-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EVkSQwaNSyCtb/dAdh6vcLg31TvIMJKxOth8rggo8Rjxe2DwaPv322aow+8T7irf dw8VFQrgdNILjp7Wr3+Dpg== 0000950137-04-001497.txt : 20040305 0000950137-04-001497.hdr.sgml : 20040305 20040305140651 ACCESSION NUMBER: 0000950137-04-001497 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040305 EFFECTIVENESS DATE: 20040305 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN EXCHANGE FUND CENTRAL INDEX KEY: 0000005100 IRS NUMBER: 741908071 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02611 FILM NUMBER: 04651409 BUSINESS ADDRESS: STREET 1: VAN KAMPEN INVESTMENTS INC STREET 2: ONE PARKVIEW PLAZA CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 BUSINESS PHONE: 6306846774 MAIL ADDRESS: STREET 1: VAN KAMPEN INVESTMENTS INC STREET 2: ONE PARKVIEW PLAZA CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN CAPITAL EXCHANGE FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN GENERAL EXCHANGE FUND DATE OF NAME CHANGE: 19831101 N-CSR 1 c81957nvcsr.txt ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-0261 Van Kampen Exchange Fund - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Ronald Robison 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: 12/31 Date of reporting period: 12/31/03 Item 1. Report to Shareholders. The Fund's annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows: Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen Exchange Fund performed during the annual period. This report includes the fund's financial statements and a list of fund investments as of December 31, 2003. Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the fund will achieve its investment objective. The fund is subject to market risk, which is the possibility that the market values of securities owned by the fund will decline and, therefore, the value of the fund shares may be less than what you paid for them. Accordingly, you can lose money investing in this fund. Please see the prospectus for more complete information on investment risks.
--------------------------------------------------------------------------------------- NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE --------------------------------------------------------------------------------------- NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT ---------------------------------------------------------------------------------------
Performance Summary PERFORMANCE OF A $10,000 INVESTMENT This chart compares your fund's performance to that of the S&P 500 Index from 12/31/93 through 12/31/03. (LINE GRAPH)
VAN KAMPEN EXCHANGE FUND S&P 500 INDEX ------------------------ ------------- 12/93 10000.00 10000.00 9644.00 9620.77 9785.00 9661.28 10403.00 10133.60 12/94 10480.00 10132.00 11796.00 11118.60 13192.00 12180.00 13550.00 13147.90 12/95 13933.00 13939.40 14657.00 14687.60 15372.00 15346.80 16652.00 15821.20 12/96 18978.00 17140.00 19415.00 17599.70 21743.00 20672.00 24152.00 22220.30 12/97 22628.00 22858.40 25637.00 26047.00 25379.00 26907.20 25247.00 24230.70 12/98 29272.00 29391.10 29578.00 30855.40 31152.00 33030.20 30637.00 30967.70 12/99 32696.00 35575.40 39079.00 36391.10 42581.00 35424.60 36168.00 35081.40 12/00 35494.00 32336.50 31475.00 28502.80 33147.00 30171.00 29818.00 25742.40 12/01 33374.00 28493.00 34129.00 28571.30 28393.00 24743.50 23358.00 20468.80 12/02 24874.00 22195.90 24453.00 21496.90 27030.00 24805.90 27898.00 25462.30 12/03 31451.00 28562.70
Index data source: Bloomberg AVERAGE ANNUAL TOTAL RETURNS
- ----------------------------------------- W/O SALES AVERAGE ANNUAL CHARGES TOTAL RETURNS since 12/16/76 Since Inception 12.50% 10-year 12.14 5-year 1.45 1-year 26.44 - -----------------------------------------
Past performance is no guarantee of future results. Investment return and principal value will fluctuate, and fund units, when redeemed, may be worth more or less than their original cost. The returns shown in this report do not reflect the deduction of taxes that a partner would pay on fund distributions or the redemption of fund units. Performance of share classes will vary due to differences in sales charges and expenses. As a result of recent market activity, current performance may vary from the figures shown. For more up-to-date information, please visit vankampen.com or speak with your financial advisor. Figures shown above assume reinvestment of all dividends and capital gains. The S&P 500 Stock Index is generally representative of the U.S. stock market. The index does not include any expenses, fees or sales charges, which would lower performance. The index is unmanaged and should not be considered an investment. 1 BY THE NUMBERS YOUR FUND'S INVESTMENTS December 31, 2003 THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF THE REPORTING PERIOD.
MARKET DESCRIPTION SHARES VALUE COMMON STOCKS 98.9% AEROSPACE & DEFENSE 0.6% Honeywell International, Inc. .............................. 12,528 $ 418,811 ----------- ALUMINUM 0.8% Alcan, Inc. (Canada)........................................ 10,774 505,839 ----------- AUTO PARTS & EQUIPMENT 0.4% Dana Corp. ................................................. 13,677 250,973 ----------- COMPUTER HARDWARE 2.1% International Business Machines Corp. ...................... 15,016 1,391,683 ----------- CONSTRUCTION & ENGINEERING 0.8% Fluor Corp. ................................................ 12,831 508,621 ----------- DIVERSIFIED BANKS 1.4% HSBC Holdings Plc--ADR (United Kingdom)..................... 11,434 901,228 ----------- DIVERSIFIED METALS & MINING 0.4% Massey Energy Corp. ........................................ 12,831 266,885 ----------- FOREST PRODUCTS 0.7% Louisiana-Pacific Corp. (a)................................. 25,970 464,344 ----------- HEALTH CARE DISTRIBUTORS 0.2% Cardinal Health, Inc. ...................................... 1,867 114,186 ----------- HEALTH CARE EQUIPMENT 0.5% Baxter International, Inc. ................................. 10,000 305,200 Edwards Lifesciences Corp. (a).............................. 1,000 30,080 ----------- 335,280 ----------- HEALTH CARE SERVICES 0.3% Medco Health Solutions, Inc. (a)............................ 6,075 206,489 ----------- INDUSTRIAL GASES 7.1% Air Products & Chemicals, Inc. ............................. 89,021 4,702,979 ----------- INDUSTRIAL MACHINERY 1.2% SPX Corp. (a)............................................... 13,648 802,639 -----------
2 See Notes to Financial Statements YOUR FUND'S INVESTMENTS December 31, 2003
MARKET DESCRIPTION SHARES VALUE xINTEGRATED OIL & GAS 9.6% Amerada Hess Corp. ......................................... 21,200 $ 1,127,204 BP Plc--ADR (United Kingdom)................................ 33,876 1,671,781 Exxon Mobil Corp. .......................................... 86,639 3,552,199 ----------- 6,351,184 ----------- MULTI-LINE INSURANCE 4.2% American International Group, Inc. ......................... 41,688 2,763,081 ----------- OFFICE SERVICES & SUPPLIES 1.5% IKON Office Solutions, Inc. ................................ 86,993 1,031,737 ----------- OIL & GAS DRILLING 0.1% Transocean, Inc. (a)........................................ 3,113 74,743 ----------- OIL & GAS EQUIPMENT & SERVICES 3.7% Baker Hughes, Inc. ......................................... 25,634 824,389 Halliburton Co. ............................................ 30,320 788,320 Schlumberger Ltd. .......................................... 16,080 879,898 ----------- 2,492,607 ----------- OIL & GAS EXPLORATION & PRODUCTION 2.4% Apache Corp. ............................................... 13,173 1,068,330 Kerr-McGee Corp. ........................................... 10,900 506,741 ----------- 1,575,071 ----------- PACKAGED FOODS 4.4% McCormick & Co., Inc. ...................................... 96,518 2,905,192 ----------- PAPER PRODUCTS 1.7% Georgia-Pacific Corp. ...................................... 37,376 1,146,322 ----------- PHARMACEUTICALS 31.0% Johnson & Johnson........................................... 78,636 4,062,336 Merck & Co., Inc. .......................................... 50,376 2,327,371 Pfizer, Inc. ............................................... 258,763 9,142,097 Schering-Plough Corp. ...................................... 156,022 2,713,222 Wyeth....................................................... 56,000 2,377,200 ----------- 20,622,226 ----------- REAL ESTATE INVESTMENT TRUSTS 1.2% Plum Creek Timber Co., Inc. ................................ 25,602 779,581 ----------- RESTAURANTS 0.1% Luby's Cafeterias, Inc. (a)................................. 13,367 49,324 -----------
See Notes to Financial Statements 3 YOUR FUND'S INVESTMENTS December 31, 2003
MARKET DESCRIPTION SHARES VALUE SEMICONDUCTORS 18.1% Intel Corp. ................................................ 374,407 $12,055,905 ----------- SPECIALTY CHEMICALS 4.4% International Flavors & Fragrances, Inc. ................... 49,712 1,735,943 Lubrizol Corp. ............................................. 37,620 1,223,402 ----------- 2,959,345 ----------- TOTAL LONG-TERM INVESTMENTS 98.9% (Cost $6,915,732).................................................. 65,676,275 REPURCHASE AGREEMENT 1.2% State Street Bank & Trust Co. ($788,000 par collateralized by U.S. Government obligations in a pooled cash account, dated 12/31/03, to be sold on 01/02/04 at $788,037) (Cost $788,000).................................................... 788,000 ----------- TOTAL INVESTMENTS 100.1% (Cost $7,703,732).................................................. 66,464,275 LIABILITIES IN EXCESS OF OTHER ASSETS (0.1%)........................ (38,144) ----------- NET ASSETS 100.0%................................................... $66,426,131 ===========
(a) Non-income producing security as this stock currently does not declare dividends. ADR--American Depositary Receipt 4 See Notes to Financial Statements FINANCIAL STATEMENTS Statement of Assets and Liabilities December 31, 2003 ASSETS: Total Investments (Cost $7,703,732)......................... $66,464,275 Cash........................................................ 350 Receivables: Dividends................................................. 90,163 Interest.................................................. 19 Other....................................................... 25,038 ----------- Total Assets............................................ 66,579,845 ----------- LIABILITIES: Payables: Investment Advisory Fee................................... 27,307 Other Affiliates.......................................... 3,772 Managing General Partners' Retirement Plan.................. 79,547 Accrued Expenses............................................ 43,088 ----------- Total Liabilities....................................... 153,714 ----------- NET ASSETS.................................................. $66,426,131 =========== NET ASSETS ARE COMPRISED OF: 198,010 units of limited partnership interest............... $65,250,366 3,333 units of non-managing general partnership interest.... 1,098,325 235 units of managing general partnership interest.......... 77,440 ----------- NET ASSETS.................................................. $66,426,131 =========== NET ASSET VALUE PER UNIT ($66,426,131 divided by 201,578 units of partnership interest outstanding)................ $ 329.53 ===========
See Notes to Financial Statements 5 Statement of Operations For the Year Ended December 31, 2003 INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $9,004)...... $ 1,071,864 Interest.................................................... 7,658 ----------- Total Income............................................ 1,079,522 ----------- EXPENSES: Investment Advisory Fee..................................... 294,120 Managing General Partners' Fees and Related Expenses........ 32,772 Audit....................................................... 29,778 Shareholder Reports......................................... 28,549 Legal....................................................... 21,190 Custody..................................................... 11,103 Other....................................................... 41,864 ----------- Total Expenses.......................................... 459,376 Less Credits Earned on Cash Balances.................... 256 ----------- Net Expenses............................................ 459,120 ----------- NET INVESTMENT INCOME....................................... $ 620,402 =========== REALIZED AND UNREALIZED GAIN/LOSS: Net Realized Gain on Investments as a result of partner in-kind redemptions....................................... $ 3,543,670 ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 48,834,218 End of the Period......................................... 58,760,543 ----------- Net Unrealized Appreciation During the Period............... 9,926,325 ----------- NET REALIZED AND UNREALIZED GAIN............................ $13,469,995 =========== NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $14,090,397 ===========
6 See Notes to Financial Statements Statements of Changes in Net Assets
YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ------------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income................................. $ 620,402 $ 587,715 Net Realized Gain on Investments as a result of partner-in-kind redemptions......................... 3,543,670 7,450,777 Net Unrealized Appreciation/Depreciation During the Period.............................................. 9,926,325 (27,980,358) ----------- ------------ Change in Net Assets from Operations.................. 14,090,397 (19,941,866) Distributions from Net Investment Income.............. (266,042) (289,544) ----------- ------------ NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... 13,824,355 (20,231,410) ----------- ------------ FROM PARTNERSHIP UNIT TRANSACTIONS: Proceeds From Units Issued Through Dividend Reinvestment........................................ 52,133 50,714 Cost of Units Repurchased............................. (3,908,192) (8,037,767) ----------- ------------ NET CHANGE IN NET ASSETS FROM PARTNERSHIP UNIT TRANSACTIONS........................................ (3,856,059) (7,987,053) ----------- ------------ TOTAL INCREASE/DECREASE IN NET ASSETS................. 9,968,296 (28,218,463) NET ASSETS: Beginning of the Period............................... 56,457,835 84,676,298 ----------- ------------ End of the Period..................................... $66,426,131 $ 56,457,835 =========== ============ CHANGE IN PARTNERSHIP UNITS OUTSTANDING: Units Issued Through Dividend Reinvestment............ 185 163 Units Repurchased..................................... (14,244) (24,560) ----------- ------------ Decrease in Partnership Units Outstanding........... (14,059) (24,397) =========== ============
See Notes to Financial Statements 7 Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
YEAR ENDED DECEMBER 31, (a) ----------------------------------------------- 2003 2002 2001 2000 1999 ----------------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD... $261.82 $352.77 $376.51 $348.41 $313.59 ------- ------- ------- ------- ------- Net Investment Income.................... 2.99 2.60 2.40 1.85 1.77 Net Realized and Unrealized Gain/Loss.... 66.00 (92.27) (24.86) 28.06 34.82 ------- ------- ------- ------- ------- Total from Investment Operations........... 68.99 (89.67) (22.46) 29.91 36.59 ------- ------- ------- ------- ------- Less: Distributions from Net Investment Income................................. 1.28 1.28 1.28 1.28 1.28 Distributions from Net Realized Gain..... -0- -0- -0- .53 .49 ------- ------- ------- ------- ------- Total Distributions........................ 1.28 1.28 1.28 1.81 1.77 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF THE PERIOD......... $329.53 $261.82 $352.77 $376.51 $348.41 ------- ------- ------- ------- ------- Total Return (b)........................... 26.44% -25.47% -5.97% 8.56% 11.48% Net Assets at End of the Period (In millions)................................ $ 66.4 $ 56.5 $ 84.7 $ 94.8 $ 94.2 Ratio of Expenses to Average Net Assets.... .78% .71% .64% .65% .75% Ratio of Net Investment Income to Average Net Assets............................... 1.05% .85% .68% .45% .53% Portfolio Turnover......................... 0% 0% 0% 0% 0%
(a) Based on average units outstanding. (b) Total return based on net asset value (NAV) assumes an investment at the beginning of the period indicated, reinvestment of all distributions for the period, and sale of all units at the end of the period, all at NAV. These returns do not reflect the deduction of taxes that a partner would pay on Fund distributions or the redemption of Fund units. 8 See Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS December 31, 2003 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Exchange Fund (the "Fund"), a California limited partnership, is a partnership registered under the Investment Company Act of 1940, as amended, as a diversified, open-end investment management company. The Fund seeks long-term growth of capital. The production of current income is a secondary objective. The Fund commenced investment operations on December 16, 1976. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION Investments in securities listed on a securities exchange are valued at their sale price as of the close of such securities exchange. Equity securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Listed securities and unlisted securities for which the last sales price is not available are valued at the mean between the last reported bid and ask price. For those securities where quotations or prices are not available, valuations are determined in accordance with procedures established in good faith by the Managing General Partners. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. The Fund may invest in repurchase agreements which are short-term investments whereby the Fund acquires ownership of a debt security and the seller agrees to repurchase the security at a future time and specified price. The Fund may invest independently in repurchase agreements, or transfer uninvested cash balances into a pooled cash account along with other investment companies advised by Van Kampen Asset Management (the "Adviser") or its affiliates, the daily aggregate of which is invested in repurchase agreements. Repurchase agreements are fully collateralized by the underlying debt security. The Fund will make payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the custodian bank. The seller is required to maintain the value of the underlying security at not less than the repurchase proceeds due the Fund. C. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. D. FEDERAL INCOME TAXES The Fund has met the qualifications to be classified as a partnership for federal income tax purposes and intends to maintain this qualification in the future. A partnership is not subject to federal income tax. 9 NOTES TO FINANCIAL STATEMENTS December 31, 2003 At December 31, 2003, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $ 3,713,939 ----------- Gross tax unrealized appreciation........................... $62,750,336 Gross tax unrealized depreciation........................... -0- ----------- Net tax unrealized appreciation on investments.............. $62,750,336 ===========
E. DISTRIBUTION OF INCOME AND GAINS Quarterly distributions to partners are recorded on the record date. Net investment income is allocated daily to each partner, relative to the total number of units held. Capital gains or losses will be allocated equally among units outstanding on the day recognized. F. EXPENSE REDUCTIONS During the year ended December 31, 2003, the Fund's custody fee was reduced by $256 as a result of credits earned on cash balances. 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Fund's Investment Advisory Agreement, the Adviser will provide facilities and investment advice to the Fund for an annual fee payable monthly of .50% based on the average daily net assets of the Fund. For the year ended December 31, 2003, the Fund recognized expenses of approximately $21,200 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the Fund is an affiliated person. Under an Accounting Services agreement, the Adviser provides accounting services to the Fund. The Adviser allocates the cost of such services to each fund. For the year ended December 31, 2003, the Fund recognized expenses of approximately $9,500 representing Van Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting services to the Fund, which is reported as part of "Other" expense in the Statement of Operations. Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser, serves as the shareholder servicing agent for the Fund. For the year ended December 31, 2003, the Fund recognized expenses of approximately $15,000 representing transfer agency fees paid to VKIS. Transfer agency fees are determined through negotiations with the Fund's Managing General Partners. Managing general partners of the Fund who are not affiliated with the Adviser are compensated by the Fund at the annual rate of approximately $500 plus a fee of $250 per Board meeting attended. The Managing General Partners of the Fund instituted a Retirement Plan effective April 1, 1996. The Plan is not funded, and obligations under the Plan will be paid solely out of the Fund's general accounts. The Fund will not reserve or set aside funds for the payment of its obligations under the Plan by any form of trust or escrow. For the current Managing General Partners not affiliated with the Adviser, the annual retirement benefit payable per 10 NOTES TO FINANCIAL STATEMENTS December 31, 2003 year for a ten year period is based upon the highest total annual compensation received in any of the three calendar years preceding retirement. Managing General Partners with more than five but less than ten years service at retirement will receive a prorated reduced benefit. Under the Plan, for the Managing General Partners retiring with the effectiveness of the Plan, the annual retirement benefit payable per year for a ten year period is equal to 75% of the total compensation received from the Fund during the 1995 calendar year. At December 31, 2003, Van Kampen Funds Inc. and Van Kampen Exchange Corp., as nonmanaging general partners of the Fund, owned 223 and 3,110 units of partnership interest, respectively. 3. PARTNERSHIP UNIT TRANSACTIONS Partners of the Fund may redeem units at any time. The net asset value of units redeemed, other than redemptions under a systematic withdrawal plan, may be paid in cash or securities, at the option of the Fund, and will ordinarily be paid in whole or in part in securities. The Fund's valuation will determine the quantity of securities tendered. The Fund will select securities for tender in redemptions based on tax or investment considerations. 4. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, excluding short-term investments, were $-0- and $3,616,271, respectively. 5. NET ASSETS At December 31, 2003, net assets include the following: Net paid in capital on units of beneficial interest......... $ 7,665,588 Net unrealized appreciation on investments.................. 58,760,543 ----------- Total net assets............................................ $66,426,131 ===========
11 REPORT OF INDEPENDENT AUDITORS To the Partners of Van Kampen Exchange Fund We have audited the accompanying statement of assets and liabilities of Van Kampen Exchange Fund, a California Limited Partnership (the "Fund"), including the portfolio of investments, as of December 31, 2003, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The Fund's financial highlights for the periods ended prior to December 31, 2000, were audited by other auditors whose report, dated February 10, 2000, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the Fund's custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Van Kampen Exchange Fund as of December 31, 2003, the results of its operations, the changes in its net assets and the financial highlights for the respective stated periods, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Chicago, Illinois February 6, 2004 12 MANAGING GENERAL PARTNERS AND IMPORTANT ADDRESSES VAN KAMPEN EXCHANGE FUND (A CALIFORNIA LIMITED PARTNERSHIP) MANAGING GENERAL PARTNERS DAVID C. ARCH J. MILES BRANAGAN JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT 1221 Avenue of the Americas New York, NY 10020 SHAREHOLDER SERVICING AGENT VAN KAMPEN INVESTOR SERVICES INC. P.O. Box 947 Jersey City, New Jersey 07303-0947 CUSTODIAN STATE STREET BANK AND TRUST COMPANY 225 Franklin Street P.O. Box 1713 Boston, Massachusetts 02110 NON-MANAGING GENERAL PARTNERS VAN KAMPEN EXCHANGE CORP. 1 Parkview Plaza P.O. Box 5555 Oakbrook Terrace, Illinois 60181-5555 VAN KAMPEN FUNDS INC. 1221 Avenue of the Americas New York, NY 10020 LEGAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS) 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT AUDITORS DELOITTE & TOUCHE LLP 180 North Stetson Avenue Chicago, Illinois 60601 * "Interested persons" of the Fund, as defined in the Investment Company Act of 1940, as amended. 13 MANAGING GENERAL PARTNERS AND OFFICERS The business and affairs of the Fund are managed under the direction of the Fund's Managing General Partners and the Fund's officers appointed by the Managing General Partners. The tables below list the managing general partners and executive officers of the Fund and their principal occupations during the last five years, other directorships held by the managing general partners and their affiliations, if any, with Van Kampen Investments Inc. ("Van Kampen Investments"), Van Kampen Asset Management ("Asset Management" or the "Adviser"), Van Kampen Funds Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van Kampen Investor Services Inc. ("Investor Services"). The term "Fund Complex" includes each of the investment companies advised by the Adviser or its affiliates as of the date of this Statement of Additional Information. Managing General Partners serve one year terms or until their successors are duly elected and qualified. Executive officers are annually elected by the managing general partners. INDEPENDENT MANAGING GENERAL PARTNERS
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INDEPENDENT MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER David C. Arch (58) Managing Managing Chairman and Chief 88 Trustee/Director/Managing Blistex Inc. General General Executive Officer of General Partner of funds 1800 Swift Drive Partner Partner Blistex Inc., a consumer in the Fund Complex. Oak Brook, IL 60523 since 1998 health care products manufacturer. Former Director of the World Presidents Organization-Chicago Chapter. Director of the Heartland Alliance, a nonprofit organization serving human needs based in Chicago. J. Miles Branagan (71) Managing Managing Private investor. 86 Trustee/Director/Managing 1632 Morning Mountain Road General General Co-founder, and prior to General Partner of funds Raleigh, NC 27614 Partner Partner August 1996, Chairman, in the Fund Complex. since 2003 Chief Executive Officer and President, MDT Corporation (now known as Getinge/Castle, Inc., a subsidiary of Getinge Industrier AB), a company which develops, manufactures, markets and services medical and scientific equipment.
14
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INDEPENDENT MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Jerry D. Choate (65) Managing Managing Prior to January 1999, 86 Trustee/Director/Managing 33971 Selva Road General General Chairman and Chief General Partner of funds Suite 130 Partner Partner Executive Officer of the in the Fund Complex. Dana Point, CA 92629 since 2003 Allstate Corporation Director of Amgen Inc., a ("Allstate") and Allstate biotechnological company, Insurance Company. Prior and Director of Valero to January 1995, Energy Corporation, an President and Chief independent refining Executive Officer of company. Allstate. Prior to August 1994, various management positions at Allstate.
15
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INDEPENDENT MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Rod Dammeyer (63) Managing Managing President of CAC, llc., a 88 Trustee/Director/Managing CAC, llc. General General private company offering General Partner of funds 4350 LaJolla Village Drive Partner Partner capital investment and in the Fund Complex. Suite 980 since 1998 management advisory Director of Stericycle, San Diego, CA 92122-6223 services. Prior to July Inc., TheraSense, Inc., 2000, Managing Partner of Ventana Medical Systems, Equity Group Corporate Inc., GATX Corporation Investment (EGI), a and Trustee of The company that makes Scripps Research private investments in Institute and the other companies. University of Chicago Hospitals and Health Systems. 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). Prior to April 1999, Director of Metal Management, Inc.
16
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INDEPENDENT MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Linda Hutton Heagy (55) Managing Managing Managing Partner of 86 Trustee/Director/Managing Heidrick & Struggles General General Heidrick & Struggles, an General Partner of funds 233 South Wacker Drive Partner Partner executive search firm. in the Fund Complex. Suite 7000 since 2003 Trustee on the University Chicago, IL 60606 of Chicago Hospitals Board, Vice Chair of the Board of the YMCA of Metropolitan Chicago and a member of the Women's Board of the University of Chicago. Prior to 1997, Partner of Ray & Berndtson, Inc., an executive recruiting firm. Prior to 1996, Trustee of The International House Board, a fellowship and housing organization for international graduate students. Prior to 1995, Executive Vice President of ABN AMRO, N.A., a bank holding company. Prior to 1992, Executive Vice President of La Salle National Bank. R. Craig Kennedy (51) Managing Managing Director and President of 86 Trustee/Director/Managing 11 DuPont Circle, N.W. General General the German Marshall Fund General Partner of funds Washington, D.C. 20016 Partner Partner of the United States, an in the Fund Complex. since 2003 independent U.S. foundation created to deepen understanding, promote collaboration and stimulate exchanges of practical experience between Americans and Europeans. Formerly, advisor to the Dennis Trading Group Inc., a managed futures and option company that invests money for individuals and institutions. Prior to 1992, President and Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. Howard J Kerr (68) Managing Managing Prior to 1998, President 88 Trustee/Director/Managing 736 North Western Avenue General General and Chief Executive General Partner of funds P.O. Box 317 Partner Partner Officer of Pocklington in the Fund Complex. Lake Forest, IL 60045 since 1998 Corporation, Inc., an Director of the Lake investment holding Forest Bank & Trust. company. Director of the Marrow Foundation.
17
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INDEPENDENT MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Jack E. Nelson (67) Managing Managing President of Nelson 86 Trustee/Director/Managing 423 Country Club Drive General General Investment Planning General Partner of funds Winter Park, FL 32789 Partner Partner Services, Inc., a in the Fund Complex. since 2003 financial planning company and registered investment adviser in the State of Florida. President of Nelson Ivest Brokerage Services Inc., a member of the NASD, Securities Investors Protection Corp. and the Municipal Securities Rulemaking Board. President of Nelson Sales and Services Corporation, a marketing and services company to support affiliated companies. Hugo F. Sonnenschein (63) Managing Managing President Emeritus and 88 Trustee/Director/Managing 1126 E. 59th Street General General Honorary Trustee of the General Partner of funds Chicago, IL 60637 Partner Partner University of Chicago and in the Fund Complex. since 1998 the Adam Smith Director of Winston Distinguished Service Laboratories, Inc. Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago. Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences. Suzanne H. Woolsey, P.H.D. Managing Managing Currently with Paladin 86 Trustee/Director/Managing (62) General General Capital Group-Paladin General Partner of funds 2001 Pennsylvania Avenue Partner Partner Homeland Security Fund in the Fund Complex. Suite 400 since 2003 since November 2003. Director of Neurogen Washington, DC 20006 Previously, Chief Corporation, a Communications Officer of pharmaceutical company, the National Academy of since January 1998. Sciences/National Research Council, an independent, federally chartered policy institution, since 2001 and Chief Operating Officer from 1993 to 2001. Director of the Institute for Defense Analyses, a federally funded research and development center, Director of the German Marshall Fund of the United States, and Trustee of Colorado College. Prior to 1993, Executive Director of the Commission on Behavioral and Social Sciences and Education at the National Academy of Sciences/National Research Council. From 1980 through 1989, Partner of Coopers & Lybrand.
18 INTERESTED MANAGING GENERAL PARTNERS:*
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INTERESTED MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Mitchell M. Merin* (50) Managing Managing President and Chief 86 Trustee/Director/Managing 1221 Avenue of the Americas General General Executive Officer of General Partner of funds New York, NY 10020 Partner, Partner funds in the Fund in the Fund Complex. President since Complex. Chairman, and Chief 2003; President, Chief Executive President Executive Officer and Officer and Chief Director of the Adviser Executive and Van Kampen Advisors Officer Inc. since December 2002. since 2002 Chairman, President and Chief Executive Officer of Van Kampen Investments since December 2002. Director of Van Kampen Investments since December 1999. Chairman and Director of Van Kampen Funds Inc. since December 2002. President, Director and Chief Operating Officer of Morgan Stanley Investment Management since December 1998. President and Director since April 1997 and Chief Executive Officer since June 1998 of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Chairman, Chief Executive Officer and Director of Morgan Stanley Distributors Inc. since June 1998. Chairman since June 1998, and Director since January 1998 of Morgan Stanley Trust. Director of various Morgan Stanley subsidiaries. President of the Morgan Stanley Funds since May 1999. Previously Chief Executive Officer of Van Kampen Funds Inc. from December 2002 to July 2003, Chief Strategic Officer of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. and Executive Vice President of Morgan Stanley Distributors Inc. from April 1997 to June 1998. Chief Executive Officer from September 2002 to April 2003 and Vice President from May 1997 to April 1999 of the Morgan Stanley Funds.
19
NUMBER OF FUNDS IN FUND TERM OF COMPLEX OFFICE AND OVERSEEN NAME, AGE AND ADDRESS POSITION(S) LENGTH OF BY MANAGING OTHER DIRECTORSHIPS OF INTERESTED MANAGING HELD WITH TIME PRINCIPAL OCCUPATION(S) GENERAL HELD BY MANAGING GENERAL PARTNER FUND SERVED DURING PAST 5 YEARS PARTNER GENERAL PARTNER Richard F. Powers, III* (57) Managing Managing Advisory Director of 88 Trustee/Director/Managing 1 Parkview Plaza General General Morgan Stanley. Prior to General Partner of funds P.O. Box 5555 Partner Partner December 2002, Chairman, in the Fund Complex. Oakbrook Terrace, IL 60181 since 1999 Director, President, Chief Executive Officer and Managing Director of Van Kampen Investments and its investment advisory, distribution and 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 at Morgan Stanley and Director of Dean Witter, Discover & Co. and Dean Witter Realty. Prior to 1996, Director of Dean Witter Reynolds Inc. Wayne W. Whalen* (64) Managing Managing Partner in the law firm 88 Trustee/Director/Managing 333 West Wacker Drive General General of Skadden, Arps, Slate, General Partner of funds Chicago, IL 60606 Partner Partner Meagher & Flom LLP, legal in the Fund Complex. since 1998 counsel to funds in the Fund Complex.
* Such Managing General Partner is an "interested person" (within the meaning of Section 2(a)(19) of the 1940 Act). Mr. Whalen is an interested person of certain funds in the Fund Complex by reason of his firm currently acting as legal counsel to such funds in the Fund Complex. Messrs. Merin and Powers are interested persons of funds in the Fund Complex and the Adviser by reason of their current or former positions with Morgan Stanley or its affiliates. 20 OFFICERS:
TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS Stephen L. Boyd (63) Vice President Officer Managing Director of Global Research Investment Management. 2800 Post Oak Blvd. since 1998 Vice President of funds in the Fund Complex. Prior to 45th Floor December 2002, Chief Investment Officer of Van Kampen Houston, TX 77056 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 Joseph J. McAlinden (61) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan 1221 Avenue of the Americas President and Chief since 2002 Stanley Investment Advisors Inc., Morgan Stanley Investment New York, NY 10020 Investment Officer Management Inc. and Morgan Stanley Investments LP and Director of Morgan Stanley Trust for over 5 years. Executive Vice President and Chief Investment Officer of funds in the Fund Complex. Managing Director and Chief Investment Officer of Van Kampen Investments, the Adviser and Van Kampen Advisors Inc. since December 2002.
21
TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS John R. Reynoldson (50) Vice President Officer Executive Director and Portfolio Specialist of the Adviser 1 Parkview Plaza since 2000 and Van Kampen Advisors Inc. Vice President of funds in the P.O. Box 5555 Fund Complex. Prior to July 2001, Principal and Co-head of Oakbrook Terrace, IL 60181 the Fixed Income Department of the Adviser and Van Kampen Advisors Inc. Prior to December 2000, Senior Vice President of the Adviser and Van Kampen Advisors Inc. Prior to May 2000, Senior Vice President of the investment grade taxable group for the Adviser. Prior to June 1999, Senior Vice President of the government securities bond group for Asset Management. Ronald E. Robison (65) Executive Vice Officer Chief Executive Officer and Chairman of Investor Services. 1221 Avenue of the Americas President and since 2003 Executive Vice President and Principal Executive Officer of New York, NY 10020 Principal Executive funds in the Fund Complex. Chief Global Operations Officer Officer and Managing Director of Morgan Stanley Investment Management Inc. Managing Director of Morgan Stanley. Managing Director and Director of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Chief Executive Officer and Director of Morgan Stanley Trust. Vice President of the Morgan Stanley Funds. A. Thomas Smith III (47) Vice President and Officer Managing Director of Morgan Stanley, Managing Director and 1221 Avenue of the Americas Secretary since 1999 Director of Van Kampen Investments, Director of the Adviser, New York, NY 10020 Van Kampen Advisors Inc., the Distributor, Investor Services and certain other subsidiaries of Van Kampen Investments. Managing Director and General Counsel-Mutual Funds of Morgan Stanley Investment Advisors, Inc. Vice President and Secretary of funds in the Fund Complex. Prior to July 2001, Managing Director, General Counsel, Secretary and Director of Van Kampen Investments, the Adviser, the Distributor, Investor Services, and certain other subsidiaries of Van Kampen Investments. Prior to December 2000, Executive Vice President, General Counsel, Secretary and Director of Van Kampen Investments, the Adviser, Van Kampen Advisors Inc., the Distributor, Investor Services and certain other subsidiaries of Van Kampen Investments. Prior to January 1999, Vice President and Associate General Counsel to New York Life Insurance Company ("New York Life"), and prior to March 1997, Associate General Counsel of New York Life. Prior to December 1993, Assistant General Counsel of The Dreyfus Corporation. Prior to August 1991, Senior Associate, Willkie Farr & Gallagher. Prior to January 1989, Staff Attorney at the Securities and Exchange Commission, Division of Investment Management, Office of Chief Counsel.
22
TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS John L. Sullivan (48) Vice President, Chief Officer Director and Managing Director of Van Kampen Investments, 1 Parkview Plaza Financial Officer and since 1996 the Adviser, Van Kampen Advisors Inc. and certain other P.O. Box 5555 Treasurer subsidiaries of Van Kampen Investments. Vice President, Oakbrook Terrace, IL 60181 Chief Financial Officer and Treasurer of funds in the Fund Complex. Head of Fund Accounting for Morgan Stanley Investment Management. Prior to December 2002, Executive Director of Van Kampen Investments, the Adviser and Van Kampen Advisors Inc.
23 Van Kampen Privacy Notice The Van Kampen companies and investment products* respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain nonpublic personal information about you. This is information we collect from you on applications or other forms, and from the transactions you conduct with us, our affiliates, or third parties. We may also collect information you provide when using our Web site, and text files (also known as "cookies") may be placed on your computer to help us to recognize you and to facilitate transactions you initiate. We do not disclose any nonpublic personal information about you or any of our former customers to anyone, except as permitted by law. For instance, so that we may continue to offer you Van Kampen investment products and services that meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect to companies that perform services on our behalf, such as printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose. To protect your nonpublic personal information internally, we permit access to it only by authorized employees, and maintain physical, electronic and procedural safeguards to guard your nonpublic personal information. * Includes Van Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the many Van Kampen mutual funds and Van Kampen unit investment trusts. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com (VAN KAMPEN INVESTMENTS LOGO) Copyright (C)2004 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. EXCH ANR 2/04 13719B04-AS-2/04 Item 2. Code of Ethics. (a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Fund or a third party. (b) No information need be disclosed pursuant to this paragraph. (c) The Fund has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. (d) The Fund has not granted a waiver or an implicit waiver from a provision of its Code of Ethics. (e) Not applicable. (f) (1) The Fund's Code of Ethics is attached hereto as Exhibit 10A. (2) Not applicable. (3) Not applicable. Item 3. Audit Committee Financial Expert. The Fund's Board of Trustees has determined that it has three "audit committee financial experts" serving on its audit committee, each of whom are "independent" Trustees: J. Miles Branagan, Jerry Choate and R. Craig Kennedy. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification. Item 4. Principal Accountant Fees and Services. (a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
2003 REGISTRANT COVERED ENTITIES(1) AUDIT FEES .............................. $19,290 N/A NON-AUDIT FEES AUDIT-RELATED FEES ............ $0 $230,000 (2) TAX FEES ...................... $ 1,500(3) $ 0 (4) ALL OTHER FEES ................ $0 $ 0 TOTAL NON-AUDIT FEES .................... $ 1,500 $230,000 TOTAL ................................... $20,790 $230,000 2002 REGISTRANT COVERED ENTITIES(1) AUDIT FEES .............................. $19,200 N/A NON-AUDIT FEES AUDIT-RELATED FEES ............ $0 $95,000 (2) TAX FEES ...................... $ 1,500(3) $ 0 (4) ALL OTHER FEES ................ $0 $ 0 TOTAL NON-AUDIT FEES .................... $ 1,500 $95,000 TOTAL ................................... $20,700 $95,000
N/A- Not applicable, as not required by Item 4. (1) Covered Entities include the Adviser (excluding sub-advisors) 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 Registrant's tax returns. (4) Tax Fees represent tax compliance services provided in connection with the review of Covered Entities' tax returns. (e)(1) The audit committee's pre-approval policies and procedures are as follows: 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 pre-approve 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 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 non-audit 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. - ------------------- (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. 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 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-1A, 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 following Audit services. All other Audit services not listed below must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated): - Statutory audits or financial audits for the Fund - Services associated with SEC registration statements (including new funds), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end fund offerings, consents), and assistance in responding to SEC comment letters - Consultations by the Fund's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies (Note: Under SEC rules, some consultations may be "audit related" services rather than "audit" services) 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 following Audit-related services. All other Audit-related services not listed below must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated): - Attest procedures not required by statute or regulation (including agreed upon procedures related to the Closed-End Fund asset coverage tests required by the rating agencies and/or lenders) - Due diligence services pertaining to potential fund mergers - Issuance of SAS-70 reports on internal controls of Morgan Stanley Trust Co. and MSIM Trade Operations - Consultations by the Fund's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be "audit" services rather than "audit-related" services) - Information systems reviews not performed in connection with the audit (e.g., application data center and technical reviews) - General assistance with implementation of the requirements of SEC rules or listing standards promulgated pursuant to the Sarbanes-Oxley Act - Audit of record keeping services performed by Morgan Stanley Trust Fund related to the New Jersey State Retirement Plan 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 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 following Tax Services. All Tax services involving large and complex transactions not listed below 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): - U.S. federal, state and local tax planning and advice - U.S. federal, state and local tax compliance - International tax planning and advice - International tax compliance - Review of federal, state, local and international income, franchise, and other tax returns - Identification of Passive Foreign Investment Companies - Review of closed-end funds pro rata allocation of taxable income and capital gains to common and preferred shares. - Domestic and foreign tax planning, compliance, and advice - Assistance with tax audits and appeals before the IRS and similar state, local and foreign agencies - Tax advice and assistance regarding statutory, regulatory or administrative developments (e.g., excise tax reviews, evaluation of Fund's tax compliance function) - Review the calculations of taxable income from corporate actions including reorganizations related to bankruptcy filings and provide guidance related to the foregoing 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 following All Other services. Permissible All Other services not listed below must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated): - Risk management advisory services, e.g., assessment and testing of security infrastructure controls The following is a list of the SEC's prohibited non-audit services. 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: - Bookkeeping or other services related to the accounting records or financial statements of the audit client - Financial information systems design and implementation - Appraisal or valuation services, fairness opinions or contribution-in-kind reports - Actuarial services - Internal audit outsourcing services - Management functions - Human resources - Broker-dealer, investment adviser or investment banking services - Legal services - Expert services unrelated to the audit 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. 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 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 - Morgan Stanley Trust Company (e)(2) 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 Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee's pre-approval policies and procedures (attached hereto). (f) Not applicable. (g) See table above. (h) The audit committee of the Board of Trustees has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors' independence in performing audit services. Item 5. Audit Committee of Listed Registrants. Not applicable. Item 6. [Reserved.] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved.] Item 9. Controls and Procedures (a) The Fund's principal executive officer and principal financial officer have concluded that the Fund's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto. (b)(1) A certification for the Principal Executive Officer of the registrant is attached hereto as part of EX-99.CERT. (b)(2) A certification for the Principal Financial Officer of the registrant is attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen Exchange Fund ------------------------ By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: February 18, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald E. Robison --------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: February 18, 2004 By: /s/ John L. Sullivan --------------------- Name: John L. Sullivan Title: Principal Financial Officer Date: February 18, 2004 EX-99.CODE 3 c81957exv99wcode.txt CODE OF ETHICS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS ADOPTED JULY 23, 2003 I. This Code of Ethics (the "Code") for the investment companies within the Van Kampen complex identified in Exhibit A (collectively, "Funds" and each, a "Fund") applies to each Fund's Principal Executive Officer, President, Principal Financial Officer and Treasurer (or persons performing similar functions) ("Covered Officers" each of whom are set forth in Exhibit B) for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. o full, fair, accurate, timely and understandable disclosure in reports and documents that a company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable laws and governmental rules and regulations; o prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. Any question about the application of the Code should be referred to the General Counsel or his/her designee (who is set forth in Exhibit C). II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF INTEREST OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private interest interferes, or appears to interfere, with the interests of, or his service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" (as defined in the Investment Company Act) of the Fund. The Fund's and its investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside the parameters of this Code, unless or until the General Counsel determines that any violation of such programs and procedures is also a violation of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Fund and its investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund or for the investment adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Fund and its investment adviser. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors/Trustees ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund. Each Covered Officer must not: o use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally (directly or indirectly) to the detriment of the Fund; o cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; or o use material non-public knowledge of portfolio transactions made or contemplated for, or actions proposed to be taken by, the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. Each Covered Officer must, at the time of signing this Code, report to the General Counsel all affiliations or significant business relationships outside the Morgan Stanley complex and must update the report annually. Conflict of interest situations should always be approved by the General Counsel and communicated to the relevant Fund or Fund's Board. Any activity or relationship that would present such a conflict for a Covered Officer would likely also present a conflict for the Covered Officer if an immediate member of the Covered Officer's family living in the same household engages in such an activity or has such a relationship. Examples of these include: o service or significant business relationships as a director on the board of any public or private company; o accepting directly or indirectly, anything of value, including gifts and gratuities in excess of $100 per year from any person or entity with which the Fund has current or prospective business dealings, not including occasional meals or tickets for theatre or sporting events or other similar entertainment; provided it is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than its investment adviser, principal underwriter, or any affiliated person thereof; and o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. DISCLOSURE AND COMPLIANCE o Each Covered Officer should familiarize himself/herself with the disclosure and compliance requirements generally applicable to the Funds; o each Covered Officer must not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's Directors/Trustees and auditors, or to governmental regulators and self-regulatory organizations; o each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and their investment advisers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Boards that he has received, read and understands the Code; o annually thereafter affirm to the Boards that he has complied with the requirements of the Code; o not retaliate against any other Covered Officer, other officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and o notify the General Counsel promptly if he/she knows or suspects of any violation of this Code. Failure to do so is itself a violation of this Code. The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any waivers(1) sought by a Covered Officer must be considered by the Board of the relevant Fund or Funds. The Funds will follow these procedures in investigating and enforcing this Code: o the General Counsel will take all appropriate action to investigate any potential violations reported to him; o if, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action; o any matter that the General Counsel believes is a violation will be reported to the relevant Fund's Audit Committee; o if the directors/trustees/managing general partners who are not "interested persons" as defined by the Investment Company Act (the "Independent Directors/Trustees/Managing General Partners") of the relevant Fund concur that a violation has occurred, they will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer or other appropriate disciplinary actions; o the Independent Directors/Trustees/Managing General Partners of the relevant Fund will be responsible for granting waivers of this Code, as appropriate; and o any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds' investment advisers, principal underwriters, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code unless any provision of this Code conflicts with any applicable federal or state law, in which case the requirements of such law will govern. The Funds' and their investment advisers' and principal underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act and Morgan Stanley's Code of Ethics are separate requirements applying to the Covered Officers and others, and are not part of this Code. - -------- (1) Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of a material departure from a provision of the code of ethics." VI. AMENDMENTS Any amendments to this Code, other than amendments to Exhibits A, B or C, must be approved or ratified by a majority vote of the Board of each Fund, including a majority of Independent Directors/Trustees/Managing General Partners. VII. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Independent Directors/Trustees/Managing General Partners of the relevant Fund or Funds and their counsel, the relevant Fund or Funds and their counsel and the relevant investment adviser and its counsel. VIII. INTERNAL USE The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion I have read and understand the terms of the above Code. I recognize the responsibilities and obligations incurred by me as a result of my being subject to the Code. I hereby agree to abide by the above Code. __________________________ Date:_____________________ EXHIBIT A FUND LIST Van Kampen Series Fund, Inc. on behalf of its series Van Kampen American Value Fund Van Kampen Asian Equity Fund Van Kampen Emerging Markets Debt Fund Van Kampen Emerging Markets Fund Van Kampen Equity Growth Fund Van Kampen European Value Equity Fund Van Kampen Focus Equity Fund Van Kampen Global Equity Allocation Fund Van Kampen Global Value Equity Fund Van Kampen Growth and Income Fund II Van Kampen International Magnum Fund Van Kampen Japanese Equity Fund Van Kampen Latin American Fund Van Kampen Mid Cap Growth Fund Van Kampen Global Franchise Fund Van Kampen Value Fund Van Kampen Worldwide High Income Fund Van Kampen U.S. Government Trust on behalf of its series Van Kampen U.S. Government Fund Van Kampen Tax Free Trust on behalf of its series Van Kampen Insured Tax Free Income Fund Van Kampen Strategic Municipal Income Fund Van Kampen California Insured Tax Free Fund Van Kampen Municipal Income Fund Van Kampen Intermediate Term Municipal Income Fund Van Kampen New York Tax Free Income Fund Van Kampen California Municipal Income Fund Van Kampen Michigan Tax Free Income Fund Van Kampen Missouri Tax Free Income Fund Van Kampen Ohio Tax Free Income Fund Van Kampen Trust on behalf of its series Van Kampen High Yield Fund Van Kampen Managed Short Term Income Fund EXHIBIT A (CONT.) FUND LIST Van Kampen Equity Trust on behalf of its series Van Kampen Utility Fund Van Kampen Growth Fund Van Kampen Aggressive Growth Fund Van Kampen Small Cap Value Fund Van Kampen Select Growth Fund Van Kampen Small Company Growth Fund Van Kampen Small Cap Growth Fund Van Kampen Value Opportunities Fund Van Kampen Tax-Exempt Trust on behalf of its Series Van Kampen High Yield Municipal Fund Van Kampen Equity Trust II on behalf of its Series Van Kampen Technology Fund Van Kampen International Advantage EXHIBIT A (CONT.) FUND LIST Van Kampen Pennsylvania Tax Free Income Fund Van Kampen Tax Free Money Fund Van Kampen Comstock Fund Van Kampen Corporate Bond Fund Van Kampen Emerging Growth Fund Van Kampen Enterprise Fund Van Kampen Equity Income Fund Van Kampen Government Securities Fund Van Kampen Growth and Income Fund Van Kampen Harbor Fund Van Kampen High Income Corporate Bond Fund Van Kampen Limited Maturity Government Fund Van Kampen Pace Fund Van Kampen Real Estate Securities Fund Van Kampen Reserve Fund Van Kampen Exchange Fund Van Kampen Life Investment Trust on behalf of its Portfolios Aggressive Growth Portfolio Comstock Portfolio Emerging Growth Portfolio Enterprise Portfolio EXHIBIT A (CONT.) FUND LIST Government Portfolio Growth and Income Portfolio Money Market Portfolio Van Kampen Municipal Income Trust Van Kampen California Municipal Trust Van Kampen High Income Trust Van Kampen High Income Trust II Van Kampen Investment Grade Municipal Trust Van Kampen Municipal Trust Van Kampen California Quality Municipal Trust Van Kampen Florida Quality Municipal Trust Van Kampen New York Quality Municipal Trust Van Kampen Ohio Quality Municipal Trust Van Kampen Pennsylvania Quality Municipal Trust Van Kampen Trust for Insured Municipals Van Kampen Trust for Investment Grade Municipals Van Kampen Trust for Investment Grade California Municipals Van Kampen Trust for Investment Grade Florida Municipals Van Kampen Trust for Investment Grade New Jersey Municipals Van Kampen Trust for Investment Grade New York Municipals Van Kampen Trust for Investment Grade Pennsylvania Municipals Van Kampen Municipal Opportunity Trust Van Kampen Advantage Municipal Income Trust Van Kampen Advantage Pennsylvania Municipal Income Trust Van Kampen Strategic Sector Municipal Trust Van Kampen Value Municipal Income Trust Van Kampen California Value Municipal Income Trust Van Kampen Massachusetts Value Municipal Income Trust Van Kampen New York Value Municipal Income Trust Van Kampen Ohio Value Municipal Income Trust Van Kampen Pennsylvania Value Municipal Income Trust Van Kampen Municipal Opportunity Trust II Van Kampen Advantage Municipal Income Trust II Van Kampen Select Sector Municipal Trust Van Kampen Senior Loan Fund Van Kampen Senior Income Trust Van Kampen Bond Fund Van Kampen Income Trust EXHIBIT B COVERED OFFICERS Mitchell M. Merin -- President Ronald E. Robison -- Executive Vice President and Principal Executive Officer John L. Sullivan -- Vice President, Chief Financial Officer and Treasurer EXHIBIT C GENERAL COUNSEL'S DESIGNEE A. Thomas Smith III EX-99.CERT 4 c81957exv99wcert.txt CERTIFICATION I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Exchange Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit 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 this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; [b) Omitted.] c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ Ronald E. Robison --------------------------- Principal Executive Officer I, John L. Sullivan, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Exchange Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit 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 this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; [b) Omitted.] c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: February 18, 2004 /s/ John L. Sullivan --------------------------- Principal Financial Officer EX-99.906CERT 5 c81957exv99w906cert.txt CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Exchange Fund In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: February 18, 2004 /s/ Ronald E. Robison --------------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen Exchange Fund and will be retained by Van Kampen Exchange Fund and furnished to the Securities and Exchange Commission or its staff upon request. This written statement required by Section 906 is being furnished with this report, but not being filed as part of this Report. Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Exchange Fund In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: February 18, 2004 /s/ John L. Sullivan --------------------------- John L. Sullivan Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Van Kampen Exchange Fund and will be retained by Van Kampen Exchange Fund and furnished to the Securities and Exchange Commission or its staff upon request. This written statement required by Section 906 is being furnished with this report, but not being filed as part of this Report. -----END PRIVACY-ENHANCED MESSAGE-----