SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [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 240.14a-12
VAN KAMPEN SENIOR INCOME TRUST
(Name of Registrant as Specified in Its Charter)
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 --
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IMPORTANT NOTICE
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TO VAN KAMPEN
SENIOR INCOME TRUST SHAREHOLDERS
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QUESTIONS & ANSWERS
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Although we recommend that you read the complete Proxy Statement, we have
provided for your convenience a brief overview of the issues to be voted on.
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Q WHY IS A SHAREHOLDER
MEETING BEING HELD?
A The Van Kampen Senior
Income Trust is a closed-end fund traded on the New York 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 EACH" of the nominees on the enclosed proxy card.
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
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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 EACH," "WITHHOLD" or "FOR EACH EXCEPT."
To withhold authority to vote for any one or more individual nominee(s), check
"FOR EACH 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 SENIOR INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
FOR FOR EACH
EACH WITHHOLD EXCEPT
1. Authority to vote [ ] [ ] [ ]
for the election as
Class X Trustees
the nominees named
below:
XXXXXXXXX, XXXXXXXXX
To withhold authority to vote for either
nominee, check "For Each Except" and write the
nominee's name on the line below.
----------------------------------
2. To transact such other business as may
properly come before the Meeting.
Please be sure to sign and date this Proxy, Date
Shareholder sign here Co-owner sign here
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SAMPLE
VAN KAMPEN SENIOR INCOME TRUST
1 PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181-5555
TELEPHONE (800) 341-2929
NOTICE OF 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 the holders of preferred shares of beneficial interest
("Preferred Shares") of Van Kampen Senior Income Trust (the "Fund") that the
Annual Meeting of Shareholders of the Fund (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 2:30 p.m., for the
following purposes:
1. To elect two Class III Trustees, one by the holders of
Common Shares and one by the holders of Preferred Shares.
The elected Class III Trustees will each serve a three-year
term or until a successor is elected and qualified.
2. To transact such other business as may properly come before
the Meeting or any adjournments thereof.
Holders of record of Common Shares and Preferred Shares 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
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND ITS MORE RECENT SEMI-ANNUAL REPORT TO ANY SHAREHOLDER UPON REQUEST. ANY SUCH
REQUEST SHOULD BE DIRECTED TO THE FUND BY CALLING 1-800-341-2929 OR BY WRITING
TO THE FUND AT 1 PARKVIEW PLAZA, PO BOX 5555, OAKBROOK TERRACE, ILLINOIS
60181-5555.
SHAREHOLDERS OF THE FUND 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, DATE AND SIGN THE PROXY CARD AND RETURN IT 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 the Fund recommends that you cast your vote:
- FOR EACH of the nominees for the Board of Trustees listed in the Proxy
Statement.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY
NO MATTER HOW MANY SHARES YOU OWN.
PROXY STATEMENT
VAN KAMPEN SENIOR INCOME TRUST
1 PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181-5555
TELEPHONE (800) 341-2929
ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 2004
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Trustees" or the "Board") of the Van Kampen Senior
Income Trust (the "Fund") of proxies to be voted at the Annual Meeting of
Shareholders of the Fund, 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 Tuesday, June 23, 2004, at 2:30 p.m. The
approximate mailing date of this 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 holders of preferred shares of beneficial
interest ("Preferred Shares") of the Fund. The Common Shares and Preferred
Shares of the Fund are sometimes collectively referred to herein as the
"Shares." 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
the Fund entitled to vote at the Meeting. At the close of business on April 23,
2004, there were issued and outstanding 180,010,000 Common Shares and 28,000
Preferred Shares of the Fund.
The purpose of the Meeting is to permit the Fund's shareholders to elect two
Class III Trustees, one by the holders of Common Shares and one by the holders
of Preferred Shares.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND ITS MORE RECENT SEMI-ANNUAL REPORT TO ANY SHAREHOLDER UPON REQUEST. ANY SUCH
REQUEST SHOULD BE DIRECTED TO THE FUND BY CALLING 1-800-341-2929 OR BY WRITING
TO THE FUND AT 1 PARKVIEW PLAZA, PO BOX 5555, OAKBROOK TERRACE, ILLINOIS
60181-5555.
VOTING
Shareholders of the 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.
With respect to the election of Trustees, holders of Common Shares and
Preferred Shares will vote as separate classes for the respective nominee to be
elected by such class of Shares. The affirmative vote of a plurality of the
Common Shares of the Fund present at the Meeting in person or by proxy is
required to elect each nominee for Trustee designated to be elected by the
holders of the Common Shares. The affirmative vote of a plurality of the
Preferred Shares of the Fund present at the Meeting in person or by proxy is
required to elect such nominee for trustee designated to be elected by the
holders of the Preferred Shares. 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 the Fund recommends that you cast your vote:
- FOR EACH of the nominees for the Board of Trustees listed in the Proxy
Statement.
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" the
proposal as to which they are entitled to be voted. A shareholder who abstains
from voting on any or all matters will be deemed present at the Meeting for
quorum purposes, but will not be deemed to have voted on the particular matter
(or matters) as to which the shareholder has abstained. Similarly, in the event
a nominee (such as a brokerage firm) holding shares for beneficial owners
indicates that instructions have not been received from the beneficial owners
and the nominee does not exercise discretionary authority (a so-called "broker
non-vote"), the Shares held by the nominee will be deemed present at the Meeting
for quorum purposes but will not be deemed to have voted on the particular
matter (or matters) as to which the nominee has not voted. With respect to the
election of Trustees, abstentions and broker non-votes are disregarded since
only votes "FOR" are considered in determining those persons receiving the
highest number of votes "FOR" cast. A majority of the outstanding Shares must be
present in person or by proxy to have a quorum to conduct business at the
Meeting.
Shareholders who execute proxies may revoke them at any time before they are
voted by filing with the 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 Fund knows of no business other than the election of Trustees that will be
presented for consideration at the Meeting. If any other matters are properly
2
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 are
not received, proxies (including abstensions and non-votes) would be voted in
favor of one or more adjournments of the Meeting of the Fund to permit further
solicitation of proxies provided they determine that such an adjournment and
additional solicitation is reasonable and in the interest of shareholders based
on a consideration of all relevant factors, including the nature of the relevant
proposal, the percentage of votes then cast, the percentage of negative votes
then cast, the nature of the proposed solicitation activities and the nature of
the reasons for such further solicitation.
INVESTMENT ADVISER
Van Kampen Asset Management serves as investment adviser to the Fund ("Asset
Management" or the "Adviser"). On November 30, 2003, the Fund's 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 10021. 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.
3
OTHER SERVICE PROVIDERS
The Fund has entered into an administration agreement and a legal services
agreement with Van Kampen. Van Kampen's principal business address is 1 Parkview
Plaza, Oakbrook Terrace, Illinois 60181-5555. The Fund has also entered an
accounting services agreement with Asset Management.
ELECTION OF TRUSTEES
Shareholders of the Fund are being asked to elect two Class III Trustees at
the Meeting to serve until the later of the 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 one Class III trustee (Richard F. Powers, III) 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 III trustee (Hugo F.
Sonnenschein) designated to be checked 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.
As in the past, only one class of trustees is being submitted to shareholders
for election at the Meeting. The Declaration of Trust of the 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 the 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 the Fund, the Fund's Declaration of Trust and the Fund's Bylaws.
4
INFORMATION REGARDING TRUSTEES
The business and affairs of the Funds are managed under the direction of the
Board of Trustees. The tables below list the Trustees, their principal
occupations during the last five years, other directorships held by them and
their affiliations, if any, with the Adviser, Van Kampen, 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 Fund generally serve three-year terms or
until their successors are duly elected and qualified. All nominees have
consented to being named in this 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 1998 Chairman and Chief Executive Officer of 88
Blistex Inc. Blistex Inc., a consumer health care
1800 Swift Drive products manufacturer. Director of the
Oak Brook, IL 60523 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
Manufacturer's 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
5
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 1998 President of CAC, L.L.C., a private company 88
CAC, L.L.C. offering capital investment and management
4350 LaJolla Village advisory services. Prior to February 2001,
Drive Vice Chairman and Director of Anixter
Suite 980 International, Inc. and IMC Global Inc.
San Diego, CA 92122-6223 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 the Fund Complex. Director
Drive of Stericycle, Inc., Ventana
Suite 980 Medical Systems, Inc., GATX
San Diego, CA 92122-6223 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).
6
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
Howard J Kerr(1) (68) Trustee 1998 Prior to 1998, President and Chief 88
736 North Western Avenue Executive Officer of Pocklington
P.O. Box 317 Corporation, Inc., an investment holding
Lake Forest, IL 60045 company. Director of the Marrow Foundation.
Hugo F. Sonnenschein(3) Trustee 1998 President Emeritus and Honorary Trustee of 88
(63) the University of Chicago and the Adam
1126 E. 59th Street Smith Distinguished Service Professor in
Chicago, IL 60637 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
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 Lake Forest Bank & Trust.
Hugo F. Sonnenschein(3) Trustee/Director/Managing
(63) General Partner of funds in
1126 E. 59th Street the Fund Complex. Director
Chicago, IL 60637 of Winston Laboratories,
Inc.
7
INTERESTED TRUSTEES
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS OF HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
TRUSTEE FUNDS SERVED DURING PAST 5 YEARS BY TRUSTEE
Richard F. Powers, Trustee 1999 Advisory Director of Morgan Stanley. Prior to December 88
III(3)* (58) 2002, Chairman, Director, President, Chief Executive
1 Parkview Plaza Officer, Director and Managing Director of Van Kampen
Oakbrook Terrace, IL Investments and its investment advisory, distribution and
60181 other subsidiaries. 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 of Morgan Stanley Dean Witter & Co. 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 1998 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 OF OTHER DIRECTORSHIPS
TRUSTEE HELD BY TRUSTEE
Richard F. Powers, Trustee/Director/Managing
III(3)* (58) General Partner of
1 Parkview Plaza funds in the Fund
Oakbrook Terrace, IL Complex.
60181
Wayne W. Whalen(2)* (64) Trustee/Director/Managing
333 West Wacker Drive General Partner of
Chicago, IL 60606 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.
* Mr. Powers is an interested person of funds in the Fund Complex and the
Adviser by reason of his 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.
8
REMUNERATION OF TRUSTEES
The compensation of Trustees and executive officers that are affiliated
persons (as defined in the Investment Company Act of 1940, as amended (the "1940
Act")) of Asset Management or Van Kampen is paid by the respective affiliated
entity. The funds in the Fund Complex, including the Fund, pay the
non-affiliated Trustees an annual retainer and meeting fees.
Each fund in the Fund Complex (except the Van Kampen Exchange Fund), including
the 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), including the
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 Fund and earn a rate of return
determined by reference to the return on the common shares of the Fund or other
funds in the Fund Complex as selected by the respective non-affiliated Trustee,
with the same economic effect as if such non-affiliated Trustee had invested in
one or more funds in the Fund Complex, including the Fund. To the extent
permitted by the 1940 Act, the Fund may invest in securities of those funds
selected by the non-affiliated Trustees in order to match its deferred
compensation obligation. The deferred compensation plan is not funded and
obligations thereunder represent general unsecured claims against the general
assets of the Fund.
The Fund has adopted a retirement plan. Under the retirement plan, a
non-affiliated Trustee who is receiving Trustee's compensation from the 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 the 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 the 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 the Fund.
9
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 Fund's most recently completed fiscal year ended July 31,
2003 or the Fund Complex's most recently completed calendar year ended December
31, 2003.
COMPENSATION TABLE
FUND COMPLEX
------------------------------------------------
AGGREGATE
PENSION OR TOTAL
RETIREMENT COMPENSATION
BENEFITS AGGREGATE BEFORE
AGGREGATE ACCRUED ANNUAL DEFERRAL FROM
COMPENSATION AS PART OF BENEFITS UPON FUND
NAME(1) FROM FUND(2) FUND EXPENSES(3) RETIREMENT(4) COMPLEX(5)
------- ------------ ---------------- ------------- -------------
David C. Arch................ $17,977 $18,589 $147,500 $193,811
Rod Dammeyer................. 17,977 31,814 147,500 177,971
Howard J Kerr................ 17,977 58,713 147,500 193,811
Hugo F. Sonnenschein......... 17,977 32,178 147,500 193,811
Wayne W. Whalen.............. 17,977 63,604 147,500 251,811
---------------
N/A: Not applicable.
(1) Trustees not eligible for compensation or retirement benefits from the Fund
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 amounts shown in this column are the aggregate compensation from the
Fund to each Trustee for the fiscal year ended July 31, 2003. The following
Trustees deferred all of their aggregate compensation payable by the Fund
for the fiscal year ended July 31, 2003: Mr. Dammeyer, Mr. Sonnenschein, and
Mr. Whalen. The deferred compensation plan is described above the table.
Amounts deferred are retained by the Fund and earn a rate of return
determined by reference to either the return on the 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 those funds selected by the Trustees in order to
match its deferred compensation obligation. The cumulative deferred
compensation (including interest) accrued with respect to each trustee from
the Fund as of July 31, 2003 is as follows: Mr. Dammeyer, $74,882; Mr. Kerr,
$8,033; Mr. Sonnenschein, $72,263; and Mr. Whalen, $82,459.
(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 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 such
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 with at least ten years of service to each such fund. The
retirement plan is described above the compensation table.
10
(5) The amounts shown in this column are accumulated from the aggregate
compensation of the operating funds 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.
SHARE OWNERSHIP OF TRUSTEES
Excluding deferred compensation balances as described in the Compensation
Table, as of May 13, 2004, each Trustee of the Fund beneficially owned equity
securities of the Fund and of all of the funds in the Fund Complex overseen by
such Trustee/Director/Managing General Partner in the dollar range amounts
specified below.
INDEPENDENT TRUSTEES
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES
IN ALL FUNDS OVERSEEN BY THE
DOLLAR RANGE OF TRUSTEE/DIRECTOR/MANAGING
EQUITY SECURITIES GENERAL PARTNER IN THE
IN THE FUND FUND COMPLEX
David C. Arch None $50,001 - $100,000
Rod Dammeyer None Over $100,000
Howard J Kerr None $1 - $10,000
Hugo F. Sonnenschein $1 - $10,000 Over $100,000
INTERESTED TRUSTEES
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES
IN ALL FUNDS OVERSEEN BY THE
DOLLAR RANGE OF TRUSTEE/DIRECTOR/MANAGING
EQUITY SECURITIES GENERAL PARTNER IN THE FUND
IN THE FUND COMPLEX
Richard F. Powers None Over $100,000
Wayne W. Whalen $1 - $10,000 Over $100,000
11
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 Fund and other funds in the Fund Complex as specified below.
INDEPENDENT TRUSTEES
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES
AND DEFERRED COMPENSATION
IN ALL FUNDS OVERSEEN BY THE
DOLLAR RANGE OF TRUSTEE/DIRECTOR/MANAGING
EQUITY SECURITIES AND DEFERRED GENERAL PARTNER IN THE
COMPENSATION IN THE FUND FUND COMPLEX
David C. Arch None $50,001 - $100,000
Rod Dammeyer $50,001 - $100,000 Over $100,000
Howard J Kerr $1 - $10,000 Over $100,000
Hugo F. Sonnenschein $50,001 - $100,000 Over $100,000
INTERESTED TRUSTEES
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES
AND DEFERRED COMPENSATION
IN ALL FUNDS OVERSEEN BY THE
DOLLAR RANGE OF TRUSTEE/DIRECTOR/MANAGING
EQUITY SECURITIES AND DEFERRED GENERAL PARTNER IN THE FUND
COMPENSATION IN THE FUND COMPLEX
Richard F. Powers None Over $100,000
Wayne W. Whalen $50,001 - $100,000 Over $100,000
As of May 13, 2004, the officers and Trustees of the Fund owned less than 1%
of the outstanding Shares of the Fund.
MEETINGS AND COMMITTEES
The Fund's Board of Trustees has one standing committee (an audit and
governance committee). This 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 Fund as defined by the New York Stock Exchange, American
Stock Exchange and Chicago Stock Exchange listing standards.
The Board's audit committee consists of Messrs. Arch, Dammeyer, Kerr and
Sonnenschein. 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 the Fund's
independent public auditors, reviews with such auditors the scope and results of
the Fund's annual audit and considers any comments which the auditors may have
regarding the Fund's financial statements, books of account or internal
controls. The Board of Trustees has adopted a formal written charter for the
audit
12
committee which sets forth the audit committee's responsibilities. The audit
committee has reviewed and discussed the financial statements of the Fund with
management as well as with the independent auditors of the 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
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 the Fund that the Fund's
audited financial statements be included in the Fund's annual report to
shareholders for the most recent fiscal year for filing with the Securities and
Exchange Commission (the "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 the Funds
is attached to this Proxy Statement.
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 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. In
addition to being Independent Trustees as defined above, each of the governance
committee members also meets 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 Independent Trustees
of the Fund select and nominate any other nominee Independent Trustees for the
Fund. While the Independent Trustees of the 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 the
Fund, which includes the Fund's nominating policies, is attached as Annex B to
this Proxy Statement.
The Board of Trustees met 9 times during the Fund's fiscal year ended July 31,
2003. The Board's audit and governance committee met 4 times during the Fund's
fiscal year ended July 31, 2003. During the fiscal year ended July 31, 2003,
each of
13
the Trustees during the period such Trustee served as a Trustee attended at
least 75% of the meetings of the Board of Trustees and all committee meetings
thereof of which such Trustee was a member.
SHAREHOLDER COMMUNICATIONS
Shareholders may send communications to the Fund's 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 Fund's office or directly to such Board member(s) at the address specified
for such trustee above. Other shareholder communications received by the 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.
SHAREHOLDER APPROVAL
With respect to the election of Trustees, those nominees receiving the highest
number of votes "FOR," cast at a meeting at which a quorum is present in person
or by proxy, up to the number of Trustees proposed to be elected, shall be
elected as Trustees to serve three-year terms or until their successors are
elected and qualified. THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR EACH" OF THE
NOMINEES.
14
OTHER INFORMATION
EXECUTIVE OFFICERS OF THE FUNDS
The following information relates to the executive officers of the Fund 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 Fund are appointed annually by
the Trustees and serve for one year or until their respective successors are
chosen and qualified. The Fund's officers receive no compensation from the Fund
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
15
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, the Advisers and Van Kampen Advisors Inc.
since December 2002.
John R. Reynoldson (50) Vice President Officer Executive Director and Portfolio Specialist of the Advisers
1 Parkview Plaza since 2000 and Van Kampen Advisors Inc. Vice President of funds in the
Oakbrook Terrace, IL 60181 Fund Complex. Prior to July 2001, Principal and Co-head of
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, Mr. Reynoldson managed the investment grade taxable
group for the Adviser since July 1999. From July 1988 to
June 1999, Mr. Reynoldson managed the government securities
bond group for Asset Management. Mr. Reynoldson has been
with Asset Management since April 1987.
Ronald E. Robison (64) 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, Managing Director of Morgan Stanley. Managing
Officer 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 1996 the Adviser, Van Kampen Advisors Inc. and certain other
Oakbrook Terrace, IL 60181 Officer and subsidiaries of Van Kampen Investments. Vice President,
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.
Howard Tiffen (55) Vice President Officer Managing Director of the Adviser and Van Kampen Advisors
1 Parkview Plaza since 2000 Inc. Vice President of the senior loan funds advised by the
P.O. Box 5555 Adviser. Prior to 1999, senior portfolio manager for Pilgrim
Oakbrook Terrace, IL 60181 Investments. Associate of the Chartered Institute of Bankers
and a member of the Economic Club of Chicago.
16
SHAREHOLDER INFORMATION
As of April 23, 2004, to the knowledge of the Fund, no shareholder owned
beneficially more than 5% of the Fund's outstanding Shares.
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 Fund's 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 reporting their affiliation with
the Fund and reports of ownership and changes in ownership of 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 the Fund, the Fund believes that during its last fiscal year, its Trustees,
officers, investment adviser and affiliated persons of the investment adviser
complied with the applicable filing requirements.
INDEPENDENT AUDITORS
The Board of Trustees of the Fund, including a majority of the Trustees who
are not "interested persons" of the 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 the Fund. The selection
of D&T for the current fiscal year was recommended and approved by the Fund's
audit committee and approved by the Fund's Board. The Fund knows of no direct or
indirect financial interest of D&T in the Fund.
AUDIT AND OTHER FEES
The Fund and certain "covered entities" were billed the following amounts by
D&T during the Fund's two most recent fiscal years.
FISCAL YEAR ENDED 2003
VAN KAMPEN
SENIOR INCOME
TRUST COVERED ENTITIES(1)
------------- -------------------
Audit Fees........................ $67,000 N/A
Non-Audit Fees
Audit-Related Fees.............. $ 6,000 $230,000(2)
Tax Fees........................ $ 2,200(3) $ 0
All Other Fees.................. $ 0 $ 0
Total Non-Audit Fees.............. $ 8,200 $230,000
Total............................. $75,300 $230,000
17
FISCAL YEAR ENDED 2002
VAN KAMPEN
SENIOR INCOME
TRUST COVERED ENTITIES(1)
------------- -------------------
Audit Fees........................ $63,100 N/A
Non-Audit Fees
Audit-Related Fees.............. $ 0 $95,000(2)
Tax Fees........................ $ 2,000(3) $ 0
All Other Fees.................. $ 0 $ 0
Total Non-Audit Fees.............. $ 2,000 $95,000
Total............................. $65,100 $95,000
---------------
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.
The audit and governance committee of the Board has considered whether the
provision of non-audit services performed by D&T to the Fund 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 Fund. 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 as Annex A.
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.
18
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 Fund. The Fund
will also reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of Shares of the
Fund. 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 Fund, the Adviser or Van Kampen, by the
transfer agent of the Fund, 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.
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 2004 Annual Meeting of Shareholders for the Fund
pursuant to Rule 14a-8 under the 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
the Fund should send such proposal to the Fund at 1 Parkview Plaza, PO Box 5555,
Oakbrook Terrace, Illinois 60181-5555.
GENERAL
Management of the 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 the Fund entitled to be present and vote at the
Meeting will be available at the offices of the 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.
19
Failure of a quorum to be present at the Meeting may necessitate adjournment
and may subject the 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
20
ANNEX A
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.
A-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
A-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
A-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;
A-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
A-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
A-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,
A-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.
A-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
A-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;
A-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.
A-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.
A-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
A-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
A-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.
A-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
A-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
A-18
ANNEX B
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.
B-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,
B-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.
B-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;
B-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.
B-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.
B-7
[VAN KAMPEN INVESTMENTS LOGO]
VVR 04
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE FORM OF PROXY
VAN KAMPEN SENIOR INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned holder of Common Shares of VAN KAMPEN SENIOR
INCOME TRUST, a Massachusetts 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 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 2:30 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 NOMINEE WITHHOLD
1. Authority to vote for the election as Class III Trustees, [ ] [ ]
the nominee named below:
XXXXXXX
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 hereon by the undersigned. 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 PROXY STATEMENT FOR THE MEETING TO BE HELD
ON JUNE 23, 2004.
Mark box at right if an address change has been noted on reverse
side of this card. [ ]
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
------------------------------------------
------------------------------------------
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 shares are held jointly, each holder must
sign.