurisdiction. Based upon and subject to the foregoing, we are of the opinion that when (i) the Registration Statement (and such other Post-Effective Amendments, if any, to the Registration Statement relating to the public offering of the Shares) shall have become effective under the 1933 Act and shall be deemed to be the Registration Statement of the Trust pursuant to the rules and regulations of the Commission under the 1933 Act, (ii) the Distribution Agreement is duly executed and delivered by the Trust and the other respective parties thereto and (iii) certificates representing the Shares are duly executed, countersigned, registered and duly delivered and paid for in accordance with the Distribution Agreement, the Shares will be validly issued, fully paid and nonassessable. 4 Van Kampen American Capital Money Market Trust July 31, 1995 Page 4 We hereby consent to the filing of this opinion with the Commission as Exhibit 10(c) to the Registration Statement. We also consent to the reference to our firm under the heading "Legal Counsel" in the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the 1933 Act or the rules and regulations of the Commission. Very truly yours, /s/ Skadden, Arps, Slate, Meagher & Flom EX-99.B11 14 CONSENT OF AUDITORS 1 EXHIBIT 11 CONSENT OF INDEPENDENT AUDITORS The Board of Trustees and Shareholders Van Kampen American Capital Money Market Fund: We consent to the use of our report included in the Statement of Additional Information which is incorporated by reference into the Prospectus and to the reference to our Firm under the headings "Financial Highlights" in the Prospectus and "Custodian and Independent Auditors" in the Statement of Additional Information. KPMG Peat Marwick LLP Chicago, Illinois July 26, 1995 EX-99.B15(A) 15 PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1 1 EXHIBIT 15(a) FORM OF PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1 VAN KAMPEN AMERICAN CAPITAL FUND The plan set forth below (the "Distribution Plan") is the written plan contemplated by Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended (the "1940 Act"), for the VAN KAMPEN AMERICAN CAPITAL FUND (the "Fund"), a Series of the Van Kampen AMERICAN CAPITAL Trust (the "Trust"). This Distribution Plan describes the material terms and conditions under which assets of the Fund may be used in connection with financing distribution related activities with respect to each of its classes of shares of beneficial interest (the "Shares"), each of which is offered and sold subject to a different combination of front-end sales charges, distribution fees, service fees and contingent deferred sales charges.1 Classes of shares, if any, subject to a front-end sales charge and a distribution and/or service fee are referred to herein as "Front-End Classes" and the Shares of such classes are referred to herein as "Front-End Shares." Classes of shares, if any, subject to a contingent-deferred sales charge and a distribution and/or a service fee are referred to herein as "CDSC Classes" and Shares of such classes are referred to herein as "CDSC Shares." Classes of shares, if any, subject to a front-end sales charge, a contingent-deferred sales charge and a distribution and/or service fee are referred to herein as "Combination Classes" and Shares of such class are referred to herein as "Combination Shares." The Fund has adopted a service plan (the "Service Plan") pursuant to which the Fund is authorized to expend on an annual basis a portion of its average net assets attributable to any or each class of Shares in connection with the provision by the principal underwriter (within the meaning of the 1940 Act) of the Shares and by brokers, dealers and other financial intermediaries (collectively, "Financial Intermediaries") of personal services to holders of Shares and/or the maintenance of shareholder accounts. The Fund also has entered into a distribution and services agreement (the "Distribution and Services Agreement") with Van Kampen American Capital Distributors, Inc. (the "Distributor"), pursuant to which the Distributor acts as the principal underwriter with respect to each class of Shares and provides services to the Fund and acts as agent on behalf of the Fund in connection with the implementation of the Service Plan. 2 The Distributor may enter into selling agreements (the "Selling Agreements") with Financial Intermediaries in order to implement the Distribution and Services Agreement, the Service Plan and this Distribution Plan. The Fund hereby is authorized to pay the Distributor a distribution fee with respect to each class of its Shares to compensate the Distributor for activities which are primarily intended to result in the sale of such Shares ("distribution related activities") performed by the Distributor with respect to the respective class of Shares of the Fund. Such distribution related activities include without limitation: (a) printing and distributing copies of any prospectuses and annual and interim reports of the Fund (after the Fund has prepared and set in type such materials) that are used by such Distributor in connection with the offering of Shares; (b) preparing, printing or otherwise manufacturing and distributing any other literature or materials of any nature used by such Distributor in connection with promoting, distributing or offering the Shares; (c) advertising, promoting and selling Shares to broker-dealers, banks and the public; (d) distribution related overhead and the provision of information programs and shareholder services intended to enhance the attractiveness of investing in the Fund; (e) incurring initial outlay expenses in connection with compensating Financial Intermediaries for (i) selling CDSC Shares and Combination Shares and (ii) providing personal services to shareholders and the maintenance of shareholder accounts of all classes of Shares, including paying interest on and incurring other carrying costs on funds borrowed to pay such initial outlays; and (f) acting as agent for the Fund in connection with implementing this Distribution Plan pursuant to the Selling Agreements. The amount of the distribution fee hereby authorized with respect to each class of Shares of the Fund shall be as follows: With respect to Class A Shares, the distribution fee authorized hereby and the service fee authorized pursuant to the Service Plan, in the aggregate, shall not exceed on an annual basis 0.25% of the Fund's average daily net assets attributable to Class A Shares sold on or after the date on which this Distribution Plan is first implemented with respect to Class A Shares. The Fund may pay a distribution fee as determined from time to time by its Board of Trustees in an annual amount not to exceed the lesser of (i) (A) 0.25% of the Fund's average daily net asset value during such year attributable to Class A Shares sold on or after the date on which this Distribution Plan was first implemented with respect to Class A Shares minus (B) the amount of the service fee with respect to the Class A Shares actually expended during such year by the Fund pursuant to the Service Plan and (ii) the actual amount of distribution related expenses incurred by the Distributor with respect to Class A Shares. With respect to Class B Shares, the distribution fee authorized hereby and the service fee authorized pursuant to the Service Plan, in the aggregate, shall not exceed on an annual basis 1.00% of the Fund's average daily net assets attributable to 2 3 Class B Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class B Shares. The Fund may pay a distribution fee with respect to the Class B Shares as determined from time to time by its Board of Trustees in an annual amount not to exceed the lesser of (A) 0.75% of the Fund's average daily net asset value during such year attributable to Class B Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class B Shares and (B) the actual amount of distribution related expenses incurred by the Distributor during such year plus prior unreimbursed distribution related expenses less the amount of any contingent deferred sales charge paid to the Distributor, in each case with respect to the Class B Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class B Shares. With respect to Class C Shares, the distribution fee authorized hereby and the service fee authorized pursuant to the Service Plan, in the aggregate, shall not exceed on an annual basis 1.00% of the Fund's average daily net assets attributable to Class C Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class C Shares. The Fund may pay a distribution fee with respect to the Class C Shares as determined from time to time by its Board of Trustees in an annual amount not to exceed the lesser of (A) 0.75% of the Fund's average daily net asset value during such year attributable to Class C Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class C Shares and (B) the actual amount of distribution related expenses incurred by the Distributor during such year plus prior unreimbursed distribution related expenses less the amount of any contingent deferred sales charge paid to the Distributor, in each case with respect to the Class C Shares sold on or after the date on which this Distribution Plan is first implemented with respect to the Class C Shares. Payments pursuant to this Distribution Plan shall not be made more often than monthly upon receipt by the Fund of a separate written expense report with respect to each class of Shares setting forth the expenses qualifying for such reimbursement allocated to each class of Shares and the purposes thereof. In the event that amounts payable hereunder with respect to shares of a Front-End Class do not fully reimburse the Distributor for its actual distribution related expenses with respect to the Shares of such class, there is no carryforward of reimbursement obligations to succeeding years. In the event the amounts payable hereunder with respect to a shares of a CDSC Class or a Combination Class do not fully reimburse the Distributor for its actual distribution related expenses with respect to the Shares of the respective class, such unreimbursed distribution expenses will be carried forward and paid by the Fund hereunder in future years so long as this Distribution Plan remains in effect, subject to applicable laws and regulations. Reimbursements for distribution related expenses payable hereunder with respect to a particular class of Shares may not be used to subsidize the sale of Shares of any other class of Shares. 3 4 The Fund shall not compensate the Distributor, and neither the Fund nor the Distributor shall compensate any Financial Intermediary, for any distribution related expenses incurred with respect to a class of Shares prior to the later of (a) the implementation of this Distribution Plan with respect to such class of Shares or (b) the date that such Financial Intermediary enters into a Selling Agreement with the Distributor. The Fund hereby authorizes the Distributor to enter into Selling Agreements with certain Financial Intermediaries to provide compensation to such Financial Intermediaries for activities and services of the type referred to in Paragraph 1 hereof. Prior to the implementation of a Selling Agreement, such agreement shall be approved by a majority of the Board of Trustees of the Trust and a majority of the Disinterested Trustees (within the meaning of the 1940 Act) by a vote cast in person at a meeting called for the purpose of voting on such Selling Agreements. The Distributor may reallocate all or a portion of its distribution fee to such Financial Intermediaries as compensation for the above-mentioned activities and services. Such reallocation shall be in an amount as set forth from time to time in the Fund's prospectus. Such Selling Agreements shall provide that the Financial Intermediaries shall provide the Distributor with such information as is reasonably necessary to permit the Distributor to comply with the reporting requirements set forth in Paragraphs 3 and 8 hereof. Subject to the provisions of this Distribution Agreement, the Fund is hereby authorized to pay a distribution fee to any person that is not an "affiliated person" or "interested person" of the Fund or its "investment adviser" or "principal underwriter" (as such terms are defined in the 1940 Act) who provides any of the foregoing services for the Fund. Such fee shall be paid only pursuant to written agreements between the Fund and such other person the terms of which permit payments to such person only in accordance with the provisions of this Distribution Agreement and which have the approval of a majority of the Disinterested Trustees by vote cast separately with respect to each class of Shares and cast in person at a meeting called for the purpose of voting on such written agreement. The Fund and the Distributor shall prepare separate written reports for each class of Shares and shall submit such reports to the Fund's Board of Trustees on a quarterly basis summarizing all payments made by them with respect to each class of Shares pursuant to this Distribution Plan, the Service Plan and the agreements contemplated hereby, the purposes for which such payments were made and such other information as the Board of Trustees or the Disinterested Trustees may reasonably request from time to time, and the Board of Trustees shall review such reports and other information. This Distribution Plan shall become effective upon its approval by (a) a majority of the Board of Trustees and a majority of the Disinterested Trustees by vote cast separately with respect to each class of Shares cast in person at a meeting called for the purpose of voting on this Distribution Plan, and (b) with 4 5 respect to each class of Shares, a "majority of the outstanding voting securities" (as such phrase is defined in the 1940 Act) of such class of Shares voting separately as a class. This Distribution Plan and any agreement contemplated hereby shall continue in effect beyond the first anniversary of its adoption by the Board of Trustees of the Fund only so long as (a) its continuation is approved at least annually in the manner set forth in clause (a) of paragraph 9 above and (b) the selection and nomination of those trustees of the Fund who are not "interested persons" of the Fund are committed to the discretion of such trustees. This Distribution Plan may be terminated with respect to a class of Shares without penalty at any time by a majority of the Disinterested Trustees or by a "majority of the outstanding voting securities" of the respective class of Shares of the Fund. This Distribution Plan may not be amended to increase materially the maximum amounts permitted to be expended hereunder except with the approval of a "majority of the outstanding voting securities" of the respective class of Shares of the Fund and may not be amended in any other material respect except with the approval of a majority of the Disinterested Trustees. Amendments required to conform this Distribution Plan to changes in the Rule or to other changes in the 1940 Act or the rules and regulations thereunder shall not be deemed to be material amendments. To the extent any service fees paid by the Fund pursuant to the Service Plan are deemed to be payments for the financing of any activity primarily intended to result in the sale of Shares issued by the Fund within the meaning of the Rule, the terms and provisions of such plan and any payments made pursuant to such plan hereby are authorized pursuant to this Distribution Plan in the amounts and for the purposes authorized in the Service Plan without any further action by the Board of Trustees or the shareholders of the Fund. To the extent the terms and provisions of the Service Plan conflict with the terms and provisions of this Distribution Plan, the terms and provisions of the Service Plan shall prevail with respect to amounts payable pursuant thereto. This paragraph 13 is adopted solely due to the uncertainty that may exist with respect to whether payments to be made by the Fund pursuant to the Service Plan constitute payments primarily intended to result in the sale of Shares issued by the Fund within the meaning of the Rule. The Trustees of the Trust have adopted this Distribution Plan as trustees under the Declaration of Trust of the Trust and the policies of the Trust adopted hereby are not binding upon any of the Trustees or shareholders of the Trust individually, but bind only the trust estate. 1 The Fund is authorized to offer multiple classes of shares pursuant to an order of the Securities and Exchange Commission 5 6 exempting the Fund from certain provisions of the 1940 Act. 6 EX-99.B15(B) 16 SHAREHOLDER ASSISTANCE AGREEMENT 1 EXHIBIT 15(b) FORM OF VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. SHAREHOLDER ASSISTANCE AGREEMENT This Agreement is entered into as of the _____day of _____, 1995, by and between Van Kampen American Capital Distributors, Inc. (formerly Van Kampen Merritt, Inc.) (the "Company") and the undersigned (the "Broker-Dealer"). WHEREAS, the Company is the principal underwriter of the open-end investment companies listed on Schedule 1 to this Agreement (hereinafter individually the "Fund" or collectively the "Funds"); and WHEREAS, the Broker-Dealer is registered as a broker-dealer with the National Association of Securities Dealers, Inc.; and WHEREAS, each respective Fund has adopted a Distribution Plan (the "Distribution Plan") and a service plan (the "Service Plan") pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended (the "1940 Act"), relating to such Fund, the Distribution Plans being described in the Fund's Prospectus and Statement of Additional Information; and WHEREAS, each respective Fund's Distribution Plans authorize the Company to enter into distribution assistance agreements such as this Agreement with broker-dealers selected by the Company, and the Broker-Dealer has been so selected; and WHEREAS, each respective Fund's Distribution Plans authorize the Company to make payments at a rate specified in an agreement such as this Agreement varying directly with the aggregate average daily net asset value of shares of each respective Fund sold by such broker-dealer on or after the effective date of this Agreement, as determined pursuant to Section 4 hereof, and held at the close of each day in accounts of clients or customers of a particular broker-dealer, such amount being referred to herein as the "Holding Level"; for purposes of calculating the Holding Level, shares of such Fund which are redeemed or otherwise disposed of from any account existing prior to such effective date shall be deemed to have been shares sold prior to such effective date to the extent of the number of shares held in such account immediately after the close of business on the day prior to such effective date; and 1 2 WHEREAS, this Agreement is a "related agreement" to the Distribution Plan as that term is used in the Rule and is subject to all of the provisions of the Rule as to such agreements; NOW, THEREFORE, the Company and the Broker-Dealer agree as follows: 1. Subject to continuing compliance with its obligations pursuant to Section 2 hereof, the Broker-Dealer shall be entitled distribution fee and service fee to payments, if any, to be paid by the Company at the annual percentage rate of the Holding Level set forth from time to time in the then current Prospectus of the Fund on a quarterly basis (prorated for any portion of such period during which this Agreement is in effect for less than the full amount of such period); it is understood and agreed that the Company may make final and binding determinations as to whether such continuing compliance and as to whether or not any Fund shares are to be considered in determining the Holding Level of any particular broker-dealer and what Fund shares, if any, are to be attributed to such purpose to a particular broker-dealer, to a different broker-dealer or to no broker-dealer. Payments shall be made to the Broker-Dealer named above and portions of the payments may be, in the discretion of the Broker-Dealer, paid over to individual registered representatives of said Broker-Dealer to whom there have been assigned accounts of clients or customers of the Broker-Dealer with respect to which the respective Holding Level was determined. 2. The distribution fee payments with respect to a class of the Fund's shares to be made in accordance with Section 1 hereof, if any, shall be paid to the Broker-Dealer as compensation for selling shares of the respective class. 3. In consideration for the service fee payments to be made in accordance with Section 1 hereof, the Broker-Dealer shall provide to its clients or customers who hold shares of each respective Fund with respect to which payments to the Broker-dealer may be made under such Fund's Distribution Plan such services and other assistance as may from time to time be reasonably requested by the Company, including but not limited to answering inquiries regarding the Fund, providing information programs regarding the fund, assisting in selected dividend payment options, account designations and addresses and maintaining the investment of such customer or client in the Fund. 4. The Company shall have the right at any time and from time to time without notice to the Broker-Dealer to amend its Prospectus with respect to the amount of the service free and the amount of the distribution fee to be paid pursuant hereto. 2 3 Such amendments shall be effective as of the date of the amended Prospectus. 5. This Agreement shall go into effect on the later of the date set forth above or the date on which it is approved by a vote of each Fund's Board of Trustees, and of those Trustees (the "Qualified Trustees") who are not interested persons (as defined in the 1940 Act), of the Fund and have no direct or indirect financial interest in the operations of the Distribution Plan or any agreement related to the Distribution Plan cast in person at a meeting called for the purpose of voting on this Agreement and shall continue in effect (unless terminated) until the June 30th next succeeding such effective date and will continue thereafter only if such continuance is specifically approved at least annually in the manner heretofore specified for initial approval. This agreement will terminate automatically in the event of its assignment (as that term is used in the Rule) or if the Distribution Plan is terminated. This Agreement may also be terminated at any time, without the payment of any penalty, on sixty (60) days written notice to the Broker-dealer, by vote of a majority of the Qualified Trustees or by vote of a majority (as that term is used in the Rule) of the outstanding voting securities of the Fund. IN WITNESS WHEREOF, this Agreement is executed as of the date first above written. VAN KAMPEN AMERICAN CAPITAL Broker-dealer Firm Name By:______________________________ Firm Address Senior Vice President By: Title: 3 EX-99.B15(C) 17 ADMINISTRATIVE SERVICES AGREEMENT 1 EXHIBIT 15(c) FORM OF VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC. ADMINISTRATIVE SERVICES AGREEMENT This Agreement is entered into as of the ____ day of ____, 19__, by and between Van Kampen American Capital Distributors, Inc. (formerly Van Kampen Merritt, Inc.) (the "Company") and the undersigned (the "Intermediary"). WHEREAS, the Company is the principal underwriter of the open-end investment companies listed on Schedule 1 to this Agreement (hereinafter individually the "Fund" or collectively the "Funds"); and WHEREAS, each respective Fund has adopted a Distribution Plan (the "Distribution Plan") pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended (the "1940 Act"), and a Service Plan (the "Service Plan") relating to such Fund, the Distribution Plans being described in the Fund's Prospectus and Statement of Additional Information; and WHEREAS, each respective Fund's Distribution Plans authorize the Company to enter into distribution services agreements such as this Agreement with certain financial intermediaries selected by the Company, and the Intermediary has been so selected; and WHEREAS, each respective Fund's Distribution Plans authorize the Company to make payments at a rate specified in an agreement such as this Agreement varying directly with the aggregate average daily net asset value of shares of each respective Fund sold by such financial intermediary on or after the effective date of this Agreement, as determined pursuant to Section 4 hereof, and held at the close of each day in accounts of clients or customers of particular intermediary, such amount being referred to herein as the "Holding Level"; for purposes of calculating the Holding Level, shares of such Fund which are redeemed or otherwise disposed of from any account existing prior to such effective date shall be deemed to have been shares sold prior to such effective date to the extent of the number of shares held in such account immediately after the close of business on the day prior to such effective date; and WHEREAS, this Agreement is a "related agreement" to the Distribution Plan as that term is used in the Rule and is subject to all of the provisions of the Rule as to such agreements; 1 2 NOW, THEREFORE, the Company and the Intermediary agree as follows: 1. Subject to continuing compliance with its obligations pursuant to Section 2 hereof, the Intermediary shall be entitled to distribution fee and service fee payments, if any, to be paid by the Company with respect to each class of the Fund's shares at the annual percentage rate of the Holding Level set forth from time to time in the then current Prospect of the Fund on a quarterly basis (prorated for any portion of such period during which this Agreement is in effect for less than the full amount of such period); it is understood and agreed that the Company may make final and binding determinations as to whether such continuing compliance and as to whether or not any Fund shares are to be considered in determining the Holding Level of any particular financial intermediary and what Fund shares, if any, are to be attributed to such purpose to a particular financial intermediary, to a different financial intermediary or to no financial intermediary. 2. The distribution fee payments with respect to a class of the Fund's shares to be made in accordance with Section 1 hereof, if any, shall be paid to the Broker-Dealer as compensation for selling shares of the respective class. 2 3 3. In consideration for the service fee payments to be made in accordance with Section 1 hereof, the Intermediary shall provide to its clients or customers who hold shares of each respective Fund with respect to which payments to the Intermediary may be made under such Fund's Distribution Plan such services and other assistance as may from time to time be reasonably requested by the Company, including but not limited to answering inquiries regarding the Fund, providing information programs regarding the Fund, assisting in selected dividend payment options, account designations and addresses and maintaining the investment of such customer or client in the Fund. 4. The Company shall have the right at any time and from time to time without notice to the Broker-Dealer to amend its Prospectus with respect to the amount of the service free and the amount of the distribution fee to be paid pursuant hereto. Such amendments shall be effective as of the date of the amended Prospectus. 5. This Agreement shall go into effect on the later of the date set forth above or the date on which it is approved by a vote of each Fund's Board of Trustees and of those Trustees (the "Qualified Trustees") who are not interested persons (as defined in the 1940 Act) of the Fund and have no direct or indirect financial interest in the operations of the Distribution Plan or any agreement related to the Distribution Plan cast in person at a meeting called for the purpose of voting on this Agreement and shall continue in effect (unless terminated) until the June 30th next succeeding such effective date and will continue thereafter only if such continuance is specifically approved at least annually in the manner heretofore specified for initial approval. This agreement will terminate automatically in the event of its assignment (as that term is used in the Rule) or if the Distribution Plan is terminated. This Agreement may also be terminated at any time, without the payment of any penalty, on sixty (60) days written notice to the Intermediary, by vote of a majority of the Qualified Trustees or by vote of a majority (as that term is used in the Rule) of the outstanding voting securities of the Fund. IN WITNESS WHEREOF, this Agreement is executed as of the date first above written. VAN KAMPEN AMERICAN CAPITAL By: Intermediary Senior Vice President 3 4 Address By: Title 4 EX-99.B15(D) 18 SERVICE PLAN 1 EXHIBIT 15(d) FORM OF VAN KAMPEN AMERICAN CAPITAL [FUND NAME] SERVICE PLAN The plan set forth below (the "Service Plan") for the VAN KAMPEN AMERICAN CAPITAL [FUND NAME] (the "Fund"), a series of the Van Kampen American Capital [Trust Name] (the "Trust") describes the material terms and conditions under which assets of the Fund may be used to compensate the Fund's principal underwriter, within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), brokers, dealers and other financial intermediaries (collectively "Financial Intermediaries") for providing personal services to shareholders and/or the maintenance of shareholder accounts with respect to each of its Class A Shares of beneficial interest (the "Class A Shares"), its Class B Shares of beneficial interest (the "Class B Shares"), and its Class C Shares of beneficial interest (the "Class C Shares") The Class A Shares, Class B Shares and Class C Shares sometimes are referred to herein collectively as the "Shares." Each class of Shares is offered and sold subject to a different combination of front-end sales charges, distribution fees, service fees and contingent deferred sales charges.1 Classes of shares, if any, subject to a front-end sales charge and a distribution and/or service fee are referred to herein as "Front-End Classes" and the Shares of such classes are referred to herein as "Front-End Shares." Classes of shares, if any, subject to a contingent-deferred sales charge and a distribution and or a service fee are referred to herein as "CDSC Classes" and Shares of such classes are referred to herein as "CDSC Shares." Classes of shares, if any, subject to a front-end sales charge, a contingent-deferred sales charge and a distribution and/or service fee are referred to herein as "Combination Classes" and Shares of such class are referred to herein as "Combination Shares." The Fund has adopted a distribution plan (the "Distribution Plan") pursuant to which the Fund is authorized to expend on an annual basis a portion of its average net assets attributable to each class of Shares in connection with financing distribution related activities. The Fund also has entered into a distribution and services agreement (the "Distribution and Services Agreement") with Van Kampen American Capital Distributors, Inc. (formerly Van Kampen Merritt, Inc.) (the "Distributor"), pursuant to which the Distributor acts as agent on behalf of the Fund in connection with the implementation of the Service Plan and acts as the principal underwriter with respect to each class of Shares. The Distributor may enter into selling agreements (the "Selling Agreements") with brokers, 2 dealers and other financial intermediaries ("Financial Intermediaries") in order to implement the Distribution Agreement, the Distribution Plan and this Service Plan. The Fund hereby is authorized to pay a service fee with respect to its Class A Shares, Class B Shares and Class C Shares to any person who sells such Shares and provides personal services to shareholders and/or maintains shareholder accounts in an annual amount not to exceed 0.25% of the average annual net asset value of the Shares maintained in the Fund by such person that were sold on or after the date on which this Service Plan was first implemented. The aggregate annual amount of all such payments with respect to each such class of Shares may not exceed 0.25% of the Fund's average annual net assets attributable to the respective class of Shares sold on or after the date on which this Service Plan was first implemented and maintained in the Fund more than one year. Payments pursuant to this Service Plan may be paid or prepaid on behalf of the Fund by the Distributor acting as the Fund's agent. Payments by the Fund to the Distributor pursuant to this Service Plan shall not be made more often than monthly upon receipt by the Fund of a separate written expense report with respect to each class of Shares setting forth the expenses qualifying for such reimbursement allocated to each class of Shares and the purposes thereof. In the event that amounts payable hereunder with respect to a class of Shares do not fully reimburse the Distributor for pre-paid service fees, such unreimbursed service fee expenses will be carried forward and paid by the Fund hereunder in future years so long as this Service Plan remains in effect, subject to applicable laws and regulations. Reimbursements for service fee related expenses payable hereunder with respect to a particular class of Shares may not be used to subsidize services provided with respect to any other class of Shares. The Fund shall not compensate the Distributor, and neither the Fund nor the Distributor shall compensate any Financial Intermediary, for any service related expenses incurred with respect to a class of Shares prior to the later of (a) the implementation of this Service Plan with respect to such class of Shares or (b) the date that such Financial Intermediary enters into a Selling Agreement with the Distributor. The Fund hereby authorizes the Distributor to enter into Selling Agreements with certain Financial Intermediaries to provide compensation to such Financial Intermediaries for activities and services of the type referred to in Paragraph 1 hereof. Prior to the implementation of a Selling Agreement, such agreement shall be approved by a majority of the Board of Trustees of the Trust and a majority of the Disinterested 2 3 Trustees (within the meaning of the 1940 Act) by a vote cast in person at a meeting called for the purpose of voting on such Selling Agreements. Such Selling Agreements shall provide that the Financial Intermediaries shall provide the Distributor with such information as is reasonably necessary to permit the Distributor to comply with the reporting requirements set forth in Paragraphs 3 and 8 hereof. Subject to the provisions of this Service Agreement, the Fund is hereby authorized to pay a service fee to any person that is not an "affiliated person" or "interested person" of the Fund or its "investment adviser" or "principal underwriter" (as such terms are defined in the 1940 Act) who provides any of the foregoing services for the Fund. Such fee shall be paid only pursuant to written agreements between the Fund and such other person the terms of which permit payments to such person only in accordance with the provisions of this Service Agreement and which have the approval of a majority of the Disinterested Trustees by vote cast separately with respect to each class of Shares and cast in person at a meeting called for the purpose of voting on such written agreement. The Fund and the Distributor shall prepare separate written reports for each class of Shares and shall submit such reports to the Fund's Board of Trustees on a quarterly basis summarizing all payments made by them with respect to each class of Shares pursuant to this Service Plan and the agreements contemplated hereby, the purposes for which such payments were made and such other information as the Board of Trustees or the Disinterested Trustees may reasonably request from time to time, and the Board of Trustees shall review such reports and other information. This Service Plan may be terminated with respect to a class of Shares without penalty at any time by a majority of the Disinterested Trustees or by a "majority of the outstanding voting securities" of the respective class of Shares of the Fund. This Service Plan shall become effective upon its approval by (a) a majority of the Board of Trustees and a majority of the Disinterested Trustees by vote cast separately with respect to each class of Shares cast in person at a meeting called for the purpose of voting on this Distribution Plan, and (b) with respect to each class of Shares, a "majority of the outstanding voting securities" (as such phrase is defined in the 1940 Act) of such class of Shares voting separately as a class. This Service Plan and any agreement contemplated hereby shall continue in effect beyond the first anniversary of its adoption by the Board of Trustees of the Fund only so long as (a) its continuation is approved at least annually in the manner set forth in clause (a) of paragraph 10 above and (b) the selection and nomination of those trustees of the Fund who are not "interested persons" of the Fund are committed to the discretion of such trustees. 3 4 This Service Plan may not be amended to increase materially the maximum amounts permitted to be expended hereunder except with the approval of a "majority of the outstanding voting securities" of the respective class of Shares of the Fund. This Service Plan may not be amended in any material respect except with the approval of a majority of the Disinterested Trustees. Amendments required to conform this Service Plan to changes in Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), the 1940 Act, the rules and regulations thereunder or the Rules of Fair Practice of the National Association of Securities Dealers, Inc. shall not be deemed to be material amendments. The Trustees of the Trust have adopted this Service Plan as trustees under the Declaration of Trust of the Trust and the policies of the Trust adopted hereby are not binding upon any of the Trustees or shareholders of the Trust individually, but bind only the trust estate. 1 The Fund is authorized to offer multiple classes of shares pursuant to an order of the Securities and Exchange Commission exempting the Fund from certain provisions of the 1940 Act. 4 EX-99.B24 19 POWER OF ATTORNEY 1 EXHIBIT 24 POWER OF ATTORNEY The undersigned, being officers and trustees of Van Kampen American Capital Money Market Trust, a Delaware business trust (the "Trust"), do hereby, in the capacities shown below, individually appoint Dennis J. McDonnell and Ronald A. Nyberg, each of Oakbrook Terrace, Illinois, and each of them, as the agents and attorneys-in-fact with full power of substitution and resubstitution, for each of the undersigned, to execute and deliver, for and on behalf of the undersigned, any and all amendments to the Registration Statement on Form N-1A filed by the Trust with the Securities and Exchange Commission pursuant to the provisions of the Securities Act of 1933 and the Investment Company Act of 1940. This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument. Dated: July 25, 1995 Signature Title _____________________________________ Trustee J. Miles Branagan 2 /s/ Richard E. Caruso ----------------------------- Trustee Richard E. Caruso /s/ Philip P. Gaughan ----------------------------- Trustee Philip P. Gaughan /s/ Roger Hilsman ------------------------ Trustee Roger Hilsman _____________________________________ Trustee R. Craig Kennedy /s/ Dennis J. McDonnell ----------------------- President, Chief Executive Officer and Trustee Dennis J. McDonnell /s/ Donald C. Miller --------------------- Chairman and Trustee Donald C. Miller 3 /s/ Jack E. Nelson --------------------------- Trustee Jack E. Nelson _____________________________________ Trustee Don G. Powell /s/ David Rees --------------------- Trustee David Rees /s/ Jerome L. Robinson ----------------------- Trustee Jerome L. Robinson /s/ Lawrence J. Sheehan ------------------------- Trustee Lawrence J. Sheehan _____________________________________ Trustee Fernando Sisto 4 /s/ Wayne W. Whalen -------------------- Trustee Wayne W. Whalen _____________________________________ Trustee William S. Woodside /s/ Edward C. Wood III ----------------------- Chief Financial and Accounting Officer Edward C. Wood III EX-27.A 20 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 6-MOS JUN-30-1995 JUL-01-1994 DEC-31-1994 41849075 41849075 661227 4883 180760 42695945 0 0 438352 438352 0 32412705 32412705 27601290 0 0 (73555) 0 0 32339762 0 842639 (10988) 188631 643020 (18980) 0 624040 0 (568757) 0 0 40881989 (36550200) 479626 4793047 0 0 0 0 83571 0 267739 29102469 1.000 .019 0 (.019) 0 0 1.000 1 0 0 This Item relates to the Fund on a composite basis and not on a class basis.
EX-27.B 21 FINANCIAL DATA SCHEDULE
6 6-MOS JUN-30-1995 JUL-11-1994 DEC-31-1994 41849075 41849075 661227 4883 180760 42695945 0 0 438352 438352 0 9918443 9918443 0 0 0 (73555) 0 0 9917831 0 842639 (10988) 188631 643020 (18980) 0 624040 0 (74263) 0 0 15887574 (6019680) 50549 9917831 0 0 0 0 83571 0 267739 4563746 1.00 .015 0 (.015) 0 0 1.00 2 0 0 This Item relates to the Fund on a composite basis and not on a class basis.