SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Co-Registrants [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Com-
mission Only (as permitted
by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 140.12a-12 14a-12
VAN KAMPEN HIGH INCOME TRUST
VAN KAMPEN HIGH INCOME TRUST II
VAN KAMPEN INVESTMENT GRADE MUNICIPAL TRUST
VAN KAMPEN MUNICIPAL TRUST
VAN KAMPEN CALIFORNIA QUALITY MUNICIPAL TRUST
VAN KAMPEN NEW YORK QUALITY MUNICIPAL TRUST
VAN KAMPEN PENNSYLVANIA QUALITY MUNICIPAL TRUST
VAN KAMPEN FLORIDA QUALITY MUNICIPAL TRUST
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
VAN KAMPEN TRUST FOR INSURED MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE NEW YORK MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE PENNSYLVANIA MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE FLORIDA MUNICIPALS
VAN KAMPEN TRUST FOR INVESTMENT GRADE NEW JERSEY MUNICIPALS
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST
VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN OHIO VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN MASSACHUSETTS VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN NEW YORK VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN CALIFORNIA VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN PENNSYLVANIA VALUE MUNICIPAL INCOME TRUST
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST II
VAN KAMPEN ADVANTAGE MUNICIPAL INCOME TRUST II
VAN KAMPEN SELECT SECTOR MUNICIPAL TRUST
VAN KAMPEN STRATEGIC SECTOR MUNICIPAL TRUST
VAN KAMPEN MUNICIPAL INCOME TRUST
VAN KAMPEN CALIFORNIA MUNICIPAL TRUST
VAN KAMPEN BOND FUND
VAN KAMPEN INCOME TRUST
(Names of Co-Registrants as Specified in Their Charters)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] Fee paid previously with preliminary materials.
-- MAY 2004 --
--------------------------------------------------------------------------------
IMPORTANT NOTICE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TO VAN KAMPEN
CLOSED-END FUND SHAREHOLDERS
--------------------------------------------------------------------------------
QUESTIONS & ANSWERS
---------------------------------------
Although we recommend that you read the complete Joint Proxy Statement, we have
provided for your convenience a brief overview of the issues to be voted on.
---------------------------------------
Q WHY IS A SHAREHOLDER
MEETING BEING HELD?
A Each Van Kampen closed-
end fund is traded on a nationally recognized stock exchange and is required to
hold an annual meeting of shareholders.
Q WHAT PROPOSAL WILL BE
VOTED ON?
A You are being asked to elect
nominees for the Board of Trustees.
Q WILL MY VOTE MAKE
A DIFFERENCE?
A Yes, your vote is important
and will make a difference no matter how many shares you own. We encourage all
shareholders to participate in the governance of their funds.
Q HOW DOES THE BOARD OF
TRUSTEES RECOMMEND THAT I VOTE?
A The Board recommends
that you vote "FOR ALL" of the nominees on the enclosed proxy card.
Q WHY DOES THE JOINT PROXY
STATEMENT LIST SEVERAL CLOSED-END FUNDS?
A The funds have a similar
proposal and it is cost-effective to have a joint proxy statement and one
meeting.
Q WHERE DO I CALL FOR
MORE INFORMATION?
A Please call Van Kampen's
Client Relations Department at 1-800-341-2929 (Telecommunications Device for the
Deaf users may call 1-800-421-2833) or visit our website at www.vankampen.com,
where you can send us an e-mail message by selecting "Contact Us."
ABOUT THE PROXY CARD
--------------------------------------------------------------------------------
Please vote on each issue using blue or black ink to mark an X in one of the
boxes provided on the proxy card.
ELECTION OF TRUSTEES - mark "FOR ALL," "WITHHOLD" or "FOR ALL EXCEPT."
To withhold authority to vote for any one or more individual nominee(s), check
"FOR ALL EXCEPT" and write the nominee's name in the line below.
Sign, date and return the proxy card in the enclosed postage-paid envelope. All
registered owners of an account, as shown in the address, must sign the card.
When signing as attorney, trustee, executor, administrator, custodian, guardian
or corporate officer, please indicate your full title.
[ ] PLEASE MARK
X VOTES AS IN
THIS EXAMPLE
VAN KAMPEN XXXXX
JOINT ANNUAL MEETING OF SHAREHOLDERS
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
FOR ALL
FOR ALL WITHHOLD EXCEPT
1x. Authority to vote [ ] [ ] [ ] 2. To transact such other business as may
for the election as properly come before the Meeting.
Class X Trustees
the nominees named
below:
XXXXXXXXX, XXXXXXXXX, XXXXXXXXX
To withhold authority to vote for any one or more
individual nominee check "For All Except" and write
the
nominee's name on the line below.
----------------------------------
Please be sure to sign and date this Proxy, Date
Shareholder sign here Co-owner sign here
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SAMPLE
VAN KAMPEN CLOSED-END FUNDS
1 PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181-5555
TELEPHONE (800) 341-2929
NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 2004
Notice is hereby given to the holders of common shares of beneficial interest
("Common Shares") and, where applicable, the holders of preferred shares of
beneficial interest (the "Preferred Shares") of each of the Van Kampen Closed-
End Funds listed on Annex A (the "Funds") to the attached Joint Proxy Statement
that the Joint Annual Meeting of Shareholders of the Funds (the "Meeting") will
be held at the offices of Van Kampen Investments Inc., 1 Parkview Plaza,
Oakbrook Terrace, Illinois 60181-5555, on Wednesday, June 23, 2004, at 3:00
p.m., for the following purposes:
1. To elect trustees in the following manner:
(a) With respect to VIG, VNV, VKI, VKV, VOV, VCV, VPV, VMV,
VKS and VOT, to elect five Class II trustees, four by
the holders of Common Shares of each such Fund and one
by the holders of the Preferred Shares of each such
Fund. The elected Class II trustees will each serve for
a three year term or until a successor shall have been
duly elected and qualified.
(b) With respect to VGM, VTJ, VKA, VFM, VIM, VTN, VAP, VOQ,
VIC, VTP, VKQ, VNM, VTF, VMO, VQC, VPQ, VLT, VIT, VMT
and VKC, to elect four Class III trustees, three by the
holders of Common Shares of each such Fund and one by
the holders of the Preferred Shares of each such Fund.
The elected Class III trustees will each serve for a
three year term or until a successor shall have been
duly elected and qualified.
(c) With respect to VKL and VIN, to elect four Class I
trustees, each by the holders of Common Shares of such
Fund. Each elected Class I trustee will serve for a
three year term or until a successor shall have been
duly elected and qualified.
(d) With respect to VBF, to elect four Class III trustees by
the holders of Common Shares of the Fund. The elected
Class III trustee will serve for a three year term or
until a successor shall have been duly elected and
qualified.
2. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
Holders of record of the Common Shares and, where applicable, Preferred Shares
of each Fund at the close of business on April 23, 2004 are entitled to notice
of and to vote at the Meeting and any adjournment thereof.
By order of the Board of Trustees
STEFANIE V. CHANG,
Vice President
May 18, 2004
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT (AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF
ANY) TO ANY SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE
RESPECTIVE FUND BY CALLING 1-800-341-2929 OR BY WRITING TO THE RESPECTIVE FUND
AT 1 PARKVIEW PLAZA, PO BOX 5555, OAKBROOK TERRACE, ILLINOIS 60181-5555.
SHAREHOLDERS OF THE FUNDS ARE INVITED TO ATTEND THE MEETING IN PERSON. IF YOU
DO NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON
THE ENCLOSED PROXY CARD WITH RESPECT TO EACH FUND IN WHICH YOU WERE A
SHAREHOLDER AS OF THE RECORD DATE, DATE AND SIGN SUCH PROXY CARD(S), AND RETURN
IT (THEM) IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK THAT
YOU MAIL YOUR PROXY PROMPTLY.
The Board of Trustees of each Fund recommends that you cast your vote:
- FOR ALL of the nominees for the Board of Trustees listed in the Joint Proxy
Statement.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
JOINT PROXY STATEMENT
VAN KAMPEN CLOSED-END FUNDS
1 PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181-5555
TELEPHONE (800) 341-2929
JOINT ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 2004
INTRODUCTION
This Joint Proxy Statement is furnished in connection with the solicitation by
the respective Board of Trustees (the "Trustees" or the "Board") of each of the
Van Kampen Closed-End Funds listed on Annex A to this Joint Proxy Statement (the
"Funds") of proxies to be voted at a Joint Annual Meeting of Shareholders of the
Funds, and all adjournments thereof (the "Meeting"), to be held at the offices
of Van Kampen Investments Inc., 1 Parkview Plaza, Oakbrook Terrace, Illinois
60181-5555, on Wednesday, June 23, 2004, at 3:00 p.m. The Meeting will be an
annual meeting for each Fund. The approximate mailing date of this Joint Proxy
Statement and accompanying form of proxy is May 20, 2004.
Participating in the Meeting are holders of common shares of beneficial
interest (the "Common Shares") and, where applicable, the holders of preferred
shares of beneficial interest (the "Preferred Shares") of each of the Funds as
set forth in Annex A to this Joint Proxy Statement. The Common Shares and the
Preferred Shares of the Funds sometimes are referred to herein collectively as
the "Shares." The Meeting is scheduled as a joint meeting of the shareholders of
the Funds because the shareholders of the Funds are expected to consider and
vote on similar matters. The Board of Trustees has determined that the use of a
joint proxy statement for the Meeting is in the best interest of the
shareholders of each of the Funds. In the event that a shareholder of any Fund
present at the Meeting objects to the holding of a joint meeting and moves for
an adjournment of the meeting of such Fund to a time immediately after the
Meeting so that such Fund's meeting may be held separately, the persons named as
proxies will vote in favor of the adjournment.
Annex A lists the abbreviated name and stock symbol by which the Funds
sometimes are referred to in this Joint Proxy Statement. Please refer to Annex A
for any questions you may have regarding whether your Fund is participating at
the Meeting, defined terms relating to the Funds and abbreviated Fund names.
The Board has fixed the close of business on April 23, 2004 as the record date
(the "Record Date") for the determination of holders of Shares of each Fund
entitled to vote at the Meeting. The number of issued and outstanding Common
Shares and, where applicable, Preferred Shares of each Fund as of the Record
Date is shown in Annex B to this Joint Proxy Statement.
The following table summarizes the proposals to be presented at the Meeting
for the Funds and the shareholders entitled to vote with respect to the
proposals.
PROPOSAL/AFFECTED FUNDS AFFECTED SHAREHOLDERS
----------------------- ---------------------
1. ELECTION OF TRUSTEES:
(a) With respect to VIG, VNV, VKI, VKV, VOV, VCV, VPV,
VMV, VKS and VOT, to elect
-- four Class II trustees, each by holders of
Common Shares of each such Fund Common
-- one Class II trustee by holders of Preferred
Shares of each such Fund Preferred
(b) With respect to VGM, VTJ, VKA, VFM, VIM, VTN, VAP,
VOQ, VIC, VTP, VKQ, VNM, VTF, VMO, VQC, VPQ, VLT,
VIT, VMT and VKC, to elect
-- three Class III trustees, each by holders of
Common Shares of each such Fund Common
-- one Class III trustee by holders of Preferred
Shares of each such Fund Preferred
(c) With respect to VKL and VIN, to elect
-- four Class I trustees, each by holders of
Common Shares of such Fund Common
(d) With respect to VBF, to elect
-- four Class III trustees, each by holders of
Common Shares of the Fund Common
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
REPORT (AND THE MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF
ANY) TO ANY SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO THE
RESPECTIVE FUND BY CALLING 1-800-341-2929 OR BY WRITING TO THE RESPECTIVE FUND
AT 1 PARKVIEW PLAZA, PO BOX 5555, OAKBROOK TERRACE, ILLINOIS 60181-5555.
VOTING
Shareholders of a Fund on the Record Date are entitled to one vote per Share
with respect to any proposal submitted to the shareholders of the Fund, with no
Share having cumulative voting rights. The voting requirement for passage of a
particular proposal depends on the nature of the proposal.
With respect to Proposal 1(a) through (d), holders of Common Shares and
Preferred Shares, where applicable, will vote as separate classes for the
respective nominee(s) to be elected by such class of Shares. The affirmative
vote of a plurality
2
of the Common Shares of a Fund present at the Meeting in person or by proxy is
required to elect each nominee for Trustee of such Fund designated to be elected
by the holders of the Common Shares of such Fund. The affirmative vote of a
plurality of the Preferred Shares of a Fund present at the Meeting in person or
by proxy is required to elect such nominee for trustee of such Fund designated
to be elected by the holders of the Preferred Shares of such Fund. Election by
plurality means those persons who receive the highest number of votes cast "FOR"
up to the total number of persons to be elected as trustees at the Meeting shall
be elected.
The Board of Trustees of each Fund recommends that you cast your vote:
- FOR ALL of the nominees for the Board of Trustees listed in the Joint Proxy
Statement.
An unfavorable vote on a proposal by the shareholders of one Fund will not
affect the implementation of such proposal by another Fund, if the proposal is
approved by the shareholders of the other Fund. An unfavorable vote on a
proposal by the shareholders of a Fund will not affect such Fund's
implementation of other proposals that receive a favorable vote. There is no
cumulative voting with respect to the election of Trustees.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon. Proxies received
prior to the Meeting on which no vote is indicated will be voted "FOR" each
proposal as to which they are entitled to be voted. Abstentions and broker
non-votes (i.e., where a nominee such as a broker, holding shares for beneficial
owners, indicates that instructions have not been received from the beneficial
owners, and the nominee does not exercise discretionary authority) are not
treated as votes "FOR" a proposal. With respect to Proposal 1(a) through (d),
abstentions and broker non-votes are disregarded since only votes "FOR" are
considered in a plurality voting requirement. A majority of the outstanding
Shares of a Fund entitled to vote must be present in person or by proxy to have
a quorum for such Fund to conduct business at the Meeting. Abstentions and
broker non-votes will be deemed present for quorum purposes.
Shareholders who execute proxies may revoke them at any time before they are
voted by filing with the respective Fund a written notice of revocation, by
delivering a duly executed proxy bearing a later date or by attending the
Meeting and voting in person.
The Funds know of no business other than that mentioned in Proposal 1 of the
Notice that will be presented for consideration at the Meeting. If any other
matters are properly presented, it is the intention of the persons named on the
enclosed proxy to vote proxies in accordance with their best judgment. In the
event a quorum is present at the Meeting but sufficient votes to approve any of
the proposals with respect to one or more Funds or proposals are not received,
proxies (including abstensions and broker non-votes) would be voted in favor of
one or more adjournments of the Meeting of the concerned Fund with respect to
such proposal to permit further solicitation of proxies,
3
provided they determine that such an adjournment and additional solicitation is
reasonable and in the interest of shareholders based on a consideration of all
relevant factors, including the nature of the relevant proposal, the percentage
of votes then cast, the percentage of negative votes then cast, the nature of
the proposed solicitation activities and the nature of the reasons for such
further solicitation.
INVESTMENT ADVISER
Van Kampen Asset Management serves as investment adviser to each Fund ("Asset
Management" or the "Adviser"). On November 30, 2003, certain of the Funds'
former investment adviser, Van Kampen Investment Advisory Corp., was merged with
and into its affiliate, Asset Management. The principal business address of the
Adviser is 1221 Avenue of the Americas, New York, New York 10020. The Adviser is
a wholly owned subsidiary of Van Kampen Investments Inc. ("Van Kampen"). Van
Kampen is one of the nation's largest investment management companies, with more
than $87 billion in assets under management or supervision as of March 31, 2004.
Van Kampen is a wholly owned subsidiary of Morgan Stanley.
The Adviser, certain affiliates of the Adviser, certain investment companies
advised by the Adviser or its affiliates and certain Trustees are named as
defendants in a number of recently filed, similar class action complaints. These
complaints generally allege that defendants violated their statutory disclosure
obligations and fiduciary duties by failing properly to disclose (i) that the
Adviser and certain affiliates of the Adviser allegedly offered economic
incentives to brokers and others to steer investors to the funds advised by the
Adviser or its affiliates rather than funds managed by other companies, and (ii)
that the funds advised by the Adviser or its affiliates allegedly paid excessive
commissions to brokers in return for their alleged efforts to steer investors to
these funds. The complaints seek, among other things, unspecified compensatory
damages, rescissionary damages, fees and costs. The defendants intend to move to
dismiss these actions and otherwise vigorously to defend them. While the
defendants believe that they have meritorious defenses, the ultimate outcome of
these matters is not presently determinable at this early stage of the
litigation.
OTHER SERVICE PROVIDERS
Each Fund, except VBF, VIN, VKL, VMT, VKC, VIG, VLT and VIT, has entered into
an administration agreement between such Fund and Van Kampen Funds Inc. (in such
capacity, the "Administrator"). The Administrator's principal business address
is 1221 Avenue of the Americas, New York, New York 10020. The Administrator is a
wholly owned subsidiary of Van Kampen. With respect to VKS, the Administrator
has engaged UBS Global Asset Management (US) Inc. (formerly Brinson Advisors,
Inc.) to act as a sub-administrator (the "Sub-Administrator"). The
Sub-Administrator's principal place of business is 51 West 52nd Street, New
York, New York 10019. With respect to VKL, Asset Management and the Fund have
entered into an administration
4
agreement with Princeton Administrators, L.P. ("Princeton") for the provision of
certain administrative services. Princeton's principal place of business is 800
Scudders Mill Road, Plainsboro, New Jersey 08536. Each Fund, except VBF and VIN,
has entered into an accounting services agreement with Asset Management and a
legal services agreement with Van Kampen. Van Kampen's principal business
address is 1221 Avenue of the Americas, New York, New York 10020. Each of VMT,
VKC, VIG, VLT and VIT has also entered into a support services agreement with
Van Kampen Funds Inc.
PROPOSAL 1: ELECTION OF TRUSTEES
Trustees are to be elected by the shareholders at the Meeting in the following
manner:
(a) With respect to VIG, VNV, VKI, VKV, VOV, VCV, VPV, VMV, VKS and
VOT, five Class II Trustees are to be elected at the Meeting, to serve
until the later of each such Fund's Annual Meeting of Shareholders in
2007 or until a successor has been duly elected and qualified. Holders
of Common Shares, voting as a separate class, will vote with respect to
four Class II Trustees (J. Miles Branagan, Linda Hutton Heagy, Mitchell
M. Merin and Wayne W. Whalen) designated to be elected by such class of
shares. Holders of Preferred Shares, voting as a separate class, will
vote with respect to one Class II Trustee, Rod Dammeyer, designated to
be elected by such class of shares. An affirmative vote of a plurality
of the Common Shares of each such Fund and a plurality of the Preferred
Shares of each such Fund, is required to elect the respective nominees.
It is the intention of the persons named in the enclosed proxy to vote
the Shares represented by them for the election of the respective
nominees listed unless the proxy is marked otherwise.
(b) With respect to VGM, VTJ, VKA, VFM, VIM, VTN, VAP, VOQ, VIC, VTP,
VKQ, VNM, VTF, VMO, VQC, VPQ, VLT, VIT, VMT and VKC, four Class III
Trustees are to be elected at the Meeting, to serve until the later of
each such Fund's Annual Meeting of Shareholders in 2007 or until a
successor has been duly elected and qualified. Holders of Common
Shares, voting as a separate class, will vote with respect to three
Class III Trustees (R. Craig Kennedy, Jack E. Nelson and Richard F.
Powers, III) designated to be elected by each such class of shares.
Holders of Preferred Shares, voting as a separate class, will vote with
respect to one Class III Trustee, Hugo F. Sonnenschein, designated to
be elected by such class of shares. An affirmative vote of a plurality
of the Common Shares of each such Fund and a plurality of the Preferred
Shares of each such Fund is required to elect the respective nominees.
It is the intention of the persons named in the enclosed proxy to vote
the
5
Shares represented by them for the election of the respective nominees
listed unless the proxy is marked otherwise.
(c) With respect to VKL and VIN, four Class I Trustees are to be
elected at the Meeting by the holders of Common Shares to serve until
the later of such Fund's Annual Meeting of Shareholders in 2007 or
until their successors have been duly elected and qualified. Holders of
Common Shares, voting as a separate class, will vote with respect to
four Class I Trustees (David C. Arch, Jerry D. Choate, Howard J Kerr
and Suzanne H. Woolsey) designated to be elected by such class of
shares. An affirmative vote of a plurality of the Common Shares of each
Fund is required to elect the respective nominees. It is the intention
of the persons named in the enclosed proxy to vote the Shares
represented by them for the election of the respective nominees listed
unless the proxy is marked otherwise.
(d) With respect to VBF, four Class III Trustees are to be elected at
the Meeting to serve until the later of the Fund's Annual Meeting of
Shareholders in 2007 or until a successor has been duly elected and
qualified. Holders of Common Shares, voting as a separate class, will
vote with respect to four Class III Trustees (R. Craig Kennedy, Jack E.
Nelson, Richard F. Powers, III and Hugo F. Sonnenschein) designated to
be elected by such class of shares. An affirmative vote of a plurality
of the Common Shares of the Fund is required to elect the nominee. It
is the intention of the persons named in the enclosed proxy to vote the
Shares represented by them for the election of the nominee listed
unless the proxy is marked otherwise.
As in the past, only one class of trustees is being submitted to
shareholders of each Fund for election at the Meeting. The Declaration
of Trust of each Fund provides that the Board of Trustees shall consist
of Trustees divided into three classes, the classes to be as nearly
equal in number as possible. The Trustees of only one class are elected
at each annual meeting so that the regular term of only one class of
Trustees will expire annually and any particular Trustee stands for
election only once in each three-year period. This type of
classification may prevent replacement of a majority of Trustees of a
Fund for up to a two-year period. The foregoing is subject to the
provisions of the Investment Company Act of 1940, as amended (the "1940
Act"), applicable state law based on the state of organization of each
Fund, each Fund's Declaration of Trust and each Fund's Bylaws.
6
INFORMATION REGARDING TRUSTEES AND NOMINEES FOR ELECTION AS TRUSTEE
The business and affairs of the Funds are managed under the direction of the
Board of Trustees. The tables below list the incumbent Trustees and nominees for
Trustee, their principal occupations during the last five years, other
directorships held by them and their affiliations, if any, with the Adviser, Van
Kampen Funds Inc., Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van
Kampen Investor Services, Inc. The term "Fund Complex" includes each of the
investment companies advised by the Adviser. Trustees of the Funds generally
serve three year terms or until their successors are duly elected and qualified.
All nominees have consented to being named in this Joint Proxy Statement and
have agreed to serve if elected.
INDEPENDENT TRUSTEES
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
David C. Arch(1) (58) Trustee + Chairman and Chief Executive Officer 88
Blistex Inc. of Blistex Inc., a consumer health
1800 Swift Drive care products manufacturer. Director
Oak Brook, IL 60523 of the Heartland Alliance, a
nonprofit organization serving human
needs based in Chicago. Director of
St. Vincent de Paul Center -- a
Chicago based day care facility
serving the children of low income
families. Board member of the
Illinois Manufacturers' Association.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
David C. Arch(1) (58) Trustee/Director/Managing
Blistex Inc. General Partner of funds in
1800 Swift Drive the Fund Complex.
Oak Brook, IL 60523
7
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
J. Miles Branagan(2) (71) Trustee + Private investor. Co-founder, and 86
1632 Morning Mountain Road prior to August 1996, Chairman, Chief
Raleigh, NC 27614 Executive Officer and President, MDT
Corporation (now known as
Getinge/Castle, Inc., a subsidiary of
Getinge Industrier AB), a company
which develops, manufactures, markets
and services medical and scientific
equipment.
Jerry D. Choate(1) (65) Trustee + Prior to January 1999, Chairman and 86
33971 Selva Road Chief Executive Officer of the
Suite 130 Allstate Corporation ("Allstate") and
Dana Point, CA 92629 Allstate Insurance Company. Prior to
January 1995, President and Chief
Executive Officer of Allstate. Prior
to August 1994, various management
positions at Allstate.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
J. Miles Branagan(2) (71) Trustee/Director/Managing
1632 Morning Mountain Road General Partner of funds in
Raleigh, NC 27614 the Fund Complex.
Jerry D. Choate(1) (65) Trustee/Director/Managing
33971 Selva Road General Partner of funds in
Suite 130 the Fund Complex. Director
Dana Point, CA 92629 of Amgen Inc., a
biotechnological company,
and Director of Valero
Energy Corporation, an
independent refining
company.
8
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
Rod Dammeyer(2) (63) Trustee + President of CAC, LLC., a private 88
CAC, L.L.C. company offering capital investment
4350 LaJolla Village Drive and management advisory services.
Suite 980 Prior to February 2001, Vice Chairman
San Diego, CA 92122-6223 and Director of Anixter
International, Inc. and IMG Global
Inc. Prior to July 2000, Managing
Partner of Equity Group Corporate
Investment (EGI), a company that
makes private investments in other
companies.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Rod Dammeyer(2) (63) Trustee/Director/Managing
CAC, L.L.C. General Partner of funds in
4350 LaJolla Village Drive the Fund Complex. Director
Suite 980 of Stericycle, Inc., Ventana
San Diego, CA 92122-6223 Medical Systems, Inc., GATX
Corporation and Trustee of
The Scripps Research
Institute and the University
of Chicago Hospitals and
Health Systems. Prior to
April 2004, Director of
TheraSense, Inc. Prior to
January 2004, Director of
TeleTech Holdings Inc. and
Arris Group, Inc. Prior to
May 2002, Director of
Peregrine Systems Inc. Prior
to February 2001, Vice
Chairman and Director of
Anixter International, Inc.
and IMC Global Inc. Prior to
July 2000, Director of
Allied Riser Communications
Corp., Matria Healthcare
Inc., Transmedia Networks,
Inc., CNA Surety, Corp. and
Grupo Azcarero Mexico (GAM).
9
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
Linda Hutton Heagy(2) (55) Trustee + Managing Partner of Heidrick & 86
Heidrick & Struggles Struggles, an executive search firm.
233 South Wacker Drive Trustee on the University of Chicago
Suite 7000 Hospitals Board, Vice Chair of the
Chicago, IL 60606 Board of the YMCA of Metropolitan
Chicago and a member of the Women's
Board of the University of Chicago.
Prior to 1997, Partner of Ray &
Berndtson, Inc., an executive
recruiting firm. Prior to 1996,
Trustee of The International House
Board, a fellowship and housing
organization for international
graduate students. Prior to 1995,
Executive Vice President of ABN AMRO,
N.A., a bank holding company. Prior
to 1992, Executive Vice President of
La Salle National Bank.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Linda Hutton Heagy(2) (55) Trustee/Director/Managing
Heidrick & Struggles General Partner of funds in
233 South Wacker Drive the Fund Complex.
Suite 7000
Chicago, IL 60606
10
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
R. Craig Kennedy(3) (52) Trustee + Director and President of the German 86
1744 R Street, N.W. Marshall Fund of the United States,
Washington, D.C. 20009 an independent U.S. foundation
created to deepen understanding,
promote collaboration and stimulate
exchanges of practical experience
between Americans and Europeans.
Formerly, advisor to the Dennis
Trading Group Inc., a managed futures
and option company that invests money
for individuals and institutions.
Prior to 1992, President and Chief
Executive Officer, Director and
member of the Investment Committee of
the Joyce Foundation, a private
foundation.
Howard J Kerr(1) (68) Trustee + Prior to 1998, President and Chief 88
736 North Western Avenue Executive Officer of Pocklington
P.O. Box 317 Corporation, Inc., an investment
Lake Forest, IL 60045 holding company. Director of the
Marrow Foundation.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
R. Craig Kennedy(3) (52) Trustee/Director/Managing
1744 R Street, N.W. General Partner of funds in
Washington, D.C. 20009 the Fund Complex.
Howard J Kerr(1) (68) Trustee/Director/Managing
736 North Western Avenue General Partner of funds in
P.O. Box 317 the Fund Complex. Director
Lake Forest, IL 60045 of the Lake Forest Bank &
Trust.
11
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
Jack E. Nelson(3) (68) Trustee + President of Nelson Investment 86
423 Country Club Drive Planning Services, Inc., a financial
Winter Park, FL 32789 planning company and registered
investment adviser in the State of
Florida. President of Nelson Ivest
Brokerage Services Inc., a member of
the NASD, Securities Investors
Protection Corp. and the Municipal
Securities Rulemaking Board.
President of Nelson Sales and
Services Corporation, a marketing and
services company to support
affiliated companies.
Hugo F. Sonnenschein(3) (63) Trustee + President Emeritus and Honorary 88
1126 E. 59th Street Trustee of the University of Chicago
Chicago, IL 60637 and the Adam Smith Distinguished
Service Professor in the Department
of Economics at the University of
Chicago. Prior to July 2000,
President of the University of
Chicago. Trustee of the University of
Rochester and a member of its
investment committee. Member of the
National Academy of Sciences, the
American Philosophical Society and a
fellow of the American Academy of
Arts and Sciences.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Jack E. Nelson(3) (68) Trustee/Director/Managing
423 Country Club Drive General Partner of funds in
Winter Park, FL 32789 the Fund Complex.
Hugo F. Sonnenschein(3) (63) Trustee/Director/Managing
1126 E. 59th Street General Partner of funds in
Chicago, IL 60637 the Fund Complex. Director
of Winston Laboratories,
Inc.
12
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
Suzanne H. Woolsey, Ph.D.(1) Trustee + Previously Chief Communications 86
(62) Officer of the National Academy of
815 Cumberstone Road Sciences/ National Research Council,
Harwood, MD 20776 an independent, federally chartered
policy institution, from 2001 to
November 2003 and Chief Operating
Officer from 1993 to 2001. Director
of the Institute for Defense
Analyses, a federally funded research
and development center, Director of
the German Marshall Fund of the
United States, Director of the Rocky
Mountain Institute and Trustee of
Colorado College. Prior to 1993,
Executive Director of the Commission
on Behavioral and Social Sciences and
Education at the National Academy of
Sciences/National Research Council.
From 1980 through 1989, Partner of
Coopers & Lybrand.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Suzanne H. Woolsey, Ph.D.(1) Trustee/Director/Managing
(62) General Partner of funds in
815 Cumberstone Road the Fund Complex. Director
Harwood, MD 20776 of Fluor Corp., an
engineering, procurement and
construction organization,
since January 2004 and
Director of Neurogen
Corporation, a
pharmaceutical company,
since January 1998.
13
INTERESTED TRUSTEES
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE
Mitchell M. Merin*(2) (50) Trustee, + President and Chief Executive Officer of funds in the Fund 86
1221 Avenue of the President Complex. Chairman, President, Chief Executive Officer and
Americas and Chief Director of the Adviser and Van Kampen Advisors Inc. since
New York, NY 10020 Executive December 2002. Chairman, President and Chief Executive
Officer Officer of Van Kampen Investments since December 2002.
Director of Van Kampen Investments since December 1999.
Chairman and Director of Van Kampen Funds Inc. since
December 2002. President, Director and Chief Operating
Officer of Morgan Stanley Investment Management since
December 1998. President and Director since April 1997 and
Chief Executive Officer since June 1998 of Morgan Stanley
Investment Advisors Inc. and Morgan Stanley Services Company
Inc. Chairman, Chief Executive Officer and Director of
Morgan Stanley Distributors Inc. since June 1998. Chairman
since June 1998, and Director since January 1998 of Morgan
Stanley Trust. Director of various Morgan Stanley
subsidiaries. President of the Morgan Stanley Funds since
May 1999. Previously Chief Executive Officer of Van Kampen
Funds Inc. from December 2002 to July 2003, Chief Strategic
Officer of Morgan Stanley Investment Advisors Inc. and
Morgan Stanley Services Company Inc. and Executive Vice
President of Morgan Stanley Distributors Inc. from April
1997 to June 1998. Chief Executive Officer from September
2002 to April 2003 and Vice President from May 1997 to April
1999 of the Morgan Stanley Funds.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Mitchell M. Merin*(2) (50) Trustee/Director/
1221 Avenue of the Managing General
Americas Partner of funds in
New York, NY 10020 the Fund Complex.
14
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE
Richard F. Powers, III*(3) Trustee + Advisory Director of Morgan Stanley. Prior to December 2002, 88
(58) Chairman, Director, President, Chief Executive Officer and
1 Parkview Plaza Managing Director of Van Kampen Investments and its
P.O. Box 5555 investment advisory, distribution and other subsidiaries.
Oakbrook Terrace, IL 60181 Prior to December 2002, President and Chief Executive
Officer of funds in the Fund Complex. Prior to May 1998,
Executive Vice President and Director of Marketing at Morgan
Stanley and Director of Dean Witter, Discover & Co. and Dean
Witter Realty. Prior to 1996, Director of Dean Witter
Reynolds Inc.
Wayne W. Whalen*(2) (64) Trustee + Partner in the law firm of Skadden, Arps, Slate, Meagher & 88
333 West Wacker Drive Flom LLP, legal counsel to certain funds in the Fund
Chicago, IL 60606 Complex.
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF TRUSTEE HELD BY TRUSTEE
Richard F. Powers, III*(3) Trustee/Director/
(58) Managing General
1 Parkview Plaza Partner of funds in
P.O. Box 5555 the Fund Complex.
Oakbrook Terrace, IL 60181
Wayne W. Whalen*(2) (64) Trustee/Director/
333 West Wacker Drive Managing General
Chicago, IL 60606 Partner of funds in
the Fund Complex.
---------------
(1) Designated as a Class I trustee.
(2) Designated as a Class II trustee.
(3) Designated as a Class III trustee.
+ Each Trustee generally serves a three-year term from the date of election.
Each Trustee has served as a Trustee of each respective Fund since the year
shown in Annex C.
* Messrs. Merin and Powers are interested persons of funds in the Fund Complex
and the Adviser by reason of their current or former positions with Morgan
Stanley or its affiliates. Mr. Whalen is an interested person of funds in the
Fund Complex by reason of his firm currently serving as legal counsel to such
funds in the Fund Complex.
15
REMUNERATION OF TRUSTEES
The compensation of Trustees and executive officers that are affiliated
persons (as defined in 1940 Act) of Asset Management or Van Kampen is paid by
the respective entity. The funds in the Fund Complex, including the Funds, pay
the non-affiliated Trustees an annual retainer and meeting fees.
Each fund in the Fund Complex (except the Van Kampen Exchange Fund) provides a
deferred compensation plan to its non-affiliated Trustees that allows such
Trustees to defer receipt of compensation and earn a return on such deferred
amounts based upon the return of the common shares of the funds in the Fund
Complex as selected by the respective non-affiliated Trustees. Each fund in the
Fund Complex (except the Van Kampen Exchange Fund) also provides a retirement
plan to its non-affiliated Trustees that provides non-affiliated Trustees with
compensation after retirement, provided that certain eligibility requirements
are met as more fully described below.
Each non-affiliated Trustee generally can elect to defer receipt of all or a
portion of the compensation earned by such non-affiliated Trustee until
retirement. Amounts deferred are retained by the respective fund and earn a rate
of return determined by reference to the return on the common shares of such
fund or other funds in the Fund Complex as selected by the respective
non-affiliated Trustee, with the same economic effect as if such non-affiliated
Trustee had invested in one or more funds in the Fund Complex, including the
Funds. To the extent permitted by the 1940 Act, each Fund may invest in
securities of those funds selected by the non-affiliated Trustees in order to
match the deferred compensation obligation. The deferred compensation plan is
not funded and obligations thereunder represent general unsecured claims against
the general assets of the respective Fund.
Each Fund has adopted a retirement plan. Under the retirement plan, a
non-affiliated Trustee who is receiving Trustee's compensation from a Fund prior
to such non-affiliated Trustee's retirement, has at least 10 years of service
(including years of service prior to adoption of the retirement plan) for such
Fund and retires at or after attaining the age of 60, is eligible to receive a
retirement benefit each year for ten years following such Trustee's retirement
from such Fund. Non-affiliated Trustees retiring prior to the age of 60 or with
fewer than 10 years but more than 5 years of service may receive reduced
retirement benefits from a Fund. Each Trustee has served as a member of each
Fund's Board of Trustees since the year of such Trustee's appointment or
election as set forth on Annex C to this Proxy Statement.
16
Additional information regarding compensation and benefits for Trustees is set
forth below. As indicated in the notes accompanying the table, the amounts
relate to either the respective Fund's most recently completed fiscal year end
in 2003 or the Fund Complex's most recently completed calendar year ended
December 31, 2003.
COMPENSATION TABLE
FUND COMPLEX
------------------------------------------------
AGGREGATE
PENSION OR TOTAL
RETIREMENT AGGREGATE COMPENSATION
AGGREGATE BENEFITS ESTIMATED BEFORE
COMPENSATION ACCRUED ANNUAL DEFERRAL FROM
FROM EACH AS PART OF BENEFITS UPON FUND
NAME(1) FUND(2) FUND EXPENSES(3) RETIREMENT(4) COMPLEX(5)
------- ------------ ---------------- ------------- -------------
David C. Arch.................. (2) $18,589 $147,500 $193,811
J. Miles Branagan.............. (2) 78,011 60,000 173,290
Jerry D. Choate................ (2) 31,482 126,000 173,290
Rod Dammeyer................... (2) 31,814 147,500 177,971
Linda Hutton Heagy............. (2) 9,233 142,500 173,290
R. Craig Kennedy............... (2) 6,424 142,500 173,290
Howard J Kerr.................. (2) 58,713 147,500 193,811
Jack E. Nelson................. (2) 40,711 109,500 173,290
Hugo F. Sonnenschein........... (2) 32,178 147,500 193,811
Wayne W. Whalen................ (2) 63,604 147,500 251,811
Suzanne H. Woolsey............. (2) 20,086 142,500 173,290
---------------
N/A: Not applicable.
(1) Trustees not eligible for compensation and retirement benefits are not
included in the Compensation Table. Theodore A. Myers retired from the Board
of Trustees of the Fund and other funds in the Fund Complex as of December
31, 2003.
(2) The amount of aggregate compensation payable by each Fund for its most
recently completed fiscal year ended in 2003 before deferral by the Trustees
under the deferred compensation plan is shown in Annex D. Certain Trustees
deferred all or a portion of the aggregate compensation payable by each Fund
for its most recently completed fiscal year end in 2003 as shown in Annex E.
The deferred compensation plan is described above the table. Amounts
deferred are retained by the respective Fund and earn a rate of return
determined by reference to either the return on the Common Shares of the
Fund or the common shares of other funds in the Fund Complex as selected by
the respective Trustee. To the extent permitted by the 1940 Act, the Fund
may invest in securities of these funds selected by the Trustees in order to
match the deferred compensation obligation. The cumulative deferred
compensation (including earnings accrued thereon for each trustee) for each
Fund as of the end of its most recently completed fiscal year end in 2003 is
shown in Annex F.
(3) The amounts shown in this column represent the sum of the estimated pension
or retirement benefit accruals expected to be accrued by the operating funds
in the Fund Complex for their respective fiscal years ended in 2003. The
retirement plan is described above the compensation table. In 2003, the
boards of the various Van Kampen-related funds in the Fund Complex were
combined. Prior to 2003, only Messrs. Whalen and Powers served as
trustees/directors/managing general partners of all the various Van
Kampen-related funds in the Fund Complex; and during 2003, other
trustees/directors/managing general partners were being elected or
appointed, as appropriate, to most of the respective boards of the
underlying Van Kampen-related funds. The amounts in this column represent
amounts for each Trustee based on funds he/she oversaw for the period
mentioned above; and thus it is anticipated that the amounts will
17
increase in future compensation tables based on the increased number of
funds overseen by such trustees going forward.
(4) For each Trustee, the amounts shown in this column represent the sum of the
estimated annual benefits upon retirement payable per year by the current
operating funds in the Fund Complex for each year of the 10-year period
commencing in the year of such Trustee's anticipated retirement. Each Fund
is expected to pay benefits each year of the 10-year period commencing in
the year of such Trustee's retirement to those Trustees who retire at or
over the age of 60 and with at least ten years of service to each Fund. The
retirement plan is described above the compensation table.
(5) The amounts shown in this column are accumulated from the aggregate
compensation of the operating investment companies in the Fund Complex for
the calendar year ended December 31, 2003 before deferral by the Trustees
under the deferred compensation plan. Because the funds in the Fund Complex
have different fiscal year ends, the amounts shown in this column are
presented on a calendar year basis. In 2003, the boards of the various Van
Kampen-related funds in the Fund Complex were combined. Prior to 2003, only
Messrs. Whalen and Powers served as trustees/directors/managing general
partners of all of the various Van Kampen-related funds in the Fund Complex;
and during 2003, other trustees/directors/managing general partners were
being elected or appointed, as appropriate, to most of the respective boards
of the underlying Van Kampen-related funds. The amounts in this column
represent amounts for each Trustee based on funds he/she oversaw for the
period mentioned above; and thus it is anticipated that the amounts will
increase in future compensation tables based on the increased number of
funds overseen by such Trustees going forward.
BOARD COMMITTEES AND MEETINGS
Each Fund's Board of Trustees has three standing committees (an audit
committee, a brokerage and services committee and a governance committee). Each
committee is comprised solely of "Independent Trustees", which is defined for
purposes herein as trustees who: (1) are not "interested persons" of the Fund as
defined by the 1940 Act and (2) are "independent" of the respective Fund as
defined by the New York Stock Exchange, American Stock Exchange and Chicago
Stock Exchange listing standards.
Each Board's audit committee consists of J. Miles Branagan, Jerry D. Choate
and R. Craig Kennedy. In addition to being Independent Trustees as defined
above, each of these Trustees also meets the additional independence
requirements for audit committee members as defined by the New York Stock
Exchange, American Stock Exchange and Chicago Stock Exchange listing standards.
The audit committee makes recommendations to the Board of Trustees concerning
the selection of each Fund's independent public auditors, reviews with such
auditors the scope and results of each Fund's annual audit and considers any
comments which the auditors may have regarding each Fund's financial statements,
books of account or internal controls. Each Board of Trustees has adopted a
formal written charter for the audit committee which sets forth the audit
committee's responsibilities. The audit committee has reviewed and discussed the
financial statements of each Fund with management as well as with the
independent auditors of each Fund, and discussed with the independent auditors
the matters required to be discussed under the Statement of Auditing Standards
No. 61. The audit committee has received the written disclosures and the letter
from the independent auditors required under
18
Independence Standard Board Standard No. 1 and has discussed with the
independent auditors their independence. Based on this review, the audit
committee recommended to the Board of Trustees of each Fund that each Fund's
audited financial statements be included in each Fund's annual report to
shareholders for the most recent fiscal year for filing with the Securities and
Exchange Commission ("SEC").
In accordance with proxy rules promulgated by the SEC, a fund's audit
committee charter is required to be filed at least once every three years as an
exhibit to a fund's proxy statement. The audit committee charter for each of the
Funds is attached as Annex K to this Proxy Statement.
Each Board's brokerage and services committee consists of Linda Hutton Heagy,
Hugo F. Sonnenschein and Suzanne H. Woolsey. The brokerage and services
committee reviews each Fund's allocation of brokerage transactions and
soft-dollar practices and reviews the transfer agency and shareholder servicing
arrangements with Van Kampen Investor Services.
Each Board's governance committee consists of David C. Arch, Rod Dammeyer,
Howard J Kerr and Jack E. Nelson. In addition to being Independent Trustees as
defined above, each of these Trustees also meets the additional independence
requirements for nominating committee members as defined by the New York Stock
Exchange, American Stock Exchange and Chicago Stock Exchange listing standards.
The governance committee identifies individuals qualified to serve as
Independent Trustees on the Board and on committees of the Board, advises the
Board with respect to Board composition, procedures and committees, develops and
recommends to the Board a set of corporate governance principles applicable to
the respective Fund, monitors corporate governance matters and makes
recommendations to the Board, and acts as the administrative committee with
respect to Board policies and procedures, committee policies and procedures and
codes of ethics. The Independent Trustees of the respective Fund select and
nominate any other nominee Independent Trustees for the respective Fund. While
the Independent Trustees of the respective Fund expect to be able to continue to
identify from their own resources an ample number of qualified candidates for
the Board of Trustees as they deem appropriate, they will consider nominations
from shareholders to the Board. Nominations from shareholders should be in
writing and sent to the Independent Trustees as described below.
In accordance with proxy rules promulgated by the SEC, a fund's nominating
committee charter is required to be filed at least once every three years as an
exhibit to a fund's proxy statement. The governance committee charter for each
of the Funds, which includes each Fund's nominating policies, is attached as
Annex L to this Proxy Statement.
19
During the fiscal year ended October 31, 2003, the Board of Trustees of VIG,
VKV, VCV, VMV, VNV, VOV, VPV, VKS, VOT, VKI, VGM, VIM, VIC, VTF, VTJ, VTN, VTP,
VMO, VKA, VAP, VKL, VKQ, VQC, VFM, VOQ, VNM and VPQ each held 7 meetings. During
each such Fund's last fiscal year, the audit committee of each such Board held 5
meetings, the brokerage and services committee of each Board held 1 meeting and
the governance committee held 1 meeting during each such Fund's last fiscal
year. During the last fiscal year, each of the Trustees of such Funds during the
period such Trustee served as a Trustee attended at least 75% of the meetings of
the respective Board of Trustees and all committee meetings thereof of which
such Trustee was a member.
During the fiscal year ended June 30, 2003, the Board of Trustees of VBF, VMT
and VKC each held 7 meetings. During each such Fund's last fiscal year, the
audit committee of each Board held 4 meetings. The brokerage and services
committee of each Board of each such Fund and the governance committee of each
Board of each such Fund did not hold any meetings during each such Fund's last
fiscal year, as each of those committees were recently organized. During the
last fiscal year, each of the Trustees of such Funds during the period such
Trustee served as a Trustee attended at least 75% of the meetings of the
respective Board of Trustees and all committee meetings thereof of which such
Trustee was a member.
During the fiscal year ended December 31, 2003, the Board of Trustees of VIN,
VLT and VIT each held 10 meetings. During each such Fund's last fiscal year, the
audit committee of each Board held 5 meetings, the brokerage and services
committee of each Board of each such Fund held 2 meetings and the governance
committee held 3 meetings during each such Fund's last fiscal year. During the
last fiscal year, each of the Trustees of such Funds during the period such
Trustee served as a Trustee attended at least 75% of the meetings of the
respective Board of Trustees and all committee meetings thereof of which such
Trustee was a member.
SHAREHOLDER COMMUNICATIONS
Shareholders may send communications to each Funds' Board of Trustees.
Shareholders should send communications intended for the Board by addressing the
communication directly to the Board (or individual Board members) and/or
otherwise clearly indicating in the salutation that the communication is for the
Board (or individual Board members) and by sending the communication to either
the applicable Fund's office or directly to such Board member(s) at the address
specified for such Trustee above. Other shareholder communications received by
any Fund not directly addressed and sent to the Board will be reviewed and
generally responded to by management, and will be forwarded to the Board only at
management's discretion based on the matters contained therein.
20
SHAREHOLDER APPROVAL
With respect to Proposal 1(a) through (d), the holders of Common Shares and
Preferred Shares, where applicable, voting as a separate class, will vote on the
respective nominees designated to be elected by such class of shares. The
affirmative vote of a plurality of the Common Shares of each Fund present at the
Meeting in person or by proxy is required to elect each nominee for Trustee
designated to be elected by the Common Shares and, where applicable, the
affirmative vote of a plurality of the Preferred Shares of each Fund present at
the Meeting in person or by proxy is required to elect each nominee for Trustee
designated to be elected by the Preferred Shares. THE BOARD OF TRUSTEES
RECOMMENDS A VOTE "FOR ALL" OF THE NOMINEES.
21
OTHER INFORMATION
EXECUTIVE OFFICERS OF THE FUNDS
The following information relates to the executive officers of the Funds who
are not Trustee nominees. Each officer also serves in the same capacity for all
or a number of the other investment companies advised by the Adviser or
affiliates of the Adviser. The officers of the Funds are appointed annually by
the Trustees and serve for one year or until their respective successors are
chosen and qualified. The Funds' officers receive no compensation from the Funds
but may also be officers of the Adviser or officers of affiliates of the Adviser
and receive compensation in such capacities.
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUNDS SERVED DURING PAST 5 YEARS
Stephen L. Boyd (63) Vice President Officer Chairman of Morgan Stanley Investment Management's Global
2800 Post Oak Blvd. since 1998 Research Steering Committee. Vice President of funds in the
45th Floor Fund Complex. Prior to March 2004, Managing Director of
Houston, TX 77056 Global Research Investment Management. Prior to December
2002, Chief Investment Officer of Van Kampen Investments and
President and Chief Operations Officer of the Adviser and
Van Kampen Advisors Inc. Prior to May 2002, Executive Vice
President and Chief Investment Officer of funds in the Fund
Complex. Prior to May 2001, Managing Director and Chief
Investment Officer of Van Kampen Investments, and Managing
Director and President of the Adviser and Van Kampen
Advisors Inc. Prior to December 2000, Executive Vice
President and Chief Investment Officer of Van Kampen
Investments, and President and Chief Operating Officer of
the Adviser. Prior to April 2000, Executive Vice President
and Chief Investment Officer for Equity Investments of the
Adviser. Prior to October 1998, Vice President and Senior
Portfolio Manager with AIM Capital Management, Inc. Prior to
February 1998, Senior Vice President and Portfolio Manager
of Van Kampen American Capital Asset Management, Inc., Van
Kampen American Capital Investment Advisory Corp. and Van
Kampen American Capital Management, Inc.
Stefanie V. Chang (37) Vice President Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas since 2003 Vice President of funds in the Fund Complex.
New York, NY 10020
22
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUNDS SERVED DURING PAST 5 YEARS
Joseph J. McAlinden (61) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas President and since 2002 Stanley Investment Advisors Inc., Morgan Stanley Investment
New York, NY 10020 Chief Investment Management Inc. and Morgan Stanley Investments LP and
Officer Director of Morgan Stanley Trust for over 5 years. Executive
Vice President and Chief Investment Officer of funds in the
Fund Complex. Managing Director and Chief Investment Officer
of Van Kampen Investments, the Adviser and Van Kampen
Advisors Inc. since December 2002.
John R. Reynoldson (50) Vice President Officer Executive Director and Portfolio Specialist of the Adviser
1 Parkview Plaza since 2000 and Van Kampen Advisors Inc. Vice President of funds in the
P.O. Box 5555 Fund Complex. Prior to July 2001, Principal and Co-head of
Oakbrook Terrace, IL 60181 the Fixed Income Department of the Adviser and Van Kampen
Advisors Inc. Prior to December 2000, Senior Vice President
of the Adviser and Van Kampen Advisors Inc. Prior to May
2000, Senior Vice President of the investment grade taxable
group for the Adviser. Prior to June 1999, Senior Vice
President of the government securities bond group for Asset
Management.
Ronald E. Robison (65) Executive Vice Officer Chief Executive Officer and Chairman of Van Kampen Investor
1221 Avenue of the Americas President and since 2003 Services. Executive Vice President and Principal Executive
New York, NY 10020 Principal Officer of funds in the Fund Complex. Chief Administrative
Executive Officer Officer, Managing Director of Morgan Stanley. Managing
Director and Director of Morgan Stanley Investment Advisors
Inc. and Morgan Stanley Services Company Inc. Chief
Executive Officer and Director of Morgan Stanley Trust.
Executive Vice President and Principal Executive Officer of
the Morgan Stanley Funds. Director of Morgan Stanley SICAV.
Previously, Chief Global Operations Officer and Managing
Director of Morgan Stanley Investment Management Inc.
John L. Sullivan (48) Vice President, Officer Director and Managing Director of Van Kampen Investments,
1 Parkview Plaza Chief Financial since 1989 the Adviser, Van Kampen Advisors Inc. and certain other
P.O. Box 5555 Officer and subsidiaries of Van Kampen Investments. Vice President,
Oakbrook Terrace, IL 60181 Treasurer Chief Financial Officer and Treasurer of funds in the Fund
Complex. Head of Fund Accounting for Morgan Stanley
Investment Management. Prior to December 2002, Executive
Director of Van Kampen Investments, the Adviser and Van
Kampen Advisors Inc.
23
SHAREHOLDER INFORMATION
As of April 23, 2004, to the knowledge of the Funds, no shareholder owned
beneficially more than 5% of a class of a Fund's outstanding Shares. As of May
13, 2004, certain Trustees and executive officers owned, directly or
beneficially, the number of Common Shares of each Fund as set forth in Annex G.
Except as indicated on Annex G, as of May 13, 2004, the Trustees and executive
officers of the Funds individually and as a group owned less than 1% of the
outstanding Shares of each Fund. Trustees and executive officers who do not own
any Common Shares of the Funds or Funds which are not owned by any Trustee or
executive officers have been omitted from the table in Annex G. As of May 13,
2004, no Trustees or executive officers owned any Preferred Shares of the Funds.
Excluding deferred compensation balances as described in the Compensation Table,
as of May 13, 2004, each Trustee beneficially owned equity securities of the
Funds and other funds in the Fund Complex overseen by the Trustees in the dollar
range amounts as specified in Annex H. Including deferred compensation balances
as described in the Compensation Table, as of May 13, 2004, each Trustee owned
the dollar ranges of amounts of the Funds and other funds in the Fund Complex as
specified in Annex I.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(f) of the 1940 Act and Section 16(a) of the Securities Exchange Act
of 1934, as amended, require each of the Funds' Trustees, officers, investment
adviser, affiliated persons of the investment adviser and persons who own more
than 10% of a registered class of the Fund's equity securities to file forms
with the SEC and the New York Stock Exchange or American Stock Exchange, as
applicable, reporting their affiliation with the Fund and reports of ownership
and changes in ownership of Fund Shares. These persons and entities are required
by SEC regulation to furnish the Fund with copies of all such forms they file.
Based on a review of these forms furnished to each Fund, each Fund believes that
during its last fiscal year, its Trustees, officers, Adviser and affiliated
persons of the Adviser complied with the applicable filing requirements except
that, due to clerical errors, Messrs. Dammeyer's and Whalen's Form 4 filings,
each regarding a sales transaction of VQC, were not filed in a timely manner.
INDEPENDENT AUDITORS
The Board of Trustees of each Fund, including a majority of the Trustees who
are not "interested persons" of each Fund (as defined by the 1940 Act), has
selected Deloitte & Touche LLP ("D&T") as the independent auditors to examine
the financial statements for the current fiscal year of each Fund. The selection
of D&T for the current fiscal year was recommended and approved by each Fund's
audit committee and approved by each Fund's Board. Each of the Funds knows of no
direct or indirect financial interest of D&T in such Fund.
24
AUDIT AND OTHER FEES
Each Fund and certain "covered entities" were billed the amounts listed on
Annex J by D&T during such Fund's most recent two fiscal years.
The audit committee of each Board has considered whether the provision of non-
audit services performed by D&T to the Funds and "covered entities" is
compatible with maintaining D&T's independence in performing audit services.
Beginning with non-audit service contracts entered into on or after May 6, 2003,
the audit committee also is required to pre-approve services to "covered
entities" to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Funds. 100% of such services
were pre-approved by the audit committee pursuant to the audit committee's
pre-approval policies and procedures. The Board's pre-approval policies and
procedures are included as part of the Board's audit committee charter, which is
attached to this Proxy Statement as Annex K.
Representatives of D&T will attend the Meeting, will have the opportunity to
make a statement if they desire to do so and will be available to answer
appropriate questions.
EXPENSES
The expenses of preparing, printing and mailing the enclosed form of proxy,
the accompanying Notice and this Proxy Statement and all other costs, in
connection with the solicitation of proxies will be borne by the Funds. The
total amount of these expenses will be allocated among each of the Funds based
upon the total number of shareholders for each Fund in relation to the total
number of shareholders for all of the Funds participating in the Meeting. The
Funds will also reimburse banks, brokers and others for their reasonable
expenses in forwarding proxy solicitation material to the beneficial owners of
the shares of the Funds. In order to obtain the necessary quorum at the Meeting,
additional solicitation may be made by mail, telephone, telegraph, facsimile or
personal interview by representatives of the Funds, the Adviser or Van Kampen,
by the transfer agents of the Funds, by dealers or their representatives or by
ALAMO direct Mail Services, Inc., a solicitation firm located in Hauppauge, New
York that has been engaged to assist in proxy solicitation at an estimated cost
of approximately $1,500 per Fund.
SHAREHOLDER PROPOSALS
To be considered for presentation at a shareholders' meeting, rules
promulgated by the SEC generally require that, among other things, a
shareholder's proposal must be received at the offices of the relevant Fund a
reasonable time before a solicitation is made. Shareholder proposals intended to
be presented at the year 2005 Annual Meeting of Shareholders for a Fund pursuant
to Rule 14a-8 under the
25
Exchange Act of 1934, as amended (the "Exchange Act"), must be received by the
Fund at the Fund's principal executive offices by January 17, 2005. In order for
proposals made outside of Rule 14a-8 under the Exchange Act to be considered
"timely" within the meaning of Rule 14a-4(c) under the Exchange Act, such
proposals must be received by the Fund at the Fund's principal executive offices
not later than April 5, 2005. Timely submission of a proposal does not
necessarily mean that such proposal will be included. Any shareholder who wishes
to submit a proposal for consideration at a meeting of such shareholder's Fund
should send such proposal to the respective Fund at 1 Parkview Plaza, PO Box
5555, Oakbrook Terrace, Illinois 60181-5555.
GENERAL
Management of each Fund does not intend to present and does not have reason to
believe that others will present any other items of business at the Meeting.
However, if other matters are properly presented to the Meeting for a vote, the
proxies will be voted upon such matters in accordance with the judgment of the
persons acting under the proxies.
A list of shareholders of each Fund entitled to be present and vote at the
Meeting will be available at the offices of the respective Fund, 1 Parkview
Plaza, Oakbrook Terrace, Illinois 60181-5555, for inspection by any shareholder
during regular business hours for ten days prior to the date of the Meeting.
Failure of a quorum to be present at the Meeting for any Fund may necessitate
adjournment and may subject such Fund to additional expense.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO FILL IN, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
STEFANIE V. CHANG,
Vice President
May 18, 2004
26
ANNEX A
VAN KAMPEN CLOSED-END FUNDS
The following list sets forth the Van Kampen closed-end investment companies
(the "Funds") participating in the Joint Annual Meeting of Shareholders to be
held at the offices of Van Kampen Investments Inc., 1 Parkview Plaza, Oakbrook
Terrace, Illinois 60181-5555 on Wednesday, June 23, 2004, at 3:00 p.m. The name
in the first column below is the legal name for each Fund. The name in the
second column is the abbreviated name of each Fund and the designation in the
third column is the stock symbol of each Fund; the abbreviated name or stock
symbol are sometimes used to identify a specific Fund in the Joint Proxy
Statement. Each of the Funds has issued common shares of beneficial interest and
such common shares of the Funds are referred to herein as the "Common Shares."
Certain Funds have issued preferred shares of beneficial interest with a
liquidation preference per share as designated in the fourth column below, and
such preferred shares of the Funds are referred to herein as the "Preferred
Shares."
PREFERRED SHARES
LEGAL NAME ABBREVIATED NAME STOCK SYMBOL OUTSTANDING
---------- ---------------- ------------ ----------------
Van Kampen Municipal Income Municipal Income Trust VMT Rate Adjusted Tax-Exempt
Trust Shares, liquidation
preference $500,000 per
share
Van Kampen California California Municipal VKC Remarketed Preferred Shares,
Municipal Trust Trust liquidation preference
$50,000 per share
Van Kampen Investment Grade Investment Grade VIG Remarketed Preferred Shares,
Municipal Trust Municipal Trust liquidation preference
$100,000 per share
Van Kampen Select Sector Select Sector VKL Remarketed Preferred Shares,
Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen Municipal Trust Municipal Trust VKQ Auction Preferred Shares,
liquidation preference
$25,000 per share
Van Kampen California California Quality VQC Auction Preferred Shares,
Quality Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen New York Quality New York Quality VNM Auction Preferred Shares,
Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen Pennsylvania Pennsylvania Quality VPQ Auction Preferred Shares,
Quality Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen Florida Quality Florida Quality VFM Auction Preferred Shares,
Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen Ohio Quality Ohio Quality Municipal VOQ Auction Preferred Shares,
Municipal Trust Trust liquidation preference
$25,000 per share
A-1
PREFERRED SHARES
LEGAL NAME ABBREVIATED NAME STOCK SYMBOL OUTSTANDING
---------- ---------------- ------------ ----------------
Van Kampen Trust for Insured Trust for Insured VIM Auction Preferred Shares,
Municipals Municipals liquidation preference
$25,000 per share
Van Kampen Trust for Trust for Investment VGM Auction Preferred Shares,
Investment Grade Municipals Grade Municipals liquidation preference
$25,000 per share
Van Kampen Trust for Trust for Investment VIC Auction Preferred Shares,
Investment Grade California Grade California liquidation preference
Municipals Municipals $25,000 per share
Van Kampen Trust for Trust for Investment VTN Auction Preferred Shares,
Investment Grade New York Grade New York liquidation preference
Municipals Municipals $25,000 per share
Van Kampen Trust for Trust for Investment VTP Auction Preferred Shares,
Investment Grade Grade Pennsylvania liquidation preference
Pennsylvania Municipals Municipals $25,000 per share
Van Kampen Trust for Trust for Investment VTF Auction Preferred Shares,
Investment Grade Florida Grade Florida liquidation preference
Municipals Municipals $25,000 per share
Van Kampen Trust for Trust for Investment VTJ Auction Preferred Shares,
Investment Grade New Jersey Grade New Jersey liquidation preference
Municipals Municipals $25,000 per share
Van Kampen Municipal Municipal Opportunity VMO Auction Preferred Shares,
Opportunity Trust Trust liquidation preference
$25,000 per share
Van Kampen Advantage Advantage Municipal VKA Auction Preferred Shares,
Municipal Income Trust Income Trust liquidation preference
$25,000 per share
Van Kampen Advantage Advantage Pennsylvania VAP Auction Preferred Shares,
Pennsylvania Municipal Municipal Income liquidation preference
Income Trust Trust $25,000 per share
Van Kampen Ohio Value Ohio Value Municipal VOV Auction Preferred Shares,
Municipal Income Trust Income Trust liquidation preference
$25,000 per share
Van Kampen Massachusetts Massachusetts Value VMV Auction Preferred Shares,
Value Municipal Income Municipal Income liquidation preference
Trust Trust $25,000 per share
Van Kampen Strategic Sector Strategic Sector VKS Auction Preferred Shares,
Municipal Trust Municipal Trust liquidation preference
$25,000 per share
Van Kampen New York Value New York Value VNV Auction Preferred Shares,
Municipal Income Trust Municipal Income liquidation preference
Trust $25,000 per share
Van Kampen California Value California Value VCV Auction Preferred Shares,
Municipal Income Trust Municipal Income liquidation preference
Trust $25,000 per share
Van Kampen Pennsylvania Pennsylvania Value VPV Auction Preferred Shares,
Value Municipal Income Municipal Income liquidation preference
Trust Trust $25,000 per share
A-2
PREFERRED SHARES
LEGAL NAME ABBREVIATED NAME STOCK SYMBOL OUTSTANDING
---------- ---------------- ------------ ----------------
Van Kampen Value Municipal Value Municipal Income VKV Auction Preferred Shares,
Income Trust Trust liquidation preference
$25,000 per share
Van Kampen Municipal Municipal Opportunity VOT Auction Preferred Shares,
Opportunity Trust II Trust II liquidation preference
$25,000 per share
Van Kampen Advantage Advantage Municipal VKI Auction Preferred Shares,
Municipal Income Trust II Income Trust II liquidation preference
$25,000 per share
Van Kampen High Income High Income Trust II VLT Auction Preferred Shares,
Trust II liquidation preference
$25,000 per share
Van Kampen High High Income Trust VIT Auction Market Preferred
Income Trust Shares, liquidation
preference $100,000 per
share
Van Kampen Bond Fund Bond Fund VBF Not Applicable
Van Kampen Income Trust Income Trust VIN Not Applicable
A-3
ANNEX B
VAN KAMPEN CLOSED-END FUNDS
The following list sets forth the number of issued and outstanding Common
Shares and Preferred Shares, where applicable, for each Fund as of April 23,
2004, the Record Date.
FUND NAME COMMON SHARES PREFERRED SHARES
--------- ------------- ----------------
Municipal Income Trust 28,684,985 330
California Municipal Trust 3,257,560 400
Investment Grade Municipal Trust 4,839,000 250
Select Sector Municipal Trust 4,682,127 1,360
Municipal Trust 36,365,392 12,000
California Quality Municipal Trust 9,686,261 3,000
New York Quality Municipal Trust 5,655,638 1,800
Pennsylvania Quality Municipal Trust 8,268,008 2,600
Florida Quality Municipal Trust 6,519,397 2,000
Ohio Quality Municipal Trust 4,330,866 1,400
Trust for Insured Municipals 9,808,248 3,600
Trust for Investment Grade Municipals 27,013,149 10,600
Trust for Investment Grade California Municipals 4,676,173 1,800
Trust for Investment Grade New York Municipals 6,211,330 2,400
Trust for Investment Grade Pennsylvania Municipals 7,432,384 2,800
Trust for Investment Grade Florida Municipals 5,563,437 2,240
Trust for Investment Grade New Jersey Municipals 6,103,771 2,600
Municipal Opportunity Trust 15,352,890 6,000
Advantage Municipal Income Trust 19,106,785 7,600
Advantage Pennsylvania Municipal Income Trust 4,368,552 1,600
Ohio Value Municipal Income Trust 1,686,828 600
Massachusetts Value Municipal Income Trust 2,681,073 1,000
Strategic Sector Municipal Trust 10,806,700 3,800
New York Value Municipal Income Trust 4,291,172 1,600
California Value Municipal Income Trust 6,043,220 2,400
Pennsylvania Value Municipal Income Trust 4,476,965 1,800
Value Municipal Income Trust 23,555,115 9,000
Municipal Opportunity Trust II 11,731,272 4,600
Advantage Municipal Income Trust II 8,175,881 3,200
High Income Trust 13,710,760 450
High Income Trust II 8,109,000 1,360
Bond Fund 11,362,465 N/A
Income Trust 15,371,737 N/A
B-1
ANNEX C
The table below sets forth the year in which each of the Trustees initially
was elected or appointed to the Board of Trustees of each Fund.
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY KERR MERIN NELSON POWERS
---- -------- ------ -------- ----- ------- ---- ----- ------ ------
Municipal Income Trust (VMT).......... 1988 2003 2003 1988 2003 2003 1992 2003 2003 1999
California Municipal Trust (VKC)...... 1988 2003 2003 1988 2003 2003 1992 2003 2003 1999
High Income Trust (VIT)............... 1988 2003 2003 1988 2003 2003 1992 2003 2003 1999
Investment Grade Municipal Trust
(VIG)................................ 1989 2003 2003 1989 2003 2003 1992 2003 2003 1999
High Income Trust II (VLT)............ 1989 2003 2003 1989 2003 2003 1992 2003 2003 1999
California Quality Municipal Trust
(VQC)................................ 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Florida Quality Municipal Trust
(VFM)................................ 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Municipal Trust (VKQ)................. 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
New York Quality Municipal Trust
(VNM)................................ 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Ohio Quality Municipal Trust (VOQ).... 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Pennsylvania Quality Municipal Trust
(VPQ)................................ 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Trust for Insured Municipals (VIM).... 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Trust for Investment Grade Municipals
(VGM)................................ 1991 2003 2003 1991 2003 2003 1992 2003 2003 1999
Advantage Municipal Income Trust
(VKA)................................ 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Advantage Pennsylvania Municipal
Income Trust (VAP)................... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Municipal Opportunity Trust (VMO)..... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Strategic Sector Municipal Trust
(VKS)................................ 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Trust for Investment Grade California
Municipals (VIC)..................... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Trust for Investment Grade Florida
Municipals (VTF)..................... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
SONNENSCHEIN WHALEN WOOLSEY
------------ ------ -------
Municipal Income Trust (VMT).......... 1994 1988 2003
California Municipal Trust (VKC)...... 1994 1988 2003
High Income Trust (VIT)............... 1994 1988 2003
Investment Grade Municipal Trust
(VIG)................................ 1994 1989 2003
High Income Trust II (VLT)............ 1994 1989 2003
California Quality Municipal Trust
(VQC)................................ 1994 1991 2003
Florida Quality Municipal Trust
(VFM)................................ 1994 1991 2003
Municipal Trust (VKQ)................. 1994 1991 2003
New York Quality Municipal Trust
(VNM)................................ 1991 1991 2003
Ohio Quality Municipal Trust (VOQ).... 1994 1991 2003
Pennsylvania Quality Municipal Trust
(VPQ)................................ 1994 1991 2003
Trust for Insured Municipals (VIM).... 1994 1991 2003
Trust for Investment Grade Municipals
(VGM)................................ 1994 1991 2003
Advantage Municipal Income Trust
(VKA)................................ 1994 1992 2003
Advantage Pennsylvania Municipal
Income Trust (VAP)................... 1994 1992 2003
Municipal Opportunity Trust (VMO)..... 1994 1992 2003
Strategic Sector Municipal Trust
(VKS)................................ 1994 1992 2003
Trust for Investment Grade California
Municipals (VIC)..................... 1994 1992 2003
Trust for Investment Grade Florida
Municipals (VTF)..................... 1994 1992 2003
C-1
ANNEX C -- (CONTINUED)
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY KERR MERIN NELSON POWERS
---- -------- ------ -------- ----- ------- ---- ----- ------ ------
Trust for Investment Grade New Jersey
Municipals (VTJ)..................... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Trust for Investment Grade New York
Municipals (VTN)..................... 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Trust for Investment Grade
Pennsylvania Municipals (VTP)........ 1992 2003 2003 1992 2003 2003 1992 2003 2003 1999
Advantage Municipal Income Trust II
(VKI)................................ 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
California Value Municipal Income
Trust (VCV).......................... 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Massachusetts Value Municipal Income
Trust (VMV).......................... 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Municipal Opportunity Trust II
(VOT)................................ 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
New York Value Municipal Income Trust
(VNV)................................ 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Ohio Value Municipal Income Trust
(VOV)................................ 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Pennsylvania Value Municipal Income
Trust (VPV).......................... 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Select Sector Municipal Trust (VKL)... 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Value Municipal Income Trust (VKV).... 1993 2003 2003 1993 2003 2003 1993 2003 2003 1999
Bond Fund (VBF)....................... 1997 2003 2003 1997 2003 2003 1997 2003 2003 1999
Income Trust (VIN).................... 1997 2003 2003 1997 2003 2003 1997 2003 2003 1999
SONNENSCHEIN WHALEN WOOLSEY
------------ ------ -------
Trust for Investment Grade New Jersey
Municipals (VTJ)..................... 1994 1992 2003
Trust for Investment Grade New York
Municipals (VTN)..................... 1994 1992 2003
Trust for Investment Grade
Pennsylvania Municipals (VTP)........ 1994 1992 2003
Advantage Municipal Income Trust II
(VKI)................................ 1994 1993 2003
California Value Municipal Income
Trust (VCV).......................... 1994 1993 2003
Massachusetts Value Municipal Income
Trust (VMV).......................... 1994 1993 2003
Municipal Opportunity Trust II
(VOT)................................ 1994 1993 2003
New York Value Municipal Income Trust
(VNV)................................ 1994 1993 2003
Ohio Value Municipal Income Trust
(VOV)................................ 1994 1993 2003
Pennsylvania Value Municipal Income
Trust (VPV).......................... 1994 1993 2003
Select Sector Municipal Trust (VKL)... 1994 1993 2003
Value Municipal Income Trust (VKV).... 1994 1993 2003
Bond Fund (VBF)....................... 1997 1997 2003
Income Trust (VIN).................... 1997 1997 2003
C-2
ANNEX D
2003 AGGREGATE COMPENSATION BEFORE DEFERRAL FROM EACH FUND
NAME OF FUND FISCAL YEAR-END ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY KERR NELSON
------------ --------------- ---- -------- ------ -------- ----- ------- ---- ------
Bond Fund.......................... 6/30 $3,126 n/a n/a $3,126 n/a n/a $3,126 n/a
California Municipal Trust......... 6/30 1,912 n/a n/a 1,912 n/a n/a 1,912 n/a
Municipal Income Trust............. 6/30 5,007 n/a n/a 5,007 n/a n/a 5,007 n/a
Advantage Municipal Income Trust... 10/31 5,179 $1,524 $1,524 5,179 $1,524 $1,524 5,179 $1,524
Advantage Municipal Income Trust
II................................ 10/31 2,886 838 838 2,886 838 838 2,886 838
Advantage Pennsylvania Municipal
Income Trust...................... 10/31 2,251 651 651 2,251 651 651 2,251 651
California Quality Municipal
Trust............................. 10/31 3,186 927 927 3,186 927 927 3,186 927
California Value Municipal Income
Trust............................. 10/31 2,607 756 756 2,607 756 756 2,607 756
Florida Quality Municipal Trust.... 10/31 2,579 748 748 2,579 748 748 2,579 748
Investment Grade Municipal Trust... 10/31 1,944 559 559 1,944 559 559 1,944 559
Massachusetts Value Municipal
Income Trust...................... 10/31 1,904 547 547 1,904 547 547 1,904 547
Municipal Opportunity Trust........ 10/31 4,460 1,306 1,306 4,460 1,306 1,306 4,460 1,306
Municipal Opportunity Trust II..... 10/31 3,549 1,037 1,037 3,549 1,037 1,037 3,549 1,037
Municipal Trust.................... 10/31 7,981 2,368 2,368 7,981 2,368 2,368 7,981 2,368
New York Quality Municipal Trust... 10/31 2,445 708 708 2,445 708 708 2,445 708
New York Value Municipal Income
Trust............................. 10/31 2,218 642 642 2,218 642 642 2,218 642
Ohio Quality Municipal Trust....... 10/31 2,199 638 638 2,199 638 638 2,199 638
Ohio Value Municipal Income
Trust............................. 10/31 1,702 489 489 1,702 489 489 1,702 489
Pennsylvania Quality Municipal
Trust............................. 10/31 2,910 850 850 2,910 850 850 2,910 850
Pennsylvania Value Municipal Income
Trust............................. 10/31 2,270 659 659 2,270 659 659 2,270 659
Select Sector Municipal Trust...... 10/31 2,133 618 618 2,133 618 618 2,133 618
Strategic Sector Municipal Trust... 10/31 3,259 954 954 3,259 954 954 3,259 954
Trust for Insured Municipals....... 10/31 3,267 952 952 3,267 952 952 3,267 952
Trust for Investment Grade
California Municipals............. 10/31 2,298 666 666 2,298 666 666 2,298 666
Trust for Investment Grade Florida
Municipals........................ 10/31 2,531 735 735 2,531 735 735 2,531 735
Trust for Investment Grade
Municipals........................ 10/31 6,818 2,014 2,014 6,818 2,014 2,014 6,818 2,014
Trust for Investment Grade New
Jersey Municipals................. 10/31 2,699 787 787 2,699 787 787 2,699 787
Trust for Investment Grade New York
Municipals........................ 10/31 2,640 769 769 2,640 769 769 2,640 769
Trust for Investment Grade
Pennsylvania Municipals........... 10/31 2,869 839 839 2,869 839 839 2,869 839
Value Municipal Income Trust....... 10/31 5,786 1,706 1,706 5,786 1,706 1,706 5,786 1,706
High Income Trust.................. 12/31 2,137 1,172 1,172 1,937 1,172 1,172 2,137 1,172
High Income Trust II............... 12/31 1,985 1,073 1,073 1,785 1,073 1,073 1,985 1,073
Income Trust....................... 12/31 2,234 1,228 1,228 2,034 1,228 1,228 2,234 1,228
NAME OF FUND SONNENSCHEIN WHALEN WOOLSEY
------------ ------------ ------ -------
Bond Fund.......................... $3,126 $3,126 n/a
California Municipal Trust......... 1,912 1,912 n/a
Municipal Income Trust............. 5,007 5,007 n/a
Advantage Municipal Income Trust... 5,179 5,179 $1,524
Advantage Municipal Income Trust
II................................ 2,886 2,886 838
Advantage Pennsylvania Municipal
Income Trust...................... 2,251 2,251 651
California Quality Municipal
Trust............................. 3,186 3,186 927
California Value Municipal Income
Trust............................. 2,607 2,607 756
Florida Quality Municipal Trust.... 2,579 2,579 748
Investment Grade Municipal Trust... 1,944 1,944 559
Massachusetts Value Municipal
Income Trust...................... 1,904 1,904 547
Municipal Opportunity Trust........ 4,460 4,460 1,306
Municipal Opportunity Trust II..... 3,549 3,549 1,037
Municipal Trust.................... 7,981 7,981 2,368
New York Quality Municipal Trust... 2,445 2,445 708
New York Value Municipal Income
Trust............................. 2,218 2,218 642
Ohio Quality Municipal Trust....... 2,199 2,199 638
Ohio Value Municipal Income
Trust............................. 1,702 1,702 489
Pennsylvania Quality Municipal
Trust............................. 2,910 2,910 850
Pennsylvania Value Municipal Income
Trust............................. 2,270 2,270 659
Select Sector Municipal Trust...... 2,133 2,133 618
Strategic Sector Municipal Trust... 3,259 3,259 954
Trust for Insured Municipals....... 3,267 3,267 952
Trust for Investment Grade
California Municipals............. 2,298 2,298 666
Trust for Investment Grade Florida
Municipals........................ 2,531 2,531 735
Trust for Investment Grade
Municipals........................ 6,818 6,818 2,014
Trust for Investment Grade New
Jersey Municipals................. 2,699 2,699 787
Trust for Investment Grade New York
Municipals........................ 2,640 2,640 769
Trust for Investment Grade
Pennsylvania Municipals........... 2,869 2,869 839
Value Municipal Income Trust....... 5,786 5,786 1,706
High Income Trust.................. 2,137 2,137 1,172
High Income Trust II............... 1,985 1,985 1,073
Income Trust....................... 2,234 2,234 1,228
D-1
ANNEX E
2003 AGGREGATE COMPENSATION DEFERRED FOR EACH FUND
NAME OF FUND FISCAL YEAR-END CHOATE DAMMEYER HEAGY NELSON SONNENSCHEIN WHALEN
------------ --------------- ------ -------- ----- ------ ------------ ------
Bond Fund...................................... 6/30 n/a $3,126 n/a n/a $3,126 $3,126
California Municipal Trust..................... 6/30 n/a 1,912 n/a n/a 1,912 1,912
Municipal Income Trust......................... 6/30 n/a 5,007 n/a n/a 5,007 5,007
Advantage Municipal Income Trust............... 10/31 $1,524 5,179 $1,524 $1,524 5,179 5,179
Advantage Municipal Income Trust II............ 10/31 838 2,886 838 838 2,886 2,886
Advantage Pennsylvania Municipal Income
Trust......................................... 10/31 651 2,251 651 651 2,251 2,251
California Quality Municipal Trust............. 10/31 927 3,186 927 927 3,186 3,186
California Value Municipal Income Trust........ 10/31 756 2,607 756 756 2,607 2,607
Florida Quality Municipal Trust................ 10/31 748 2,579 748 748 2,579 2,579
Investment Grade Municipal Trust............... 10/31 559 1,944 559 559 1,944 1,944
Massachusetts Value Municipal Income Trust..... 10/31 547 1,904 547 547 1,904 1,904
Municipal Opportunity Trust.................... 10/31 1,306 4,460 1,306 1,306 4,460 4,460
Municipal Opportunity Trust II................. 10/31 1,037 3,549 1,037 1,037 3,549 3,549
Municipal Trust................................ 10/31 2,368 7,981 2,368 2,368 7,981 7,981
New York Quality Municipal Trust............... 10/31 708 2,445 708 708 2,445 2,445
New York Value Municipal Income Trust.......... 10/31 642 2,218 642 642 2,218 2,218
Ohio Quality Municipal Trust................... 10/31 638 2,199 638 638 2,199 2,199
Ohio Value Municipal Income Trust.............. 10/31 489 1,702 489 489 1,702 1,702
Pennsylvania Quality Municipal Trust........... 10/31 850 2,910 850 850 2,910 2,910
Pennsylvania Value Municipal Income Trust...... 10/31 659 2,270 659 659 2,270 2,270
Select Sector Municipal Trust.................. 10/31 618 2,133 618 618 2,133 2,133
Strategic Sector Municipal Trust............... 10/31 954 3,259 954 954 3,259 3,259
Trust for Insured Municipals................... 10/31 952 3,267 952 952 3,267 3,267
Trust for Investment Grade California
Municipals.................................... 10/31 666 2,298 666 666 2,298 2,298
Trust for Investment Grade Florida
Municipals.................................... 10/31 735 2,531 735 735 2,531 2,531
Trust for Investment Grade Municipals.......... 10/31 2,014 6,818 2,014 2,014 6,818 6,818
Trust for Investment Grade New Jersey
Municipals.................................... 10/31 787 2,699 787 787 2,699 2,699
Trust for Investment Grade New York
Municipals.................................... 10/31 769 2,640 769 769 2,640 2,640
Trust for Investment Grade Pennsylvania
Municipals.................................... 10/31 839 2,869 839 839 2,869 2,869
Value Municipal Income Trust................... 10/31 1,706 5,786 1,706 1,706 5,786 5,786
High Income Trust.............................. 12/31 1,172 1,937 1,172 1,172 2,137 2,137
High Income Trust II........................... 12/31 1,073 1,785 1,073 1,073 1,985 1,985
Income Trust................................... 12/31 1,228 2,034 1,228 1,228 2,234 2,234
E-1
ANNEX F
CUMULATIVE COMPENSATION DEFERRED (PLUS INTEREST) FROM EACH FUND
NAME OF FUND FISCAL YEAR-END CHOATE DAMMEYER HEAGY KERR NELSON SONNENSCHEIN WHALEN
------------ --------------- ------ -------- ----- ---- ------ ------------ ------
Bond Fund............................... 6/30 n/a $16,355 n/a $2,327 n/a $15,531 $17,483
California Municipal Trust.............. 6/30 n/a 27,439 n/a 23,607 n/a 26,353 25,554
Municipal Income Trust.................. 6/30 n/a 41,639 n/a 25,190 n/a 39,645 40,488
Advantage Municipal Income Trust........ 10/31 1,585 45,373 1,544 25,839 1,597 42,368 44,574
Advantage Municipal Income Trust II..... 10/31 872 33,726 850 24,602 880 31,660 32,295
Advantage Pennsylvania Municipal Income
Trust.................................. 10/31 678 30,592 661 24,272 685 28,777 28,992
California Quality Municipal Trust...... 10/31 965 35,376 940 24,788 973 33,176 34,037
California Value Municipal Income
Trust.................................. 10/31 787 32,301 768 24,445 795 30,348 30,791
Florida Quality Municipal Trust......... 10/31 778 32,271 759 24,450 786 30,321 30,762
Investment Grade Municipal Trust........ 10/31 582 29,036 568 24,115 589 27,347 27,352
Massachusetts Value Municipal Income
Trust.................................. 10/31 570 28,775 556 24,075 576 27,106 27,075
Municipal Opportunity Trust............. 10/31 1,359 41,887 1,324 25,469 1,369 39,161 40,901
Municipal Opportunity Trust II.......... 10/31 1,079 37,090 1,052 24,961 1,088 34,753 35,842
Municipal Trust......................... 10/31 2,463 59,747 2,398 27,477 2,478 55,588 59,739
New York Quality Municipal Trust........ 10/31 737 31,597 719 24,377 745 29,701 30,052
New York Value Municipal Income Trust... 10/31 668 30,346 652 24,241 676 28,552 28,731
Ohio Quality Municipal Trust............ 10/31 664 30,313 648 24,244 671 28,520 28,697
Ohio Value Municipal Income Trust....... 10/31 509 27,778 498 23,976 516 26,190 26,025
Pennsylvania Quality Municipal Trust.... 10/31 885 33,949 863 24,630 893 31,862 32,532
Pennsylvania Value Municipal Income
Trust.................................. 10/31 686 30,626 669 24,271 693 28,809 29,027
Select Sector Municipal Trust........... 10/31 643 29,967 628 24,208 651 28,203 28,333
Strategic Sector Municipal Trust........ 10/31 993 35,745 968 24,820 1,001 33,515 34,425
Trust for Insured Municipals............ 10/31 991 35,559 966 24,832 999 33,366 34,251
Trust for Investment Grade California
Municipals............................. 10/31 693 30,841 677 24,307 701 29,008 29,258
Trust for Investment Grade Florida
Municipals............................. 10/31 765 55,925 746 48,237 773 52,581 52,428
Trust for Investment Grade Municipals... 10/31 2,095 52,693 2,040 26,748 2,109 49,204 52,393
Trust for Investment Grade New Jersey
Municipals............................. 10/31 819 55,683 799 48,316 827 52,455 52,263
Trust for Investment Grade New York
Municipals............................. 10/31 800 32,649 781 24,484 808 30,662 31,155
Trust for Investment Grade Pennsylvania
Municipals............................. 10/31 873 33,863 852 24,611 881 31,775 32,432
Value Municipal Income Trust............ 10/31 1,774 48,418 1,728 26,155 1,787 45,168 47,783
High Income Trust....................... 12/31 1,237 33,880 1,245 26,044 1,231 31,612 31,332
High Income Trust II.................... 12/31 1,133 32,703 1,141 25,903 1,128 30,544 30,125
Income Trust............................ 12/31 1,296 14,573 1,303 2,027 1,290 13,682 15,378
F-1
ANNEX G
TRUSTEE OWNERSHIP OF COMMON SHARES OF THE FUNDS
The table below indicates the number of Common Shares of the respective
Funds listed below owned by each Trustee listed below as of May 13, 2004, and
the percentage of such Trustee's Common Shares to the total Common Shares
outstanding for such Fund is shown in parenthesis when such ownership
individually exceeds 1% of the total Common Shares outstanding.
ARCH BRANAGAN DAMMEYER HEAGY KENNEDY SONNENSCHEIN WHALEN WOOLSEY
---- -------- -------- ----- ------- ------------ ------ -------
Advantage Municipal Income
Trust(1)......................... 300 69 196,870(1.03%) 100 100 300 836
Advantage Municipal Income Trust
II(2)............................ 500 76 141,576(1.73%) 350 500
Bond Fund......................... 56 50 290
California Municipal Trust(3)..... 90,750(2.79%)
California Quality Municipal
Trust............................ 86,794
California Value Municipal Income
Trust............................ 50,317
High Income Trust................. 676 257 67,617 19,012
High Income Trust II.............. 550 232 150 200
Investment Grade Municipal
Trust............................ 524 113 11,400 100 100 300 823
Income Trust...................... 111 930
Municipal Income Trust............ 577 70 11,300 100 100 300 844 565
Municipal Opportunity Trust....... 300 178 6,400 100 100 300 881 350
Municipal Opportunity Trust
II(4)............................ 76 126,974(1.08%) 100 350 500
Municipal Trust................... 800 74 16,600 100 100 300 853
Select Sector Municipal Trust..... 511 82 100 100 350 500
Strategic Sector Municipal
Trust............................ 500 78 72,921
Trust for Insured Municipals...... 300 69 9,000 50 892
Trust for Investment Grade
California Municipals(5)......... 96,316(2.06%)
Trust for Investment Grade
Municipals....................... 300 69 8,000 883 355
Value Municipal Income Trust...... 74 64,378
---------------
(1) The Trustees as a group own 1.04% of the total Common Shares outstanding of
Advantage Municipal Income Trust
(2) The Trustees as a group own 1.75% of the total Common Shares outstanding of
Advantage Municipal Income Trust II
(3) The Trustees as a group own 2.79% of the total Common Shares outstanding of
California Municipal Trust
(4) The Trustees as a group own 1.09% of the total Common Shares outstanding of
Municipal Opportunity Trust II
(5) The Trustees as a group own 2.06% of the total Common Shares outstanding of
Trust for Investment Grade California Municipals
G-1
ANNEX H
TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES
The table below indicates the aggregate dollar range of equity securities of
the respective Funds listed below owned by each Trustee listed below as of May
13, 2004.
INDEPENDENT TRUSTEES
-----------------------------------------------------------------------------------------
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY
---- -------- ------ -------- ----- -------
Advantage Municipal Income Trust...... $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Advantage Municipal Income Trust II... $1-$10,000 $1-$10,000 over $100,000
Bond.................................. $1-$10,000 $1-$10,000
California Municipal Trust............ over
$100,000
California Quality Municipal Trust.... over
$100,000
California Value Municipal Trust...... over
$100,000
High Income Trust..................... $1-$10,000 $1-$10,000 over $100,000
High Income Trust II.................. $1-$10,000 $1-$10,000 $1-$10,000
Income Trust.......................... $1-$10,000
Investment Grade Municipal Trust...... $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Income Trust................ $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Opportunity Trust........... $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Opportunity Trust II........ $1-$10,000 over $100,000 $1-$10,000
Select Sector Municipal Trust......... $1-$10,000 $1-$10,000 $1-$10,000 $1-$10,000
Municipal Trust....................... $10,001-$50,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Strategic Sector Municipal Trust...... $1-$10,000 $1-$10,000 over $100,000
Trust for Insured Municipals.......... $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
Trust for Investment Grade California
Municipals........................... over
$100,000
Trust for Investment Grade
Municipals........................... $1-$10,000 $1-$10,000 over $100,000
Value Municipal Income Trust.......... $1-$10,000 over $100,000
Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen by
Trustee in the Fund Complex.......... $50,001-$100,000 $10,001-$50,000 $1-$10,000 over $100,000 $10,001- $1-$10,000
$50,000
INDEPENDENT TRUSTEES
-------------------------------------
KERR NELSON SONNENSCHEIN
---- ------ ------------
Advantage Municipal Income Trust...... $1-$10,000
Advantage Municipal Income Trust II... $1-$10,000
Bond..................................
California Municipal Trust............
California Quality Municipal Trust....
California Value Municipal Trust......
High Income Trust.....................
High Income Trust II..................
Income Trust..........................
Investment Grade Municipal Trust...... $1-$10,000
Municipal Income Trust................ $1-$10,000
Municipal Opportunity Trust........... $1-$10,000
Municipal Opportunity Trust II........ $1-$10,000
Select Sector Municipal Trust......... $1-$10,000
Municipal Trust.......................
Strategic Sector Municipal Trust......
Trust for Insured Municipals..........
Trust for Investment Grade California
Municipals...........................
Trust for Investment Grade
Municipals...........................
Value Municipal Income Trust..........
Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen by
Trustee in the Fund Complex.......... $1-$10,000 over $100,000
INTERESTED TRUSTEES
-------------------------------------------------------------
MERIN POWERS WHALEN WOOLSEY
----- ------ ------ -------
Advantage Municipal Income Trust...... $10,001-$50,000
Advantage Municipal Income Trust II... $1-$10,000
Bond.................................. $1-$10,000
California Municipal Trust............
California Quality Municipal Trust....
California Value Municipal Trust......
High Income Trust..................... $50,001-$100,000
High Income Trust II.................. $1-$10,000
Income Trust.......................... $1-$10,000
Investment Grade Municipal Trust...... $1-$10,000
Municipal Income Trust................ $1-$10,000 $1-$10,000
Municipal Opportunity Trust........... $10,001-$50,000 $1-$10,000
Municipal Opportunity Trust II........ $1-$10,000
Select Sector Municipal Trust......... $1-$10,000
Municipal Trust....................... $1-$10,000 $10,001-$50,000
Strategic Sector Municipal Trust......
Trust for Insured Municipals.......... $10,000-$50,000
Trust for Investment Grade California
Municipals...........................
Trust for Investment Grade
Municipals........................... $10,000-$50,000 $1-$10,000
Value Municipal Income Trust..........
Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen by
Trustee in the Fund Complex.......... over $100,000 over $100,000 over $100,000 $10,001-
$50,000
H-1
ANNEX I
TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES
The table below indicates the aggregate dollar range of equity securities of
the respective Funds listed below owned by each Trustee, combining equity
beneficial ownership with such Trustees' deferred compensation amounts, as of
May 13, 2004.
INDEPENDENT TRUSTEES
----------------------------------------------------------------------------------------------
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY
---- -------- ------ -------- ----- -------
Advantage Municipal
Income Trust......... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Advantage Municipal
Income Trust II...... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
Advantage Pennsylvania
Municipal Income
Trust................ $1-$10,000 $10,001-$50,000 $1-$10,000
Bond Fund............. $1-$10,000 $10,001-$50,000 $1-$10,000
California Municipal
Trust................ over $100,000
California Quality
Municipal Trust...... $1-$10,000 over $100,000 $1-$10,000
California Value
Municipal Income
Trust................ $1-$10,000 over $100,000 $1-$10,000
Florida Quality
Municipal Trust...... $1-$10,000 $10,001-$50,000 $1-$10,000
High Income Trust..... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
High Income Trust II.. $1-$10,000 $1-$10,000 $1-$10,000 $10,001-$50,000 $1-$10,000 $1-$10,000
Income Trust.......... $1-$10,000 $1-$10,000 $10,001-$50,000
Investment Grade
Municipal Trust...... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Massachusetts Value
Municipal Income
Trust................ $1-$10,000 $10,001-$50,000 $1-$10,000
Municipal Income
Trust................ $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Opportunity
Trust................ $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Opportunity
Trust II............. $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Municipal Trust....... $10,001-$50,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
INDEPENDENT TRUSTEES
----------------------------------------------------
KERR NELSON SONNENSCHEIN
---- ------ ------------
Advantage Municipal
Income Trust......... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Advantage Municipal
Income Trust II...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Advantage Pennsylvania
Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Bond Fund............. $1-$10,000
California Municipal
Trust................ $10,001-$50,000 $10,001-$50,000
California Quality
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
California Value
Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Florida Quality
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
High Income Trust..... $10,001-$50,000 $1-$10,000 $10,001-$50,000
High Income Trust II.. $10,001-$50,000 $1-$10,000 $10,001-$50,000
Income Trust.......... $1-$10,000 $1-$10,000 $10,001-$50,000
Investment Grade
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Massachusetts Value
Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Municipal Income
Trust................ $10,001-$50,000 $10,001-$50,000
Municipal Opportunity
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Municipal Opportunity
Trust II............. $10,001-$50,000 $1-$10,000 $10,001-$50,000
Municipal Trust....... $10,001-$50,000 $1-$10,000 $50,001-$100,000
INTERESTED TRUSTEES
-------------------------------------------------------------
MERIN POWERS WHALEN WOOLSEY
----- ------ ------ -------
Advantage Municipal
Income Trust......... $50,001-$100,000
Advantage Municipal
Income Trust II...... $10,001-$50,000
Advantage Pennsylvania
Municipal Income
Trust................ $10,001-$50,000
Bond Fund............. $10,001-$50,000 $1-$10,000
California Municipal
Trust................ $10,001-$50,000
California Quality
Municipal Trust...... $10,001-$50,000
California Value
Municipal Income
Trust................ $10,001-$50,000
Florida Quality
Municipal Trust...... $10,001-$50,000
High Income Trust..... $50,001-$100,000
High Income Trust II.. $10,001-$50,000
Income Trust.......... $10,001-$50,000 $1-$10,000
Investment Grade
Municipal Trust...... $10,001-$50,000
Massachusetts Value
Municipal Income
Trust................ $10,001-$50,000
Municipal Income
Trust................ $50,001-$100,000 $1-$10,000
Municipal Opportunity
Trust................ $50,001-$100,000 $1-$10,000
Municipal Opportunity
Trust II............. $1-$10,000
Municipal Trust....... $50,001-$100,000
I-1
ANNEX I -- (CONTINUED)
INDEPENDENT TRUSTEES
----------------------------------------------------------------------------------------------
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY
---- -------- ------ -------- ----- -------
New York Quality
Municipal Trust...... $1-$10,000 $10,001-$50,000 $1-$10,000
New York Value
Municipal Income
Trust................ $1-$10,000 $10,001-$50,000 $1-$10,000
Ohio Quality Municipal
Trust................ $1-$10,000 $10,001-$50,000 $1-$10,000
Ohio Value Municipal
Income Trust......... $1-$10,000 $10,001-$50,000 $1-$10,000
Pennsylvania Quality
Municipal Trust...... $1-$10,000 $10,001-$50,000 $1-$10,000
Pennsylvania Value
Municipal Income
Trust................ $1-$10,000 $10,001-$50,000 $1-$10,000
Select Sector
Municipal Trust...... $1-$10,000 $1-$10,000 $1-$10,000 $10,001-$50,000 $1-$10,000 $1-$10,000
Strategic Sector
Municipal Trust...... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
Trust for Insured
Municipals........... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000 $1-$10,000
Trust for Investment
Grade California
Municipals........... $1-$10,000 over $100,000 $1-$10,000
Trust for Investment
Grade Florida
Municipals........... $1-$10,000 $50,001-$100,000 $1-$10,000
Trust for Investment
Grade Municipals..... $1-$10,000 $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
Trust for Investment
Grade New Jersey
Municipals........... $1-$10,000 $50,001-$100,000 $1-$10,000
Trust for Investment
Grade New York
Municipals........... $1-$10,000 $10,001-$50,000 $1-$10,000
INDEPENDENT TRUSTEES
----------------------------------------------------
KERR NELSON SONNENSCHEIN
---- ------ ------------
New York Quality
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
New York Value
Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Ohio Quality Municipal
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Ohio Value Municipal
Income Trust......... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Pennsylvania Quality
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Pennsylvania Value
Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Select Sector
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Strategic Sector
Municipal Trust...... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Trust for Insured
Municipals........... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Trust for Investment
Grade California
Municipals........... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Trust for Investment
Grade Florida
Municipals........... $10,001-$50,000 $1-$10,000 $50,001-$100,000
Trust for Investment
Grade Municipals..... $10,001-$50,000 $1-$10,000 $50,001-$100,000
Trust for Investment
Grade New Jersey
Municipals........... $10,001-$50,000 $1-$10,000 $50,001-$100,000
Trust for Investment
Grade New York
Municipals........... $10,001-$50,000 $1-$10,000 $10,001-$50,000
INTERESTED TRUSTEES
-------------------------------------------------------------
MERIN POWERS WHALEN WOOLSEY
----- ------ ------ -------
New York Quality
Municipal Trust...... $10,001-$50,000
New York Value
Municipal Income
Trust................ $10,001-$50,000
Ohio Quality Municipal
Trust................ $10,001-$50,000
Ohio Value Municipal
Income Trust......... $10,001-$50,000
Pennsylvania Quality
Municipal Trust...... $10,001-$50,000
Pennsylvania Value
Municipal Income
Trust................ $10,001-$50,000
Select Sector
Municipal Trust...... $10,001-$50,000
Strategic Sector
Municipal Trust...... $10,001-$50,000
Trust for Insured
Municipals........... $10,001-$50,000
Trust for Investment
Grade California
Municipals........... $1-$10,000
Trust for Investment
Grade Florida
Municipals........... $50,001-$100,000
Trust for Investment
Grade Municipals..... $50,001-$100,000 $1-$10,000
Trust for Investment
Grade New Jersey
Municipals........... $50,001-$100,000
Trust for Investment
Grade New York
Municipals........... $10,001-$50,000
I-2
ANNEX I -- (CONTINUED)
INDEPENDENT TRUSTEES
----------------------------------------------------------------------------------------------
ARCH BRANAGAN CHOATE DAMMEYER HEAGY KENNEDY
---- -------- ------ -------- ----- -------
Trust for Investment
Grade Pennsylvania
Municipals........... $1-$10,000 $10,001-$50,000 $1-$10,000
Value Municipal Income
Trust................ $1-$10,000 $1-$10,000 over $100,000 $1-$10,000
Aggregate Dollar Range
of Equity Securities
and Deferred
Compensation in all
Registered Investment
Companies Overseen by
Trustee in the Fund
Complex.............. $50,001-$100,000 $10,001- $10,001-$50,000 over $100,000 $1-$10,000 $1-$10,000
$50,000
INDEPENDENT TRUSTEES
----------------------------------------------------
KERR NELSON SONNENSCHEIN
---- ------ ------------
Trust for Investment
Grade Pennsylvania
Municipals........... $10,001-$50,000 $1-$10,000 $10,001-$50,000
Value Municipal Income
Trust................ $10,001-$50,000 $1-$10,000 $10,001-$50,000
Aggregate Dollar Range
of Equity Securities
and Deferred
Compensation in all
Registered Investment
Companies Overseen by
Trustee in the Fund
Complex.............. over $100,000 $10,001-$50,000 over $100,000
INTERESTED TRUSTEES
-------------------------------------------------------------
MERIN POWERS WHALEN WOOLSEY
----- ------ ------ -------
Trust for Investment
Grade Pennsylvania
Municipals........... $10,001-$50,000
Value Municipal Income
Trust................ $10,001-$50,000
Aggregate Dollar Range
of Equity Securities
and Deferred
Compensation in all
Registered Investment
Companies Overseen by
Trustee in the Fund
Complex.............. over $100,000 over $100,000 over $100,000 $10,001-
$50,000
I-3
ANNEX J
FISCAL YEAR END 2003 AUDIT AND OTHER FEES
NON-AUDIT FEES
-----------------------------------------------------
NAME OF FUND FISCAL YEAR-END AUDIT FEES AUDIT-RELATED TAX(3) ALL OTHER TOTAL NON-AUDIT TOTAL
------------ --------------- ---------- ------------- ------ --------- --------------- -----
Bond Fund....................... 6/30 $21,300 $ 0 $1,500 $0 $ 1,500 $ 22,800
California Municipal Trust...... 6/30 27,500 2,800 1,500 0 4,300 31,800
Municipal Income Trust.......... 6/30 26,200 2,800 1,500 0 4,300 30,500
Advantage Municipal Income
Trust.......................... 10/31 27,575 3,170 1,500 0 4,670 32,245
Advantage Municipal Income Trust
II............................. 10/31 22,275 3,170 1,500 0 4,670 26,945
Advantage Pennsylvania Municipal
Income Trust................... 10/31 22,274 3,170 1,500 0 4,670 26,944
California Quality Municipal
Trust.......................... 10/31 27,574 3,170 1,500 0 4,670 32,244
California Value Municipal
Income Trust................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Florida Quality Municipal
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Investment Grade Municipal
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Massachusetts Value Municipal
Income Trust................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Municipal Opportunity Trust..... 10/31 27,574 3,170 1,500 0 4,670 32,244
Municipal Opportunity Trust
II............................. 10/31 27,574 3,170 1,500 0 4,670 32,244
Municipal Trust................. 10/31 27,574 3,170 1,500 0 4,670 32,244
New York Quality Municipal
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
New York Value Municipal Income
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Ohio Quality Municipal Trust.... 10/31 22,274 3,170 1,500 0 4,670 26,944
Ohio Value Municipal Income
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Pennsylvania Quality Municipal
Trust.......................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Pennsylvania Value Municipal
Income Trust................... 10/31 22,274 3,170 1,500 0 4,670 26,944
Select Sector Municipal Trust... 10/31 22,274 3,170 1,500 0 4,670 26,944
Strategic Sector Municipal
Trust.......................... 10/31 26,094 3,170 1,500 0 4,670 30,764
Trust for Insured Municipals.... 10/31 27,574 3,170 1,500 0 4,670 32,244
Trust for Investment Grade
California Municipals.......... 10/31 22,274 3,170 1,500 0 4,670 26,944
Trust for Investment Grade
Florida Municipals............. 10/31 22,274 3,170 1,500 0 4,670 26,944
Trust for Investment Grade
Municipals..................... 10/31 27,574 3,170 1,500 0 4,670 32,244
Trust for Investment Grade New
Jersey Municipals.............. 10/31 22,274 3,170 1,500 0 4,670 26,944
Trust for Investment Grade New
York Municipals................ 10/31 22,274 3,170 1,500 0 4,670 26,944
Trust for Investment Grade
Pennsylvania Municipals........ 10/31 22,274 3,170 1,500 0 4,670 26,944
Value Municipal Income Trust.... 10/31 27,575 3,170 1,500 0 4,670 32,245
High Income Trust............... 12/31 38,135 3,550 1,500 0 5,050 43,185
High Income Trust II............ 12/31 38,135 3,550 1,500 0 5,050 43,185
Income Trust.................... 12/31 21,730 0 1,500 0 1,500 23,230
Covered Entities(1)............. N/A 230,000(2) 0 0 230,000 230,000
J-1
---------------
N/A- Not applicable.
(1) Covered Entities include the Adviser and any entity controlling, controlled
by or under common control with the Adviser that provides ongoing services
to the Registrant.
(2) Audit-Related Fees represent assurance and related services provided that
are reasonably related to the performance of the audit of Covered Entities'
financial statements.
(3) Tax Fees represent tax compliance services provided in connection with the
review of the Funds' tax returns.
J-2
FISCAL YEAR END 2002 AUDIT AND OTHER FEES
NON-AUDIT FEES
-----------------------------------------------------
NAME OF FUND FISCAL YEAR-END AUDIT FEES AUDIT-RELATED TAX(3) ALL OTHER TOTAL NON-AUDIT TOTAL
------------ --------------- ---------- ------------- ------ --------- --------------- -----
Bond Fund........................ 6/30 $24,816 $ 3,000 $1,500 $0 $ 4,500 $29,316
California Municipal Trust....... 6/30 20,267 3,000 1,500 0 4,500 24,767
Municipal Income Trust........... 6/30 26,067 3,000 1,500 0 4,500 30,567
Advantage Municipal Income
Trust........................... 10/31 26,019 3,000 1,500 0 4,500 30,519
Advantage Municipal Income Trust
II.............................. 10/31 21,019 3,000 1,500 0 4,500 25,519
Advantage Pennsylvania Municipal
Income Trust.................... 10/31 21,019 3,000 1,500 0 4,500 25,519
California Quality Municipal
Trust........................... 10/31 26,019 3,000 1,500 0 4,500 30,519
California Value Municipal Income
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Florida Quality Municipal
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Investment Grade Municipal
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Massachusetts Value Municipal
Income Trust.................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Municipal Opportunity Trust...... 10/31 26,019 3,000 1,500 0 4,500 30,519
Municipal Opportunity Trust II... 10/31 26,019 3,000 1,500 0 4,500 30,519
Municipal Trust.................. 10/31 26,019 3,000 1,500 0 4,500 30,519
New York Quality Municipal
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
New York Value Municipal Income
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Ohio Quality Municipal Trust..... 10/31 21,019 3,000 1,500 0 4,500 25,519
Ohio Value Municipal Income
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Pennsylvania Quality Municipal
Trust........................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Pennsylvania Value Municipal
Income Trust.................... 10/31 21,019 3,000 1,500 0 4,500 25,519
Select Sector Municipal Trust.... 10/31 21,019 3,000 1,500 0 4,500 25,519
Strategic Sector Municipal
Trust........................... 10/31 24,619 3,000 1,500 0 4,500 29,119
Trust for Insured Municipals..... 10/31 26,019 3,000 1,500 0 4,500 30,519
Trust for Investment Grade
California Municipals........... 10/31 21,019 3,000 1,500 0 4,500 25,519
Trust for Investment Grade
Florida Municipals.............. 10/31 21,019 3,000 1,500 0 4,500 25,519
Trust for Investment Grade
Municipals...................... 10/31 26,019 3,000 1,500 0 4,500 30,519
Trust for Investment Grade New
Jersey Municipals............... 10/31 21,019 3,000 1,500 0 4,500 25,519
Trust for Investment Grade New
York Municipals................. 10/31 21,019 3,000 1,500 0 4,500 25,519
Trust for Investment Grade
Pennsylvania Municipals......... 10/31 21,019 3,000 1,500 0 4,500 25,519
Value Municipal Income Trust..... 10/31 26,019 3,000 1,500 0 4,500 30,519
High Income Trust................ 12/31 36,000 3,000 1,500 0 4,500 40,500
High Income Trust II............. 12/31 36,000 3,000 1,500 0 4,500 40,500
Income Trust..................... 12/31 21,500 3,000 1,500 0 4,500 26,000
Covered Entities(1).............. N/A 95,000(2) 0 0 95,000 95,000
J-3
---------------
N/A- Not applicable.
(1) Covered Entities include the Adviser and any entity controlling, controlled
by or under common control with the Adviser that provides ongoing services
to the Registrant.
(2) Audit-Related Fees represent assurance and related services provided that
are reasonably related to the performance of the audit of Covered Entities'
financial statements.
(3) Tax Fees represent tax compliance services provided in connection with the
review of the Fund's tax returns.
J-4
ANNEX K
JOINT AUDIT COMMITTEE CHARTER
OF THE
VAN KAMPEN FUNDS
AS ADOPTED ON JULY 23, 2003(1)
---------------
(1) This Joint Audit Committee Charter, adopted as of the date above, supercedes
and replaces all prior versions that may have been adopted from time to
time.
1. MISSION STATEMENT
The Audit Committee (the "Audit Committee") is a committee of the Board of
Trustees/Directors/Managing General Partners (referred to herein as the
"Trustees" and collectively as the "Board") of each Van Kampen Fund (each a
"Fund").(2) The purpose of the Audit Committee is to provide assistance to the
Board in fulfilling its legal and fiduciary obligations with respect to matters
involving the accounting, auditing, financial reporting, internal control over
financial reporting and legal compliance functions of the Funds, including,
without limitation; (a) assisting the Board's oversight of (i) the integrity of
the Fund's financial statements, (ii) the Fund's compliance with legal and
regulatory requirements, (iii) the qualifications, independence and performance
of the Fund's independent auditors (the "Independent Auditors") and (iv) the
performance of the Fund's internal audit function, and (b) making the statement
by the Audit Committee pursuant to the rules of the Securities and Exchange
Commission (the "SEC") for inclusion in the Fund's annual proxy statement, if
any.
2. COMPOSITION
The Audit Committee shall be comprised of three or more Trustees of the Board.
Audit Committee members shall be designated by the full Board, and the manner of
selection of the Audit Committee chair shall also be designated by the full
Board.
The duties and responsibilities of an Audit Committee member shall be in
addition to those duties set out for a member of the Board. Audit Committee
members shall undertake this commitment with the understanding that they are
assuming additional responsibilities to prepare for, attend and actively
participate in Audit Committee meetings. This may require members to undertake
training covering their financial oversight responsibilities.
Each member of the Audit Committee shall be qualified to serve on the Audit
Committee pursuant to the requirements of the Sarbanes-Oxley Act of 2002 (the
"Act") and the rules and regulations promulgated by the SEC pursuant to the Act
and any requirements and rules of the New York Stock Exchange (the "NYSE"), the
American Stock Exchange (the "AMEX") and/or the Chicago Stock Exchange ("CHX")
as applicable to the Fund. Each member of the Audit Committee shall be
"independent" as defined by the Act and any rules and regulations
---------------
(2) This Joint Audit Committee Charter has been adopted by each Fund. Solely for
the sake of clarity and simplicity, this Joint Audit Committee Charter has
been drafted as if there is a single Fund, a single Audit Committee and a
single Board. The terms "Audit Committee," "Trustees" and "Board" mean the
Audit Committee, Trustees and the Board of each Fund, respectively, unless
the context otherwise requires. The Audit Committee, Trustees and the Board
of each Fund, however, shall act separately and in the best interests of its
respective Fund.
K-2
promulgated by the SEC pursuant to the Act and any requirements and rules of the
NYSE, AMEX and/or CHX as applicable to the Fund.
According to the rules and regulations promulgated by the SEC pursuant to the
Act, a member is independent (an "Independent Trustee") if he or she, other than
in his or her capacity as a member of the Board, the Audit Committee or any
other board committee, (a) does not accept directly or indirectly any
consulting, advisory or other compensatory fee from the Fund, other than receipt
of Trustee's fees (including additional amounts, if any, paid to chairs of
committees and committee members) and any pension or other forms of deferred
compensation from the Fund for prior service, so long as such compensation is
not contingent in any way on continued service, and (b) is not an "interested
person" of the Fund as defined in Section 2(a)(19) of the Investment Company Act
of 1940, as amended (the "1940 Act"). [The requirements of the NYSE, AMEX and
CHX are set forth in Appendix A hereto.]
Each member of the Audit Committee must be "financially literate" as such
qualification is interpreted by the Board in its business judgment, or must
become financially literate within a reasonable period of time after his or her
appointment to the Audit Committee. In addition, at least one member of the
Audit Committee must have "accounting or related financial management expertise"
as the Board interprets such qualification in its business judgment. Further,
either (a) at least one member of the Audit Committee must be determined to be
an "audit committee financial expert" (as such term is defined in the rules and
regulations promulgated by the SEC pursuant to the Act) by the Board, or (b) if
no member of the Audit Committee is an "audit committee financial expert," such
fact must be disclosed in the Fund's annual report filed with the SEC. The Audit
Committee shall recommend to the Board whether one or more of its members should
be deemed to be an "audit committee financial expert" or, if not, why not, and
the Board shall make the final determinations in this regard.
No Trustee may serve as a member of the Audit Committee if such Trustee serves
on the audit committee of more than two other public issuers, unless the Board
determines that such simultaneous service would not impair the ability of such
Trustee to serve effectively on the Audit Committee. Any such determination must
be disclosed in the Fund's annual proxy statement, if any.
3. MEETINGS OF THE AUDIT COMMITTEE
The Audit Committee shall fix its own rules of procedure, which shall be
consistent with the Fund's organizational documents and this Joint Audit
Committee Charter. The Audit Committee shall meet on a regular basis and special
meetings may be called as circumstances require. The Audit Committee, in its
discretion, may ask members of management or others to attend its meetings (or
portions thereof) and to provide pertinent information as necessary. The Audit
K-3
Committee shall meet separately on a periodic basis with (a) the principal
financial officer of the Fund and persons assisting with the preparation of the
Fund's financial statements, (b) the internal auditors (or personnel responsible
for the Fund's internal audit function) and (c) the Independent Auditors, in
each case to discuss any matters that the Audit Committee or any of the above
persons or firms believe should be discussed privately.
The Audit Committee shall cause to be maintained minutes of all meetings and
records relating to those meetings and provide copies of such minutes to the
Board and the Fund.
4. AUTHORITY
The Audit Committee shall have the authority to, carry out its duties and
responsibilities as set forth in this Joint Audit Committee Charter.
5. DUTIES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE
In carrying out its duties and responsibilities, the Audit Committee's
policies and procedures will remain flexible, so that it may be in a position to
react or respond to changing circumstances or conditions. The following are the
duties and responsibilities of the Audit Committee:
a. Oversight of the Auditor's Engagement/Independence
i. Instruct the Independent Auditors that they are ultimately
accountable to the Board and the Audit Committee, as the
shareholders' representatives, and that the Audit Committee has the
sole authority and responsibility to select (subject to ratification
by a majority of the Independent Trustees of the Board), compensate,
evaluate, and where appropriate terminate the Independent Auditors.
ii. Approve the selection (subject to ratification by a majority of the
Independent Trustees of the Board), compensation, evaluation and
termination of the Independent Auditors to audit the books and
accounts of the Fund and its subsidiaries, if any, for each fiscal
year.
iii. Review and, in its sole discretion, approve in advance the
Independent Auditors' annual engagement letter, including the
proposed fees contained therein.
iv. Review and, in its sole discretion, pre-approve (A) all engagements
for audit and non-audit services to be provided by the Independent
Auditors to the Fund and (B) all engagements for non-audit services
to be provided by the Independent Auditors (1) to the Fund's
investment adviser(s) or (2) to any entity controlling, controlled by
or under common control with the Fund's investment adviser(s) that
provides
K-4
ongoing services to the Fund; but in the case of the services
described in subsection (B)(1) or (2), only if the engagement relates
directly to the operations and financial reporting of the Fund
(clauses (A) and (B), collectively, the "Covered Services" and the
entities referred to in clause (B), collectively, the "Covered
Entities"); provided that pre-approval by the Audit Committee of
Covered Services be effected pursuant to the procedures described
below in Section VI captioned "PRE-APPROVAL PROCEDURES"; and provided
that this Joint Audit Committee Charter shall not be violated if
pre-approval of any non-audit Covered Service is not obtained in
circumstances in which the pre-approval requirement is waived under
rules promulgated by the SEC under the Act or the NYSE or Amex
listing standards.
v. Obtain and review at least annually from the Independent Auditors a
report describing:
(1) the Independent Auditors' internal quality-control procedures;
(2) any material issues raised by the most recent internal quality-
control review, or peer review, of the Independent Auditors, or
by any inquiry or investigation by any governmental or
professional authority, within the preceding five years,
respecting one or more independent audits carried out by the
Independent Auditors, and any steps taken to deal with any such
issues; and
(3) all relationships between the Independent Auditor and the Fund.
vi. Review at least annually the qualifications, performance and
independence of the Independent Auditors, including the performance
of the lead partner of the Independent Auditors, and, in its
discretion, make decisions regarding the replacement or termination
of the Independent Auditors when circumstances warrant.
vii. Oversee the independence of the Independent Auditors by, among other
things:
(1) actively engaging in a dialogue with the Independent Auditors
with respect to any disclosed relationships or services that may
impact the objectivity and independence of the Independent
Auditors, and taking appropriate action to satisfy itself of the
auditor's independence;
(2) monitoring compliance by the Independent Auditors with the audit
partner rotation requirements contained in the Act and the rules
and regulations promulgated by the SEC thereunder;
K-5
(3) monitoring compliance by the Fund, the Fund's investment
adviser(s), the Fund's distributor and the Independent Auditors
with the employee conflict of interest requirements contained in
the Act and the rules and regulations promulgated by the SEC
thereunder;
(4) considering whether there should be a regular rotation of the
Independent Auditors; and
(5) obtaining from the Independent Auditors and reviewing a complete
description of all audit, management consulting, or other
services performed for management or its affiliates, consistent
with Independence Standards Board Standard 1.
b. Oversight of Financial Statements and the Audit
i. Review the annual audit plan of the Independent Auditors, including
the scope of audit activities, monitor such plan's progress, changes
thereto and results periodically during the year and review the
results of the year-end audit of the Fund, including any comments or
recommendations of the Independent Auditors.
ii. Obtain and review at least annually for the Fund a report from the
Independent Auditors describing:
(1) all critical accounting policies and practices used;
(2) all alternative treatments within United States generally
accepted accounting principles for policies and practices related
to material items that have been discussed with management of the
Fund, including (1) ramifications of the use of such alternative
disclosures and treatments, and (2) the treatment preferred by
the Independent Auditors;
(3) other material written communications between the Independent
Auditors and management of the Fund, such as any management
letter or schedule of unadjusted differences; and
(4) all non-audit services provided to any entity in the Fund's
investment company complex that were not pre-approved by the
Fund's Audit Committee pursuant to the Fund's pre-approval
procedures.
iii. Review with the principal financial officer of the Fund and persons
responsible for assisting with the preparation of the Fund's
financial statements, internal audit (or management responsible for
the Fund's internal audit function) and the Independent Auditors,
the following:
(1) the Fund's annual audited financial statements and interim
financial statements, and any major issues related thereto,
including
K-6
any significant matters arising in the preparation of the annual
and interim financial statements;
(2) critical accounting policies and such other accounting policies
of the Fund as are deemed appropriate for review by the Audit
Committee prior to any annual or interim filings with the SEC or
other regulatory body, including any financial reporting issues
which could have a material impact on the Fund's financial
statements;
(3) major issues regarding accounting principles and financial
statements presentations, including (i) any significant changes
in the Funds' selection or application of accounting principles,
and (ii) any analyses prepared by management and/or the
Independent Auditors setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of
the ramifications and effects of alternative generally accepted
accounting principles methods on the Funds' financial
statements;
(4) the Funds' exposure to risk, as well as the Funds' major
financial risk exposures and steps to control such exposures;
(5) qualitative judgments made about the appropriateness, not just
the acceptability, of accounting principles and financial
disclosure practices used or proposed to be adopted by the Funds
and, particularly, about the degree of neutrality and
objectivity of its accounting principles and underlying
estimates;
(6) any uncorrected misstatements whose effects management believes
are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole;
(7) procedures used to assess the representativeness of the
valuations of securities provided by external pricing sources,
particularly where such valuations are not based on prices last
quoted in organized markets;
(8) for securities valued at "fair value" as determined in good
faith under procedures established by the Board, inquire as to
Independent Auditors' conclusions as to the reasonableness of
the "fair value" procedures, management's adherence to such
procedures, and the adequacy of supporting documentation for any
valuation offered under the procedures;
(9) significant tax accounting policies elected by the Funds
(including matters affecting qualification under Subchapter M of
the
K-7
Internal Revenue Code) and their effect on amounts distributed and reported to
shareholders for Federal tax purposes;
(10) review with counsel legal and regulatory matters that may have a
material effect on the Funds' financial statements, related
compliance policies and programs, and any reports received from
regulators; and
(11) the effect of regulatory, accounting and financial reporting
initiatives on the financial statements of the Fund.
iv. Review on a regular basis with the Independent Auditors any problems
or difficulties encountered by the Independent Auditors in the course
of any audit work, including management's response with respect
thereto, any restrictions on the scope of the Independent Auditors's
activities or on access to requested information, and any significant
disagreements with management. In connection therewith, the Audit
Committee will review with the Independent Auditors the following:
(1) any accounting adjustments that were noted or proposed by the
Independent Auditors but were rejected by management (as
immaterial or otherwise);
(2) any communications between the audit team and the Independent
Auditors' national office respecting auditing or accounting
issues presented by the engagement; and
(3) any "management" or "internal control" letter issued, or proposed
to be issued, by the Independent Auditors to the Fund.
v. Attempt to resolve all disagreements between the Independent Auditors
and management regarding financial reporting.
vi. Review information obtained from the Independent Auditors pursuant to
Section 10A of the Securities Exchange Act of 1934.
c. Oversight of Internal Control Over Financial Reporting
i. Review periodically a report from the Fund's principal executive
officer, principal financial officer and Independent Auditors, at
least annually, regarding the following:
(1) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
of the Fund, any entity in the investment company complex (as
such term is defined in Regulation S-X promulgated by the SEC)
that is responsible for the financial reporting or operations of
the Fund (the "Related Entities"), or, to the knowledge of such
persons,
K-8
other service providers, which are reasonably likely to adversely affect the
Fund's ability to record, process, summarize, and report financial information,
including any material weaknesses in internal control over financial reporting
identified by the Independent Auditors;
(2) any fraud, whether or not material, that involves management or
other employees of the Fund, the Related Entities, or, to the
knowledge of such persons, other service providers to the Fund
who have a significant role in the Fund's internal control over
financial reporting; and
(3) any change in the Fund's internal control over financial
reporting that has materially affected, or is reasonably likely
to materially affect, the Fund's internal control over financial
reporting.
d. Compliance
i. Establish and maintain free and open means of communication between
and among the Board, the Audit Committee, the Independent Auditors,
internal auditors (or other personnel responsible for the internal
audit function), the Fund's management, including the principal
financial officer, management of the Fund's investment adviser(s),
management of the Fund's distributor, and management of those service
providers of the Fund deemed appropriate by the Audit Committee,
including providing such parties with appropriate opportunities to
meet separately and privately with the Audit Committee on a periodic
basis as the Audit Committee may deem necessary or appropriate.
ii. Establish procedures (by the earlier of: (1) the Fund's first annual
meeting shareholders' meeting, if any, after January 15, 2004 or (2)
October 31, 2004) for (A) the receipt, retention and treatment of
complaints received by the Fund regarding accounting, internal
accounting controls or auditing matters, and (B) the confidential,
anonymous submission by employees of the Related Entities, other
service providers responsible for such services or other persons of
concerns regarding questionable accounting or auditing matters.
iii. Secure independent expert advice to the extent the Audit Committee
determines it to be appropriate, including retaining, with or without
approval of the Board, independent counsel, accountants, consultants
or others, to assist the Audit Committee in fulfilling its duties and
responsibilities, the cost of such independent expert advisors to be
borne by the Fund.
K-9
iv. Discuss earnings press releases, if any, as well as financial
information and earnings guidance provided to analysts and rating
agencies, but this discussion may be general in nature (i.e.,
discussion of the type of information to be disclosed and the type of
presentation to be made) and need not precede each earnings release
or earnings guidance.
e. Miscellaneous
i. Perform an annual performance evaluation of the Audit Committee,
which evaluation shall compare the performance of the Audit Committee
with the requirements of this Joint Audit Committee Charter and
consider the goals and objectives of the Audit Committee for the
upcoming year. The evaluation shall include a review and assessment
of the adequacy of this Joint Audit Committee Charter and propose any
changes for approval by the Board. The performance evaluation by the
Audit Committee shall be conducted in such manner as the Audit
Committee deems appropriate;
ii. Report regularly to the Board on its activities, as appropriate; and
iii. Perform such additional activities, and consider such other matters,
within the scope of its duties and responsibilities, as the Audit
Committee or the Board deems necessary or appropriate.
6. PRE-APPROVAL PROCEDURES
The Audit Committee shall prepare written pre-approval procedures pursuant to
which it may pre-approve Covered Services. The Audit Committee, in its
discretion, may elect to delegate to one or more of its members authority to
pre-approve non-audit services to the Fund and Covered Services between
regularly scheduled meetings of the Audit Committee. Any such pre-approval
decision must be presented to the Committee at its next scheduled meeting. The
Audit Committee shall review and approve its pre-approval procedures at least
annually. The pre-approval procedures in effect from time-to-time shall be
attached to this Joint Audit Committee Charter as Appendix B.
7. REPORTING
The Audit Committee shall report its activities to the Board on a regular
basis, so that the Board is kept informed of its activities on a current basis.
In connection therewith, the Audit Committee will review with the Board any
issues that arise with respect to the quality or integrity of the Fund's
financial statements, the Fund's compliance with legal or regulatory
requirements, the performance and independence of the Independent Auditors, or
the performance of the Fund's internal audit function. In particular, the Audit
Committee will also report to the Board its conclusions or recommendations with
respect to matters the Audit Committee
K-10
considers to be of interest or the Board requests. Reports to the Board may take
the form of an oral report by the chairperson of the Audit Committee or any
other member of the Audit Committee designed by the Audit Committee to make this
report.
The Audit Committee shall make the statement required by the rules of the SEC
to be included in the Fund's annual proxy statement, if any, and determine to
its satisfaction that the Audit Committee has: (a) reviewed and discussed the
audited financial statements with management of the Fund; (b) discussed with the
Independent Auditors the matters required to be discussed by the Statements on
Auditing Standards No. 61; (c) received the written disclosures and the letter
from the Independent Auditors required by ISB Standard No. 1 and have discussed
with the Independent Auditors the auditor's independence; and (d) made a
recommendation to the Board as to whether the financial statements be included
in the Fund's annual report for the past fiscal year, as filed with the SEC.
8. RESOURCES
The Board shall ensure that the Audit Committee has adequate resources, as
determined by the Audit Committee, with which to discharge its responsibilities,
including for the payment of (a) compensation (i) to any firm of Independent
Auditors engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Fund, and (ii) to any
advisors employed by the Audit Committee, including independent counsel,
consultants or other advisors, as the Audit Committee determines necessary to
carry out its duties, and (b) ordinary administrative expenses of the Audit
Committee that are necessary or appropriate in carrying out its duties.
9. LIMITS ON ROLE OF AUDIT COMMITTEE
While the Audit Committee has the duties and responsibilities set forth in
this Joint Audit Committee Charter, the Audit Committee is not responsible for:
- planning or conducting the audit or for determining whether the Fund's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles;
- determining whether the Form N-CSR filed by the Fund with the SEC
- contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with
respect to the period covered by the report;
K-11
- determining whether the Fund's financial statements and other financial
information included in the Form N-CSR fairly present in all material
respects the financial condition, results of operations, changes in net
assets and cash flows of the Fund as of, and for, the periods presented in
the Form N-CSR; or
- establishing or maintaining disclosure controls and procedures and internal
control over financial reporting for the Fund.
In fulfilling its responsibilities hereunder, it is recognized that members of
the Audit Committee are not full-time employees of the Fund or the Fund's
investment adviser(s) or the Fund's distributor. The Audit Committee and its
members do not have a duty or responsibility to conduct "field work" or other
types of auditing or accounting reviews or procedures or to set auditor
independence standards, and each member of the Audit Committee shall be entitled
to rely on (a) the integrity of those persons and organizations within and
outside the Fund, the Fund's investment adviser(s), the Fund's distributor and
service providers to the Fund from which it receives information, (b) the
accuracy of the financial and other information provided to the Audit Committee
absent actual knowledge to the contrary (which shall be promptly reported to the
Board) and (c) statements made by management or third parties as to any
information technology, internal audit and other non-audit services provided by
the Independent Auditors to the Fund.
K-12
JOINT AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
VAN KAMPEN FUNDS
AS ADOPTED JULY 23, 2003(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.(2)
The SEC has issued rules specifying the types of services that an independent
auditor may not provide to its audit client, as well as the audit committee's
administration of the engagement of the independent auditor. The SEC's rules
establish two different approaches to pre-approving services, which the SEC
considers to be equally valid. Proposed services either: may be pre-approved
without consideration of specific case-by-case services by the Audit Committee
("general pre-approval"); or require the specific pre-approval of the Audit
Committee ("specific pre-approval"). The Audit Committee believes that the
combination of these two approaches in this Policy will result in an effective
and efficient procedure to preapprove services performed by the Independent
Auditors. As set forth in this Policy, unless a type of service has received
general pre-approval, it will require specific pre-approval by the Audit
Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee will consider whether such
services are consistent with the SEC's rules on auditor independence. The Audit
Committee will also consider whether the Independent Auditors are best
positioned to provide the most effective and efficient services, for reasons
such as its familiarity with the Fund's business, people, culture, accounting
systems, risk profile and other factors, and whether the service might enhance
the Fund's ability to manage or
---------------
(1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval Policy
and Procedures (the "Policy"), adopted as of the date above, supercedes and
replaces all prior versions that may have been adopted from time to time.
(2) Terms used in this Policy and not otherwise defined herein shall have the
meanings as defined in the Joint Audit Committee Charter.
K-13
control risk or improve audit quality. All such factors will be considered as a
whole, and no one factor should necessarily be determinative.
The Audit Committee is also mindful of the relationship between fees for audit
and nonaudit services in deciding whether to pre-approve any such services and
may determine for each fiscal year, the appropriate ratio between the total
amount of fees for Audit, Audit-related and Tax services for the Fund (including
any Audit-related or Tax service fees for Covered Entities that were subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
The appendices to this Policy describe the Audit, Audit-related, Tax and All
Other services that have the general pre-approval of the Audit Committee. The
term of any general pre-approval is 12 months from the date of pre-approval,
unless the Audit Committee considers and provides a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the Independent Auditors without obtaining specific
pre-approval from the Audit Committee. The Audit Committee will add to or
subtract from the list of general pre-approved services from time to time, based
on subsequent determinations.
The purpose of this Policy is to set forth the policy and procedures by which
the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
The Fund's Independent Auditors have reviewed this Policy and believes that
implementation of the Policy will not adversely affect the Independent Auditors'
independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may delegate
either type of pre-approval authority to one or more of its members. The member
to whom such authority is delegated must report, for informational purposes
only, any pre-approval decisions to the Audit Committee at its next scheduled
meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal
K-14
control, and consultations relating to the audit. The Audit Committee will
monitor the Audit services engagement as necessary, but no less than on a
quarterly basis, and will also approve, if necessary, any changes in terms,
conditions and fees resulting from changes in audit scope, Fund structure or
other items.
In addition to the annual Audit services engagement approved by the Audit
Committee, the Audit Committee may grant general pre-approval to other Audit
services, which are those services that only the Independent Auditors reasonably
can provide. Other Audit services may include statutory audits and services
associated with SEC registration statements (on Forms N-1 A, N-2, N-3, N-4,
etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the Audit services in Appendix B.1. All
other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements or, to the extent they are Covered Services, the Covered Entities'
financial statements, or that are traditionally performed by the Independent
Auditors. Because the Audit Committee believes that the provision of
Audit-related services does not impair the independence of the auditor and is
consistent with the SEC's rules on auditor independence, the Audit Committee may
grant general pre-approval to Audit-related services. Audit-related services
include, among others, accounting consultations related to accounting, financial
reporting or disclosure matters not classified as "Audit services"; assistance
with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; agreed-upon or expanded audit procedures
related to accounting and/or billing records required to respond to or comply
with financial, accounting or regulatory reporting matters; and assistance with
internal control reporting requirements under Forms N-SAR and/or N-CSR.
The Audit Committee has pre-approved the Audit-related services in Appendix
B.2. All other Audit-related services not listed in Appendix B.2 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide Tax
services to the Fund and, to the extent they are Covered Services, the Covered
K-15
Entities, such as tax compliance, tax planning and tax advice without impairing
the auditor's independence, and the SEC has stated that the Independent Auditors
may provide such services. Hence, the Audit Committee believes it may grant
general pre-approval to those Tax services that have historically been provided
by the Independent Auditors, that the Audit Committee has reviewed and believes
would not impair the independence of the Independent Auditors, and that are
consistent with the SEC's rules on auditor independence. The Audit Committee
will not permit the retention of the Independent Auditors in connection with a
transaction initially recommended by the Independent Auditors, the sole business
purpose of which may be tax avoidance and the tax treatment of which may not be
supported in the Internal Revenue Code and related regulations. The Audit
Committee will consult with Director of Tax or outside counsel to determine that
the tax planning and reporting positions are consistent with this policy.
Pursuant to the preceding paragraph, the Audit Committee has pre-approved the
Tax Services in Appendix B.3. All Tax services involving large and complex
transactions not listed in Appendix B.3 must be specifically pre-approved by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
has been delegated), including tax services proposed to be provided by the
Independent Auditors to any executive officer or trustee/director/managing
general partner of the Fund, in his or her individual capacity, where such
services are paid for by the Fund (generally applicable only to internally
managed investment companies).
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the All Other services in Appendix 13.4.
Permissible All Other services not listed in Appendix B.4 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
A list of the SEC's prohibited non-audit services is attached to this policy
as Appendix B.5. The SEC's rules and relevant guidance should be consulted to
determine the precise definitions of these services and the applicability of
exceptions to certain of the prohibitions.
K-16
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be provided by
the Independent Auditors will be established annually by the Audit Committee.
Any proposed services exceeding these levels or amounts will require specific
pre-approval by the Audit Committee. The Audit Committee is mindful of the
overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services. For each fiscal year, the Audit
Committee may determine the appropriate ratio between the total amount of fees
for Audit, Audit-related, and Tax services for the Fund (including any
Audit-related or Tax services fees for Covered Entities subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
8. PROCEDURES
All requests or applications for services to be provided by the Independent
Auditors that do not require specific approval by the Audit Committee will be
submitted to the Fund's Chief Financial Officer and must include a detailed
description of the services to be rendered. The Fund's Chief Financial Officer
will determine whether such services are included within the list of services
that have received the general pre-approval of the Audit Committee. The Audit
Committee will be informed on a timely basis of any such services rendered by
the Independent Auditors. Requests or applications to provide services that
require specific approval by the Audit Committee will be submitted to the Audit
Committee by both the Independent Auditors and the Fund's Chief Financial
Officer, and must include a joint statement as to whether, in their view, the
request or application is consistent with the SEC's rules on auditor
independence.
The Audit Committee has designated the Fund's Chief Financial Officer to
monitor the performance of all services provided by the Independent Auditors and
to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. A sample report is included as Appendix
B.7. Both the Fund's Chief Financial Officer and management will immediately
report to the chairman of the Audit Committee any breach of this Policy that
comes to the attention of the Fund's Chief Financial Officer or any member of
management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an annual
basis to meet its responsibility to oversee the work of the Independent Auditors
and to assure the auditor's independence from the Fund, such as reviewing a
formal written statement from the Independent Auditors delineating all
relationships between the Independent Auditors and the Fund, consistent with
Independence
K-17
Standards Board No. 1, and discussing with the Independent Auditors its methods
and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any entity
controlling, controlled by or under common control with the Fund's investment
adviser(s) that provides ongoing services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the Fund's
audit committee must pre-approve non-audit services provided not only to the
Fund but also to the Covered Entities if the engagements relate directly to the
operations and financial reporting of the Fund. This list of Covered Entities
would include:
- Van Kampen Investments, Inc.
- Van Kampen Investment Advisory Corporation
- Van Kampen Asset Management Inc.
- Van Kampen Advisors Inc.
- Van Kampen Funds Inc.
- Van Kampen Trust Company
- Van Kampen Investor Services Inc.
- Van Kampen Management Inc.
- Morgan Stanley Investment Management Inc.
- Morgan Stanley Investments LP
K-18
ANNEX L
JOINT GOVERNANCE COMMITTEE CHARTER
OF THE
VAN KAMPEN FUNDS
AS ADOPTED ON MARCH 3, 2004
1. MISSION STATEMENT
The Governance Committee (the "Governance Committee") is a committee of the
Board of Trustees/Directors/Managing General Partners (referred to herein as the
"Trustees" and collectively as the "Board") of each Van Kampen Fund (each a
"Fund")(1). The purpose of the Governance Committee is to (1) identify
individuals qualified to serve on the Board as trustees/directors/managing
general partners that are "independent" as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended (the "1940 Act") (the "Independent
Trustees"), and on committees of the Board, and to recommend, for selection by
the Board, the Board nominees for meetings of shareholders, (2) advise the Board
with respect to Board composition, procedures and committees, (3) advise the
Board with respect to Trustee compensation and benefits, and administer the
Fund's deferred compensation plans and retirement plan, (4) develop and
recommend to the Board a set of corporate governance principles applicable to
the Fund, monitor corporate governance matters and make recommendations to the
Board and act as the administrative committee with respect to Board policies and
procedures, committee policies and procedures and (5) oversee periodic
evaluations of the Board and any committees of the Board.
2. COMPOSITION
The Governance Committee shall be comprised of three or more Trustees of the
Board. Governance Committee members shall be designated by the full Board, and
the manner of selection of the Governance Committee chair shall also be
designated by the full Board.
Each member of the Governance Committee shall be qualified as "independent" as
defined by the listing requirements and rules of the New York Stock Exchange
(the "NYSE"), the American Stock Exchange (the "AMEX") and the Chicago Stock
Exchange ("CHX"). Members of the Committee shall also qualify as "non-employee
directors" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, and "outside directors" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended, and shall
satisfy any other necessary standards of independence under applicable laws or
regulations.
---------------
(1) This Joint Governance Committee Charter has been adopted by each Fund.
Solely for the sake of clarity and simplicity, this Joint Governance
Committee Charter has been drafted as if there is a single Fund, a single
Governance Committee and a single Board. The terms "Governance Committee,"
"Trustees" and "Board" mean the Governance Committee, Trustees and the Board
of each Fund, respectively, unless the context otherwise requires. The
Governance Committee, Trustees and the Board of each Fund, however, shall
act separately and in the best interests of its respective Fund.
L-2
3. MEETINGS OF THE GOVERNANCE COMMITTEE
The Governance Committee shall fix its own rules of procedure, which shall be
consistent with the Fund's organizational documents and this Joint Governance
Committee Charter. The Governance Committee shall meet on a regular basis (which
shall be at least two times annually) and special meetings may be called as
circumstances require. The Governance Committee, in its discretion, may ask
Trustees, members of management or others, whose advice and counsel are sought
by the Governance Committee, to attend its meetings (or portions thereof) and to
provide such pertinent information as the Governance Committee requests.
The Governance Committee shall cause to be maintained minutes of all meetings
and records to those meetings and provide copies of such minutes to the Board
and the Fund.
4. AUTHORITY
The Governance Committee shall have the authority to carry out its duties and
responsibilities as set forth in this Joint Governance Committee Charter.
5. DUTIES AND RESPONSIBILITIES OF THE GOVERNANCE COMMITTEE
In carrying out its duties and responsibilities, the Governance Committee's
policies and procedures will remain flexible, so that it may be in a position to
react or respond to changing circumstances or conditions. The following are the
duties and responsibilities of the Governance Committee:
a. Board Candidates and Nominees
The Governance Committee shall have the following goals and
responsibilities with respect to Board candidates and nominees:
i. evaluate the suitability of potential trustee/director/managing
general partner nominees proposed by Trustees, shareholders or
others;
ii. recommend, for selection by the Board, the Independent Trustee
nominees for election by the shareholders or appointment by the
Board, as the case may be, pursuant to the Fund's organizational
documents. Persons recommended by the Governance Committee shall
possess such knowledge, experience, skills, expertise and diversity
so as to enhance the Board's ability to manage and direct the affairs
and business of the Fund, including, when applicable, to enhance the
ability of committees of the Board to fulfill their duties and/or to
satisfy any independence requirements imposed by law, regulation or
any listing requirements of the New York Stock Exchange ("NYSE"), the
American Stock Exchange (the "AMEX") and the Chicago Stock Exchange
("CHX") (the NYSE,
L-3
AMEX and CHX are collectively referred to herein as the "Exchanges");
and
iii. review the suitability for continued service as a trustee/director/
managing general partner of each Independent Trustee when his or her
term expires and at such other times as the Governance Committee
deems necessary or appropriate, and to recommend whether or not the
Independent Trustee should be re-nominated.
b. Board Composition, Procedures and Committees
The Governance Committee shall have the following goals and
responsibilities with respect to the composition, procedures and
committees of the Board as a whole:
i. review periodically with the Board the size and composition of the
Board as a whole and recommend, if necessary, measures to be taken so
that the Board reflects the appropriate balance of knowledge,
experience, skills, expertise and diversity required for the Board as
a whole and contains at least the minimum number of Independent
Trustees required by the 1940 Act and the Exchanges;
ii. make recommendations concerning any other aspect of the procedures of
the Board that the Governance Committee considers warranted,
including but not limited to procedures with respect to the waiver by
the Board of any Fund rule, guideline, procedure, code of ethics or
corporate governance principle;
iii. make recommendations on the requirements for, and means of, Board
orientation;
iv. periodically review and make recommendations concerning the committee
structure of the Board, the members and size of committees (including
the creation or elimination of committees), the orientation of
committee members, the annual review performed, if any, by each
committee, the independence and qualifications of the members of the
audit committee and the overall allocation of responsibilities among
the Board and the committees; and
v. recommend that the Board establish such special committees as may be
desirable or necessary from time to time in order to address ethical,
legal or other matters that may arise. The Governance Committee's
power to make such a recommendation under this Joint Governance
Committee Charter shall be without prejudice to the right of any other
committee of the Board, or any individual trustee/director/managing
general partner, to make such a recommendation at any time.
L-4
c. Compensation and Benefits
The Governance Committee shall have the following goals and responsibilities
with respect to the Trustees' compensation and benefits of the Board as a
whole:
i. periodically review the goals and objectives of the Trustees'
compensation and benefits and make recommendations concerning such
goals and objectives, the level and structure of Trustee compensation
and the level of Trustee compensation by Fund and the allocation of
Trustee compensation among Funds;
ii. periodically review and make recommendations concerning the Fund's
deferred compensation plan and the Fund's retirement plan; and
iii. act as the administrative committee under the Trustee's Deferred
Compensation Plan and Retirement Plan.
d. Corporate Governance
The Governance Committee shall have the following goals and principles with
respect to Board corporate governance:
i. monitor corporate governance principles for the Fund, which shall be
consistent with any applicable laws, regulations and listing
standards, considering, but not limited to, the following:
(1) trustee/director/managing general partner qualification standards
to reflect the independence requirements of the Sarbanes-Oxley
Act of 2002, as amended ("SOX") and the rules thereunder, the
1940 Act, and the Exchanges; the Governance Committee shall also
develop policies regarding trustee/director/managing general
partner tenure, retirement, removal and succession;
(2) trustee/director/managing general partner duties and
responsibilities, including with respect to attendance at
meetings and advance review of meeting materials;
(3) trustee/director/managing general partner access to management,
and, as necessary and appropriate, independent advisers;
(4) trustee/director/managing general partner compensation, deferred
compensation and retirement policies; and policies on
reimbursement of out-of-pocket expenses; and
(5) trustee/director/managing general partner orientation and
continuing education;
L-5
ii. review periodically the corporate governance principles adopted by
the Board to assure that they are appropriate for the Fund and comply
with the requirements of SOX, the 1940 Act and the Exchanges, and to
recommend any desirable changes to the Board;
iii. consider other corporate governance issues that arise from time to
time, and to develop appropriate recommendations for the Board; and
e. Periodic Evaluations and Board Training
The Governance Committee shall be responsible for overseeing the evaluation of
the Board as a whole and each committee. The Governance Committee shall
establish procedures to allow it to exercise this oversight function.
In conducting this review, the Governance Committee shall evaluate whether the
Board appropriately addresses the matters that are or should be within its scope
pursuant to the set of corporate governance principles adopted by the Governance
Committee. The Governance Committee shall address matters that the Governance
Committee considers relevant to the Board's performance, including at least the
following: the adequacy, appropriateness and quality of the information and
recommendations presented by management of the Fund to the Board, the manner in
which they were discussed or debated and whether the number and length of
meetings of the Board were adequate for the Board to complete its work in a
thorough and thoughtful manner.
The Governance Committee shall report to the Board on the results of its
evaluation, including any recommended changes to the principles of corporate
governance, and any recommended changes to the Fund's or the Board's or a
Committee's policies or procedures. This report may be written or oral.
The Governance Committee shall be responsible for making recommendations on
the requirements for, and means of, Board training.
6. EVALUATION OF THE GOVERNANCE COMMITTEE
The Governance Committee shall, on an annual basis, evaluate its performance
under this Joint Governance Committee Charter. In conducting this review, the
Governance Committee shall evaluate whether this Joint Governance Committee
Charter appropriately addresses the matters that are or should be within its
scope. The Governance Committee shall address matters that the Governance
Committee considers relevant to its performance, including at least the
following: the adequacy, appropriateness and quality of the information and
recommendations presented by the Governance Committee to the Board, the manner
in which they were discussed or debated, and whether the number and length of
meetings of the Governance Committee were adequate for the Governance Committee
to complete its work in a thorough and thoughtful manner.
L-6
The Governance Committee shall report to the Board on the results of its
evaluation, including any recommended amendments to this Joint Governance
Committee Charter, and any recommended changes to the Fund's or the Board's
policies or procedures. This report may be written or oral.
7. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS
The Governance Committee may conduct or authorize investigations into or
studies of matters within the Governance Committee's scope of responsibilities,
and may retain, at the Fund's expense, such independent counsel or other
advisers as it deems necessary.
L-7
[VAN KAMPEN INVESTMENTS LOGO]
VKCL 04
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE FORM OF PROXY
VAN KAMPEN XXXXX TRUST
JOINT ANNUAL MEETING OF SHAREHOLDERS
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned holder of Common Shares of VAN KAMPEN XXXXX
TRUST, a XXXXX business trust (the "Fund"), hereby appoints John
L. Sullivan, Lou Anne McInnis and Elizabeth A. Nelson and each of
them or their respective designees, with full power of
substitution and revocation, as proxies to represent the
undersigned at the Joint Annual Meeting of Shareholders to be
held at the offices of Van Kampen Investments Inc., 1 Parkview
Plaza, Oakbrook Terrace, Illinois 60181-5555, on Wednesday, June
23, 2004 at 3:00 p.m., and any and all adjournments thereof (the
"Meeting"), and thereat to vote all XXXXX Shares which the
undersigned would be entitled to vote, with all powers the
undersigned would possess if personally present, in accordance
with the instructions indicated herein.
FOR ALL
1. Authority to vote for the election as Trustees, the nominees FOR WITHHOLD EXCEPT
named below: [ ] [ ] [ ]
Class X Trustees: (01) XXXXX, (02) XXXXX (03) XXXXX and (04)
XXXXX
------------------------------------------------------------
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
CHECK "FOR ALL EXCEPT" AND WRITE THE NOMINEE'S NAME ON THE
LINE BELOW.
------------------------------------------------------------
2. To transact such other business as may properly come before
the Meeting.
If more than one of the proxies, or their substitutes, are
present at the Meeting or any adjournment thereof, they jointly
(or, if only one is present and voting then that one) shall have
authority and may exercise all powers granted hereby. This Proxy,
when properly executed, will be voted in accordance with the
instructions marked by the undersigned on the reverse side. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
PROPOSAL DESCRIBED HEREIN AND IN THE DISCRETION OF THE PROXIES
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE ACCOMPANYING
NOTICE OF MEETING AND JOINT PROXY STATEMENT FOR THE MEETING TO BE
HELD ON JUNE 23, 2004.
PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE
HAS YOUR ADDRESS CHANGED? Date
-------------------------------------------- ------------------
Shareholder signature
------------------------------------------ -------------------------------------------- Date --------------
Co-owner signature (if applicable)
------------------------------------------
------------------------------------------
Mark box at right if an address change has
been noted on the reverse side of this
card. [ ]
Please sign this Proxy exactly as your name
or names appear on the books of the Fund.
When signing as attorney, trustee, executor,
administrator, custodian, guardian or
corporate officer, please give full title.
If common shares are held jointly, each
holder must sign.